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As filed with the Securities and Exchange Commission on
February ___, 1997
Registration No. 333-______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
ALPHA RESOURCES, INC.
(Exact name of small business issuer as specified in its charter)
_______________
<TABLE>
<C> <C> <C)
Florida 6770 59-3422883
(State or other (Primary standard (I.R.S. Employer
jurisdiction of industrial Identification No.)
incorporation or classification code
organization) number)
</TABLE>
___________________
901 Chestnut Street, Suite A
Clearwater, FL 34616
(813) 447-3620
(Address, including zip code, and telephone number, including
area code,
of small business issuer's principal executive offices)
_______________
Gerald L. Couture
901 Chestnut Street, Suite A
Clearwater, FL 34616
(813) 447-3620
(Name, address, including zip code, and telephone number,
including
area code, of agent for service)
_______________
Copies to:
Michael T. Cronin, Esquire
Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A.
911 Chestnut Street
P.O. Box 1368
Clearwater, Florida 34617
(813) 461-1818
_______________
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering.
If this Form is a post-effective amendment filed pursuant to
Rule 4629c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box.
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount to Proposed Proposed Amount of
Title of Each Class of be Maximum Maximum Registration
Securities to be Registered Offering Aggregate Fee
Registered Price Per Offering
Security(1) Price(1)
<S> <C> <C> <C> <C>
Units (2) 10,000 Units $6.00 $60,000 $20.69
Common Stock, $.0001
par value (2) 600,000 Shares N/A N/A N/A
Underwriter's Warrants (3) 1000 Warrants $.01 $.01 $.01
Common Stock, $.0001
par value (4) 60,000 Shares $0.12 $7.20 $2.48
Total $23.18
</TABLE>
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(1) Estimated solely for the purpose of determining the
registration fee.
(2) Includes an aggregate of 600,000 shares of Common Stock
to be offered to the public in 1,000 Units. Each Unit
consists of 60 shares of Common Stock.
(3) Underwriter's Warrants to purchase 1,000 Units,
consisting of an aggregate of 60,000 shares of Common Stock.
(4) Represents shares of Common Stock underlying
Underwriter's Warrants.
______________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Cross Reference Sheet Pursuant to Rule 404(a)
Cross reference between Item of Part I of Form SB-2 and the
prospectus filed by the above Company as of the registration
statement.
<TABLE>
<CAPTION>
Registration Statement
Item Number Prospectus Heading
<S> <C>
1. Forepart of the Registration Statement FRONT COVER
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover INSIDE FRONT COVER
Pages of Prospectus and OUTSIDE BACK COVER
3. Summary Information and Risk Factors PROSPECTUS SUMMARY and RISK
FACTORS
4. Use of Proceeds USE OF PROCEEDS
5. Determination of Offering Price UNDERWRITING
6. Dilution DILUTION and COMPARATIVE DATA
7. Selling Security Holders NOT APPLICABLE
8. Plan of Distribution UNDERWRITING
9. Legal Proceedings LITIGATION
10. Directors, Executive Officers, Promoters, MANAGEMENT
and Control Persons
11. Security Ownership of Certain Beneficial PRINCIPAL SHAREHOLDERS
Owners and Management
12. Description of Securities DESCRIPTION OF SECURITIES
13. Interest of Names Experts and Counsel EXPERTS and LEGALITY OF SHARES
14. Disclosure of Commission Position on UNDERWRITING
Indemnification for Securities Act
Liabilities
15. Organization Within Five Years PROSPECTUS SUMMARY and BUSINESS
16. Description of Business BUSINESS
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17. Management's Discussion and Analysis NOT APPLICABLE
or Plan of Operations
18. Description of Property BUSINESS
19. Certain Relationships and Related CERTAIN TRANSACTIONS
Transactions
20. Market for Common Equity and Related NOT APPLICABLE
Stockholder Matters
21. Executive Compensation MANAGEMENT
22. Financial Statements FINANCIAL STATEMENTS
23. Changes in and Disagreements with NOT APPLICABLE
Accountants on Accounting and
Financial Disclosure
</TABLE>
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ALPHA RESOURCES, INC.
10,000 Units
Offering Price $6.00 Per Unit
Each Unit consists of 60 shares of common stock, par value
$0.0001 (the "Common Stock") of Alpha Resources, Inc. (the
"Company"). The offering price of the Units has been arbitrarily
determined by the Company, and bear no relationship to the assets
or book value of the Company or any other recognized criteria of
value. (See "DESCRIPTION OF SECURITIES" and "UNDERWRITING").
This offering will be conducted in accordance with Rule 429
promulgated under the Securities Act of 1933, as amended
("Securities Act"). The net offering proceeds, after deduction
for underwriting commissions and Underwriter's non-accountable
expense allowance (estimated at $7,800, if the entire offering is
sold, or $3,900, if only the minimum offering is sold), and the
securities to be issued to investors must be deposited in an
escrow account (the "Deposited Funds" and "Deposited Securities,"
respectively). While held in the escrow account, the securities
may not be traded or transferred. Except for an amount up to 10%
of the Deposited Funds (estimated at $5,220, if the entire
offering is sold, or at $2,610, if only the minimum offering is
sold which is releasable to the Company under Rule 419, the
Deposited Funds and the Deposited Securities may not be released
until an acquisition meeting certain specified criteria has been
made and a sufficient number of investors reaffirm their
investment in accordance with the procedures set forth in Rule
419. Pursuant to these procedures, a new prospectus, which
describes an acquisition candidate and its business and includes
audited financial statements, will be deliver to all investors.
The Company must return the pro rata portion of the Deposited
Funds to any investor who does not elect to remain an investor.
Unless a sufficient number of investors elect to remain
investors, all investors will be entitled to the return of a pro
rata portion of the Deposited Proceeds (and any interest earned
thereon (and none of the Deposited Securities will be issued to
investors). If the event an acquisition is not consummated
within 15 months of the effective date, the Deposited Funds will
be returned on a pro rata basis to all investors. (See
"PROSPECTUS SUMMARY: Investors' Rights to Reconfirm Investment
Under Rule 419").
THE SECURITIES OFFERED INVOLVE A VERY HIGH DEGREE OF RISK
AND IMMEDIATE SUBSTANTIAL DILUTION, AND SHOULD BE CONSIDERED ONLY
BY THOSE PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. (See "RISK FACTORS").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Offering Price Proceeds
to Public Commissions(1) to Company(2)
<S> <C> <C> <C>
Per Unit Total (3) $6.00 .60 5.40
Minimum $30,000 3,000 27,000
Maximum $60,000 6,000 54,000
</TABLE>
The date of this Prospectus is ______________, 1997
GREENWAY CAPITAL CORPORATION
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(1) Underwriting commissions shown do not include the
compensation to be received by Greenway Capital Corporation
("Underwriter"), in the form of: (i) a non-accountable
expense allowance of 3% of the gross proceeds of the
offering (ii) warrants ("Underwriter Warrants") to purchase
units ("Underwriter Units") equal to 10% of the total Units
sold in the offering at a price of $7.20 per Underwriter
Unit. In addition, the Company has agreed to indemnify the
Underwriter against certain civil liabilities, including
liabilities which may arise under the Securities Act (See
"Underwriting").
(2) Before deducting expenses of the offering payable by the
Company (including the Underwriter's non-accountable expense
allowance of from $900 to $1,800) estimated at $14,400 if
the minimum offering is sold and $18,300 if the entire
offering is sold.
(3) The offering is being conducted by the Underwriter on a
"5,000 Unit minimum, 10,000 Unit maximum" basis. In the
event that the minimum of 5,000 Units having a gross
subscription price of $30,000 is not sold within three
months following the effective date of this prospectus
(unless extended by the Company and Underwriter for an
additional period not to exceed three months), all proceeds
raised will be promptly returned to investors, without
paying interest and without deducting any sales commissions
or expenses of the offering. All proceeds from the sale of
Units will be placed in escrow with ___________________,
________________________, no later than noon of the next
business day following receipt. Subscribers will not have
the use of their funds, will not earn interest on funds in
escrow, and will not be able to obtain return of funds
placed in escrow unless and until the minimum offering
period expires. In the event the minimum number of shares
is sold within the offering period, the offering will
continue three months following the date of this prospectus,
all offered Units are sold, or terminated by the Company,
whichever occurs first. (See "UNDERWRITING"). Assuming the
minimum number of Units is sold within the offering period,
the Deposited Funds and Deposited Securities will be held in
escrow and investors will not have the use of the Deposited
Funds or the right to receive and deal in the Deposited
Securities until released in accordance with the
requirements of Rule 419, which may be as long as 18 months
following the date of this prospectus. (See "PROSPECTUS
SUMMARY: Investors' Rights to Reconfirm Investment Under
Rule 419.")
FEDERAL LAW REQUIRES THAT ANY BROKER OR DEALER PARTICIPATING
IN THE ISSUANCE OF CERTAIN SECURITIES, INCLUDING THOSE OFFERED
HEREBY, DELIVER A COPY OF THE PROSPECTUS TO ANY PERSON WHO IS
EXPECTED TO RECEIVE A CONFIRMATION OF SALE AT LEAST 48 HOURS
PRIOR TO THE MAILING OF SUCH CONFIRMATION.
THE UNITS HAVE BEEN REGISTERED ONLY IN THE STATES OF
FLORIDA, ILLINOIS, AND NEW YORK, AND MAY ONLY BE SOLD TO PERSONS
WHO ARE RESIDENTS OF SUCH STATES. ACCORDINGLY, THE WARRANTS,
SHOULD THEY BECOME EXERCISABLE, MAY ONLY BE EXERCISED BY PERSONS
WHO RESIDE IN THOSE STATES. IF THE UNITS ARE REGISTERED IN ANY
OTHER STATES, THE COMPANY WILL AMEND THIS PROSPECTUS TO REFLECT
SUCH ADDITIONAL REGISTRATION.
THE STATES OF CONNECTICUT, IDAHO, AND SOUTH DAKOTA HAVE
ADOPTED REGULATIONS THAT MAY PROHIBIT PURCHASES OF THE COMPANY'S
SECURITIES WITHIN SUCH STATES IN ANY SUBSEQUENT TRADING MARKET
WHICH MAY DEVELOP. ACCORDINGLY, A LEGEND WILL BE PLACE ON ALL
CERTIFICATES REPRESENTING THE
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UNITS PROHIBITING SALE OF THE UNITS IN THE STATES OF CONNECTICUT,
IDAHO, AND SOUTH DAKOTA.
The Units are offered by the Underwriter, as agent for the
Company, subject to prior sale and withdrawal or cancellation of
the offering, without notice, by the Company or the Underwriter.
Offers to purchase and sales by the Company and the Underwriter
are subject to: (a) acceptance by the Company and the
Underwriter; (b) the sale of the minimum number of Units
specified herein; (c) the release and delivery to the Company of
the proceeds of this offering and delivery of the securities in
accordance with Rule 419; and (e) the right of the Company and
Underwriter to reject any and all offers to purchase.
None of the Company's officers, directors, and promoters,
and no other affiliate of the Company, has had any preliminary
contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger
between the Company and such other company (see "BUSINESS:
General"). None of the Company's officers, directors, and
promoters, and no other affiliate of the Company, knows of any
person or group of persons who are likely to purchase,
beneficially own, or control any portion of the Units offered.
There are no plans, proposals, arrangements, or understandings
with any person with regard to the development of a trading
market in any of the Company's securities following an
acquisition meeting the requirements of Rule 419.
The Company proposed to provide to shareholders within 180
days following the end of each fiscal year an annual report
containing a general description of its business operations and
financial statements which have been examined and reported on,
with an opinion expressed by an independent certified public
accountant. The Company's fiscal year end is December 31.
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PROSPECTUS SUMMARY
The Company
Alpha Resources, Inc. (the "Company"), was organized as a
Delaware corporation on January 13, 1997. Since inception, the
Company's activities have been limited to the sale of initial
shares in connection with its organization and the preparation of
this offering. A total of 120,000 shares of Common Stock have
been issued to officers and directors for an aggregate of $600 in
cash. Additional funds have been loaned to the Company by its
officers, directors and principal shareholders, to cover Company
expenses. See "CERTAIN TRANSACTIONS.") The Company proposed to
evaluate one or more businesses and ultimately acquire an
interest or otherwise participate in a business. As of the date
of this prospectus, no specific businesses have been investigated
by the Company, and it does not propose to engage in the
evaluation of any such businesses unless and until the successful
completion of the offering. Consequently, the Company has only
generally allocated the net proceeds of this offering to the
search for and participation in a business.
The Company's offices are located at 901 Chestnut Street,
Suite A, Clearwater, FL 34616, where its telephone number is
(813) 447-3620.
Investors' Rights to Reconfirm Investment Under Rule 419
General
The SEC has adopted Rule 419 relating to "blank check"
issuers (a development stage company that has no specific
business plan or has indicated that its plan is to engage in a
merger or acquisition with an unidentified company). This rule
provides that upon consummation of the offering there be
deposited into an escrow or special account all proceeds
received, less underwriting commissions and expenses, and all
securities issued. The set offering proceeds (less 10% which may
be withdrawn for expenses) must remain in escrow until the
earlier of an acquisition meeting certain criteria and
affirmation of the offering, or 18 months from the date hereof.
During such escrow period no trading in the "blank check"
issuer's securities may take place. Inasmuch as the Company is a
development stage company planning to engage in a merger or
acquisition with an unidentified company, the Company will be
subject to Rule 419.
Deposit of Offering Proceeds and Securities
Rule 419 requires that the net offering proceeds, after
deduction for underwriting compensation and offering expenses and
all securities to be issued be deposited into an escrow or trust
account (the "Deposited Funds" and "Deposited Securities,"
respectively) governed by an agreement which contains certain
terms and provisions specified by the rule. Under Rule 419, the
Deposited Funds (less 10% otherwise releasable under the rule)
and the Deposited Securities will be released to the Company and
to investors, respectively, only after the Company has met the
following three conditions. First, the Company must execute an
agreement for an acquisition(s) meeting certain prescribed
criteria. Second, the Company must successfully complete a
reconfirmation offering which includes certain prescribed terms
and condition. Third, the acquisition(s) meeting the prescribed
criteria must be consummated (see "Prescribed Acquisition
Criteria" and "Reconfirmation Offering" within this section).
Accordingly, the Company has entered into an escrow agreement
with _______________________ ("Unit Escrow Agent") and with
______________________, a banking corporation (the "Funds Escrow
Agent") which provides that:
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(1) The net proceeds will be deposited into an escrow
account maintained by the Funds Escrow Agent promptly
after the successful completion of the offering.
Except for the 10% of the Deposited Funds, which may be
released to the Company, the Deposited Funds and
interest or dividends thereon, if any, will be held for
the sole benefit of the investors and can be invested
only in a bank savings account, a money market fund, or
federal government securities or securities guaranteed
as to principal and interest by the federal government.
(2) All securities issued in connection with the
offering and any other securities issued with respect
to such securities, including securities issued with
respect to stock splits, stock dividends, or similar
rights, will be deposited directly into escrow with the
Unit escrow Agent promptly upon issuance. Certificates
for the Deposited Securities will be issued in the
names of the investors. Accordingly, the Deposited
Securities are deemed to be issued and outstanding, and
are held by the Unit Escrow Agent for the sole benefit
of the investors who retain all voting rights, if any,
with respect to the Deposited Securities. The
Deposited Securities held in escrow may not be
transferred, disposed of, nor any interested created
therein, other than by will or the laws of descent and
distribution, or, pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code
of 1986 or the Employee Retirement Income Security Act.
(3) Warrants, convertible securities, or other
derivative securities relating to securities held in
escrow may be exercised or converted in accordance with
their terms; provided, however, that the securities
received upon exercise or conversion together with any
cash or other consideration paid in connection with the
exercise or conversion, are to be promptly deposited
into escrow.
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds and the
Deposited Securities can be released the Company must first
execute one or more agreements to acquire one or more acquisition
candidates meeting certain specified criteria. The agreement
must provide for the acquisition of a business or assets for
which the fair market value of the business represents at least
80% of the offering proceeds, but excluding underwriting
commissions, underwriting expenses, and dealer allowances payable
to non-affiliates. For purpose of the offering, the estimated
fair value of the business or assets to be acquired must be at
least $48,000, if the entire offering is sold, or $24,000, if
only the minimum offering is sold. Once an acquisition agreement
meeting the above criteria has been executed, the Company must
successfully complete the mandated reconfirmation offering and
consummate the acquisition. Any agreement pertaining to an
acquisition will include a condition precedent to the effect that
investors representing 80% of the offering proceeds must elect to
reconfirm their investment in the Units, all as provided in Rule
419.
It is possible that the Company may propose to acquire a
business in the development stage. A business is in the
development stage if it is devoting substantially all of its
efforts to establishing a new business, and either planned
principal operations have commenced or planned principal
operations have commenced but there has been no significant
revenue therefrom. As noted above, under Rule 419 the Company
must acquire a business or assets for which the fair value of the
business represents at least 80% of the offering proceeds,
including funds received or to be received from the exercise of
Warrants, less certain underwriting expenses. Accordingly, the
Company's ability to acquire a business in the development stage
may be limited to the extent it cannot locate such businesses
with a fair value high enough to satisfy the requirements of Rule
419.
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Post Effective Amendment
Once the agreement governing the acquisition of a business
meeting the above criteria has been executed, Rule 419 requires
the Company to update the registration statement with a post-
effective amendment ("Amendment"). The Amendment must contain
information about: the proposed acquisition candidate (or
candidates, if more than one) and its business, including audited
financial statements,; the results of this offering; and, the use
of the funds disbursed from escrow. The Amendment must also
include the terms of the reconfirmation offer mandated by Rule
419. The reconfirmation offer will include certain prescribed
conditions which must be satisfied before the Deposited Funds and
Deposited Securities can be released from escrow.
Reconfirmation Offering
The reconfirmation offer must commence within five business
days after the effective date of the Amendment. Pursuant to Rule
419, the terms of the reconfirmation offer must include the
following conditions:
(1) The prospectus contained in the Amendment will be
sent to each investor whose securities are held in
escrow within five business days after the effective
date of the Amendment;
(2) Each investor will have not less than 20, nor more
than 45, business days from the effective date of the
Amendment to notify the Company in writing, that the
investor elects to remain an investor;
(3) If the Company does not receive written
notification from investors representing 80% of the
offering proceeds (estimated at $48,000, if the entire
offering is sold, or $24,000, if only the minimum
offering is sold), within 45 business days following
the effective date of their election to reconfirm their
investments in the Units, the Deposited Funds (and any
related interest or dividends) held in escrow for all
investors' will be returned to them on a pro rata basis
within five business days by first class mail or other
equally prompt means;
(4) The acquisition will be consummated only if
investors representing 90% of the offering proceeds,
including funds received or to be received from the
exercise of Warrants, notify the Company in writing of
their election to reconfirm their investments in the
Units within 45 business days following the effective
date;
(5) If an acquisition is consummated, any investor who
does not reconfirm his investment in the Units to the
Company in writing within 45 days following the
effective date of the Amendment will receive his pro
rata portion of the Deposited Funds (and any related
interest or dividends) held in escrow for all
investors' within five business days by first class
mail or other equally prompt means;
(6) If an acquisition is not consummated by
_____________________ (18 months from the date of this
Prospectus), the Deposited Funds held in escrow shall
be returned to all investors on a pro rata basis within
five business days by first class mail or other equally
prompt means.
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Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be released
to the Company and the investors, respectively, after the Unit
Escrow Agent and Funds Escrow Agent have received a signed
representation from the Company and any other evidence acceptable
to them that: the Company has executed one or more agreements for
the acquisition of one or more business for which the fair market
value of the business represents at least 80% of the offering
proceeds and has filed the required Amendment; the Amendment has
been declared effective, the mandated reconfirmation offer
containing the conditions prescribed by Rule 419 has been
completed, and the Company has satisfied all of the prescribed
conditions of the reconfirmation offer; and, the acquisition of
the business with the fair value of at least 80% of the offering
proceeds is consummated.
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RISK FACTORS
The purchase of the securities offered hereby involves a
high degree of risk. Each prospective investor should consider,
in addition to the negative implications of all material set
forth herein, the following specific risks, particularly in
relation to your own financial circumstances and ability to
suffer the loss of your entire investment.
Risk Factors Relating to the Company's Business
No Operating History
The Company was organized under the laws of the State of
Delaware on January 13, 1997, and has no revenues from operations
or meaningful assets. The Company has not as yet identified any
business or product for possible acquisition. The Company faces
all of the risks inherent in a new business and those risks
specifically inherent in the type of business in which the
Company proposes to engage, namely, the investigation and
acquisition of an interest in a business. The purchase of the
securities offered hereby must be regarded as the placing of
funds at a high risk in a new or "start-up" venture with all of
the unforeseen costs, expenses, problems, and difficulties to
which such ventures are subject. (See "USE OF PROCEEDS" and
"BUSINESS.")
Potential Profit to be Received by Management
The officers and directors of the Company currently own 100%
of the Common Stock presently issued and outstanding. The
officers and directors paid an aggregate price of $600 for these
shares (See "CERTAIN TRANSACTIONS: Purchase of Stock at
Organization"). The officers and directors of the Company may
actively negotiate or otherwise consent to the purchase of any
portion of their common stock as a condition to or in connection
with a proposed merger or acquisition transaction. The proceeds
of this offering will not be used to purchase, either directly or
indirectly, any securities held by officers and directors. A
premium may be paid on this stock in connection with any such
stock purchase transactions and public investors will not receive
any portion of the premium that may be paid. Furthermore, the
Company's shareholders may not be afforded an opportunity to
approve or consent to any particular stock buy-out transaction.
(See "BUSINESS: Acquisition of Business"). Due to the fact that
such officers and directors may negotiate to receive such a
premium means that there is a potential for members of management
to consider their own personal pecuniary benefit rather than the
best interests of the Company's other stockholders. Such conduct
may present management with conflicts of interest and, as a
result of such conflicts, may possibly compromise management's
state law fiduciary duties to the Company's shareholders. The
Company has not adopted any policy for resolving such conflicts.
No finder's fees may be paid, directly or indirectly, by the
Company (out of revenues or other funds, or by the issuance of
debt or equity securities), to officers, directors, or promoters
of the Company, or their affiliates and associates. Furthermore,
the Company will not pay consulting fees or salaries to officers,
directors, or promoters of the Company, or their affiliates and
associates. The Company will reimburse clerical and office
expenses, such as telephone charges, copy charges, overnight
courier service, travel expenses, and similar costs incurred by
officers, directors, and promoters, and their affiliates and
associates, on Company matters, which is estimated will not
exceed, an average $1,000 per month. (See "USE OF PROCEEDS").
Except for such reimbursement and the potential sale of stock
discussed in the preceding paragraph, there are no arrangements
or methods of payment by which the officers, directors, and
promoters, and their affiliates and associates, will receive
funds, securities, or other assets from the Company or in
connection with any acquisition by the Company.
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The Company will not participate in a business combination
with any entity controlled by an officer, director, or promoter
of the Company, or their affiliates and associates.
Lack of Diversification
The extremely limited size of the Company, even after the
offering is completed, makes it unlikely that the Company will be
able to commit its funds to the acquisition of more than one
specific business, so the Company's activities will not be
diversified. Therefore, the success or failure of any business
acquired by the Company will have a substantial impact on the
Company. (See "BUSINESS"). Furthermore, the Company will not
engage in the creations of subsidiary entities with a view to
distributing their securities to the shareholders of the Company.
No Current Negotiations Regarding an Acquisition or Merger
None of the Company's officers, directors, or promoters, or
their affiliates and associates, have had any preliminary contact
or discussion, and there are no present plans, proposals,
arrangements or understanding, with any representatives of the
owners of any business or company regarding the possibility of an
acquisition or merger transaction contemplated in the prospectus.
(See "BUSINESS: General").
Failure of Sufficient Number of Investors to Reconfirm
Investment
A business combination with a target business cannot be
consummated unless, in connection with the reconfirmation
offering required by Rule 419, the Company can successfully
convince a sufficient number of investors representing 80% of the
maximum offering proceeds to elect to reconfirm their investment,
the proposed business acquisition will not be consummated. In
such event, none of the Deposited Securities hell in escrow will
be issued and the Deposited Funds will be returned to investors
on a pro rata basis. Since 13% of the gross offering proceeds is
to be paid to the Underwriter to cover underwriting commissions
and expenses and approximately 9% of the gross proceeds may be
used for other expenses of the Company, investors will be
returned only approximately 78% of their invested funds plus any
interest that accrues on the Deposited Funds held in escrow.
Use of Business Acquisition Consultants or Finders
While it is not presently anticipated that the Company will
engage unaffiliated professional firms specializing in business
acquisitions on reorganizations, such firms may be retained if
management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take
various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments
involving issuance of equity securities (including those of the
Company), or any combination of these or other compensation
arrangements. The Company estimates that any fees for such
services will not exceed 10% of the amount of the securities
issued or cash paid by the Company to acquire a business. The
Company will not have funds to pay a retainer in connection with
any consulting arrangement, and no fee will be paid unless and
until an acquisition is completed in accordance with Rule 419.
(See "USE OF PROCEEDS," and "BUSINESS").
13
<PAGE> 14
No Assurance of Profitability
There can be no assurance that the Company will be able to
acquire a favorable business. In addition, even if the Company
becomes engaged in a new business, there can be no assurance that
it will be able to generate revenues or profits therefrom.
No Assurance of Conventional Financing for Business Acquired
or Merged
Although there are no specific business combinations or
other transactions contemplated by management, it may be expected
that any such target business will present such a level of risk
that conventional private or public offerings of securities or
conventional bank financing would not be available to the Company
once it acquires said business.
