U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
BLENCATHIA ACQUISITION CORPORATION
-----------------------------
(Name of Small Business Issuer)
Delaware 52-2068325
- ------------------------------- -----------------------------------
(State or Other Jurisdiction of I.R.S. EmployerIdentification Number
Incorporation or Organization)
1504 R Street, N.W., Washington, D.C. 20009
------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
202/387-5400
_____________
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
PART I
ITEM 1. BUSINESS.
Blencathia Acquisition Corporation (the "Company"), was
incorporated on December 3, 1997 under the laws of the State of
Delaware to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. The Company
has been in the developmental stage since inception and has no
operations to date other than issuing shares to its original
shareholders.
The Company will attempt to locate and negotiate with a
business entity for the merger of that target company into the
Company. In certain instances, a target company may wish to become
a subsidiary of the Company or may wish to contribute assets to the
Company rather than merge. No assurances can be given that the
Company will be successful in locating or negotiating with any
target company.
The Company has been formed to provide a method for a foreign
or domestic private company to become a reporting ("public") company
whose securities are qualified for trading in the United States
secondary market.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting
company with a class of publicly-traded securities. These are
commonly thought to include the following:
* the ability to use registered securities to make
acquisitions of assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial
institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a
business combination with the Company may include the following:
* a company for which a primary purpose of becoming public
is the use of its securities for the acquisition of
assets or businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of
securities on terms acceptable to it;
* a company which wishes to become public with less
dilution of its common stock than would occur upon an
underwriting;
* a company which believes that it will be able obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which may wish an initial entry into
the United States securities market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan;
* a company seeking one or more of the other perceived
benefits of becoming a public company.
A business combination with a target company will normally
involve the transfer to the target company of the majority of the
issued and outstanding common stock of the Company, and the
substitution by the target company of its own management and board
of directors.
No assurances can be given that the Company will be able to
enter into a business combination, as to the terms of a business
combination, or as to the nature of the target company.
The Company is voluntarily filing this Registration Statement
with the Securities and Exchange Commission and is under no
obligation to do so under the Securities Exchange Act of 1934.
RISK FACTORS
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The
Company has had no operating history nor any revenues or earnings
from operations. The Company has no significant assets or financial
resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase
continuously until the Company can consummate a business combination
with a target company. There is no assurance that the Company can
identify such a target company and consummate such a business
combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The
success of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition and management
of the identified target company. While management will prefer
business combinations with entities having established operating
histories, there can be no assurance that the Company will be
successful in locating candidates meeting such criteria. In the
event the Company completes a business combination, of which there
can be no assurance, the success of the Company's operations will be
dependent upon management of the target company and numerous other
factors beyond the Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an
insignificant participant in the business of seeking mergers with
and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which may
be merger or acquisition target candidates for the Company. Nearly
all such entities have significantly greater financial resources,
technical expertise and managerial capabilities than the Company
and, consequently, the Company will be at a competitive disadvantage
in identifying possible business opportunities and successfully
completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger
or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no current
arrangement, agreement or understanding with respect to engaging in
a merger with or acquisition of a specific business entity. There
can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified
any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company
will be able to negotiate a business combination on terms favorable
to the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target company to
have achieved, or without which the Company would not consider a
business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity
having no significant operating history, losses, limited or no
potential for immediate earnings, limited assets, negative net worth
or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, management anticipates
devoting only a limited amount of time per month to the business of
the Company. The Company's sole officer has not entered into a
written employment agreement with the Company and he is not expected
to do so in the foreseeable future. The Company has not obtained
key man life insurance on its officer and director. Notwithstanding
the combined limited experience and time commitment of management,
loss of the services of this individual would adversely affect
development of the Company's business and its likelihood of
continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's officer and
director participates in other business ventures which may compete
directly with the Company. Additional conflicts of interest and
non-arms length transactions may also arise in the future.
Management has adopted a policy that the Company will not seek a
merger with, or acquisition of, any entity in which any member of
management serves as an officer, director or partner, or in which
they or their family members own or hold any ownership interest.
See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS--Conflicts of Interest."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act") requires companies subject thereto to provide certain
information about significant acquisitions including certified
financial statements for the company acquired covering one or two
years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target companies
to prepare such financial statements may significantly delay or
essentially preclude consummation of an otherwise desirable
acquisition by the Company. Acquisition prospects that do not have
or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of
the Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The
Company has neither conducted, nor have others made available to it,
market research indicating that demand exists for the transactions
contemplated by the Company. Even in the event demand exists for a
merger or acquisition of the type contemplated by the Company, there
is no assurance the Company will be successful in completing any
such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations,
even if successful, will in all likelihood result in the Company
engaging in a business combination with only one business entity.
Consequently, the Company's activities will be limited to those
engaged in by the business entity which the Company merges with or
acquires. The Company's inability to diversify its activities into
a number of areas may subject the Company to economic fluctuations
within a particular business or industry and therefore increase the
risks associated with the Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company
will be subject to regulation under the Exchange Act, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In
the event the Company engages in business combinations which result
in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be
required to register as an investment company and could be expected
to incur significant registration and compliance costs. The Company
has obtained no formal determination from the Securities and
Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of
such Act could subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in shareholders of a target company
obtaining a controlling interest in the Company. Any such business
combination may require shareholders of the Company to sell or
transfer all or a portion of the Company's common stock held by
them. The resulting change in control of the Company will likely
result in removal of the present officer and director of the Company
and a corresponding reduction in or elimination of his participation
in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based upon
a business combination with a business entity which, in all
likelihood, will result in the Company issuing securities to
shareholders of such business entity. The issuance of previously
authorized and unissued common stock of the Company would result in
reduction in percentage of shares owned by the present shareholders
of the Company and would most likely result in a change in control
or management of the Company.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target company; however, there can be no assurance that such
business combination will meet the statutory requirements of a
tax-free reorganization or that the parties will obtain the intended
tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both
parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management of the Company will request that
any potential business opportunity provide audited financial
statements. One or more attractive business opportunities may
choose to forego the possibility of a business combination with the
Company rather than incur the expenses associated with preparing
audited financial statements. In such case, the Company may choose
to obtain certain assurances as to the target company's assets,
liabilities, revenues and expenses prior to consummating a business
combination, with further assurances that an audited financial
statement would be provided after closing of such a transaction.
Closing documents relative thereto may include representations that
the audited financial statements will not materially differ from the
representations included in such closing documents.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing
computer programs use only two digits to identify a year in such
program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date.
If not corrected, many computer applications could fail or create
erroneous results by or following the year 2000 ("Year 2000
Problem"). Many of the computer programs containing such date
language problems have not been corrected by the companies or
governments operating such programs. It is impossible to predict
what computer programs will be effected, the impact any such
computer disruption will have on other industries or commerce or the
severity or duration of a computer disruption.
The Company does not have operations and does not maintain
computer systems. Before the Company enters into any business
combination, it may inquire as to the status of any target company's
Year 2000 Problem, the steps such target company has taken or
intends to take to correct any such problem and the probable impact
on such target company of any computer disruption. However, there
can be no assurance that the Company will not merge with a target
company that has an uncorrected Year 2000 Problem or that any
planned Year 2000 Problem corrections will be sufficient. The
extent of the Year 2000 Problem of a target company may be
impossible to ascertain and any impact on the Company will likely be
impossible to predict.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity
in exchange for the Company's securities. The Company has no
particular acquisition in mind and has not entered into any
negotiations regarding such an acquisition. Neither the Company's
officer and director nor any affiliate has engaged in any
negotiations with any representative of any company regarding the
possibility of an acquisition or merger between the Company and such
other company.
Management anticipates seeking out a target company through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms,
accounting firms, investment bankers, financial advisors and similar
persons, the use of one or more World Wide Web sites and similar
methods. No estimate can be made as to the number of persons who
will be contacted or solicited. Management may engage in such
solicitation directly or may employ one or more other entities to
conduct or assist in such solicitation. Management and its
affiliates pay referral fees to consultants and others who refer
target businesses for mergers into public companies in which
management and its affiliates have an interest. Payments are made
if a business combination occurs, and may consist of cash or a
portion of the stock in the Company retained by management and its
affiliates, or both.
The Company has no full time employees. The Company's
president has agreed to allocate a portion of his time to the
activities of the Company, without compensation. The president
anticipates that the business plan of the Company can be implemented
by his devoting no more than 10 hours per month to the business
affairs of the Company and, consequently, conflicts of interest may
arise with respect to the limited time commitment by such officer.
Management is currently involved with other blank check
companies, and is involved in creating additional blank check
companies similar to this one. A conflict may arise in the event
that another blank check company with which management is affiliated
is formed and actively seeks a target company. Management
anticipates that target companies will be located for the Company
and other blank check companies in chronological order of the date
of formation of such blank check companies or by lot. However,
other blank check companies that may be formed may differ from the
Company in certain items such as place of incorporation, number of
shares and shareholders, working capital, types of authorized
securities, or other items. It may be that a target company may be
more suitable for or may prefer a certain blank check company formed
after the Company. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred blank check
company regardless of date of formation or choice by lot. See
"ITEM 5, DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS--Current Blank Check Companies"
The Certificate of Incorporation of the Company provides that
the Company may indemnify officers and/or directors of the Company
for liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of the Company could be used or
attached to satisfy any liabilities subject to such indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business entity
which desires to seek the perceived advantages of a corporation
which has a class of securities registered under the Exchange Act.
The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate
in a business venture of virtually any kind or nature. Management
anticipates that it will be able to participate in only one
potential business venture because the Company has nominal assets
and limited financial resources. See ITEM F/S, "FINANCIAL
STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will
not permit the Company to offset potential losses from one venture
against gains from another.
The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize
the public marketplace in order to raise additional capital in order
to expand into new products or markets, to develop a new product or
service, or for other corporate purposes. The Company may acquire
assets and establish wholly-owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Management believes (but has not conducted any research to
confirm) that there are business entities seeking the perceived
benefits of a publicly registered corporation. Such perceived
benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees,
increasing the opportunity to use securities for acquisitions,
providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at
various stages of development, all of which will make the task of
comparative investigation and analysis of such business
opportunities difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business entities with any cash or
other assets. However, management believes the Company will be able
to offer owners of acquisition candidates the opportunity to acquire
a controlling ownership interest in a public company without
incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a
merger or acquisition transaction for the owners of a business
opportunity.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the officer and director of the
Company, who is not a professional business analyst. In analyzing
prospective business opportunities, management may consider such
matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; 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;
specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the
perceived public recognition or acceptance of products, services, or
trades; name identification; and other relevant factors. This
discussion of the proposed criteria is not meant to be restrictive
of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities.
The Exchange Act requires that any merger or acquisition
candidate comply with certain reporting requirements, which include
providing audited financial statements to be included in the
reporting filings made under the Exchange Act. The Company will not
acquire or merge with any company for which audited financial
statements cannot be obtained at or within a reasonable period of
time after closing of the proposed transaction.
