Document:

Exhibit 10.1

                                CHEC RAIL INC.

                            2005 STOCK OPTION PLAN

1.    PURPOSE OF THE PLAN

1.1   The purpose of the Plan is to attract, retain and motivate persons of
      training experience and leadership as key service providers to the
      Corporation and its Subsidiaries, including their directors, officers and
      employees, and to advance the interests of the Corporation by providing
      such persons with the opportunity, through share options, to acquire an
      increased proprietary interest in the Corporation.

2.    DEFINED TERMS

      Where used herein, the following terms shall have the following meanings,
      respectively:

2.1   "BOARD" shall mean the board of directors of the Corporation.

2.2   "CORPORATION" means CHEC Rail Inc. and includes any successor corporation
      thereof.

2.3   "CONSULTANT" means, in relation to the Corporation, an individual, or a
      company wholly-owned by individuals, who:

      (a)   provides ongoing consulting services to the Corporation or an
            Affiliate of the Corporation under a written contract;

      (b)   possesses technical, business or management expertise of value to
            the Corporation or an Affiliate of the Corporation;

      (c)   spends a significant amount of time and attention on the business
            and affairs of the Corporation or an Affiliate of the Corporation;
            and

      (d)   has a relationship with the Corporation or an Affiliate of the
            Corporation that enables the individual to be knowledgeable about
            the business and affairs of the Corporation.

2.4   "DIRECTORS" means directors, senior officers and Management Company
      Employees of the Corporation.

2.5   "ELIGIBLE PERSON" means:

      (i)   any Director, Employee, Consultant or Management Company Employee
            of the Corporation (an "ELIGIBLE INDIVIDUAL"); or

      (ii)  a corporation controlled by an Eligible Individual, the issued and
            outstanding voting shares of which are, and will continue to be,
            beneficially owned, directly or indirectly, by such Eligible
            Individual (an "EMPLOYEE CORPORATION").

2.6   "EMPLOYEE" means:

      (a)   an individual who is considered an employee under the Income Tax
            Act (i.e. for whom income tax, employment insurance and CPP
            deductions must be made at source);

      (b)   an individual who works full-time for the Corporation providing
            services normally provided by an employee and who is subject to the
            same control and direction by the Corporation over the details and
            methods of work as an employee of the Corporation, but for whom
            income tax deductions are not made at source; or

      (c)   an individual who works for the Corporation on a continuing and
            regular basis for a minimum amount of time per week providing
            services normally provided by an employee and who is subject to the
            same control and direction by the Corporation over the details and
            methods of work as an employee of the Corporation, but for whom
            income tax deductions are not made at source.

2.7   "INSIDER" means any insider, as such term is defined in Subsection 1(1)
      of the Securities Act (Ontario), of the Corporation, other than a person
      who falls within that definition solely by virtue of being a director or
      senior officer of a Subsidiary, and includes any associate, as such term
      is defined in Subsection 1(1) of the Securities Act (Ontario), of any
      such insider.

2.8   "INVESTOR RELATIONS ACTIVITIES" means any activities or oral or written
      communications, by or on behalf of the Corporation or shareholder of the
      Corporation, which promotes or reasonably could be expected to promote
      the purchase or sale of securities of the Corporation, but does not
      include:

      (a)   the dissemination of information provided, or records prepared, in
            the ordinary course of business of the Corporation

            (i)   to promote the sale of products or services of the
                  Corporation, or

            (ii)  to raise public awareness of the Corporation,

            that cannot reasonably be considered to promote the purchase or
            sale of securities of the Corporation;

      (b)   activities or communications necessary to comply with the
            requirements of

            (i)   applicable Securities Laws,

            (ii)  requirements or the by-laws, rules or other regulatory
                  instruments of any other self-regulatory body or exchange
                  having jurisdiction over the Corporation; or

      (c)   communications by a publisher of, or writer for, a newspaper,
            magazine or business or financial publication, that is of general
            and regular paid circulation, distributed only to subscribers to it
            for value or to purchasers of it, if

            (i)   the communication is only through the newspaper, magazine or
                  publication, and

            (ii)  the publisher or writer receives no commission or other
                  consideration other than for acting in the capacity of
                  publisher or writer.

2.9   "MANAGEMENT COMPANY EMPLOYEE" means an individual employed by a Person
      providing management services to the Corporation, which is required for
      the ongoing successful operation of the business enterprise of the
      Corporation, but excluding a Person engaged in Investor Relations
      Activities.

2.10  "MARKET PRICE" at any date in respect of the Shares means the closing
      sale price of such Shares on any stock exchange on the trading day
      immediately preceding such date.  In the event that such Shares did not
      trade on such trading day, the Market Price shall be the average of the
      bid and ask prices in respect of such Shares at the close of trading on
      such trading day.  In the event that such Shares are not listed and
      posted for trading on any stock exchange, the Market Price shall be the
      fair market value of such Shares as determined by the Board in its sole
      discretion.

2.11  "OPTION" means an option to purchase Shares granted to an Eligible Person
      under the Plan.

2.12  "OPTION PRICE" means the price per Share at which Shares may be purchased
      under an Option, as the same may be adjusted from time to time in
      accordance with Article 8 hereof.

2.13  "OPTIONED SHARES" means the Shares issuable pursuant to an exercise of
      Options.

2.14  "OPTIONEE" means an Eligible Person to whom an Option has been granted
      and who continues to hold such Option.

