Registration Number:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BLUE THUNDER CORP.
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(Name of small business
issuer in its charter)
Delaware 6770 06-1573316
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(State of incorporation (Primary Standard Industrial (I.R.S. Employer
or jurisdiction Classification Code Number) Identification No.)
of organization)
64-34 79th Street, Middle Village, New York, 11379 (718)326-4286
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(Address and telephone number of principal executive offices)
64-34 79th Street, Middle Village, New York, 11379 (718)326-4286
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(Address of principal place of business or
intended principal place of business)
Roger Fidler, Esq., 163 South St., Hackensack New Jersey 07601 (201) 457-1221
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(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: as soon as practicable
after the effective date of the registration statement and date of the
prospectus.
The registrant hereby amends the registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that the registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount Proposed Proposed Amount of
Securities Being Being Maximum Maximum Registration
Registered Registered Offering Aggregate Fee
Price Per Offering
Unit (1) Price(1)
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Shares of Common Stock
Contained in Units 2,000,000 $ 0.02 $ 40,000 $ 10.56
"A" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "A" Warrants 2,000,000 .20 400,000 105.60
"B" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "B" Warrants 2,000,000 .30 600,000 158.40
"C" Warrants 2,000,000 0 0 0
Shares of Common Stock
Underlying "C" Warrants 2,000,000 3.00 6,000,000 1,584.00
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TOTAL $7,040,000 $ 1,858.56
(1) Estimated for purposes of computing the registration fee pursuant to Rule
457.
<PAGE>
Cross Reference Sheet
Showing the Location In Prospectus of
Information Required by Items of Form SB-2
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
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1. Front of Registration Statement Front of Registration
and Outside Front Cover of Statement and Outside
Prospectus Front Cover of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus of Prospectus and Outside
Front Cover Page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Prospectus Summary -
Price Determination of Offering
Price; High Risk Factors
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Litigation
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management of Common Stock
12. Description of Securities Description of Securities
13. Interest of Named Experts and Legal Opinions; Experts
Counsel
14. Disclosure of Commission Position Statement as to
on Indemnification for Securities Indemnification
Act Liabilities
15. Organization Within Last Management; Certain
Five Years Transactions
16. Description of Business Proposed Business
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17. Management's Discussion and Proposed Business -
and Analysis or Plan of Plan of Operation
Operation
18. Description of Property Proposed Business
19. Certain Relationships and Related Certain Transactions
Transactions
20. Market for Common Stock and Prospectus Summary;
Related Stockholder Matters Market for Registrant's
Common Stock and Related
Stockholders Matters;
High Risk Factors
21. Executive Compensation Remuneration
22. Financial Statements Financial Statements
23. Changes in and Disagreements Not Applicable
with Accountants on Accounting
and Financial Disclosure
<PAGE>
PROSPECTUS
Initial Public Offering
Blue Thunder Corp.
(A Delaware Corporation)
2,000,000 Units Offered at $0.02 per Unit
Blue Thunder Corp. offers for sale, on a best efforts all-or-none basis,
2,000,000 units at a purchase price of $0.02 per unit. Each unit consists of one
share of common stock, and one "A", one "B", and one "C", two-year redeemable
common stock purchase warrant. We are selling the units on a "best-efforts, all
or none basis" for a period of 90 days. We will not use an underwriter or
securities dealer. If the entire amount of the offering is not sold within the
offering period, investors' funds will be promptly returned without interest or
deduction.
We are making the offering in compliance with Rule 419 of Regulation C to
the Securities Act of 1933. Pursuant to Rule 419, the proceeds of the offering
as well as the securities purchased will be placed in an escrow account. If the
entire amount of the offering is sold, none of the securities, and only 10% of
the funds, may be removed from escrow until a business combination has been
negotiated and our stockholders have reconfirmed the offering, including the
terms and conditions of the business combination. Our officers, directors,
current stockholders and any of their affiliates or associates may purchase up
to of the offering. Prior to the offering, no public market has existed in our
securities. We cannot guarantee that a trading market in the units or in the
shares of common stock or warrants which constitute the units will ever develop.
These securities have not been approved or disapproved by the Securities
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and Exchange Commission nor has the Commission passed upon the accuracy or
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adequacy of the prospectus. Any representation to the contrary is a criminal
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offense.
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These securities are highly speculative, involve a high degree of risk and
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should be purchased only by persons who can afford to lose their entire
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investment. See "Risk Factors" commencing page 4 for special risks concerning us
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and the offering.
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All investors' checks or money orders should be made payable to "Torrington
Savings Bank as Escrow Agent for Blue Thunder Corp."
Underwriting
Price to Discounts and Proceeds to the
Public Commissions the Company
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Per Unit $ 0.02 $ 0 $ 0.02
TOTAL $ 40,000.00 $ 0 $ 40,000.00
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The date of the Prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
Page
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Prospectus Summary.............................................
The Company..................................................
The Offering.................................................
Summary Financial Information..................................
Risk Factors...................................................
Dilution.......................................................
Use of Proceeds................................................
Capitalization.................................................
Proposed Business..............................................
History and organization..................................
Plan of operation.........................................
Business combinations.....................................
Offering conducted in compliance with Rule 419
to the Securities Act................................
Regulation................................................
Employees.................................................
Facilities................................................
Year 2000 issues..........................................
Management.....................................................
Statement as to Indemnification................................
Market for our Common Stock....................................
Certain Transactions...........................................
Principal Stockholders.........................................
Beneficial ownership......................................
Prior blank check company involvement.....................
Description of Securities......................................
Common stock..............................................
Preferred stock...........................................
Redeemable common stock purchase warrants.................
Reports to stockholders...................................
Dividends.................................................
Transfer agent............................................
Plan of Distribution...........................................
Conduct of the offering...................................
Method of subscribing.....................................
Expiration date...........................................
Expiration Date...........................................
Expiration Date................................................
Litigation.....................................................
Legal Opinions.................................................
Experts........................................................
Further Information............................................
Financial Statements...........................................
2
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PROSPECTUS SUMMARY
The Company
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We are a Delaware corporation organized on February 2, 2000 to acquire a
business. Although our management presently has no understandings with any
potential target business, we believe that we will be an attractive combination
candidate as we have liquid assets, nominal liabilities, the potential of
raising additional funds through warrant exercise and flexibility in
structuring. We do not intend to invest or trade in securities as our primary
business or pursue any business which would render us an "investment company"
under the Investment Company Act of 1940.
We have limited our activities to selling shares of our common stock in
connection with our organization and the preparation of the registration
statement and the prospectus for our initial public offering. We intend to limit
our activities following the offering to searching for and acquiring a business.
We maintain our office at 64-34 79th Street, Middle Village, New York 11379
Our phone number is (718) 326-4286.
The Offering
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We have registered the units to be sold in the offering in New York. We
will not sell units to any investor in a state other than New York unless the
units are registered or qualified in such state. Purchasers in this offering and
in any subsequent trading market must be residents of states in which our
securities are registered or qualified.
Securities offered............................................... 2,000,000
units
Common Stock outstanding
prior to the offering............................................ 2,550,000
shares
Common Stock to be
outstanding after the offering................................... 4,550,000
shares
Warrants outstanding
prior to the offering............................................ 0
warrants
Warrants to be
outstanding after the offering................................... 6,000,000
warrants
We will realize net proceeds of $40,000 from the exercise of the "A"
warrant, $60,000 from the "B" warrant and $400,000 from the "C" Warrant,
$1,000,000. These proceeds will be added to our working capital after we
acquire a target company.
3
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SUMMARY FINANCIAL INFORMATION
The following is a summary of our financial information and is qualified in
its entirety by our audited financial statements.
From February 2, 2000
to March 31, 2000
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Statement of Income Data:
Net Sales $ 0
Net profit (Loss) $ $(5,000)
Net Loss Per Share $ 0.00
Shares Outstanding at 03/31/00 2,550,000
Pro-Forma
As of After
March 31, 2000 Offering
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Balance Sheet Data
Cash $ 8,904 $ 48,904
Working Capital $ 8,904 $ 48,904*
Total Assets $ 20,500 $ 60,500
Long Term Debt $ 0 $ 0
Total Liabilities $ 0 $ 0
Total Shareholders' Equity $ 20,500 $ 60,500
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* Assumes net proceeds of $40,000. Offering expenses aggregating $25,500 are
being paid from funds raised in the initial sale of 2,550,000 shares of our
common stock for $25,500.
RISK FACTORS
The securities we are offering are highly speculative in nature and involve
an extremely high degree of risk. They should be purchased only by persons who
can afford to lose their entire investment.
After the conclusion of an acquisition, the management of the target company
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will probably assume management of our company.
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Upon the successful completion of a business combination, we anticipate
that we will have to issue to the owners of the acquired company authorized but
unissued common stock representing a majority of the issued and outstanding
shares of our common stock. Therefore, we anticipate that the consummation of a
business combination will result in a change of control and the resignation or
removal of our present officers and directors. If our management changes, we can
provide no assurance of the experience or qualification of the new management in
the operation of the acquired business.
4
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Investors will not have access to their funds after the consummation of the
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offering for a period of up to 18 months.
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Commencing upon the sale of the units, investor' funds, reduced by 10% for
expenses as permitted by Rule 419, will remain in escrow, in an interest -
bearing account. Although investors may exercise their warrants during the
escrow period, both the cash exercise price and the shares of common stock
underlying the warrants must be kept in escrow until the acquisition is
reconfirmed. In that event, investors will receive their securities and we will
withdraw investor funds from escrow.
Investors will have no right to their invested funds or purchased
securities for up to 18 months from the date of the prospectus. No transfer of
the escrowed securities can be permitted other than by will, the laws of
intestacy, or pursuant to a qualified domestic relations order, or pursuant to
the Employee Retirement Income Security Act.
Investors will be offered the return, with interest, of their funds held in
escrow only if
+ they vote against reconfirmation of the acquisition of the target
business; or
+ we are unable to locate a target business within 18 months from the
date of the prospectus.
Our officers and directors are engaged in outside business activities.
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Our directors and officers are engaged in outside business activities, and
the amount of time they will devote to our business is anticipated to be only
about 5 to 20 hours each per week.
Conflicts of interest may adversely affect investors.
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A conflict of interest may arise between our management's personal
pecuniary interest and its fiduciary duty to investors.
To aid the resolution of such conflicts, we have adopted three procedures:
+ in the confirmation offer to our stockholders to vote upon a business
combination with an affiliated entity, stockholders who also hold
securities of the affiliated entity will be required to vote their shares
of our stock in the same proportion as non-affiliated stockholders;
+ we will not acquire any company in which more than a majority of its
capital is beneficially owned by any or a combination of our
officers, directors, promoters, affiliates or associates; and
+ our officers and directors will disclose to us any target businesses which
come to their attention in their capacity as an officer or director or
otherwise.
Such procedures have been orally agreed to with our management and, where
appropriate, will be incorporated in any acquisition agreement with a target
company in which any of our affiliates has an interest.
5
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We anticipate making one acquisition and investors will take the risk of the
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quality of the new management and economic fluctuations in the chosen
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industry.
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In the event we are successful in acquiring a suitable business, we will,
in all likelihood, be required to issue our common stock in an acquisition or
merger transaction so that the owners of the acquired business would own a
majority of our common stock. Thus, we do not believe that we will be able to
negotiate more than one business combination. Our lack of diversification will
subject us to the quality of the new management and to economic fluctuations
within a particular industry in which the target company conducts business.
We may redeem our warrants for nominal consideration and warrantholders may be
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unable to sell or exercise them.
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We may redeem the warrants for $.001 each upon 30 days' prior notice, if
the closing bid price of our common stock for any twenty consecutive trading
days ending within ten days of the notice of redemption exceeds the exercise
price of any class of warrant by $.50. If there is no current registration
statement or if the warrants and underlying shares are not registered in the
state of residence of the warrantholder, the warrants may not be exercised and
would expire worthless or would have to be redeemed for nominal consideration.
The proceeds of the offering may be insufficient to provide financing to the
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acquired company.
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While we presently anticipate that we will be able to locate and consummate
a suitable business combination, if we determine that a business combination
requires additional funds, we may seek additional financing through loans,
issuance of additional securities or through other financing arrangements. We
have not negotiated any such financial arrangement, and we can give no
assurances that such additional financing will be available or, if available,
that such additional financing will be on acceptable terms. We can offer no
assurance that any or all of the warrants will be exercised.
DILUTION
Our net tangible book value as of March 31, 2000 was $8,904. Our net
tangible book value per share was $0.003. Net tangible book value represents our
net tangible assets which are our total tangible assets less our total
liabilities. The public offering price per unit (each unit containing one share
of common stock) is $0.02 represents both gross and net proceeds per share as
all expenses of the offering are being paid from funds in our treasury. The pro
forma net tangible book value after the offering will be $48,904. The pro forma
net tangible book value per share after the offering will be $0.011 per share.
The shares (contained in the units) purchased by investors in the offering will
be diluted $0.009 or 45%. As of March 31, 2000, there were 2,550,000 shares of
our common stock outstanding. Dilution represents the difference between the
public offering price and the net pro forma tangible book value per share
immediately following the completion of the public offering.
6
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The following table illustrates the dilution which will be experienced by
investors in the offering:
Public offering price per unit (containing one share) ........... $ 0.020
Net tangible book value per share before offering................ $ 0.003
Pro-forma net tangible book value per share after offering....... $ 0.011
Pro-forma increase per share attributable to offered shares...... $ 0.008
Pro-forma dilution to public investors........................... $ 0.009
The following table sets forth, as of the date of the prospectus, the
percentage of equity to be purchased by the public investors compared to the
percentage of equity to be owned by the present stockholders, and the
comparative amounts paid for the units (each unit containing one share) by the
public investors as compared to the total consideration paid by our present
stockholders.
Approximate Approximate
Percentage Percentage
Public Shares Total Shares Total Total
Stockholder Purchased Outstanding Consideration Consideration
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New Investors 2,000,000 44.0% $ 40,000 61.5%
Existing
Shareholders 2,550,000* 56.0% $ 25,500 38.5%
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* We sold 2,550,000 shares of common stock prior to the offering at $.01 per
share. These shares are not being registered.
USE OF PROCEEDS
Both gross and net proceeds of the offering will be $40,000 as all costs
associated with the offering have been or will be paid from funds presently in
our treasury. Pursuant to Rule 15c2-4 under the Securities Exchange Act of 1934,
all of offering proceeds must be placed in escrow until all of the units are
sold. Pursuant to Rule 419, after all of the units are sold, we may and intend
to have $4,000, representing 10% of the escrowed funds, released to us. All
funds held in escrow at the time a business combination is consummated will be
released to the combined entity which will have full discretion for use of
the funds. In the event we need in excess of $4,000 to find and suitable
business entity, our management has agreed to advance any additional funds
required. Neither we nor the combined entity will repay our management for any
such advances.
The funds in escrow will be released for use by the acquired
company upon the consummation of a buinsess combination and the reconfirmation
less any amounts returned to infvestors who did not reconfirm their investment.
Percentage
of net proceeds
Amount of the offering
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Escrowed funds pending
business combination $36,000 90%
Upon the consummation of a business combination, we anticipate that our
management will change. Our present management anticipates that the escrowed
funds will be used by the post-merger management at its sole discretion. Under
no circumstances, will funds, when released from escrow after consummation of an
acquisition, be received by our present management. This policy is based upon an
oral agreement with our management. Our management is unaware of any
circumstances under which such policy through its own initiative may be changed.
We do not intend to hire consultants to locate and consummate the acquisition of
a target company.
Our present management will not make any loans from the $4,000 (10% of the
escrowed funds), nor will our present management borrow funds using either our
working capital or escrowed funds as security. This policy is based upon an oral
agreement with our management. Our management is unaware of any circumstances
under which such policy through its own initiative, may be changed.
Offering proceeds will be placed in escrow at Torrington Savings Bank,
Torrington, Connecticut, an insured depository institution, pending consummation
of a business combination and reconfirmation by investors, in either a
certificate of deposit, interest bearing savings account or in short term
government securities.
7
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CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2000,
and pro forma as adjusted to give effect to the net proceeds from the sale of
2,000,000 units in the offering.
March 31, 2000
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Pro-forma
Actual As Adjusted
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Long-term debt $ 0 $ 0
Stockholders' equity:
Common stock, $.001 par value;
authorized 50,000,000 shares,
issued and outstanding
2,550,000 shares; $ 2,550 $ 4,550
Preferred stock, $.001 par value;
authorized 5,000,000 shares,
issued and outstanding -0-.
Additional paid-in capital $ 22,950 $ 60,950*
Deficit accumulated during
the development period $ (5,000) $ (5,000)
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Total stockholders' equity $ 20,500 $ 60,500
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Total capitalization $ 20,500 $ 60,500
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* Assumes net proceeds of $40,000. Offering expenses aggregating $25,500 are
being paid from funds raised in the initial sale of 2,550,000 shares of our
common stock for $25,500.
PROPOSED BUSINESS
History and Organization
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We were organized under the laws of the State of Delaware on February 2,
2000. Since our inception, we have been engaged in organizational efforts and
obtaining initial financing.