The Company may enter into a business combination with a
business entity that desires to establish a public trading market
for its shares. A target company may attempt to avoid what it deems
to be adverse consequences of undertaking its own public offering by
seeking a business combination with the Company. Such consequences
may include, but are not limited to, time delays of the registration
process, significant expenses to be incurred in such an offering,
loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory
terms.
The Company will not restrict its search for any specific kind
of business entities, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or
in essentially any stage of its business life. It is impossible to
predict at this time the status of any business in which the Company
may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded,
or may seek other perceived advantages which the Company may offer.
Management of the Company, which in all likelihood will not be
experienced in matters relating to the business of a target company,
will rely upon its own efforts in accomplishing the business
purposes of the Company. Outside consultants or advisors may be
utilized by the Company to assist in the search for qualified target
companies. If the Company does retain such an outside consultant or
advisor, any cash fee earned by such person will need to be assumed
by the target company, as the Company has limited cash assets with
which to pay such obligation.
The Company has entered into a non-exclusive written agreement
with TPG Capital Corporation to supervise the search for target
companies as potential candidates for a business combination. TPG
Capital Corporation has received common stock of the Company for a
nominal amount in consideration of its agreement to provide such
services. TPG Capital Corporation will pay as its own expenses any
costs it incurs in supervising the search for a target company. TPG
Capital Corporation may enter into agreements with other
consultants to assist in locating a target company and may share
stock received by it with such other consultants. TPG Capital
Corporation is an affiliate of the Company's management. See "ITEM
4: SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT."
Following a business combination the Company may benefit from
the services of others in regard to accounting, legal services,
underwritings and corporate public relations. If requested by a
target company, management may recommend one or more underwriters,
financial advisors, accountants, public relations firms or other
consultants to provide such services.
A potential target company may have an agreement with a
consultant or advisor providing that services of the consultant or
advisor be continued after any business combination. Additionally,
a target company may be presented to the Company only on the
condition that the services of a consultant or advisor be continued
after a merger or acquisition. Such preexisting agreements of
target companies for the continuation of the services of attorneys,
accountants, advisors or consultants could be a factor in the
selection of a target company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement
with another corporation or entity. It may also acquire stock or
assets of an existing business. On the consummation of a
transaction, it is likely that the present management and
shareholders of the Company will no longer be in control of the
Company. In addition, it is likely that the Company's officer and
director will, as part of the terms of the acquisition transaction,
resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which
there can be no assurance, it will be undertaken by the surviving
entity after the Company has entered into an agreement for a
business combination or has consummated a business combination and
the Company is no longer considered a blank check company. The
issuance of additional securities and their potential sale into any
trading market which may develop in the Company's securities may
depress the market value of the Company's securities in the future
if such a market develops, of which there is no assurance.
While the terms of a business transaction to which the Company
may be a party cannot be predicted, it is expected that the parties
to the business transaction will desire to avoid the creation of a
taxable event and thereby structure the acquisition in a "tax-free"
reorganization under Sections 351 or 368 of the Internal Revenue
Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a
target company, management expects to focus on the percentage of the
Company which target company shareholders would acquire in exchange
for their shareholdings in the target company. Depending upon,
among other things, the target company's assets and liabilities, the
Company's shareholders will in all likelihood hold a substantially
lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of ownership may be subject
to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected
by the Company can be expected to have a significant dilutive effect
on the percentage of shares held by the Company's shareholders at
such time.
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate agreements.
Although the terms of such agreements cannot be predicted, generally
such agreements will require certain representations and warranties
of the parties thereto, will specify certain events of default, will
detail the terms of closing and the conditions which must be
satisfied by the parties prior to and after such closing and will
include miscellaneous other terms..
The Company will not acquire or merge with any entity which
cannot provide audited financial statements at or within a
reasonable period of time after closing of the proposed transaction.
The Company is subject to all of the reporting requirements
included in the Exchange Act. Included in these requirements is the
duty of the Company to file audited financial statements as part of
or within 60 days following its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as
applicable). If such audited financial statements are not available
at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or
if the audited financial statements provided do not conform to the
representations made by the target company, the closing documents
may provide that the proposed transaction will be voidable at the
discretion of the present management of the Company.
Pierce Mill Associates, Inc. the principal shareholder of the
Company, has agreed that it will advance to the Company any
additional funds which the Company needs for operating capital and
for costs in connection with searching for or completing an
acquisition or merger. Such advances will be made without
expectation of repayment unless the owners of the business which the
Company acquires or merges with agree to repay all or a portion of
such advances. There is no minimum or maximum amount Pierce Mill
will advance to the Company. The Company will not borrow any funds
to make any payments to the Company's promoters, management or their
affiliates or associates.
The Board of Directors has passed a resolution which contains
a policy that the Company will not seek an acquisition or merger
with any entity in which the Company's officer, director, and
shareholders or any affiliate or associate serves as an officer or
director or holds any ownership interest.
COMPETITION
The Company will remain an insignificant participant among the
firms which engage in the acquisition of business opportunities.
There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources
and technical expertise than the Company. In view of the Company's
combined extremely limited financial resources and limited
management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's
competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no
agreements to acquire any properties. The Company currently uses
the offices of Pierce Mill Associates at no cost to the Company.
Pierce Mill Associates has agreed to continue this arrangement until
the Company completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known by the
Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all directors individually and all directors
and officers of the Company as a group. Except as noted, each
person has sole voting and investment power with respect to the
shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
-------------------- ------------------ --------------
Pierce Mill Associates, Inc.(1) 4,250,000 85%
1504 R Street, N.W.
Washington, D.C. 20009
TPG Capital Corporation (1) 750,000 15%
1504 R Street, N.W.
Washington, D.C. 20009
James M. Cassidy (2) 5,000,000 100%
1504 R Street, N.W.
Washington, D.C. 20009
All Executive Officers and
Directors as a Group (1 Person) 5,000,000 100%
(1) Mr. Cassidy owns 100% of the issued and outstanding stock
of Pierce Mill Associates, Inc. and is the controlling shareholder,
sole director and officer of TPG Capital Corporation.
(2) As the sole shareholder, officer and director of Pierce
Mill Associates, Inc. and the controlling shareholder, sole director
and officer of TPG Capital Corporation, Mr. Cassidy is deemed to be
the beneficial owner of the common stock of the Company owned by
those entities.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
James M. Cassidy 63 President, Secretary, Director
There are no agreements or understandings for the officer or
director to resign at the request of another person and the
above-named officer and director is not acting on behalf of nor will
act at the direction of any other person.
Set forth below is the name of the director and officer of the
Company, all positions and offices with the Company held, the period
during which he has served as such, and the business experience
during at least the last five years:
James Michael Cassidy, Esq., LL.B., LL.M., received a Bachelor
of Science in Languages and Linguistics from Georgetown University
in 1960, a Bachelor of Laws from The Catholic University School of
Law in 1963, and a Master of Laws in Taxation from The Georgetown
University School of Law in 1968. From 1963-1964, Mr. Cassidy was
law clerk to the Honorable Inzer B. Wyatt of the United States
District Court for the Southern District of New York. From
1964-1965, Mr. Cassidy was law clerk to the Honorable Wilbur K.
Miller of the United States Court of Appeals for the District of
Columbia. From 1969-1975, Mr. Cassidy was an associate of the law
firm of Kieffer & Moroney and a principal in the law firm of Kieffer
& Cassidy, Washington, D.C. From 1975 to date, Mr. Cassidy has been
a principal in the law firm of Cassidy & Associates, Washington,
D.C. and its predecessors, specializing in securities law and
related corporate and federal taxation matters. Mr. Cassidy is a
member of the bar of the District of Columbia and is admitted to
practice before the United States Tax Court and the United States
Supreme Court.
PREVIOUS BLANK CHECK COMPANIES
In 1988, management was involved in two blank check offerings.
Mr. Cassidy was vice president, a director and a shareholder of
First Agate Capital Corporation and Consolidated Financial
Corporation. In August, 1988, First Agate Capital Corporation
offered 50,000 units at $10.00 for an aggregate of $500,000 in an
underwritten offering of its common stock and warrants. First Agate
Capital is no longer a public company and has had no activity since
1991. In November, 1988, Consolidated Financial Corporation offered
50,000 units at $10.00 for an aggregate of $500,000 in an
underwritten offering of its common stock and warrants. In 1990, in
connection with the change in control of Consolidated Financial
Corporation, Mr. Cassidy transferred all his shares of Consolidated
Financial Corporation common stock without compensation or any
financial benefit and resigned as an officer and director of that
company. Mr. Cassidy has had no further relationship or
transactions with Consolidated Financial Corporation since 1990. As
described in public filings made by the company, in June, 1991, the
new management of Consolidated Financial Corporation effected its
merger with A.B.E Industrial Holdings.
CURRENT BLANK CHECK COMPANIES
Mr. Cassidy is the president, sole director and a beneficial
shareholder of Sheffield Acquisitions, Inc., Tunlaw International
Corporation, Aberdeen Acquisition Corporation, Barhill Acquisition
Corporation, Sunderland Acquisition Corporation, and Westford
Acquisition Corporation. Until its business combination on December
30, 1997, Mr. Cassidy was the sole director and beneficial
shareholder of Corcoran Technologies Corporation. Until its
business combination on December 4, 1998, Mr. Cassidy was the sole
director and beneficial shareholder of Chatsworth Acquisition
Corporation. Sheffield Acquisitions, Inc. has filed a registration
statement on Form S-1 under the Securities Act which has not yet
been declared effective. Tunlaw International Corporation, Corcoran
Technologies Corporation, Chatsworth Acquisition Corporation,
Aberdeen Acquisition Corporation, Barhill Acquisition Corporation,
Sunderland Acquisition Corporation, and Westford Acquisition
Corporation filed registration statements on Forms 10-SB under the
Exchange Act which became effective and each files periodic reports
under the Exchange Act. The initial business purpose of each of
these companies was to engage in a merger or acquisition with an
unidentified company or companies and each were or will be
classified as a blank check company until completion of a business
acquisition.
Mr. Cassidy anticipates being involved with additional blank
check companies filed under the Securities Act or under the Exchange
Act.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
On December 30, 1997, Prime Management, Inc., a California
corporation, merged with and into Corcoran Technologies Corporation.
Corcoran Technologies Corporation was formed on March 27, 1997 to
engage in a merger or acquisition with an unidentified company or
companies and was structured substantially identically to the
Company, including identical management and beneficial shareholders.