2.15  "PLAN" means the CHEC Rail Inc. Employee Stock Option Plan, as the same
      may be further amended or varied from time to time.

2.16  "SECURITIES LAWS" means securities legislation, securities regulation and
      securities rules, as amended, and the policies, notices, instruments and
      blanket orders in force from time to time that are applicable to the
      Corporation.

2.17  "SHARES" means the common shares of the Corporation or, in the event of
      an adjustment contemplated by Article 8 hereof, such other shares or
      securities to which an Optionee may be entitled upon the exercise of an
      Option as a result of such adjustment.

2.18  "SUBSIDIARY" means any corporation that is a subsidiary, as such term is
      defined in Subsection 1(2) of the Business Corporations Act (Ontario), of
      the Corporation.

3.    ADMINISTRATION OF THE PLAN

3.1   The Plan shall be administered by the Board.

3.2   The Board shall have the power, where consistent with the general purpose
      and intent of the Plan and subject to the specific provisions of the
      Plan:

      (a)   to establish policies and to adopt rules and regulations for
            carrying out the purposes, provisions and administration of the
            Plan;

      (b)   to interpret and construe the Plan and to determine all questions
            arising out of the Plan or any Option, and any such interpretation,
            construction or determination made by the Board shall be final,
            binding and conclusive for all purposes;

      (c)   to determine the number of Shares covered by each Option;

      (d)   to determine the Option Price of each Option;

      (e)   to determine the time or times when Options will be granted and
            exercisable;

      (f)   to determine if the Shares which are issuable on the exercise of an
            Option will be subject to any restrictions upon the exercise of
            such Option; and

      (g)   to prescribe the form of the instruments relating to the grant,
            exercise and other terms of Options.

3.3   The Board may, in its discretion, require as conditions to the grant or
      exercise of any Option that the Optionee shall have:

      (a)   represented, warranted and agreed in form and substance
            satisfactory to the Corporation that he or she is acquiring and
            will acquire such Option and the Shares to be issued upon the
            exercise thereof or, as the case may be, is acquiring such Shares,
            for his or her own account, for investment and not with a view to
            or in connection with any distribution, that he or she has had
            access to such information as is necessary to enable him or her to
            evaluate the merits and risks of such investment and that he or she
            is able to bear the economic risk of holding such Shares for an
            indefinite period;

      (b)   agreed to restrictions on transfer in form and substance
            satisfactory to the Corporation and to an endorsement on any option
            agreement or certificate representing the Shares making appropriate
            reference to such restrictions; and

      (c)   agreed to indemnify the Corporation in connection with the
            foregoing.

3.4   Any Option granted under the Plan shall be subject to the requirement
      that, if at any time counsel to the Corporation shall determine that the
      listing, registration or qualification of the Shares subject to such
      Option upon any securities exchange or under any law or regulation of any
      jurisdiction, or the consent or approval of any securities exchange or
      any governmental or regulatory body, is necessary as a condition of, or
      in connection with, the grant or exercise of such Option or the issuance
      or purchase of Shares thereunder, such Option may not be accepted or
      exercised in whole or in part unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained
      on conditions acceptable to the Board.  Nothing herein shall be deemed to
      require the Corporation to apply for or to obtain such listing,
      registration, qualification, consent or approval.

4.    SHARES SUBJECT TO THE PLAN

Options may be granted in respect of authorized and unissued Shares, provided
that the aggregate number of Shares reserved for issuance upon the exercise of
all Options granted under the Plan, subject to any adjustment of such number
pursuant to the provisions of Article 8 hereof, shall not exceed 12% of the
issued and outstanding common shares of the Company from time to time. Optioned
Shares in respect of which Options are not exercised shall be available for
subsequent Options. No fractional Shares may be purchased or issued under the
Plan.

5.    ELIGIBILITY, GRANT AND TERMS OF OPTIONS

5.1   Options may be granted to any Eligible Person in accordance with Section
      5.2 hereof.

5.2   Options may be granted by the Corporation to the extent that they are
      approved by the Board.

5.3   Subject as herein and otherwise specifically provided in this Article 5,
      the number of Shares subject to each Option, the Option Price of each
      Option, the expiration date of each Option, the extent to which each
      Option is exercisable from time to time during the term of the Option and
      other terms and conditions relating to each such Option shall be
      determined by the Board.

5.4   Each Option granted under this Plan shall be exercisable for a maximum
      period of five (5) years from the date the Option is granted to the
      Optionee.  Subject to this section 5.4, the Board shall, at the time of
      granting an Option, determine the time or times when an Option or a part
      of an Option shall be exercisable.

5.5   If, as and when any Shares have been duly purchased and paid for under
      the terms of an Option, such Shares shall be conclusively deemed allotted
      and issued as fully paid non-assessable Shares at the price paid
      therefor.

5.6   An Option is personal to the Optionee and is non-assignable and non-
      transferable (whether by operation of law or otherwise), except as
      provided for herein.  Upon any attempt to transfer, assign, pledge,
      hypothecate or otherwise dispose of an Option contrary to the provisions
      of the Plan, or upon the levy of any attachment or similar process upon
      an Option, the Option shall, at the election of the Corporation, cease
      and terminate and be of no further force or effect whatsoever.

5.7   No Options shall be granted to any Optionee if such grant could result,
      at any time, in the issuance to any one individual and such individual's
      associates, within a one-year period, of a number of Shares exceeding 5%
      of the issued and outstanding Shares.

