<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 6770 APPLIED FOR
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification Number)
Incorporation or Organization) Classification Code Number)
</TABLE>
245 FIFTH AVENUE--SUITE 1500
NEW YORK, NEW YORK 10016
(212) 696-4282
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------------------
LAWRENCE BURSTEIN, PRESIDENT
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
245 Fifth Avenue--Suite 1500
New York, New York 10016
(212) 696-4282
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
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IRA I. ROXLAND, ESQ. DAVID ALAN MILLER, ESQ.
STEPHEN E. FOX, ESQ. GRAUBARD MOLLEN & MILLER
COOPERMAN LEVITT WINIKOFF 600 Third Avenue
LESTER & NEWMAN, P.C. New York, New York 10016
800 Third Avenue (212) 818-8800
New York, New York 10022 Fax: (212) 818-8881
(212) 688-7000
Fax: (212) 755-2839
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / / / / ________----------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Units, consisting of one share of Common Stock,
$.0001 par value, and one Class A Warrant(2)....... 1,955,000 uts. $6.00 $11,730,000 $3,096.72
Underwriters' Unit Purchase Option................... 170,000 uts. -- $100 (3)
Units, issuable upon exercise of the underwriters'
Unit Purchase Option, consisting of one share of
Common Stock, $.0001 par value, and one Class A
Warrant(4)......................................... 170,000 uts. $6.60 $1,122,000 $296.21
Class A Warrants, each to purchase one share of
Common Stock and one-half of a Class B
Warrant(5)......................................... 200,000 wts. -- -- (3)
Class B Warrants, each to purchase one share of
Common Stock(6).................................... 1,162,500 wts. -- -- (3)
Common Stock, $.0001 par value, issuable upon
exercise of Class A Warrants(7).................... 2,325,000 shs. $5.00 $11,625,000 $3,069.00
Common Stock, $.0001 par value, issuable upon
exercise of Class B Warrants(7).................... 1,162,500 shs. $7.50 $8,718,750 $2,301.75
Total................................................ $8,763.68
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Includes 255,000 units issuable pursuant to the underwriters' over-allotment
option.
(3) No fee pursuant to Rule 457(g).
(4) Includes such presently indeterminate number of additional units as may be
issued pursuant to the anti-dilution provisions of the underwriters' unit
purchase option.
(5) Represents outstanding warrants which may be sold by a warrantholder
commencing six months after the consummation of a business combination as
described in this registration statement.
(6) Includes such presently indeterminate number of additional Class B warrants
as may be issued pursuant to the anti-dilution provisions of the Class A
warrants.
(7) Includes such presently indeterminate number of additional shares of common
stock as may be issued pursuant to the respective anti-dilution provisions
of the Class A warrants and the Class B warrants.
----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, MAY 11, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
1,700,000 UNITS
------------------
This is an initial public offering of our securities. Each unit consists of:
- one share of our common stock; and
- one Class A warrant.
The Class A warrants entitle each holder to purchase:
- one share of our common stock; and
- one-half of one Class B warrant
at a price of $5.00 commencing on the later of our completion of a business
combination or , 2001 [one year from the date of this prospectus]
and continuing through , 2006 [six years from the date of this
prospectus].
The Class B warrants entitle each holder to purchase one share of our common
stock at a price of $7.50 per share commencing on the later of our completion of
a business combination or , 2001 [one year from the date of this
prospectus] and continuing through , 2006 [six years from the date
of this prospectus].
The Class A warrants and Class B warrants may be redeemed by us under
certain conditions at a price of $0.05 per warrant at any time after they become
exercisable.
In considering this offering, you should know that:
- there is presently no public market for our units, common stock or
warrants;
- our common stock and Class A warrants will not trade separately until the
occurrence of certain events;
- we have granted the underwriters a 45-day option to purchase up to 255,000
additional units solely to cover any over-allotments, if any; and
- Our officers and directors and their affiliates have agreed with the
underwriters to purchase an aggregate of 125,000 units in this offering.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6. THIS OFFERING IS NOT SUBJECT TO THE PROTECTION OF
THE SEC'S RULES RELATING TO "BLANK CHECK" OFFERINGS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<CAPTION>
PER UNIT TOTAL
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Public offering price.................................. $6.00 $10,200,000
Underwriting discounts................................. $0.42 $ 714,000
Proceeds, before expenses, to us....................... $5.58 $ 9,486,000
</TABLE>
Gaines, Berland Inc., on behalf of the underwriters, expects to deliver our
securities to purchasers on or about , 2000.
------------------------
GAINES, BERLAND INC. EARLYBIRDCAPITAL, INC.
THE DATE OF THIS PROSPECTUS IS , 2000
<PAGE>
STATE BLUE SKY INFORMATION
We will only offer and sell the units in Delaware, the District of Columbia,
Florida, Hawaii, Illinois, Maryland, New York and Rhode Island. Additionally, we
believe that the units, upon completion of this offering, and the common stock
and Class A warrants comprising the units, once they become separately
transferable, will be eligible for sale on a secondary market basis in each such
state and in Iowa and Pennsylvania. Purchasers of such securities either in this
offering or in any subsequent trading market which may develop must be residents
of such states. We will amend this prospectus for the purpose of disclosing
additional states, if any, in which our securities will be eligible for resale
in the secondary trading market.
------------------------
TABLE OF CONTENTS
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PAGE
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Prospectus Summary.......................................... 1
The Offering................................................ 2
Risk Factors................................................ 6
Use of Proceeds............................................. 10
Dilution.................................................... 11
Capitalization.............................................. 12
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 13
Proposed Business........................................... 14
Management.................................................. 22
Principal Stockholders...................................... 26
Certain Transactions........................................ 28
Description of Securities................................... 30
Underwriting................................................ 34
Legal Matters............................................... 36
Experts..................................................... 36
Where You Can Find Additional Information................... 37
Index to Financial Statements............................... 38
</TABLE>
Until , 2000, all dealers selling these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the obligation of dealers to deliver a prospectus when acting as
an underwriter and with respect to their unsold allotments or subscriptions.
i
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SOME OF THE INFORMATION IN THIS PROSPECTUS. IT MAY
NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. FOR A MORE COMPLETE
UNDERSTANDING OF THIS OFFERING, YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,
INCLUDING THE RISK FACTORS AND THE FINANCIAL STATEMENTS. UNLESS WE TELL YOU
OTHERWISE, THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITERS WILL
NOT EXERCISE THEIR OVER-ALLOTMENT OPTION.