Plan of Operation
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We were organized as a vehicle to seek, investigate and acquire a target
company or business which desires to employ our funds and the potential funds
from the exercise of our warrants in its business or to seek the perceived
advantages of a publicly-held corporation. Our principal business objective will
be to seek long-term growth potential through the acquisition of a business
rather than immediate, short-term earnings. We will not restrict our search to
any specific business, industry or geographical location and, thus, may acquire
any type of business.
8
<PAGE>
We do not currently engage in any business activities which provide cash
flow. The costs of identifying, investigating and analyzing business
combinations will be paid with money in our treasury. Investors will most likely
not have the opportunity to participate in any of these decisions. We are
sometimes referred to as a "blank check" company because investors will entrust
their investment monies to our management without having a chance to analyze the
ultimate use to which their money may be put. Although substantially all of the
proceeds of the offering are intended to be used to effect a business
combination, the proceeds are not otherwise designated for any specific
purposes. Investors will have an opportunity to evaluate the specific merits or
risks of only the business combination our management decides to enter into.
Cost overruns will be funded through our founding stockholders' voluntary
contribution of capital.
We may seek a business which has recently commenced operations, is a
developing company in need of additional funds for expansion, is seeking to
develop a new product or service, or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the combination
with a company which does not need substantial additional capital, but which
desires to establish a public trading market for its shares while avoiding the
time delays, significant expense, loss of voting control and compliance with
various Federal and State securities laws which would occur in a public
offering.
Our officers and directors intend, on a frequent basis, to consult with
business associates and leads from business journals to locate a suitable target
business. They intend to review business plans, study financial statements and
visit the operations center of businesses which they feel may be suitable
acquisitions. None of our officers or directors have had any preliminary contact
or discussions with any representative of any other entity regarding a business
combination.
Accordingly, any target business that is selected may be a financially week
company or an entity in its early stage of development or growth, including
entities without established records of sales or earnings. In that event, we
will be subject to numerous risks inherent in its business and operations. In
addition, we may affect a business combination with an entity in an industry
characterized by a high level of risk, and, although our management will
endeavor to evaluate the risks inherent in a particular target business, there
can be no assurance that we will properly identify all significant
risks.
Our management anticipates that it may be able to effect only one business
combination, due primarily to our limited financing, and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a target
business in order to achieve a tax-free reorganization. This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against gains from another.
We anticipate that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital, our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the benefits of a publicly traded
corporation. Such perceived benefits of a publicly traded corporation may
include facilitating or improving the terms on which additional equity financing
may be obtained, providing liquidity for the principals of a business, creating
a means for providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable statutes)
for all stockholders and other benefits. Potentially available business
combinations may occur 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 extremely difficult and complex.
9
<PAGE>
Evaluation of business combinations
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We do not intend to advertise or promote ourselves to potential target
businesses. Instead, our management intends actively to search for potential
target businesses among its colleagues and associates, through capital wanted
advertising in business publications and on the Internet and other similar
sources. In the unlikely event our management decides to advertise in a business
publication to attract a target business, our management will assume the cost of
such advertising.
Our officers and directors will analyze or supervise the analysis of
business combinations. None of our officers and directors is a professional
business analyst. Our management has not divided duties among its members. In
analyzing prospective business combinations, our management will consider such
matters as the following:
+ available technical, financial, and managerial resources,
+ working capital and other financial requirements,
+ history of operations, if any,
+ 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 and development,
+ specific risk factors not now foreseeable but which then may be anticipated
to impact on our proposed activities,
+ the potential for growth or expansion,
+ the potential for profit,
+ the recognition or acceptance of products or services and
+ name identification and other relevant factors.
As a part of the investigation, our officers and directors will meet
personally with management and key personnel, visit and inspect material
facilities, obtain independent analysis or verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures, to the extent of our limited financial
resources and management expertise.
Since we will be subject to Section 13 or 15 (d) of the Securities Exchange
Act, we will be required to furnish information about the acquisition, including
audited financial statements for the target company, covering one, two or three
years depending upon the relative size of the acquisition. Consequently,
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 Securities Exchange Act are applicable. In the
event our obligation to file periodic reports is suspended under Section 15(d)
of that act, we intend voluntarily to file such reports.
10
<PAGE>
We anticipate that any business combination will present certain risks. We
may not be able adequately to identify many of these risks prior to selection.
Our investors must, therefore, depend on the ability of our management to
identify and evaluate these risks. We anticipate that the principals of some of
the combinations which will be available to us were unable to develop a going
concern or that such business is in its development stage in that it has not
generated significant revenues from its principal business activity. The risk
exists that even after the consummation of such a business combination and the
related expenditure of our funds, and proceeds, if any, from warrant exercise,
the combined enterprise will still be unable to become a going concern or
advance beyond the development stage. Many of the potential business
combinations may involve new and untested products, processes, or market
strategies. We may assume such risks although they may adversely impact on our
stockholders because we consider the potential rewards to outweigh them.
Business Combinations
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In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may alternatively
purchase stock or assets of an existing business.
Any merger or acquisition can be expected to have a significant dilutive
effect on the percentage of shares held by our existing stockholders, including
purchasers in the offering. The target business we consider will, in all
probability, have significantly more assets than we do. Therefore, in all
likelihood, our management will offer a controlling interest in our company to
the owners of the target business. While the actual terms of a transaction to
which we may be a party cannot be predicted, we expect that the parties to the
business transaction will find it desirable to avoid the creation of a taxable
event and thereby structure the acquisition in a so-called "tax-free"
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code. In
order to obtain tax-free treatment under the Internal Revenue Code, the owners
of the acquired business may need to own 80% or more of the voting stock of the
surviving entity. As a result, our stockholders, including investors in the
offering, would retain 20% or less of the issued and outstanding shares of the
surviving entity, which would result in significant dilution in percentage of
the entity after the combination and may also result in a reduction in the net
tangible book value per share of our investors. In addition, a majority or all
of our directors and officers will probably, as part of the terms of the
acquisition transaction, resign.
Our management will not actively negotiate or otherwise consent to the
purchase of any portion of their common stock as a condition to or in connection
with a proposed business combination, unless such a purchase is demanded by the
principals of the target company as a condition to a merger or acquisition. Our
officers and directors have agreed to this restriction which is based on an oral
understanding between members of our management. Members of our management are
unaware of any circumstances under which such policy, through their own
initiative, may be changed.
The issuance of substantial additional securities and their potential sale
into any trading market which may develop in our common stock may have a
depressive effect on our future trading market.
11
<PAGE>
The structure of the business combination will depend on, among other
factors:
+ the nature of the target business,
+ our needs and desires and the needs and desires of those persons
controlling the target business,
+ the management of the target business and
+ our relative negotiating strength compared to the strength of the persons
controlling the target business.
If at any time prior to the completion of the offering, we enter
negotiations with a possible acquisition candidate and such a transaction
becomes probable, we will suspend the offering and file an amendment to the
registration statement which will include financial statements, including
balance sheets, statements of cash flow and stockholders' equity, of the
proposed target.
We will not purchase the assets of any company of which a majority of the
outstanding capital stock is beneficially owned by one or more or our officers,
directors, promoters or affiliates or associates. Furthermore, we intend to
adopt a procedure whereby a special meeting of our stockholders will be called
to vote upon a business combination with an affiliated entity, and stockholders
who also hold securities of such affiliated entity will be required to vote
their shares of stock in the same proportion as our publicly held shares are
voted. Our officers and directors have not approached and have not been
approached by any person or entity with regard to any proposed business venture
which desires to be acquired by us. We will evaluate all possible business
combinations brought to us. If the business combination is brought to
us by any of our promoters, management, or their affiliates or associates,
disclosure as to this fact will be included in the post-effective amendment to
the registration statement, thereby allowing the public investors the
opportunity to evaluate the business combination before voting to reconfirm
their investment.
We have adopted a policy that we will not pay a finder's fee to any member
of management for locating a merger or acquisition candidate. No member of
management intends to or may seek and negotiate for the payment of finder's
fees. In the event there is a finder's fee, it will be paid at the direction of
the successor management after a change in management control resulting from a
business combination. Our policy regarding finder's fees is based on an oral
agreement among management. Our management is unaware of any circumstances under
which such policy through their own initiative may be changed.
We will remain an insignificant player among the firms which engage in
business combinations. Many established venture capital and financial concerns
have significantly greater financial and personnel resources and technical
expertise than we will. In view of our combined limited financial resources and
limited management availability, we will continue to be at a significant
competitive disadvantage compared to most of our competitors. Also, we will be
competing with a number of other small, blank check public and shell companies.
12
<PAGE>
Offering Conducted in Compliance with Rule 419 to the Securities Act
- --------------------------------------------------------------------
We are a blank check development stage company. Our sole business purpose
is to merge with or acquire a presently unidentified company or business.
Consequently, the offering is being conducted in compliance with Rule 419. The
securities purchased by investors and the funds received in the offering will be
deposited to and held in an escrow account, except for 10% of the funds which we
may withdraw, until an acquisition is completed. Before the acquisition can be
completed, the remainder of investors' funds can be released to us and
certificates representing the securities can be released to the investors, we
are required to update the registration statement with a post-effective
amendment, and, within the five days after its effective date, we are required
to furnish investors with a prospectus.
The prospectus, which is part of the post-effective amendment, will contain
the terms of a reconfirmation offer and information regarding the acquisition
candidate and its business, including the terms and conditions of the
acquisition agreement and audited financial statements of the acquisition
candidate. Investors must have no fewer than 20 and no more than 45 business
days from the effective date of the post-effective amendment to decide to
reconfirm their investment and remain an investor or, alternatively, to require
the return of their funds, including interest, from escrow. If we do not
complete an acquisition meeting specified criteria within 18 months of the date
of the prospectus, all of the funds in the escrow account must be returned
promptly to investors, plus interest. Thus, if the offering period is extended
to its limit, we will have only 15 months in which to consummate a merger or
acquisition.
Deposit of Securities
----------------------
The certificates representing the investors' securities will be released
from escrow to investors only after we have met the following three conditions.
+ We must execute an agreement for the acquisition of a target company.
+ We must successfully complete a reconfirmation offering to our investors.
+ We must consummate the acquisition.
Accordingly, we have entered into an escrow agreement with Torrington
Savings Bank which provides that:
+ All securities issued in connection with the offering and any other
securities issued with respect to such securities, including securities
issued with respect to stock splits, stock dividends or similar rights are
to be deposited directly into the escrow account promptly upon issuance.
The identity of the investors are to be included on the stock certificates
or other documents evidencing the securities. The securities held in the
escrow account are to remain as issued and deposited and are to be held for
the sole benefit of the investors who retain the voting rights with respect
to the securities held in their names. The securities held in the escrow
account may not be transferred, disposed of nor any interest created
therein other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order
+ Warrants which are part of the units held in the escrow account may be
exercised in accordance with their terms provided, however, the shares of
our common stock received upon exercise together with any cash or other
consideration paid in connection with the exercise, are to be promptly
deposited into the escrow account.
13
<PAGE>
Prescribed acquisition criteria.
--------------------------------
Rule 419 requires that before the deposited securities can be released we
must first execute an agreement to acquire a business. The agreement must
provide for the acquisition of a business or assets for which the fair value of
the business represents at least 80% of the maximum offering proceeds, including
funds received or to be received from the exercise of warrants.
Post-effective amendment
------------------------
Once the acquisition agreement has been executed, Rule 419 requires us to
update the registration statement with a post-effective amendment. The
post-effective amendment must contain information about:
+ the proposed acquisition candidate and its business, including audited
financial statements; the results of the offering; and
+ the use of the funds disbursed from the escrow account. The post-effective
amendment must also include the terms of the reconfirmation offering.
Reconfirmation
--------------
The reconfirmation must commence within five business days after the
effective date of the post-effective amendment and must include the following
conditions:
+ the prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the escrow account within five
business days after the effective date of the post-effective amendment;
+ each investor will have no fewer than 20, and no more than 45, business
days from the effective date of the post-effective amendment to notify us
in writing that he or she elects to remain an investor;
+ if we do not receive written notification from any investor within 45
business days following the effective date, the investors' escrowed
securities will be returned to us and the investor's escrowed funds to the
investor;
+ unless investors representing 80% of the maximum offering proceeds elect to
remain investors, the acquisition of the target business would be
prevented, deposited securities held in escrow will be returned to us and
the funds to the investors; and
+ if a consummated acquisition has not occurred within 18 months from the
date of this prospectus, the deposited securities held in the escrow
account will be returned to us and the funds to the investors.
14
<PAGE>
Release of deposited securities
-------------------------------
The desposited securities may be released to investors after:
+ the escrow agent has received a signed representation from us and any other
evidence acceptable by the escrow agent that:
We have executed an agreement for the acquisition of a business for
which the value of the business represents at least 80% of the maximum
offering proceeds and we have filed the required post-effective
amendment; and
the post-effective amendment has been declared effective; the
reconfirmation offer has been completed; and we have satisfied all of
the prescribed conditions of the reconfirmation offer.
+ the acquisition of the business with the fair value of at least 80% of the
maximum proceeds has been consummated.
Regulation
- ----------
The Investment Company Act defines an "investment company" as an issuer
which is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading of securities. While we do not intend to
engage in such activities, we could become subject to regulations under the
Investment Company Act in the event we obtain or continue to hold a minority
interest in a number of enterprises. We could be expected to incur significant
registration and compliance costs if required to register under the Investment
Company Act. Accordingly, our management will continue to review our activities
from time to time with a view toward reducing the likelihood we could be
classified as an investment company.
Employees
- ---------
We presently have no employees. Our President/Treasurer and our Secretary
are engaged in outside business activities and they anticipate that they each
will devote to the our business only between 5 and 20 hours per week
until the acquisition of a successful business opportunity has been consummated.
Facilities
- ----------
We are presently using the office of our President, Edward Reilly, at no
cost, as our office, an arrangement which we expect to continue until the
completion of the offering. We presently do not own any equipment, and do not
intend to purchase or lease any equipment prior to or upon completion of the
offering.
Year 2000 Issues
- ----------------
We currently have no operations and do not own or lease any equipment. As a
consequence, we do not anticipate incurring any expense or difficulties with
regard to Year 2000 issues. Management-owned computer and telecommunications
equipment has functioned into the year 2000 without interruption and our
management does not anticipate to suffer year 2000 problems in the future.
15
<PAGE>
MANAGEMENT
Our officers and directors and further information concerning them are as
follows:
Name Age Position
- ----------------- --- --------------------
Edward C. Reilly* 39 President, Treasurer
64-34 79th Street, and a Director
Middle Village, New York
11379
Bridget Vasile 24 Secretary and a
365 Klondike Avenue Director
Staten Island, New York
10314
- --------------------
* May be deemed our "Promoter" as that term is defined under the Securities
Act.
Edward Reilly is a Medicare Specialist (Government Programs) for NYL CARE
Health Plans in Astor, NY since 1998. From 1987-1998, Mr. Reilly was a District
Agent for The Prudential Life Insurance Company where he sold life, health,
home, auto and annuity products. Mr. Reilly holds a B.S. in Finance degree from
St. John's University, Jamaica, NY and is a New York State licensed insurance
agent
Bridget Vasile has been the office manager for Diplomat Strategies in New
York, NY since 1998. From 1996 to 1998, she attended the College of Staten
Island, Staten Island, New York. She received her associates degree from Saint
Vincent's College, Staten which she attended from 1993-1996.
No member of our management is currently affiliated or associated with any
blank check company. Our management does not currently intend to promote other
blank check entities. However, our management may become involved with the
promotion of other blank check companies in the future. A potential conflict of
interest may occur in the event of such involvement. Additionally, a member of
our management may be a stockholder in an acquired business. Pursuant to an oral
agreement with the members of our management, our management will introduce any
potential acquisition to us and in the event of the acquisition of a business in
which any of our stockholders is an owner, the shares of the affiliated
stockholder will be voted in the same proportion as shares of non-affiliated
investors.
Remuneration
- ------------
None of our officers or directors has received or will receive any cash
remuneration. No remuneration of any nature has been or will be paid for
services rendered by a director in such capacity. Our management does not intend
to receive any compensation from the owners of the acquired company. We cannot
predict the remuneration to be awarded management or your company after
consummation of the acquisition.
16
<PAGE>
Management involvement
- ----------------------
We have conducted no business as of yet, aside from raising initial funding
associated with our offering. After the closing of the offering, our management
intends to contact business associates and acquaintances to search for target
businesses and then will consider and negotiate with target businesses until an
acquisition agreement is entered into.
Management control
- ------------------
Our management may not divest themselves of ownership of our shares of
common stock prior to the consummation of an acquisition or merger transaction.
This policy is based on an unwritten agreement among management. Management is
not aware of any circumstances under which such policy, through their own
initiative, may be changed.
STATEMENT AS TO INDEMNIFICATION
Section 145 of the Delaware General Corporation Law provides for
indemnification of our officers, directors, employees and agents. Under Article
XI of our by-laws, we will indemnify and hold harmless to the fullest extent
authorized by the Delaware General Corporation Law, any of our directors,
officers, agents or employees, against all expense, liability and loss
reasonably incurred or suffered by such person in connection with activities on
our behalf. We have provided complete disclosure of relevant sections of our
certificate of incorporation and by-laws is provided in Part II of the
registration statement. This information can also be examined as described in
"Further Information."