5.8   The aggregate number of Options granted to Consultants shall not exceed
      2% of the issued and outstanding Shares of the Corporation in any 12
      month period.

5.9   The aggregate number of options granted to persons employed in Investor
      Relations Activities shall not exceed 2% of the issued and outstanding
      Shares of the Corporation in any 12 month period. Options issued to
      consultants providing Investor Relations services must vest in stages
      over 12 months with no more than 1/4 of the options vesting in any three
      month period.

5.10  The Corporation's shareholders must approve any Plan or grant that,
      together with all of the Corporation's other previously established stock
      option plans or grants, could result at any time in the number of Shares
      reserved for issuance under stock options exceeding 10% of the issued and
      outstanding Shares.

5.11  The Corporation represents that all Employees, Consultants or Management
      Company Employees who receive Options will be, at the time of grant, a
      bona fide Employee, Consultant or Management Company Employee, as the
      case may be.

For the purposes of this Section 5, the phrase "issued and outstanding Shares"
excludes any Shares issued pursuant to the Plan or other stock options, stock
option plans, employee stock purchase plans or other compensation or incentive
mechanisms, over a preceding one-year period and "associate" means any person
associated with such Insider.

6.    TERMINATION OF EMPLOYMENT, DEATH

6.1   Subject to Sections 6.2 and 6.3 hereof and to any express resolution
      passed by the Board with respect to an Option, an Option and all rights
      to purchase Shares pursuant thereto shall expire and terminate within
      sixty (60) days after the Optionee who holds such Option ceases to be an
      Eligible Person. Options granted to an Optionee who is engaged in
      Investor Relations Activities shall expire and terminate within thirty
      (30) days after the Optionee who holds such Option ceases to be employed
      to provide Investor Relations Activities.

6.2   If an Optionee dies before the expiry of an Option in accordance with the
      terms thereof, the Optionee's legal representative(s) may, subject to the
      terms of the Option and the Plan:

      (a)   exercise the Option to the extent that the Optionee was entitled to
            do so at the date of his or her death at any time up to and
            including, but not after, a date one year following the date of
            death of the Optionee, or prior to the close of business on the
            expiration date of the Option, whichever is earlier; and

      (b)   with the prior written consent of the Board, exercise at any time
            up to and including, but not after, a date one year following the
            date of death of the Optionee, or prior to the close of business on
            the expiration date of the Option, whichever is earlier, any part
            of the Option which was not exercisable at the time of the
            Optionee's death to purchase all or any of the Optioned Shares as
            the Board may designate but not exceeding the number of Optioned
            Shares the Optionee would have otherwise been entitled to purchase
            had the Optionee survived.

6.3   For greater certainty, Options shall not be affected by any change of
      employment of the Optionee or by the Optionee ceasing to be a director of
      the Corporation provided that the Optionee continues to be an Eligible
      Person.

6.4   For the purposes of this Article 6, a determination by the Corporation
      that an Optionee was discharged for "cause" shall be binding on the
      Optionee; provided, however, that such determination shall not be
      conclusive of the Optionee's potential entitlement to damages for the
      loss of the right to exercise an Option in the event that a court of
      competent jurisdiction ultimately determines that the discharge was
      without "cause".

6.5   If an Optionee has been terminated "for cause" or does not exercise his
      or her options in accordance with the provisions of sections 6.2 or 6.3
      as the case may be, the number of options not exercised shall be added to
      the number of options remaining available to be granted under the Plan.

7.    EXERCISE OF OPTIONS

7.1   Subject to the provisions of the Plan, an Option may be exercised from
      time to time by delivery to the Corporation at its registered office of a
      written notice of exercise addressed to the Secretary of the Corporation
      specifying the number of Shares with respect to which the Option is being
      exercised and accompanied by payment in full, by cash or certified
      cheque, of the option Price of the Shares then being purchased.
      Certificates for such Shares shall be issued and delivered to the
      Optionee within a reasonable time following the receipt of such notice
      and payment.

7.2   Notwithstanding any of the provisions contained in the Plan or in any
      Option, the Corporation's obligation to issue Shares to an Optionee
      pursuant to the exercise of any Option shall be subject to:

      (a)   completion of such registration or other qualification of such
            Shares or obtaining approval of such governmental or regulatory
            authority as the Corporation shall determine to be necessary or
            advisable in connection with the authorization, issuance or sale
            thereof;

      (b)   the admission of such Shares to listing on any stock exchange on
            which the Shares may then be listed;

      (c)   the receipt from the Optionee of such representations, warranties,
            agreements and undertakings, as the Corporation determines to be
            necessary or advisable in order to safeguard against the violation
            of the securities laws of any jurisdiction; and

      (d)   the satisfaction of any conditions on exercise prescribed pursuant
            to Section 3.4 hereof.

      In this connection the Corporation shall, to the extent necessary, take
      all commercially reasonable steps to obtain such approvals, registrations
      and qualifications as may be necessary for the issuance of such Shares in
      compliance with applicable securities laws and for the listing of such
      Shares on any stock exchange on which the Shares are then listed.

7.3   Options shall be evidenced by a share option agreement, instrument or
      certificate in such form not inconsistent with this plan as the Board may
      from time to time determine as provided for under Subsection 3.2 (g),
      provided that the substance of Article 5 be included therein.