We are a blank check company formed to effect a merger, exchange of capital
stock, asset acquisition or other similar business combination with an as yet
unidentified operating business which we believe has significant growth
potential. We intend to focus our efforts in identifying a prospective target in
the following industries:
- internet and other new media products and services; and
- communications and entertainment.
We intend to utilize cash derived from the proceeds of this offering, our
capital stock, debt or a combination of cash, capital stock and debt in
effecting a business combination. While we may, under certain circumstances,
seek to effect business combinations with more than one target business, our
initial business combination must be with a target business whose fair market
value is at least equal to 80% of our net assets at the time of such
acquisition. Consequently, it is likely that the we will have the ability to
effect only a single business combination.
To date, our efforts have been limited to organizational activities. The
implementation of our business plan is wholly contingent upon the successful
sale of the units offered by this prospectus.
We were organized under the laws of the State of Delaware on March 17, 2000.
Our offices are located at 245 Fifth Avenue, Suite 1500, New York, New York
10016, and our telephone number is (212) 696-4282.
<PAGE>
THE OFFERING
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Securities offered........................... 1,700,000 units, at $6.00 per unit, each unit
consisting of:
- one share of common stock; and
- one Class A warrant.
The common stock and Class A warrants will
begin to trade separately on the 90(th) day
after the date of this prospectus unless
Gaines, Berland informs us of its decision to
allow earlier separate trading. In no event,
however, can the common stock and Class A
warrants be traded separately until we file
with the SEC an audited balance sheet
reflecting our receipt of the proceeds of
this offering.
Common stock:
Number outstanding prior to this
offering................................. 750,000 shares
Number to be outstanding after this
offering................................. 2,450,000 shares
Class A Warrants:
Number outstanding prior to this
offering................................. 200,000 warrants
Number to be outstanding after this
offering................................. 1,900,000 warrants
Securities underlying Class A warrants..... Each Class A warrant is exercisable into one
share of common stock and one-half of a Class
B warrant.
Exercise price............................. The exercise price of each Class A warrant is
$5.00, subject to adjustment.
Exercise period............................ The Class A warrants will become exercisable
on the later of:
- the completion of a business combination
with a target business; or
- , 2001 [one year from the date of
this prospectus], and will expire at
5:00 p.m., New York City time, on ,
2006 [six years from the date of this
prospectus].
Redemption................................. We may redeem the outstanding Class A
warrants, in whole and not in part, at our
option and with the underwriters' consent, at
a price of $.05 per Class A warrant at any
time after the Class A warrants become
exercisable upon not less than 30 days' prior
written notice, provided that the reported
last sale price of our common stock equals or
exceeds $7.50 per share, for the 20
consecutive trading days ending on the third
day prior to the notice of redemption.
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2
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Class B Warrants:
Number to be outstanding after this No Class B warrants will be outstanding until
offering................................. the Class A warrants are exercised.
Securities underlying Class B warrants..... Each Class B warrant will be exercisable into
one share of common stock.
Exercise price............................. The exercise price of each Class B warrant is
$7.50, subject to adjustment.
Exercise period............................ The Class B warrants will become exercisable
on the later of:
- the completion of a business combination
with a target business; or
- , 2001 [one year from the date of
this prospectus], and will expire at
5:00 p.m., New York City time, on ,
2006 [six years from the date of this
prospectus].
Redemption................................. We may redeem the outstanding Class B
warrants, in whole and not in part, at our
option and with the underwriters' consent, at
a price of $.05 per Class B warrant at any
time after the Class B warrants become
exercisable upon not less than 30 days' prior
written notice, provided that the reported
last sale price of our common stock equals or
exceeds $10.00 per share, for the 20
consecutive trading days ending on the third
day prior to the notice of redemption.
Proposed OTC Bulletin Board symbols for our:
Units...................................... UETVU
Common Stock............................... UETV
Class A Warrants........................... UETVA
Offering proceeds to be held in trust........ $8,653,000 of the proceeds of this offering
will be placed in a trust fund. Such proceeds
will not be released until the earlier of the
completion of a business combination or our
liquidation.
Stockholder approval of business We will seek stockholder approval before we
combination.................................. effect any business combination. We will not
effect a business combination if:
- stockholders purchasing shares in this
offering, I.E., public stockholders, who own
at least a majority of the shares sold in
this offering, vote against the
transaction; or
- public stockholders owning more than 20% of
the shares sold in this offering exercise
their conversion rights.
</TABLE>
3
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<TABLE>
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Conversion rights............................ Each public stockholder presented with the
right to vote on a business combination may,
if he votes no, demand that his stock be
converted into his pro rata share of the
trust fund if the business combination is
approved and completed. Without taking into
account any interest earned on the trust
fund, the per-share conversion price would be
$5.09, or $.81 less than the per-unit
offering price.
Escrow of principals' common stock........... Common stock and warrants held by our
officers, directors and their affiliates,
representing in the aggregate approximately
53.4% of our outstanding common stock prior
to this offering, as well as those units to
be purchased by our officers, directors and
their affiliates in this offering, will be
placed in an escrow account until six months
following the completion of a business
combination or our liquidation.
Liquidation if no business combination....... In the event we do not effect a business
combination within 24 months or, in certain
circumstances, within 30 months, from the
date of this offering, we will dissolve and
distribute to our public stockholders the
amount in our trust fund plus any remaining
net assets, unless we determine to seek
stockholder approval to continue our
existence.
</TABLE>
4
<PAGE>
SUMMARY FINANCIAL DATA
The following table summarizes financial data for our business and should be
read in conjunction with our financial statements, which are included in this
prospectus. Our company was formed in March 2000 and will not commence
commercial operations until after this offering is completed.
<TABLE>
<CAPTION>
MARCH 31, 2000
----------------------
ACTUAL AS ADJUSTED
-------- -----------
<S> <C> <C>
Balance Sheet Data:
Total assets........................................... $250 $8,955,250
Working capital (deficit).............................. 75 8,955,075
Total liabilities...................................... 175 --
Value of common stock subject to possible conversion... -- 1,729,735
Stockholders' equity (deficit)......................... 75 7,225,340
</TABLE>
The information presented in this table under the "As Adjusted" column gives
effect to:
- the sale of 1,700,000 units in this offering at $6.00 per unit;
- our receipt of $8,955,000 of net proceeds in this offering; and
- $8,653,000 of such net proceeds being deposited in a trust fund which will
be available to us only upon the completion of a business combination
within the time period described in this prospectus. If we are unable to
complete a business combination, we will be dissolved and the proceeds
held in the trust fund will be distributed to the public stockholders. If
we effect a business combination, the conversion rights to the public
stockholders may result in the conversion into cash of up to approximately
19.99% of the aggregate number of public shares at a per-share conversion
price equal to the amount in the trust fund as of the record date for the
determination of stockholders entitled to vote on the business
combination, inclusive of any interest, divided by the number of public
shares.