We have been informed that in the opinion of the Commission indemnification
for liabilities arising under the Securities Act, which may be permitted to our
directors, officers or control persons pursuant to our certificate of
incorporation and by-laws is against the public policy as expressed in the
Securities Act and is, therefore, unenforceable.
MARKET FOR OUR COMMON STOCK
Prior to the date of the prospectus, no trading market for our common stock
has existed. Pursuant to the requirements of Rule 15g-8 of the Securities
Exchange Act, a trading market will not develop prior to or after the
effectiveness of the registration statement while certificates representing the
shares of common stock and warrants which constitute the units remain in escrow.
Stock and warrant certificates must remain in escrow until the consummation of a
business combination and its confirmation by our investors pursuant to Rule 419.
We can offer no assurance that a trading market will develop upon the
consummation of a business combination and the subsequent release of the stock
and warrant certificates from escrow. To date, neither we nor anyone acting on
our behalf has taken any affirmative steps to retain or encourage any
broker-dealer to act as a market maker for our common stock. Further, we have
not entered into any discussions, or understandings, preliminary or otherwise,
through our management or through anyone acting on our behalf with any market
maker concerning the participation of a market maker in the possible future
trading market, for our common stock.
17
<PAGE>
Present management does not anticipate that it will undertake or will
employ consultants or advisers to undertake any negotiations or discussions
prior to the execution of an acquisition agreement. Our management expects that
discussions in this area will ultimately be initiated by the party or parties
controlling the entity or assets which we may acquire who may employ consultants
or advisors to obtain market makers.
We have not issued any options or warrants to purchase, or securities
convertible into, our common equity. The 2,550,000 shares of our common stock
currently outstanding are "restricted securities" as that term is defined in the
Securities Act. Pursuant to Rule 144 of the Securities Act, the holder of the
restricted securities may each sell during any three month period, after
February 2, 2001, an amount equal to the greater of one percent of our issued
and outstanding common stock or one week's trading volume. Therefore, if we sell
all the units being offered, the holders may sell no less than 45,500 shares (1%
of 4,550,000 shares) during any three month period. A recent letter from the
Commission's Division of Small Business to the NASD removed the the availability
of Rule 144 to certain holders of shares in a reporting company which merges
with a non-reporting company. In our management's opinion, the letter does not
apply to the shares held by our founding shareholders. In the event Rule 144 is
not available, our shareholders intend to register the sale of his shares with
the Commission.
CERTAIN TRANSACTIONS
We were incorporated in the State of Delaware on February 2, 2000 under the
name of Blue Thunder Corp. On March 29, 2000 we sold 2,550,000 shares of our
common stock at $.01 per share, for a total cash consideration of $25,500.
PRINCIPAL STOCKHOLDERS
The table on the following page sets forth certain information regarding
the beneficial ownership of our common stock as of the date of the prospectus,
and as adjusted to reflect the sale of the units in the offering, by (i) each
person who is known by us to own beneficially more than 5% of our outstanding
Common Stock; (ii) each of our officers and directors; and (iii) all of our
directors and officers as a group.
18
<PAGE>
Name/Address Shares of Percent of Percent of
Beneficial Common Stock Class Owned Class Owned
Owner Beneficially Before After
Offering Owned Offering Offering
- --------------------------------------------------------------------------------
Edward Reilly* 25,000 1.0% 0.6%
64-34 79th Street
Middle Village
NY 11379
Bridget Vasile 25,000 1.0% 0.6%
365 Klondike Avenue
Staten Island
NY 10314
Christopher Knight* 375,000 14.7% 8.2%
77-44 66th Rd.
Middle Village, New York
11379
Allied Resources Inc.* 500,000 19.6% 11.0%
40 Exchange Place, Suite 1904B
New York, New York
10005
Bridgewater Resources Ltd.* 400,000 15.7% 8.8%
Par La Ville Place
14 Par La Ville Road
Hamilton Bermuda
Shorewood Stables Inc.* 500,000 19.6% 11.0%
40 Exchange Place, Suite 1904A
New York, New York
10005
Joseph Fabiili* 375,000 14.7% 8.2%
77-44 66th Rd.
Middle Village, New York
11379
Jerry Stefaniuk* 350,000 13.7% 7.7%
77-44 66th Rd.
Middle Village, New York
11379
Total Officers 50,000 2.0% 1.1%
and Directors
(2 Persons)
- -------------------------
* May be deemed "Promoters" as that term is defined under the Securities Act.
19
<PAGE>
The current stockholders have not received or will receive any extra or
special benefits that were not shared equally by all holders of shares of our
common stock.
Prior blank check companies involvement
- ---------------------------------------
None of our officers or directors, nor our founder, promoter or principal
stockholder have been involved as a principal of a blank check company.
DESCRIPTION OF SECURITIES
Common stock
- ------------
We are authorized to issue 50,000,000 shares of common stock, $.001 par
value per share, of which 2,550,000 shares are issued and outstanding. Each
outstanding share of common stock is entitled to one vote, either in person or
by proxy, on all matters that may be voted upon by the holder at meetings of
our stockholders.
Holders of our common stock
+ have equal ratable rights to dividends from funds legally available
therefor, if declared by our board of directors;
+ are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon our liquidation, dissolution
or winding up;
+ do not have preemptive, subscription or conversion rights, or redemption or
sinking fund provisions; and
+ are entitled to one non-cumulative vote per share on all matters on which
stockholders may vote at all meetings of our stockholders.
All shares of our common stock which are part of the units, or which
underlie the warrants, will be fully paid for and non-assessable when issued,
with no personal liability attaching to ownership. Holders of shares of our
common stock do not have cumulative voting rights, which means that the holders
of more than 50% of outstanding shares voting for the election of directors can
elect all of our directors if they so choose and, in such event, the holders of
the remaining shares will not be able to elect any of our directors. At the
completion of the offering, the present officers and directors and present
stockholders will beneficially own at least 56% of the outstanding shares of
our common stock and a greater percentage of shares if they purchase units in
the offering. Accordingly, after completion of the offering, our present
stockholders will be in a position to control all of our affairs.
Preferred stock
- ---------------
We may issue up to 5,000,000 shares of our preferred stock from time to
time in one or more series. As of the date of the prospectus, no shares of
preferred stock have been issued. Our board of directors, without further
approval of our stockholders, is authorized to fix the dividend rights and
terms, conversion rights, voting rights, redemption rights, liquidation
preferences and other rights and restrictions relating to any series. Issuances
of additional shares of preferred stock, while providing flexibility in
connection with possible financings, acquisitions and other corporate purposes,
could, among other things, adversely affect the voting power of the holders of
other our securities and may, under certain circumstances, have the effect of
deterring hostile takeovers or delaying changes in control or management.
20
<PAGE>
Redeemable common stock purchase warrants
- -----------------------------------------
The warrants which are part of the units shall be exercisable for a period
of two years commencing from the date of the prospectus. Each warrant entitles
the holder to purchase one share of our common stock. The "A" Warrants are
exercisable at $.20; the "B" Warrants at $.30; and the "C" Warrants are $3.00.
The common stock underlying the warrants will, upon exercise of the warrants, be
validly issued, fully paid and non-assessable. The warrants will be subject to
redemption, at any time, for $0.001 per warrant, upon 30 days' prior written
notice, if the closing bid price of our common stock, as reported by the market
on which the common stock trades, exceeds the exercise price of the warrant by
$.50 per share for any 20 consecutive trading days ending within ten days
prior to the date of the notice of redemption.
The warrants can only be exercised when there is a current effective
registration statement covering the underlying shares of common stock. If we do
not obtain or are unable to maintain a current effective registration statement,
warrantholders will be unable to exercise them and they may become valueless.
Moreover, if the shares of common stock underlying the warrants are not
registered or qualified for sale in the state in which a warrantholder resides,
such holder might not be permitted to exercise any warrants.
We will deliver warrant certificates representing five warrants for each
unit purchased immediately upon their release from escrow. Warrantholders may
exchange their warrant certificates for new certificates of different
denominations, and may exercise or transfer their warrants. Warrantholders may
sell their warrants if a market exists rather than exercise them. However, we
can offer no assurance that a market will develop or continue in the warrants.
If we are unable to qualify the shares underlying the warrants for sale in
certain states, holders of the warrants in those states will have no choice but
either to sell their warrants or allow them to expire.
Warrantholders may exercise their warrants by surrendering the warrant
certificate, with the form of election properly completed and executed, together
with payment of the exercise price, to us or the warrant agent. Warrants may be
exercised in whole or from time to time in part. If less than all of the
warrants evidenced by a warrant certificate are exercised, a new warrant
certificate will be issued for the number of unexercised warrants.
Warrantholders are protected against dilution of the equity interest
represented by the underlying shares of common stock upon the occurrence of
certain events, including, but not limited to, issuance of stock dividends. If
we merge, reorganize or are acquired in such a way as to terminate the warrants,
they may be exercised immediately prior to such action. In the event of
liquidation, dissolution or winding up, holders of the warrants are not entitled
to participate in our assets.
For the life of the warrants, holders are given the opportunity to profit
from a rise in the market price of our common stock. The exercise of the
warrants will result in the dilution of the then book value of our common stock
and would result in a dilution of the percentage ownership of then existing
stockholders. The terms upon which we may obtain additional capital may be
adversely affected through the period in which the warrants remain exercisable.
Warrantholders may be expected to exercise them at a time when we would, in all
likelihood, be able to obtain equity capital on terms more favorable than the
exercise price of the warrants.
21
<PAGE>
In the event that we call the warrants for redemption, warrantholders may
not be able to exercise their warrants if we have not updated the prospectus in
accordance with the requirements of the Securities Act or the warrants have not
been qualified for sale under the laws of the state where the warrantholder
resides. In addition, a call for redemption could force the warrantholder to
accept the redemption price, which, in the event of an increase in the price of
the stock, would be substantially less than the difference between the exercise
price and the market value.
Future financing
- ----------------
In the event the proceeds of the offering are not sufficient to enable us
successfully to fund a business combination, we may seek additional financing.
At this time, we believe that the proceeds of the offering and the possibility
for additional funding through warrant exercise will be sufficient and therefore
do not expect to issue any additional securities before we consummate a business
combination. However, we may issue additional securities, incur debt or procure
other types of financing if needed. We have not entered into any agreements,
plans or proposals for such financing and at present have no plans to do so. We
will not use the escrowed funds as collateral or security for any loan. Further,
the escrowed funds will not be used to pay back any loan incurred by us. If we
require additional financing, there is no guarantee that financing will be
available to us or, if available, that such financing will be on acceptable
terms acceptable.
Reports to stockholders
- -----------------------
We intend to furnish our stockholders with annual reports containing
audited financial statements as soon as practicable after the end of each fiscal
year. Our fiscal year ends on December 31st.
Dividends
- ---------
We have only been recently organized, have no earnings and have paid no
dividends to date. Since we were formed as a blank check company with our only
intended business being the search for an appropriate business combination, we
do not anticipate having earnings or paying dividends at least until a business
combination is reconfirmed by our stockholders. However, we can give no
assurance that after we consummate a business combination, we will have earnings
or issue dividends.
Transfer agent
- --------------
We have appointed Olde Monmouth Stock Transfer Co., Inc., 77 Memorial
Parkway, Suite 101, Atlantic Highlands, New Jersey 07716 as transfer agent for
our shares of common stock and warrants.
22
<PAGE>
PLAN OF DISTRIBUTION
Conduct of the offering
- -----------------------
We hereby offer the right to subscribe for 2,000,000 units at $.02 per unit
on an "best efforts, all or none basis." We will not compensate any person in
connection with the offer and sale of the units.
Our President, Edward Reilly, shall distribute prospectuses related to the
offering. We estimate that he will distribute approximately 40 to 50
prospectuses, limited to acquaintances, friends and business associates.
Edward Reilly shall conduct the offering of the units. Although Mr.
Reilly is an "associated person" as that term is defined in Rule 3a4-1 under
the Securities Exchange Act, he will not be deemed to be a broker because:
+ he will not be subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Securities Exchange Act at the time of
the sale of our securities;
+ he will not be compensated in connection with the sale
of our units;
+ he will be not an associated person of a broker or dealer at the time of
his participation in the sale of our securities; and
+ he shall restrict his participation to the following activities:
preparing written communications or delivering them through the mails
or other means that does not involve his oral solicitation of a
potential purchaser;
responding to inquiries of potential purchasers in communications
initiated by potential purchasers, provided however, that the content
of each response is limited to information contained in the
registration statement; or
performing ministerial and clerical work involved in effecting any
transaction.
As of the date of the prospectus, we have not retained a broker in
connection with the sale of the units. In the event we retain a broker who may
be deemed an underwriter, we will file an amendment to the registration
statement with the Commission. However, we have no present intention of using a
broker.
We will not approach nor permit anyone acting on our behalf to approach a
market maker or take any steps to request or encourage a market in our
securities prior to an acquisition of a business opportunity and confirmation by
our stockholders of the acquisition. We have not conducted any preliminary
discussions or entered into any understandings with any market maker regarding a
future trading market in our securities, nor do we have any plans to engage in
any discussions. We do not intend to use consultants to obtain market makers. No
member of our management, no promoter or anyone acting at their direction will
recommend, encourage or advise investors to open brokerage accounts with any
broker-dealer which makes a market in the units, shares or warrants. Our
investors shall make their own decisions regarding whether to hold or sell their
securities. We shall not exercise any influence over investors' decisions.
23
<PAGE>
Method of subscribing
- ---------------------
Persons may subscribe for units by filling in and signing the subscription
agreement and delivering it to us prior to the expiration date. Subscribers must
pay $0.02 per unit in cash or by check, bank draft or postal express money order
payable in United States dollars to "Torrington Savings Bank as Escrow Agent for
Blue Thunder Corp." The offering is being made on a "best efforts, all or none
basis." Thus, unless all 2,000,000 units are sold, none will be sold.
Our officers, directors, current stockholders and any of their affiliates
or associates may purchase up to 50% of the units. Such purchases may be made in
order to close this "all or none" offering. Units purchased by our officers,
directors and principal stockholders will be acquired for investment purposes
and not with a view toward distribution.
Expiration date
- ---------------
The offering will end the earlier of the receipt of subscriptions for
2,000,000 units or 90 days from the date of the prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have not previously been required to comply with the reporting
requirements of the Securities Exchange Act. We have filed with the Commission a
registration statement on Form SB-2 to register the shares of our common stock
and warrants constituting the units and the shares of common stock underlying
the warrants. The prospectus is part of the registration statement, and, as
permitted by the Commission's rules, does not contain all of the information in
the registration statement. For further information about us and the securities
offered under the prospectus, you may refer to the registration statement and to
the exhibits and schedules filed as a part of the registration statement. You
can review the registration statement and its exhibits at public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661.
You may call the Commission at 1-800-SEC-0330 for further information. The
registration statement is also available electronically on the World Wide Web at
http://www.sec.gov.
You can also call or write us at any time with any questions you may have.
We would be pleased to speak with you about any aspect of our business and the
offering.
LEGAL PROCEEDINGS
We not a party to nor are we aware of any existing, pending or threatened
lawsuits or other legal actions.
LEGAL MATTERS
Roger Fidler, Esq., 163 South St., Hackensack New Jersey 07601 is passing
upon the validity of the shares of common stock and the warrants constituting
the units offered by the prospectus and the shares of common stock underlying
the warrants.
FINANCIAL STATEMENTS
The following are our financial statements, with independent auditor's
report, for the period from inception, February 2, 2000, to March 31, 2000.
24
<PAGE>
REPORT OF INDEPENDENT AUDITOR
To The Board of Directors and Shareholders
of Blue Thunder Corp. (a development stage company)
I have audited the accompanying balance sheet of Blue Thunder Corp.(a
development stage company) as of March 31, 2000, and the related statements of
operations, changes in stockholders' equity, and cash flows for the period from
inception, February 2, 2000, through March 31, 2000. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Blue Thunder Corp.(a
development stage company) as of March 31, 2000, and the related statements of
operations, changes in stockholders' equity, and cash flows for the period from
inception, February 2, 2000, through March 31, 2000 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that Blue
Thunder Corp. (a development stage company) will continue as a going concern. As
more fully described in Note 2, the Company is a blank check company that is
dependent upon the success of management to successfully complete a self
underwriting and locate and acquire a business and may require
additional capital to enter into any business combination. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans as to these matters are described in Note 2. The
financial statements do not include any adjustments to reflect the possible
effects on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result from the possible inability of
Blue Thunder Corp.(a development stage company) to continue as a going concern.
/s/Thomas Monahan
----------------------------
THOMAS MONAHAN
Certified Public Accountant
Paterson, New Jersey
April 16, 2000
F-1
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
BALANCE SHEET
March 31, 2000
ASSETS
Current assets
Cash $ 8,904
------
Total current assets 8,904
Other assets
Deferred offering expenses 11,000
Organization costs, Net 596
----------
Total other assets 11,596
----------
Total $ 20,500
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $-0-
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
5,000,000 shares authorized;
-0- shares issued and outstanding
Common stock, $.001 par value;
50,000,000 shares authorized; At March 31,
2000 there are 2,550,000 shares
outstanding $ 2,550
Additional paid-in capital 22,950
Deficit accumulated during the
development stage (5,000)
---------
Total stockholders equity $ 20,500
---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 20,500
=========
See notes to financial statements.