Time to Be Devoted by Management
The officers and directors of the Company currently are
employed or engaged full time in other positions or activities
and will devote only that amount of time to the affairs of the
Company which they deem appropriate. The amount of time devoted
by management to the affairs of the Company will depend on the
number and type of businesses under consideration at any given
time. In the fact of competing demands for their time, it should
be anticipated that the officers and directors will grant
priority to their full-time positions rather than the business
affairs of the Company. The Company estimates that each officer
will contribute an average of 10 hours per month to Company
matters (See "MANAGEMENT").
Conflicts of Interest
Certain conflicts of interest may exist between the Company
and its officers and directors, due to the fact that they are
employed full time in other endeavors. Failure by management to
conduct the Company's business in its best interest may subject
management to claims by the Company and/or its shareholders of
breach of fiduciary duty. (See "MANAGEMENT: Conflicts of
Interest.")
Dependent on Outside Advisors
In connection with its investigation of a possible business
and in order to supplement the business experience of management,
the Company may employ accountants, technical experts,
appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by management without
any input from controlling shareholders. Furthermore, it is
anticipated that such persons may be engaged by the Company on an
independent basis without a continuing fiduciary or other
obligation to the Company. The Company has no arrangement or
understanding to employ any of its officers or directors as
outside advisors. (See "BUSINESS").
Inability to Evaluate Investments
The Company's limited funds and the lack of full-time
management will likely make it impracticable to conduct a
complete and exclusive investigation and analysis of a business.
Therefore, management decisions will likely be made without
detailed feasibility studies, independent analysis, market
surveys, and the like which, if the Company had more funds
available, would be desirable. The Company will be particularly
dependent in making decisions on information provided by the
promoter, owner, sponsor, or others associated with the
businesses seeking the Company's participation, and which will
have a direct economic interest in completing a transaction with
the Company. (See "BUSINESS").
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<PAGE> 15
Possible Consequences of Business Reorganization
It is likely that the Company will issue additional shares
of Common Stock or preferred stock in connection with its
potential merger, consolidation, or other business
reorganization, and that the proceeds of the offering will be
used in the business of the acquisition or merger candidate (the
Company will not make loans of the net proceeds of the offering).
The consequences may be a change of control of the Company;
significant dilution to the public shareholders' investment; and,
a material decrease in the public shareholders' equity interest
in the Company. Since the Company has not made any determination
with respect to the acquisition of any specific business, it
cannot speculate on the form of any potential business
reorganization or the amount of securities which the Company may
issue in connection therewith. The board of directors may issue
additional securities of the Company on terms and conditions
which the board of directors, in its sole discretion, determines
to be in the best interest of the Company and without seeking
shareholder approval. (See "BUSINESS").
Limited Rights of Shareholders in an Acquisition
Although investors may request the return of their
investment funds in connection with the reconfirmation offering
required by Rule 419, the Company's shareholders may not be
afforded an opportunity specifically to approve or disapprove any
particular business reorganization or acquisition. Except under
certain circumstances, the directors of the Company will be able
to consummate an acquisition by or of the Company without the
approval of the shareholders of the company. Under applicable
corporate law, only in the event of a merger, consolidation, or
sale of all or substantially all of the assets of the Company
(but not a target company), will a shareholder of this Company
have the right to object to the merger, consolidation, or sale
and assert his or her dissenter's right to appraisal of his or
her shares. If an acquisition is consummated in the form of an
exchange of securities, no shareholder of the Company will have
the right to object thereto and claim dissenter's rights.
Limitation on Acquisitions
The Company is subject to Rule 419 and certain reporting
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and will be required to furnish certain
information about significant acquisitions, including audited
financial statements for the company(s) acquired for one, two, or
three years, depending on the relative size of the acquisition.
Consequently, the acquisition prospects available to the Company
would be limited to those that can provide the required audited
financial statements. (See "BUSINESS: Selection of a
Business").
Leverage
A business acquired through a leveraged buy-out, i.e.,
financing the acquisition of the business by borrowing on the
assets of the business to be acquired, will be profitable only if
it generates enough revenues to cover the related debt and
expenses. This practice could increase the Company's exposure to
larger losses. There can be no assurance that any business
acquired through a leveraged buy-out will generate sufficient
revenues to cover the related debt and expenses. The use of
leverage to consummate a business combination may reduce the
ability of the Company to incur additional debt, make other
acquisitions, or declare dividends, and may subject the Company's
operations to strict financial controls and significant interest
expense. It may be expected that the Company will have few, if
any, opportunities to utilize leverage in an acquisition. Even
if the Company is able to identify a business where leverage may
be used, there is no assurance that financing will be available,
or if available, on terms acceptable to the Company. (See
"BUSINESS: Leverage")
15
<PAGE> 16
Competition
The search for potentially profitable businesses is
intensely competitive. The Company expects to be at a
disadvantage in competing with firms which have substantially
greater financial and management resources than the Company. It
is expected this competitive condition will exist in any industry
in which the Company may become engaged. (See `BUSINESS").
Issuance of Preferred Stock
The Company currently has authorized 5,000,000 shares of
preferred stock, par value $0.001 per share. No shares of
preferred stock are issued and outstanding. Although the
Company's board of directors has no present intention to do so,
it has the authority, without action by the Company's
shareholders, to issue the authorized and unissued preferred
stock in one or more series and determine the voting rights,
preferences as to dividends and liquidation, conversion rights,
and other rights of any such series. Such shares may, if and
when issued, have rights superior to those of the Common Stock.
(See "DESCRIPTION OF SECURITIES").
Governmental Regulation
The use of assets and/or conduct of business which the
Company may acquire could be subject to governmental regulations,
including environmental and taxation matters, which regulations
would have a materially adverse affect on the use of such assets
and/or conduct of such businesses. (See "BUSINESS").
General Risks Relating to Investment
No Access to Investors' Funds While Held in Escrow
The Units are offered on a "best efforts" basis, and no
individual, firm, or corporation, including the Underwriter, has
agreed to purchase or take down any of the offered Units.
Consequently, there is no assurance that the required minimum
number of Units (5,000), will be sold during the minimum offering
period, which may last as long as six months, or if the 5,000
Units are sold within the minimum offering period, that all
10,000 Units will be sold during the offering period. Provisions
have been made to deposit in escrow the funds received from the
purchase of Units, and in the event $30,000 is not received
within three months following the effective date of this
Prospectus (unless extended by the Company and Underwriter for an
additional period not to exceed three months), proceeds so
collected will be promptly refunded to investors without paying
interest and without deducting sales commissions or expenses.
During this initial offering period of up to six months,
subscribers cannot earn interest on their funds and have no right
to the return or use of their funds (See "UNDERWRITING.")
Following sale of at least the minimum number of Units
within the prescribed period, investors' funds (reduced to
reflect payments for underwriting compensation and expense
amounts, if any, otherwise released as permitted by Rule 419)
will remain in escrow as Deposited Funds. While interest will
accrue on the Deposited Funds after successful completion of the
offering, investors will have no right to the return of or the
use of their funds for a period of up to 18 months from the date
of this prospectus. Prior to the expiration of the 18-month
period following the date of this prospectus, investors will be
offered return of their pro rata portion of the Deposited Funds
held in escrow (and interest), only in connection with the
16
<PAGE> 17
reconfirmation offering required to be conducted upon execution
of an agreement to acquire a target business which represents 80%
of the maximum offering proceeds. If the Company is unable to
locate a target businesses meeting the above acquisition
criteria, investors will have to wait the full 18-month period
following the date of this prospectus before a pro rata portion
of their funds (and interest) is returned.
Restriction on Sale of Units Held in Rule 419 Escrow Account
Under Rule 419, the Company must deposit in a special
account securities issued and funds received in its initial
offering. According to Rule 15g-8 adopted under the Securities
Exchange Act of 1934, it is unlawful for any person to sell or
offer to sell the Units (or any interest in or related to the
Units) held in the Rule 419 account other than pursuant to a
qualified domestic relations order. As a result, contracts for
sale to be satisfied by delivery of the Deposited Securities
(e.g. contracts for sale on a when, as, and if issued basis), and
sales of derivative securities to be settled by delivery of the
Deposited Securities (e.g. physically-settled option on the
securities), are prohibited. Rule 15g-8 also prohibits sales of
other interests based on the Units, whether or not physical
delivery is required. Accordingly, investors will not be able to
liquidate their investment in the Units unless and until the
Deposited Securities are released from escrow as provided in Rule
419. Securities are released from escrow as provided in Rule 419.
Therefore, there will be no trading market for the Units
following completion of the offering. even if the Deposited
Securities are released from escrow following a business
acquisition pursuant to Rule 419, there can be no assurance that
a public market for the Company's securities will develop. As a
result, purchasers of the Units offered may not be able to
liquidate their investment readily, if at all.
Resale Prohibited in Certain States
The states of Connecticut, Idaho, and South Dakota have
adopted regulations that may prohibit sale of the Company's Units
in those states following release of the Units from escrow under
Rule 419. All certificates representing the Units will contain a
legend prohibiting resale of the Units in the states of
Connecticut, Idaho, and South Dakota.
Dependence on Successful Completion of Offering
The company is dependent on successful completion of this
offering to implement its proposed business plan. Furthermore,
if the offering is unsuccessful, it is likely that present
shareholders of the Company will lose their entire investment
since the Company will have no working capital after paying
certain expenses associated with this offering. (See
"BUSINESS.")
Disproportionate Risks
On sale of all Units offered hereby (assuming allocation of
the public offering price solely to the Common Stock) present
shareholders would own approximately 17% of the then outstanding
shares of the Company, for which they would have paid $600 or
approximately 1% of the then invested capital of the Company, and
the persons purchasing shares in this offering would then own 83%
of the then outstanding shares, for which they will have paid
$60,000 or approximately 99% of the then invested capital. If
only the minimum number of Units is sold, existing shareholders
would own approximately 29% of the stock outstanding for which
they would have paid approximately 2% of the total capital
invested, as compared to public shareholders who would own
approximately 71% of the stock outstanding for which they would
have paid $30,000 or approximately 98% of the total capital
invested. Consequently, purchasers in this
17
<PAGE> 18
offering will bear a disproportionately greater risk investing in
the Company than its present shareholders. (See "COMPARATIVE DATA.")
Substantial and Immediate Dilution to Public
Persons purchasing Units in this offering will suffer a
substantial and immediate dilution to the net tangible book value
of their shares below the public offering price. Giving effect
to the sale of all offered Units, the Company would have a net
tangible book value of approximately $.059 per share so that
persons purchasing Units in the offering would suffer an
immediate dilution of $.041 per share or 41% from the offering
price of $6.00 per Unit. Giving effect to the sale of the
minimum number of Units, the net tangible book value of the
Company would be approximately $.039 per share or similar dilution
to the public investors of $.061 per share or 61% of the public
offering price. (See "DILUTION.")
Lack of Revenue and Dividends
The company has had no earnings and cannot predict when, if
ever, it will realize any material revenue or realize a profit
from any operations it may subsequently undertake. The Company
has paid no dividends and does not propose to do so in the
foreseeable future.
Arbitrary Offering Price
The offering price of the Units does not bear any
relationship to the assets, book value, or net worth of the
Company or any other generally accepted criteria of value, and
should not be considered to be an indication of the actual value
of the Company. The offering price was arbitrarily determined by
the Company. (See "UNDERWRITING.")
Possible sale of Common Stock Pursuant to Rule 144
All of the Company's 120,000 shares of Common Stock
presently outstanding are "restricted securities" and, in the
event a public market for the Common Stock develops in the
future, such shares may be sold as early as December 1998, in
reliance on Rule 144 adopted under the Securities Act, if certain
requirements are met. Investors should be aware that sales under
Rule 144 may have a depressive effect on the price of the
Company's stock in any market which may develop. (See
"DESCRIPTION OF SECURITIES.")
18
<PAGE> 19
DILUTION
As of January 15, 1997, the Company had an unaudited net
tangible book value (total tangible assets less total
liabilities) of $600.00, or a net tangible book value per share
of approximately $0.005. The table below sets forth the dilution
to persons purchasing Units in this offering without taking into
account any changes in the net tangible book value of the Company
after January 15, 1997, except the sale of the minimum and
maximum number of Units offered at the public offering price and
receipt of the net proceeds therefrom, and without taking into
consideration the Underwriter's Warrants.
<TABLE>
<CAPTION>
Assuming Minimum Assuming Maximum
Units Sold Units Sold
<S> <C> <C> <C> <C>
Public offering price
per share(1) $0.100 $0.100
Net tangible book value
before offering(2) $0.005 $0.005
Increase attributable to
purchase of shares by $0.034 $0.054
new investors
Pro forma net tangible
book value after
offering(3) $0.039 $0.059
Dilution per share to
new investors $0.061 $0.041
Percent Dilution 61% 41%
</TABLE>
_____________________________
(1) Offering Price per share of Common Stock included in the
Units and before deduction of offering expenses and
commissions.
(2) Determined by dividing the number of shares of Common Stock
outstanding into the net tangible book value of the Company.
(3) After deduction of offering expenses and commissions
estimated at $18,300 if the entire offering is sold and
$14,400 is only the minimum offering is sold.
19
<PAGE> 20
COMPARATIVE DATA
The following chart illustrates percentage ownership in the
Company held by the present shareholders and by the public
investors in this offering and sets forth a comparison of the
amounts paid by the present shareholders and by the public
investors.
<TABLE>
<CAPTION>
Total Total Average Price
Shares Consideration Per Share
Purchased
<S> <C> <C> <C> <C> <C>
Number % Amount %
Minimum
Offering
Present 120,000 28.6% $ 600 2.0% $0.005
Shareholders
New Investors 300,000 71.4% $30,00 98.0% $0.100
Maximum
Offering
Present 120,000 16.7% $600 1.0% $0.005
Shareholders
New Investors 600,000 83.3% $60,000 99.0% $0.100
</TABLE>
20
<PAGE> 21
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale
of all 10,000 Units is estimated at approximately $41,700, after
deducting underwriting commissions and expenses. If only the
minimum offering is sold, the Company will receive net proceeds
of approximately $15,600. All of the net proceeds must be
deposited in Escrow pursuant to Rule 419. Except for an amount
up to 10% of the Deposited Funds, ($__________, if the entire
offering is sold, or $____________, if only the minimum offering
is sold), which is otherwise releasable under the rule, the
Deposited Funds may not be released until an acquisition meeting
certain specified criteria has been made and a sufficient number
of investors reconfirm their investment in accordance with the
procedures set forth in Rule 419. Accordingly, the net proceeds
of the offering may be applied as follows:
<TABLE>
<CAPTION>
Items Assuming Minimum Assuming Maximum
Units Sold Units Sold
<S> <C> <C>
1. Company Offering Expenses(1) $14,400 $18,300
2. Funds available for
investigation and evaluation $15,600 $41,700
of prospective business (2)
TOTAL $30,000 $60,000
</TABLE>
___________________________
(1) These expenses represent legal, accounting, printing, and
other costs incurred by the Company in connection with the
offering. A portion of these expenses have been paid by the
Company with advances from the current officers and
directors.
(2) The Company utilizes office space at 901 Chestnut Street,
Clearwater, FL 34616, provided by a private company owned by
Gerald Couture, an officer, director and principal
shareholder of the Company. The Company will not pay rent
for this office space. The Company will reimburse clerical
and office expenses, such as telephone charges, copy
charges, overnight courier service, travel expenses, and
similar cost incurred by Mr. Couture on Company matters,
which is estimated will not exceed, an average, $1,000 per
month. These funds may also be used to cover the expense of
legal and accounting services related to investigation and
evaluation of businesses. A portion or all of the funds
required to pay these expenses may not be released until
after the acquisition of a business is completed in
accordance with Rule 419. A portion of the funds available
for a business may be used to pay a fee or other
compensation to a person or entity, other than an officer of
director of the Company, which submits a business acquired
by the Company. (See "BUSINESS")
There are no plans, proposals, arrangements, or
understandings with respect to the sale or issuance of additional
securities of the Company prior to the location of an acquisition
or merger candidate.
After the Company reaches an agreement for acquisition of a
business, it is required by Rule 419 to prepare and disseminate
the Amendment to all investors, which will describe the business
to be acquired and provide more specific information on the use
of the net proceeds of the offering in such business. The
Amendment will also provide information on the proposed use of
any proceeds obtained from the exercise of Warrants in the
business acquired by the Company.
21
<PAGE> 22
Except for reimbursement of offering costs and expenses
incurred by officers and directors on Company matters described
above, no portion of the net proceeds of the offering may be paid
to officers, directors, promoters, or their affiliates or
associates, directly or indirectly, as consultant fees, officer
salaries, director fees, purchase of their shares, or other
payments. The board of directors has adopted a policy to the
foregoing effect, which may be rescinded or amended only by
majority vote of the Company's stockholders who do not hold any
common stock presently outstanding (whether now held or hereafter
acquired) and will expire by its terms on the date an acquisition
of business venture is consummated. While the board of directors
may seek a change in this policy prior to an acquisition, no
change may be made except by the vote specified. No portion of
the net proceeds will be used to make loans to any person. The
Company will not borrow funds and use the proceeds therefrom to
make payments to the Company's officers, directors, or promoters,
or their affiliates or associates.
The Company has no agreement or understanding with any
consultant or advisor to provide services in connection with any
future business acquisition. The Company does not anticipate
that it will engage consultants or advisors specializing in
business acquisitions or reorganizations, although the
possibility exists that management may find it to be beneficial
to the Company to retain the services of such a consultant. In
no circumstances will the Company retain the services of any
consultant who is also an officer, director, or promoter, of the
Company, or their affiliates and associates. Compensation to a
consultant may take various forms, including one time cash
payments, payments based on a percentage of revenues or product
sales volume, payments involving issuance of securities
(including those of the Company) or any combination of these or
other compensation arrangements. The Company estimates that any
fees for such services paid in cash will not exceed 10% of the
amount of the securities issued by the Company to acquire a
business. The Company will not have funds to pay a retainer in
connection with any consulting arrangement, and no fee will be
paid unless and until an acquisition is completed in accordance
with Rule 419. None of the Company's officers, directors, or
promoters have, in the past, used any particular consultant or
advisor on a regular basis.
22
<PAGE> 23
BUSINESS
General
The Company was organized for the purpose of seeking,
investigating, and ultimately acquiring an interest in business
with long-term growth potential. Persons should not purchase
Units in the offering if they expect short-term earnings or
appreciation in the value of the Company. The Company currently
has no commitment or arrangement to participate in a business and
cannot now predict what type of business it may enter into or
acquire. It is emphasized that the business objectives discussed
herein are extremely general and are not intended to be
restrictive on the discretion of the Company's management.
Persons purchasing Units in the offering will be entrusting
their funds to the Company's management, subject to the
requirements of Rule 419. The net proceeds of the offering are
not specifically allocated to identified purposes or allocated to
the acquisition of any specific type of business venture.
Decisions concerning these matters may be made by management
without shareholder action, except for the right of each investor
to recover his pro rata portion of the Deposited Funds in
accordance with Rule 419. (See "USE OF PROCEEDS.")
Management anticipates that it may be able to participate in
only one potential business venture, due primarily to the
Company's limited financing. This lack of diversification should
be considered a substantial risk of investing in the Company
because it will not permit the Company to offset potential losses
from one venture against gains from another.
Selection of a Business
The Company anticipates that businesses for possible
acquisition will be referred by various sources, including its
officers and directors, professional advisors, securities broker-
dealers, venture capitalists, members of the financial community,
and others who may present unsolicited proposals. The Company
will seek businesses from all known sources, but will rely
principally on personal contacts of its officers and directors
and their affiliates, as well as indirect associations between
them and other business and professional people. While it is not
presently anticipated that the Company will engage unaffiliated
professional firms specializing in business acquisitions on
reorganizations, such firms may be retained if management deems
it in the best interest of the Company.
Compensation to a finder or business acquisition firm may
take various forms, including one-time cash payments, payments
based on a percentage of revenues or product sales volume,
payments involving issuance of securities (including those of the
Company), or any combination of these or other compensation
arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services, but estimates that
any fees for such services paid in cash will not exceed 10% of
the gross proceeds of this offering and/or equity securities (not
debt) equal to 10% of the amount of the securities issued by the
Company to acquire a business. If a finder or business
acquisition firm is utilized by the Company, the cost may be paid
out of the net proceeds of this offering. ( See "USE OF
PROCEEDS.") The board of directors has adopted a policy, which
may be rescinded or amended only by majority vote of the
Company's stockholders who do not hold any common stock presently
outstanding (whether now held or hereafter acquired) and will
expire by its terms on the date an acquisition of a business
venture is consummated, prohibiting the payment, either directly
or indirectly, of any finder's fee or similar compensation to any
person who has served as an officer or director of the Company
prior to the acquisition, or who is a promoter. While the board
of directors may seek a change in this policy prior to an
acquisition, no change may be made except by the vote specified.
23
<PAGE> 24
The Company will not restrict its search to any particular
business, industry, or geographical location, and management
reserves the right to evaluate and enter into any type of
business in any location. The Company may participate in newly
organized business venture or a more established company entering
a new phase of growth or in need of additional capital to
overcome existing financial problems. Participation in a new
business venture entails greater risks since in many instances
management of such a venture will not have proved its ability,
the eventual market of such venture's product or services will
likely not be established, and the profitability of the venture
will be unproven and cannot be predicted accurately. If the
Company participates in a more established firm with existing
financial problems, it may be subjected to risk because the
financial resources of the Company may not be adequate to
eliminate or reverse the circumstances leading to such financial
problems.
In seeking a business venture, the decision of management
will not be controlled by an attempt to take advantage of any
anticipated or perceived appeal of a specific industry,
management group, product, or industry, but will be based on the
business objective of seeking long-term capital appreciation in
the real value of the Company. The Company will not acquire or
merge with a business or corporation in which the Company's
officers, directors, or promoters, or their affiliates or
associates, have any direct or indirect ownership interest. The
board of directors has adopted a policy, which may be rescinded
or amended only by majority vote of the Company's stockholders
who do not hold any common stock presently outstanding (whether
now held or hereafter acquired) and will expire by its terms on
the date and acquisition of a business venture is consummated,
prohibiting the acquisition of any business in which a promoter
or any person who has served as an officer or director of the
Company, or any of their affiliates or associates, held, directly
or indirectly, any ownership interest prior to the acquisition.
While the board of directors may seek a change in this policy
prior to an acquisition, no change may be made except by the vote
specified.
The analysis of new businesses will be undertaken by or
under the supervision of the officers and directors (See
"MANAGEMENT"). In analyzing prospective businesses, management
will consider, to the extent applicable, the available technical,
financial, and managerial resources, working capital and other
prospects for the future, the nature of present and expected
competition; the quality and experience of management services
which may be available and the depth of that management; the
potential for further research, development, or exploration; the
potential for growth and expansion; the potential for profit; the
perceived public recognition or acceptance of products, services,
or trade or service marks; name identification; and other
relevant factors.
It is possible that the Company may propose to acquire a
business in the development stage. A business is in the
development stage if it is devoting substantially all of its
efforts to establishing a new business, and either planned
principal operations have not commenced or planned principal
operations have commenced but there has been not significant
revenue therefrom. Under Rule 419 the Company must acquire a
business or assets for which the fair value of the business
represents at least 80% of the offering proceeds, including funds
received or to be received from the exercise of Warrants, less
certain underwriting expenses. Accordingly, the Company's
ability to acquire a business in the development stage may be
limited to the extent it cannot locate such businesses with fair
value high enough to satisfy the requirements of Rule 419.
The Company will be subject to requirements of Rule 419 and
certain reporting requirements under the Exchange Act and will,
therefore, be required to furnish certain information about
significant acquisitions, including audited financial statements
for the company(s) acquired, covering one, two, or three years,
depending on the relative size of the acquisition. Consequently,
acquisition prospects that do not have or are unable to obtain
24
<PAGE> 25
the required audited statements which meet the requirements of
Rule 419 and the Exchange Act will not be appropriate for
acquisition. The Company anticipates that it will voluntarily
prepare and file periodic reports under the Exchange Act,
notwithstanding the fact that such obligation may be suspended
under sections 15(d) of the Exchange Act.
The decision to participate in a specific business may be
based on management's analysis of the quality of the other firm's
management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological
changes, and other factors which are difficult, if not
impossible, to analyze through any objective criteria. It is
anticipated that the results of operations of a specific firm may
not necessarily be indicative of the potential for the future
because of the requirement to substantially shift marketing
approaches, expand significantly, change product emphasis, change
or substantially augment management, and other factors.
The Company will analyze all available factors and make a
determination based on a composite of available facts, without
reliance on any single factor. The period within which the
Company may participate in a business on completion of this
offering cannot be predicted and will depend on circumstances
beyond the Company's control, including the availability of
businesses, the time required for the Company to complete its
investigation and analysis of prospective businesses, the time
required to prepare appropriate documents and agreements
providing for the Company's participation, and other
circumstances. It is anticipated that the analysis of specific
proposals and the selection of a business will take several
months. Even after the Company has located a prospective
acquisition target, it will still have to comply with the
reconfirmation mandate of Rule 419, which may take months.
Persons should not purchase Units in this offering if they expect
a short-term appreciation in the value of the Company or its
securities.
Acquisition of Business
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, or other reorganization with another corporation
or entity; joint venture; license; purchase and sale of assets;
or purchase and sale of stock, the exact nature of which cannot
now be predicted. Notwithstanding the above, the Company does
not intend to participate in a business through the purchase of
minority stock positions. On the consummation of a transaction,
it is likely that the present management and shareholders of the
Company will not be in control of the Company. In addition,
majority or all of the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by
new directors without vote of the Company's shareholders.