8.    CERTAIN ADJUSTMENTS

8.1   In the event of any subdivision or redivision of the Shares into a
      greater number of Shares at any time after the grant of an Option to any
      Optionee and prior to the expiration of the term of such Option, the
      Corporation shall deliver to such Optionee at the time of any subsequent
      exercise of his or her Option in accordance with the terms hereof, in
      lieu of the number of Shares to which he or she was theretofore entitled
      upon such exercise, but for the same aggregate consideration payable
      therefor, such number of Shares as such Optionee would have held as a
      result of such subdivision or redivision if, on the record date thereof,
      the Optionee had been the registered holder of the number of Shares to
      which he or she was theretofore entitled upon such exercise.

8.2   In the event of any consolidation of the Shares into a lesser number of
      Shares at any time after the grant of an Option to any Optionee and prior
      to the expiration of the term of such Option, the Corporation shall
      deliver to such Optionee at the time of any subsequent exercise of his or
      her Option in accordance with the terms hereof, in lieu of the number of
      Shares to which he or she was theretofore entitled upon such exercise,
      but for the same aggregate consideration payable therefor, such number of
      Shares as such Optionee would have held as a result of such consolidation
      if, on the record date thereof, the Optionee had been the registered
      holder of the number of Shares to which he or she was theretofore
      entitled upon such exercise.

8.3   If at any time after the grant of an Option to any Optionee and prior to
      the expiration of the term of such Option, the Shares shall be
      reclassified, reorganized or otherwise changed, otherwise than as
      specified in Sections 8.1 and 8.2 or, subject to the provisions of
      Subsection 9.2(a) hereof, the Corporation shall consolidate, merge or
      amalgamate with or into another corporation (the corporation resulting or
      continuing from such consolidation, merger or amalgamation being herein
      called the "Successor Corporation") or, the Corporation shall pay a stock
      dividend (other than any dividends in the ordinary course), the Optionee
      shall be entitled to receive upon the subsequent exercise of his or her
      Option in accordance with the terms hereof and shall accept in lieu of
      the number of Shares to which he or she was theretofore entitled upon
      such exercise but for the same aggregate  consideration payable therefor,
      the aggregate number of shares of the appropriate class and/or other
      securities of the Corporation or the Successor Corporation (as the case
      may be) and/or other consideration from the Corporation or the Successor
      Corporation (as the case may be) that the Optionee would have been
      entitled to receive as a result of such reclassification, reorganization
      or other change or, subject to the provisions of Subsection 9.2(a)
      hereof, as a result of such consolidation, merger, amalgamation, or stock
      dividend, if on the record date of such reclassification, reorganization,
      other change or stock dividend, or the effective date of such
      consolidation, merger or amalgamation or dividend payment, as the case
      may be, he or she had been the registered holder of the number of Shares
      to which he or she was theretofore entitled upon such exercise.

8.4   In the event the Corporation should declare and pay a special cash
      dividend or other distribution out of the ordinary course, a special
      dividend in specie on the Shares, or a stock dividend other than in the
      ordinary course, the Option Price of all Options outstanding on the
      record date of such dividend or other distribution shall be reduced by an
      amount equal to the cash payment or other distribution or the fair market
      value of the dividend in specie or stock dividend or other distribution,
      as determined by the Board in its sole discretion.  Any such reduction in
      the Option Price shall be subject to regulatory approval and the Option
      Price shall not be less than $0.01 per Share.

9.    AMENDMENT OR DISCONTINUANCE OF THE PLAN

9.1   The Board may amend or discontinue the Plan at any time, provided,
      however, that no such amendment may materially and adversely affect any
      Option previously granted to an Optionee without the consent of the
      Optionee, except to the extent required by law.  Any such amendment
      shall, if required, be subject to the prior approval of, or acceptance
      by, any stock exchange on which the Shares are listed and posted for
      trading.

9.2   Notwithstanding anything contained to the contrary in this Plan or in any
      resolution of the Board in implementation thereof:

      (a)   in the event the Corporation proposes to amalgamate, merge or
            consolidate with any other corporation (other than a wholly-owned
            Subsidiary) or to liquidate, dissolve or wind-up, or in the event
            an offer to purchase or repurchase the Shares of the Corporation or
            any part thereof shall be made to all or substantially all holders
            of Shares of the Corporation, the Corporation shall have the right,
            upon written notice thereof to each Optionee holding Options under
            the Plan, to permit the exercise of all such Options within the 20
            day period next following the date of such notice and to determine
            that upon the expiration of such 20 day period, all rights of the
            Optionees to such Options or to exercise same (to the extent not
            theretofore exercised) shall ipso facto terminate and cease to have
            further force or effect whatsoever;

      (b)   in the event of the sale by the Corporation of all or substantially
            all of the assets of the Corporation as an entirety or
            substantially as an entirety so that the Corporation shall cease to
            operate as an active business, any outstanding Option may be
            exercised as to all or any part of the Optioned Shares in respect
            of which the Optionee would have been entitled to exercise the
            Option in accordance with the provisions of the Plan at the date of
            completion of any such sale at any time up to and including, but
            not after the earlier of: (i) the close of business on that date
            which is thirty (30) days following the date of completion of such
            sale; and (ii) the close of business on the expiration date of the
            Option; but the Optionee shall not be entitled to exercise the
            Option with respect to any other Optioned Shares;

      (c)   subject to the rules of any relevant stock exchange or other
            regulatory authority, the Board may, by resolution, advance the
            date on which any Option may be exercised or extend the expiration
            date of any Option.  The Board shall not, in the event of any such
            advancement or extension, be under any obligation to advance or
            extend the date on or by which Options may be exercised by any
            other Optionee; and

      (d)   the Board may, by resolution, but subject to applicable regulatory
            requirements, decide that any of the provisions hereof concerning
            the effect of termination of the Optionee's employment shall not
            apply to any Optionee for any reason acceptable to the Board.