5
<PAGE>
RISK FACTORS
AN INVESTMENT IN OUR SECURITIES INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISKS DESCRIBED BELOW TOGETHER WITH THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS BEFORE MAKING A DECISION TO INVEST IN OUR UNITS.
SINCE WE ARE NOT SUBJECT TO THE SEC BLANK CHECK OFFERING RULES, YOU WILL NOT
BE ENTITLED TO THE PROTECTIONS NORMALLY AFFORDED TO INVESTORS OF BLANK CHECK
COMPANIES
We are exempt from rules promulgated by the SEC to protect investors of
blank check companies since we will have net tangible assets in excess of
$5,000,000 upon the successful completion of this offering. Accordingly,
investors will not be afforded the benefits or protections of such rules.
WE WILL NOT GENERATE ANY REVENUE UNTIL, AT THE EARLIEST, THE COMPLETION OF A
BUSINESS COMBINATION
Our resources are limited to the proceeds we receive in this offering. We
have had no revenues to date, nor will we achieve any revenues, other than
interest income on the proceeds of this offering, until, at the earliest, the
completion of a business combination. Moreover, there can be no assurance that
any business we combine with, either at the time of or after the business
combination, will derive any material revenues from its operations or operate on
a profitable basis.
IF WE ARE DEEMED TO BE SUBJECT TO THE INVESTMENT COMPANY ACT OF 1940, WE MAY
BE REQUIRED TO INSTITUTE BURDENSOME COMPLIANCE REQUIREMENTS AND BE SUBJECT
TO RESTRICTIONS RELATING TO OUR ACTIVITIES
The regulatory scope of the Investment Company Act of 1940, which was
enacted principally for the purpose of regulating vehicles for pooled
investments in securities, extends generally to companies engaged primarily in
the business of investing, reinvesting, owning, holding or trading in
securities. The Investment Company Act may, however, also be deemed to be
applicable to a company which does not intend to be characterized as an
investment company but which, nevertheless, engages in activities which may be
deemed to be within the definitional scope of certain provisions of the
Investment Company Act. While we do not believe that our anticipated principal
activities will subject us to regulation under the Investment Company Act, there
can be no assurance that we will not be deemed to be an investment company,
especially during the period prior to a business combination. In the event we
are deemed to be an investment company, we may become subject to certain
restrictions relating to our activities, including:
- restrictions on the nature of our investments; and
- the issuance of securities,
and have imposed upon us certain requirements, including:
- registration as an investment company;
- adoption of a specific form of corporate structure; and
- compliance with certain burdensome reporting, recordkeeping, voting, proxy
and disclosure requirements and other rules and regulations.
In the event of our characterization as an investment company, we would be
required to comply with such additional regulatory burdens which would require
additional expense we have not allotted for such purposes.
6
<PAGE>
IF WE ARE FORCED TO LIQUIDATE PRIOR TO A BUSINESS COMBINATION, OUR PUBLIC
STOCKHOLDERS WILL RECEIVE LESS THAN $6.00 PER SHARE UPON DISTRIBUTION OF THE
TRUST FUND AND OUR REMAINING ASSETS
If we are unable to effect a business combination and if we do not seek
stockholder approval to continue our operations, or such stockholder approval is
not obtained, we will liquidate our assets and distribute to our public
stockholders in proportion to their respective equity interests in our company:
- the net proceeds of this offering remaining in our trust fund;
- interest earned on the trust fund; and
- any remaining net assets.
In the event of any such liquidation, the per-share liquidation distribution
will be less than $6.00 per-share as a consequence of the expenses of this
offering and our anticipated costs incurred in seeking a business combination.
Furthermore, there will be no distribution from the trust fund with respect
to our outstanding warrants and, accordingly, the warrants will expire worthless
in the event we liquidate prior to the completion of a business combination.
OUR OFFICERS AND DIRECTORS MAY HAVE A CONFLICT OF INTEREST ALLOCATING
MANAGEMENT TIME WHICH MAY BE TO THE DETRIMENT OF OUR STOCKHOLDERS
Our officers and directors are not required to commit their full time to our
affairs, which may result in a conflict of interest in allocating management
time between our operations and other businesses. Such conflict may not be in
the best interest of our stockholders.
SINCE WE HAVE NOT AS YET SELECTED A PARTICULAR INDUSTRY OR ANY TARGET
BUSINESS WITH WHICH TO EFFECT A BUSINESS COMBINATION, WE ARE UNABLE TO
ASCERTAIN THE MERITS OR RISKS OF THE INDUSTRY OR BUSINESS IN WHICH WE MAY
ULTIMATELY OPERATE
We have not selected any particular industry or any target business on which
to concentrate our search for a business combination. Accordingly, there is no
current basis for prospective investors to evaluate the possible merits or risks
of the particular industry or the target business in which we may ultimately
operate. We will become subject to numerous risks inherent to the business
operations of any company with which we effect a business combination. Although
our management will endeavor to evaluate the risks inherent in a particular
industry or target business, there can be no assurance that we will properly
ascertain or assess all such significant risk factors.
OUR MANAGEMENT MAY NOT BE CORRECT IN ASSESSING THE MANAGEMENT OF A POTENTIAL
TARGET BUSINESS
There can be no assurance that our assessment of the skills, qualifications
or abilities of the management of a prospective target business will prove to be
correct, especially in light of the possible inexperience of our officers and
directors in evaluating certain types of businesses. In addition, there can be
no assurance that, despite a positive assessment by our management, the
management of a prospective target business will have the necessary skills,
qualifications or abilities to manage a public company intending to embark on a
program of business development.
LIMITATIONS ON EFFECTING OUR INITIAL BUSINESS COMBINATION MAKES IT LIKELY
THAT WE WILL ONLY BE ABLE TO EFFECT A BUSINESS COMBINATION WITH ONE COMPANY,
WHICH WOULD CAUSE OUR STOCKHOLDERS TO BE ENTIRELY DEPENDENT UPON THE FUTURE
PERFORMANCE OF A SINGLE BUSINESS OR PRODUCT
Our initial business combination must be with a business with a fair market
value of at least 80% of our net assets at the time of such acquisition.