In connection with the Company's acquisition of a business,
the present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell
a portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the
Company. As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company
would acquire a higher percentage of equity ownership in the
Company. Although the Company's present shareholders did not
acquire their shares of Common Stock with a view towards any
subsequent sale in connection with a business reorganization, it
is not unusual for affiliates of the entity participating in the
reorganization to negotiate to purchase shares held by the
present shareholders in order to reduce the number of "restricted
securities" held by persons no longer affiliated with the Company
and thereby reduce the potential adverse impact on the public
market in the Company's Common Stock that could result from
substantial sales of such shares after the restrictions no longer
apply. Public investors will not receive any portion of the
premium that may be paid in the foregoing circumstances.
25
<PAGE> 26
Furthermore, the Company's shareholders may not be afforded an
opportunity to approve or consent to any particular stock buy-out
transaction. (See MANAGEMENT: Conflicts of Interest.")
It is anticipated that any securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms
of such registration rights and the number of securities, if any,
which may be registered cannot be predicted, it may be expected
that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.
The issuance of substantial additional securities and their
potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on such market.
While the actual terms of a transaction to which the Company
may be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
structure the acquisition as a so-called "tax-free" event under
sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
"Code"). In order to obtain tax-free treatment under section 351
of the Code, it would be necessary for the owners of the acquired
business to own 80% or more of the stock of the surviving entity.
In such event, the shareholders of the Company, including
investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity. Section
368(a)(1) of the Code provides for tax-free treatment of certain
business reorganization between corporate entities where on
corporation is merged with or acquires the securities or assets
of another corporation. Generally, the Company will be the
acquiring corporation in such a business reorganization, and the
tax-free status of the transaction will not depend on the
issuance of any specific amount of the Company's voting
securities. It is not uncommon, however, that as a negotiated
element of a transaction completed in reliance on section 368,
the acquiring corporation issue securities in such an amount that
the shareholders of the acquired corporation will hold 50% or
more of the voting stock of the surviving entity. Consequently,
there is a substantial possibility that the shareholders of the
Company immediately prior to the transaction would retain less
than 50% of the issued and outstanding shares of the surviving
entity. Therefore, regardless of the form of the business
acquisition, it may be anticipated that the investors in this
offering will experience a significant reduction in their
percentage of ownership in the Company.
Notwithstanding the fact that the Company is technically the
acquiring entity in the foregoing circumstances, generally
accepted accounting principles will ordinarily require that such
transaction be accounted for as if the Company had been acquired
by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the
other company.
The manner in which the Company participates in a business
will depend on the nature of the business, the respective needs
and desires of the Company and other parties, the management of
the business, and the relative negotiating strength of the
Company and such other management.
It is possible that the Company will not have sufficient
funds from the proceeds of this offering to fully undertake such
development, marketing, and manufacturing of products which may
be acquired. Accordingly, following the acquisition of any such
product rights, the Company may be required to either seek
additional debt or equity financing or obtain funding from third
parties, in exchange for which the Company would probably be
required to give up a portion of its interest in any acquired
product. There is no assurance that the Company will be able
either to obtain additional financing or interest third parties
in providing funding for the further development, marketing, and
manufacturing of any products acquired.
26
<PAGE> 27
The Company will participate in a business only after the
negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require specific representations
and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and
the conditions which must be satisfied by each of the parties
prior to such closing, will outline the manner of bearing costs
if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms. It should
be expected that one of the conditions will be compliance with
Rule 419, and reconfirmation by investors representing at least
80% of the gross proceeds of the offering, after giving effect to
the exercise of all Warrants included in the Units sold in the
offering.
It is anticipated that the investigation of specific
businesses and the negotiation, drafting, and execution of
relevant agreements, disclosure documents, and other instruments
will require substantial management time and attention and
substantial costs for accountants, attorneys, and others. If a
decision is made not to participate in a specific business, the
costs theretofore incurred in the related investigation would not
be recoverable. Furthermore, even if an agreement is reached for
the participation in a specific business, the failure to
consummate that transaction may result in the loss to the Company
of the related costs incurred which could materially adversely
affect subsequent attempts to locate and participate in
additional businesses.
Operation of Business After Acquisition
The Company's operation following its acquisition of a
business will be dependent on the nature of the Business and the
interest acquired. The Company is unable to predict whether the
Company will be in control of the business or whether present
management will be in control of the Company following the
acquisition. It may be expected that the business will present
various risks to investors herein, certain of which have been
generally summarized in the "RISK FACTORS" portion of this
prospectus. The specific risks of a given business cannot be
predicted at the present time.
Leverage
The Company may be able to participate in a business
involving the use of leverage. Leveraging a transaction involves
the acquisition of a business through incurring indebtedness for
a portion of the purchase price of that business, which is
secured by the assets of the business acquired.
One method by which leverage may be used is that the Company
would locate an operating business available for sale and arrange
for the financing necessary to purchase such business.
Acquisition of a business in this fashion would enable the
Company to participate in a larger venture that its limited funds
would permit, or use less of its funds to acquire a business and
thereby commit its remaining funds to the operations of the
business acquired.
Leveraging a transaction would involve significant risks due
to the fact that the borrowing involved in a leveraged
transaction will ordinarily be secured by the combined assets of
the Company and the business to be acquired. If the combined
enterprises are not able to generate sufficient revenues to make
payments on the debt incurred to acquire the business, the lender
would be able to exercise the remedies provided by law or by
contract and foreclose on substantially all of the assets of the
Company. Consequently, the Company's participation in a
leveraged transaction may significantly increase the risk of loss
to the Company. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as
during periods of lower interest rates because the investment in
the business held on a leveraged basis will only be profitable if
it generates sufficient revenues to cover the related debt and
other costs of the financing.
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<PAGE> 28
The likelihood of the Company obtaining a conventional bank
loan for a leveraged transaction would depend largely on the
business being acquired and its perceived ability to generate
sufficient revenues to repay the debt. Generally, businesses
suitable for leveraging are limited to those with income-
producing assets that are either in operation or can be placed in
operation relatively quickly. The Company cannot predict whether
it will be able to locate any such business. As a general matter
it may be expected that the Company will have few, if any,
opportunities to examine businesses where leveraging would be
appropriate.
Even if the Company is able to locate a business where
leveraging techniques may be used, there is no assurance that
financing for the acquisition will be available or, if available,
on terms acceptable to the Company. Lenders from which the
Company may obtain funds for purposes of a leveraged buy-out may
impose restrictions of the future borrowing, dividend, and
operating policies of the Company. It is not possible at this
time to predict the restrictions, if any which lenders may impose
or the impact thereof on the Company.
Governmental Regulation
It is impossible to predict the government regulation, if
any, to which the Company may be subject until it has acquired an
interest in a business. The use of assets and/or conduct of
businesses which the Company may acquire could subject it to
environmental, public health and safety, land use, trade, or
other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, management
will endeavor to ascertain, to the extent of the limited
resources of the Company, the effects of such government
regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of
government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will
make the acquisition of an interest in such business a higher
risk.
Competition
The Company will be involved in intense competition with
other business entities, many of which will have a competitive
edge over the Company by virtue of their more substantial
financial resources and prior experience in business. There is
no assurance that the Company will be successful in obtaining
suitable investments.
Offices
The Company utilizes office space at 901 Chestnut Street,
Suite A, Clearwater, Florida 34616, provided by a private company
owned by Gerald L. Couture, an officer, director, and principal
shareholder of the Company. The Company will not pay rent for
this office space. The Company will reimburse clerical and
office expenses, such as telephone charges, copy charges,
overnight courier service, travel expenses, and similar costs
incurred by Gerald L. Couture on Company matters, which is
estimated will not exceed, on average, $1,000 per month.
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<PAGE> 29
Employees
The Company is a development stage company and currently has
no employees. Executive officers, who are not compensated for
their time contributed to the Company, will devote only such time
to the affairs of the Company as they deem appropriate. (See
MANAGEMENT.") Management of the Company expects to use
consultants, attorneys, and accountants as necessary, and does
not anticipate a need to engage any full-time employees so long
as it is seeking and evaluating businesses. Michael T. Cronin,
partner in the law firm of Johnson, Blakely, Pope, Bokor, Ruppel
& Burns, P.A., counsel to the Company, is a shareholder of the
Company. It is expected that the Company will continue to retain
the services of Johnson, Blakely, Pope, Bokor, Ruppel & Burns,
P.A., following completion of this offering. The need for
employees and their availability will be addressed in connection
with a decision whether or not to acquire or participate in a
specific business industry.
29
<PAGE> 30
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the date of this
prospectus, the aggregate number of shares of Common Stock of the
Company owned of record or beneficially by each person who owned
of record, or is known by the Company to own beneficially, more
than 5% of the Company's Common Stock, and the name and
shareholdings of each officer and director and all officers and
directors as a group:
<TABLE>
<CAPTION>
Percent
Number
of Before
Shares Offering After Offering
Owned(1)
Name and Address(2) Minimum Maximum
<S> <C> <C> <C> <C>
Gerald Couture
901 Chestnut Street,
Suite A 40,000 33.3% 9.5% 5.6%
Clearwater, FL 34616
Michael T. Cronin
911 Chestnut Street
Clearwater, FL 34616 40,000 33.3% 9.5% 5.6%
Lawrence Steinberg
2 Lincoln Centre
5420 LBJ Freeway,
Suite 540, LB 56
Dallas, TX 75240 40,000 33.3% 9.5% 5.6%
All Officers and
Directors 120,000 100% 28.6% 16.7%
As a Group (3 persons)
</TABLE>
____________________________
(1) All shares are held beneficially and of record, and each
record shareholder has sole voting, investment and
dispositive power.
(2) The persons listed are all of the officers, directors and
promoters of the Company.
Officers and Directors
The following table sets forth the names, age, and position
of each director and executive officer of the Company.
<TABLE>
<CAPTION>
Name Age Position and Office
Held
<S> <C> <C>
Gerald Couture 51 Chief Executive
Officer, Chief
Financial Officer,
Director
Michael T. Cronin 41 Secretary, Director
Lawrence Steinberg 60 Vice President,
Director
</TABLE>
The above individuals are the persons responsible for
founding and organizing the business of the Company, and each
became an officer and director of the Company in connection with
its organization in August 1993. The term of office of each
officer and director is one year and until his successor is
elected and qualified.
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<PAGE> 31
Officers and directors will not be compensated for the time
they devote to the Company's affairs.
Each officer and director will devote only such time to the
business affairs of the Company as he or she deems appropriate.
(See "Conflicts of Interest" below.)
Biographical Information
Set forth below is biographical information for each of the
Company's officers and directors. No person other than the
Company's officers and directors will perform any management
functions for the Company. Consequently, investors will be
relying on the general business acumen and experience of the
Company's management and should critically assess the information
set forth below.
Gerald Couture is a principal in Couture & Company, Inc., a
corporate financial consulting firm he founded in 1980. Mr.
Couture has been director and/or officer of several corporations
over the past ten years. These include Medical Technology
Systems, Inc. from August, 1987 to October 15, 1996; which
completed a Chapter 11 Bankruptcy reorganization proceeding in
1996; Cinema North Corporation and affiliates from June, 1983 to
date; Smith & Wesson Knives, Inc., from March, 1988 to December,
1992; Prime Container Corp., June, 1985 to December, 1992;
Vermont Manufacturing Corporation from March, 1975 to December,
1992.
Michael T Cronin, has been a practicing attorney with the
law firm of Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A.,
in Clearwater, Florida since 1983. Mr. Cronin concentrates his
practice in securities and corporate law. Mr. Cronin is acting
as counsel to the Company and owns 40,000 shares of Common Stock.
Lawrence Steinberg, has been a practicing attorney for over
35 years. Since April 1994, he has been "Of Counsel" with
Jenkens & Gilchrist, P.C., Dallas, Texas. Prior to that time,
for over 20 years, he was either a shareholder or partner with
Johnson & Steinberg, P.C. and its predecessor partnership. Also,
Mr. Steinberg has been an active investor in real estate and
venture capital investments. From July 1992 to January 1997, he
was Chief Executive Officer and Principal Shareholder of a
corporation, which has owned and operated a television station in
Charleston, South Carolina. In addition, he is currently the
owner of a corporation which owns and operates video stores.
Conflicts of Interest; Prior Participation Blank Check Companies
Each of the officers and directors of the Company has other
professional and business interests to which he devotes his
primary attention. Each may continue to do so notwithstanding
the fact that management time should be devoted to the business
of the Company.
The Company has no arrangement, understanding, or intention
to enter into any transaction or participate in any business
venture with any officer, director, or principal shareholder or
with any firm or business organization with which they are
affiliated, whether by reason of stock ownership, position as
officer or director, or otherwise. The board of directors has
adopted a policy limiting the circumstances under which the
Company may enter into such transactions. Although it is
believed that the policy adopted by the Company will help to
resolve conflicts of interest, there can be no assurance that
such policies will be successfully implemented or that, if
implemented, conflicts will be satisfactorily resolved in the
best interests of the Company.
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<PAGE> 32
In connection with the Company's acquisition of a business,
the present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell
portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the
Company. A conflict of interest is inherent in this situation
since the Company's officers and directors will be negotiating
for the acquisition on behalf of the Company and for sale of
their Common Stock for their own respective accounts. Management
has not adopted any policy for resolving the foregoing potential
conflicts, should they arise.
Lawrence Steinberg, an officer and director of the Company,
has served as a founder, officer, and director of other companies
formed with the express purpose of seeking available businesses.
It should be expected that all of the officers and directors will
form and promote other "blank check" companies in the future.
Any such activities by management are not, in the opinion of
management, a part of a single plan of financing, and the board
of directors has adopted a policy, which may be rescinded or
amended only by majority vote of the Company's stockholders who
do not hold any common stock presently outstanding (whether now
held or hereafter acquired) and will expire by its terms on the
date an acquisition of a business venture is consummated,
prohibiting the Company from participating in a business
acquisition with any other "blank check" company in which any
person who has served as an officer or director of the Company
prior to the acquisition holds directly, or indirectly, any
ownership interest. While the board of directors may seek a
change in this policy prior to any acquisition, no change may be
made except by the vote specified. Certain conflicts of interest
are inherent in the participation of the Company's officers and
directors as shareholders in other "blank check" companies, which
may be difficult, if not impossible, to resolve in all cases in
the best interests of the Company. Failure by management to
conduct the Company's business in its best interests may result
in liability of management of the Company to the shareholders.
In order to mitigate any potential conflict, each of the
officers, directors, and promoters of the Company has undertaken
in writing not to participate as an officer or director in any
"blank check" company that files a registration statement under
the Securities Act of 1933, prior to the date the Company
identifies a business it proposes to acquire which meets the
acquisition criteria of Rule 419, or the date six months
following the date of this prospectus, whichever occurs first.
32
<PAGE> 33
CERTAIN TRANSACTIONS
Purchase of Stock At Organization
In connection with organizing the Company, its officers and
directors, paid an aggregate of $600 in cash to purchase a total
of 120,000 shares of Common Stock at a sales price of $0.005 per
share. These transactions were not the result of arm's length
negotiation. All of the shares of Common Stock presently issued
and outstanding are "restricted securities" as that term is
defined under the Securities Act and, as such, may not be sold in
the absence of registration under the Securities Act or the
availability of an exemption therefrom. Under current law, such
shares could not be sold for a period of two years from the date
on which they are purchased, and then only under limited
circumstances. (See "DESCRIPTION OF SECURITIES.")
Affiliate Advances
Messrs. Couture, Cronin and Steinberg will make additional
advances as required to cover the Company's expenses through
completion of the offering. The advances do not bear interest,
and will be repaid out of the net proceeds of the offering, if
successful. In the event the offering is not successful, it is
not expected that Messrs. Couture, Cronin and Steinberg will be
able to recoup their advances.
Other Arrangements
The Company has no agreement or understanding, express or
implied, with any officer, director, or promoter, or their
affiliates or associates, regarding employment with the Company
or compensation for services. The Company has no plan,
agreement, or understanding, express or implied, with any
officer, director, or promoter, or their affiliates or
associates, regarding the issuance to such persons of any shares
of the Company's authorized and unissued Common Stock. The
existing officers and directors reserve the right to acquire
Units in this offering. There is no understanding between the
Company and any of its present shareholders regarding the sale of
a portion or all of the Common Stock currently held by them in
connection with any future participation by the Company is a
business. There are no other plans, understandings, or
arrangements whereby any of the Company's officers, directors,
principal shareholders, or promoters, or any of their affiliates
or associates, would receive funds, stock, or other assets in
connection with the Company's participation in a business. No
advances have been made or contemplated by the Company to any of
its officers, directors, principal shareholders, or promoters, or
any of their affiliates or associates.
33
<PAGE> 34
Upon acquisition of a business, it is possible that current
management will resign and be replaced by persons associated with
the business acquired, particularly if the Company participates
in a business by effecting a stock exchange, merger, or
consolidation as discussed under "BUSINESS." In the event that
any member of current management remains after effecting a
business acquisition, that member's time commitment and
compensation will likely be adjusted based on the nature and
location of such business and the services required, which cannot
now be foreseen.
DESCRIPTION OF SECURITIES
Units
The Units offered hereby consist of 60 shares of Common.
The Common Stock is immediately detachable on delivery from the
escrow required by Rule 419, so that the Common Stock can be
separately transferable on issuance. (See "COMMON STOCK" and
"WARRANTS," below.)
Common Stock
The Company is authorized to issue 15,000,000 shares,
consisting of 10,000,000 shares of Common Stock, par value
$0.0001 per share, of which 120,000 shares are issued and
outstanding, and 5,000,000 shares of preferred stock, par value
$0.001 (the "Preferred Stock"), of which no shares have been
issued.
Holders of Common Stock are entitled to one vote per share
on each matter submitted to a vote at any meeting of
shareholders. Shares of Common Stock do not carry cumulative
voting rights and, therefore, holders of a majority of the
outstanding shares of Common Stock will be able to elect the
entire board of directors, and, if they do so, minority
shareholders would not be able to elect any members to the board
of directors. The Company's board of directors has authority,
without action by the Company's shareholders, to issue all or any
portion of the authorized but unissued shares of Common Stock,
which would reduce the percentage ownership in the Company of its
shareholders and which may dilute the book value of the Common
Stock.
Shareholders of the Company have no pre-emptive rights to
acquire additional shares of Common Stock. The Common Stock is
not subject to redemption and carries no subscription or
conversion rights. In the event of liquidation of the Company,
the shares of Common Stock are entitled to share equally in
corporate assets after satisfaction of all liabilities. The
shares of Common Stock, when issued, will be fully paid and non-
assessable.
Holders of Common Stock are entitled to receive such
dividends as the board of directors may from time to time declare
out of funds legally available for the payment of dividends. The
Company has not paid dividends on its Common Stock and does not
anticipate that it will pay dividends in the foreseeable future.
Preferred Stock
The Company's board of directors has authority, without
action by the shareholders, to issue all or any portion of the
authorized but unissued Preferred Stock in one or more series and
to determine the voting rights, preferences as to dividends and
liquidation, conversion rights, and other rights of such series.
The Preferred Stock, if and when issued, may carry rights
superior to those of the Common Stock.
The Company considers it desirable to have a class or
classes of Preferred Stock available to provide increased
flexibility in structuring possible future acquisitions and
financings and in meeting corporate needs which may arise. If
opportunities arise that would make it desirable to issue
Preferred Stock through either public offerings or private
placements, the provision for these classes of stock in the
Company's certificate of incorporation would avoid the possible
delay and expense of a shareholder's meeting, except as may be
required by law or regulatory authorities. Issuance of the
Preferred Stock would result, however, in a series of securities
outstanding that may have certain preferences with respect to
dividends, liquidation, redemption, and other matters superior to
over the Common Stock which would result in dilution of the
34
<PAGE> 35
income per share and net book value of the Common Stock.
Issuance of additional Common Stock pursuant to any conversion
right which may be attached to the Preferred Stock may also
result in the dilution of the net income per share and net book
value of the Common Stock. The specific terms of any series of
Preferred Stock will depend primarily on market conditions, terms
of a proposed acquisition or financing, and other factors
existing at the time of issuance. Therefore, it is not possible
at this time to determine the respects in which a particular
series of Preferred Stock will be superior to the Company's
Common Stock. The board of directors does not have any specific
plan for the issuance of Preferred Stock at the present time and
does not intend to issue any such stock on terms which it deems
are not in the best interests of the Company and its
shareholders.
Resale of Outstanding Shares.
All 120,000 shares of the Common Stock presently issued and
outstanding are "restricted securities" as that term is defined
in Rule 144 adopted under the Securities Act of 1933 which
provides, in essence, that as long as there is publicly available
current information about the Company, a person holding
restricted securities for a period of at least two years may sell
in each 90-day period, provided he is not part of a group acting
in concert, an amount equal to the greater of the average weekly
trading volume of the stock during the four calendar weeks
preceding the sale or 1% of the Company's outstanding Common
Stock. Consequently, beginning in December, 1998, 120,000 shares
of Common Stock currently issued and outstanding will have been
held for two years within the meaning of Rule 144 and may be
eligible for resale in accordance with such volume restrictions.
Sales under Rule 144 or otherwise may, in the future, have a
depressive effect on the price of the Company's Common Stock in
any market which may develop.
Transfer Agent
Upon the closing of this offering, he transfer agent for the
Company's securities will be Continental Stock Transfer & Trust
Company, New York, New York.
35
<PAGE> 36
UNDERWRITING
Plan of Distribution
Pursuant to an underwriting agreement (the "Underwriting
Agreement"), the Company has engaged Greenway Capital
Corporation, the Underwriter, as its exclusive agent to sell
10,000 Units to the public on a "best efforts" basis. There can
be no assurance that any of the Units will be sold. If the
Underwriter fails to sell at least 5,000 Units within three
months from the effective date of this prospectus (unless
extended by the Company and Underwriter for an additional period
not to exceed three months), the offering will be terminated and
subscription payments will be promptly refunded in full to
subscribers, without paying interest or deducting expenses.
All subscriptions payments should be made payable to
"___________ Bank - Alpha Resources, Inc. Escrow Account." The
subscription payments will be deposited by the Underwriter no
later than noon of the next business day following receipt into
an escrow account maintained by _________________ Bank [address].
The escrow agent will hold all subscription payments pending the
sale of the minimum number of Units within the specified period.
Such subscription payments will only be withdrawn from the escrow
account for the purpose of paying the underwriting and offering
expenses and establishing the escrow for the Deposited Funds
under Rule 419, or for the purpose of refunding subscriptions to
investors (without interest and without deduction for offering
expenses) if the minimum number of Units is not sold.
If the minimum number of Units is sold within the specified
period, the net offering proceeds, after deduction for
underwriting commissions and offering expenses, estimated at
$18,300, if the entire offering is sold, and $14,400, if only the
minimum offering is sold, and the securities to be issued to
investors will be deposited in an escrow account. While held in
the escrow account, the securities may not be traded or
transferred. Except for an amount up to 10% of the Deposited
Funds (estimated at $5,220, if the entire offering is sold, or at
$2,610, if only the minimum offering is sold), which is otherwise
releasable under the rule, the Deposited Funds and the deposited
Securities may not released until an acquisition meeting certain
specified criteria has been made and sufficient number of
investors reconfirm their investment in accordance with the
procedures set forth in Rule 419. Pursuant to these procedures,
a new prospectus, which describes an acquisition candidate and
its business and includes audited financial statements, will be
delivered to all investors. The Company must return the pro rata
portion of the Deposited Funds to any investor who does not elect
to remain an investor. Unless a sufficient number of investors
elect to remain investors, all investors will be entitled to the
return of a pro rata portion of the Deposited proceeds (and any
interest earned thereon), and none of the Deposited Securities
will be issued to investors. In the event an acquisition is not
consummated within 18 months of the effective date, the Deposited
Funds will be returned in a pro rata basis to all investors.
(See "PROSPECTUS SUMMARY: Investors' Rights to Reconfirm
Investment Under Rule 419").
The public offering price of the Units was determined by the
Company after consultation with the Underwriter and is based
arbitrarily upon various considerations, including market
conditions and other factors. The public offering price does not
bear any relationship to the assets, book value of the Company,
or other traditionally recognized criteria or indicia of value.
The Company's officers and directors may acquire a substantial
amount of the shares in this offering.
The Underwriter will receive a sales commission of 10% or
$0.60 per Unit. The Company has also agreed to pay the
Underwriter a non-accountable expense allowance equal to 3% of
the gross proceeds of the offering $1,800 if the entire offering
is sold and $900 if only the minimum offering is sold. The
Underwriter has advised the Company that it proposes to allow
concessions to certain selected dealers who are members of the
36
<PAGE> 37
National Association of Securities Dealers. The amount of such
concessions will be determined through negotiations between the
Underwriter and the selected dealers or between such selected
dealers and other dealers, as the case may be.
The Company has agreed to indemnify the Underwriter, and the
Underwriter has agreed to indemnify the Company against certain
liabilities, including liabilities under the Securities Act. In
the opinion of the Securities and Exchange Commission, such
indemnification is against the public policy as expressed in the
Securities Act and is, therefore, unenforceable.
The foregoing is a summary of the principal terms of the
Underwriting Agreement, which summary does not purport to be
complete. For all the terms of the Underwriting Agreement,
reference is made to a copy thereof which is on file as an
exhibit to the registration statement of which this prospectus
forms a part.