At the time of the merger, Prime Management, Inc. was an operating
transportation company with two wholly-owned subsidiaries, Mid-Cal
Express, a long-haul trucking company hauling shipments of general
commodities, including temperature-sensitive goods, in both
intrastate and interstate commerce and Mid-Cal Logistics, a freight
brokerage company. Pursuant to the merger, Corcoran Technologies
Corporation changed its name to Prime Companies, Inc. and Corcoran
Technologies Corporation filed a Form 8-K with the Securities and
Exchange Commission describing the merger. The common stock of
Prime Companies, Inc. trades on the NASD OTC Bulletin Board under
the symbol PRMC. Detailed information concerning Prime Companies,
Inc. may be obtained from its filings under the Exchange Act which
are found the EDGAR archives page of the Securities and Exchange
Commission's Website at www.sec.gov.
On December 4, 1998, AmeriCom USA, Inc., a Delaware
corporation, merged with and into Chatsworth Acquisition
Corporation. Chatsworth Acquisition Corporation was formed on
December 3, 1997 to engage in a merger or acquisition with an
unidentified company or companies and was structured substantially
identically to the Company, including identical management and
beneficial shareholders. AmeriCom USA, Inc. is an operating
Internet advertising company with one wholly-owned subsidiary,
Diversified Associates International, a California company.
Pursuant to the merger, Chatsworth Acquisition Corporation changed
its name to AmeriCom USA, Inc. and Chatsworth Acquisition
Corporation filed a Form 8-K with the Securities and Exchange
Commission describing the merger. AmeriCom USA, Inc. is seeking the
admission of its common stock to quotation on the NASD OTC Bulletin
Board. Detailed information concerning AmeriCom USA, Inc. may be
obtained from its filings under the Exchange Act which are found the
EDGAR archives page of the Securities and Exchange Commission's
Website at www.sec.gov.
CONFLICTS OF INTEREST
The Company's officer and director has organized and expects
to organize other companies of a similar nature and with a similar
purpose as the Company. Consequently, there are potential inherent
conflicts of interest in acting as an officer and director of the
Company. Insofar as the officer and director is engaged in other
business activities, management anticipates that it will devote only
a minor amount of time to the Company's affairs. The Company does
not have a right of first refusal pertaining to opportunities that
come to management's attention insofar as such opportunities may
relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check
company with which management is affiliated is formed and actively
seeks a target company. It is anticipated that target companies
will be located for the Company and other blank check companies in
chronological order of the date of formation of such blank check
companies or by lot. However, any blank check companies that may be
formed may differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working capital,
types of authorized securities, or other items. It may be that a
target company may be more suitable for or may prefer a certain
blank check company formed after the Company. In such case, a
business combination might be negotiated on behalf of the more
suitable or preferred blank check company regardless of date of
formation or choice by lot. Mr. Cassidy will be responsible for
seeking, evaluating, negotiating and consummating a business
combination with a target company which may result in terms
providing benefits to Mr. Cassidy.
Mr. Cassidy is the principal of Cassidy & Associates, a
securities law firm located in Washington, D.C. As such, demands
may be placed on the time of Mr. Cassidy which will detract from the
amount of time he is able to devote to the Company. Mr. Cassidy
intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no
assurance that Mr. Cassidy would not attend to other matters prior
to those of the Company. Mr. Cassidy projects that initially up to
ten hours per month of his time may be spent locating a target
company which amount of time would increase when the analysis of,
and negotiations and consummation with, a target company are
conducted.
Mr. Cassidy owns 100% of the issued and outstanding stock of
Pierce Mill Associates which owns 4,250,000 shares of common stock
of the Company and is the president, director and controlling
shareholder of TPG Capital Corporation, a Delaware corporation,
which owns 750,000 shares of the Company's common stock. At the
time of a business combination, management expects that some or all
of the shares of Common Stock owned by Pierce Mill Associates and
shares of Common Stock owned by TPG Capital Corporation will be
purchased by the target company or retired by the Company. The
amount of Common Stock sold or continued to be owned by Pierce Mill
Associates or TPG Capital Corporation cannot be determined at this
time.
The terms of business combination may include such terms as
Mr. Cassidy remaining a director or officer of the Company and/or
the continuing securities or other legal work of the Company being
handled by the law firm of which Mr. Cassidy is the principal. The
terms of a business combination may provide for a payment by cash or
otherwise to Pierce Mill Associates or TPG Capital Corporation for
the purchase of all or part of their common stock of the Company by
a target company or for services rendered incident to or following a
business combination. Mr. Cassidy would directly benefit from such
employment or payment. Such benefits may influence Mr. Cassidy's
choice of a target company.
The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a target company to
the Company where that reference results in a business combination.
No finder's fee of any kind will be paid by the Company to
management or promoters of the Company or to their associates or
affiliates. No loans of any type have, or will be, made by the
Company to management or promoters of the Company or to any of their
associates or affiliates.
The Company will not enter into a business combination, or
acquire any assets of any kind for its securities, in which
management or promoters of the Company or any affiliates or
associates have any interest, direct or indirect.
Management has adopted certain policies involving possible
conflicts of interest, including prohibiting any of the following
transactions involving management, promoters, shareholders or their
affiliates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such
persons prior to a business combination;
(iii) The entering into any business combination
or acquisition of assets in which such
persons have any interest, direct or indirect; or
(iv) The payment of any finder's fees to such persons.
These policies have been adopted by the Board of Directors of
the Company, and any changes in these provisions require the
approval of the Board of Directors. Management does not intend to
propose any such action and does not anticipate that any such action
will occur.
There are no binding guidelines or procedures for resolving
potential conflicts of interest. Failure by management to resolve
conflicts of interest in favor of the Company could result in
liability of management to the Company. However, any attempt by
shareholders to enforce a liability of management to the Company
would most likely be prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company will
not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities the Company could be subject to
regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940. Any violation of
such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officer and director does not receive any
compensation for his services rendered to the Company, has not
received such compensation in the past, and is not accruing any
compensation pursuant to any agreement with the Company.
The officer and director of the Company will not receive any
finder's fee from the Company as a result of his efforts to implement
the Company's business plan outlined herein. However, the officer
and director of the Company anticipates receiving benefits as a
beneficial shareholder of the Company. See "ITEM 4. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 5,000,000 shares of Common
Stock to the following persons for a total of $1,000 in cash:
Name Number of Total Shares Consideration
Pierce Mill Associates, Inc. 4,250,000 $850
TPG Capital Corporation 750,000 $150
Mr. Cassidy, the president and sole director of the Company,
is the sole director and shareholder of Pierce Mill Associates, Inc.
and is therefore considered to be the beneficial owner of the common
stock of the Company issued to Pierce Mill Associates, Inc. With
respect to the sales made to Pierce Mill Associates, Inc., the
Company relied on Section 4(2) of the Securities Act of 1933, as
amended and Rule 506 promulgated thereunder.
Mr. Cassidy is the sole director, controlling shareholder
and president of TPG Capital Corporation. With respect to the
sales made to TPG Capital Corporation, the Company relied upon
Section 3(b) of the Securities Act of 1933, as amended and Rule 701
promulgated thereunder.
The shareholders of the Company have executed and delivered
"lock-up" letter agreements which provide that such shareholders
shall not sell the securities except in connection with or following
the consummation of a merger or acquisition. Further, each
shareholder has placed its stock certificates with the Company until
such time. Any liquidation by the current shareholders after the
release from the "lock-up" selling limitation period may have a
depressive effect upon the trading price of the Company's securities
in any future market which may develop.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, par value $.0001 per share, and
20,000,000 shares of Preferred Stock, par value $.0001 per share.
The following statements relating to the capital stock set forth the
material terms of the Company's securities; however, reference is
made to the more detailed provisions of, and such statements are
qualified in their entirety by reference to, the Certificate of
Incorporation and the By-laws, copies of which are filed as exhibits
to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the stockholders.
Holders of common stock do not have cumulative voting rights.
Holders of common stock are entitled to share ratably in dividends,
if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata
all assets remaining after payment in full of all liabilities. All
of the outstanding shares of common stock are fully paid and
non-assessable.
Holders of common stock have no preemptive rights to purchase
the Company's common stock. There are no conversion or redemption
rights or sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the
issuance of 20,000,000 shares of preferred stock, $.0001 par value
per share, of which no shares have been issued. The Board of
Directors is authorized to provide for the issuance of shares of
preferred stock in series and, by filing a certificate pursuant to
the applicable law of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions
thereof without any further vote or action by the shareholders. Any
shares of preferred stock so issued would have priority over the
common stock with respect to dividend or liquidation rights. Any
future issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the
voting and other rights of the holders of common stock. At present,
the Company has no plans to issue any preferred stock nor adopt any
series, preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of
rights to purchase such shares, could be used to discourage an
unsolicited acquisition proposal. For instance, the issuance of a
series of preferred stock might impede a business combination by
including class voting rights that would enable the holder to block
such a transaction, or facilitate a business combination by
including voting rights that would provide a required percentage
vote of the stockholders. In addition, under certain circumstances,
the issuance of preferred stock could adversely affect the voting
power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such stock
based on its judgment as to the best interests of the stockholders
of the Company, the Board of Directors could act in a manner that
would discourage an acquisition attempt or other transaction that
some, or a majority, of the stockholders might believe to be in
their best interests or in which stockholders might receive a
premium for their stock over the then market price of such stock.
The Board of Directors does not at present intend to seek
stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or stock exchange rules.
The Company has no present plans to issue any preferred stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's
revenues and earnings, if any, capital requirements and financial
conditions. The payment of dividends, if any, will be within the
discretion of the Company's Board of Directors. The Company
presently intends to retain all earnings, if any, for use in its
business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
RESTRICTIONS ON TRANSFERS OF SECURITIES PRIOR TO BUSINESS COMBINATION
The proposed business activities described herein classify the
Company as a blank check company. See "GLOSSARY". The Securities
and Exchange Commission and many states have enacted statutes, rules
and regulations limiting the sale of securities of blank check
companies. Management does not intend to undertake any efforts to
cause a market to develop in the Company's securities until such
time as the Company has successfully implemented its business plan
described herein. Accordingly, the shareholders of the Company have
executed and delivered a "lock-up" letter agreement, affirming that
such shareholders shall not sell their shares of the Company's
common stock except in connection with or following completion of a
merger or acquisition resulting in the Company no longer being
classified as a blank check company. The shareholders have
deposited their stock certificates with the Company's management,
who will not release the certificates except in connection with or
following the completion of a merger or acquisition.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996 limited
the authority of states to impose restrictions upon sales of
securities made pursuant to Sections 4(1) and 4(3) of the Securities
Act of 1933, as amended (the "Securities Act") of companies which
file reports under Sections 13 or 15(d) of the Securities Exchange
Act. The Company files such reports. As a result, sales of the
Company's common stock in the secondary trading market by the
holders thereof may be made pursuant to Section 4(1)of the
Securities Act (sales other than by an issuer, underwriter or broker).