Consequently, it is likely that we will have the ability to effect only a single
business combination and be unable to diversify our operations or benefit from
the possible spreading of risks or offsetting of losses. Our probable lack of
diversification may subject
7
<PAGE>
us to numerous economic, competitive and regulatory developments, any or all of
which may have a substantial adverse impact upon the particular industry in
which we may operate subsequent to a business combination. Accordingly, our
prospects for success will be entirely dependent upon the future performance of
a single business or product.
WE MAY ISSUE SHARES OF OUR COMMON STOCK AND/OR PREFERRED STOCK TO EFFECT A
BUSINESS COMBINATION, WHICH WOULD REDUCE THE EQUITY INTEREST OF OUR
STOCKHOLDERS
We may issue shares of our common stock or preferred stock, or a combination
of common and preferred stock, to effect a business combination. The issuance of
additional shares of our common stock or any number of shares of our preferred
stock may:
- significantly reduce the equity interest of our stockholders;
- possibly cause a change in control if a substantial number of our shares
of common stock are issued in connection with a business combination which
may affect, among other things, our ability to utilize our net operating
loss carryforwards, if any;
- adversely affect prevailing market prices for our common stock; and
- impair our ability to raise additional capital through the sale of our
equity securities.
Additionally, to the extent we issue shares of common stock to effect a business
combination, the potential for the issuance of substantial numbers of additional
shares upon exercise of our Class A warrants could increase our cost of the
target business in terms of number of shares required to be issued.
WE MAY SEEK ADDITIONAL FINANCING TO COMPLETE A BUSINESS COMBINATION OR TO
FUND THE OPERATIONS AND GROWTH OF THE TARGET BUSINESS
We may seek additional financing to complete a business combination or to
fund the operations and growth of a target business, which may include assuming
or refinancing the indebtedness of the target business. There can be no
assurance that such financing would be available on acceptable terms, if at all.
To the extent that such additional financing proves to be unavailable when
needed to complete a particular business combination, we would, in all
likelihood, be compelled to restructure the transaction or abandon that
particular business combination and seek an alternative candidate. In addition,
our failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business.
IF WE LOSE THE SERVICES OF LAWRENCE BURSTEIN, WE WOULD HAVE DIFFICULTY
FINDING A SUITABLE TARGET BUSINESS FOR A BUSINESS COMBINATION
Our ability to successfully effect a business combination will be largely
dependent upon the efforts of Lawrence Burstein, our president. We have not
entered into an employment agreement with Mr. Burstein or obtained any "key man"
life insurance on his life. The loss of Mr. Burstein's services could have a
material adverse effect on our ability to successfully achieve our business
objectives, including seeking a suitable target business to effect a business
combination.
8
<PAGE>
OUR WARRANTHOLDERS MAY BE UNABLE TO EXERCISE THEIR CLASS A WARRANTS IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT, WHICH WOULD DEPRIVE SUCH
WARRANTS OF ANY VALUE AND LIMIT THE MARKET OF SUCH WARRANTS
We will be able to issue shares of our common stock and Class B warrants
upon exercise of the Class A warrants only if:
- there is a then-current prospectus relating to the common stock and
Class B warrants issuable upon the exercise of the Class A warrants under
an effective registration statement filed with the SEC; and
- only if such common stock and Class B warrants are qualified for sale or
exempt from qualification under applicable state securities laws of the
jurisdictions in which the various holders of Class A warrants reside.
Although we have agreed to meet these conditions, we cannot assure investors
that we will be able to do so. The Class A warrants may be deprived of any value
and the market for the Class A warrants may be limited if a then-current
prospectus covering the common stock and Class B warrants issuable upon the
exercise of the Class A warrants is not effective pursuant to an effective
registration statement or if such common stock and Class B warrants are not
qualified or exempt from qualification in the jurisdictions in which the holders
of the Class A warrants reside.
OUR EXISTING STOCKHOLDERS WILL CONTINUE TO CONTROL OUR AFFAIRS, WHICH MAY
PRECLUDE OTHER STOCKHOLDERS FROM INFLUENCING OUR CORPORATE DECISIONS
Upon completion of this offering, our existing stockholders, which includes
our officers and directors, collectively, will beneficially own approximately
35.7% of the then issued and outstanding shares of our common stock. These
stockholders may be able to effectively exercise control over all matters
requiring approval by our stockholders, including the election of directors and
approval of significant corporate transactions other than approval of a business
combination.
WE INTEND TO HAVE OUR SECURITIES QUOTED ON THE OTC BULLETIN BOARD, WHICH MAY
ADVERSELY AFFECT THE LIQUIDITY AND PRICE OF OUR SECURITIES
Our securities will be traded in the over-the-counter market. It is
anticipated that they will be quoted on the OTC Bulletin Board, an NASD
sponsored and operated inter-dealer automated quotation system for equity
securities not included in The Nasdaq Stock Market, as well as in the NQB Pink
Sheets. Although we believe that the OTC Bulletin Board has been recognized by
the brokerage community as an acceptable alternative to the NQB Pink Sheets,
there can be no assurance that the liquidity and prices of the units in the
secondary market will not be adversely affected.
FORWARD LOOKING STATEMENTS FOUND IN THIS PROSPECTUS MAY NOT BE ACCURATE
INDICATORS OF OUR FUTURE PERFORMANCE
This prospectus contains certain forward-looking statements and information
relating to, among other things, our business strategy and anticipated business
combination. We identify forward-looking statements in this prospectus using
words such as the following and other similar statements:
<TABLE>
<S> <C> <C> <C>
"believes" "intends" "plans" "expects"
"predicts" "may" "will" "would"
"should" "contemplates" "anticipates"
</TABLE>
These statements are based on our beliefs as well as assumptions we made
using information currently available to us. Because these statements reflect
our current views concerning future events as they relate to us, these
statements involve certain risks, uncertainties and assumptions which may be
significantly more adverse than the results or expectations discussed in the
forward-looking statements.
9
<PAGE>
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the units, after
deducting offering expenses and underwriting discounts, will be approximately
$8,955,000, or $10,332,000 if the underwriters' over-allotment option is
exercised in full.
We intend to allocate the net proceeds as follows:
- $8,653,000, or $10,030,000 if the underwriters' over-allotment option is
exercised in full, will be placed in a trust fund maintained by The Bank
of New York, 51 West 52(nd) Street, New York, New York, as trustee. Such
proceeds will not be released from the trust fund until the earlier of the
completion of a business combination or our liquidation.