Underwriter Warrants
On the sale of the minimum number of Units offered hereby,
the Company will sell to the Underwriter, at price of $0.01 each,
warrants ("Underwriter Unit Warrants") to purchase units
("Underwriter Units"), each Underwriter Unit consisting of sixty
shares of Common Stock. The number of Underwriter Unit Warrants
sold to the Underwriter shall equal 10% percent of the total
number of Units sold to the public in the offering, or a maximum
1,000 Underwriter Unit Warrants. The Underwriter Unit Warrants
are exercisable for a period of four years commencing one year
after the date hereof. The exercise price of the Underwriter
Unit Warrants will be $7.20 per unit. The Underwriter Unit
Warrants are non-transferable for one year, except to officers of
the Underwriter, or officers or partners of selling group
members. The Underwriter Warrants are exercisable for a term of
four years from the date the Underwriter Unit Warrants are
exercised. The Underwriter Unit Warrants are protected against
dilution on the occurrence of certain events, such as stock
dividends, split-ups, and reclassifications. The holder of the
Underwriter Unit Warrants have no voting, dividend, or other
rights as stockholders of the Company with respect to shares
underlying the Underwriter Unit Warrants unless such warrants
have been exercised.
At any time during the period in which the Underwriter Unit
Warrants are exercisable, the Company is obligated to offer the
holders the right to register the Common Stock issuable on
exercise thereof in any registration statement filed by the
Company. In addition, the holders are also granted the right to
demand registration on one occasion only. The Company has agreed
to pay the costs, including legal, accounting, and other costs,
incurred in connection with such registration.
During the life of the Underwriter Unit Warrants, the
holders thereof are given, a nominal cost, the opportunity to
profit from a rise in the market price of the Common Stock with a
resulting dilution in the interest to the other holders of Common
Stock. The holders of the Underwriter Unit Warrants can be
expected to exercise such warrants at a time when the Company
would, in all likelihood, be able to obtain needed capital from
an offering of its unissued Common Stock on terms more favorable
to the Company than those provided for by the Underwriter Unit
Warrants. Such circumstances may adversely affect the terms on
which the Company can obtain additional financing.
37
<PAGE> 38
LITIGATION
The Company is not a party to any material pending legal
proceedings and no such action by or, to the best of its
knowledge, against the Company has been threatened.
38
<PAGE> 39
LEGALITY OF SHARES
Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., counsel
to the Company will render an opinion that the Common Stock being
offered hereby, when issued, will be fully paid and non-
assessable under the corporation law of the State of Delaware.
Michael T. Cronin, a partner in said firm is a shareholder of the
Company.
39
<PAGE> 40
EXPERTS
The financial statements included in this prospectus, to the
extent and for the periods indicated in its report, have been
included herein and in the registration statement in reliance on
the report of Pender, Newkirk and Company, the Company's
independent certified public accounts, given on the authority of
such firm as experts in accounting and auditing.
40
<PAGE> 41
FURTHER INFORMATION
The Company has filed with the Securities and Exchange
Commission a registration statement, SEC File No.
___________________, under the Securities Act of 1933, as
amended, with respect to the securities offered by this
prospectus. This prospectus omits certain information contained
in the registration statement. For further information,
reference is made to the registration statement and to the
exhibits filed therewith. Statements contained in this
prospectus as to the contents of any contract or other document
referred are not necessarily complete, and where such contract or
other document is an exhibit to the registration statement, such
statement is deemed to be qualified and amplified in all respects
by the provisions of the exhibit. The complete registration
statement, including exhibits, is not available to the public at
the Southeast Regional Office, Atlanta District Office, but may
be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission at 450 Fifth
Street, NW, Washington, DC 20549, at its Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, NY 10048, and
at its Midwest Regional Office, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and copies may be obtained from
the public reference facilities maintained by the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
41
<PAGE> 42
ALPHA RESOURCES, INC.
(A Development Stage Company)
Financial Statements
For the Period from Inception (January 13, 1997) to January 15, 1997
Contents
<TABLE>
<CAPTION>
Page
------
<S> <C>
Independent Auditor's Report on Financial Statements F-2
Financial Statements:
Balance Sheet F-3
Statement of Changes in Stockholders' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
</TABLE>
F-1
<PAGE> 43
Independent Auditors' Report
Board of Directors
Alpha Resources, Inc.
Clearwater, Florida
We have audited the accompanying balance sheet of Alpha
Resources, Inc. as of January 15, 1997 and the related statements
of changes in stockholders' equity, and cash flows for the period
January 13, 1997 (date of inception) to January 15, 1997. These
financial statements are the responsibility of the management of
Alpha Resources, Inc. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. These standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the
financial position of Alpha Resources, Inc. as of January 15,
1997 and the results of its operations and its cash flows for the
period then ended in conformity with generally accepted
accounting principles.
Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
January 17, 1997
F-2
<PAGE> 44
ALPHA RESOURCES, INC.
(A Development Stage Company)
Balance Sheet
January 15, 1997
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 15,600
Organization expense 500
---------
$ 16,100
=========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
Current liabilities:
Accrued professional fees $ 500
Loans payable - stockholders 15,000
---------
$ 15,500
Stockholders' equity:
Preferred stock, $.001 par value:
Authorized - 5,000,000
Issued or outstanding - none
Common stock, $.0001 par value:
Authorized - 10,000,000
Issued and outstanding - 120,000 120
Additional paid-in capital 480
---------
Total stockholders' equity $ 600
---------
$ 16,100
=========
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements
F-3
<PAGE> 45
ALPHA RESOURCES, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period from Inception (January 13, 1997) to January 15, 1997
<TABLE>
<CAPTION>
Total Additional
Stockholders' Common Paid-in
Equity Stock Capital
------------- -------- ----------
<S> <C> <C> <C>
Issuance of 120,000 shares of
common stock $ 600 $ 120 $ 480
------- ------- -------
Balance, January 15, 1997 $ 600 $ 120 $ 480
======= ======= =======
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements
F-4
<PAGE> 46
ALPHA RESOURCES, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Period from Inception (January 13, 1997) to January 15, 1997
<TABLE>
<S> <C>
Cash flows from financing activities:
Proceeds from issuance of common stock $ 600
Proceeds from loans payable - stockholders 15,000
-------
Net cash from financing activities 15,600
-------
Cash at January 15, 1997 $ 15,600
=======
</TABLE>
Supplemental disclosure of non-cash investing and financing
activities:
The company accrued $500 of legal fees to form the company.
These fees have been recorded as organizational costs in a
non-cash transaction.
The Accompanying Notes Are An Integral Part Of The Financial Statements
F-5
<PAGE> 47
ALPHA RESOURCES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period from Inception (January 13, 1997) to January 15, 1997
Note I - Background
Alpha Resources, Inc. (the "Company") was incorporated January
13, 1997 in the State of Delaware, and has been in the
development stage since its formation. The Company intends to
effect a merger, exchange of capital stock, asset acquisition, or
other similar business combination or acquisition with a business
entity. The Company has not identified any specific business or
company to fulfill it intentions.
The Company plans to register its securities with the Securities
and Exchange Commission and offer certain securities in a "blank
check" offering subject to Rule 419 of the Securities Act of
1933.
Note 2 - Summary of Significant Accounting Policies
Accounting Estimates
The preparation of financial statements requires management to
make estimates and assumptions that effect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Income Taxes
The Company plans to file its income taxes on a calendar year
basis. Deferred income taxes are provided for when transactions
are reflected in income for financial reporting purposes in a
year other than the year of their inclusion in taxable income.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that
includes the enactment date. At January 15, 1997, the Company
had no timing differences and therefore no deferred tax had been
reported on its financial statements.
Concentration of Credit Risk
The Company maintains cash balances at a bank. The account is
insured by the Federal Deposit Insurance Corporation up to
$100,000.
Note 3 - Related Party Transactions
The Company has received $15,000 of loans from the three
shareholders of the Company. These loans are due on demand and
bear interest at 8% per annum and are unsecured. These
shareholders are also officers and directors of the Company.
One shareholder is also providing office space to the Company at
no charge, pursuant to an oral agreement. The agreement remains
in effect until a business combination is consummated or until
any escrow held from the offering is terminated, upon thirty days
prior written notice by either party to the agreement.
F-6
<PAGE> 48
No dealer, salesperson, or any other individual has been authorized
to give any information or make any representations not contained in
this Prospectus in connection with the offering covered by this
Prospectus. If given or made, such information or representations
must not be relied upon as having been authorized by the Company or
the Underwriters. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, the Common Stock in any
jurisdiction where, or to any person to whom, it is unlawful to make
such offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any Further circumstances,
create an implication that there has not been any change in the facts
set forth in this Prospectus or in the affairs of the Company since
the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information......... 5
Prospectus Summary............ 8
The Company................... 8
Risk Factors.................. 12
Dilution...................... 19
Comparative Data.............. 20
Use of Proceeds............... 21
Business...................... 23
Principal Shareholders........ 30
Certain Transactions.......... 33
Description of Securities..... 34
Underwriting.................. 36
Litigation.................... 38
Legality of Shares............ 39
Experts....................... 40
Further Information........... 41
Financial Statements.......... F-1
</TABLE>
- ----------------------------------------------------------------
ALPHA RESOURCES, INC.
10,000 UNITS
600,000 SHARES OF
COMMON STOCK
-----------------
PROSPECTUS
-----------------
-----------------
____1997
- ------------------------------------------------------------------
<PAGE> 49
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Certificate of Incorporation (the "Certificate") provides
that a Director shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a
Director, except, (i) for any breach of the duty of loyalty; (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of laws; (iii) for liability under
Section 174 of the Delaware General Corporation Law (the "Delaware
GCL") (relating to certain unlawful dividends, stock repurchases or
stock redemptions); or (iv) for any transaction from which the
Director derived any improper personal benefit. Article 3 of the
Company's Certificate, included as Exhibit 3 hereto, provides that the
Company shall indemnify each Director and such of the Company's
officers, employees and agents as the Board of Directors shall
determine from time to time to the fullest extent provided by the
Delaware GCL.
Article I of the Company's Bylaws, included in Exhibit 3B hereto,
provides, in general, that the Company shall indemnify its directors
and officers under the circumstances specified in the Delaware GCL and
gives authority to the Company to purchase insurance with respect to
such indemnification.
Item 25. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the issuance and
distribution of the securities being registered hereby.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee...... $__________
National Association of Securities Dealers, Inc.
examination fee.......................................... ___________
Accounting fees and expenses............................. ___________
Legal fees and expenses.................................. ___________
Printing and engraving expenses.......................... ___________
Blue Sky fees and expenses (including legal fees)........ ___________
Transfer Agent and Registrar fees and expenses........... ___________
Miscellaneous............................................ ___________
TOTAL......................................... ___________
</TABLE>
* Estimates
The Registrant will bear all expenses listed above.
II-1
<PAGE> 50
Item 26. Recent Sales of Unregistered Securities
The Company has issued 120,000 shares of its Common Stock to its
three (3) founders.
For such transactions, the Company relied upon Section 4(2) of
the Securities Act of 1933 as an exemption available from the
registration requirements of Section 5 of the Securities Act of 1933
for transactions by an issuer not involving a public offering. The
securities were issued to a purchaser who represented, in a manner
satisfactory to the Company, that it had acquired the securities for
investment and not with the view of the distribution thereof. The
transaction described or referred to above did not involve an
underwriter, and no discount or commission was paid in connection
therewith. No advertising or general solicitation was employed by the
Company in offering the securities and no commissions were paid in
connection with the sales thereof. The securities of the Company
issued to the purchasers have been embossed with the legend
restricting transfer of such securities. A stop transfer order
concerning the transfer of the certificates representing all the
common stock issued and outstanding as indicated above has been noted
on the Company's stock transfer ledger.
II-2
<PAGE> 51
<TABLE>
<CAPTION>
Item 27. Exhibits and Financial Statement Schedule.
<C> <S>
10.1 Form of Underwriting Agreement (1)
10.2 Form of Selected Dealers Agreement (1)
10.3 Form of Underwriter's Warrant (1)
10.4 Form of Proceeds Escrow Agreement
10.5 Certificate of Incorporation (1)
10.6 By-Laws (1)
10.7 Opinion re: Legality and Consent of Counsel (2)
10.8 Consent of Pender, Newkirk & Co. , CPA (1)
</TABLE>
___________________
(1)Filed herewith.
(2)To be filed by amendment.
II-3
<PAGE> 52
Item 28. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereto) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers, and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director,
officer, or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the
securities being registered, the Company will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby further undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
<PAGE> 53
II-4
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-5
<PAGE> 54
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all the requirements of filing on
this Form SB-2 and authorizes this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Clearwater, State of Florida on February ___, 1997.
ALPHA RESOURCES, INC.
By: /s/ Gerald Couture
-----------------------------
Gerald Couture, President
and Chief Executive Officer
In accordance with the requirements of the Securities Act of
1933, this Registration Statement on Amendment No. 1 to Form SB-2 has
been signed by the following persons in the capacities and on the
dates stated.
<TABLE>
<S> <C> <C>
Signature Capacity Date
- --------- -------- ----
/s/ Gerald Couture Chairman of the Board, February ___, 1997
- ------------------------ Chief Executive Officer,
Gerald Couture Financial Officer, Chief
Accounting Officer, President,
Treasurer
/s/ Michael T. Cronin Director, Secretary February ___, 1997
- ------------------------
Michael T. Cronin
/s/ Lawrence Steinberg Director February ___, 1997
- ------------------------
Lawrence Steinberg
</TABLE>
II-6
<PAGE> 55
600,000 Shares of Common Stock
ALPHA RESOURCES, INC.
UNDERWRITING AGREEMENT
_________________, 1997
Greenway Capital Corporation
45 Broadway
19th Floor
New York, NY 10006
Gentlemen:
Alpha Resources, Inc., a Florida corporation (the "Company"),
proposes to sell to the public up to 600,000 shares of the
Company's Common Stock par value $0.0001 (the "Shares"). The
Company hereby employs you, Greenway Capital Corporation (the
"Underwriter") as exclusive agent of the Company in connection
with the proposed sale, on a "best efforts, all or none" basis as
to 300,000 Shares and a "best efforts" basis as to the remaining
300,000 Shares. The shares will be offered in Units. Each Unit
will contain 60 Shares. Up to 10,000 Units at $6.00 per Unit
shall be offered. All references herein to "you" shall be to
each of you. The Company and the Underwriter hereby represent
and warrant and agree with the following terms, provisions and
conditions.
1. Securities Offered/Terms.
The Company proposes to issue and sell up to 10,000
Units at $6.00 per Unit. Each Unit consist of 60 shares of
Common Stock. The minimum offering amount shall be 5,000 Units
or $30,000 of gross offering proceeds. The maximum offering
amount shall be 10,000 Units or $60,000 of gross offering
proceeds. The Shares shall be offered to the public for a ninety
(90) day period from the Effective Date of the Registration
Statement covering this offering. The initial offering period of
ninety (90) days may be extended by mutual agreement between the
Company and the Underwriter for an additional ninety (90) days.
There shall be one closing for this offering which shall occur
upon the earlier of the receipt of proceeds for the maximum
number of Units offered hereby or in the event the maximum number
of Shares is not sold then for the number of Units sold, provided
such number is not less than 5,000 Units prior to the close of
the offering. In accordance with Section 3.3 of this Agreement,
all funds received from subscribers shall be held in escrow with
_________________________________.
2. Representations and Warranties.
2.1. Representations and Warranties of the Company.
The Company (which includes all subsidiaries of the Company)
represents and warrants to, and agrees with, the Underwriter
that:
(a) A Registration Statement (SEC File No.
_______ on Form SB-2 and one or more post-effective amendments
relating to the public offering of the Units, Underwriter
Warrants and shares underlying the Underwriter Warrants,
including a preliminary form of prospectus, amended and/or
<PAGE> 56
supplemented Prospectus, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder (including but not limited to Regulation
S-K and the General Instructions to Form SB-2 and Rule 419), and
has been filed with the Commission under the Act. The Company
has prepared in the same manner and proposes to file, prior to
the effective date of such Registration Statement, additional
amendments to such Registration Statement, including a final form
of Prospectus, copies of which shall be delivered to you.
"Preliminary Prospectus" shall mean each prospectus filed
pursuant to Rule 430 of the Rules and Regulations. The
Registration Statement (including all financial schedules and
exhibits) as amended at the time it becomes effective and the
final prospectus included therein are respectively referred to as
the "Registration Statement" and the "Prospectus", except that
(i) if the prospectus first filed pursuant to Rule 424(b), and
(ii) if such registration statement or prospectus is amended or
such prospectus is supplemented after the effective date of such
registration statement and prior to the Closing Date (as
hereinafter defined), the terms "Registration Statement" and
"Prospectus" shall include the Registration Statement and
Prospectus so amended, and the term "prospectus" shall include
the Prospectus as so supplemented, or both, as the case may be.
(b) When the Registration Statement and/or a
post-effective amendment thereto becomes effective and at all
times subsequent thereto up to the Closing Date (i) the
Registration Statement and Prospectus will in all respects
conform to the requirements of the Act and the Rules and
Regulations; and (ii) neither the Registration Statement nor the
Prospectus will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make statements therein not misleading; provided,
however, that the Company makes no representations, warranties or
agreements as to information contained in or omitted from the
Registration Statement or Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by
or on behalf of the Underwriter specifically for use in the
preparation thereof. It is understood that the statements set
forth in the Prospectus under the heading "Underwriting" and the
identity of counsel to the Underwriter under the heading "Legal
Opinions" constitute the only information furnished in writing by
or on behalf of the Underwriter for inclusion in the Registration
Statement and Prospectus, as the case may be.
(c) The Commission has not issued an order pre
venting or suspending the use of any Preliminary Prospectus with
respect to the Shares and each Preliminary Prospectus has
complied fully in all material respects with the requirements of
the Act and the Rules and Regulations and, as of its date, did
not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein
not misleading.
(d) The Company is, and on the Closing Date will
be, a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida. The Company
has, and on the Closing Date will have, the power and authority
to conduct all of the activities conducted by it, to own or lease
all of the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the
Prospectus. The Company at the Closing Date will be duly
licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets
2
<PAGE> 57
owned or leased by it makes such license or qualification
necessary, except where failure to be so licensed or to qualify
will not materially affect the Company's business, properties or
financial condition. A complete and correct copy of the charter,
including all amendments thereto, and of the by-laws of the
Company has been delivered to you, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date.
(e) Except as otherwise provided for in the Regi
stration Statement, subsequent to the date hereof and prior to
the Closing Date, the Company will not acquire or agree to ac
quire any of its equity securities and will not issue or agree to
issue any of its or their equity securities other than pursuant
to currently outstanding options, warrants and convertible
securities. Except as set forth or referred to in the Pros
pectus, the Company shall not have outstanding, and on the
Closing Date will not have outstanding, any options to purchase,
or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to
issue or sell, shares of the Company's Common Stock or any such
warrants, convertible securities or obligations.
(f) No holders of Common Stock or of any
securities of the Company exercisable or convertible into the
Company's Common Stock have the right to include such Common
Stock or securities in the Registration Statement.
(g) The financial statements of the Company
included in the Registration Statement and the prospectus, as
amended and supplemented, together with related notes, present
fairly the financial position of the Company as of the respective
dates thereof for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods presented. Pender
Newkirk & Co., Certified Public Accountants, who have reported on
such financial statements, are independent accountants with
respect to the Company as required by the Act and the Rules
and Regulations. No other financial statements or notes thereto
are required to be included in the Registration Statement and
Prospectus.
(h) Subsequent to the respective dates as of
which information is set forth in the Registration Statement and
the Prospectus and prior to the Closing Date, except as set forth
in or contemplated by the Registration Statement and the
Prospectus, (A) the Company has not incurred and will not have
incurred any material liabilities or obligations, direct or
contingent, and has not entered into and will not have entered
into any material transactions other than as contemplated in the
Registration Statement and the prospectus, (B) the Company has
not and will not have paid or declared any dividends or have made
any other distribution on its capital stock and (C) there has not
been and will not have been any material adverse change in the
business, financial condition or results of operations of the
Company, or in the book value of the assets of the Company,
arising from any reason whatsoever.
(i) Except as set forth in or contemplated by
the Registration Statement and the Prospectus, the Company does
not have, and on the Closing Date will not have, any material
contingent liabilities.
(j) The Company has no subsidiary corporations
except as disclosed in the Registration Statement or Prospectus
nor has it any equity interest in any partnership, joint venture,
association or other entity except as disclosed in the Registra
tion Statement or prospectus.
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(k) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or
proceedings pending or to the knowledge of the Company
threatened, against or affecting the Company or its business,
financial condition, results of operations or material
properties, or any of its principal officers before or by any
federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would
materially and adversely affect the Company or its business,
financial condition, results of operations or material
properties.
(l) The Company is not in violation of its
charter or by-laws. Neither the execution and delivery of this
Agreement, nor the issue and sale of the Shares or the
Underwriter's Warrants hereunder, nor the consummation of any of
the transactions contemplated herein, nor the compliance by the
Company with the terms and provisions hereof has conflicted with
or will conflict with, or has resulted in or will result in a
breach of, any of the terms and provisions of, or has constituted
or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant
to the terms of any indenture, mortgage, deed of trust, note,
loan or credit agreement or any other agreement or instrument to
which the Company is a party or by which the Company may be bound
or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the charter or the by-laws of the Company or any
statute or any order, rule or regulation applicable to the
Company of any court or of any federal, state or other regulatory
authority or other government body having jurisdiction over the
Company.
(m) When paid for in accordance with this Agree
ment, the Units and the Underwriter Warrants, and the shares
issuable upon exercise of the Underwriter Warrants will be
validly issued, fully paid and non-assessable. The description
in the Registration Statement and the Prospectus of the Shares
and Underwriter Warrants is, and on the date hereof and on the
Closing Date will be, in all material respects complete and
accurate. The issuance and sale of the Shares and the
Underwriter Warrants have been duly and validly authorized. The
Underwriter Warrants constitute valid and binding obligations of
the Company, enforceable in accordance with their terms, to issue
and sell, upon exercise and payment in accordance with the terms
thereof, the number of shares called for thereby.
(n) All issued and outstanding shares of Common
Stock of the Company have been duly authorized and validly issued
and the Common Stock is fully paid and non-assessable; the
holders thereof are not subject to personal liability by reason
of being such holders; and none of such securities were issued in
violation of the preemptive rights of any holders of any security
of the Company, or were offered, sold or issued in violation of
the Act or any state law.
(o) The Company and each of its subsidiaries
have good and marketable title to all properties and assets
described in the Registration Statement and Prospectus as owned
by them, free and clear of all liens, charges, encumbrances or
restrictions, except such liens, charges, encumbrances or
restrictions as are described in the Registration Statement and
Prospectus. The Company has valid, subsisting and enforceable
leases for the material properties described in the Registration
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<PAGE> 59
Statement and prospectus as leased by it, with such exceptions as
are not material and do not materially interfere with the use
made and proposed to be made of such properties by the Company.
(p) There is no document or contract of a char
acter required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required. No state
ment, representation, warranty or covenant made by the Company in
this Agreement or made in any certificate or document required by
this Agreement to be delivered to you was, when made, inaccurate,
untrue or incorrect.
(q) All taxes which are due from the Company
have been paid in full (or adequate accruals for the payment
thereof have been provided for in their accounting records), and
the Company has no tax deficiency or claim outstanding, proposed
or assessed against it.
(r) Subsequent to the respective dates as of
which information is given in the Registration Statement and
Prospectus, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (A) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, or entered into any transaction
other than in the ordinary course of business and which is not
required to be disclosed in the Registration Statement, or (B)
declared or paid any dividend or made any other distribution on
or in respect to its capital stock.
(s) On the effective date of the Registration
Statement, the Company shall have an authorization of capital
stock as set forth therein.
(t) The Company has all material licenses,
permits and other governmental authorizations as are required for
the conduct of its business or the ownership of its property as
described in the Registration Statement and Prospectus and is in
all respects complying therewith and owns or possesses adequate
rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct
of such business and has not received any notice of conflict with
the asserted rights of others in respect thereof. None of the
activities or business of the Company are in violation of, or
cause the Company to violate, any law, rule, regulation or order
of the United States, any state, county or locality, or any
agency or body of the United States or any state, county or
locality, the violation of which would have a material adverse
impact upon the condition (financial or otherwise), business,
property, prospective results of operations, or net worth of the
Company.
(u) The Company has not, directly or indirectly,
at any time (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contri
bution in violation of law or (ii) made any payment to any state,
federal or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other
than payments or contributions required or allowed by applicable
law. The Company's internal accounting controls and procedures
are sufficient to cause the Company to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as
amended.
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<PAGE> 60
(v) On the Closing Date all transfer or other
taxes (including franchise, capital stock or other tax, other
than income taxes, imposed by any jurisdiction), if any, which
are required to be paid in connection with the sale and transfer
of the Shares to the Underwriter hereunder will have been fully
paid or provided for by the Company and all laws imposing such
taxes will have been fully complied with.
(w) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be ex
pected to constitute, the stabilization or manipulation of the
price of the Shares.
(x) The Company has not entered into any
agreement pursuant to which any person is entitled, either
directly or indirectly, to compensation from the Company for
services as a finder in connection with the public offering
referred to herein, other than as set forth in the Registration
Statement and Prospectus.
(y) All shares of the Company's Common Stock
sold by the Company within a period of three years from the date
hereof as set forth in Item 24 of Part II of the Registration
Statement have been sold by the Company pursuant to a valid
exemption from the registration provisions of the Act and not in
violation of Section 5 thereof.
(z) Other than as set forth in the Prospectus,
no person is entitled either directly or indirectly to
compensation from the Company, from the Underwriter, or from any
other person for services as a finder in connection with the
proposed offering, and the Company agrees to indemnify and hold
harmless the Underwriter against any losses, claims, damages or
liabilities, joint or several which shall, for all purposes of
this Agreement, include, but not be limited to, all costs of
defense.