Notwithstanding the provisions of this Article 9, should changes be required to
the Plan by any securities commission, stock exchange or other governmental or
regulatory body of any jurisdiction to which the Plan or the Corporation now is
or hereafter becomes subject, such changes shall be made to the Plan as are
necessary to conform with such requirements and, if such changes are approved
by the Board, the Plan as amended, shall be filed with the records of the
Corporation and shall remain in full force and effect in its amended form as of
and from the date of its adoption by the Board.

10.   MISCELLANEOUS PROVISIONS

10.1  An Optionee shall not have any rights as a shareholder of the Corporation
      with respect to any of the Shares covered by such Option until the date
      of issuance of a certificate for Shares upon the exercise of such Option,
      in full or in part, and then only with respect to the Shares represented
      by such certificate or certificates.  Without in any way limiting the
      generality of the foregoing, no adjustment shall be made for dividends or
      other rights for which the record date is prior to the date such share
      certificate is issued.

10.2  Nothing in the Plan or any Option shall confer upon an Optionee any right
      to continue or be re-elected as a director of the Corporation or any
      right to continue in the employ of the Corporation or any Subsidiary, or
      affect in any way the right of the Corporation or any Subsidiary to
      terminate his or her employment at any time; nor shall anything in the
      Plan or any Option be deemed or construed to constitute an agreement, or
      an expression of intent, on the part of the Corporation or any Subsidiary
      to extend the employment of any Optionee beyond the time which he or she
      would normally be retired pursuant to the provisions of any present or
      future retirement plan of the Corporation or any Subsidiary, or beyond
      the time at which he or she would otherwise be retired pursuant to the
      provisions of any contract of employment with the Corporation or any
      Subsidiary.

10.3  Notwithstanding Section 5.8 hereof, Options may be transferred or
      assigned between an Eligible Individual and the related Employee
      Corporation provided the assignor delivers notice to the Corporation
      prior to the assignment.

10.4  The Plan and all matters to which reference is made herein shall be
      governed by and interpreted in accordance with the laws of the Province
      of Ontario and the laws of Canada applicable therein.

11.   SHAREHOLDER AND REGULATORY APPROVAL

11.1  The Plan shall be subject to ratification by the shareholders of the
      Corporation to be effected by a resolution passed at a meeting of the
      shareholders of the Corporation, and to acceptance by any other relevant
      regulatory authority.  Any Options granted prior to such ratification and
      acceptance shall be conditional upon such ratification and acceptance
      being given and no such Options may be exercised unless and until such
      ratification and acceptance are given.

<PAGE>

                       RESOLUTIONS OF THE DIRECTORS OF

                                CHEC RAIL INC.

                  APPROVAL OF THE EMPLOYEE STOCK OPTION PLAN

BE IT RESOLVED THAT:

1.    the Employee Stock Option Plan (the "Plan"), a copy of which is annexed
      hereto, be and the same is hereby approved;

2.    the granting to those Eligible Persons of the Corporation as the
      Directors of the Corporation may from time to time determine (the
      "Grantee" and collectively the "Grantees"), of options (the "Options")
      pursuant to the Plan to purchase an aggregate of 3,000,000 common shares
      of the Corporation at a price per share and on such other terms and
      conditions as any director or officer may approve consistent with the
      Plan, such approval being conclusively evidenced by the execution and
      delivery by such director or officer on behalf of the Corporation of
      Option Agreements (as hereinafter defined) to each of the Grantees, be
      and the same is hereby approved

3.    all of the Options shall be exercisable in whole or in part at any time
      and from time to time prior to February 1, 2012;

4.    any director or officer of the Corporation be and is hereby authorized
      and directed to execute under the corporate seal of the Corporation and
      to deliver to each of the Grantees an option agreement (the "Option
      Agreement") on such terms and conditions as he may determine, but in each
      case consistent with the terms of the Plan and this resolution, such
      determination to be conclusively evidenced thereby;

5.    the directors of the Corporation will fix the exercise price per share at
      the time of issuance as the consideration for the issuance of the common
      shares issued pursuant to this resolution;

6.    upon the exercise of an Option by a Grantee, at any time or from time to
      time in accordance with the Plan, the common shares in respect of which
      the Option is exercised shall be issued as fully paid and non-assessable
      and the transfer agent and registrar of the Corporation is hereby
      authorized and directed to issue, countersign and register a certificate
      or certificates representing such common shares to be issued in the names
      of such Grantee;

7.    any one director or officer be and they are hereby delegated the
      authority to execute and deliver, on behalf of the Corporation and under
      its corporate seal or otherwise, all agreements, instruments, notices,
      consents, acknowledgments, certificates and other documents and do all
      such acts and things as such officer may consider necessary, desirable or
      useful for the purposes of giving effect to the foregoing resolutions or
      any other agreements or instruments herein referred to, including the
      registration, recording and filing of any agreement or instrument; and

8.    these resolutions may be executed in counterparts and such counterparts
      together shall constitute a single instrument.  Delivery of an executed
      counterpart of these resolutions by electronic means, including, without
      limitation, by facsimile transmission or by electronic delivery in
      portable document format (".pdf") or tagged image file format (".tif"),
      shall be equally effective as delivery of a manually executed counterpart
      hereof.  Any party delivering an executed counterpart of these
      resolutions by electronic means shall also deliver a manually executed
      counterpart hereof by mail or courier.