If, after a merger or acquisition, the Company does not meet
the qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter ("OTC")
market. The OTC market differs from national and regional stock
exchanges in that it (1) is not sited in a single location but
operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are
offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. The Company may apply for listing on
the NASD OTC Bulletin Board or may offer its securities in what are
commonly referred to as the "pink sheets" of the National Quotation
Bureau, Inc. To qualify for listing on the NASD OTC Bulletin Board,
an equity security must have one registered broker-dealer, known as
the market maker, willing to list bid or sale quotations and to
sponsor the company for listing on the Bulletin Board.
GLOSSARY
"Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "blank check" company is a
development stage company that has no
specific business plan or purpose or has
indicated that its business plan is to
engage in a merger or acquisition with an
unidentified company or companies and is
issuing "penny stock" securities as defined
in Rule 3a51-1 of the Exchange Act.
The Company Blencathia Acquisition Corporation, the company
whose common stock is the subject of this
registration statement.
Exchange Act The Securities Exchange Act of 1934, as
amended.
"Penny Stock" Security As defined in Rule 3a51-1 of the Exchange
Act, a "penny stock" security is any equity
security other than a security (i) that is a
reported security (ii) that is issued by an
investment company (iii) that is a put or
call issued by the Option Clearing
Corporation (iv) that has a price of $5.00
or more (except for purposes of Rule 419 of
the Securities Act) (v) that is registered
on a national securities exchange (vi) that
is authorized for quotation on the Nasdaq
Stock Market, unless other provisions of
Rule 3a51-1 are not satisfied, or (vii) that
is issued by an issuer with (a) net tangible
assets in excess of $2,000,000, if in
continuous operation for more than three
years or $5,000,000 if in operation for less
than three years or (b) average revenue of
at least $6,000,000 for the last three years.
Securities Act The Securities Act of 1933, as amended.
Small Business Issuer As defined in Rule 12b-2 of the Exchange
Act, a "Small Business Issuer" is an entity
(i) which has revenues of less than
$25,000,000 (ii) whose public float (the
outstanding securities not held by
affiliates) has a value of less than
$25,000,000 (iii) which is a United States
or Canadian issuer (iv) which is not an
Investment Company and (v) if a
majority-owned subsidiary, whose parent
corporation is also a small business issuer.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
(A) MARKET PRICE. There is no trading market for the
Company's Common Stock at present and there has been no trading
market to date. There is no assurance that a trading market will
ever develop or, if such a market does develop, that it will
continue.
The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market
price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the rules
require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny
stocks, the broker or dealer must (i) obtain financial information
and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or
dealer must also deliver, prior to any transaction in a penny stock,
a disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth the
basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed,
written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny
stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny
stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks.
In order to qualify for listing on the Nasdaq SmallCap Market,
a company must have at least (i) net tangible assets of $4,000,000
or market capitalization of $50,000,000 or net income for two of the
last three years of $750,000; (ii) public float of 1,000,000 shares
with a market value of $5,000,000; (iii) a bid price of $4.00; (iv)
three market makers; (v) 300 shareholders and (vi) an operating
history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for
two of the last three years of $500,000; (ii) a public float of
500,000 shares with a market value of $1,000,000; (iii) a bid price
of $1.00; (iv) two market makers; and (v) 300 shareholders.
If, after a merger or acquisition, the Company does not meet
the qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter ("OTC")
market. The OTC market differs from national and regional stock
exchanges in that it (1) is not sited in a single location but
operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are
offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. The Company may apply for listing on
the NASD OTC Bulletin Board or may offer its securities in what are
commonly referred to as the "pink sheets" of the National Quotation
Bureau, Inc. To qualify for listing on the NASD OTC Bulletin Board,
an equity security must have one registered broker-dealer, known as
the market maker, willing to list bid or sale quotations and to
sponsor the company for listing on the Bulletin Board.
If the Company is unable initially to satisfy the requirements
for quotation on the Nasdaq SmallCap Market or becomes unable to
satisfy the requirements for continued quotation thereon, and
trading, if any, is conducted in the OTC market, a shareholder may
find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
(B) HOLDERS. There are two holders of the Company's Common
Stock. The issued and outstanding shares of the Company's Common
Stock were issued in accordance with the exemptions from
registration afforded by Sections 3(b) and 4(2) of the Securities
Act of 1933 and Rules 506 and 701 promulgated thereunder.
(C) DIVIDENDS. The Company has not paid any dividends to
date, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the
Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation
and there are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities
which were not registered as follows:
Date Name Number of Shares Consideration
December 5, 1997 Pierce Mill 4,250,000 $850
Associates, Inc.(1)
December 5, 1997 TPG Capital 750,000 $150
Corporation (2)
________
(1) Mr. Cassidy, the president and sole director of the
Company, is the sole director and shareholder of Pierce Mill
Associates, Inc. and is therefore considered to be the beneficial
owner of the common stock of the Company issued to Pierce Mill
Associates, Inc. With respect to the sales made to Pierce Mill
Associates, Inc., the Company relied on Section 4(2) of the
Securities Act of 1933, as amended and Rule 506 promulgated
thereunder.
(2) Mr. Cassidy is the sole director, controlling shareholder
and president of TPG Capital Corporation. With respect to the
sales made to TPG Capital Corporation, the Company relied upon
Section 3(b) of the Securities Act of 1933, as amended and Rule 701
promulgated thereunder.
The shareholders of the Company have executed and delivered
"lock-up" letter agreements which provide that such shareholders
shall not sell the securities except in connection with or following
the consummation of a merger or acquisition. Further, each
shareholder has placed its stock certificates with the Company until
such time. Any liquidation by the current shareholders after the
release from the "lock-up" selling limitation period may have a
depressive effect upon the trading price of the Company's securities
in any future market which may develop.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware provides that a Delaware corporation has the power, under
specified circumstances, to indemnify its directors, officers,
employees and agents, against expenses incurred in any action, suit
or proceeding. The Certificate of Incorporation and the By-laws of
the Company provide for indemnification of directors and officers to
the fullest extent permitted by the General Corporation Law of the
State of Delaware.
The General Corporation Law of the State of Delaware provides
that a certificate of incorporation may contain a provision
eliminating the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary
duty as a director provided that such provision shall not eliminate
or limit the liability of a director (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 (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit. The Company's Certificate of Incorporation contains such a
provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS,
OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE
FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for
the period ended October 31, 1998. The following financial
statements are attached to this report and filed as a part thereof.
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheet as of October 31, 1998
4) Notes to Balance Sheet as of October 31, 1998
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1998
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF OCTOBER 31, 1998
PAGE 3 - STATEMENTS OF OPERATIONS FOR TEN MONTHS
ENDED OCTOBER 31, 1998 AND FOR THE PERIOD
FROM DECEMBER 2, 1997 (INCEPTION) TO
OCTOBER 31, 1998
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY FOR THE PERIOD FROM DECEMBER 2,
1997 (INCEPTION) TO OCTOBER 31,1998
PAGE 5 - STATEMENTS OF CASH FLOW FOR THE TEN MONTHS
ENDED OCTOBER 31, 1998 AND FOR THE PERIOD
FROM DECEMBER 2, 1997 (INCEPTION) TO
OCTOBER 31, 1998
PAGE 6 - 8 - NOTES TO FINANCIAL STATEMENTS AS OF
OCTOBER 31, 1998
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Blencathia Acquisition Corporation
(A Development Stage Company)
We have audited the accompanying balance sheet of Blencathia
Acquisition Corporation (a development stage company) as of October
31, 1998 and the related statements of operations, changes in
stockholders' equity and cash flows for the ten months then ended
and for the period from December 2, 1997 (inception) to October 31,
1998. These financial statements are the responsibility of the
Company's management. 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. Those 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
statements 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
Blencathia Acquisition Corporation (a development stage company) as
of October 31, 1998, and the results of its operations and its cash
flows for the ten months then ended and from December 2, 1997
(inception) to October 31, 1998, in conformity with generally
accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
December 21, 1998
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF OCTOBER 31, 1998
ASSETS
Cash $ 868
TOTAL ASSETS $ 868
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $ -
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001
par value, 20 million
shares authorized, none
issued and outstanding -
Common Stock, $.0001 par
value, 100 million shares
authorized, 5,000,000 issued
and outstanding 500
Capital in excess of par 500
Accumulated deficit during
development stage (132)
Total Stockholders' Equity 868
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 868
See accompanying notes to financial statements.
2
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE TEN MONTHS ENDED OCTOBER 31, 1998
AND FOR THE PERIOD FROM DECEMBER 2, 1997
(INCEPTION) TO OCTOBER 31, 1998
CUMULATIVE FROM
DECEMBER 2, 1997 TEN MONTHS
(INCEPTION) TO ENDED
OCTOBER 31, 1998 OCTOBER 31,1998
Income $ - $ -
Expenses
Bank charges $ 132 $ 132
NET LOSS $ (132) $ (132)
See accompanying notes to financial statements.
3
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 2, 1997
(INCEPTION) TO OCTOBER 31, 1998
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
Common stock issuance $ 500 $ 500 $ - $ 1,000
Net loss for the ten
months ended October
31, 1998 - - (132) (132)
BALANCE AT OCTOBER
31, 1998 500 $ 500 $ (132) $ 868
See accompanying notes to financial statements.
4
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE TEN MONTHS ENDED OCTOBER 31, 1998
AND FOR THE PERIOD FROM DECEMBER 2, 1997
(INCEPTION) TO OCTOBER 31, 1998
CUMULATIVE FROM
DECEMBER 2, 1997 TEN MONTHS
(INCEPTION) TO ENDED
OCTOBER 31, 1998 OCTOBER 31, 1998
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (132) $ (132)
Adjustments to
reconcile net loss
to net cash used
by operating activities: - -
Net cash used in
operating activities (132) (132)
CASH FLOWS FROM INVESTING
ACTIVITIES - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance
of common stock 1,000 -
Net cash provided by
financing activities 1,000 -
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 868 (132)
CASH AND CASH
EQUIVALENTS - BEGINNING
OF PERIOD - 1,000
CASH AND CASH EQUIVALENTS
- END OF PERIOD $ 868 $ 868
See accompanying notes to financial statements.
5
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Blencathia Acquisition Corporation (a development stage
company) ("the Company") was incorporated in Delaware on
December 2, 1997 to serve as a vehicle to effect a merger,
exchange of capital stock, asset acquisition or other
business combination with a domestic or foreign private
business. At October 31, 1998, the Company had not yet
commenced any formal business operations, and all activity
to date relates to the Company's formation and proposed
fund raising. The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent
upon its ability to identify a prospective target business
and raise the capital it will require through the issuance
of equity securities, debt securities, bank borrowings or
a combination thereof.
B. Use of Estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
C. Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash
equivalents.
6
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Income Taxes
The Company accounts for income taxes under the Financial
Accounting Standards Board of Financial Accounting
Standards No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 109, deferred tax
assets and liabilities are recognized for the future tax
consequences attributable to differences between the
financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. 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. Under Statement 109, 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. There were no current or deferred
income tax expense or benefits due to the Company's
limited operations for the period ended October 31, 1998.