2.2. Representations and Warranties of the Underwriter.
The Underwriter represents and warrants to, and agrees with the
Company that:
(a) The Underwriter is registered as a broker/
dealer under the laws of the United States and under the laws of
each jurisdiction in which it is required to be registered as a
broker-dealer, or has entered into a selected broker-dealer's
agreement with a party which is appropriately registered to sell
the Shares in states for which the Underwriter is not registered
as a broker/dealer, in order to and in which it intends to offer
or sell any of the Shares, and each individual through whom it
will act in any offer or sale of the Shares is properly
registered or licensed by all requited regulatory authorities.
(b) The Underwriter is a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD").
(c) The Underwriter is not the subject of any
order revoking or suspending any registration of membership re
ferred to in subsection 2.2(a) or 2.2(b) above or which, with the
passage of time, will cause such suspension or revocation.
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<PAGE> 61
(d) The Underwriter will promptly notify the
Company in writing should any of its representations set forth
above become inaccurate during the term of this Agreement.
(e) The Underwriter shall comply with all applic
able federal and state laws governing the offer and sale of the
Shares.
3. Employment of the Underwriter.
On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein
set forth:
3.1. (a) The Company hereby employs the Underwriter
as its exclusive agent to sell for its account 300,000 Shares of
its securities, as defined in Section 1 hereof, on a "best
efforts, all or none" basis and the remaining 300,000 Shares on a
"best efforts" basis.
(b) In the event that less than 300,000 Shares
are sold during the offering period, this offering will not be
completed, none of the Shares will be sold, and all proceeds will
be returned in full, without interest or deduction, to sub
scribers, not later than 7 business days following the expiration
of ninety (90) day (or 180 days, as the case may be) from the
effective date as set forth in the Prospectus described herein.
3.2. The Units shall be offered to the general public
at the public offering price of $6.00 per Unit.
3.3. All funds received from subscribers shall be held
in escrow with ________________________________________ (the
"Escrow Agent"). All subscriber checks shall be made payable to
the bank escrow agent only and all checks shall be transmitted to
the escrow agent by noon of the next business day following their
receipt by the Underwriter or participating broker dealers
directly to the bank escrow agent. The Underwriter shall
further, with respect to the handling and transmission of
subscriber funds, at all times comply with Rule 15c2-4 of the
Securities and Exchange Act of 1934 and NASD Notice to Members 84-
7.
3.4. The Company agrees to issue, or cause to be
issued, the Shares and the Underwriter Warrants in such names and
denominations as may be specified by the Underwriter and to
deliver the Shares on the Closing Date against payment to the
Company of $6.00 per Unit, less the Underwriter commission
provided for in Paragraph 3.5 hereof and the non-accountable
expense allowance provided for in Paragraph 7.2 hereof.
3.5. The Underwriter shall be entitled to receive as
compensation (a) a commission of $.60 per Unit with respect to
all Units sold, which compensation the Underwriter shall be
entitled to deduct and retain from the proceeds of the sale of
the Shares prior to transmittal of payment to the Company.
Subject to the sale of the minimum number of Shares offered
hereby (300,000), the Company agrees to sell to the Underwriter,
for up to $_____, up to _____ Common Stock Purchase Warrants (the
"Underwriter Warrants") to purchase one (1) share of Common Stock
for each ten (10) Shares of Common Stock sold pursuant to the
offering. The Underwriter Warrants shall be exercisable at a
price of $___ per Share (120% of the price of the Share). The
number of Underwriter Warrants to be sold to the Underwriter
shall be based on one (1) Warrant for each ten (10) Shares of
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<PAGE> 62
Common Stock sold in the offering. The Underwriter Warrants
shall not be assignable or transferable for one year following
their issuance, except to officers of the undersigned or to
officers or partners of members of the selling group. The
Underwriter Warrants will contain appropriate anti-dilution
provisions and the Company will set aside sufficient Shares to
provide for their exercise.
3.6. The Underwriter may, in its discretion, form a
"Selling Group" and offer Shares for sale through certain dealers
who are members of the NASD at the public offering price less a
commission of $___ per Share with no re-allowance to other
dealers.
3.7. The Underwriter and the Company, by mutual
agreement may, at any time prior to Closing Date, direct that the
Escrow Agent return funds to any or all subscribers.
4. Covenants of the Company.
The Company covenants and agrees with the Underwriter
that:
(a) The Company will use its best efforts to
cause the Registration Statement to become effective and upon
notification from the Commission that the Registration Statement
has become effective, will so advise you and will not at any
time, whether before or after the effective date, file any
amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised
and furnished with a copy or to which you or your counsel have
objected in writing or which is not in compliance with the Act
and the Rules and Regulations. At any time prior to the later of
(A) the completion by the Underwriter of the distribution of the
Shares contemplated hereby (but in no event more than nine months
after the date on which the Registration Statement shall have
become or been declared effective) and (B) ninety (90) days after
the date on which the Registration Statement shall have become or
been declared effective (or such longer period of time as a
current Registration Statement must remain in effect with respect
to the Share Warrants), the Company will prepare and file with
the Commission, promptly upon your request, any amendments or
supplements to the Registration Statement or prospectus which, in
your opinion, may be reasonably necessary or advisable in
connection with the distribution of the Shares, the Underwriter
Warrants and shares of Common Stock underlying the Underwriter
Warrants.
As soon as the Company is advised thereof, the
Company will advise you, and confirm the advice in writing, of
the receipt of any comments of the Commission, of the effective
ness of any post-effective amendment to the Registration State
ment, of the filing of any supplement to the prospectus or any
amended Prospectus, of any request made by the Commission for
amendment of the Registration Statement or for supplementing of
the Prospectus or for additional information with respect
thereto, of the issuance by the Commission or any state or regu
latory body of any stop other or other order suspending the
effectiveness of the Registration Statement or any order prevent
ing or suspending the use of any preliminary prospectus, or of
the suspension of the qualification of the Shares for offering in
any jurisdiction, or of the institution of any proceedings for
any of such purposes, and will use its best efforts to prevent
the issuance of any such order, and, if issued, to obtain as soon
as possible the lifting thereof.
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<PAGE> 63
The Company has caused to be delivered to you
copies of each Preliminary Prospectus, and the Company has con
sented and hereby consents to the use of such copies for the pur
poses permitted by the Act. The Company authorizes the Under
writer and dealers to use the Prospectus in connection with the
sale of the Shares for such period as in the opinion of counsel
to the Underwriter the use thereof is required to comply with the
applicable provisions of the Act and the Rules and Regulations.
In case of the happening, at any time within the period that a
prospectus is required under this Act to be delivered in con
nection with sales by an Underwriter, of any event of which the
Company has knowledge and which materially affects the Company or
the securities of the Company, or which in the opinion of counsel
for the Company or counsel for the Underwriter should be set
forth in an amendment of the Registration Statement or a supple
ment the Prospectus in order to make the statements therein not
then misleading, in light of the circumstances existing at the
time the Prospectus is required to be delivered to a purchaser of
the Shares or in case it shall be necessary to amend or
supplement the Prospectus to comply with law or with the Rules
and Regulations, the Company will notify you promptly and
forthwith prepare and furnish to you copies of such amended
Prospectus or of such supplement to be attached to the
Prospectus, in such quantities as you may reasonably request, in
order that the Prospectus, as so amended or supplemented, will
not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
in the Prospectus, in the light of the circumstances under which
they are made, not misleading. The preparation and furnishing of
any such amendment or supplement to the Registration Statement or
amended Prospectus or supplement to be attached to the prospectus
shall be without expense to the Underwriters, except that in case
any Underwriter is required, in connection with the sale of the
Shares, to deliver a prospectus nine (9) months or more after the
effective date of the Registration Statement, the Company will
upon request of and at the expense of the Company, amend or
supplement the Registration Statement and prospectus and furnish
the Underwriter with reasonable quantities of prospectuses
complying with Section 10(a)(3) of the Act.
The Company will comply with the applicable
provisions of the Act, the Rules and Regulations and the
Securities Exchange Act of 1934, and the rules and regulations
thereunder in connection with the offering and issuance of the
Shares. The Company will further comply with all undertakings
contained in the Registration Statement.
(b) The Company will use its best efforts to
qualify the Shares for sale under the securities or "blue sky"
laws of such jurisdictions as the Underwriter may designate and
will make such applications and furnish such information as may
be required for that purpose and to comply with such laws,
provided the Company shall not be required to qualify as a
foreign corporation or a dealer in securities or to execute a
general consent to service of process in any jurisdiction in any
action other than one arising out of the offering or sale of the
Shares. The Company will, from time to time, prepare and file
such statements and reports as are or may be required to continue
such qualification in effect for so long a period as the
Underwriter may reasonably request.
(c) For so long as the Company is a reporting
company under either Section 12(g) or 15(d) of the Securities
Exchange Act of 1934, the Company, at its expense, will furnish
to its stockholders and warrant holders an annual report (includ
ing financial statements audited by independent public account
ants), in reasonable detail, and at its expense, will furnish to
you during the period ending five (5) years from the date hereof,
(i) as soon as practicable after the end of each fiscal year, a
balance sheet of the Company and any of its subsidiaries as at
the end of such fiscal year, together with statements of income,
surplus and source and application of funds of the Company and
any subsidiaries for such fiscal year, all in reasonable detail
and accompanied by a copy of the certificate or report thereon of
independent accountants; (ii) as soon as they are available, a
copy of all reports (financial or other) mailed to security
holders; (iii) as soon as they are available, a copy of all non-
confidential reports and financial statements furnished to or
filed with the Commission; and (iv) such other non-confidential
information as you may from time to time reasonably request.
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<PAGE> 64
In the event the Company has an active subsidiary
or subsidiaries, such financial statements will be on a consoli
dated basis to the extent the accounts of the Company and its
subsidiary or subsidiaries are consolidated in reports furnished
to its stockholders generally.
(d) The Company will deliver to you at or before
the effective date two signed copies of the Registration State
ment including all financial statements and exhibits filed there
with, and of all amendments thereto, and will deliver to the
several Underwriters, if any, such number of copies of the Regis
tration Statement, including such financial statements and
exhibits, and of all amendments thereto and as many copies of any
Preliminary prospectus filed with the Commission prior to the
effective date of the Registration Statement as the Underwriters
may reasonably request. The Company will deliver to the Under
writers on the effective date of the Registration Statement and
thereafter for so long as a prospectus is required to be deliv
ered under the Act, from time to time, as many copies of the
prospectus, in final form, or as thereafter amended or supple
mented, as the Underwriters may from time to time reasonably
request.
(e) The Company will make generally available to
its security holders and deliver to you as soon as it is practic
able to do so but in no event later than ninety (90) days after
the end of twelve (12) months after its current fiscal quarter,
an earnings statement (which need not be audited) covering a
period of at least twelve (12) consecutive months beginning after
the effective date of the Registration Statement, which shall
satisfy the requirements of Section 11(a) of the Act.
(f) The Company will apply the net proceeds from
the sale of the Shares for the purposes set forth under "Use of
Proceeds" in the Prospectus, and will file such reports with the
Commission with respect to the sale of the Shares and the appli
cation of the proceeds therefrom as may be required pursuant to
Rule 419 or Rule 463 under the Act.
(g) [Reserved]
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<PAGE> 65
(h) The Company will, promptly upon request,
prepare and file with the Commission any amendments or supple
ments to the Registration Statement, Preliminary Prospectus or
Prospectus and take any other action, which in the reasonable
opinion of legal counsel to the Underwriter, may be reasonably
necessary or advisable in connection with the distribution of the
Shares, and will use its best efforts to cause the same to become
effective as promptly as possible.
(i) The Company will reserve and keep available
the maximum number of its authorized but unissued shares of
Common Stock which are issuable upon exercise of the Share
Underwriter Warrants.
(j) [Reserved]
(k) Within 2 business days following the Closing
Date, if the Company so qualifies the Company will apply for
listing in Standard and Poors Corporation Reports and Moodys OTC
Guide and shall use its best efforts to have the Company included
in such publications for at least five (5) years from the date of
this Agreement.
(l) [Reserved]
(m) [Reserved]
(n) Prior to the Closing Date, the Company will
not issue, directly or indirectly, without your prior consent,
any press release or other communication or hold any press
conference with respect to the Company or its activities or the
offering of the Shares.
(o) The Company agrees, at its sole cost and
expense, to accomplish on demand one (1) registration of the
securities underlying the Underwriter Warrants for resale, at
such time during the period between the first and fifth
anniversaries of the Effective Date of the Registration Statement
as the Underwriter shall so request in writing. The Company
shall not enter into any agreement or take any steps which would
substantially impair the registration rights of holders of the
Underwriter Warrants or the underlying Shares.
5. Conditions of Underwriter Obligation.
The obligations of the Underwriter hereunder are subject
to the accuracy (as of the date hereof, and as of the Closing
Date) of and compliance with the representations and warranties
of the Company herein, to the performance by the Company of its
obligations hereunder, and to the following conditions:
(a) (i) The Registration Statement shall have
become effective not later than 5:00 P.M., New York Time, on the
date of this Agreement, or at such later time or on such later
date as you may agree to in writing; (ii) at or prior to the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission
and no proceeding for that purpose shall have been initiated or
shall be threatened, or to the knowledge of the Company, contem
plated by the Commission; (iii) no stop order suspending the
effectiveness of the qualification or registration of the Shares
under the securities or "blue sky" laws of any jurisdiction
(whether or not a jurisdiction which you shall have specified)
shall be threatened or to the knowledge of the Company contem
plated by the authorities of any such jurisdiction or shall have
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<PAGE> 66
been issued and in effect; (iv) any request for additional in
formation on the part of the Commission or any such authorities
shall have been complied with to the satisfaction of the
Commission and any such authorities, and to the reasonable satis
faction of Johnson, Blakely, Pope, Bokor, Ruppel, & Burns, P.A.,
counsel to the Underwriter; and (v) after the date hereof no
amendment or supplement to the Registration Statement or the
prospectus shall have been filed unless a copy thereof was first
submitted to the Underwriter and the Underwriter did not object
thereto.
(b) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (i) there shall not have been any change in the
capital stock of the Company or any material change in the long
term debt of the Company, except as set forth in or contemplated
by the Registration Statement and Prospectus, (ii) there shall
not have been any material adverse change in the general affairs,
management, financial position or results of operations of the
Company, whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or
contemplated by the Registration Statement or Prospectus and
(iii) the Company shall not have sustained any material inter
ference with its business or properties from fire, explosion,
flood or other casualty, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in
the Registration Statement and Prospectus, if in the reasonable
judgment of the Underwriter any such development referred to in
clauses (i), (ii) or (iii) makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by the
Underwriter at the public offering price.
(c) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there shall have been no litigation instituted
against the Company or any of its officers or directors, and
since such dates there shall be no proceeding instituted or
threatened against the Company or any of its officers or
directors, before or by any federal, state or local court, com
mission, regulatory body, administrative agency or other govern
mental body, domestic or foreign, in which litigation or proceed
ing an unfavorable ruling, decision or finding would materially
and adversely affect the business, material properties, financial
condition or results of operations of the Company.
(d) Each of the representations and warranties
of the Company contained herein shall be true and correct as of
this date and at the Closing Date as if made at the Closing Date,
and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to
be fulfilled or complied with by the Company at or prior to the
Closing Date shall have been duly performed, fulfilled or com
plied with.
(e) At the Closing Date, you shall have received
the opinion, dated as of the Closing Date, of Johnson, Blakely,
Pope, Bokor, Ruppel & Burns, P.A., in form and substance
satisfactory to the Underwriter, to the effect that:
(i) The Company (A) has been duly
organized and is validly existing under the laws of the
State of Florida, (B) is duly qualified and in good
standing as a foreign corporation in each jurisdiction
in which the character of the assets owned or leased by
it requires such qualification, except where failure to
so qualify will not materially adversely affect the
Company's business, properties or financial condition,
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<PAGE> 67
and (C) has all requisite corporate power and authority
to own or lease its properties and conduct its business
as described in the Prospectus.
(ii) To the knowledge of such counsel
after reasonable inquiry therefor, the Company has no
subsidiaries and does not own any shares of stock or
other equity securities issued by any corporation and
does not have any equity interest in any firm,
partnership, joint venture, association or other entity,
except as disclosed or incorporated by reference in the
Registration Statement.
(iii) No authorization, approval, or
consent or license of any governmental or regulatory
body, agency or instrumentality (other than registration
under the Act or qualification under state securities or
"blue sky" laws) is required in connection with (i) the
authorization, issuance, transfer, sale or delivery of
the Shares; (ii) the execution, delivery and performance
of this Agreement by the Company; or (iii) the taking of
such action contemplated herein; or, if any such
authorization, approval, consent or licenses is
required, such has been obtained and is in full force
and effect.
(iv) The Company's authorized
capitalization is as set forth in the Registration
Statement and the prospectus. The outstanding shares of
the Common Stock (including the Shares) have been duly
authorized and validly issued, are fully paid and non-
assessable, and have not been issued in violation of any
preemptive rights. The certificates representing the
Shares are in due and proper form.
(v) The description of the Common Stock
contained in the Registration Statement and the
Prospectus conforms to the rights set forth in the
charter and the by-laws of the Company.
(vi) The Common Stock to be issued upon
the exercise of the Underwriter Warrants has been duly
reserved and, when issued and paid for, will be validly
issued, fully paid and non-assessable with no personal
liability attaching to the ownership thereof. The
Underwriter Warrants have been duly authorized and
constitute valid and binding obligations of the Company
to issue and sell, upon exercise thereof and payment
therefor, the number of shares of Common Stock called
for thereby.
(vii) The Company has full corporate
power and authority to enter into this Agreement and the
Financial Consulting Agreement, and both this Agreement
and the Financial Consulting Agreement have been duly
authorized, executed and delivered by or on behalf of
the company and constitutes the legal, valid and binding
obligation of the Company.
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(viii) The Registration Statement and
the Prospectus comply as to form, and appear on their
face to be approximately responsive in all material
respects, with the requirements of the Act and the Rules
and Regulations (except that no opinion need be
expressed as to financial statements, schedules and
other financial data contained in the Registration
Statement or the Prospectus).
(ix) Such counsel has participated in the
preparation of the Registration Statement and the
prospectus and nothing has come to the attention of such
counsel to lead it to believe that, both as of the
Effective Date and as of the Closing Time, either the
Registration Statement or the prospectus, or any
amendment or supplement thereto, contained or contains
any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading (except that no opinion need be expressed as
to financial statements, schedules and other financial
data contained in the Registration Statement or the
Prospectus).
(x) Such counsel is familiar with all
contracts or other documents referred to in the
Registration Statement and the Prospectus and such
contracts or other documents are fairly summarized or
disclosed therein, or filed (or incorporated by
reference) as exhibits thereto as required, and such
counsel does not know of any contracts or other
documents required to be summarized or disclosed or
filed which have not been summarized or disclosed or
filed.
(xi) The Registration Statement has
become effective under the Act, and no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that
purpose has been instituted or is threatened, pending or
contemplated.
(xii) The execution and delivery of
this Agreement and the consummation by the Company of
the transactions herein contemplated and the compliance
with the terms of this Agreement do not and will not
conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, the
charter or by-laws of the Company, or any indenture,
mortgage or other agreement or instrument known to such
counsel to which the Company is a party or by which it
or any of its properties is bound, or any existing law,
rule, regulation, judgment, order or decree of any
government, governmental body or court, domestic or
foreign, having jurisdiction over the Company or any of
its respective properties.
(xiii) Such counsel knows of no suits
or claims, not covered by insurance, threatened or
pending against the Company in any court or before or by
any governmental body which would materially affect the
business of the Company or its financial condition
except as set forth in or contemplated by the
Prospectus.
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<PAGE> 69
(xiv) To the knowledge of such
counsel after reasonable inquiry therefor, the
statements in the Registration Statement under the
captions "Prospectus Summary", "Risk Factors" and
"Description of Business" have been reviewed by such
counsel and insofar as they refer to descriptions of
agreements, statements of law, descriptions of statutes,
rules or regulations or legal conclusions, are correct
in all material respects.
(xv) To the knowledge of such counsel
after reasonable inquiry therefor, the Company has all
governmental licenses and authorizations material to its
business.
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of
the Shares hereunder as the Underwriter reasonably may request.
In rendering such opinions, such counsel may rely upon certifi
cates of officers of the Company and of public officials. In
rendering such opinion, such counsel may rely as to all matters
of law other than the laws of the United States or of the State
of Florida upon opinions of counsel satisfactory to you, in which
case the opinions shall state that such counsel has no reason to
believe that you and they are not entitled so to rely.
(f) All corporate proceedings and other legal
matters relating to this Agreement, the Registration Statement,
the Prospectus and other related matters shall be satisfactory to
or approved by counsel to the Underwriter, and you shall have
received from such counsel a signed opinion, dated as of the
Closing Date, with respect to the validity of the issuance of the
Stock and Warrants, the form of the Registration Statement and
prospectus (other than the financial statements and other
financial data contained therein), the execution of this Agree
ment and other related matters as you may reasonably require. The
Company shall have furnished to counsel for the Underwriter such
documents as they may reasonably request for the purpose of
enabling them to render such opinion.
(g) On the Closing Date, (i) the representations
and warranties of the Company contained in this Agreement shall
be true and correct with the same effect as if made on and as of
the Closing Date and the Company shall have performed all of its
obligations hereunder and satisfied all the conditions on its
part to be satisfied at or prior to such Closing Date, (ii) the
Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are re
quired to be stated therein in accordance with the Act and the
Rules and Regulations, and in all material respects conform to
the requirements thereof, and neither the Registration Statement
nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) there shall
have been, since the respective dates as of which information is
given, no material adverse change in the business, properties or
condition (financial or otherwise), results of operations,
capital stock, long-term or short-term debt or general affairs of
the Company from that set forth in the Registration Statement and
the Prospectus, except changes which the Registration Statement
and the Prospectus indicate might occur after the effective date
of the Registration Statement, and the Company shall not have
incurred any material liabilities or agreement not in the
ordinary course of business other than as referred to in the
Registration Statement and prospectus; and (iv) except as set
forth in the prospectus, no action, suit or proceeding at law or
15
<PAGE> 70
in equity shall be pending or threatened against the Company
which would be required to be set forth in the Registration
Statement, and no proceedings shall be pending or threatened
against the Company before or by any commission, board or admin
istrative agency in the United States or elsewhere, wherein an
unfavorable decision, ruling or finding would materially and
adversely affect the business, property, condition (financial or
otherwise), results of operations or general affairs of the
Company, and (v) you shall have received concurrently with the
execution and delivery of this Agreement and at the Closing Date,
a certificate signed by each of the Chairman of the Board or the
President and the principal financial or accounting officer of
the Company, in form and substance satisfactory to you, dated as
of the date of this Agreement and the Closing Date, evidencing
compliance with the provisions of this subsection (h). Without
limiting the foregoing, such Certificate shall be to the effect
that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the
Prospectus and (A) as of the date of such certificate,
the statements in the Registration Statement and the
prospectus are true and correct and neither the
Registration Statement nor the Prospectus omits to state
a material fact required to be stated therein or
necessary in order to make the statements therein not
untrue or misleading and (B) in the case of the
certificate delivered at the Closing Date, since the
Effective Date no event has occurred as a result of
which it is necessary to amend or supplement the
prospectus in order to make the statements therein not
untrue or misleading.
(ii) No stop order suspending the
effectiveness of the Registration Statement shall have
been issued by the Commission and no proceeding for that
purpose shall have been initiated or shall be threatened
or contemplated by the staff of the Commission, and no
stop order suspending the effectiveness of the
qualification or registration of the Shares under the
securities or "blue sky" laws of any jurisdiction
(whether or not a jurisdiction you shall have specified)
shall be threatened or contemplated by the authorities
of any such jurisdiction or shall have been issued and
shall remain in effect.
(iii) The conditions contained in
subsections (a), (b) and (c) of this Section 5 (which
shall be set forth in full in such certificate) have
been complied with.
(iv) Each of the representations and
warranties of the Company contained in this Agreement
were when originally made and are at the time such
certificate is dated, true and correct.
(v) Each of the covenants required
herein to be performed by the Company on or prior to the
date of such certificate has been duly, timely and fully
performed and each condition herein required to be
complied with by the Company on or prior to the date of
such certificate has been duly, timely and fully
complied with.
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<PAGE> 71
The Company shall have furnished to you such
certificates, in addition to those specifically mentioned herein,
as you reasonably may have requested as to the accuracy and com
pleteness at the Closing Date of any statement in the Registra
tion Statement or the Prospectus, as to the accuracy at the Clos
ing Date of the representations and warranties of the Company, as
to the performance by the Company of its obligations hereunder,
or as to the fulfillment of the conditions concurrent and
precedent to your obligations hereunder.