- The net proceeds not held in the trust fund, approximately $302,000
irrespective of whether or not the underwriters' over-allotment option is
exercised in full, will be used for, or in connection with:
- the performance of due diligence investigations of prospective
acquisition candidates;
- legal, accounting and other expenses attendant to such due diligence
investigations and to structuring, negotiating and consummating a
business combination;
- legal and accounting fees to be incurred in connection with our
obligation to file periodic reports, proxy statements and other
informational material with the SEC; and
- payment to Unity Venture Capital Associates Ltd. of a monthly fee of
$7,500 for general and administrative expenses.
To the extent that our capital stock is used in whole or in part as
consideration to effect a business combination, the proceeds held in the trust
fund as well as any other net proceeds not expended will be used to finance the
operations of the target business.
Unity Venture has advanced approximately to us $55,000 for payment of
certain of our expenses of this offering. Such advances will be repaid out of
the gross proceeds of this offering.
Proceeds of this offering not immediately required for the purposes set
forth above will be invested in United States government securities or other
high-quality, short-term interest-bearing investments, provided, however, that
we will attempt to invest the net proceeds in a manner which does not result in
us being deemed to be an investment company under the Investment Company Act. We
believe that, in the event a business combination is not effected during the
24 month period from the date of the completion of this offering, unless
extended to 30 months as discussed elsewhere in this prospectus, and to the
extent that a significant portion of the net proceeds is not used in evaluating
various prospective target businesses, the interest income derived from
investment of the net proceeds during such period will be sufficient to defray
continuing general and administrative expenses, as well as costs relating to
compliance with securities laws and regulations, including associated
professional fees.
Our public stockholders will be entitled to receive funds from the trust
fund only in the event of our liquidation or if they were to seek to convert
their shares into cash upon a business combination which they voted against. Our
public stockholders will not have any other right or interest in the trust fund.
10
<PAGE>
DILUTION
The difference between the initial public offering price per share of our
common stock, assuming no value is attributed to the Class A warrants included
in the units, and the pro forma net tangible book value per share of our common
stock after this offering constitutes the dilution to investors in this
offering. Net tangible book value per share is determined by dividing our net
tangible book value, which is our total tangible assets less total liabilities,
by the number of outstanding shares of our common stock.
As of March 31, 2000, our net tangible book value was $0, or $0.00 per share
of common stock. After giving effect to the sale of 1,700,000 shares of common
stock included in the units, and the deduction of underwriting discounts and
estimated offering expenses, our pro forma net tangible book value at March 31,
2000 would have been $7,225,340, or $2.95 per share of common stock,
representing an immediate increase in net tangible book value of $2.95 per share
to existing stockholders and an immediate dilution of $3.05 per share to new
investors. The following table illustrates the foregoing information as of
March 31, 2000 with respect to dilution to new investors on a per-share basis,
assuming no value is attributed to the Class A warrants included in the units:
<TABLE>
<S> <C> <C>
Public offering price per share of common stock............. $6.00
Net tangible book valuable before this offering........... $0.00
Increase attributable to new investors.................... 2.95
-----
Pro forma net tangible book value after this offering(1).... 2.95
-----
Dilution to new investors................................... $3.05
=====
</TABLE>
- ------------------------
(1) This amount is not adjusted for $1,729,735 of the gross proceeds of this
offering because if we effect a business combination, the conversion rights
to the public stockholders may result in the conversion into cash of up to
approximately 19.99% of the aggregate number of the shares sold in this
offering at a per-share conversion price equal to the amount in the trust
fund as of the record date for the determination of stockholders entitled to
vote on the business combination, inclusive of any interest, divided by the
number of shares sold in this offering.
The following table sets forth as of March 31, 2000 certain information with
respect to our existing stockholders and new investors:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ------------------------ AVERAGE PRICE
AMOUNT PERCENTAGE AMOUNT PERCENTAGE PER SHARE
--------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders................ 750,000 30.6% $ 75 --% $ .0001
New investors........................ 1,700,000 69.4% $10,200,000 100.0% $ 6.00
--------- ----- ----------- -----
Total.............................. 2,450,000 100.0% $10,200,075 100.0%
========= ===== =========== =====
</TABLE>
11
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2000 and
as adjusted to give effect to the sale of our units in this offering and the
application of the estimated net proceeds derived from the sale of our units:
<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
----------------------
ACTUAL AS ADJUSTED
-------- -----------
<S> <C> <C>
Common stock, $.0001 par value, 0 and 339,830 shares subject
to possible conversion, at conversion value(1)............ $-- $1,729,735
=== ==========
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized;
none issued............................................. $-- $ --
Common stock, $.0001 par value, 20,000,000 shares
authorized; 750,000 shares issued and outstanding;
2,110,170 shares issued and outstanding (excluding
339,830 shares subject to possible conversion), as
adjusted................................................ 75 211
Additional paid-in capital................................ -- 7,225,129
Deficit accumulated during development stage.............. -- --
--- ----------
Total stockholders' equity.............................. $75 $7,225,340
=== ==========
</TABLE>
- ------------------------
(1) Reflects 19.99% of the shares of common stock sold in this offering that may
be converted into cash if we effect a business combination and the holders
of such shares exercise their conversion rights.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We were formed on March 17, 2000 to serve as a vehicle to effect a merger,
exchange of capital stock, asset acquisition or other similar business
combination with an as yet unidentified operating business which we believe has
significant growth potential. We intend to utilize cash derived from the
proceeds of this offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination.
We have neither engaged in any operations nor generated any revenues to
date. Our entire activity since inception has been to prepare for our proposed
fundraising through an offering of our equity securities. We are a development
stage company.
We estimate that the net proceeds from the sale of the units, after
deducting offering expenses and underwriting discounts, will be approximately
$8,955,000, or $10,332,000 if the underwriters' over-allotment option is
exercised in full. We will use substantially all of the net proceeds of this
offering to acquire a target business, including identifying and evaluating
prospective acquisition candidates, selecting the target business, and
structuring, negotiating and consummating the business combination. We will not
acquire a target business unless its fair market value is at least 80% of our
net assets at the time of the acquisition. To the extent that our capital stock
is used in whole or in part as consideration to effect a business combination,
the proceeds held in the trust fund as well as any other net proceeds not
expended will be used to finance the operations of the target business.