      THE UNDERSIGNED, being all the directors of the Corporation, hereby sign
the foregoing resolution pursuant to the provisions of the Business
Corporations Act (Ontario).

Dated as of the 1st day of February, 2005.

/s/ Ira Lyons
----------------
/s/ Frank Carino
----------------

<PAGE>

                      RESOLUTIONS OF THE SHAREHOLDERS OF

                                CHEC RAIL INC.

                    APPROVAL OF THE 2005 STOCK OPTION PLAN

BE IT RESOLVED THAT:

      1. the Corporation be authorized to create an incentive stock option plan
         reserving for issuance that number of common shares which shall not
         exceed 12% of the issued and outstanding common shares of the
         Corporation from time to time;

      2. the directors of the Corporation be authorized to revoke the foregoing
         resolution without further approval of the shareholders; and

3.    any one director or officer be and they are hereby delegated the
      authority to execute and deliver, on behalf of the Corporation and under
      its corporate seal or otherwise, all agreements, instruments, notices,
      consents, acknowledgments, certificates and other documents and do all
      such acts and things as such officer may consider necessary, desirable or
      useful for the purposes of giving effect to the foregoing resolutions or
      any other agreements or instruments herein referred to, including the
      registration, recording and filing of any agreement or instrument.

      THE UNDERSIGNED, being the sole shareholder of the Corporation, hereby
signs the foregoing resolutions pursuant to the provisions of the Business
Corporations Act (Ontario).

Dated as of the 1st day of February, 2005.

CANADIAN HYDROGEN ENERGY COMPANY

Per:       /s/ Frank Carino
       --------------------
       Name:   Frank Carino
       Title:  Secretary

      I have the authority to bind the corporation

      /s/ Ira Lyons
-------------------
          Ira Lyons

<PAGE>SETTLEMENT AGREEMENT AND RELEASE

EXHIBIT 10.1

SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement (“Agreement”) is made as of October 15, 2008 by and between GigaBeam Corporation, 4021 Stirrup Creek Drive, Suite 400, Durham, North Carolina 27703 (“Gigabeam”), and Portside Growth and Opportunity Fund, c/o Ramius LLC, 599 Lexington Avenue, 20th Floor, New York, New York 10022 (“Portside”).  Gigabeam and Portside are sometimes referred to herein, individually, as a “Party,” and, collectively as the “Parties.”

WHEREAS, Portside commenced an action against  Gigabeam on August 3, 2007 in the United States District Court for the Southern District of New York, captioned Portside Growth and Opportunity Fund v. Gigabeam Corporation, bearing Index No. 07 Civ. 6990 (the “Action”);

WHEREAS, the Parties have engaged in settlement negotiations and have now reached an agreement, fully and finally compromising, settling, and resolving the disputes between the Parties relating to Portside’s claims as alleged in its complaint; and

WHEREAS, the Parties each have received the advice of counsel in the preparation, drafting, and execution of this Agreement, which was negotiated at arm’s length.

NOW, THEREFORE, in consideration of the mutual promises and representations herein contained, the undertakings herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.

Effective Date.  This Agreement will be effective on the date on which it has been executed by all Parties.

2.

General Release from Portside.  Effective upon the receipt of the funds and Shares due under paragraph 4, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Portside, its parents, subsidiaries, affiliates, officers, directors, attorneys, employees, shareholders, members, agents, representatives, business entities, partners, and successors in interest (for this section only, the “Releasors”) hereby releases and discharges Gigabeam, its parents, subsidiaries, affiliates, officers, directors, attorneys, employees, shareholders, members, agents, representatives, business entities, partners, and successors in interest (for this section only, the “Releasees”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, whether known or unknown, in law or equity, of every kind and nature which against the Releasees, the Releasors ever had, now have, or hereafter can, shall, or may have, for, upon, or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the day of the date of this RELEASE, except for the obligations of Gigabeam under this Agreement.

3.

General Release from Gigabeam.  For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Gigabeam, its parents, subsidiaries, affiliates, officers, directors, attorneys, employees, shareholders, members, agents, representatives, business entities, partners, and successors in interest (for this section only, the “Releasors”) hereby releases Portside, its parents, subsidiaries, affiliates, officers, directors, attorneys, employees, shareholders, members, agents, representatives, business entities, partners, and successors in interest (for this section only, the “Releasees”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, whether known or unknown, in law or equity, of every kind and nature which against Releasees, the Releasors ever had, now have, or hereafter can, shall, or may have, for, upon, or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the day of the date of this RELEASE, except for the obligations of Portside under this Agreement.

4.