E. New Accounting Pronouncements
The Financial Accounting Standards Board has recently
issued several new accounting pronouncements. Statement
No. 129, "Disclosure of Information about Capital
Structure" establishes standards for disclosing
information about an entity's capital structure, is
effective for financial statements for periods ending
after December 15, 1997 and has been adopted by the
Company as of December 31, 1997. Statement No. 130,
"Reporting Comprehensive Income" establishes standards for
reporting and display of comprehensive income and its
components, and is effective for fiscal years beginning
after December 15, 1997. Statement No. 131, "Disclosures
about Segments of an Enterprise and Related Information"
establishes standards for the way that public business
enterprises report information about operating segments in
annual financial statements and requires that those
enterprises report selected information about operating
segments in interim financial reports issued to
shareholders. It also establishes standards for related
disclosures about products and services, geographic areas,
and major customers, and is effective for
7
BLENCATHIA ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
financial statements for periods beginning after December
15, 1997. The Company believes that its adoption of
Statements 130 and 131 will not have a material effect on
the Company's financial position or results of operations.
NOTE 2 - STOCKHOLDERS' EQUITY
A. Preferred Stock
The Company is authorized to issue 20,000,000 shares of
preferred stock at $.0001 par value, with such
designations, voting and other rights and preferences as
may be determined from time to time by the Board of
Directors.
B. Common Stock
The Company is authorized to issue 100,000,000 shares of
common stock at $.0001 par value. The Company issued
4,250,000 and 750,000 shares to Pierce Mill Associates,
Inc. and TPG Capital Corporation, respectively.
NOTE 3 - RELATED PARTIES
Legal counsel to the Company is a firm owned by a director
of the Company who also owns 100% of the outstanding
stock of Pierce Mill Associates, Inc., the 85%
shareholder. The same party is also the controlling
shareholder of TPG Capital Corporation, the 15% shareholder.
8
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-laws:
2.1* Certificate of Incorporation
2.2* By-Laws
(3) Instruments Defining the Rights of Holders
3.1* Lock-Up Agreement with Pierce Mill Associates
3.2* Lock-Up Agreement with TPG Capital Corporation
(10)(a) Consents - Experts
10.1* Consent of Accountants
____________
* Filed herewith
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the Registrant caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized.
BLENCATHIA ACQUISITION CORPORATION
By: /s/ James M. Cassidy
James M. Cassidy, Director and President
February 8, 1999
Certificate of Incorporation
CERTIFICATE OF INCORPORATION
of
THE BLENCATHIA ACQUISITION CORPORATION
ARTICLE ONE
Name
The name of the corporation is The Blencathia Acquisition
Corporation.
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
ARTICLE FOUR
Shares
The total number of shares of stock which the Corporation shall
have authority to issue is 120,000,000 shares, consisting of
100,000,000 shares of Common Stock having a par value of $.0001 per
share and 20,000,000 shares of Preferred Stock having a par value of
$.0001 per share.
The Board of Directors is authorized to provide for the
issuance of the shares of Preferred Stock in series and, by filing a
certificate pursuant to the applicable law of the State of Delaware,
to establish from time to time the number of shares to be included
in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof.
The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to,
determination of the following:
A. The number of shares constituting that series and the
distinctive designation of that series;
B. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends
on share of that series;
C. Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such
voting rights;
D. Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events as
the Board of Directors shall determine;
E. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates;
F. Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
G. The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, and the relative rights of priority, if any, of
payment of shares of that series; and
H. Any other relative rights, preferences and limitations of
that series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon as
its certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of the
Corporation and the name of its initial registered agent and its
business address is
The Prentice-Hall Corporation System, Inc.
1013 Centre Road
Wilmington, Delaware 19805 (County of New Castle)
The initial registered agent is a resident of the State of
Delaware.
ARTICLE SEVEN
Incorporator
Lee W. Cassidy, 1504 R Street, N.W., Washington, D.C. 20009.
ARTICLE EIGHT
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive
rights whatsoever.
ARTICLE NINE
By-Laws
The initial by-laws shall be adopted by the Shareholders or the
Board of Directors. The power to alter, amend, or repeal the
by-laws or adopt new by-laws is vested in the Board of Directors,
subject to repeal or change by action of the Shareholders.
ARTICLE TEN
Number of Votes
Each share of Common Stock has one vote on each matter on which
the share is entitled to vote.
ARTICLE ELEVEN
Majority Votes
A majority vote of a quorum of Shareholders (consisting of the
holders of a majority of the shares entitled to vote, represented in
person or by proxy) is sufficient for any action which requires the
vote or concurrence of Shareholders, unless otherwise required or
permitted by law or the by-laws of the Corporation.
ARTICLE TWELVE
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative voting
shall not be permitted.
ARTICLE THIRTEEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or
other transaction between the Corporation and any of its directors,
officers or securityholders, or any corporation or firm in which any
of them are directly or indirectly interested, shall be invalid
solely because of this relationship or because of the presence of
the director, officer or securityholder at the meeting of the Board
of Directors or committee authorizing the contract or transaction,
or his participation or vote in the meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall apply
only if:
(1) The material facts of the relationship or interest of each
such director, officer or securityholder are known or disclosed:
(a) to the Board of Directors or the committee and it
nevertheless authorizes or ratifies the contract or transaction by a
majority of the directors present, each such interested director to
be counted in determining whether a quorum is present but not in
calculating the majority necessary to carry the vote; or
(b) to the Shareholders and they nevertheless authorize or
ratify the contract or transaction by a majority of the shares
present, each such interested person to be counted for quorum and
voting purposes; or
(2) the contract or transaction is fair to the Corporation as
of the time it is authorized or ratified by the Board of Directors,
the committee or the Shareholders.
ARTICLE FOURTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent
provided in Paragraphs (B), (D) or (F) and to the extent permitted
from time to time by law:
(1) any person who is or was director, officer, agent or
employee of the Corporation, and
(2) any person who serves or served at the Corporation's
request as a director, officer, agent, employee, partner or trustee
of another corporation or of a partnership, joint venture, trust or
other enterprise.
B. Extent--Derivative Suits. In case of a suit by or in the
right of the Corporation against a person named in Paragraph (A) by
reason of his holding a position named in Paragraph (A), the
Corporation shall indemnify him, if he satisfies the standard in
Paragraph (C), for expenses (including attorney's fees but excluding
amounts paid in settlement) actually and reasonably incurred by him
in connection with the defense or settlement of the suit.
C. Standard--Derivative Suits. In case of a suit by or in the
right of the Corporation, a person named in Paragraph (A) shall be
indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation.
However, he shall not be indemnified in respect of any claim, issue
or matter as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the Corporation unless
(and only to the extent that) the court in which the suit was
brought shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is fairly and
reasonably entitled to indemnity for such expenses as the court
shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action or
proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of his
holding a position named in Paragraph (A), the Corporation shall
indemnify him, if he satisfies the standard in Paragraph (E), for
amounts actually and reasonably incurred by him in connection with
the defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a nonderivative
suit, a person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation and , with respect to any criminal action or proceeding,
he had no reason to believe his conduct was unlawful. The
termination of a nonderivative suit by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person failed to
satisfy this Paragraph (E) (2).
F. Determination That Standard Has Been Met. A determination
that the standard of Paragraph (C) or (E) has been satisfied may be
made by a court of law or equity or the determination may be made by:
(1) a majority of the directors of the Corporation (whether or
not a quorum) who were not parties to the action, suit or
proceeding, or
(2) independent legal counsel (appointed by a majority of the
directors of the Corporation, whether or not a quorum, or elected by
the Shareholders of the Corporation) in a written opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under Paragraph
(F) may determine that a person has met the standard as to some
matters but not as to others, and may reasonably prorate amounts to
be indemnified.
H. Advance Payment. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment and
(2) the person receiving the payment undertakes in writing to
repay unless it is ultimately determined that he is entitled to
indemnification by the Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by Paragraphs
(A) - (G) shall not be exclusive of any other rights to which a
person may be entitled by law or by by-law, agreement, vote of
Shareholders or disinterested directors, or otherwise.
J. Continuation. The indemnification and advance payment
provided by Paragraphs (A) - (H) shall continue as to a person who
has ceased to hold a position named in paragraph (A) and shall inure
to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any
position named in Paragraph (A) against any liability incurred by
him in any such positions or arising out of this status as such,
whether or not the Corporation would have power to indemnify him
against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments, and
insurance purchases and payments made under Paragraphs (A) - (K)
shall be reported in writing to the Shareholders of the Corporation
with the next notice of annual meeting, or within six months,
whichever is sooner.
M. Amendment of Article. Any changes in the General
Corporation Law of Delaware increasing, decreasing, amending,
changing or otherwise effecting the indemnification of directors,
officers, agents, or employees of the Corporation shall be
incorporated by reference in this Article as of the date of such
changes without further action by the Corporation, its Board of
Directors, of Shareholders, it being the intention of this Article
that directors, officers, agents and employees of the Corporation
shall be indemnified to the maximum degree allowed by the General
Corporation Law of the State of Delaware at all times.
ARTICLE FIFTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or
having been a director of the Corporation, shall have any personal
liability for monetary damages to the Corporation or any of its
Shareholders for any breach of fiduciary duty except as to the
extent provided in Paragraph (B).
B. Extent of Limitation. The limitation provided for in this
Article shall not eliminate or limit the liability of a director to
the Corporation or its Shareholders (i) for any breach of the
director's duty of loyalty to the Corporation or its Shareholders
(ii) for any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law (iii) for any
unlawful payment of dividends or unlawful stock purchases or
redemptions in violation of Section 174 of the General Corporation
Law of Delaware or (iv) for any transaction for which the director
derived an improper personal benefit.
IN WITNESS WHEREOF, the incorporator hereunto has executed this
certificate of incorporation on this 2nd day of December, 1997.
________________________________
Lee W. Cassidy, Incorporator
By-Laws
BLENCATHIA ACQUISITION CORPORATION
BY-LAWS
ARTICLE I
The Stockholders
SECTION 1.1. ANNUAL MEETING. The annual meeting of the
stockholders of Blencathia Acquisition Corporation (the
"Corporation") shall be held on the third Thursday in May of each
year at 10:30 a.m. local time, or at such other date or time as
shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting, for the election of directors
and for the transaction of such other business as may come before
the meeting.
SECTION 1.2. SPECIAL MEETINGS. A special meeting of the
stockholders may be called at any time by the written resolution or
request of two-thirds or more of the members of the Board of
Directors, the president, or any executive vice president and shall
be called upon the written request of the holders of two-thirds or
more in amount, of each class or series of the capital stock of the
Corporation entitled to vote at such meeting on the matters(s) that
are the subject of the proposed meeting, such written request in
each case to specify the purpose or purposes for which such meeting
shall be called, and with respect to stockholder proposals, shall
further comply with the requirements of this Article.