6. Indemnity Provisions.
6.1. (a) The Company agrees to indemnify, defend, and
hold the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act, and each
person executing a Selected Dealers Agreement with each Under
writer, free and harmless from and against any and all losses,
claims, damages, liabilities, and expenses, joint or several
(including reasonable legal or other expenses incurred by the
Underwriter and controlling person in connection with defending
any such claims or liabilities, whether or not resulting in any
liability to the Underwriter or to any controlling person), which
the Underwriter or such controlling person may incur under the
Act or at common law or otherwise, but only to the extent that
such losses, claims, damages, liabilities, and expenses shall
arise out of or be based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or in the prospectus or in any amendment or amendments
to the Registration Statement or prospectus (if such Registration
Statement or Prospectus, as from time to time amended and supple
mented, are used by the Underwriter when seeking indemnity, in
accordance with the provisions of the Act and the Rules and
Regulations, including those relating to delivery of other papers
(hereinafter collectively called "blue sky application") executed
by the Underwriter for filing in any state or states in order to
qualify under the securities laws thereof the securities covered
by this Agreement), or shall arise out of or be based upon any
omission or alleged omission to state therein a material fact
required to be stated in the Registration Statement or Prospectus
or in any amendment or amendments (if such Registration Statement
and Prospectus, as from time to time amended and supplemented,
are used by the Underwriter when seeking indemnity, in accordance
with the provisions of the Act and the Rules and Regulations,
including those relating to delivery of final prospectuses), or
in any blue sky application or necessary to make statements in
any thereof not misleading; provided, however, that this
indemnity agreement shall not apply to any such losses, claims,
demands, liabilities, or expenses arising out of, or based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus or
in any amendments thereto or in any blue sky application arising
out of, or based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon information
furnished to the Company by the Underwriter in writing expressly
for use in the Registration Statement or Prospectus or in any
amendment or amendments thereto or was made by the Underwriter in
a blue sky application not in reliance upon information furnished
by the Company.
17
<PAGE> 72
(b) The Underwriter agrees to give the Company
an opportunity to participate in the defense or preparation of
the defense of any action brought against the Underwriter or
controlling person of the Underwriter to enforce any such claim
or liability, and the Company shall have the right to so partici
pate. The Company shall, subject to the provisions hereinafter
stated, have the right to assume the defense of such action
(including the employment of counsel and payment of expenses)
insofar as such action shall relate to any alleged liability in
respect of which indemnity may be sought against the Company. In
the event of any such assumption by the Company, the Underwriter
or any controlling person shall have the right to employ separate
counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be
at the expense of the Company unless (i) the Company does not
assume such defense or (ii) the employment of such counsel has
been specifically authorized by the Company. The Company shall
not be liable to indemnify any person for any settlement of any
such action effected without the Company's consent. The agree
ment of the Company under the foregoing indemnity is expressly
conditioned upon notice of any such action having been sent by
the Underwriter or controlling person, as the case may be, to the
Company, by letter or telegram (addressed as in this Agreement
hereinafter provided) promptly after the commencement of any such
action against the Underwriter or controlling person, such notice
either being accompanied by copies of papers served or filed in
connection with such action or by a statement of the nature of
the action to the extent known to the Underwriter or controlling
person. Failure to so notify within a reasonable time of any
such action shall relieve the Company of its respective liabili
ties under the foregoing indemnity, but failure to notify the
Company as herein provided shall not relieve it from any liabil
ity which it may have to the Underwriter or controlling person
other than on account of the indemnity agreement contained in
this Article.
6.2. (a) The Underwriter agrees to indemnify, defend
and hold the Company, each of its directors and each of its
officers who has signed the Registration Statement and each
person, if any, who controls the Company within the meaning of
Section 15 of the Act free and harmless against any and ail
losses, claims, demands, liabilities and expenses (including
reasonable legal or other expenses incurred by the indemnified
person in connection with defending any such claims or
liabilities whether or not resulting in any liability to the
indemnified person) to which any indemnified person may become
subject, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or prospectus or in any amendment or
amendments thereto or in any blue sky application, or amendments
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, resulting from the use of
written information furnished to the Company by the Underwriter
for use in the preparation of the Registration Statement or the
Prospectus, or in any amendment or amendments thereto or any blue
sky application.
(b) The indemnified person agrees to give the
Underwriter an opportunity to participate in the defense or
preparation of the defense of any action brought against such
indemnified person to enforce any such claim or liability, and
the Underwriter shall have the right to so participate. The
Underwriter shall, subject to the provisions hereinafter stated,
have the right to assume the defense of such action (including
the employment of counsel and the payment of expenses) insofar as
such action shall relate to any alleged liability in respect of
which indemnity may be sought against it. The Company and each
18
<PAGE> 73
such director, officer or controlling person shall have the right
to employ separate counsel in any such action and to participate
in the defense thereof but the fees and expenses of such counsel
shall not be at the expense of the Underwriter unless (i) the
Underwriter does not assume such defense or (ii) the employment
of such counsel has been specifically authorized by the
Underwriter. The Underwriter shall not be liable to indemnify
any person for any settlement of any such action effected without
the Underwriter consent. The agreement of the Underwriter under
the foregoing indemnity is expressly conditioned upon notice of
any such action having been sent by the indemnified person to the
Underwriter by letter or by telegram (addressed as in this Agree
ment hereinafter provided) promptly after the commencement of
such action against the indemnified person, such notice either
being accompanied by copies of papers served or filed in connec
tion with such action or by a statement of the nature of the
action to the extent known to the indemnified person. Failure to
so notify within a reasonable time of any such action shall re
lieve the Underwriter of its liabilities under the foregoing
indemnity, but failure to notify the Underwriter shall not re
lieve the Underwriter from any liability which the Underwriter
may have to the indemnified person other than on account of the
indemnity agreement contained in this Article.
6.3. The provisions of this Article shall not in any
way prejudice any rights which the Underwriter or person who
controls the Underwriter within the meaning of Section 15 of the
Act may have against the Company or any person who controls the
Company within the meaning of Section 15 of the Act or the
Company or such controlling person may have against the
Underwriter or person controlling the Underwriter under any
statute other than the Act, at common law or otherwise.
6.4. The indemnity agreements contained in this Article
shall survive the Closing Date and shall also inure to the bene
fit of successors of the Company, successors of the Underwriter
and successors of any person who controls either the Company or
the Underwriter within the meaning of Section 15 of the Securi
ties Act, and shall be valid irrespective of any investigation
made by or on behalf of the Underwriter or the Company.
7. Payment of Expenses.
7.1. The Company will pay all costs and expenses inci
dent to the performance of this Agreement by the Company
including, but not limited to, the fees and expenses of counsel
to the Company and of the Company's accountants; the costs and
expenses incident to the preparation, printing, filing and
distribution under the Act of the Registration Statement (includ
ing the financial statements therein and all amendments and
exhibits thereto), furnishing to the Underwriter of copies of the
Registration Statement, each Preliminary Prospectus and the
Prospectus, as amended or supplemented (including costs of
shipping and mailing of Preliminary and Final Prospectuses, and
the cost of advertising the issue), the fee of the National
Association of Securities Dealers, Inc. ("NASD") in connection
with the filing required by the NASD relating to the offering of
the Shares contemplated hereby and the reasonable fees and
expenses of counsel for the Underwriter in connection with NASD
review; all expenses, including reasonable fees and disbursements
of counsel to the Underwriter, in connection with the qualifica
tion of the Shares under the state securities or blue sky laws
which the Underwriter shall designate; the cost of printing and
furnishing to the Underwriter copies of the Registration State
ment, each Preliminary Prospectus, the prospectus, this Agree
ment, Selling Agreement and the Blue Sky Memorandum, and the cost
19
<PAGE> 74
of printing the certificates representing the Stock and Warrants
comprising the Shares, the cost of mailing of preliminary and
Final Prospectuses, the cost of hosting one due diligence
meeting, and the cost of advertising the issue. The Company
shall pay any and all taxes (including any transfer, franchise,
capital stock or other tax imposed by any jurisdiction) on sales
to the Underwriter hereunder. The Company will also pay all
costs and expenses incident to the furnishing of any amended
Prospectus or of any supplement to be attached to the Prospectus
as called for in this Agreement.
7.2. In addition to the foregoing expenses, if all
60,000 Units are sold, the Company will pay the Underwriter an
expense allowance for which it need not account of $.18 per Unit
for each Unit sold, to a maximum of $______. In the event the
transactions contemplated hereby are not consummated for any
reason, the Company shall not be liable for the accountable
expenses of the Underwriter.
7.3. No person is entitled either directly or in
directly to compensation from the Company, from the Underwriter
or from any other person for services as a finder in connection
with the proposed offering, and the Company agrees to indemnify
and hold harmless the Underwriter against any losses, claims,
damages or liabilities, joint or several, which shall for all
purposes of this Agreement, include, but not be limited to, all
costs of defense and investigation and all attorneys' fees, to
which the Company, the Underwriter or such other person may
become subject insofar as such losses, claims, damages or liabil
ities (or actions in respect thereof) arise out of or are based
upon the claim of any person (other than in an employee of the
party claiming indemnity) or entity that he or it is entitled to
a finder's fee in connection with the proposed offering by reason
of such person's or entity's influence, prior contact or agree
ment with the indemnifying party. The Underwriter shall recipro
cally indemnify the Company against any loss, claim, damage or
liability including the cost of defense and investigation and
attorneys fees to which the Company may become subject insofar as
such loss, claim, damage or liabilities (or actions in respect
thereof) arise out of or are based upon the claim of any person
(other than an employee of the party claiming indemnification)
that he or it is entitled to a finders fee in connection with the
proposed offering by reason of such person's or entity's influ
ence, prior contact or agreement with the Underwriter.
8. Public Offering.
The Underwriter agrees to make a public offering of the
Shares covered by this Agreement as soon after the effective date
of the Registration Statement as is advisable, in accordance with
and as set forth in the Registration Statement, the Act, the
Securities Exchange Act of 1934, as amended, the rules of the
NASD, and applicable State Blue Sky regulations.
9. Delivery and payment.
9.1. Payment for the Shares sold by the Underwriter
shall be made to the Company by certified or official bank check
at the office of the Underwriter, or such other place in the
State of Florida as the Underwriter and the Company shall
designate against delivery of the appropriate Shares and
Underwriter Warrants to the Underwriter. Such payment and
delivery shall be made at 10:00 A.M., Florida time, on that date
which is within ten days subsequent to the expiration of the
within offering period, or such other time as the Company and the
20
<PAGE> 75
Underwriter shall determine, the date and time last fixed here
under for payment and delivery being herein called the "Closing
Date". Certificates, or a window ticket if the Underwriter shall
so request, for the Shares to be so delivered will be in such
denominations and registered in such names as the Underwriter
requests not less than three full business days prior to the
Closing Date, and will be made available to you for inspection,
checking and packaging, not less than one full business day prior
to the Closing Date. Underwriter Warrants shall be registered in
the name of the Underwriter, its officers or such selected
dealers designated by the Underwriter.
10. Brokerage.
The parties hereto agree that there is no finder in
connection with this transaction. The Company shall indemnify
and hold harmless the Underwriter from and against any claim by
any person with whom the Company has dealt, and the Underwriter
shall indemnify and hold harmless the Company from and against
any claim by any person with whom the Underwriter has dealt, for
a brokerage commission, finder's fee or origination fee in con
nection with the sale of the securities hereunder, as well as all
liabilities, costs, charges and expenses (including, without
limitation, reasonable fees and expenses of counsel) which the
Underwriter or the Company, as the case may be, may incur or pay
as the result of investigating, defending or settling any such
claim or responding to any judgment based thereon or in connec
tion therewith.
11. Underwriter Warrants.
Subject to the sale of the minimum number of Shares, the
Company shall sell to the Underwriter at $.001 each, Warrants to
purchase up to 60,000 Units (the "Underwriter Warrants")
exercisable for a period of four years commencing twelve (12)
months following the effective date of the Registration
Statement. The Underwriter Warrants shall be exercisable at a
price of $7.20 per Share (120% of the price of each Unit included
in the offering). The number of Underwriter Warrants to be sold
to the Underwriter shall be based on one warrant for each ten
shares of Common Stock sold in the offering.
12. Termination - Liability.
12.1. Notwithstanding any of the terms and provisions
hereof, this Agreement may be terminated at any time prior to the
Closing Date by the Underwriter if the Underwriter shall
determine, in its sole uncontrolled discretion that if, since the
respective dates as of which information was given in the Regis
tration Statement or Prospectus, the Company shall have sustained
a loss, whether or not insured, by reason of fire, flood,
accident or other calamity or otherwise, which substantially
affects the value of the property of the Company as a whole, or
which materially interferes with the operation of the business of
the Company as a whole, and which in the sole judgment of the
Underwriter shall render it impracticable to offer for sale or to
enforce contracts made by the Underwriter for the sale of the
Shares or, if as a result of action by the New York Stock
Exchange, the American Stock Exchange, the NASD, the Commission,
or any federal or state agency, or by action of the Congress or
by Executive Order, trading in securities generally on either of
such Exchanges or in the over-the-counter market shall have been
suspended or limited or minimum prices shall have been estab
lished on either of such Exchanges or in the over-the-counter
market or any new restrictions on transactions in securities
21
<PAGE> 76
materially limiting the free market for securities shall gener
ally have been established, or if a banking moratorium shall have
been declared by either Federal or New York State authority, or
if in the sole discretion of the Underwriter no favorable public
market exists for the Shares, or if some other catastrophe,
natural calamity, act of God, act of public enemy, labor dispute
or other event occurs, the effect of which is materially to
disrupt the financial markets in the United States or trans
actions, materially in the aggregate, related to the offering, or
the financial condition, business practices, or the officers or
directors of the Company have not fulfilled the Underwriter
expectations. If this Agreement shall be terminated pursuant to
this Article 12, the Underwriter shall not be responsible for any
expenses of the Company or others for any charges or claims, and
neither the Company nor the Underwriter shall be under any obli
gation under this Agreement, except that (a) the Company shall
remain liable to the extent provided in Article 6.1 and (b) the
Company and the Underwriter shall retain their respective
liabilities pursuant to Article 5 hereof, and the letter of
intent executed between the parties dated March 31, 1992.
12.2. If this Agreement shall be terminated pursuant to
Article 12 or if the offering provided for herein is not consum
mated because any condition to the Underwriter obligations
hereunder is not satisfied or because of any refusal, inability
or failure on the part of the Company to comply with any of the
terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company shall not be liable
to the Underwriter for damages on account of loss of anticipated
profits arising out of the transactions covered by this Agree
ment, but the Company shall pay out-of-pocket expenses incurred
by the Underwriter in contemplation of the performances by it of
its obligations hereunder on an accountable basis, including the
fees and disbursements of its counsel and its printing and
traveling expenses and postage, telephone and telegraph charges,
up to a maximum of $50,000 and the Company shall remain liable to
the extent provided in Article 6.1 and the Company and the Under
writer shall retain their respective liabilities pursuant to
Article 5 hereof.
13. Survival of Representations.
The representations and warranties herein made shall
survive the Closing Date and shall continue in full force and
effect regardless of any investigations made by the party relying
upon any such representation or warranty.
14. Parties in Interest.
This Agreement is made solely for the benefit of the
Underwriter and the Company, and, to the extent expressed, any
person, firm or corporation controlling the Underwriter or the
Company, the directors of the Company, its officers who have
signed the Registration Statement, and their respective execu
tors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement. The terms "successor" or "successors and assigns"
shall not include any purchaser, as such purchaser, from the
Underwriter, of the Shares, Share Warrants or Shares. All of the
obligations of the Underwriter and the Company hereunder are
several and not joint.
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<PAGE> 77
15. Governing Law.
This Agreement shall be governed by the law of the State
of Florida without regard to conflicts of law.
16. Notices.
Any notice required or permitted to be given hereunder
shall be given in writing by depositing the same in the United
States Mail, postage pre-paid, or by Western Union, charges pre
paid, addressed as follows:
<TABLE>
<S> <C>
To the Underwriter: Joseph Guccione
Greenway Capital Corp.
50 Broadway
33rd Floor
New York, NY 10004
To the Company: Alpha Resources, Inc.
901 Chestnut Street
Unit A
Clearwater, FL 34616
Attention: Gerald Couture
with copies to: Michael T. Cronin, Esq.
Johnson, Blakely, Pope, Bokor,
Ruppel & Burns, P.A.
911 Chestnut Street
Clearwater, FL 34617
</TABLE>
17. Entire Agreement.
This Agreement shall supersede any Agreement or Under
standing, oral or in writing, express or implied, between the
Company and the Underwriter relating to the sale of any of the
Shares.
18. Waiver and Amendment.
No change, amendment or supplement to, or waiver of,
this Agreement or any term, provision or condition herein, shall
be valid or of any effect unless in writing and signed by the
party against whom such is asserted.
23
<PAGE> 78
If the foregoing is in accordance with your understand
ing of our agreement, kindly sign and return this Agreement,
whereupon it will become a binding agreement between the Company
and the Underwriter in accordance with its terms.
Very truly yours,
ALPHA RESOURCES, INC.
By:
______________________________
Its:
______________________________
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
GREENWAY CAPITAL CORPORATION
By:
______________________________
Its:
______________________________
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<PAGE> 79
ALPHA RESOURCES, INC.
60,000 UNITS
GREENWAY CAPITAL CORPORATION
SELECTED DEALERS AGREEMENT
_______________________, 1997
Gentlemen:
1. Underwriting
Subject to the terms and conditions of an Underwriting
Agreement between us as the Underwriter (the "Underwriter") Alpha
Resources, Inc. a Florida corporation (the "Company"), we have
agreed, as agent for the Company, to offer for sale to the public
up to 60,000 Units (the "Units"). The offering will be on a
"best efforts, all or none" basis as to 30,000 Units and on a
"best efforts" basis as to the remaining 30,000 Units. Unless
all of the Units are subscribed and paid for during an offering
period of ninety (90) days (which may be extended by agreement of
the Underwriter and the Company for an additional ninety (90)
calendar days) (the "Offering Period"), none of the Units will be
sold.
2. Selected Dealers
As Underwriter, we are offering to certain selected
dealers (the "Selected Dealers") who are members in good standing
of the National Association of Securities Dealers, Inc. (the
"NASD") the right as set forth herein to sell a portion of the
Units to the public at the public offering price of $6.00 per
Unit.
3. Escrow of Subscription Funds
The proceeds of the Offering will be placed in escrow
with Bank One Texas, N.A. (the "Escrow Agent"). If a minimum of
30,000 Units are not sold during the ninety (90) calendar day
period commencing upon the effective date of the aforementioned
Registration Statement (unless extended for an additional ninety
(90) calendar days by the Underwriter, as provided for in the
Underwriting Agreement), the underwriting will be terminated, the
offering will be withdrawn and the proceeds will be returned to
subscriber without interest and without deduction for commissions
or expenses.
4. Selling Concession
The Selected Dealer will be allowed on all Units sold
by it a concession of $___ per Unit (__% of the full % Under
writers' commission) payable in seven (7) days following the
termination of this Agreement, provided that the Units allotted
to the Selected Dealer continue to be held by the Selected
Dealer's customers. No reallowance may be made by Selected
Dealers out of such concessions.
5. Selected Dealer Sales
The Selected Dealer shall purchase the Units for its
customers only through the Underwriter, and all such purchases
shall be made upon orders already received by the Selected Dealer
from its customers. No Units may be purchased for the account of
the Selected Dealer or its principals. In all sales of the Units
hereunder, the Selected Dealer shall confirm as agent for a
member of the public.
<PAGE> 80
6. Compliance with Securities Laws and
NASD Rules of Fair Practice
On becoming a Selected Dealer and in offering and
selling the Units, you agree to comply with all the applicable
requirements of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended. Upon application,
you will be informed as to the states in which the Underwriter
has been advised that the Units have been qualified for sale
under the respective securities or blue sky laws of such states,
but the Underwriter does not assume any obligations or
responsibility as to the right of any Selected Dealer to sell the
Units in any state therein, notwithstanding any information the
Underwriter may furnish as to the states where it is believed the
Units may be lawfully sold.
In connection with this offering, we will each comply
with the Rules of Fair Practice of the NASD, and, without
limiting the foregoing we each agree that we shall each comply
with Rules 8, 24, 25 and 36 of said Rules of Fair Practice of
NASD and the related sections specified in such rules, including
but not limited to Article III, Section 24 of the NASD Rules of
Fair Practice and interpretation of said rules.
7. Delivery of Funds
Amounts in payment for subscriptions of the Units shall be
promptly transmitted by the Selected Dealers to the Escrow Agent,
i.e., not later than 12:00 noon of the next business day
following the Selected Dealer's receipt thereof.
8. Payment of Sales and Deposit of Sales Proceeds
All payments received by the Selected Dealer for the
sale of the Units sold pursuant to this Agreement shall be trans
mitted timely to the Escrow Agent in clearing house funds, within
forty-eight hours accompanied by all confirmation and
applications identifying the subscribers of such Units by name,
address, taxpayer identifying number and quantity of Units
subscribed for. All checks and other orders for the payment of
money shall be made payable to the order of Bank One Texas, N.A.,
as Escrow Agent for Alpha Resources, Inc. Units" and shall be in
the full public offering price of $6.00 per Share.
9. Closing and Delivery of Certificates
A closing shall be held at the offices of the Escrow
Agent or such other place in the States of Georgia or New York as
the Underwriter may determine, on or before the seventh business
day after the termination of the Offering Period, such last date
for payment and delivery being referred to therein as the Closing
Date. Promptly after the Closing, certificates for the Units
sold by you shall be delivered to you in such names and
denominations as you shall have requested, and your selling
concession shall be paid to you promptly thereafter.
10. Selected Dealer's Undertakings
No person is authorized to make any representations
concerning the Units except those contained in the Company's then
current prospectus. The Selected Dealer will not sell the Units
pursuant to this Agreement unless the Prospectus is furnished to
the purchaser at least 48 hours prior to the mailing of the
confirmation of sale, or is sent to such person under such
circumstances that it would be received by him 48 hours prior to
his receipt of a confirmation of the sale. The Selected Dealer
agrees not to use any supplemental sales literature of any kind
without prior written approval of the Underwriter, unless it is
furnished by the Underwriter for such purpose. In offering and
selling the Units, the Selected Dealer will rely solely on the
representations contained in the Company's Prospectus.
Additional copies of the then current Prospectus will be supplied
by the Underwriter in reasonable quantities upon request.
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<PAGE> 81
11. Representations and Warranties of Selected Dealer
By accepting this Agreement, the Selected Dealer
represents that it is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended; is qualified to act
as a broker-dealer in the states or other jurisdiction in which
it offers the Units; is a member in good standing with the NASD;
and will maintain such registrations, qualifications and
memberships throughout the terms of this Agreement. Further, the
Selected Dealer agrees to comply with all applicable Federal
laws; the laws of the states or other jurisdictions concerned;
and the Rules and Regulations of the NASD. Further, the Selected
Dealer agrees that it will not offer or sell the Units in any
state or jurisdiction except the states in which it is licensed
as a broker-dealer under the laws of such states. The Selected
Dealer shall not be entitled to any compensation during any
period in which it has been suspended or expelled from membership
in the NASD.
The Selected Dealer confirms it is familiar with Rule
15c2-8 under the Securities Exchange Act of 1934 (the "1934
Act"), relating to the distribution of preliminary and final
prospectuses, and confirms it will comply therewith (whether or
not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the 1934 Act). We will make available to
you, to the extent made available to us by the Company such
number of copies of the Prospectus as Selected Dealer may
reasonably request for purposes contemplated by the 1933 Act, the
1934 Act, and the rules and regulations thereunder.
Your attention is directed to Rule 10b-6 under the 1934
Act, which contains certain prohibitions against trading by a
person interested in a distribution until such person has
completed its participation in the distribution. You confirm
that you will at all times comply with the provisions of such
Rule in connection with this offering.
12. Indemnification
The Company and the Underwriter have agreed to certain
indemnities, as more particularly set forth in the Underwriting
Agreement between the parties which has been filed as an Exhibit
to the Company's Registration Statement.
13. Expenses
No expenses will be charged to Selected Dealers. A
single transfer tax, if any, on the sale of the Units by the
Selected Dealer to its customers will be paid when such Units are
delivered to the Selected Dealer for delivery to its customers.
However, the Selected Dealer will pay its proportionate share of
any transfer tax or any other tax (other than the single transfer
tax described above) if any such tax shall be from time to time
assessed against the Underwriter and other Selected Dealers.
14. Communications
All communications to the Underwriter shall be sent to
Greenway Capital Corporation, 45 Broadway, 19th Floor, New York,
New York 10006, Attention: Joseph Guccione, President. Any
notice to the Selected Dealer shall be properly given if
telephoned or mailed to the Selected Dealer as its telephone
number or address set forth below.
15. Assignment and Termination
This Agreement may not be assigned by the Selected
Dealer without the Underwriter's written consent. This Agreement
will terminate upon the termination of the offering, except that
either party may terminate this Agreement at any time by giving
written notice to the other.
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<PAGE> 82
16. No Authority to Act as Agent
As a Selected Dealer, you are not authorized to act as
agent for the Underwriter or the Company in offering any Units to
the public or otherwise.
17. Liability
Nothing will constitute the Selected Dealers an associa
tion or other separate entity or partners with the Underwriter or
with each other or with the Company, but you will be responsible
for your share of any liability or expense based on any claim to
the contrary. Neither we nor the Company shall be under any
liability to you or in respect of the authorization, issuance,
full payment, non-assessibility, value or validity of any Units;
for or in respect of the form of, or the statements contained in
or omitted from, the Prospectus or registration Statement, the
Underwriting Agreement, or any other instrument executed by the
Company or by others, or any agreements on its or their part to
be performed; for or in respect of the qualification of the Units
for sale under the Securities Act of 1933, as amended, or the
laws of any jurisdiction; or for or in respect of any other
matter connected with this Agreement, except agreements expressly
assumed by us herein shall be implied; provided, however, that
nothing herein shall be deemed to deny, exclude or impair any
liability imposed by the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
18. Public Advertisement
It is expected that public advertisement of the Units
will be made on or about the date of the commencement of the
initial public offering. Twenty-four (24) hours after such
advertisement shall have appeared, but not before, you will be
free to advertise the Units allotted for sale to or sold by you
or such larger number of Units as you may desire, with our
consent, at your own expense and risk, under your own name,
subject to any restriction by local laws; but, your advertisement
must conform in all respects to the requirements of the
Securities Act of 1933, as amended, and the Underwriter shall be
under no obligation or liability in respect of such
advertisement.