Consideration.  In exchange for the general releases set forth above in Sections 2 and 3, as well as other valuable consideration, the Parties acknowledge and agree to the following:

Upon notice that both Parties have executed this Agreement, (I) (i) Portside shall promptly surrender to Gigabeam (1) any and all (but in no case less than 342) shares of Gigabeam Series B Preferred Stock held by Portside (the “Preferred Stock”), and (2) any and all warrants exercisable for Gigabeam Common Stock issued to Portside (the “Warrants”) and in exchange, (ii) Gigabeam shall, prior to October 31, 2008 and promptly upon receipt of the Preferred Stock and Warrants, issue and deliver to Portside all right, title and interest in and to 1,304,578 shares of Gigabeam Common Stock (the “Shares”) and (II) Gigabeam shall pay or cause to be paid to Portside by wire transfer of immediately available funds the sum of $99,000, to be paid in weekly installments beginning October 24, 2008 and each week thereafter on the Friday of that week unless such Friday is not a business day in which case the payment will be due on the following Monday.  Payments shall be as set forth in the following schedule:

					
	October 24, 2008

	$500

	 
	January 2, 2009

	$500

	October 31, 2008

	$3,000

	 
	January 9, 2009

	$500

	November 7, 2008

	$500

	 
	January 16, 2009

	$500

	November 14, 2008

	$500

	 
	January 23, 2009

	$500

	November 21, 2008

	$500

	 
	January 30, 2009

	$7,500

	November 28, 2008

	$3,000

	 
	February 6, 2009

	$500

	December 5, 2008

	$500

	 
	February 13, 2009

	$500

					
	December 12, 2008

	$500

	 
	February 20, 2009

	$500

	December 19, 2008

	$500

	 
	February 27, 2009

	$71,000

	December 26, 2008

	$7,500

	 
	TOTAL

	$99,000

  All outstanding cash will be due on February 27, 2009.  Gigabeam may, in its sole discretion, prepay all cash amounts due without penalty at any time.  Portside further agrees that, upon notice that both Parties have executed this Agreement, Gigabeam may cancel the Warrants. The exchange of the Preferred Stock and Warrants for the Shares is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933 Act, as amended (the "Securities Act").   

5.

No Admission.  Nothing in this Agreement is intended to or may be construed in any manner as an admission by any of the Parties of any liability, wrongdoing, violation of law, or unlawful conduct whatsoever.  Neither this Agreement nor any of its provisions shall be offered or received in evidence against any Party in any action or proceeding, except an action or proceeding to enforce its terms.  The consideration offered herein is the full, final and complete settlement of all claims asserted or that might have been asserted by Portside against Gigabeam, or its parents, subsidiaries, affiliates, officers, directors, attorneys, employees, shareholders, members, agents, representatives, business entities, partners, and successors in interest.

6.

Stipulation of Discontinuance.  Upon the execution of this Agreement, the Parties shall execute and submit to the Court a Stipulation of Dismissal without Prejudice, without costs to any Party.  Upon the receipt of the funds and Shares due under paragraph 4, the Parties shall execute and submit to the Court a Stipulation of Dismissal with Prejudice, without costs to any Party, in a form as set forth in Exhibit A hereto.

7.

Entire Understanding.  No statements, promises or representations have been made by any Party to any other, or relied upon, and no consideration has been offered, promised, expected or held out other than as may be expressly provided herein.  This Agreement sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior contracts, agreements, arrangements, communications, discussions, representations and warranties, whether oral or written, between the Parties.  This Agreement may be amended only by a writing executed by each of the Parties.

8.

Public Disclosure.  No later than 8:30 a.m., New York City time, on the second business day following the execution of this Agreement, Gigabeam shall file with the Securities and Exchange Commission a Current Report on Form 8-K reasonably acceptable to Portside describing the material terms of this Agreement as required by the Securities Exchange Act of 1934, as amended.  The Parties shall not make any statements which criticize, demean, malign or disparage another Party to this Agreement.

9.

Representations and Warranties.  Each Party hereto represents and warrants that (a) it has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity not a Party hereto any claim, debt, covenant, agreement, contract, liability, demand, obligation, account, expense, action, cause of action or suit being released hereunder; (b) each Party has full right, power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby; (c) each Party holds all right, title and interest in and to any securities tendered by it to the other Party pursuant to this Agreement; (d) all acts or proceedings required to be taken by the Parties to authorize the execution, delivery and performance of this Agreement, and the consummation of all the transactions contemplated hereby, have been duly and properly taken; (e) no consent, approval or authorization of any third party is required in order to consummate the transactions contemplated by this Agreement or to vest full right, title and interest in and to the Shares upon the Purchaser except as has otherwise already been obtained; (f) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement in accordance with the terms and conditions of this Agreement have been duly and validly authorized by all necessary action on the part of such Party and will not violate (i) the articles of incorporation, bylaws or other organizational certificates or documents of such Party, as amended to date; (ii) to such Party’s knowledge, any order, judgment, injunction, award or decree of any court, or governmental or regulatory body against, or binding upon, or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon such Party or upon the properties or business of such Party, or (iii) to such Party’s knowledge, any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to such Party or to the properties or business of such Party; and (g) this Agreement has been duly executed and delivered and constitutes the lawful, valid and legally binding obligations of each Party enforceable in accordance with their respective terms.  

10.

The Shares.  Gigabeam further represents, warrants and covenants that:

(a)

Upon their issuance to Portside, the Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with Portside being entitled to all rights accorded to a holder of Gigabeam Common Stock. The issuance of the Shares as contemplated by this Agreement is exempt from the registration requirements of the Securities Act, and neither Gigabeam nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 

(b)

The Shares shall constitute 9.99% of Gigabeam’s issued and outstanding Common Stock immediately after giving effect to their issuance.  If, after the date this Agreement is executed, but before the Shares are issued, Gigabeam issues more than 100,000 shares of its common stock, Gigabeam will issue to Portside a number of shares of Gigabeam common stock equal to 11.1% of the additional shares issued which shares shall be treated as Shares for all purposes under this Agreement.