F-2
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, FEBRUARY 2, 2000, TO MARCH 31, 2000
Income $-0-
Costs of goods sold -0-
------
Gross profit -0-
Operations:
General and administrative 5,000
Depreciation and Amortization -0-
------
Total costs 5,000
Net profit (loss) $(5,000)
========
PER SHARE AMOUNTS:
Net profit (loss) per common
share outstanding - basic $ 0.00
=======
SHARES OF COMMON STOCK OUTSTANDING 2,550,000
=========
See notes to financial statements.
F-3
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM February 2, 2000 (INCEPTION) THROUGH MARCH 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (5,000)
Item not affecting cash flow from operations:
Amortization -0-
-------
NET CASH USED IN OPERATING ACTIVITIES (5,000)
CASH FLOWS FROM INVESTING ACTIVITY:
Deferred offering expenses (11,000)
Organization costs incurred (596)
---------
CASH USED IN INVESTING ACTIVITIES (11,596)
CASH FLOWS FROM FINANCING ACTIVITY:
Sales of common stock 25,500
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 25,500
Increase (decrease) in cash 8,904
Cash balance beginning of period -0-
---------
CASH, end of period $ 8,904
=========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -
Cash paid for income taxes $ -
See notes to financial statements.
F-4
<PAGE>
BLUE THUNDER CORP.
(A development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
accumulated
Additional during
Preferred Preferred Common Common paid in development
stock stock stock stock capital stage Total
(shares) ($) (shares) ($) ($) ($) ($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sale of 2,550,000
shares of
common stock 0 $ 0 2,550,000 $ 2,550 $ 22,950 $ 25,500
Net profit (loss) $ (5,000) (5,000)
- ------------------------------------------------------------------------------------------------------
Balance
March 31, 2000 0 $ 0 2,550,000 $ 2,550 $ 22,950 $ (5,000) $ 20,500
</TABLE>
See notes to financial statements.
F-5
<PAGE>
BLUE TUUNDER CORP.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM FEBRUARY 2, 2000 (INCEPTION) THROUGH MARCH 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY
Blue Thunder Corp.(the "Company"), was organized in Delaware on February 2,
2000 and is authorized to issue 50,000,000 shares of common stock, $0.001 par
value each and 5,000,000 shares of preferred stock, $0.001 par value each.
The Company is a "blank check" company which plans to search for and
acquire a suitable business to merge with or acquire. Operations since
incorporation have consisted primarily of obtaining capital contributions by the
initial investors and activities regarding the registration of the offering with
the Securities and Exchange Commission.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company is a blank check
company that is dependent upon the success of management to successfully
complete a self underwriting and locate and acquire a business and may
require additional capital to enter into any business combination. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The Company is dependent upon its ability to have positive cash
flows from operations to sustain any business activity. The Company's future
capital requirements will depend on numerous factors including, but not limited
to, continued progress in completing its self underwritten offering, finding a
business to acquire, completing the process of acquiring the business and
obtaining the needed investment capital and working capital to engage in
profitable operations. The Company plans to engage in such financing efforts on
a continuing basis.
The financial statements presented consist of the balance sheet of the
Company as at March 31, 2000 and the related statements of operations and
cash flows and stockholders' equity for period from inception, February 2, 2000,
to March 31, 2000.
Fiscal Year
The fiscal year of the Company is the calendar year.
Deferred Offering Costs
Deferred offering costs, incurred in anticipation of the Company filing a
registration statement pursuant to Rule 419 under the Securities Act of 1933, as
amended, are being deferred until the registration is complete.
Organization Costs, Net
Organization costs are being amortized over a period of 60 months.
Accumulated amortization as of March 31, 2000, was $-0-.
F-6
<PAGE>
Income Taxes
The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," which
requires the recognition of deferred tax liabilities and assets at currently
enacted tax rates for the expected future tax consequences of events that have
been included in the financial statements or tax returns. A valuation allowance
is recognized to reduce the net deferred tax asset to an amount that is more
likely than not to be realized. The tax provision shown on the accompanying
statement of operations is zero since the deferred tax asset generated from the
net operating loss is offset in its entirety by a valuation allowance. State
minimum taxes will be expensed as incurred.
Cash and Cash Equivalents
Cash and cash equivalents, if any, include all highly liquid debt
instruments with an original maturity of three months or less at the date of
purchase.
Fair Value of Financial Instruments
Cash, accounts payable and other current liabilities are recorded in the
financial statements at cost, which approximates fair market value because of
the short-term maturity of those instruments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Significant Concentration of Credit Risk
At March 31, 2000, the Company has a concentration of its credit risk by
maintaining deposits in one bank. The maximum loss that could have resulted from
this risk totaled $-0- which represents the excess of the deposit liabilities
reported by the banks over the amounts that would have been covered by the
insurance.
NOTE 3 - STOCKHOLDERS' EQUITY
Common Stock
For the period from inception, February 2, 2000, to March 29, 2000, the
Company sold an aggregate of 2,550,000 shares of common stock to its president
investor for an aggregate consideration of $25,500 or $0.01 per share.
Preferred Stock
Up to 5,000,000 shares of preferred stock may be issued from time to time
in one or more series. The Company's board of directors, without further
stockholder approval, is authorized to fix the dividend rights and terms,
conversion rights, voting rights, redemption rights, liquidation preferences and
other rights and restrictions relating to any such series. Issuances of
additional shares of preferred stock, while providing flexibility in connection
with possible financings, acquisitions and other corporate purposes, could,
among other things adversely affect the voting power of the holders of other
securities and may, under certain circumstances, have the effect of deterring
hostile takeovers or delaying changes in control or management.
The number of shares of preferred stock outstanding at March 31, 2000 is
- -0-.
F-7
<PAGE>
NOTE 4 - RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds be deposited into an escrow or
trust account (the "Deposited Funds" and "Deposited Securities", respectively)
governed by an agreement which contains certain terms and provisions specified
by that rule. The Company may receive 10% of the escrowed funds for working
capital. The remaining Deposited Funds and the Deposited Securities will be
released to the Company and to the investors, respectively, only after the
Company has met the following three basic conditions. First, the Company must
execute an agreement for an acquisition meeting certain prescribed criteria.
Second, the Company must file a post-effective amendment to its registration
statement which includes the terms of a reconfirmation offer that must contain
conditions prescribed by Rule 419. The post-effective amendment must also
contain information regarding the acquisition candidate and its business,
including audited financial statements. The agreement must include, as a
condition precedent to its consummation, a requirement that the number of
investors who contributed at least 80% of the offering proceeds must elect to
reconfirm their investments. Third, the Company must conduct the reconfirmation
offer and satisfy all of the prescribed conditions. The post-effective amendment
must also include the terms of the reconfirmation offer mandated by Rule 419.
After the Company submits a signed representation to the escrow agent that the
requirements of Rule 419 have been met and after the acquisition is consummated,
the escrow agent can release the Deposited Funds and Deposited Securities.
Investors who do not reconfirm their investments will receive the return of a
pro rata portion thereof; and in the event investors representing less than 80%
of the Deposited Funds reconfirm their investments, the Deposited Funds will be
returned to all the investors on a pro rata basis.
NOTE 5 - GAIN (LOSS) PER SHARE OF COMMON STOCK
Net gain (loss) per share of common stock outstanding, as shown on the
statement of operations, is based on the number of shares outstanding at each
balance sheet date. Weighted average shares outstanding was not computed since
it would not be meaningful in the circumstances, as all shares issued during the
period from incorporation through March 31, 2000 were for initial capital.
Therefore, the total shares outstanding at the end of each period was deemed to
be the most relevant number of shares to use for purposes of this disclosure.
For future periods, the Company will utilize the treasury stock method for
computing earnings per share, and will compute a weighted average number of
shares outstanding once additional shares of stock are issued to new
stockholders. Under the treasury stock method, the dilutive effect of
outstanding stock options and other convertible securities for determining
primary earnings per share is computed using the average market price during the
fiscal period, whereas the dilutive effect of outstanding stock options and
convertible securities for determining fully diluted earnings per share is
computed using the market price as of the end of the fiscal period, if greater
than the average market price.
F-8
<PAGE>
NOTE 6 - RELATED PARTY TRANSACTIONS
Office Facilities
Rental of office space and use of office, computer and telecommunications
equipment are provided by the President of the Company on a month to month basis
free of charge.
Officer Salaries
For the period from inception, February 2, 2000, to March 31, 2000, no
officer has received any compensation for serving as such.
NOTE 7 - PROPOSED OFFERING
The Company intends to prepare and file a registration statement with the
Securities and Exchange Commission pursuant to Rule 419 (see Note 4). The
offering, on a "best efforts all-or-none basis" will consist of 2,000,000 units
at $.02 per unit or an aggregate offering price of $25,500. Each unit will
consist of one share of common stock and three redeemable common stock purchase
warrants. Each warrant is exercisable into one share of common stock for a
period of two years from the effective date of a registration statement relating
to the underlying shares of common stock, the "A" Warrant at $.20, the "B"
Warrant at $.30, and the "C" Warrant at $3.00. The warrants are redeemable at
any time, upon thirty day's written notice, in the event the average closing
price of the common stock is at least $.50 greater than the exercise price of
any given warrant for a period of twenty consecutive trading days ending within
ten days prior to the notice of redemption.
F-9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Delaware General Corporation Law provides for the indemnification of
the officers, directors and corporate employees and agents of Blue Thunder Corp.
(the "Registrant") under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith 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, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which 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, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstance of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or such court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
25
<PAGE>
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation as authorized in this section. Such
expenses including attorneys' fees incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
26
<PAGE>
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
Articles Ninth and Tenth of the Registrant's certificate of incorporate
provide as follows:
NINTH:
The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the Delaware General Corporation Law, as the
same may be amended and supplemented.
TENTH:
The Corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the Delaware General Corporation Law, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Article XII of the Registrant's by-laws provides as follows:
27
<PAGE>
ARTICLE XII - INDEMNIFICATION OF DIRECTORS AND OFFICERS
1. INDEMNIFICATION. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such person is or
was a director, trustee, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, trustee,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation, and with
respect to any criminal action or proceeding, had reasonable cause to
believe that such person's conduct was lawful.
2. DERIVATIVE ACTION. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in the corporation's favor by reason of the fact that such person
is or was a director, trustee, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of any other corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation; provided, however, that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of such person's duty
to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as such court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation.
3. SUCCESSFUL DEFENSE. To the extent that a director, trustee, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in whole or in part, in defense of any action, suit or
proceeding referred to in paragraphs 1 and 2 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
28
<PAGE>
4. AUTHORIZATION. Any indemnification under paragraph 1 and 2 above (unless
ordered by a court) shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the
director, trustee, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of
conduct set forth in paragraph 1 and 2 above. Such determination shall be
made (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, (b) by independent legal counsel (selected by one or more of
the directors, whether or not a quorum and whether or not disinterested) in
a written opinion, or (c) by the stockholders. Anyone making such a
determination under this paragraph 4 may determine that a person has met
the standards therein set forth as to some claims, issues or matters but
not as to others, and may reasonably prorate amounts to be paid as
indemnification.
5. ADVANCES. Expenses incurred in defending civil or criminal actions, suits
or proceedings shall be paid by the corporation, at any time or from time
to time in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in paragraph 4 above upon
receipt of an undertaking by or on behalf of the director, trustee,
officer, employee or agent to repay such amount unless it shall ultimately
be determined by the corporation that the payment of expenses is authorized
in this Section.
6. NONEXCLUSIVITY. The indemnification provided in this Section shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any law, by-law, agreement, vote of stockholders or
disinterested director or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee or agent and shall insure to the benefit of the
heirs, executors, and administrators of such a person.
7. INSURANCE. The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, trustee,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or
agent of any corporation, partnership, joint venture, trust or other
enterprise, against any liability assessed against such person in any such
capacity or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such
liability.
8. "CORPORATION" DEFINED. For purpose of this action, references to the
"corporation" shall include, in addition to the corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
directors, trustees, officers, employees or agents, so that any person who
is or was a director, trustee, officer, employee or agent of such of
constituent corporation will be considered as if such person was a
director, trustee, officer, employee or agent of the corporation.
29
<PAGE>
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are estimated as
follows:
Escrow Fee $ 600
Securities and Exchange Commission Registration Fee 1,500
Legal Fees and Consulting Fees 15,000
Accounting Fees 5,000
Printing and Engraving 1,000
Blue Sky Qualification Fees and Expenses 1,000
Miscellaneous 400
Transfer Agent Fee 1,000
---------
TOTAL $ 25,500
Item 26. Recent Sales of Unregistered Securities
The registrant issued 2,550,000 shares of common stock on February 2, 2000
to its Stockholders, for cash consideration of $.01 per share for an aggregate
investment of $25,500. The registrant sold these shares of common stock under
the exemption from registration provided by Section 4(2) of the Securities Act.
No securities have been issued for services.
Neither the registrant nor any person acting on its behalf offered or sold
the securities by means of any form of general solicitation or general
advertising. No services were performed by any purchaser as consideration for
the shares issued.
The purchasers represented in writing that they acquired the securities for
his own accounts. A legend was placed on the stock certificates stating that the
securities have not been registered under the Securities Act and cannot be sold
or otherwise transferred without an effective registration or an exemption
therefrom.
30
<PAGE>
EXHIBITS
Item 27.
3.1 Certificate of Incorporation*
3.2 By-Laws*
4.1 Specimen Certificate of Common Stock*
4.2 Form of Warrant*
4.3 Form of Warrant Agreement*
4.4 Form of Escrow Agreement*
5.1 Opinion of Counsel*
23.1 Accountant's Consent to Use Opinion
23.2 Counsel's Consent to Use Opinion*
<PAGE>
Item 28.
UNDERTAKINGS
The Registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement (the "Registration
Statement"):
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
Effective Date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this registration
statement, including (but not limited to) the addition of an
underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) To deposit into the Escrow Account at the closing, certificates in such
denominations and registered in such names as required by the Company to
permit prompt delivery to each purchaser upon release of such securities
from the Escrow Account in accordance with Rule 419 of Regulation C under
the Securities Act. Pursuant to Rule 419, these certificates shall be
deposited into an escrow account, not to be released until a business
combination is consummated.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
31
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized the registration
statement to be signed on its behalf by the undersigned, in the Borough of
Queens, City of New York, State of New York on April 26, 2000.
BLUE THUNDER CORP.
By: /s/Edward Reilly
---------------------------
Edward Reilly, President
In accordance with the requirements of the Securities Act of 1933, the
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/Edward Reilly
- ------------------------------- Dated: April 26, 2000
Edward Reilly
President, Treasurer, Director
/s/Bridgette Vasile
- ------------------------------- Dated: April 26, 2000
Bridgette Vasile
Secretary, Director
32
<PAGE>
CERTIFICATE OF INCORPORATION
OF
BLUE THUNDER CORP.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws
(particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory
thereof and supplemental thereto, and known, identified and referred to as the
"Delaware General Corporation Law") hereby certifies that:
FIRST:
The name of this corporation (hereinafter called the "Corporation") is
BLUE THUNDER CORP.
SECOND:
The address, including street, number, city and county, of the registered
office of the Corporation in the State of Delaware is 1013 Centre Road,
Wilmington, New Castle County, Delaware 19805; and the name of the registered
agent of the Corporation is Corporation Service Company.
THIRD:
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law of the State of Delaware.
FOURTH:
The total number of shares of stock which the Corporation shall have
authority to issue is 55,000,000. The par value of each of such shares is $.001.
50,000,000 of such shares shall be shares of common stock.
5,000,000 of such shares shall be shares of preferred stock. The board of
directors of the Corporation is hereby granted the power to determine by
resolution from time to time the powers, preferences, rights, qualifications,
restrictions or limitations of the preferred stock.
FIFTH:
The name and mailing address of the incorporator are as follows:
Joel Pensley
c/o Office of Roger Fidler Attorney at Law
163 South Street
Hackensack New Jersey 07601
SIXTH:
The Corporation is to have perpetual existence.
<PAGE>
SEVENTH:
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Delaware General Corporation Law or on the application of
trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Delaware General Corporation
Law, order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement of the Corporation as
consequence and to any reorganization of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if sanctioned
by the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
EIGHTH:
For the management of the business and for the conduct of the affairs of
the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation and of its directors and of its stockholders or any
class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its board of directors. The number of
directors which shall constitute the whole board of directors shall be
fixed by, or in the manner provided in, the by-laws. The phrase "whole
board" and the phrase "total number of directors" shall be deemed to have
the same meanings, to wit, the total number of directors which the
Corporation would have if there were no vacancies. No election of directors
need be by written ballot.
2. After the original or other by-laws of the Corporation have been adapted,
amended, or repealed, as the case may be, in accordance with the provisions
of Section 109 of the Delaware General Corporation Law, and after the
Corporation has received any payment for any of its stock, the power to
adopt, amend, or repeal the by-laws of the Corporation may be exercised by
the board of directors of the Corporation subject to the reserved power of
the stockholders to make, alter and repeal any by-laws adopted by the board
of directors; provided, however, that any provision for the classification
of directors of the Corporation for staggered terms pursuant to the
provisions of subsection (d) of Section 141 of the Delaware General
Corporation Law shall be set forth in an initial by-law or in a by-law
adopted by the stockholders of the Corporation entitled to vote.