We are obligated, commencing on the date of this prospectus, to pay to Unity
Ventures a monthly fee of $7,500 for general and administrative expenses. In
addition, since March 31, 2000, approximately $55,000 has been advanced by Unity
Ventures, on a non-interest bearing basis, for payment on our behalf of certain
expenses of this offering. We intend to repay such loan out of the proceeds of
this offering.
The report of independent public accountants on our financial statements
includes an explanatory paragraph with respect to us being in the development
stage, which raises substantial doubt about our ability to continue as a going
concern.
13
<PAGE>
PROPOSED BUSINESS
INTRODUCTION
We were formed to serve as a vehicle for the acquisition of a target
business which we believe has significant growth potential. We intend to utilize
cash derived from the proceeds of this offering, our capital stock, debt or a
combination of these in effecting a business combination Our management has
broad discretion with respect to the specific application of the net proceeds of
this offering and, as a result, this offering can be characterized as a blank
check offering. Our efforts in identifying a prospective target business will be
limited to the target industries listed below. While we may, under certain
circumstances, seek to effect business combinations with more than one target
business, we will, in all likelihood, have the ability, as a result of our
limited resources, to effect only a single business combination.
EFFECTING A BUSINESS COMBINATION
IN GENERAL
Although substantially all of the net proceeds of this offering are intended
to be generally applied toward effecting a business combination, subject to the
limitation concerning target industries discussed below, such proceeds are not
otherwise being designated for any more specific purposes. Accordingly,
prospective investors will invest in us without an opportunity to evaluate the
specific merits or risks of any one or more business combinations. A business
combination may involve the acquisition of, or merger with, a company which does
not need substantial additional capital but which desires to establish a public
trading market for its shares, while avoiding what it may deem to be adverse
consequences of undertaking a public offering itself, such as time delays,
significant expense, loss of voting control and compliance with various Federal
and state securities laws. In the alternative, a business combination may
involve a company which may be financially unstable or in its early stages of
development or growth.
THE INDUSTRIES WE WILL TARGET
We intend to focus our efforts in identifying a prospective target business
in the following industries:
- internet and other new media products and services; and
- communications and entertainment.
To date, we have not selected any particular industry from the target
industries or any target business on which to concentrate our search for a
business combination. Accordingly, there is no basis for investors in this
offering to evaluate the possible merits or risks of the target business or the
particular industry in which we may ultimately operate. To the extent we effect
a business combination with a financially unstable company or an entity in its
early stage of development or growth, including entities without established
records of sales or earnings, we will become subject to numerous risks inherent
in the business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, to the extent that we effect a
business combination with an entity in an industry characterized by a high level
of risk, we will become subject to the currently unascertainable risks of that
industry. An extremely high level of risk frequently characterizes certain
industries which experience rapid growth. In addition, although our management
will endeavor to evaluate the risks inherent in a particular industry or target
business, there can be no assurance that we will properly ascertain or assess
all significant risk factors.
14
<PAGE>
SOURCES OF TARGET BUSINESSES
We anticipate that various target business candidates will be brought to our
attention from various unaffiliated sources, including securities
broker-dealers, investment bankers, venture capitalists, bankers and other
members of the financial community, who may present solicited or unsolicited
proposals. Our officers and directors and their affiliates may also bring to our
attention target business candidates. While we do not presently anticipate
engaging the services of professional firms that specialize in business
acquisitions on any formal basis, we may engage such firms in the future, in
which event we may pay a finder's fee or other compensation. In no event,
however, will we pay a finder's fee or commission to our officers or directors
or any entity with which they are affiliated for such service.
SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION
Subject to the limitation that a target business be within our required
target industries, our management will have virtually unrestricted flexibility
in identifying and selecting a prospective target business. In evaluating a
prospective target business, our management will consider, among other factors,
the following:
- financial condition and results of operation;
- growth potential;
- experience and skill of management and availability of additional
personnel;
- capital requirements;
- competitive position;
- stage of development of the products, processes or services;
- degree of current or potential market acceptance of the products,
processes or services;
- proprietary features and degree of intellectual property or other
protection of the products, processes or services;
- regulatory environment of the industry; and
- costs associated with effecting the business combination.
These criteria are not intended to be exhaustive; any evaluation relating to the
merits of a particular business combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by our management in connection with effecting a business combination consistent
with our business objective. In connection with our evaluation of a prospective
target business, our management anticipates that we will conduct an extensive
due diligence review which will encompass, among other things, meetings with
incumbent management and inspection of facilities, as well as review of
financial or other information which will be made available to us.
We will endeavor to structure a business combination so as to achieve the
most favorable tax treatment to us, the target business and both companies'
stockholders. There can be no assurance, however, that the Internal Revenue
Service or appropriate state tax authority will agree with our tax treatment of
the business combination.
The time and costs required to select and evaluate a target business and to
structure and complete the business combination cannot presently be ascertained
with any degree of certainty. Mr. Burstein, our president and principal
stockholder, intends to devote approximately 40% of his business time to our
affairs and, accordingly, completion of a business combination may require a
greater period of time than if he devoted his full time to our affairs. We do
not have any full time employees who will be devoting 100% of his or her time to
our affairs. Any costs incurred in connection with the identification
15
<PAGE>
and evaluation of a prospective target business with which a business
combination is not ultimately completed will result in a loss to us and reduce
the amount of capital available to otherwise complete a business combination.
FAIR MARKET VALUE OF TARGET BUSINESS
We will not acquire a target business unless the fair market value of such
business is at least 80% of our net assets at the time of such acquisition. The
fair market value of such business will be determined by our board of directors
based upon standards generally accepted by the financial community, such as
actual and potential sales, earnings and cash flow and book value. If our board
is not able to independently determine that the target business has a sufficient
fair market value, we will obtain an opinion from an unaffiliated, independent
investment banking firm which is a member of the National Association of
Securities Dealers, Inc. with respect to the satisfaction of such criteria.
Since any opinion, if obtained, would merely state that fair market value meets
the 80% of net assets threshold, it is not anticipated that copies of such
opinion would be distributed to our stockholders, although copies will be
provided to stockholders who request it. We will not be required to obtain an
opinion from an investment banking firm as to the fair market value if our board
of directors independently determines that the target business does have
sufficient fair market value.