(c)

For the purposes of Rule 144 under the Securities Act, Gigabeam acknowledges that the holding period of the Shares may be tacked onto the holding 

period of the Preferred Shares and Warrants.  The Company further acknowledges that the Shares may be freely transferred or sold pursuant to Rule 144 under the 1933 Act without the requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144.  Gigabeam agrees not to take a position contrary to this Section 10(c).  However, Gigabeam will not provide a legal opinion on these matters.  Gigabeam will permit Portside’s counsel to submit a legal opinion to GigaBeam’s transfer agent, in a form acceptable to such transfer agent, opining as to Rule 144.

11.

Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given when received if personally delivered, sent by facsimile, or by established overnight courier as follows:

To Portside:

c/o Ramius LLC

599 Lexington Avenue, 20th Floor

New York, NY 10022

Attn: Jeffrey Smith / Owen Littman

Fax: (212) 845-7986

To Gigabeam:

c/o Amy Trombly

Trombly Business Law

1320 Centre Street, Suite 202

Newton, MA  02459

12.

Counterparts.  This Agreement may be executed in any number of counterparts and by facsimile, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.

13.

Successors and Assigns.  This Agreement shall inure to the benefit of, be binding upon and enforceable by the successors and assigns of Portside and Gigabeam.

14.

Governing Law and Venue.  This Agreement shall be governed by, interpreted and construed in accordance with and under the laws of the State of New York without regard to principles of conflicts of law.  The Parties agree that New York courts shall have exclusive jurisdiction over all disputes and controversies arising out of this Settlement Agreement, and any claim for relief and other legal proceeding to interpret or enforce the respective rights of the Parties must be filed in the Supreme Court of the State of New York, New York County, or the United States District Court for the Southern District of New York.  The Parties hereby consent to personal jurisdiction and venue in the Supreme Court of the State of New York, County of New York, and the United States District Court for the Southern District of New York solely for any dispute arising out of this Agreement.  The prevailing Party or Parties shall be entitled to recover from the losing Party or Parties their reasonable attorney’s fees and costs incurred in any lawsuit or other action brought to enforce any right arising out of this Agreement.

15.

WAIVER OF JURY TRIAL.  ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT WILL BE RESOLVED BY A JUDGE ALONE AND EACH OF THE PARTIES WAIVES ANY RIGHT TO A JURY TRIAL THEREOF.

16.

Construction; Drafting; No Prejudice.  Should any provision of this Agreement require judicial interpretation, it is agreed that the Court, in interpreting or considering such provision, shall not apply any presumption that the terms hereof shall be more strictly construed against the Party who itself or through its agent prepared the same, it being agreed that all Parties hereto have participated in the drafting of this Agreement and that legal counsel was consulted by each Party in connection with the drafting, finalization and execution of this Agreement.

17.

Severability.  If any provision or term of this Agreement is held to be illegal, invalid, or unenforceable, such provision or term shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement.  Furthermore, in lieu of each such illegal, invalid, or unenforceable provision or term there shall be added automatically as a part of this Agreement another provision or term as similar to the illegal, invalid, or unenforceable provision as may be possible and that is legal, valid, and enforceable.

18.

Captions.  Caption headings of this Agreement are inserted for convenience purposes and are to have no substantive effect.

IN WITNESS WHEREOF, the Parties have each duly executed this Agreement as of the date first above written.

		
	Portside Growth and Opportunity Fund

	 

	 

	By:

	/s/ Jeffrey C. Smith

	Name:

	Jeffrey C. Smith

	Title:

	Authorized Signatory

		
	GigaBeam Corporation

	 

	 

	By:

	/s/ S. Jay Lawrence

	Name:

	S. Jay Lawrence

	Title:

	Chief Executive Officer

EXHIBIT A

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

			
	-------------------------------------------------------------------------

	x

	No. 07 Civ. 6990 (NRB)

	PORTSIDE GROWTH AND OPPORTUNITY FUND,

Plaintiff,

v.

GIGABEAM CORPORATION,

Defendant.

	:

:

:

:

:

:

:

:

:

	-------------------------------------------------------------------------

	x

	 

STIPULATION OF DISMISSAL WITH PREJUDICE

WHEREAS plaintiff Portside Growth and Opportunity Fund (“Portside”) and defendant Gigabeam Corporation (“Gigabeam”), have resolved their differences and settled the above-captioned action; and

WHEREAS no party to the Settlement or to this action is an infant or incompetent person for whom a committee has been appointed and no person not a party has an interest in the subject matter of this action;

IT IS HEREBY STIPULATED AND AGREED, by and among the undersigned, that the above-captioned action, including all claims and counterclaims that are asserted or could have been asserted therein, is hereby dismissed with prejudice and without costs to any party.

				
	Dated:  ______________, 2008

	 

	New York, New York

	 

	 
	 

	By:

	 
	By:

	 

	 
	Thomas J. Fleming

Joshua S. Androphy

	 
	Robert I. Bodian

Jason D. Padgett

	 
	OLSHAN GRUNDMAN FROME

ROSENZWEIG & WOLOSKY LLP.

	 
	MINTZ LEVIN COHN FERRIS

GLOVSKY & POPEO, P.C.

	 
	Park Avenue Tower

65 East 55th Street

New York, New York  10022

	 
	The Chrysler Center

666 Third Avenue

New York, New York  10017

	 
	 
	 
	 

	 
	Attorneys for Plaintiff

Portside Growth and Opportunity Fund

	 
	Attorneys for Defendant

Gigabeam Corporation

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