3. Whenever the Corporation shall be authorized to issue only one class of
stock, each outstanding share shall entitle the holder thereof to notice
of, and the right to vote at, any meeting of stockholders. Whenever the
Corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under
the provisions of this certificate of incorporation shall entitle the
holder thereof to the right to vote at any meeting of stockholders except
as the provisions of paragraph (2) of subsection (b) to Section 242 of the
Delaware General Corporation Law shall otherwise require; provided, that no
share of any such class which is otherwise denied voting power shall
entitle the holder thereof to vote upon the increase or decrease in the
number of authorized shares of said class.
<PAGE>
4. With the consent in writing or pursuant to a vote of the holders of a
majority of the capital stock issued and outstanding, the board of
directors shall have the authority to dispose, in any manner, of the whole
property of the Corporation.
5. The by-laws shall determine whether and to what extent the accounts and
books of the Corporation, or any of them, shall be open to inspection by
the stockholders; and no stockholder shall have any right or inspecting any
account or book or document of the Corporation, except as conferred by law
or by the by-laws or by resolution of the stockholders.
6. The stockholders and directors shall have the power to hold their
respective meetings and to keep the books, documents and papers of the
Corporation outside the State of Delaware at such places as may be from
time to time designated by the by-laws or by resolution of the stockholders
or directors, except as otherwise required by the Delaware General
Corporation Law.
7. Any action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted.
NINTH:
The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the Delaware General Corporation Law, as the
same may be amended and supplemented.
TENTH:
The Corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the Delaware General Corporation Law, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ELEVENTH:
From time to time, any of the provisions of this certificate of
incorporation may be amended, altered or repealed; and other provisions
authorized by the laws at the time in force may be added or inserted in the
manner and at the time prescribed by said laws; and all rights at any time
conferred upon the stockholders of the Corporation by this certificate of
incorporation are granted subject to the provisions of this Article ELEVENTH.
TWELFTH:
The Corporation elects not to be governed by Section 203 of the Delaware
General Corporation Law.
Signed on January 27, 2000
/s/Joel Pensley
---------------------
Joel Pensley
Incorporator
<PAGE>
BLUE THUNDER CORP.
A Delaware Corporation
BY-LAWS
ARTICLE I
Principal Executive Office
The principal executive office of Blue Thunder Corp.(the "Corporation")
shall be at 64- 34 79th Street, Middle Village, New York 11379. The
Corporation may also have offices at such other places within or without the
State of Delaware as the board of directors shall from time to time determine.
ARTICLE II
Stockholders
SECTION 1. Place of Meetings. All annual and special meetings of the
stockholders shall be held at the principal executive office or at such other
place within or without the State of Delaware as the board of directors may
determine and as designated in the notice of such meeting.
SECTION 2. Annual Meeting. A meeting of the stockholders for the election
of directors and for the transaction of any other business shall be held
annually at such date and time as the board of directors may determine.
SECTION 3. Special Meetings. Special meeting of the stockholders for any
purpose or purposes may be called at any time by the board of directors, or by a
committee of the board of directors which as been duly designated by the board
of directors and whose powers and authorities, as provided in a resolution of
the board of directors or in these by-laws, include the power and authority to
call such meetings, or by stockholders owning at least twenty-five percent (25%)
of the entire voting power of the corporation's capital stock but such special
meetings may not be called by any other person or persons.
SECTION 4. Conduct of Meetings. Annual and special meetings shall be
conducted in accordance with these by-laws or as otherwise prescribed by the
board of directors. The chairman or the chief executive officer shall preside at
such meetings.
SECTION 5. Notice of Meeting. Written notice stating the place, day and
time of the meeting and the purpose or purposes for which the meeting is called
shall be mailed by the secretary or the officer performing his duties, not less
than ten days nor more than fifty days before the meeting to each stockholder of
record entitled to vote at such meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail, addressed to the
stockholder at his address as it appears on the stock transfer books or records
as of the record date prescribed in Section 6, with postage thereon prepaid. If
a stockholder be present at a meeting, or in writing waive notice thereof before
or after the meeting, notice of the meeting to such stockholder shall be
unnecessary. When any stockholders' meeting, either annual or special, is
adjourned for thirty days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting. It shall not be necessary to give
any notice of the time and place of any meeting adjourned for less than thirty
days or of the business to be transacted at such adjourned meeting, other than
an announcement at the meeting at which such adjournment is taken.
<PAGE>
SECTION 6. Fixing of Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any stockholders' meeting, or
any adjournment thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the board of directors shall fix in advance a date as the record
date for any such determination of stockholders. Such date in any case shall be
not more than sixty days, and in case of a stockholders' meeting, not less than
ten days prior to the date on which the particular action, requiring such
determination of stockholders, is to be taken.
When a determination of stockholders entitled to vote at any stockholders'
meeting has been made as provided in this section, such determination shall
apply to any adjournment thereof.
SECTION 7. Voting Lists. The officer or agent having charge of the stock
transfer books for shares shall make, at least ten days before each
stockholders' meeting, a complete record of the stockholders entitled to vote at
such meeting or any adjournment thereof, with the address of and the number of
shares held by each. The record, for a period of ten days before such meeting,
shall be kept on file at the principal executive office, whether within or
outside the State of Delaware, and shall be subject to inspection by any
stockholder for any purpose germane to the meeting at any time during usual
business hours. Such record shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any stockholder
for any purpose germane to the meeting during the whole time of the meeting. The
original stock transfer books shall be prima facie evidence as to the
stockholders entitled to examine such record or transfer books or to vote at any
stockholders' meeting.
SECTION 8. Quorum. One-fourth of the outstanding shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a stockholders'
meeting. If less than one-fourth of the outstanding shares are represented at a
meeting, a majority of the shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The stockholders present
at a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
SECTION 9. Proxies. At all stockholders' meetings, a stockholder may vote
by proxy executed in writing by such stockholder or by his duly authorized
attorney in fact. Proxies solicited on behalf of the management shall be voted
as directed by such stockholder or, in the absence of such direction, as
determined by a majority of the board of directors. No proxy shall be valid
after eleven months from the date of its execution unless otherwise provided in
the proxy.
SECTION 10. Voting. At each election for directors every stockholder
entitled to vote at such election shall be entitled to one vote for each share
of stock held. Unless otherwise provided by the certificate of incorporation, by
statute, or by these by-laws, a majority of votes of the shares present in
person or by proxy at a lawful meeting and entitled to vote on the election of
directors shall be sufficient to pass on a transaction or matter, except in the
election of directors, which election shall be determined by a plurality of the
votes of the shares present in person or by proxy at the meeting and entitled to
vote on the election of directors.
<PAGE>
SECTION 11. Voting of Shares in the Name of Two or More Persons. When
ownership of stock stands in the name of two or more persons, in the absence of
written directions to the Corporation to the contrary, at any stockholders'
meeting any one or more of such stockholders may cast, in person or by proxy,
all votes to which such ownership is entitled. In the event an attempt is made
to cast conflicting votes, in person or by proxy, by the several persons in
whose name shares of stock stand, the vote or votes to which these persons are
entitled shall be cast as directed by a majority of those holding such stock and
present in person or by proxy at such meeting, but no votes shall be cast for
such stock without the direction of such a majority.
SECTION 12. Voting of Shares by Certain Holders. Shares of capital stock
standing in the name of another corporation may be voted by any officer, agent
or proxy as these 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 held by an administrator, executor, guardian or conservator may be voted
by him, either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name. Shares standing in the name of
a receiver may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer thereof
into his name if authority to do so is contained in an appropriate order of the
court or other public authority by which such receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares at any stockholders' meeting until such shares have been transferred into
the name of the pledgee and thereafter such pledgee shall be entitled to vote
the shares so transferred.
Neither treasury shares of its own stock held by the Corporation, nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
Corporation, shall be voted at any stockholders' meeting or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.
SECTION 13. Inspectors of Election. In advance of any stockholders'
meeting, the chairman of the board or the board of directors may appoint any
persons, other than nominees for office, as inspectors of election to act at
such meeting or any adjournment thereof. The number of inspectors shall be
either one or three. If the board of directors appoints either one or three
inspectors, that appointment shall not be altered at the meeting. If inspectors
of election are not so appointed, the chairman of the board of directors may
make an appointment at the meeting. In case any person appointed as inspector
fails to appear or fails or refuses to act, the vacancy may be filled by
appointment in advance of the meeting or at the meeting by the chairman of the
board of directors or the president of the Corporation.
Unless otherwise prescribed by applicable law, the duties of such
inspectors shall include: determining the number of shares of stock and the
voting power of each share, the shares of stock represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies;
receiving votes, ballots or consents; hearing and determining all challenges and
questions in any way arising in connection with the right to vote; counting and
tabulating all votes or consents; determining the result; and such acts as may
be proper to conduct the election or vote with fairness to all stockholders.
<PAGE>
SECTION 14. Nominating Committee. The board of directors or a committee
appointed by the board of directors shall act as nominating committee for
selecting the management nominees for election as directors. Except in the case
of a nominee substituted as a result of the death or other incapacity of a
management nominee, the nominating committee shall deliver written nominations
to the secretary at least twenty days prior to the date of the annual meeting.
Provided such committee makes such nominations, no nominations for directors
except those made by the nominating committee shall be voted upon at the annual
meeting unless other nominations by stockholders are made in writing and
delivered to the secretary in accordance with the provisions of the
Corporation's certificate of incorporation.
SECTION 15. New Business. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary in accordance
with the provisions of the Corporation's certificate of incorporation. 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 shall be acted upon at such annual
meeting unless stated and filed as provided in the Corporation's certificate of
incorporation.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The business and affairs of the Corporation
shall be under the direction of the board of directors. The chairman shall
preside at all meetings of the board of directors.
SECTION 2. Number, Term and Election. The number of directors shall be such
number, not less than one nor more than seven (exclusive of directors, if any,
to be elected by holders of preferred stock), as shall be provided from time to
time in a resolution adopted by the board of directors, provided that no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director, and provided further that no action shall be taken to
decrease or increase the number of directors from time to time unless at least
two-thirds of the directors then in office shall concur in said action.
Exclusive of directors, if any, elected by holders of preferred stock, vacancies
in the board of directors, however caused, and newly created directorships shall
be filled by a vote of two-thirds of the directors then in office, whether or
not a quorum, and any director so chosen shall hold office for a term expiring
at the annual stockholders' meeting at which the term of the class to which the
director has been chosen expires and when the director's successor is elected
and qualified. The board of directors shall be classified in accordance with the
provisions of Section 3 of this Article III.
SECTION 3. Regular Meetings. A regular meeting of the board of directors
shall be held at such time and place as shall be determined by resolution of the
board of directors without other notice than such resolution.
SECTION 4. Special Meetings. Special meetings of the board of directors may
be called by or at the request of the chairman, the chief executive officer or
one-third of the directors. The person calling the special meetings of the board
of directors may fix any place as the place for holding any special meeting of
the board of directors called by such persons.
Members of the board of the directors may participate in special meetings
by means of telephone conference or similar communications equipment by which
all persons participating in the meeting can hear each other. Such participation
shall constitute presence in person.
<PAGE>
SECTION 5. Notice. Written notice of any special meeting shall be given to
each director at least two days previous thereto delivered personally or by
telegram or at least seven days previous thereto delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the United States mail so addressed,
with postage thereon prepaid if mailed or when delivered to the telegraph
company if sent by telegram. Any director may waive notice of any meeting by a
writing filed with the secretary. The attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any meeting of the board of
directors need be specified in the notice or waiver of notice of such meeting.
SECTION 6. Quorum. A majority of the number of directors fixed by Section 2
shall constitute a quorum for the transaction of business at any meeting of the
board of directors, but if less than such majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time.
Notice of any adjourned meeting shall be given in the same manner as prescribed
by Section 5 of this Article III.
SECTION 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by these by-laws, the
certificate of incorporation, or the General Corporation Law of the State of
Delaware.
SECTION 8. Action Without a Meeting. Any action required or permitted to be
taken by the board of directors at a meeting may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the directors.
SECTION 9. Resignation. Any director may resign at any time by sending a
written notice of such resignation to the home office addressed to the chairman.
Unless otherwise specified therein such resignation shall take effect upon
receipt thereof by the chairman.
SECTION 10. Vacancies. Any vacancy occurring on the board of directors
shall be filled in accordance with the provisions of the Corporation's
certificate of incorporation. Any directorship to be filled by reason of an
increase in the number of directors may be filled by the affirmative vote of
two-thirds of the directors then in office or by election at an annual meeting
or at a special meeting of the stockholders held for that purpose. The term of
such director shall be in accordance with the provisions of the Corporation's
certificate of incorporation.
SECTION 11. Removal of Directors. Any director or the entire board of
directors may be removed only in accordance with the provisions of the
Corporation's certificate of incorporation.
SECTION 12. Compensation. Directors, as such, may receive compensation for
service on the board of directors. Members of either standing or special
committees may be allowed such compensation as the board of directors may
determine.
SECTION 13. Age Limitation. No person 72 years or more of age shall be
eligible for election, reelection, appointment or reappointment to the board. No
director shall serve as such beyond the annual meeting immediately following the
director becoming 72 years of age. This age limitation does not apply to an
advisory director.
<PAGE>
ARTICLE IV
Committees of the Board of Directors
The board of directors may, by resolution passed by a majority of the whole
board, designate one or more committees, as they may determine to be necessary
or appropriate for the conduct of the business, and may prescribe the duties,
constitution and procedures thereof. Each committee shall consist of one or more
directors appointed by the chairman. The chairman may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
The chairman shall have power at any time to change the members of, to fill
vacancies in, and to discharge any committee of the board. Any member of any
such committee may resign at any time by giving notice to the Corporation;
provided, however, that notice to the board, the chairman of the board, the
chief executive officer, the chairman of such committee, or the secretary shall
be deemed to constitute notice to the Corporation. Such resignation shall take
effect upon receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective. Any member of any such committee may be removed
at any time, either with or without cause, by the affirmative vote of a majority
of the authorized number of directors at any meeting of the board called for
that purpose.
ARTICLE V
Officers
SECTION 1. Positions. The officers shall be a chairman, a president, one or
more vice presidents, a secretary and a treasurer, each of whom shall be elected
by the board of directors. The board of directors may designate one or more vice
presidents as executive vice president or senior vice president. The board of
directors may also elect or authorize the appointment of such other officers as
the business may require. The officers shall have such authority and perform
such duties as the board of directors may from time to time authorize or
determine. In the absence of action by the board of directors, the officers
shall have such powers and duties as generally pertain to their respective
offices.
SECTION 2. Election and Term of Office. The officers shall be elected
annually by the board of directors at the first meeting of the board of
directors held after each annual meeting of the stockholders. If the election of
officers is not held at such meeting, such election shall be held as soon
thereafter as possible. Each officer shall hold office until his successor shall
have been duly elected and qualified, until his death or until he shall resign
or shall have been removed in the manner hereinafter provided. Election or
appointment of an officer, employee or agent shall not of itself create contract
rights. The board of directors may authorize the Corporation to enter into an
employment contract with any officer in accordance with state law; but no such
contract shall impair the right of the board of directors to remove any officer
at any time in accordance with Section 3 of this Article V.
SECTION 3. Removal. Any officer may be removed by vote of two-thirds of the
board of directors whenever, in its judgment, the best interests will be served
thereby, but such removal, other than for cause, shall be without prejudice to
the contract rights, if any, of the person so removed.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.
SECTION 5. Remuneration. The remuneration 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.
<PAGE>
ARTICLE VI
Contracts, Loans, Checks and Deposits
SECTION 1. Contracts. To the extent permitted by applicable law, and except
as otherwise prescribed by the Corporation's certificate of incorporation or
these by-laws with respect to certificates for shares, the board of directors or
the executive committee may authorize any officer, employee, or agent to enter
into any contract or execute and deliver any instrument in the name of and on
behalf. Such authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf and no evidence of
indebtedness shall be issued in its name unless authorized by the board of
directors. Such authority may be general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name
shall be signed by one or more officers, employees or agents in such manner,
including in facsimile form, as shall from time to time be determined by
resolution of the board of directors.
SECTION 4. Deposits. All funds not otherwise employed shall be deposited
from time to time to the credit in any of its duly authorized depositories as
the board of directors may select.
ARTICLE VII
Certificates for Shares and Their Transfer
SECTION 1. Certificates for Shares. The shares of capital stock shall be
represented by certificates signed by the chairman of the board of directors or
the president or a vice president and by the treasurer or an assistant treasurer
or the secretary or an assistant secretary, and may be sealed with the seal or a
facsimile thereof. Any or all of the signatures upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent, or
registered by a registrar, other than the Corporation itself or an employee. If
any officer who has signed or whose facsimile signature has been placed upon
such certificate shall have ceased to be such officer before the certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the date of its issue.
SECTION 2. Form of Share Certificates. All certificates representing shares
of capital stock shall set forth upon the face or back that the Corporation will
furnish to any stockholder upon request and without charge a full statement of
the designations, preferences, limitations, and relative rights of the shares of
each class authorized to be issued, the variations in the relative rights and
preferences between the shares of each such series so far as the same have been
fixed and determined, and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series.