LIMITED ABILITY TO EVALUATE THE TARGET BUSINESS' MANAGEMENT
Although we intend to closely scrutinize the management of a prospective
target business in connection with evaluating the desirability of effecting a
business combination, there can be no assurance that our assessment of such
management will prove to be correct, especially in light of the possible
inexperience of our directors in evaluating certain types of businesses. In
addition, there can be no assurance that such future management will have the
necessary skills, qualifications or abilities to manage a public company
intending to embark on a program of business development. Furthermore, the
future role of our directors, if any, in the target business cannot presently be
stated with any certainty. While it is possible that one or more of our
directors will remain associated in some capacity with us following a business
combination, it is unlikely that any of them will devote their full efforts to
our affairs subsequent to a business combination. Moreover, there can be no
assurance that our directors will have significant experience or knowledge
relating to the operations of the particular target business.
We may seek to recruit additional managers to supplement the incumbent
management of the target business. There can be no assurance that we will have
the ability to recruit such additional managers, or that such additional
managers will have the requisite skills, knowledge or experience necessary to
enhance the incumbent management.
PROBABLE LACK OF BUSINESS DIVERSIFICATION
While we may, under certain circumstances, seek to effect business
combinations with more than one target business, our initial business
combination must be with a target business which satisfies the minimum valuation
standard at the time of such acquisition, discussed above. Consequently, it is
likely that we will have the ability to effect only a single business
combination. Accordingly, the prospects for our success will be entirely
dependent upon the future performance of a single business. Unlike certain
entities which have the resources to complete several business combinations of
entities operating in multiple industries or multiple areas of a single
industry, it is highly likely that we will not have the resources to diversify
our operations or benefit from the possible spreading of risks or offsetting of
losses. Our probable lack of diversification may subject us to numerous
economic, competitive and regulatory developments, any or all of which may have
a substantial adverse impact upon the particular industry in which we may
operate subsequent to a business combination. In addition, by consummating a
business combination with only a single entity, the prospects for our success
may become dependent
16
<PAGE>
upon the development or market acceptance of a single or limited number of
products, processes or services. Accordingly, even with our capital investment
in and management assistance, if any, to the target business, there can be no
assurance that the target business will prove to be commercially viable. Prior
to the completion of a business combination, we have no intention of either
loaning any of the proceeds of this offering to any company or purchasing a
minority equity interest in any company.
OPPORTUNITY FOR STOCKHOLDER APPROVAL OF BUSINESS COMBINATION
We are under no obligation to provide information to our stockholders
regarding the various potential target businesses being considered by our
management. Consequently, our stockholders will neither receive nor otherwise
have the opportunity to evaluate any financial or other information which will
be made available to us in connection with selecting a potential business
combination. As a result, investors in this offering will be entirely dependent
on the judgment of our management in connection with the selection of a target
business.
Prior to the completion of a business combination, however, we will submit
the transaction to our stockholders for approval, even if the nature of the
acquisition is such as would not ordinarily require stockholder approval under
applicable state law. In connection with seeking stockholder approval of a
business combination, we will furnish our stockholders with proxy solicitation
materials prepared in accordance with the Securities Exchange Act of 1934,
which, among other matters, will include a description of the operations of the
target business and audited historical financial statements of such business.
All of our existing stockholders, including all of our officers and
directors, have agreed to vote their respective shares of common stock owned by
them immediately prior to this offering in accordance with the vote of the
majority of all the other shares of common stock voted on any business
combination. We will proceed with the business combination only if the public
stockholders, who own at least a majority of the shares of common stock sold in
this offering, vote in favor of the business combination and public stockholders
owning less than 20% of the shares sold in this offering exercise their
conversion rights.
CONVERSION RIGHTS
At the time we seek stockholder approval of any business combination, we
will offer each public stockholder, except those discussed below, the right to
have such stockholder's shares of common stock converted to cash if such
stockholder votes against the business combination and the business combination
is approved and completed. The per-share conversion price will be equal to the
amount in the trust fund, inclusive of any interest, as of the record date for
determination of stockholders entitled to vote on such business combination,
divided by the number of shares sold in this offering. Without taking into any
account interest earned on the trust fund, the per-share conversion price would
be $5.09, or $.91 less than the per-unit offering price of $6.00. There will be
no distribution from the trust fund with respect to the warrants included in the
units. An eligible stockholder may request conversion at any time prior to the
vote taken with respect to a proposed business combination at a meeting held for
that purpose, but such request will not be granted unless such stockholder votes
against the business combination and the business combination is approved and
completed. It is anticipated that the funds to be distributed to stockholders
entitled to convert their shares who elect such conversion will be distributed
promptly after completion of a business combination. Our existing stockholders
will not have any conversion rights to the extent such shares of common stock
owned by them were purchased immediately prior to this offering. We will not
complete any business combination if public stockholders, owning 20% or more of
the shares sold in this offering, exercise their conversion rights.
17
<PAGE>
LIQUIDATION IF NO BUSINESS COMBINATION
In the event that we do not complete a business combination within
24 months after the completion of this offering, or within 30 months if the
extension criteria described below have been satisfied, and except as described
below, we will be dissolved and will distribute to all of our public
stockholders, in proportion to their respective equity interests, an aggregate
sum equal to the amount in the trust fund, inclusive of any interest, plus any
remaining net assets. Our existing stockholders have waived their rights to
participate in any liquidation distribution with respect to shares of common
stock owned by them immediately prior to this offering. If we were to expend all
of the net proceeds of this offering, other than the proceeds deposited in the
trust fund, and without taking into account interest, if any, earned on the
trust fund, the per-share liquidation price would be $5.09, or $.91 less than
the per-unit offering price of $6.00. The proceeds deposited in the trust fund
could, however, become subject to the claims of our creditors which could be
prior to the claims of the public stockholders. Although our officers and
directors have agreed to be personally liable to pay any of our debts,
obligations and liabilities under certain circumstances, there can be no
assurance that the per-share liquidation price will not be less than $5.09, plus
interest, due to claims of creditors. There will be no distribution from the
trust fund with respect to the warrants included in the units.
If we enter into either a letter of intent, an agreement in principle or a
definitive agreement to effectuate a business combination prior to the
expiration of 24 months after the completion of this offering, but are unable to
complete such business combination within such 24 month period, then we will
have an additional six months in which to complete that business combination
contemplated by such letter of intent, agreement in principle or definitive
agreement. If we are unable to do so by the expiration of the 30 month period
from the completion of this offering, we will then liquidate. Upon notice from
us, the trustee of the trust fund will commence liquidating the investments
constituting the trust fund and will turn over the proceeds to our transfer
agent for distribution to our stockholders. Except as described below, we
anticipate that our instruction to the trustee would be given promptly after the
expiration of the applicable 24 month or 30 month period.