SECTION 1.3. NOTICE OF MEETINGS. Written notice of each
meeting of stockholders, whether annual or special, stating the
date, hour and place where it is to be held, shall be served either
personally or by mail, not less than fifteen nor more than sixty
days before the meeting, upon each stockholder of record entitled to
vote at such meeting, and to any other stockholder to whom the
giving of notice may be required by law. Notice of a special
meeting shall also state the purpose or purposes for which the
meeting is called and shall indicate that it is being issued by, or
at the direction of, the person or persons calling the meeting. If,
at any meeting, action is proposed to be taken that would, if taken,
entitle stockholders to receive payment for their stock, the notice
of such meeting shall include a statement of that purpose and to
that effect. If mailed, notice shall be deemed to be delivered when
deposited in the United States mail or with any private express mail
service, postage or delivery fee prepaid, and shall be directed to
each such stockholder at his address, as it appears on the records
of the stockholders of the Corporation, unless he shall have
previously filed with the secretary of the Corporation a written
request that notices intended for him be mailed to some other
address, in which case, it shall be mailed to the address designated
in such request.
SECTION 1.4. FIXING DATE OF RECORD. (a) In order that the
Corporation may determine the stockholders entitled to notice of or
to vote at any meeting of stockholders, or any adjournment thereof,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the
date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of, or to vote at, a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of, or to
vote at, a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting (to the extent that such action by written consent
is permitted by law, the Certificate of Incorporation or these
By-Laws), the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which date
shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of
Directors, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required by law, shall be
the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation
by delivery to its registered office in its state of incorporation,
its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board
of Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior
action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled
to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than
sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
SECTION 1.5. INSPECTORS. At each meeting of the
stockholders, the polls shall be opened and closed and the proxies
and ballots shall be received and be taken in charge. All questions
touching on the qualification of voters and the validity of proxies
and the acceptance or rejection of votes, shall be decided by one or
more inspectors. Such inspectors shall be appointed by the Board of
Directors before or at the meeting, or, if no such appointment shall
have been made, then by the presiding officer at the meeting. If
for any reason any of the inspectors previously appointed shall fail
to attend or refuse or be unable to serve, inspectors in place of
any so failing to attend or refusing or unable to serve shall be
appointed in like manner.
SECTION 1.6. QUORUM. At any meeting of the stockholders,
the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum of the
stockholders for all purposes, unless the representation of a larger
number shall be required by law, and, in that case, the
representation of the number so required shall constitute a quorum.
If the holders of the amount of stock necessary to constitute
a quorum shall fail to attend in person or by proxy at the time and
place fixed in accordance with these By-Laws for an annual or
special meeting, a majority in interest of the stockholders present
in person or by proxy may adjourn, from time to time, without notice
other than by announcement at the meeting, until holders of the
amount of stock requisite to constitute a quorum shall attend. At
any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally notified.
SECTION 1.7. BUSINESS. The chairman of the Board, if any,
the president, or in his absence the vice-chairman, if any, or an
executive vice president, in the order named, shall call meetings of
the stockholders to order, and shall act as chairman of such
meeting; provided, however, that the Board of Directors or executive
committee may appoint any stockholder to act as chairman of any
meeting in the absence of the chairman of the Board. The secretary
of the Corporation shall act as secretary at all meetings of the
stockholders, but in the absence of the secretary at any meeting of
the stockholders, the presiding officer may appoint any person to
act as secretary of the meeting.
SECTION 1.8. STOCKHOLDER PROPOSALS. No proposal by a
stockholder shall be presented for vote at a special or annual
meeting of stockholders unless such stockholder shall, not later
than the close of business on the fifth day following the date on
which notice of the meeting is first given to stockholders, provide
the Board of Directors or the secretary of the Corporation with
written notice of intention to present a proposal for action at the
forthcoming meeting of stockholders, which notice shall include the
name and address of such stockholder, the number of voting
securities that he holds of record and that he holds beneficially,
the text of the proposal to be presented to the meeting and a
statement in support of the proposal.
Any stockholder who was a stockholder of record on the
applicable record date may make any other proposal at an annual
meeting or special meeting of stockholders and the same may be
discussed and considered, but unless stated in writing and filed
with the Board of Directors or the secretary prior to the date set
forth herein above, such proposal shall be laid over for action at
an adjourned, special, or annual meeting of the stockholders taking
place sixty days or more thereafter. This provision shall not
prevent the consideration and approval or disapproval at the annual
meeting of reports of officers, directors, and committees, but in
connection with such reports, no new business proposed by a
stockholder, qua stockholder, shall be acted upon at such annual
meeting unless stated and filed as herein provided.
Notwithstanding any other provision of these By-Laws, the
Corporation shall be under no obligation to include any stockholder
proposal in its proxy statement materials or otherwise present any
such proposal to stockholders at a special or annual meeting of
stockholders if the Board of Directors reasonably believes the
proponents thereof have not complied with Sections 13 or 14 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder; nor shall the Corporation be required to
include any stockholder proposal not required to be included in its
proxy materials to stockholders in accordance with any such section,
rule or regulation.
SECTION 1.9. PROXIES. At all meetings of stockholders, a
stockholder entitled to vote may vote either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the secretary
before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 1.10. VOTING BY BALLOT. The votes for directors,
and upon the demand of any stockholder or when required by law, the
votes upon any question before the meeting, shall be by ballot.
SECTION 1.11. VOTING LISTS. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares of stock registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof and may be
inspected by any stockholder who is present.
SECTION 1.12. PLACE OF MEETING. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or any
special meeting called by the Board of Directors. If no designation
is made or if a special meeting is otherwise called, the place of
meeting shall be the principal office of the Corporation.
SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. Shares of
capital stock of the Corporation standing in the name of another
corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or
in the absence of such provision, as the board of directors of such
corporation may determine.
Shares of capital stock of the Corporation standing in the
name of a deceased person, a minor ward or an incompetent person may
be voted by his administrator, executor, court-appointed guardian or
conservator, either in person or by proxy, without a transfer of
such stock into the name of such administrator, executor,
court-appointed guardian or conservator. Shares of capital stock of
the Corporation standing in the name of a trustee may be voted by
him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the
name of a receiver may be voted, either in person or by proxy, by
such receiver, and stock held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his
name if authority to do so is contained in any appropriate order of
the court by which such receiver was appointed.
A stockholder whose stock is pledged shall be entitled to
vote such stock, either in person or by proxy, until the stock has
been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote, either in person or by proxy, the
stock so transferred.
Shares of its own capital stock belonging to this Corporation
shall not be voted, directly or indirectly, at any meeting and shall
not be counted in determining the total number of outstanding stock
at any given time, but shares of its own stock held by it in a
fiduciary capacity may be voted and shall be counted in determining
the total number of outstanding stock at any given time.
ARTICLE II
Board of Directors
SECTION 2.1. GENERAL POWERS. The business, affairs, and the
property of the Corporation shall be managed and controlled by the
Board of Directors (the "Board"), and, except as otherwise expressly
provided by law, the Certificate of Incorporation or these By-Laws,
all of the powers of the Corporation shall be vested in the Board.
SECTION 2.2. NUMBER OF DIRECTORS. The number of directors
which shall constitute the whole Board shall be not fewer than one
nor more than five. Within the limits above specified, the number
of directors shall be determined by the Board of Directors pursuant
to a resolution adopted by a majority of the directors then in
office.
SECTION 2.3. ELECTION, TERM AND REMOVAL. Directors shall be
elected at the annual meeting of stockholders to succeed those
directors whose terms have expired. Each director shall hold office
for the term for which elected and until his or her successor shall
be elected and qualified. Directors need not be stockholders. A
director may be removed from office at a meeting expressly called
for that purpose by the vote of not less than a majority of the
outstanding capital stock entitled to vote at an election of directors.
SECTION 2.4. VACANCIES. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors then in office, though less than
a quorum; except that vacancies resulting from removal from office
by a vote of the stockholders may be filled by the stockholders at
the same meeting at which such removal occurs provided that the
holders of not less than a majority of the outstanding capital stock
of the Corporation (assessed upon the basis of votes and not on the
basis of number of shares) entitled to vote for the election of
directors, voting together as a single class, shall vote for each
replacement director. All directors elected to fill vacancies shall
hold office for a term expiring at the time of the next annual
meeting of stockholders and upon election and qualification of his
successor. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of an incumbent director.
SECTION 2.5. RESIGNATIONS. Any director of the Corporation
may resign at any time by giving written notice to the president or
to the secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein and, unless
otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 2.6. PLACE OF MEETINGS, ETC. The Board of Directors
may hold its meetings, and may have an office and keep the books of
the Corporation (except as otherwise may be provided for by law), in
such place or places in or outside the state of incorporation as the
Board from time to time may determine.
SECTION 2.7. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held as soon as practicable after
adjournment of the annual meeting of stockholders at such time and
place as the Board of Directors may fix. No notice shall be
required for any such regular meeting of the Board.
SECTION 2.8. SPECIAL MEETINGS. Special meetings of the
Board of Directors shall be held at places and times fixed by
resolution of the Board of Directors, or upon call of the chairman
of the Board, if any, or vice-chairman of the Board, if any, the
president, an executive vice president or two-thirds of the
directors then in office.
The secretary or officer performing the secretary's duties
shall give not less than twenty-four hours' notice by letter,
telegraph or telephone (or in person) of all special meetings of the
Board of Directors, provided that notice need not given of the
annual meeting or of regular meetings held at times and places fixed
by resolution of the Board. Meetings may be held at any time
without notice if all of the directors are present, or if those not
present waive notice in writing either before or after the meeting.
The notice of meetings of the Board need not state the purpose of
the meeting.
SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE. Members
of the Board of Directors of the Corporation, or any committee
thereof, may participate in a regular or special or any other
meeting of the Board or committee by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting.
SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if prior or subsequent to such action all the members of the
Board or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
the proceedings of the Board or committee.
SECTION 2.11. QUORUM. A majority of the total number of
directors then in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there be
less than a quorum present, a majority of those present may adjourn
the meeting from time to time.
SECTION 2.12. BUSINESS. Business shall be transacted at
meetings of the Board of Directors in such order as the Board may
determine. At all meetings of the Board of Directors, the chairman
of the Board, if any, the president, or in his absence the
vice-chairman, if any, or an executive vice president, in the order
named, shall preside.
SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (a) No
contract or transaction between the Corporation and one or more of
its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of the Corporation's directors or officers, are
directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board
or committee which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed
or are known to the Board of Directors or the
committee, and the Board or committee in good faith
authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be
less than a quorum; or
(2) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote
thereon, and the contract or transaction is
specifically approved in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee
of the Board of Directors or the stockholders.