Each certificate representing shares shall state upon the face thereof:
that the Corporation is organized under the laws of the State of Delaware; the
name of the person to whom issued; the number and class of shares, the
designation of the series, if any, which such certificate represents; the par
value of each share represented by such certificate, or a statement that the
shares are without par value. Other matters in regard to the form of the
certificates shall be determined by the board of directors.
SECTION 3. Payment for Shares. No certificate shall be issued for any share
of capital stock until such share is fully paid.
SECTION 4. Form of Payment for Shares. The consideration for the issuance
of shares of capital stock shall be paid in accordance with the provisions of
the certificate of incorporation.
<PAGE>
SECTION 5. Transfer of Shares. Transfer of shares of capital stock shall be
made only on the stock transfer books of the Corporation. Authority for such
transfer shall be given only to the holder of record thereof or by his legal
representative, who shall furnish proper evidence of such authority, or by his
attorney thereunto authorized by power of attorney duly executed and filed with
the Corporation. Such transfer shall be made only on surrender for cancellation
of the certificate for such shares. The person in whose name shares of capital
stock stand on the books shall be deemed by the Corporation to be the owner
thereof for all purposes.
SECTION 6. Lost Certificates. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. When authorizing such issue of a new certificate,
the board of directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen, or destroyed
certificate, or his legal representative, to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed.
ARTICLE VIII
Fiscal Year; Annual Audit
The fiscal year shall end on the last day of December of each year. The
Corporation shall be subject to an annual audit as of the end of its fiscal year
by independent public accountants appointed by and responsible to the board of
directors.
ARTICLE IX
Dividends
Dividends upon the capital stock, subject to the provisions of the
certificate of incorporation, if any, may be declared by the board of directors
at any regular or special directors' meeting, pursuant to law. Dividends may be
paid in cash, in property or in stock.
ARTICLE X
Corporation Seal
The corporate seal shall be in such form as the board of directors shall
prescribe.
ARTICLE XI
Amendments
Pursuant to the certificate of incorporation, these by-laws may be
repealed, altered, amended or rescinded by the stockholders only by vote of not
less than three-quarters of the voting power of the outstanding shares of
capital stock entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a stockholders' meeting
called for that purpose (provided that notice of such proposed repeal,
alteration, amendment or rescission is included in the notice of such meeting).
In addition, the board of directors may repeal, alter, amend or rescind these
by-laws by vote of two-thirds of the board of directors at a legal meeting held
in accordance with the provisions of these by-laws.
<PAGE>
ARTICLE XII
Indemnification of Directors and Officers
1. INDEMNIFICATION. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such person is or
was a director, trustee, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, trustee,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation, and with
respect to any criminal action or proceeding, had reasonable cause to
believe that such person's conduct was lawful.
2. DERIVATIVE ACTION. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in the corporation's favor by reason of the fact that such person
is or was a director, trustee, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of any other corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation; provided, however, that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of such person's duty
to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as such court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, by itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interest of the corporation.
3. SUCCESSFUL DEFENSE. To the extent that a director, trustee, officer,
employee or agent of the corporation has been successful, on the merits or
otherwise, in whole or in part, in defense of any action, suit or
proceeding referred to in paragraphs 1 and 2 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
<PAGE>
4. AUTHORIZATION. Any indemnification under paragraph 1 and 2 above (unless
ordered by a court) shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the
director, trustee, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of
conduct set forth in paragraph 1 and 2 above. Such determination shall be
made (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, (b) by independent legal counsel (selected by one or more of
the directors, whether or not a quorum and whether or not disinterested) in
a written opinion, or (c) by the stockholders. Anyone making such a
determination under this paragraph 4 may determine that a person has met
the standards therein set forth as to some claims, issues or matters but
not as to others, and may reasonably prorate amounts to be paid as
indemnification.
5. ADVANCES. Expenses incurred in defending civil or criminal actions, suits
or proceedings shall be paid by the corporation, at any time or from time
to time in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in paragraph 4 above upon
receipt of an undertaking by or on behalf of the director, trustee,
officer, employee or agent to repay such amount unless it shall ultimately
be determined by the corporation that the payment of expenses is authorized
in this Section.
6. NONEXCLUSIVITY. The indemnification provided in this Section shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any law, by-law, agreement, vote of stockholders or
disinterested director or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee or agent and shall insure to the benefit of the
heirs, executors, and administrators of such a person.
7. INSURANCE. The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, trustee,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or
agent of any corporation, partnership, joint venture, trust or other
enterprise, against any liability assessed against such person in any such
capacity or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such
liability.
8. "CORPORATION" DEFINED. For purpose of this action, references to the
"corporation" shall include, in addition to the corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
directors, trustees, officers, employees or agents, so that any person who
is or was a director, trustee, officer, employee or agent of such of
constituent corporation will be considered as if such person was a
director, trustee, officer, employee or agent of the corporation.
<PAGE>
BLUE THUNDER CORP.
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
This certifies that ----------
is the registered owner of ----------------
fully paid and non-assessable shares of common stock, $.001 par value each of
BLUE THUNDER CORP.
Transferable on the books of the Corporation in person or by attorney upon
surrender of this Certificate duly endorsed or assigned. This Certificate and
the shares represented hereby are subject to the laws of the State of Delaware,
and to the Certificate of Incorporation and By-laws of the Corporation, as now
or hereafter amended. This Certificate is not valid unless countersigned by the
Transfer Agent
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated: ----------------
BLUE THUNDER CORP.
/s/Bridgette Vasile CORPORATE SEAL /s/Edward Reilly
- ------------------ 2000 --------------------
Secretary DELAWARE President
Countersigned:
Olde Monmouth Stock Transfer Co., Inc.
Transfer Agent
AUTHORIZED SIGNATURE
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common and not as community property
UNIFORM GIFTS TO MINORS ACT
( Custodian) (Minor)
under the Uniform Gifts of Minors Act of the State of ------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
Please insert social security
or other identifying number: -----------------
(Insert name and address, including zip code):
- ----------------------------------------------------
- ----------------------------------------------------
- --------------------------------------------- shares
of the Common Stock represented by the within Certificate and do hereby
irrevocably constitute and appoint
- ----------------------------------------------------
to transfer the said shares on the books of the within named Corporation
with full power of substitution in the premises.
DATED: ------------- ---------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
it is written upon the face of the Certificate in every particular without
alteration or enlargement or any change whatever.
SIGNATURE GUARANTEE:
BLUE THUNDER CORP.
(INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)
This certifies that: -------------------------
the registered Holder or registered assign (the "Holder"), is the owner for
value received of: ---------- warrants (the "Warrants") (subject to adjustment
as hereinafter referred to), each of which Warrants entitles the Holder to
purchase during the period commencing --------- and expiring at 5:00 P.M.
Eastern Time on ------, 200-, one fully paid, non-assessable share of common
stock, $.001 par value per share ("Share") of Blue Thunder Corp.,a Delaware
corporation (the "Company"), upon payment of $-- per share (the "Exercise
Price"), provided, however, that the number of Shares purchasable upon exercise
of each Warrant may be increased or reduced and the Exercise Price adjusted in
the event of a stock dividend, stock split, reclassification, reorganization,
consolidation, merger, sale of all or substantially all of the property of the
Company, sales of stock at less than the greater of market value or the Exercise
Price or other dilutive transactions. The Exercise Price of Warrants represented
by this Warrant Certificate is payable either in cash or by bank draft to the
order of the Company. No adjustment shall be made for any dividends on any
Shares issuable upon exercise of the Warrants represented by this Warrant
Certificate.
In order to exercise these Warrants, the form of election to purchase on
the reverse side must be properly completed and executed. If Warrants
represented by this Warrant Certificate are exercised with respect to fewer than
all Shares purchasable, certificates representing Warrants to purchase the
remaining number of Shares will be issued.
The Company shall not be required to issue fractions of Shares upon the
exercise of Warrants, but the holder shall have the right to purchase a whole
Share.
Warrants are transferable at the office of the Company by the Holder
thereof in person or by attorney duly authorized in writing, but only upon
surrender of the Warrant Certificate and the payment of transfer taxes, if any.
Upon any such transfer, a new Warrant Certificate or new Warrant Certificates of
different denominations of like tenor and representing in the aggregate the
right to purchase a like number of Shares, will be issued to the transferee in
exchange for this Warrant Certificate.
This Warrant Certificate, when surrendered at the office of the Company by
the Holder in person or by attorney duly authorized in writing, may be exchanged
for any other Warrant Certificates of different denominations of like tenor and
representing in the aggregate the right to purchase a like number of Shares.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Shares or other securities
purchasable upon the exercise of Warrants are closed for any reason, the Company
shall not be required to make delivery of Certificates for the securities
purchasable upon such exercise until the date of the reopening of said transfer
books.
The Holder shall not be entitled to any of the rights of a shareholder of
the Company prior to exercise hereof.
This Warrant Certificate is not valid unless countersigned by the Warrant
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
COUNTERSIGNED:
OLDE MONMOUTH STOCK TRANSFER CO., INC.
77 Memorial Parkway, Suite 101
Atlantic Highlands, New Jersey 07716
AUTHORIZED SIGNATURE
Dated: ----------------
BLUE THUNDER CORP.
/s/Bridgette Vasile CORPORATE SEAL /s/Edward Reilly
- ------------------ 2000 --------------------
Secretary DELAWARE President
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common and not as community property
UNIFORM GIFTS TO MINORS ACT
(Custodian) (Minor)
under the Uniform Gifts of Minors Act of the State of ------------------
EXERCISE
I or we hereby irrevocably elect to exercise the right of purchase
represented by this certificate to purchase ------ shares of the common stock of
the Company ("Shares") and hereby make payment of ----------------- (number of
shares purchased multiplied by $--) payable to the order of Blue Thunder Corp.,
in payment of the exercise price for such Shares, and request that certificates
for the Shares shall be issued in the name of:
Please insert social security or EIN number
or other identifying number: -------------------------
(Insert name address, including zip code):
- ------------------------------------------------------
- ------------------------------------------------------
And, if such number of Shares shall not be all of the shares purchasable
hereunder, that a new Warrant Certificate or like tenor for the balance of the
remaining Shares purchasable hereunder be delivered to the undersigned at the
address above.
IMPORTANT: The name of the person exercising this warrant must correspond
with the name of the Warrantholder written on the face of this Certificate in
every particular, without alteration or any change whatever, unless it has been
assigned by completing the Assignment form below.
DATED: ---------------- 20-- X---------------------------------------
Signature of Registered Holder
X---------------------------------------
Signature of Registered Holder
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
Please insert social security or EIN number
or other identifying number: -----------------
(Insert name and address, including zip code):
- ----------------------------------------------------
- ----------------------------------------------------
The right to purchase -------------- Shares evidenced by this Warrant, and
does hereby irrevocably constitute and appoint any officer of the Company or its
transfer agent and registrar as lawful Attorney to transfer such right on the
books of the Company with full power of substitution in the premises.
DATED: -------------, 20-- X---------------------------------------
Signature of Registered Holder
X---------------------------------------
Signature of Registered Holder
IMPORTANT: Every registered owner of this Certificate must sign it to
assign or otherwise transfer Warrants. The above signature or signatures must
correspond with the name or names written on the face of this Certificate in
every particular, without alteration, enlargement or any change whatever. Each
signature should be "medallion" guaranteed by an eligible guarantor institution
(Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) with
membership in an approved signature guarantee Medallion Program pursuant to Rule
17Ad-15 of the Securities Exchange Act of 1934.
SIGNATURE GUARANTEE:
WARRANT AGREEMENT
-------------------------
BLUE THUNDER CORP.
AND
OLDE MONMOUTH STOCK TRANSFER CO., INC.
WARRANT AGENT
----------------- , 2000
<PAGE>
WARRANT AGREEMENT
THIS AGREEMENT dated as of ----------------, 2000, between Blue Thunder
Corp., a Delaware corporation (the "Company"), and Olde Monmouth Stock Transfer
Co., Inc. , a transfer agency located in Atlantic Highlands, New Jersey (the
"Warrant Agent") (collectively, the "Parties" and individually a "Party").
WHEREAS: The Company is conducting a public offering (the "Public
Offering") of 2,000,000 units (the "Units") each Unit consisting of one share of
Common Stock, $.001 par value per share ("Common Stock") and three redeemable
common stock purchase warrants ("Warrants"); and
WHEREAS, the Company desires to provide for the issuance, registration,
transfer, exchange and exercise of certificates (the "Warrant Certificates")
representing the Warrants and for the exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrant Certificates and the Warrants, and the respective rights and
obligations thereunder of the Company, the registered holders of the Warrant
Certificates and the Warrant Agent, the Parties agree as follows:
1. Definitions.
As used herein:
(a) "Common Stock" shall mean Common Stock of the Company, whether now or
hereafter authorized, holders of which have the right to participate
in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
(b) "Corporate Office" shall mean the place of business of the Warrant
Agent (or its successor) which office is presently located at 77
Memorial Parkway, Suite 101, Atlantic Highlands, New Jersey 07716.
(c) "Effective Date" shall mean ------------------ , 2000, the date on
which the Company's Registration Statement is declared effective by
the Securities and Exchange Commission.
(d) "Exercise Date" shall mean the date of surrender for exercise of any
Warrant Certificate, provided the exercise form on the back of the
Warrant Certificate or a form substantially similar thereto has been
completed in full by the Registered Owner or a duly appointed attorney
and the Warrant Certificate is accompanied by payment in full of the
Exercise Price.
(e) "Exercise Period" shall mean the period commencing on the Effective
Date and extending to and through the Expiration Date.
(f) "Exercise Price" shall mean $--; provided, however, that in the event
the Company reduces the Exercise Price, the Exercise Price shall be as
established by the Company.
(g) "Expiration Date" shall mean 5:00 P.M. Eastern Time on the last day of
the two year period commencing on the Effective Date, subject to the
terms provided in Section 5 herein for redemption; provided however,
if such date shall be a holiday or a day on which banks are authorized
to close, then Expiration Date shall mean 5:00 p.m., Eastern Time on
the next following day which in the State of New Jersey is not a
holiday or a day on which banks are authorized to close. If the
Company redeems the Warrants as provided in Section 5 of this
Agreement, the Expiration Date shall be the date fixed for redemption.
<PAGE>
(h) "Warrants" shall mean 6,000,000 Warrants to purchase 6,000,000 shares
of Common Stock, all of which will be sold in the Public Offering as
part of the Units.
(i) "Registered Owner" shall mean the person in whose name any Warrant
Certificate shall be registered on the books maintained by the Warrant
Agent pursuant to Section 7 of this Agreement.
(j) "Registration Statement" shall mean the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333- ), as amended.
(k) "Warrant Agent" shall mean Olde Monmouth Stock Transfer Co., Inc. or
any successor, as the transfer agent and registrar of the Warrants.
(l) "Warrant Shares" shall mean and include up to 6,000,000 authorized and
unissued shares of Common Stock reserved for issuance on exercise of
the Warrants, and unless otherwise noted, and any additional shares of
Common Stock or other property which may hereafter be issuable or
deliverable on exercise of the Warrants pursuant to Section 9 of this
Agreement.
2. Warrants and Issuance of Warrant Certificates.
Each Warrant shall initially entitle the Registered Owner of a Warrant
Certificate representing Warrants to purchase one share of Common Stock on the
exercise of each Warrant, subject to modification and adjustment as hereinafter
provided in Section 9. Warrant Certificates representing 6,000,000 Warrants and
evidencing the right to purchase an aggregate of 6,000,000 shares of Common
Stock of the Company shall be executed by the proper officers of the Company and
delivered to the Warrant Agent for countersignature. Warrant Certificates to be
delivered to the Warrant Agent shall be in direct relation to the Units sold in
the Company's Public Offering and shall be attached to certificates representing
an equal number of shares of Common Stock. The Warrant Certificates representing
the Warrants will be issued and delivered on written order of the Company signed
by the proper officers of the Company. The Warrant Agent shall deliver Warrant
Certificates in required whole number denominations to the persons entitled
thereto in connection with any transfer or exchange permitted under this
Agreement.
Except as provided in Section 8 hereof, certificates representing the
Warrant Shares shall be issued only on or after the Exercise Date on exercise of
the Warrants or on transfer or exchange of the Warrant Shares.
3. Form and Execution of Warrant Certificates.
The Warrant Certificates shall be substantially in the form attached as
Exhibit "A" and may have such letters, numbers or other marks of identification
and such legends, summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement. The Warrant Certificates shall be dated as of the
date of issuance, whether on initial issuance, transfer, exchange or in lieu of
mutilated, lost, stolen or destroyed Warrant Certificates.
Each Warrant Certificate shall be initially issued only when attached to a
certificate representing that number of Shares of Common Stock which is
one-fifth the number of Warrants represented by the Warrant Certificate and
shall be separately transferable from the certificate representing the Shares of
Common Stock immediately upon issuance.
<PAGE>
The Warrant Certificates shall be executed on behalf of the Company by its
duly authorized officers, by manual signatures or by facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of the Company's
seal. The Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. In the
event any officer of the Company who executed the Warrant Certificates shall
cease to be an officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature and delivery by the Warrant Agent, such
Warrant Certificates may be countersigned, issued and delivered by the Warrant
Agent with the same force and effect as though the person who signed such
Warrant Certificates had not ceased to be an officer of the Company.