19. Termination; Cancellation of Offering
This Agreement shall terminate on the Closing Date as
defined by the Underwriting Agreement and may be terminated by us
at any time prior thereto.
The Underwriting Agreement provides that unless at
least 60,000 Units offered thereunder are sold during the
Offering Period, the offering will be canceled. If the offering
is canceled, this Agreement will terminate and all sales by you
and for your account hereunder will be similarly canceled, and
all payments received will be refunded directly to the
subscribers by the Escrow Agent without interest and without
deduction for commissions or expenses.
Notwithstanding such termination or cancellation, you
shall remain liable, to the extent provided by law, for your
proportionate amount of any claim, demand, or liability which may
be asserted against you along or against you together with other
Selected Dealers and/or us, based upon the claim that the
Selected Dealers or any of them and/or we constitute an
association, an unincorporated business, or any other separate
entity.
20. Application to Participate
If you desire to offer and sell any of the Units, your
application should reach us promptly by telephone or telegraph at
the office of Fred Luthy, Fax #(212) 344-0819, and you should
sign and return to us the enclosed copy of this Agreement,
whereupon we shall use our best efforts to comply with your
requests. The Underwriter reserves the right to accept, reject
or modify subscriptions, in whole or in part, to make allotments,
and to close the subscription book at any time, without notice.
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<PAGE> 83
Subscriptions for Units will be confirmed subject to the terms
and conditions of this Agreement. The Units are offered for
delivery, when, as and if accepted by the Underwriter and subject
to the terms stated herein and in the Prospectus (a copy of which
is enclosed) filed as Part I of the aforementioned Registration
Statement; to the approval of counsel (or the Underwriter and the
Company as to legal matters; and to withdrawal, cancellation or
modification, without notice.
21. Confirmation
Please confirm the foregoing and indicate the number of
Units you desire allotted to you by telegraphing your acceptance
and order and by signing the duplicate copy of this Agreement
enclosed herewith and returning it to us at the address set forth
in Section 14 above.
Very truly yours,
GREENWAY CAPITAL CORPORATION
By:_________________________________________
Authorized Officer
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<PAGE> 84
ALPHA RESOURCES, INC.
ACCEPTANCE AND ORDER
Greenway Capital Corporation
45 Broadway - 19th Floor
New York, NY 1006
Dear Sirs:
On the terms of the foregoing Selected Dealer Agreement, we
hereby subscribed for an allotment of ___ Units.
We agree to all the terms and conditions stated in the
foregoing Agreement. We acknowledge receipt of the Prospectus
relating to the above Units and we further state that in entering
this order we have relied upon said Prospectus and no other
statements whatsoever, written or oral. We affirm that we are
either (i) a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD") or (ii) a dealer with
its principal place of business located outside the United
States, its territories, or possessions and not registered under
the Securities Exchange Act of 1934, and not eligible for
membership in the NASD, who hereby agrees to make no sales within
the United States, its territories or its possessions or to
persons who are nationals thereof or residents therein, and in
making any sales, to comply with the NASD's interpretation with
respect to free-riding and withholding, as well as all other
pertinent interpretations of the NASD that may be applicable to
us. We also affirm and agree that we will comply with the terms
of the offering and in conformity with the Rules of Fair Practice
of the NASD, (including but not limited to Article III, Section
24 of the NASD Rules of Fair Practice, including interpretation
of said section) and all applicable Rules and Regulations
promulgated under the Securities Exchange Act of 1934.
Date:__________________, 1997
<TABLE>
<C> <C>
Dealer Name:____________________ Accepted By:_________________
Address:________________________ Date Accepted:_______________
________________________
Telephone:______________________ Tax I.D.#:___________________
Fax No.: _______________________
</TABLE>
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<PAGE> 85
THIS UNDERWRITERS WARRANT HAS BEEN ISSUED
IN CONNECTION WITH AN UNDERWRITING AGREEMENT
DATED _____________, 1997
ALPHA RESOURCES, INC.
COMMON STOCK PURCHASE WARRANT
The Transferability of this Warrant is
Restricted as Provided in Article 3
In consideration of the sum of Six Dollars ($6.00) and other
good and valuable consideration, the receipt of which is hereby
acknowledged by ALPHA RESOURCES, INC., a Delaware corporation
(the "Company"), GREENWAY CAPITAL CORPORATION (the "UNDERWRITER")
is hereby granted the right to purchase, at any time from
______________, 1998 (a date which is twelve months from the
effective of the Company's Registration Statement) until 5:00
P.M., New York City time, on _____________, 1998, ____________
fully paid and non-assessable shares of the Company's Common
Stock, $.0001 par value per share ("Common Stock").
This Warrant is exercisable at a price of $7.20 per share of
Common Stock issuable hereunder (the "Exercise Price") payable in
cash or by certified or official bank check in New York Clearing
House funds, subject to adjustment as provided in Article 6
hereof. Upon surrender of this Warrant with the annexed
Subscription Form duly executed, together with payment of the
Purchase Price (as hereinafter defined) for the shares of Common
Stock purchased at the Company's principal executive offices in
Florida the registered holder of the Warrant ("holder") shall be
entitled to receive a certificate or certificates for the shares
of Common Stock so purchased.
1. Exercise of Warrant.
The purchase rights represented by this Warrant are
exercisable at the option of the holder hereof, in whole or in
part (but not as to fractional shares of the Common Stock) during
<PAGE> 86
any period in which this Warrant may be exercised as set forth
above. In the case of the purchase of less than all the shares
of Common Stock purchasable under this Warrant, the Company shall
cancel this Warrant upon the surrender hereof and shall execute
and deliver a new Warrant of like tenor for the balance of the
shares of Common Stock purchasable hereunder.
2. Issuance of Stock Certificates.
The issuance of certificates for shares of Common Stock upon
the exercise of this Warrant shall be made without charge to the
holder hereof including, without limitation, any tax which may be
payable in respect of the issuance thereof, and such certificates
shall (subject to the provisions of Articles 3 and 5 hereof) be
issued in the name of, or in such names as may be directed by,
the holder hereof; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of such
certificate in a name other than that of the holder and the
Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the
issuance thereof shall have established to the satisfaction of
the Company that such tax has been paid.
3. Restriction on Transfer of Warrant.
The holder of this Warrant, by its acceptance hereof,
covenants and agrees that this Warrant is being acquired as an
investment and not with a view to the distribution thereof, and
that it will not be sold, transferred, assigned, hypothecated or
otherwise disposed of except to the officers of the UNDERWRITER,
or members of the selling group. No transfer other than to such
officers as above provided for shall be permitted.
4. Price.
Section 4.1 Initial and Adjusted Purchase Price. The
initial purchase price shall be $7.20 per share of Common Stock.
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<PAGE> 87
The adjusted purchase price shall result from time to time from
any and all adjustments of the initial purchase price in
accordance with the provisions of Article 6 hereof.
Section 4.2 Purchase Price. The term "Purchase Price"
herein shall mean the initial purchase price or the adjusted pur
chase price, depending upon the context.
5. Registration Rights.
Section 5.1 Registration Under the Securities Act
of 1933. The shares of Common Stock issuable upon exercise of
this Warrant the "Warrant Shares") have been registered under the
Securities Act of 1933, as amended (the "Act"), on Form S-1, File
No. 33-68826 (the "Registration Statement").
Upon exercise, in part or in whole, of this Warrant, the
Warrant Shares shall bear the following legend:
"The shares represented by this certificate have
been registered under the Securities Act of 1933,
as amended, solely for sale to the holder of a
warrant to purchase such shares, which holder may
be deemed to be an underwriter of such shares
within the provisions and for purposes only of the
Securities Act of 1933, as amended. The issuer of
these shares will agree to a transfer hereof only
if (1) an amended or supplemented prospectus
setting forth the terms of the offer has been filed
as part of a post-effective amendment to the
Registration Statement under which these shares are
registered or as part of a new registration
statement, if then required, and such post-
effective amendment or new registration statement
has become effective under the Securities Act of
1933, as amended or (2) counsel to the issuer is
satisfied that no such post-effective amendment or
new registration statement is required."
The Company agrees that it shall be satisfied that no
post-effective amendment or new registration is required for the
public sale of the Warrant Shares if it shall be presented with a
letter from the Staff of the Securities and Exchange Commission
(the "Commission") stating in effect that, based upon stated
facts which the Company shall have no reason to believe are not
true in any material respect, the Staff will not recommend any
action to the Commission if such shares are offered and sold
without delivery of a prospectus, and that, therefore, no post-
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<PAGE> 88
effective amendment to the Registration Statement under which
such shares are registered or new registration statement is
required to be filed.
Section 5.2 Registration Rights. If, at any time
commencing twelve (12) months from the date hereof and expiring
on a date which is five (5) years from the effective date of the
Company's Registration Statement on Form S-1 (Registration No.
33-68826, the Company proposes to register any of its Common
Stock under the Act (other than pursuant to a Form S-4, S-8 or
comparable Registration Statement), it will give written notice,
at least sixty (60) days prior to the filing of each such
registration statement, to the UNDERWRITER and to all other
holders of the Warrants and/or the Warrant Shares of its
intention to do so. If the UNDERWRITER or other holders of the
Warrants and/or Warrant Shares notify the Company within thirty
(30) days after receipt of any such notice of its or their desire
to include the Warrants and/or Warrant Shares in such proposed
registration statement, the Company shall afford the UNDERWRITER
and/or such holders of the Warrants and/or Warrant Shares the
opportunity to have the Warrants and/or Warrant Shares registered
under such registration statement.
Notwithstanding the provisions of this Section 5.2, the
Company shall have the right at any time after it shall have
given written notice pursuant to this Section 5.2 (irrespective
of whether a written request for inclusion of Warrant Shares
shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
Section 5.3 Demand Registration.
(a) At any time commencing twelve (12) months from the
date hereof and expiring five (5) years from the effective date
of the Company's Registration Statement on Form S-1 (Registration
No. 33-68826), the holders of a majority of the Warrants (with
respect to the number of shares of Common Stock issuable
thereunder) and/or the Warrant Shares shall have the right (which
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<PAGE> 89
right is in addition to the registration rights under Section 5.2
hereof), on one (1) occasion only at the Company's expense as
provided in Section 5.4(b) hereof to request that the Company,
upon written notice to it, prepare and file with the Commission a
post-effective amendment to the Registration Statement or a new
registration statement, if then required, and such other
documents, including an amended or supplemented prospectus, as
may be necessary in the opinion of both counsel for the Company
and counsel for the UNDERWRITER, in order to comply with the
provisions of the Act, so as to permit a public offering and sale
for eighteen (18) consecutive months of the Warrants and/or
Warrant Shares by such holders and any other holders notifying
the Company within thirty (30) days after receiving notice from
the Company of such request.
(b) The Company covenants and agrees to give written
notice of any registration request under this Section 5.3 by any
holder or holders to all other registered holders of the Warrants
and Warrant Shares within fifteen (15) days from the date of the
receipt of any such registration request.
Section 5.4 Covenants of the Company with Respect to
Registration. In connection with any registration under Section
5.2 or 5.3 hereof, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to have any
post-effective amendment or new registration statement declared
effective at the earliest possible time, and shall furnish such
number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, fees and expenses
in connection with all post-effective amendments or new registra
tion statements under Section 5.2 and Section 5.3(a) hereof in
cluding, without limitation, the Company's legal and accounting
fees, printing expenses, blue sky fees and expenses, except that
the Company shall not pay for any of the following costs, fees or
expenses: (i) underwriting discounts and commissions allocable
5
<PAGE> 90
to the Warrant Shares, (ii) state transfer taxes, (iii) brokerage
commissions and (iv) fees and expenses of counsel and accountants
for the holders of the Warrants and/or Warrant Shares.
(c) The Company will take all necessary action which
may be required in qualifying or registering the Warrant Shares
included in a post-effective amendment or new registration
statement for offering and sale under the securities or blue sky
laws of such states as are requested by the holders of the
Warrant Shares, provided that the Company shall not be obligated
to execute or file any general consent to service of process or
to qualify as a foreign corporation to do business under the laws
of any such jurisdiction.
(d) The Company shall indemnify the holders of Warrant
Shares to be sold pursuant to any post-effective amendment or new
registration statement and each person, if any, who controls such
holders within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investi
gating, preparing or defending against any claim whatsoever) to
which any of them may become subject under the Act, the Exchange
Act or otherwise, arising from such post-effective amendment or
new registration statement to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed
to indemnify the Underwriter contained in Section 5 of the
Underwriting Agreement dated November __, 1993 (the "Underwriting
Agreement") between the Company and the UNDERWRITER.
(e) The holders of the Warrant Shares to be sold
pursuant to a post-effective amendment or new registration state
ment, and their successors and assigns, shall indemnify the
Company, its officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, against all loss, claim,
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<PAGE> 91
damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any
claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from information furnished
by or on behalf of such holders, or their successors or assigns,
for specific inclusion in such post-effective amendment or new
registration statement to the same extent and with the same
effect as the provisions pursuant to which the Underwriters have
agreed to indemnify the Company contained in Section 6 of the
Underwriting Agreement.
6. Adjustments of Purchase Price and Number of Shares.
Section 6.1 Subdivision and Combination. In case the
Company shall at any time subdivide or combine the outstanding
shares of Common Stock, the Purchase Price shall forthwith be
proportionately decreased in the case of subdivision or increased
in the case of combination.
Section 6.2 Adjustment in Number of Shares. Upon each
adjustment of the Purchase Price pursuant to the provisions of
this Article 6, the number of shares of Common Stock issuable
upon the exercise of each Warrant shall be adjusted to the near
est full share by multiplying the Purchase price in effect
immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of the Warrant immediately
prior to such adjustment and dividing the product so obtained by
the adjusted Purchase Price.
Section 6.3 Reclassification, Consolidation, Merger,
Etc. In case of any reclassification or change of the outstand
ing shares of Common Stock (other than a change in par value to
no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in the case of any consoli
dation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in
which the Company is the surviving corporation and which does not
result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a sub
division or combination of such shares or a change in par value,
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<PAGE> 92
as aforesaid), or in the case of a sale or conveyance to another
corporation of the property of the Company as an entirety, the
holder of this Warrant shall thereafter have the right to
purchase the kind and number of shares of stock and other
securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance at a price
equal to the product of (x) the number of shares issuable upon
exercise of this Warrant and (y) the Purchase price in effect
immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such
holder had exercised this Warrant.
7. Exchange and Replacement of Warrant.
This Warrant is exchangeable without expense, upon the
surrender hereof by the registered holder at the principal
executive office of the Company, for a new Warrant of like tenor
and date representing in the aggregate the right to purchase the
same number of shares as are purchasable hereunder in such denom
inations as shall be designated by the registered holder hereof
at the time of such surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it, and reim
bursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of
like tenor, in lieu of this Warrant.
8. Elimination of Fractional Interests.
The Company shall not be required to issue stock certificates
representing fractions of shares of Common Stock, nor shall it be
required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional
interests shall be eliminated.
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<PAGE> 93
9. Reservation and Listing of Shares.
The Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose
of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall be issuable upon the exercise
hereof. The Company covenants and agrees that, upon exercise of
this Warrant and payment of the Purchase Price therefor, all
shares of Common Stock issuable upon such exercise shall be duly
and validly issued, fully paid and non-assessable, provided that
the purchase price per share shall equal or exceed the par value
of the Common Stock. As long as the Warrant shall be
outstanding, the Company shall use its best efforts to cause all
shares of Common Stock issuable upon the exercise of the Warrant
to be listed (subject to official notice of issuance) on all
securities exchanges on which the Common Stock may then be
listed.
10. Notices to Warrant Holders.
Nothing contained in this Warrant shall be construed as
conferring upon the holder hereof the right to vote or to consent
or to receive notice as a shareholder in respect of any meetings
of shareholders for the election of directors or any other
matter, or as having any rights whatsoever as a shareholder of
the Company. If, however, at any time prior to the expiration of
the Warrant and prior to its exercise, any of the following
events shall occur:
(a) The Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling
them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books
of the Company; or
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<PAGE> 94
(b) The Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of
the Company or securities convertible into or
exchangeable for shares of capital stock of the Company,
or any option, right or warrant to subscribe therefor;
or
(c) A dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation
or merger) or a sale of all or substantially all of its
property, assets and business as an entirety shall be
proposed;
then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the
transfer books for the determination of the shareholders entitled
to such dividend, distribution, convertible or exchangeable
securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the
transfer books, as the case may be. Failure to give such notice
or any defect therein shall not affect the validity of any action
taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
11. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified
mail, return receipt requested:
(a) If to the registered holder of this Warrant, to the
address of such holder as shown on the books of the
Company; or
(b) If to the Company, to the address set forth on the
first page of this Warrant.
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<PAGE> 95
12. Successors.
All the covenants, agreements, representations and warranties
contained in this Warrant shall bind the patties hereto and their
respective heirs, executors, administrators, distributees,
successors and assigns.
13. Headings.
The Article and Section headings in this Warrant are inserted
for purposes of convenience only and shall have no substantive
effect.
14. Law Governing.
This Warrant is delivered in the State of New York and shall
be construed and enforced in accordance with, and governed by,
the laws of the State of Florida.
WITNESS the seal of the Company and the signature of its duly
authorized President.
ALPHA RESOURCES, INC.
By: _________________________
Its: _________________________
Attest:
_____________________________
11
<PAGE> 96
PROCEEDS ESCROW AGREEMENT
THIS PROCEEDS ESCROW AGREEMENT (this "Agreement") is made
and entered into this ___ day of ____________________, 1997, by
and between ALPHA RESOURCES, INC., a Florida corporation (the
"Company"), and GREENWAY CAPITAL CORPORATION (the "Underwriter"),
and ____________________________, a ________ corporation (the
"Escrow Agent").
Premises
The Company proposes to offer for sale to the general public
in certain states up to 10,000 Units at $6.00 per Unit with each
Unit consisting of 60 shares of Common Stock in accordance with
the registration provisions of the Securities Act of 1933, as
amended and pursuant to a registration statement of Form SB-2
(the "Registration Statement") on file with the Securities and
Exchange Commission. The Company and the Underwriter have
entered into or will, prior to the effective date of the
Registration Statement, enter into an agreement pursuant to which
the Underwriter has agreed to offer for sale the Common Stock in
accordance with the terms of the prospectus contained in the
Registration Statement and is authorized to organize a selling
group consisting of brokerage firms which are members of the
National Association of Securities Dealers, Inc. ("Selling
Group"), to participate in the sales effort. In accordance with
the terms of the Registration Statement, the Company and the
Underwriter desire to provide for the escrow of the gross
subscription payments for Common Stock until the amount, as set
forth below, has been received.
Agreement
NOW, THEREFORE, the parties hereto agree as follows:
1. Until termination of this Agreement, all funds
collected by the Underwriter or any member of the Selling Group
from subscriptions for the purchase of Common Stock in the
subject offering shall be deposited promptly with the Escrow
Agent, but in any event no later than noon of the next business
day following receipt. Such funds shall be transmitted in
accordance with the terms of the agreement between the Company
and the Underwriter, which terms shall similarly apply to members
of the Selling Group through agreement between the Underwriter
and the Selling Group.
2. Concurrently with transmitting funds to the Escrow
Agent, the Underwriter and the members of the Selling Group shall
also deliver to the Escrow Agent a schedule setting forth the
name and address of each subscriber whose funds are included in
such transmittal, the number of shares of Common Stock subscribed
for, and the dollar amount paid. All funds so deposited shall
remain the property of the subscribed and shall not be subject to
any lien or charges by the Escrow Agent, or judgments or
creditors' claims against the Company until released to it in the
manner hereinafter provided.
<PAGE> 97
3. If at any time prior to the expiration of the minimum
offering period, as specified in paragraph 4, $30,000 has been
deposited pursuant to this Agreement, the Escrow Agent shall
confirm the receipt of such funds to the Company and the
Underwriter and, within seven days of such confirmation, promptly
transmit 10% of the amount deposited in escrow to the Underwriter
and the balance to the Company in accordance with their written
instructions (such event is hereinafter referred to as the
"Closing"). Thereafter, the Escrow Agent shall continue to
accept deposits from the Underwriter and the Selling Group and
transmit without further request or instruction 10% of the amount
deposited to the Underwriter and the balance to the Company until
the offering is terminated as provided in the agreement between
the Company and the Underwriter.
4. If, within six months after the effective date of the
Registration Statement (unless extended by agreement of the
Company and Underwriter for an additional period not to exceed
three months), the Underwriter and Selling Group have not
deposited $30,000 with the Escrow Agent, the Escrow Agent shall
so notify the Underwriter and the Company and shall promptly
transmit to those investors who subscribed for the purchase of
Common Stock the amount of money each such investor so paid. The
Escrow Agent shall furnish to the Company and the Underwriter an
accounting for the refund in full to all subscribers.
5. If at any time prior to the termination of this escrow
the Escrow Agent is advised by the Securities and Exchange
Commission that a stop order has been issued with respect to the
Registration Statement, the Escrow Agent shall thereupon return
all funds to the respective subscribers.
6. It is understood and agreed that the duties of the
Escrow Agent are entirely ministerial, being limited to receiving
monies from the Underwriter and the Selling Group and holding and
disbursing such monies in accordance with this Agreement.
7. The Escrow Agent is not a party to, and is not bound
by, any agreement between the Company and the Underwriter or the
Underwriter and the Selling Group which may be evidenced by or
arise out of the foregoing instructions.
8. The Escrow Agent acts hereunder as a depository only,
and is not responsible or liable in any manner whatsoever for the
sufficiency, correctness, genuineness, or validity of any
instrument deposited with it, or with respect to the form or
execution of the same, or the identity, authority, or rights of
any person executing or depositing the same.
9. The Escrow Agent shall not be required to take or be
bound by notice of any default if any person or to take any
action with respect to such default involving any expense or
liability, unless notice in writing is given to an officer of the
Escrow Agent of such default by the undersigned or any of them,
and unless it is indemnified in a manner satisfactory to it
against any expense or liability arising therefrom.
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<PAGE> 98
10. The Escrow Agent shall not be liable for acting on any
notice, request, waiver, consent, receipt, or other paper or
document believed by the Escrow Agent to be genuine and to have
been signed by the proper party or parties.
11. The Escrow Agent shall not be liable for any error of
judgment or for any act done or step taken or omitted by it in
good faith, or for any mistake of fact or law, or for anything
which it may do or refrain from doing in connection herewith,
except its own willful misconduct.
12. The Escrow Agent shall not be answerable for the
default or misconduct of any agent, attorney, or employee
appointed by it if such agent, attorney, or employee shall have
been selected with reasonable care.
13. The Escrow Agent may consult with legal counsel in the
event of any dispute or question as to the consideration of the
foregoing instructions or the Escrow Agent's duties hereunder,
and the Escrow Agent shall incur no liability and shall be fully
protected in acting in accordance with the opinion and
instructions of such counsel.
14. In the event of any disagreement between the
undersigned or any of them, the person or persons named in the
foregoing instructions, and/or any other person, resulting in
adverse claims and/or demands being made in connection with or
for any papers, money, or property involved herein or affected
hereby, the Escrow Agent shall be entitled at its option to
refuse to comply with any such claim, or demand so long as such
disagreement shall continue and, in so refusing, the Escrow Agent
shall not be or become liable to the undersigned or any of them
or to any person named in the foregoing instructions for the
failure or refusal to comply with such conflicting or adverse
demands, and the Escrow Agent shall be entitled to continue to so
refrain and refuse to so act until:
(a) the rights of adverse claimants
have been finally adjudicated in a court
assuming and having jurisdiction of the
parties and the money, papers, and property
involved herein or affected hereby; and/or
(b) all differences shall have been
adjusted by agreement and the Escrow Agent
shall have been notified thereof in writing
signed by all of the persons interested.
15. The fee of the Escrow Agent is $__________, receipt of
which is hereby acknowledged. In addition, if a minimum of
$30,000 is not received in escrow within the escrow period and
the Escrow Agent is required to return funds to investors as
provided in Section 4, the Escrow Agent shall received a fee of
$______ per check for such service. The fee agreed on for
services rendered hereunder is intended as full compensation for
the Escrow Agent's services contemplated by this Agreement;
however, in the event that the conditions of this Agreement are
not fulfilled, the Escrow Agent renders any material service not
contemplated by this Agreement, there is any assignment of
interest in the subject matter of this Agreement, there is any
material modification hereof, any material controversy arises
hereunder, or the Escrow Agent is made a party to or justifiably
intervenes in any litigation pertaining to this Agreement or the
subject matter hereof, the Escrow Agent shall be reasonably
3
<PAGE> 99
compensated for such extraordinary expenses, including reasonable
attorneys' fees, occasioned by any delay, controversy,
litigation, or event and the same may be recoverable only from
the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers, as of the date first-above written.
ALPHA RESOURCES, INC.
By:________________________________
Duly Authorized Officer
GREENWAY CAPITAL CORPORATION
By:________________________________
Duly Authorized Officer
______________________ hereby acknowledges receipt of this
Agreement and agrees to act in accordance with said Agreement and
on the terms and conditions above set forth this ___ day of
_____________________, 199___.
4
<PAGE> 100
CERTIFICATE OF INCORPORATION
OF
ALPHA RESOURCES, INC.
**************
1. The name of the corporation is ALPHA RESOURCES, INC.
The business address of the corporation is 901 Chestnut Street,
Suite A, Clearwater, FL 34616.