(b) Interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
SECTION 2.14. COMPENSATION OF DIRECTORS. Each director of
the Corporation who is not a salaried officer or employee of the
Corporation, or of a subsidiary of the Corporation, shall receive
such allowances for serving as a director and such fees for
attendance at meetings of the Board of Directors or the executive
committee or any other committee appointed by the Board as the Board
may from time to time determine.
SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. The Board of
Directors may lend money to, guarantee any obligation of, or
otherwise assist, any officer or other employee of the Corporation
or of any subsidiary, whether or not such officer or employee is
also a director of the Corporation, whenever, in the judgment of the
directors, such loan, guarantee, or assistance may reasonably be
expected to benefit the Corporation; provided, however, that any
such loan, guarantee, or other assistance given to an officer or
employee who is also a director of the Corporation must be
authorized by a majority of the entire Board of Directors. Any such
loan, guarantee, or other assistance may be made with or without
interest and may be unsecured or secured in such manner as the Board
of Directors shall approve, including, but not limited to, a pledge
of shares of the Corporation, and may be made upon such other terms
and conditions as the Board of Directors may determine.
SECTION 2.16. NOMINATION. Subject to the rights of holders
of any class or series of stock having a preference over the common
stock as to dividends or upon liquidation, nominations for the
election of directors may be made by the Board of Directors or by
any stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such
stockholder's intent to make such nomination or nominations has been
given, either by personal delivery or by United States mail, postage
prepaid, to the secretary of the Corporation not later than (i) with
respect to an election to be held at an annual meeting of
stockholders, the close of business on the last day of the eighth
month after the immediately preceding annual meeting of
stockholders, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the
close of business on the fifth day following the date on which
notice of such meeting is first given to stockholders. Each such
notice shall set forth: (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission, had
the nominee been nominated, or intended to be nominated, by the
Board of Directors, and; (e) the consent of each nominee to serve as
a director of the Corporation if so elected. The presiding officer
at the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
ARTICLE III
Committees
SECTION 3.1. COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the number of directors then
fixed by these By-Laws or resolution thereto, may establish such
standing or special committees of the Board as it may deem
advisable, and the members, terms, and authority of such committees
shall be set forth in the resolutions establishing such committee.
SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF OFFICE.
The Board of Directors may, at any meeting, by majority vote of the
Board of Directors, elect from the directors an executive committee.
The executive committee shall consist of such number of members as
may be fixed from time to time by resolution of the Board of
Directors. The Board of Directors may designate a chairman of the
committee who shall preside at all meetings thereof, and the
committee shall designate a member thereof to preside in the absence
of the chairman.
SECTION 3.3. EXECUTIVE COMMITTEE POWERS. The executive
committee may, while the Board of Directors is not in session,
exercise all or any of the powers of the Board of Directors in all
cases in which specific directions shall not have been given by the
Board of Directors; except that the executive committee shall not
have the power or authority of the Board of Directors to (i) amend
the Certificate of Incorporation or the By-Laws of the Corporation,
(ii) fill vacancies on the Board of Directors, (iii) adopt an
agreement or certification of ownership, merger or consolidation,
(iv) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets,
or a dissolution of the Corporation or a revocation of a
dissolution, (v) declare a dividend, or (vi) authorize the issuance
of stock.
SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. Regular and
special meetings of the executive committee may be called and held
subject to the same requirements with respect to time, place and
notice as are specified in these By-Laws for regular and special
meetings of the Board of Directors. Special meetings of the
executive committee may be called by any member thereof. Unless
otherwise indicated in the notice thereof, any and all business may
be transacted at a special or regular meeting of the executive
meeting if a quorum is present. At any meeting at which every
member of the executive committee shall be present, in person or by
telephone, even though without any notice, any business may be
transacted. All action by the executive committee shall be reported
to the Board of Directors at its meeting next succeeding such
action.
The executive committee shall fix its own rules of procedure,
and shall meet where and as provided by such rules or by resolution
of the Board of Directors, but in every case the presence of a
majority of the total number of members of the executive committee
shall be necessary to constitute a quorum. In every case, the
affirmative vote of a quorum shall be necessary for the adoption of
any resolution.
SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES. The Board of
Directors, by majority vote of the Board of Directors then in
office, shall fill vacancies in the executive committee by election
from the directors.
ARTICLE IV
The Officers
SECTION 4.1. NUMBER AND TERM OF OFFICE. The officers of the
Corporation shall consist of, as the Board of Directors may
determine and appoint from time to time, a chief executive officer,
a president, one or more executive vice-presidents, a secretary, a
treasurer, a controller, and/or such other officers as may from time
to time be elected or appointed by the Board of Directors, including
such additional vice-presidents with such designations, if any, as
may be determined by the Board of Directors and such assistant
secretaries and assistant treasurers. In addition, the Board of
Directors may elect a chairman of the Board and may also elect a
vice-chairman as officers of the Corporation. Any two or more
offices may be held by the same person. In its discretion, the
Board of Directors may leave unfilled any office except as may be
required by law.
The officers of the Corporation shall be elected or appointed
from time to time by the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected or
appointed or until his death or until he shall resign or shall have
been removed by the Board of Directors.
Each of the salaried officers of the Corporation shall devote
his entire time, skill and energy to the business of the
Corporation, unless the contrary is expressly consented to by the
Board of Directors or the executive committee.
SECTION 4.2. REMOVAL. Any officer may be removed by the
Board of Directors whenever, in its judgment, the best interests of
the Corporation would be served thereby.
SECTION 4.3. THE CHAIRMAN OF THE BOARD. The chairman of the
Board, if any, shall preside at all meetings of stockholders and of
the Board of Directors and shall have such other authority and
perform such other duties as are prescribed by law, by these By-Laws
and by the Board of Directors. The Board of Directors may designate
the chairman of the Board as chief executive officer, in which case
he shall have such authority and perform such duties as are
prescribed by these By-Laws and the Board of Directors for the chief
executive officer.
SECTION 4.4. THE VICE-CHAIRMAN. The vice-chairman, if any,
shall have such authority and perform such other duties as are
prescribed by these By-Laws and by the Board of Directors. In the
absence or inability to act of the chairman of the Board and the
president, he shall preside at the meetings of the stockholders and
of the Board of Directors and shall have and exercise all of the
powers and duties of the chairman of the Board. The Board of
Directors may designate the vice-chairman as chief executive
officer, in which case he shall have such authority and perform such
duties as are prescribed by these By-Laws and the Board of Directors
for the chief executive officer.
SECTION 4.5. THE PRESIDENT. The president shall have such
authority and perform such duties as are prescribed by law, by these
By-Laws, by the Board of Directors and by the chief executive
officer (if the president is not the chief executive officer). The
president, if there is no chairman of the Board, or in the absence
or the inability to act of the chairman of the Board, shall preside
at all meetings of stockholders and of the Board of Directors.
Unless the Board of Directors designates the chairman of the Board
or the vice-chairman as chief executive officer, the president shall
be the chief executive officer, in which case he shall have such
authority and perform such duties as are prescribed by these By-Laws
and the Board of Directors for the chief executive officer.
SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. Unless the Board
of Directors designates the chairman of the Board or the
vice-chairman as chief executive officer, the president shall be the
chief executive officer. The chief executive officer of the
Corporation shall have, subject to the supervision and direction of
the Board of Directors, general supervision of the business,
property and affairs of the Corporation, including the power to
appoint and discharge agents and employees, and the powers vested in
him by the Board of Directors, by law or by these By-Laws or which
usually attach or pertain to such office.
SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. In the absence
of the chairman of the Board, if any, the president and the
vice-chairman, if any, or in the event of their inability or refusal
to act, the executive vice-president (or in the event there is more
than one executive vice-president, the executive vice-presidents in
the order designated, or in the absence of any designation, then in
the order of their election) shall perform the duties of the
chairman of the Board, of the president and of the vice-chairman,
and when so acting, shall have all the powers of and be subject to
all the restrictions upon the chairman of the Board, the president
and the vice-chairman. Any executive vice-president may sign, with
the secretary or an authorized assistant secretary, certificates for
stock of the Corporation and shall perform such other duties as from
time to time may be assigned to him by the chairman of the Board,
the president, the vice-chairman, the Board of Directors or these
By-Laws.
SECTION 4.8. THE VICE-PRESIDENTS. The vice-presidents, if
any, shall perform such duties as may be assigned to them from time
to time by the chairman of the Board, the president, the
vice-chairman, the Board of Directors, or these By-Laws.
SECTION 4.9. THE TREASURER. Subject to the direction of
chief executive officer and the Board of Directors, the treasurer
shall have charge and custody of all the funds and securities of the
Corporation; when necessary or proper he shall endorse for
collection, or cause to be endorsed, on behalf of the Corporation,
checks, notes and other obligations, and shall cause the deposit of
the same to the credit of the Corporation in such bank or banks or
depositary as the Board of Directors may designate or as the Board
of Directors by resolution may authorize; he shall sign all receipts
and vouchers for payments made to the Corporation other than routine
receipts and vouchers, the signing of which he may delegate; he
shall sign all checks made by the Corporation (provided, however,
that the Board of Directors may authorize and prescribe by
resolution the manner in which checks drawn on banks or depositories
shall be signed, including the use of facsimile signatures, and the
manner in which officers, agents or employees shall be authorized to
sign); unless otherwise provided by resolution of the Board of
Directors, he shall sign with an officer-director all bills of
exchange and promissory notes of the Corporation; whenever required
by the Board of Directors, he shall render a statement of his cash
account; he shall enter regularly full and accurate account of the
Corporation in books of the Corporation to be kept by him for that
purpose; he shall, at all reasonable times, exhibit his books and
accounts to any director of the Corporation upon application at his
office during business hours; and he shall perform all acts incident
to the position of treasurer. If required by the Board of
Directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such sure ties as the
Board of Directors may require.
SECTION 4.10. THE SECRETARY. The secretary shall keep the
minutes of all meetings of the Board of Directors, the minutes of
all meetings of the stockholders and (unless otherwise directed by
the Board of Directors) the minutes of all committees, in books
provided for that purpose; he shall attend to the giving and serving
of all notices of the Corporation; he may sign with an
officer-director or any other duly authorized person, in the name of
the Corporation, all contracts authorized by the Board of Directors
or by the executive committee, and, when so ordered by the Board of
Directors or the executive committee, he shall affix the seal of the
Corporation thereto; he may sign with the president or an executive
vice-president all certificates of shares of the capital stock; he
shall have charge of the certificate books, transfer books and stock
ledgers, and such other books and papers as the Board of Directors
or the executive committee may direct, all of which shall, at all
reasonable times, be open to the examination of any director, upon
application at the secretary's office during business hours; and he
shall in general perform all the duties incident to the office of
the secretary, subject to the control of the chief executive officer
and the Board of Directors.