4. Exercise.
The exercise of Warrants in accordance with this Agreement shall only be
permitted during the Exercise Period.
Warrants shall be deemed to have been exercised immediately prior to the
close of business on the Exercise Date. The exercise form shall be executed by
the Registered Owner thereof or the Registered Owner's attorney duly authorized
in writing and shall be delivered together with payment to the Warrant Agent, in
cash or by official bank or certified check, of an amount in lawful money of the
United States of America. Such payment shall be in an amount equal to the
Exercise Price as hereinabove defined.
The person entitled to receive the number of Warrant Shares deliverable on
such exercise shall be treated for all purposes as the Registered Owner of such
Warrant Shares as of the close of business on the Exercise Date. The Company
shall not be obligated to issue any fractional share interests in Warrant
Shares. If Warrants represented by more than one Warrant Certificate shall be
exercised at one time by the same Registered Owner, the number of full Warrant
Shares which shall be issuable on exercise thereof shall be computed on the
basis of the aggregate number of full Warrant Shares issuable on such exercise.
As soon as practicable on or after the Exercise Date and in any event
within 30 days after such date, the Warrant Agent shall cause to be issued and
delivered to the person or persons entitled to receive the same, a certificate
or certificates for the number of Warrant Shares deliverable on such exercise.
No adjustment shall be made in respect of cash dividends on Warrant Shares
deliverable on exercise of any Warrant. The Warrant Agent shall promptly notify
the Company in writing of any exercise and of the number of Warrant Shares
caused to be delivered and shall cause payment of an amount in cash equal to the
Exercise Price to be made promptly to the order of the Company. The Parties
contemplate such payments will be made by the Warrant Agent to the Company on a
weekly basis and will consist of collected funds only. The Warrant Agent shall
hold any proceeds collected and not yet paid to the Company in a
Federally-insured escrow account at a commercial bank selected by agreement of
the Company and the Warrant Agent, at all times relevant hereto. Following a
determination by the Warrant Agent that collected funds have been received, the
Warrant Agent shall cause the Transfer Agent to issue share certificates
representing the number of Warrant Shares purchased by the Registered Owner.
Expenses incurred by the Warrant Agent, including administrative costs, and
the standard fees imposed by the Warrant Agent for the Warrant Agent's services,
shall be paid by the Company and shall be deducted from the Escrow Account prior
to distribution of funds to the Company.
<PAGE>
A detailed accounting statement setting forth the number of Warrants
exercised, the number of Warrant Shares issued, the net amount of exercised
funds and all expenses incurred by the Warrant Agent shall be transmitted to the
Company on payment of each exercise amount. Such accounting statement shall
serve as an interim accounting for the Company during the Exercise Period. The
Warrant Agent shall render to the Company, at the completion of the Exercise
Period, a complete accounting setting forth the number of Warrants exercised,
the identity of persons exercising such Warrants, the number of Warrant Shares
issued, the amounts distributed to the Company, and all expenses incurred by the
Warrant Agent.
The Company may be required to deliver a prospectus that satisfies the
requirements of Section 10 of the Securities Act of 1933, as amended (the "1933
Act") with delivery of the Warrant Shares and must have a registration statement
(or a post-effective amendment to an existing registration statement) effective
under the 1933 Act in order for the Company to comply with any such prospectus
delivery requirements. The Company will advise the Warrant Agent of the status
of any such registration statement under the 1933 Act and of the effectiveness
of the Company's registration statement or lapse of effectiveness.
No issuance of Warrant Shares shall be made unless there is an effective
registration statement under the 1933 Act, and registration or qualification of
the Warrant Shares, or an exemption therefrom, has been obtained from state or
other regulatory authorities in the jurisdiction in which such Warrant Shares
are sold. The Company will provide to the Warrant Agent written confirmation of
all such registration or qualification, or an exemption therefrom, when
requested by the Warrant Agent.
5. Redemption.
Commencing the Effective Date, the Company may, at its option, redeem the
Warrants in whole, but not in part, for a redemption price of $.001 per Warrant,
on not less than 30 days' notice to the Registered Owners. The right to redeem
the Warrants may be exercised by the Company during the Exercise Period only in
the event (i) the closing bid price for Company's shares of Common Stock has
equaled or exceeded $x.xx ($.50 more than the Warrant Exercise Price) for 20
consecutive trading days, (ii) any notice of the call for redemption is given
not more than ten (10) business days after the conclusion of the 20 consecutive
trading days referred to in the foregoing (i), (iii) the Company has a
registration statement (or a post-effective amendment to an existing
registration statement) pertaining to the Warrant Shares effective with the
Securities and Exchange Commission, which registration statement would enable a
Registered Owner to exercise the Warrants, and (iv) the expiration of the 30 day
notice period is within the Exercise Period. In the event the Company exercises
its right to redeem the Warrants, the Expiration Date will be deemed to be, and
the Warrants will be exercisable until the close of business on, the date fixed
for redemption in such notice. If any Warrant called for redemption is not
exercised by such time, it will cease to be exercisable and the Registered Owner
thereof will be entitled only to the redemption price
6. Reservation of Shares and Payment of Taxes.
The Company covenants that it will at all times reserve and have available
from its authorized shares of Common Stock such number of Shares as shall then
be issuable on exercise of all outstanding Warrants. The Company covenants that
all Warrant Shares issuable shall be duly and validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof.
<PAGE>
The Registered Owner shall pay all documentary, stamp or similar taxes and
other government charges that may be imposed with respect to the issuance of the
Warrants, or the issuance, transfer or delivery of any Warrant Shares on
exercise of the Warrants. In the event the Warrant Shares are to be delivered in
a name other than the name of the Registered Owner of the Warrant Certificates,
no such delivery shall be made unless the person requesting the same has paid to
the Warrant Agent or Transfer Agent the amount of any such taxes or charges
incident thereto.
The Company will supply the Warrant Agent with blank Warrant Certificates,
so as to maintain an inventory satisfactory to the Warrant Agent. The Warrant
Agent will also serve as Transfer Agent for the Shares.
7. Registration of Transfer.
The Warrant Certificates may be transferred in whole or in part and may be
separately transferred from the Share Certificate to which such Warrant
Certificate is attached upon initial issuance, if any, at any time during the
Exercise Period. Warrant Certificates to be exchanged shall be surrendered to
the Warrant Agent at its corporate office. The Company shall execute and the
Warrant Agent shall countersign, issue and deliver in exchange therefor, the
Warrant Certificate or Certificates which the holder making the transfer shall
be entitled to receive.
The Warrant Agent shall keep transfer books at its corporate office on
which Warrant Certificates and the transfer thereof shall be registered. On due
presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
All Warrant Certificates presented for registration of transfer or exercise
shall be duly endorsed or be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company and the Warrant Agent.
Prior to due presentment for registration of transfer thereof, the Company
and the Warrant Agent may treat the Registered Owner of any Warrant Certificate
as the absolute owner thereof (notwithstanding any notations of ownership or
writing thereon made by anyone other than the Company or the Warrant Agent) and
the Parties shall not be affected by any notice to the contrary.
8. Loss or Mutilation.
On receipt by the Company and the Warrant Agent of evidence satisfactory as
to the ownership of and the loss, theft, destruction or mutilation of any
Warrant Certificate, the Company shall execute and the Warrant Agent shall
countersign and deliver in lieu thereof, a new Warrant Certificate representing
an equal aggregate number of Warrants. In the case of loss, theft or destruction
of any Warrant Certificate, the Registered Owner requesting issuance of a new
Warrant Certificate shall be required to secure an indemnity bond from an
approved surety bonding company in favor of the Company and Warrant Agent in an
amount satisfactory to each of them. In the event a Warrant Certificate is
mutilated, such Certificate shall be surrendered and cancelled by the Warrant
Agent prior to delivery of a new Warrant Certificate. Applicants for a
substitute Warrant Certificate shall also comply with such other regulations and
pay such other reasonable charges as the Company may prescribe.
<PAGE>
9. Adjustment of Exercise Price and Shares.
(a) If at any time prior to the expiration of the Warrants by their terms
or by exercise, the Company increases or decreases the number of its
issued and outstanding shares of Common Stock, or changes in any way
the rights and privileges of such shares of Common Stock, by means of
(i) the payment of a share dividend or the making of any other
distribution on such shares of Common Stock payable in its shares of
Common Stock, (ii) a split or subdivision of shares of Common Stock,
or (iii) a consolidation or combination of shares of Common Stock,
then the Exercise Price in effect at the time of such action and the
number of Warrants required to purchase each Warrant Share at that
time shall be proportionately adjusted so that the numbers, rights and
privileges relating to the Warrant Shares then purchasable upon the
exercise of the Warrants shall be increased, decreased or changed in
like manner, for the same aggregate purchase price set forth in the
Warrants, as if the Warrant Shares purchasable upon the exercise of
the Warrants immediately prior to the event had been issued,
outstanding, fully paid and non-assessable at the time of that event.
Any dividend paid or distributed on the shares of Common Stock in
shares of any other class of shares of the Company or securities
convertible into shares of Common Stock shall be treated as a dividend
paid in shares of Common Stock to the extent shares of Common Stock
are issuable on the payment or conversion thereof.
(b) In the event, prior to the expiration of the Warrants by exercise or
by their terms, the Company shall be recapitalized by reclassifying
its outstanding shares of Common Stock into shares with a different
par value, or by changing its outstanding shares of Common Stock to
shares without par value or in the event of any other material change
in the capital structure of the Company or of any successor
corporation by reason of any reclassification, recapitalization or
conveyance, prompt, proportionate, equitable, lawful and adequate
provision shall be made whereby any Registered Owner of the Warrants
shall thereafter have the right to purchase, on the basis and the
terms and conditions specified in this Agreement, in lieu of the
Warrant Shares theretofore purchasable on the exercise of any Warrant,
such securities or assets as may be issued or payable with respect to
or in exchange for the number of Warrant Shares theretofore
purchasable on exercise of the Warrants had such reclassification,
recapitalization or conveyance not taken place; and in any such event,
the rights of any Registered Owner of a Warrant to any adjustment in
the number of Warrant Shares purchasable on exercise of such Warrant,
as set forth above, shall continue and be preserved in respect of any
stock, securities or assets which the Registered Owner becomes
entitled to purchase.
(c) In the event the Company, at any time while the Warrants shall remain
unexpired and unexercised, shall sell all or substantially all of its
property, or dissolves, liquidates or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made
as part of the terms of such sale, dissolution, liquidation or winding
up such that the Registered Owner of a Warrant may thereafter receive,
on exercise thereof, in lieu of each Warrant Share which the
Registered Owner would have been entitled to receive, the same kind
and amount of any stock, securities or assets as may be issuable,
distributable or payable on any such sale, dissolution, liquidation or
winding up with respect to each share of Common Stock of the Company;
provided, however, that in the event of any such sale, dissolution,
liquidation or winding up, the right to exercise the Warrants shall
terminate on a date fixed by the Company, such date to be not earlier
than 5:00 P.M., Eastern Time, on the 30th day next succeeding the date
on which notice of such termination of the right to exercise the
Warrants has been given by mail to the Registered Owners thereof at
such addresses as may appear on the books of the Company.
<PAGE>
(d) In the event prior to the expiration of the Warrants by exercise or by
their terms, the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to purchase its shares
of Common Stock at a price per share more than 10% below the
then-current market price per share (as defined below) at the date of
taking such record, then, (i) the number of Warrant Shares purchasable
pursuant to the Warrants shall be redetermined as follows: the number
of Warrant Shares purchasable pursuant to a Warrant immediately prior
to such adjustment (taking into account fractional interests to the
nearest 1,000th of a share) shall be multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock of
the Company outstanding (excluding shares of Common Stock then owned
by the Company) immediately prior to the taking of such record, plus
the number of additional shares offered for purchase, and the
denominator of which shall be the number of shares of Common Stock of
the Company outstanding (excluding shares of Common Stock owned by the
Company) immediately prior to the taking of such record, plus the
number of shares which the aggregate offering price of the total
number of additional shares so offered would purchase at such current
market price; and (ii) the Exercise Price per Warrant Share
purchasable pursuant to a Warrant shall be redetermined as follows:
the Exercise Price in effect immediately prior to the taking of such
record shall be multiplied by a fraction, the numerator of which is
the number of Warrant Shares purchasable immediately prior to the
taking of such record, and the denominator of which is the number of
Warrant Shares purchasable immediately after the taking of such record
as determined pursuant to clause (i) above; provided, however, (i)
that any adjustment in the number of shares issuable as set forth
above shall be effective only to the extent sufficient shares of
Common Stock have bee registered through a registration statement
effective under the 1933 Act, and (ii) that any adjustment in the
Exercise Price does not cause the Company to receive proceeds in
excess of the amount authorized by any such registration statement.
For the purpose hereof, the current market price per share at any date
shall be determined as follows:
(i) The current market price shall be the average of the closing
prices of the Common Stock as reported by the exchange or system
on which the Company's Common Stock trades for 10 consecutive
business days commencing 30 business days prior to the record
date;
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges or so quoted, the current market price shall
be the average of the last reported highest bid and the lowest
asked prices quoted on the National Association of Securities
Dealers, Inc. Automated Quotations System or, if not so quoted,
then by the National Quotation Bureau, Inc. for 10 consecutive
business days commencing 30 business days prior to the record
date; or
(iii)If the Common Stock is not so listed or admitted to unlisted
trading privileges or so quoted, and bid and asked prices are not
reported, the current market price shall be determined in such
reasonable manner as may be prescribed by the Board of Directors.
(e) On exercise of the Warrants by the Registered Owners, the Company
shall not be required to deliver fractions of Warrant Shares;
provided, however, that the Company shall make prompt, proportionate,
equitable, lawful and adequate provisions in respect of any such
fraction of one Warrant Share either on the basis of adjustment in the
then applicable Exercise Price or a purchase of the fractional
interest at the price of the Company's shares of Common Stock or such
other reasonable basis as the Company may determine.
<PAGE>
(f) In the event, prior to expiration of the Warrants by exercise or by
their terms, the Company shall determine to take a record of the
holders of its shares of Common Stock for the purpose of determining
stockholders entitled to receive any stock dividend, distribution or
other right which will cause any change or adjustment in the number,
amount, price or nature of the shares of Common Stock or other stock,
securities or assets deliverable on exercise of the Warrants pursuant
to the foregoing provisions, the Company shall give to the Registered
Owners of the Warrants at the addresses as may appear on the books of
the Company at least 30 days' prior written notice to the effect that
it intends to take such a record. Such notice shall specify the date
as of which such record is to be taken; the purpose for which such
record is to be taken; and the number, amount, price and nature of the
shares of Common Stock or other stock, securities or assets which will
be deliverable o exercise of the Warrants after the action for which
such record will be taken has been completed. Without limiting the
obligation of the Company to provide notice to the Registered Owners
of the Warrants of any corporate action hereunder, the failure of the
Company to give notice shall not invalidate such corporate action of
the Company.
(g) The Warrants shall not entitle the Registered Owner thereof to any of
the rights of stockholders or to any dividend declared on the shares
of Common Stock unless the Warrant is exercised and the Warrant Shares
purchased prior to the record date fixed by the Board of Directors of
the Company for the determination of holders of shares of Common Stock
entitled to such dividend or other right.
(h) Any reduction in the applicable Exercise Price shall be effective upon
written notice to the Warrant Agent, which notice shall be given
pursuant to a duly and validly authorized resolution of the Board of
Directors of the Company. Any such reduction in the Exercise Price
shall not entitle the Registered Owners to issuance of any additional
Common Shares pursuant to the adjustment provisions set forth
elsewhere herein, regardless of whether the reduction in the Exercise
Price was effected either prior to or following exercise of Warrants
by the Registered Owners thereof. A nonexercising Registered Owner
shall have no remedy or rights to receive any additional Warrant
Shares as a result of any reduction in any applicable Exercise Price
pursuant to this subsection.
10. Duties, Compensation and Termination of Warrant Agent.
The Warrant Agent shall act hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificate or the Warrants represented thereby or of the Warrant Shares or
other property delivered on exercise of any Warrant. The Warrant Agent shall not
be under any duty or responsibility to any holder of the Warrant Certificates to
make or cause to be made any adjustment of the Exercise Price or to determine
whether any fact exists which may require any such adjustment.
<PAGE>
The Warrant Agent shall not (i) be liable for any recital or statement of
fact contained herein or for any action taken or omitted by it in reliance on
any Warrant Certificate or other document or instrument believed by it in good
faith to be genuine and to have been signed or presented by the proper Party or
Parties, (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificates, or (iii) be liable for any act or omission in
connection with this Agreement except for its own negligence or willful
misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken or omitted by it in good faith in accordance
with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand of
the Company shall be sufficiently evidenced by an instrument signed by an
officer of the Company. The Warrant Agent shall not be liable for any action
taken or omitted by it in accordance with such notice, statement, instruction,
request, direction, order or demand.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder and to reimburse the Warrant Agent for its reasonable
expenses. The Company further agrees to indemnify the Warrant Agent against any
and all losses, expenses and liabilities, including judgments, costs and counsel
fees, for any action taken or omitted by the Warrant Agent in the execution of
its duties and powers hereunder, excepting losses, expenses and liabilities
arising as a result of the Warrant Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may terminate the
Warrant Agent and the Warrant Agent shall be discharged from all further duties
and liabilities hereunder (except liabilities arising as a result of the Warrant
Agent's own negligence or willful misconduct) on 30 days' prior written notice
to the other Party. Upon notice by the Company to the Warrant Agent, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to the
Registered Owner of each Warrant Certificate. The expenses the Warrant Agent
incurs in mailing such notice shall be paid by the Company. On such resignation
or termination, the Company shall appoint a new Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been
notified in writing of the resignation by the Warrant Agent, then the Registered
Owner of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. Any new Warrant Agent
shall have its principal office in the United States.