2. The address of its registered office in the State of
Delaware is 1013 CENTRE ROAD, WILMINGTON, NEW CASTLE COUNTY,
DELAWARE, 19805. The name of its registered agent at such address
is CORPORATION SERVICE COMPANY.
3. The nature of the business of the corporation or
purposes to be conducted or promoted by the corporation is to
engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the
corporation shall have authority to issue is Fifteen Million
(15,000,000) shares, 10,000,000 of which shall be Common Stock,
of the par value of One Thousand Cent ($.0001) per share and
5,000,000 of which shall be Preferred Stock, of the par value of
One Hundredth Cent ($.001) per share.
Additional designations and powers, preferences and rights
and qualifications, limitations or restrictions thereof of the
<PAGE> 101
shares of each class shall be determined by the Board of
Directors of the corporation from time to time, including but not
limited to the following:
(1) the designation of each series and the number of
shares that shall constitute the series;
(2) the rate of dividends, if any, payable on the
shares of each series, the time and manner of payment and whether
or not such dividends shall be cumulative;
(3) whether shares of each series may be redeemed and,
if so, the redemption price and the terms and conditions of
redemption;
(4) sinking fund provisions, if any, for the
redemption or purchase of shares of each series which is
redeemable;
(5) the amount, if any, payable upon shares of each
series in the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, and the manner and
preference of such payment;
(6) voting rights, if any on the shares of each series
and any conditions upon the exercisability of such rights.
The holders of Common Stock shall be entitled to one (1)
vote for each share held at all meetings of the Stockholders of
the Corporation. The holders of Preferred Stock shall be entitled
2
<PAGE> 102
to the number of votes set forth in the Designation of Shares of
Preferred Stock.
5. The name and mailing address of the corporation's
incorporator is Michael T. Cronin, 911 Chestnut Street,
Clearwater, FL 34616.
6. The name and address of the person who is to serve as
the sole director until the first annual meeting of the
stockholders or until his successor is selected and qualified is
Michael T. Cronin, 911 Chestnut Street, Clearwater, FL
34616.
7. The corporation is to have perpetual existence.
8. In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly
authorized:
To make, alter or repeal the bylaws of the corporation.
To authorize and cause to be executed mortgages and
liens upon the real and personal property of the corporation.
To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper
purpose and to abolish any such reserve in the manner in which it
was created.
By a majority of the whole board, to designate one or
more committees, each committee to consist of one or more of the
directors of the corporation. The board may designate one or more
directors as alternate members of the committee, who may replace
any absent or disqualified member at any meeting of the
committee. The bylaws may provide that in the absence or
3
<PAGE> 103
disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to
act at the meeting in the place of any such agent or disqualified
member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the bylaws of the
corporation, shall have and may exercise all the powers and
authority of the board of directors in the management of the
business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or
authority in reference to amending the certificate of
incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease, or exchange of
all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation; and, unless the resolution or bylaws
expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance or
stock.
When and as authorized by stockholders in accordance with
statute, to sell, lease or exchange all or substantially all of
the property and assets of the corporation, including its
goodwill and its corporate franchises, upon such terms and
conditions and for such consideration, which may consist in whole
or in part of money or property, including shares of stock in,
and/or other securities of, any other corporation or corporation,
4
<PAGE> 104
as its board of directors shall deem expedient and for the best
interests of the corporation.
9. To the maximum extent permitted by Section 102(b)(7) of
the General Corporation Law of Delaware, a director of this
corporation shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived
an improper personal benefit.
10. Meetings of the stockholders may be held within or
without the State of Delaware, as the bylaws may provide. The
books of the corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the
Board of Directors or in the bylaws of the corporation. Elections
of directors need not be by written ballot unless the bylaws of
the corporation shall so provide.
11. The corporation reserves the right to amend, alter,
change, or repeal any provision contained in this certificate of
incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
5
<PAGE> 105
THE UNDERSIGNED, being the incorporator names hereinbefore,
for the purposes of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, does make this
certificate, hereby declaring and certifying that this is his act
and deed and the facts herein stated are true, and accordingly,
has hereunto set his hand this 9th day of January, 1997.
/s/ Michael T. Cronin
-------------------------
Michael T. Cronin
STATE OF FLORIDA )
COUNTY OF PINELLAS )
BE IT REMEMBERED that on this 9th day of January,
1997, personally came before me, a Notary Public of the State of
Florida, MICHAEL T. CRONIN, who executed the foregoing Certificate
of Incorporation as Incorporator, who is personally known to me,
and he acknowledged that the said certificate is his act and deed
and that the facts stated therein are true.
Given under my hand and seal of office the day and year aforesaid.
/s/ Patricia D. Graf
------------------------
Notary Public
6
<PAGE> 106
BYLAWS
OF
ALPHA RESOURCES, INC.
ARTICLE I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders of this corporation shall be held at the time and
place designated by the Board of Directors of the corporation.
The annual meeting of shareholders for any year shall be held
no later than thirteen (13) months after the last preceding
annual meeting of shareholders. Business transacted at the
annual meeting shall include the election of directors of the
corporation.
Section 2. Special Meetings. Special meetings of the
shareholders shall be held when directed by the Board of
Directors, or when requested in writing by the holders of not
less than ten percent (10%) of all the shares entitled to vote at
the meeting. A meeting requested by shareholders shall be called
for a date not less than ten (10) nor more than sixty (60) days
after the request is made, unless the shareholders requesting the
meeting designate a later date. The call for the meeting shall
be issued by the Secretary, unless the President, Board of
Directors, or shareholders requesting the meeting designate
another person to do so.
Section 3. Place. Meetings of shareholders may be held
within or without the State of Florida.
Section 4. Notice. Written notice stating the place, day
and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days
before the meeting, either personally or by first class mail, by
or at the direction of the President, the Secretary, or the
officer or persons calling the meeting to each shareholder of
record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with
postage thereon prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is
adjourned to another time or place, it shall not be necessary to
give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting any
<PAGE> 107
business may be transacted that might have been transacted on the
original date of the meeting. If, however, after the adjournment
the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given as
provided in this section to each shareholder of record on the new
record date entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date.
For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other
purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period but not to
exceed, in any case, sixty (60) days. If the stock transfer
books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days immediately
preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any
determination of shareholders, such date in any case to be not
more than sixty (60) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on
which the particular action requiring such determination of
shareholders is to be taken.
If the stock transfer books are not closed and no record date
is fixed for the determination of shareholders entitled to notice
or to vote at a meeting of shareholders, or shareholders entitled
to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof, unless the Board of Directors fixes a new record date
for the adjourned meeting.
Section 7. Voting Record. The officers or agent having
charge of the stock transfer books for shares of the corporation
shall make, at least ten (10) days before each meeting of
shareholders, a complete list of the shareholders entitled to
vote at such meeting or any adjournment thereof, with the address
of and the number and class and series, if any, of shares held by
each. The list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the registered office of the
corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar
of the corporation and any shareholder shall be entitled to
inspect the list at any time during usual business hours. The
list shall also be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any
shareholder at any time during the meeting.
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<PAGE> 108
If the requirements of this section have not been
substantially complied with, the meeting on demand of any
shareholder in person or by proxy, shall be adjourned until the
requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the
shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. When a
specified item of business is required to be voted on by a class
or series a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business
by that class or series.
If a quorum is present, the affirmative vote of the majority
of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders unless
otherwise provided by law.
After a quorum has been established at a shareholders'
meeting, the subsequent withdrawal of shareholders, so as to
reduce the number of shareholders entitled to vote at the meeting
below the number required for a quorum, shall not affect the
validity of any action taken at the meeting or any adjournment
thereof.
Section 9. Voting of Shares. Each outstanding share,
regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by
another corporation the majority of the voting stock of which is
owned or controlled by this corporation, and shares of stock of
this corporation held by it in a fiduciary capacity shall not be
voted, directly or indirectly, at any meeting, and shall not be
counted in determining the total number of outstanding shares at
any given time.
A shareholder may vote the number of shares owned by him
either in person or by proxy executed in writing by the
shareholder or his duly authorized attorney-in-fact.
Shares standing in the name of another corporation, domestic
or foreign, may be voted by the officer, agent, or proxy
designated by the bylaws of the corporate shareholder; or, in the
absence of any applicable bylaw, by such person as the Board of
Directors of the corporate shareholder may designate. Proof of
such designation may be made by presentation of a certified copy
of the bylaws or other instrument of the corporate shareholder.
In the absence of any such designation, or in case of conflicting
designation by the corporate shareholder, the chairman of the
board, president, any vice president, secretary and treasurer of
the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
3
<PAGE> 109
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person
or by proxy, but no trustee shall be entitled to vote shares held
by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority so to do be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee or his nominee
shall be entitled to vote the shares so transferred.
On and after the date on which written notice of redemption
of redeemable shares has been mailed to the holders thereof and a
sum sufficient to redeem such shares has been deposited with a
bank or trust company with irrevocable instruction and authority
to pay the redemption price to the holders thereof upon surrender
of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding
shares.
Section 10. Proxies. Every shareholder entitled to vote at
a meeting of shareholders or to express consent or dissent
without a meeting or a shareholders' duly authorized attorney-in-
fact may authorize another person or persons to act for him by
proxy.
Every proxy must be signed by the shareholder or his attorney-
in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the
shareholder executing it, except as otherwise provided by law.
The authority of the holder of a proxy to act shall not be
revoked by the incompetence or death of the shareholder who
executed the proxy unless, before the authority is exercised,
written notice of an adjudication of such incompetence or of such
death is received by the corporate office responsible for
maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or
more persons and does not otherwise provide, a majority of them
present at the meeting, or if only one is present then that one,
may exercise all the powers conferred by the proxy; but if the
proxy holders present at the meeting are equally divided as to
the right and manner of voting in any particular case, the voting
of such shares shall be prorated.
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<PAGE> 110
If a proxy expressly provides, any proxy holder may appoint
in writing a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of
this corporation may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or
otherwise represent their shares, as provided by law. Where the
counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been
deposited with the corporation as provided by law, such documents
shall be subject to the same right of examination by a
shareholder of the corporation, in person or by agent or
attorney, as are the books and records of the corporation, and
such counterpart and such copy of such record shall be subject to
examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time
for any proper purpose.
Section 12. Shareholders' Agreements. Two (2) or more
shareholders, of this corporation may enter an agreement
providing for the exercise of voting rights in the manner
provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall
impair the right of this corporation to treat the shareholders of
record as entitled to vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any
action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or
special meeting of shareholders of the corporation, or any action
which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted. If any class of shares is entitled to vote
thereon as a class, such written consent shall be required of the
holders of a majority of the shares of each class of shares
entitled to vote as a class thereon and of the total shares
entitled to vote thereon.
Within ten (10) days after obtaining such authorization by
written consent, notice shall be given to those shareholders who
have not consented in writing. The notice shall fairly summarize
the material features of the authorized action and, if the action
be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under the law, the notice
shall contain a clear statement of the right of shareholders
dissenting therefrom to be paid the fair value of their shares
upon compliance with further provisions of the law regarding the
rights of dissenting shareholders.
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<PAGE> 111
ARTICLE II. Directors
Section 1. Function. All corporate powers shall be
exercised by or under the authority of, and the business and
affairs of a corporation shall be managed under the direction of,
the Board of Directors.
Section 2. Qualification. Directors need not be residents
of this state or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have
authority to fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform
his duties as a director, including his duties as a member of any
committee of the board upon which he may serve, in good faith, in
a manner he reasonably believes to be in the best interests of
the corporation, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to
rely on information, opinions, reports or statements, including
financial statements and other financial data, in each case
prepared or presented by:
(a) one or more officers or employees of the
corporation whom the director reasonably believes to be reliable
and competent in the matters presented,
(b) counsel, public accountants or other persons as to
matters which the director reasonably believes to be within such
person's professional or expert competence, or
(c) a committee of the board upon which he does not
serve, duly designated in accordance with a provision of the
articles of incorporation or the bylaws, as to matters within its
designated authority, which committee the director reasonably
believes to merit confidence.
A director shall not be considered to be acting in good faith
if he has knowledge concerning the matter in question that would
cause such reliance described above to be unwarranted.
A person who performs his duties in compliance with this
section shall have no liability by reason of being or having been
a director of the corporation.
Section 5. Presumption of Assent. A director of the
corporation who is present at a meeting of its Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless he votes
against such action or abstains from voting in respect thereto
because of an asserted conflict of interest.
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Section 6. Number. This corporation shall have at least one
(1) director. The minimum number of directors may be increased
or decreased from time to time by amendment to these bylaws, but
no decrease shall have the effect of shortening the terms of any
incumbent director and no amendment shall decrease the number of
directors below one (1), unless the stockholders have voted to
operate the corporation.
Section 7. Election and Term. Each person named in the
articles of incorporation as a member of the initial board of
directors shall hold office until the first annual meeting of
shareholders, and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office
or death.
At the first annual meeting of shareholders and at each
annual meeting thereafter the shareholders shall elect directors
to hold office until the next succeeding annual meeting. Each
director shall hold office for the term for which he is elected
and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase
in the number of directors, may be filled by the affirmative vote
of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a
vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of
shareholders called expressly for that purpose, any director or
the entire Board of Directors may be removed, with or without
cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of
directors fixed by these bylaws shall constitute a quorum for the
transaction of business. The act of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or
other transaction between this corporation and one (1) or more of
its directors or any other corporation, firm, association or
entity in which one or more of the directors are directors or
officers or are financially interested, shall be either void or
voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of
Directors or a committee thereof which authorizes, approves or
ratifies such contract or transaction or because his or their
votes are counted for such purpose, if:
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(a) The fact of such relationship or interest is
disclosed or known to the Board of Directors or committee which
authorizes, approves or ratifies the contract or transaction by a
vote or consent sufficient for the purpose without counting the
votes or consents of such interested directors; or
(b) The fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they
authorize, approve or ratify such contract or transaction by vote
or written consent; or
(c) The contract or transaction is fair and reasonable
as to the corporation at the time it is authorized by the board,
a committee or the shareholders.
Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors
or a committee thereof which authorizes, approves or ratifies
such contract or transaction.
Section 12. Executive and Other Committees. The Board of
Directors, by resolution adopted by a majority of the full Board
of Directors, may designate from among its members an executive
committee and one or more other committees each of which, to the
extent provided in such resolution, shall have and may exercise
all the authority of the Board of Directors, except that no
committee shall have the authority to:
(a) approve or recommend to shareholders actions or
proposals required by law to be approved by shareholders,
(b) designate candidates for the office of director,
for purposes of proxy solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any
committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares
unless pursuant to a general formula or method specified by the
Board of Directors, or
(f) authorize or approve the issuance or sale of, or
any contract to issue or sell, shares or designate the terms of a
series of a class of shares, except that the Board of Directors,
having acted regarding general authorization for the issuance or
sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general
formula or method specified by the Board of Directors, by
resolution or by adoption of a stock option or other plan,
authorize a committee to fix the terms of any contract for the
sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price,
the rate or manner of payment of dividends, provisions for
redemption, sinking fund, conversion, voting or preferential
rights, and provisions for other features of a class of shares,
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or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the
terms thereof and to authorize the statement of the terms of a
series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance
with this section, may designate one (1) or more directors as
alternate members of any such committee, who may act in the place
and stead of any absent member or members at any meeting of such
committee.
Section 13. Place of Meetings. Regular and special meetings
by the Board of Directors may be held within or without the State
of Florida.
Section 14. Time, Notice and Call of Meetings. Regular
meetings by the Board of Directors shall be held without notice.
Written notice of the time and place of special meetings of the
Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two (2) days
before the meeting or by notice mailed to the director at least
five (5) days before the meeting.
Notice of a meeting of the Board of Directors need not be
given to any director who signs a waiver of notice either before
or after the meeting. Attendance of a director at a meeting
shall constitute a waiver of notice of such meeting and waiver of
any and all objections to the place of the meeting, the time of
the meeting, or the manner in which it has been called or
convened, except when a director states, at the beginning of the
meeting, any objection to the transaction of business because the
meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the Board of Directors to
another time and place. Notice of any such adjourned meeting
shall be given to the directors who were not present at the time
of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment,
to the other directors.
Meetings of the Board of Directors may be called by the
chairman of the board, by the president of the corporation, or by
any two (2) directors.
Members of the Board of Directors may participate in a
meeting of such board by means of a conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in
person at a meeting.
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Section 15. Action Without a Meeting. Any action required
to be taken at a meeting of the directors of a corporation, or
any action which may be taken at a meeting of the directors or a
committee thereof, may be taken without a meeting if a consent in
writing, setting forth the action so to be taken, signed by all
of the directors, or all the members of the committee, as the
case may be, is filed in the minutes of the proceedings of the
board or of the committee. Such consent shall have the same
effect as a unanimous vote.
ARTICLE III. Officers
Section 1. Officers. The officers of this corporation shall
consist of a president, a secretary and a treasurer, each of whom
shall be elected by the Board of Directors. Such other officers
and assistant officers and agents as may be deemed necessary may
be elected or appointed by the Board of Directors from time to
time. Any two (2) or more offices may be held by the same
person. The failure to elect a president, secretary or treasurer
shall not affect the existence of this corporation.
Section 2. Duties. The officers of this corporation shall
have the following duties:
The President shall be the chief executive officer of the
corporation, shall have general and active management of the
business and affairs of the corporation subject to the directions
of the Board of Directors, and shall preside at all meetings of
the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the
corporate records except the financial records; shall record the
minutes of all meetings of the stockholders and Board of
Directors, send all notice of meetings out, and perform such
other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of
receipts and disbursements and render accounts thereof at the
annual meetings of stockholders and whenever else required by the
Board of Directors or the President, and shall perform such other
duties as may be prescribed by the Board of Directors or the
President.
Section 3. Removal of Officers. Any officer or agent
elected or appointed by the Board of Directors may be removed by
the board whenever in its judgment the best interests of the
corporation will be served thereby.
Any officer or agent elected by the shareholders may be
removed only by vote of the shareholders, unless the shareholders
shall have authorized the directors to remove such officer or
agent.
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Any vacancy, however occurring, in any office may be filled
by the Board of Directors, unless the bylaws shall have expressly
reserved such power to the shareholders.
Removal of any officer shall be without prejudice to the
contract rights, if any, of the person so removed; however,
election or appointment of an officer or agent shall not of
itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this
corporation shall be entitled to have a certificate, representing
all shares to which he is entitled. No certificate shall be
issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this
corporation shall be signed by the President or Vice President
and the Secretary or an Assistant Secretary and may be sealed
with the seal of this corporation or a facsimile thereof. The
signatures of the President or Vice President and the Secretary
or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar,
other than the corporation itself or an employee of the
corporation. In case any officer who signed or whose facsimile
signature has been placed upon such certificate shall have ceased
to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such
officer at the date of its issuance.
Every certificate representing shares which are restricted as
to the sale, disposition or other transfer of such shares shall
state that such shares are restricted as to transfer and shall
set forth or fairly summarize upon the certificate, or shall
state that the corporation will furnish to any shareholder upon
request and without charge a full statement of, such
restrictions.
Each certificate representing shares shall state upon the
face thereof: the name of the corporation; that the corporation
is organized under the laws of this state; the name of the person
or persons to whom issued; the number and class of shares, and
the designation of the series, if any, which such certificate
represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par
value.
Section 3. Transfer of Stock. The corporation shall
register a stock certificate presented to it for transfer if the
certificate is properly endorsed by the holder of record or by
his duly authorized attorney, and upon surrender or cancellation
of a certificate or certificates for a like number of shares.
Section 4. Lost, Stolen, or Destroyed Certificates. The
corporation shall issue a new stock certificate in the place of
any certificate previously issued if the holder of record of the
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certificate (a) makes proof in affidavit form that it has been
lost, destroyed or wrongfully taken; (b) requests the issue of a
new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good
faith and without notice of any adverse claim; (c) gives bond in
such form as the corporation may direct, to indemnify the
corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or
theft of a certificate; and (d) satisfies any other reasonable
requirements imposed by the corporation.
ARTICLE V. Books and Records
Section 1. Corporate Records.
(a) The corporation shall keep as permanent records
minutes of all meetings of its shareholders and Board of
Directors, a record of all actions taken by the shareholders or
Board of Directors without a meeting, and a record of all actions
taken by a committee of the Board of Directors on behalf of the
corporation.
(b) The corporation shall maintain accurate accounting
records and a record of its shareholders in a form that permits
preparation of a list of the names and addresses of all
shareholders in alphabetical order by class of shares showing the
number and series of shares held by each.
(c) The corporation shall keep a copy of: its articles
or restated articles of incorporation and all amendments to them
currently in effect; these Bylaws or restated Bylaws and all
amendments currently in effect; resolutions adopted by the Board
of Directors creating one or more classes or series of shares and
fixing their relative rights, preferences, and limitations, if
shares issued pursuant to those resolutions are outstanding; the
minutes of all shareholders' meetings and records of all actions
taken by shareholders without a meeting for the past three years;
written communications to all shareholders generally or all
shareholders of a class of series within the past three years,
including the financial statements furnished for the last three
years; a list of names and business street addresses of its
current directors and officers; and its most recent annual report
delivered to the Department of State.
(d) The corporation shall maintain its records in
written form or in another form capable of conversion into
written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. A shareholder
is entitled to inspect and copy, during regular business hours at
the corporation's principal office, any of the corporate records
described in Section 1(c) of this Article if the shareholder
gives the corporation written notice of the demand at least five
(5) business days before the date on which he wishes to inspect
and copy the records.
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A shareholder is entitled to inspect and copy, during regular
business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if
the shareholder gives the corporation written notice of this
demand at least five (5) business days before the date on which
he wishes to inspect and copy provided (a) the demand is made in
good faith and for a proper purpose; (b) the shareholder
described with reasonable particularity the purpose and the
records he desires to inspects; and (c) the records are directly
connected with the purpose: (i) excerpts from minutes of any
meeting of the Board of Directors, records of any action of a
committee of the Board of Directors while acting in place of the
Board on behalf of the corporation; (ii) accounting records;
(iii) the record of shareholders; and (iv) any other books and
records of the corporation.
This Section 2 does not affect the right of a shareholder to
inspect and copy the shareholders' list described in Section 7 of
Article I, if the shareholder is in litigation with the
corporation to the same extent as any other litigant or the power
of a court to compel the production of corporate records for
examination.
The corporation may deny any demand for inspection if the
demand was made for an improper purpose, or if the demanding
shareholder has within the two (2) years preceding his demand,
sold or offered for sale any list of shareholders of the
corporation or of any other corporation, has aided or abetted any
person in procuring any list of shareholders for that purpose, or
has improperly used any information secured through any prior
examination of the records of this corporation or any other
corporation.
Section 3. Financial Information. Not later than four (4)
months after the close of each fiscal year, this corporation
shall prepare a balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its
fiscal year, and a profit and loss statement showing the results
of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of
voting trust certificates for shares of the corporation, the
corporation shall mail to such shareholder or holder of voting
trust certificates a copy of the most recent such balance sheet
and profit and loss statement.
The balance sheets and profit and loss statements shall be
filed in the registered office of the corporation in this state,
shall be kept for at least five (5) years, and shall be subject
to inspection during business hours by any shareholder or holder
of voting trust certificates, in person or by agent.
ARTICLE VI. Dividends
The Board of Directors of this corporation may, from time to
time, declare, and the corporation may pay dividends on its
shares in cash, property or its own shares, except when the
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corporation is insolvent or when the payment thereof would render
the corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the
articles of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and
paid, except as otherwise provided in this section, only out of
the unreserved and unrestricted earned surplus of the corporation
or out of capital surplus, howsoever arising but each dividend
paid out of capital surplus, and the amount per share paid from
such surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
(b) Dividends may be declared and paid in the
corporation's own treasury shares.
(c) Dividends may be declared and paid in the
corporation's own authorized but unissued shares out of any
unreserved and unrestricted surplus of the corporation upon the
following conditions:
(1) If a dividend is payable in shares having a
par value, such shares shall be issued at not less than the par
value thereof and there shall be transferred to stated capital at
the time such dividend is paid an amount of surplus equal to the
aggregate par value of the shares to be issued as a dividend.
(2) If a dividend is payable in shares without par
value, such shares shall be issued at such stated value as shall
be fixed by the Board of Directors by resolution adopted at the
time such dividend is declared, and there shall be transferred to
stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect
of such shares; and the amount per share so transferred to stated
capital shall be disclosed to the shareholders receiving such
dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be
paid to the holders of shares of any other class unless the
articles of incorporation so provide or such payment is
authorized by the affirmative vote or the written consent of the
holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any
class into a greater number of shares of the same class without
increasing the stated capital of the corporation shall not be
construed to be a share dividend within the meaning of this
section.
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ARTICLE VII. Corporate Seal
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
name of the corporation as it appears on page 1 of these Bylaws.
ARTICLE VIII. Amendments
These bylaws may be repealed or amended, and new bylaws may
be adopted, by the Board of Directors.
End of Bylaws adopted, by the Board of Directors.
DIRECTORS:
___________________________
Gerald Couture
___________________________
Michael T. Cronin
___________________________
Lawrence Steinberg
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CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use in the Prospectus constituting part
of the Registration Statement on Form SB-2, and any amendments,
there to, to be filed by Alpha Resources, Inc. of our Auditors'
Opinion dated January 17, 1997, accompanying the Financial
Statements of Alpha Resources, Inc. as of January 15, 1997, and
to the use of our name under the caption "Experts" in the
Prospectus.
Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
February 14, 1997
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