SECTION 4.11. THE CONTROLLER. The controller shall be the
chief accounting officer of the Corporation. Subject to the
supervision of the Board of Directors, the chief executive officer
and the treasurer, the controller shall provide for and maintain
adequate records of all assets, liabilities and transactions of the
Corporation, shall see that accurate audits of the Corporation's
affairs are currently and adequately made and shall perform such
other duties as from time to time may be assigned to him.
SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT
SECRETARIES. The assistant treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the
Board of Directors may determine. The assistant secretaries as
thereunto authorized by the Board of Directors may sign with the
chairman of the Board, the president, the vice-chairman or an
executive vice-president, certificates for stock of the Corporation,
the issue of which shall have been authorized by a resolution of the
Board of Directors. The assistant treasurers and assistant
secretaries, in general, shall perform such duties as shall be
assigned to them by the treasurer or the secretary, respectively, or
chief executive officer, the Board of Directors, or these By-Laws.
SECTION 4.13. SALARIES. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no officer
shall be prevented from receiving such salary by reason of the fact
that he is also a director of the Corporation.
SECTION 4.14. VOTING UPON STOCKS. Unless otherwise ordered
by the Board of Directors or by the executive committee, any
officer, director or any person or persons appointed in writing by
any of them, shall have full power and authority in behalf of the
Corporation to attend and to act and to vote at any meetings of
stockholders of any corporation in which the Corporation may hold
stock, and at any such meeting shall possess and may exercise any
and all the rights and powers incident to the ownership of such
stock, and which, as the owner thereof, the Corporation might have
possessed and exercised if present. The Board of Directors may
confer like powers upon any other person or persons.
ARTICLE V
Contracts and Loans
SECTION 5.1. CONTRACTS. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
SECTION 5.2. LOANS. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be issued
in its name unless authorized by a resolution of the Board of
Directors. Such authority may be general or confined to specific
instances.
ARTICLE VI
Certificates for Stock and Their Transfer
SECTION 6.1. CERTIFICATES FOR STOCK. Certificates
representing stock of the Corporation shall be in such form as may
be determined by the Board of Directors. Such certificates shall be
signed by the chairman of the Board, the president, the
vice-chairman or an executive vice-president and/or by the secretary
or an authorized assistant secretary and shall be sealed with the
seal of the Corporation. The seal may be a facsimile. If a stock
certificate is countersigned (i) by a transfer agent other than the
Corporation or its employee, or (ii) by a registrar other than the
Corporation or its employee, any other signature on the certificate
may be a facsimile. In the event that any officer, transfer agent
or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent, or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue. All
certificates for stock shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares of stock
represented thereby are issued, with the number of shares of stock
and date of issue, shall be entered on the books of the Corporation.
All certificates surrendered to the Corporation for transfer shall
be canceled and no new certificates shall be issued until the former
certificate for a like number of shares of stock shall have been
surrendered and canceled, except that, in the event of a lost,
destroyed or mutilated certificate, a new one may be issued therefor
upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
SECTION 6.2. TRANSFERS OF STOCK. Transfers of stock of the
Corporation shall be made only on the books of the Corporation by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed and
filed with the secretary of the Corporation, and on surrender for
cancellation of the certificate for such stock. The person in whose
name stock stands on the books of the Corporation shall be deemed
the owner thereof for all purposes as regards the Corporation.
ARTICLE VII
Fiscal Year
SECTION 7.1. FISCAL YEAR. The fiscal year of the
Corporation shall begin on the first day of January in each year and
end on the last day of December in each year.
ARTICLE VIII
Seal
SECTION 8.1. SEAL. The Board of Directors shall approve a
corporate seal which shall be in the form of a circle and shall have
inscribed thereon the name of the Corporation.
ARTICLE IX
Waiver of Notice
SECTION 9.1. WAIVER OF NOTICE. Whenever any notice is
required to be given under the provisions of these By-Laws or under
the provisions of the Certificate of Incorporation or under the
provisions of the corporation law of the state of incorporation,
waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice. Attendance
of any person at a meeting for which any notice is required to be
given under the provisions of these By-Laws, the Certificate of
Incorporation or the corporation law of the state of incorporation
shall constitute a waiver of notice of such meeting except when the
person attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened.
ARTICLE X
Amendments
SECTION 10.1. AMENDMENTS. These By-Laws may be
altered, amended or repealed and new By-Laws may be adopted
at any meeting of the Board of Directors of the Corporation
by the affirmative vote of a majority of the members of the
Board, or by the affirmative vote of a majority of the
outstanding capital stock of the Corporation (assessed upon
the basis of votes and not on the basis of number of
shares) entitled to vote generally in the election of
directors, voting together as a single class.
ARTICLE XI
Indemnification
SECTION 11.1. INDEMNIFICATION. The Corporation
shall indemnify its officers, directors, employees and
agents to the fullest extent permitted by the General
Corporation Law of Delaware, as amended from time to time.
[END]
Blencathia Acquisition Corporation
1504 R Street, NW
Washington, D.C.
December 5, 1997
Pierce Mill Associates, Inc.
1504 R Street, N.W.
Washington, D.C. 20009
Re: Lock Up Agreement with Blencathia Acquisition Corporation
Gentlemen:
As part of the sale of the shares of Common Stock of Blencathia Acquisition
Corporation (the "Company") to the undersigned (the "Holder"), the Holder
hereby represents, warrants, covenants and agrees, for the benefit of the
Company and the holders of record (the "third party beneficiaries") of the
Company's outstanding securities, including the Company's Common Stock,
$.0001 par value (the "Stock") at the date hereof and during the pendency of
this letter agreement that the Holder will not transfer, sell, contract to
sell, devise, gift, assign, pledge, hypothecate, distribute or grant any
option to purchase or otherwise dispose of, directly or indirectly, its
shares of Stock of the Company owned beneficially or otherwise by the Holder
except in connection with or following completion of a merger or acquisition
by the Company and the Company is no longer classified as a blank check
company as defined in Section 7(b)(3) of the Securities Act of 1933, as
amended.
Any attempted sale, transfer or other disposition in violation of this
letter agreement shall be null and void.
The Holder further agrees that the Company (i) will instruct its transfer
agent not to transfer such securities (ii) may provide a copy of this letter
agreement to the Company's transfer agent for the purpose of instructing the
Company's transfer agent to place a legend on the certificate(s) evidencing
the securities subject hereto and disclosing that any transfer, sale,
contract for sale, devise, gift, assignment, pledge or hypothecation of such
securities is subject to the terms of this letter agreement and (iii) will
issue stop-transfer instructions to its transfer agent for the period
contemplated by this letter agreement for such securities.
This letter agreement shall be binding upon the Holder, its agents, heirs,
successors, assigns and beneficiaries.
Any waiver by the Company of any of the terms and conditions of this letter
agreement in any instance must be in writing and must be duly executed by
the Company and the Holder and shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
thereof.
The Holder agrees that any breach of this letter agreement will cause the
Company and the third party beneficiaries irreparable damage for which there
is no adequate remedy at law. If there is a breach or threatened breach of
this letter agreement by the Holder, the Holder hereby agrees that the
Company and the third party beneficiaries shall be entitled to the issuance
of an immediate injunction without notice to restrain the breach or
threatened breach. The Holder also agrees that the Company and all third
party beneficiaries shall be entitled to pursue any other remedies for such
a breach or threatened breach, including a claim for money damages.
THE HOLDER
By:
Pierce Mill Associates, Inc.
Agreed and accepted this 5th day of December , 1997.
Blencathia Acquisition Corporation
1504 R Street, NW
Washington, D.C.
December 5, 1997
TPG Capital Corporation
1504 R Street, N.W.
Washington, D.C. 20009
Re: Lock Up Agreement with Blencathia Acquisition Corporation
Gentlemen:
As part of the sale of the shares of Common Stock of Blencathia Acquisition
Corporation (the "Company") to the undersigned (the "Holder"), the Holder
hereby represents, warrants, covenants and agrees, for the benefit of the
Company and the holders of record (the "third party beneficiaries") of the
Company's outstanding securities, including the Company's Common Stock,
$.0001 par value (the "Stock") at the date hereof and during the pendency of
this letter agreement that the Holder will not transfer, sell, contract to
sell, devise, gift, assign, pledge, hypothecate, distribute or grant any
option to purchase or otherwise dispose of, directly or indirectly, its
shares of Stock of the Company owned beneficially or otherwise by the Holder
except in connection with or following completion of a merger or acquisition
by the Company and the Company is no longer classified as a blank check
company as defined in Section 7(b)(3) of the Securities Act of 1933, as
amended.
Any attempted sale, transfer or other disposition in violation of this
letter agreement shall be null and void.
The Holder further agrees that the Company (i) will instruct its transfer
agent not to transfer such securities (ii) may provide a copy of this letter
agreement to the Company's transfer agent for the purpose of instructing the
Company's transfer agent to place a legend on the certificate(s) evidencing
the securities subject hereto and disclosing that any transfer, sale,
contract for sale, devise, gift, assignment, pledge or hypothecation of such
securities is subject to the terms of this letter agreement and (iii) will
issue stop-transfer instructions to its transfer agent for the period
contemplated by this letter agreement for such securities.
This letter agreement shall be binding upon the Holder, its agents, heirs,
successors, assigns and beneficiaries.
Any waiver by the Company of any of the terms and conditions of this letter
agreement in any instance must be in writing and must be duly executed by
the Company and the Holder and shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
thereof.
The Holder agrees that any breach of this letter agreement will cause the
Company and the third party beneficiaries irreparable damage for which there
is no adequate remedy at law. If there is a breach or threatened breach of
this letter agreement by the Holder, the Holder hereby agrees that the
Company and the third party beneficiaries shall be entitled to the issuance
of an immediate injunction without notice to restrain the breach or
threatened breach. The Holder also agrees that the Company and all third
party beneficiaries shall be entitled to pursue any other remedies for such
a breach or threatened breach, including a claim for money damages.
THE HOLDER
By:
TPG Capital Corporation
Agreed and accepted this 5th day of December, 1997.
WEINBERG & COMPANY, PA
Town Executive Center
6100 Glades Road, Suite 314
Boca Raton, Florida 33434
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in the Form 10-SB Registration Statement
of Blencathia Acquisition Corporation of our report for the ten months
ended October 31, 1998 dated December 21, 1998 relating to the
financial statements of Blencathia Acquisition Corporation
which appear in such Form 10-SB.
WEINBERG & COMPANY PA
Certified Public Accountants
Boca Raton, Florida
January 15, 1999
[ARTICLE] 5
[CIK] 0001078723
[NAME] BLENCATHIA ACQUISITION CORPORATION
<TABLE>
<S> <C>
[PERIOD-TYPE] 10-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] OCT-31-1998
[CASH] 868
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 868
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 0
[CURRENT-LIABILITIES] 0
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 5000000
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 868
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 0
[EPS-PRIMARY] 0.0
[EPS-DILUTED] 0.0
</TABLE>