After acceptance in writing of an appointment of a new warrant agent is
received by the Company, such new warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; provided, however, if it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed. The
Company shall file a notice of appointment of a new warrant agent with the
resigning Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Owner of each Warrant Certificate.
<PAGE>
Any corporation into which the Warrant Agent or any new Warrant Agent may
be converted or merged, or any corporation resulting from any consolidation to
which the Warrant Agent or any new Warrant Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant Agent
shall be a successor Warrant Agent under this Agreement, provided that such
corporation is eligible for appointment as a successor to the Warrant Agent. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed to the Company and to the Registered Owner of each
Warrant Certificate. No further action shall be required for establishment and
authorization of such successor Warrant Agent.
The Warrant Agent, its officers or directors and it subsidiaries or
affiliates may buy, hold or sell Warrants or other securities of the Company and
otherwise deal with the Company in the same manner and to the same extent and
with like effect as though it were not the Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company.
11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental agreement make any
changes or corrections in this Agreement they shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent provision or mistake or
error herein contained. Additionally, the Parties may make any changes or
corrections deemed necessary which shall not adversely affect the interests of
the Registered Owners of Warrant Certificates; provided, however, this Agreement
shall not otherwise be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Owners of Warrant Certificates
representing not less than a majority of the Warrants outstanding. Additionally,
no change in the number or nature of the Warrant Shares purchasable on exercise
of a Warrant or the Exercise Price therefor shall be made without the consent in
writing of the Registered Owner of the Warrant Certificate representing such
Warrant, other than such changes as are specifically prescribed by this
Agreement.
12. Notices.
All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently in writing and sent by registered or certified mail, return
receipt requested and postage prepaid, or by tested telex, telegram or cable to:
in the case of the Company:
Blue Thunder Corp.
64-34 79th Street
Middle Village
New York 11379
and in the case of the Warrant Agent:
Olde Monmouth Stock Transfer Co., Inc.
77 Memorial Parkway (Suite 101)
Atlantic Highlands New Jersey 07716
and, if requested by the Company to the Registered Owner of a Warrant
Certificate, at the address of such Registered Owner as set forth on the books
maintained by the Warrant Agent.
<PAGE>
13. Persons Benefiting.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns, and the
Registered Owners and beneficial owners from time to time of the Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer on any other person any right, remedy or claim or to impose on any other
person any duty, liability or obligation.
14. Further Instruments.
The Parties shall execute and deliver any and all such other instruments
and shall take any and all such other actions as may be reasonable or necessary
to carry out the intention of this Agreement.
15. Severability.
If any provision of this Agreement shall be held, declared or pronounced
void, voidable, invalid, unenforceable or inoperative for any reason by any
court of competent jurisdiction, government authority or otherwise, such
holding, declaration or pronouncement shall not affect adversely any other
provision of this Agreement, which shall otherwise remain in full force and
effect and be enforced in accordance with its terms, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
16. Waiver.
All the rights and remedies of either Party under this Agreement are
cumulative and not exclusive of any other rights and remedies as provided by
law. No delay or failure on the part of either Party in the exercise of any
right or remedy arising from a breach of this Agreement shall operate as a
waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any Party where required hereunder to any act or
occurrence shall not be deemed to be a consent to any other action or
occurrence.
17. General Provisions.
This Agreement shall be construed and enforced in accordance with, and
governed by, the local laws of the State of New Jersey. Except as otherwise
expressly stated herein, time is of the essence in performing hereunder. This
Agreement embodies the entire agreement and understanding between the Parties
and supersedes all prior agreements and understandings relating to the subject
matter hereof, and this Agreement may not be modified or amended or any term or
provision hereof waived or discharged except in writing signed by the Party
against whom such amendment, modification, waiver or discharge is sought to be
enforced. The headings of this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof. This Agreement may
be executed in any number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first above mentioned.
THE COMPANY:
BLUE THUNDER CORP.
(CORPORATE SEAL)
By:
-----------------------------------
Edward Reilly, President
ATTEST:
- -----------------------------------
Bridget Vasile, Secretary
THE WARRANT AGENT:
OLDE MONMOUTH STOCK TRANSFER CO., INC.
By:
------------------------------------
Title:
ATTEST:
- -------------------------------------
, Secretary
<PAGE>
ESCROW AGREEMENT IN ACCORDANCE WITH RULE 419
UNDER THE SECURITIES ACT OF 1933
ESCROW AGREEMENT dated as of ------- --, 2000 (the "Agreement") by and
between Blue Thunder Corp. a Delaware corporation (the "Company") and
Torrington Savings Bank (the "Escrow Agent") (collectively the "Parties" and,
individually, a "Party").
The Company, through its President, will sell in its public offering (the
"Offering") up to 2,000,000 units (the "Units") each Unit consisting of one
share of common stock, par value $.001 (the "Shares") and three redeemable
common stock purchase warrants (the "Warrants"), as more fully described in the
Company's definitive Prospectus dated ---------------- , 2000 comprising part of
the Company's Registration Statement on Form SB-2 (the "Registration Statement")
under the Securities Act of 1933, (the "Securities Act") (File No.-------)
declared effective on -------------, 2000 (the "Prospectus").
The Company desires that the Escrow Agent accept all offering proceeds,
with no deductions for amounts permitted to be released to the Company under
Rule 419 to the Securities Act ("Rule 419"), a copy of which rule is attached
hereto and made a part hereof, to be derived by the Company from the sale of the
Units (the "Offering Proceeds"), as well as the share and warrant certificates
representing the Shares and Warrants, which constitute the Units, issued in
connection with the Offering, in escrow, to be held and disbursed as hereinafter
provided.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter set forth, the Parties agree as follows:
1. Appointment of Escrow Agent.
The Company hereby appoints the Escrow Agent to act in accordance with and
subject to the terms of this Agreement; and the Escrow Agent hereby accepts such
appointment and will act in accordance with and subject to such terms.
2. Deposit of Offering Proceeds and Share Certificates.
Subject to Rule 419, upon the Company's receipt and acceptance of
subscriptions and Offering Proceeds, the Company shall promptly deliver to the
Escrow Agent such checks in the aggregate amount of the Offering Proceeds drawn
to the order of the Escrow Agent or, alternatively, in the event that checks are
drawn to the order of the Company, they shall be endorsed by the Company for
collection by the Escrow Agent and credited to the Escrow Account.
All share and warrant certificates representing the Shares and Warrants,
respectively, issued in connection with the Offering shall also be deposited by
the Company directly into the Escrow Account promptly upon issuance. The
identity of the purchasers of the securities shall be included on the stock and
warrant certificates and other documents evidencing such securities. Securities
held in the Escrow Account are to remain as issued and deposited and shall be
held for the sole benefit of the purchasers, who shall have voting rights with
respect to securities held in their names. No transfer or other disposition of
securities held in the Escrow Account or any interest related to such securities
shall be permitted other than by will or the laws of descent and distribution,
or pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of 1986 as amended, or Title 1 of the Employee Retirement Income
Security Act and the rules thereunder.
<PAGE>
Warrants, convertible securities or other derivative securities, if any,
relating to securities held in the Escrow Account may be exercised or converted
in accordance with their terms; provided however, that securities received upon
exercise or conversion, together with any cash or other consideration paid in
connection with the exercise or conversion, are promptly deposited into the
Escrow Account.
3. Disbursement of the Escrow Account.
Upon the earlier of (i) receipt by the Escrow Agent of a signed
representation from the Company to the Escrow Agent, that the requirements of
Rule 419 have been met, and consummation of an acquisition meeting the
requirements of Rule 419 or (ii) written notification from the Company to the
Escrow Agent to deliver the Offering Proceeds to another escrow agent in
accordance with Paragraph 4 then, in such event, the Escrow Agent shall disburse
the Offering Proceeds (inclusive of any interest thereon) to the Company and the
securities to the purchasers or registered holders identified on the deposited
securities or deliver the Offering Proceeds and securities to such other escrow
agent, as the case may be, whereupon the Escrow Agent shall be released from
further liability hereunder.
Notwithstanding the foregoing, if the Company has not informed the Escrow
Agent within 18 months after the date of the Prospects in writing that an
acquisition meeting the requirements of Rule 419 has occurred, funds held in the
Escrow Account shall be returned by first class mail or equally prompt means pro
rata to the purchasers and all securities held in the Escrow Account shall be
returned to the Company within five business days following that date.
4. Concerning the Escrow Agent.
The Escrow Agent shall not be liable for any actions taken or omitted by
it, or any action suffered by it to be taken or omitted by it, in good faith and
in the exercise of its own best judgment, and may rely conclusively and shall be
protected in acting upon any order, notice demand, certificate, opinion or
advice of counsel (including counsel chosen by the Escrow Agent), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provision, but also as to the truth
and acceptability of any information therein contained) which is believed by the
Escrow Agent to be genuine and to be signed or presented by the proper person or
person.
The Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper Party or Parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto.
The Escrow Agent shall not be responsible for the sufficiency or accuracy,
the form of, or the execution validity, value or genuineness of any document or
property received, held or delivered by it hereunder, or of any signature or
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein, nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the person executing
or delivering or purporting to execute or deliver any document or property paid
or delivered by the Escrow Agent under the provisions hereof.
<PAGE>
The Escrow Agent shall not be liable for any loss which may be incurred by
reason of any investment of any monies or properties which it holds hereunder.
The Escrow Agent shall have the right to assume, in the absence of written
notice to the contrary from the proper person or persons, that a fact or an
event by reason of which an action would or might be taken by the Escrow Agent
does not exist or has not occurred, without incurring liability for any action
taken or omitted, in good faith and in the exercise of its own best judgment, in
reliance upon such assumption.
The Escrow Agent shall be indemnified and held harmless by the Company from
and against any expenses, including counsel fees and disbursements, or loss
suffered by the Escrow Agent in connection with any action, suit or other
proceeding involving any claim, or in connection with any claim or demand, which
in any way directly or indirectly arises out of or relates to this Agreement,
the services of the Escrow Agent hereunder, the monies or other property held by
it hereunder or any such expense or loss. Promptly after the receipt by the
Escrow Agent of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Escrow Agent shall, if a claim in respect thereof shall
be made against the other Parties, notify such Parties in writing; but the
failure by the Escrow Agent to give such notice shall not relieve any Party form
any liability which such Party may have to the Escrow Agent hereunder. Upon the
receipt of such notice, the Escrow Agent, in its sole discretion, may commence
an action in the nature of interpleader in an appropriate court to determine
ownership or disposition of the Escrow Account or it may deposit the Escrow
Account with the clerk of any appropriate court or it may retain the Escrow
Account pending receipt of a final, non-appealable order of a court having
jurisdiction over all of the Parties directing to whom and under what
circumstances the Escrow Account is to be disbursed and delivered.
The Escrow Agent shall be entitled to reasonable compensation from the
Company for all services rendered by it hereunder.
From time to time on and after the date hereof, the Company shall deliver
or cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow
Agent shall reasonably request (it being understood that the Escrow Agent shall
have no obligation to make such request) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure itself that it is protected in acting hereunder.
The Escrow Agent may resign at any time and be discharged from its duties
as Escrow Agent hereunder by its giving the Company at least thirty (30) days'
prior written notice thereof. As soon as practicable after its resignation, the
Escrow Agent shall turn over to a successor escrow agent appointed by the
Company, all monies and property held hereunder upon presentation of the
document appointing the new escrow agent and its acceptance thereof. If no new
escrow agent is so appointed in the sixty (60) day period following the giving
of such notice of resignation, the Escrow Agent may deposit the Escrow Account
with any court it deems appropriate.
The Escrow Agent shall resign and be discharged form its duties as Escrow
Agent hereunder if so requested in writing at any time by the Company, provided,
however, that such resignation shall become effective only upon acceptance of
appointment by a successor escrow agent as provided above. Notwithstanding
anything herein to the contrary, the Escrow Agent shall not be relieved from
liability thereunder for its own gross negligence or its own willful misconduct.
<PAGE>
5. Miscellaneous.
This Agreement shall for all purposes be deemed to be made under and shall
be construed in accordance with the internal laws of the State of Delaware.
This Agreement contains the entire agreement of the Parties with respect to
the subject matter hereof and, except as expressly provided herein, may not be
changed or modified except by an instrument in writing signed by the Party to be
charged.
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation thereof.
This Agreement shall be binding upon and inure to the benefit of the
respective Parties and their legal representatives, successors and assigns.
Any notice or other communication required or which may be given hereunder
shall be in writing and either be delivered personally or be mailed, certified
or registered mail, return receipt requested, postage prepaid, and shall be
deemed given when so delivered personally or, if mailed, two (2) days after the
date of mailing. The Parties may change the persons and addresses to which the
notices or other communications are to be sent by giving written notice to any
such change in the manner provided herein for giving notice.
WITNESS the execution of this Agreement as of the date first above written.
BLUE THUNDER CORP.
By: /s/
------------------------------
Edward Reilly, President
This Escrow Agreement is accepted as of the ----- day of ----------, 2000.
TORRINGTON SAVINGS BANK
By: ------------------------------
Authorized Representative
<PAGE>
Roger Fidler, Esq.
163 South St.
Hackensack New Jersey 07601
April 26, 2000
Securities and Exchange Commission
Washington, D.C.
Re: Blue Thunder Corp.
To Whom It May Concern:
Blue Thunder Corp.(the "Company") is a corporation duly incorporated and
validly existing and in good standing under the laws of the State of Delaware.
The Company has full corporate powers to own its property and conduct its
business, as such business is described in the prospectus which is a part of a
registration statement on Form SB-2. The Company is qualified to do business as
a foreign corporation in good standing in every jurisdiction in which the
ownership of property and the conduct of business requires such qualification.
This opinion is given in connection with the registration with the
Securities and Exchange Commission of one million (2,000,000) units, ("Units")
each Unit consisting of one share of common stock ("Share") and three redeemable
common stock purchase warrants ("Warrant") at a price per unit of $0.02, for
sale in the Company's proposed public offering.
I have acted as counsel to the company in connection with the preparation
of the Registration Statement on Form SB-2, pursuant to which the Units (each
consisting of one Share and three Warrants), and Shares underlying the Warrants
are being registered and, in so acting, I have examined the originals and copies
of the corporate instruments, certificates and other documents of the Company
and interviewed representatives of the Company to the extent I deemed it
necessary in order to form the basis for the opinion hereafter set forth. In
such examination, I have assumed the genuineness of all signatures and
authenticity of all documents submitted to me as certified or photostatic
copies. As to all questions of fact material to this opinion which have not been
independently established, I have relied upon statements or certificates of
officers or representatives of the Company.
All of the 2,000,000 Shares contained in the Units and 6,000,000 Shares
underlying the Warrants which are being registered are now authorized but
unissued Shares. The Warrants which are part of the Units have been authorized
by the board of directors of the Company
Based upon the foregoing, I am of the opinion that the 2,000,000 Shares,
being registered for sale by the Company as part of the Units when issued and
sold pursuant to this Registration Statement and the 6,000,000 Shares underlying
the Warrants which are likewise part of the Units, when exercised, will be
legally issued, fully paid and non-assessable and there will be no personal
liability to investors and holders of the Warrants who exercise them.
/s/Roger Fidler
---------------------
Roger Fidler
Exhibit 23.1
Consent of Thomas Monahan CPA
<PAGE>
CONSENT
I, Thomas Monahan, hereby consent to the use of my report dated February
10, 2000, relating to the audited financial statements for period from inception
(February 2, 2000) to March 31, 2000 in a registration statement on SB-2 of Blue
Thunder Corp. to be filed with the Securities and Exchange Commission.
April 26, 2000
/s/Thomas Monahan
------------------
Thomas Monahan CPA
Exhibit 23.2
Consent of Roger Fidler, Esq.
<PAGE>
CONSENT
I, Roger Fidler, hereby consent to the use of my opinion dated April 26,
2000 and my name under the caption "Legal Matters" in the SB-2 Registration
Statement and prospectus, and any amendments thereto, as filed with the
Securities and Exchange Commission. of Blue Thunder Corp. to be filed with the
Securities and Exchange Commission.
/s/Roger Fidler
---------------------
Roger Fidler
Dated: April 26, 2000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule March 31, 2000
</LEGEND>
<CIK> 0001107635
<NAME> Blue Thunder Corp.
This schedule contains summary financial information
extracted from financial statements for the period from
inception, February 2, 2000, to March 31, 12000 and is
qualified in its entirety by reference to such financial
statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> FEB-2-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,904
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,904
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,500
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,500
<OTHER-SE> 17,950
<TOTAL-LIABILITY-AND-EQUITY> 20,500
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 5,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (5,000)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,000)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