Our stockholders shall be entitled to receive funds from the trust fund only
in the event of our liquidation or if such stockholders seek to convert their
respective shares into cash in connection with a business combination which such
stockholder voted against and which is actually completed by us. In no other
circumstances shall a stockholder have any right or interest of any kind to or
in the trust fund.
In the event we do not succeed in effecting a business combination within
the period required, we may seek stockholder approval to continue in existence
by amending our Certificate of Incorporation to provide for a new dissolution
date. We intend to redeem all of our common stock held by public stockholders
voting against such amendment, who shall receive in return their pro rata share
of our total net proceeds.
PRIOR INVOLVEMENT OF PRINCIPALS IN BLANK CHECK COMPANIES
All of our officers and directors have held similar positions in at least
one other blank check company, each of which as of the date of this prospectus
has both publicly sold its equity securities to finance a business combination
with a target business and subsequently completed a business
18
<PAGE>
combination. Information with respect to each such blank check company, initial
public offering and business combination is set forth below:
<TABLE>
<CAPTION>
PERCENTAGE
DATE OF IPO DATE OF OF TARGET
NAME OF BLANK (APPROXIMATE BUSINESS NAME AND NATURE BUSINESS TRADING MARKET
CHECK COMPANY NET PROCEEDS) COMBINATION OF TARGET BUSINESS ACQUIRED (TICKER SYMBOL)
- --------------------- -------------------- -------------------- -------------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Unity First November 1996 July 1999 GraphOn Corporation 44% Nasdaq SmallCap
Acquisition Corp. ($7,500,000, develops, markets, Market (GOJO)
excluding sells and supports
approximately server-based
$17,000,000 from software for the
subsequently enterprise computing
exercised IPO environment.
Warrants)
Trinity Americas Inc. February 1994 March 1996 Brazil Fast Food 43% Nasdaq SmallCap
($9,000,000) Corp. owns and Market (BOBS)
operates hamburger
fast food
restaurants in
Brazil
Trinity Six Inc. August 1993 May 1995 USCI Inc. develops 48% OTC Bulletin Board
($9,000,000, exclu- centralized (USCM)(1)
ding approximately automated
$25,000,000 from computer-based
subsequently cellular telephone
exercised IPO activation systems
Warrants)
Trinity Capital May 1992 November 1993 Alliance 20% (2)
Opportunity Corp. ($21,750,000) Entertainment Corp.
distributed pre-
recorded music,
accessories and
entertainment
related products
Trinity Capital September 1991 August 1993 SubMicron Systems 37% (3)
Enterprise Corp. ($9,000,000, exclu- Corporation
ding approximately manufactured semi-
$6,000,000 from conductor capital
subsequently equipment
exercised IPO
Warrants)
Trinity Acquisition August 1990 August 1991 T.H.Q., Inc. designs 50% Nasdaq SmallCap
Corp. ($2,250,000, exclu- and markets Nintendo Market (TOYH)
ding approximately and Sega games
$10,000,000 from
subsequently
exercised IPO
Warrants)
RT Acquisition September 1988 April 1990 Polyvision 20% AMEX (PLI)
Associates Inc. ($1,525,000) Corporation
manufactures and
sells vision
projection systems,
architectural
building panels,
modular partitions
and office products
RT Associates Inc. April 1987 March 1998 Bloc Development 48% NYSE (GML)(4)
($2,250,000) Corp. develops
software
</TABLE>
- ------------------------------
(1) A wholly-owned subsidiary of USCI Inc. filed a voluntary petition under
Chapter 11 of the Federal Bankruptcy Code on October 29, 1999, approximately
4 years after the business combination. None of our officers and directors
were affiliated with USCI at the time of its bankruptcy.
19
<PAGE>
(2) Alliance Entertainment Corp. filed a voluntary petition under Chapter 11 of
the Federal Bankruptcy Code on May 21, 1998, approximately 5 years after the
business combination, and terminated its registration under the Exchange Act
on August 20, 1998. None of our officers and directors were affiliated with
Alliance at the time of its bankruptcy.
(3) SubMicron Systems filed a voluntary petition under Chapter 11 of the Federal
Bankruptcy Code on September 1, 1999, approximately 6 years after the
business combination. It completed the sale of substantially all of its
assets pursuant to a bankruptcy court order in October 1999 and is presently
in liquidation.
(4) Bloc Development Corp. was acquired by Global Direct Mail Corp., now known
as Tiger Direct Inc., in 1995. On November 30, 1995, Tiger Direct ceased to
be a reporting company under the Exchange Act.
There can be no assurance that we will be able to effect a business
combination or that the type of business or the performance of the target
business, if any, will be similar to that of these other blank check companies.
COMPETITION
In identifying, evaluating and selecting a target business, we expect to
encounter intense competition from other entities having a business objective
similar to that of us. Many of these entities are well established and have
extensive experience in connection with identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater technical, human and/or other resources than us and our financial
resources will be relatively limited when contrasted with those of many of these
competitors. This inherent competitive limitation may give others an advantage
in pursuing the acquisition of certain target businesses. Further, our
obligation to seek stockholder approval of a business combination may delay the
completion of a transaction; and our obligation in certain circumstances to
convert into cash shares of common stock held by our eligible stockholders may
reduce the resources available to us for a business combination or for other
corporate purposes. Either of these obligations may place us at a competitive
disadvantage in successfully negotiating a business combination. Our management
believes, however, that our status as a public entity and potential access to
the United States public equity markets may give us competitive advantage over
privately-held entities having a similar business objective as us in acquiring a
target business with significant growth potential on favorable terms.
UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS
In the event that we succeed in effecting a business combination, we will,
in all likelihood, become subject to intense competition from competitors of the
target business. In particular, certain industries which experience rapid growth
frequently attract an increasingly larger number of competitors, including
competitors with increasingly greater financial, marketing, technical and other
resources than the initial competitors in the industry. The degree of
competition characterizing the industry of any prospective target business
cannot presently be ascertained. There can be no assurance that, subsequent to a
business combination, we will have the resources to compete effectively,
especially to the extent that the target business is in a high-growth industry.
FACILITIES
We presently occupy approximately 500 square feet of office space in
premises occupied by Unity Venture. The cost for such space is included in the
$7,500 per-month fee Unity Venture charges us for general and administrative
services. We believe, based upon rents and fees for similar services in the New
York City metropolitan area, that the fee charged by Unity Venture is at least
as favorable as we could have obtained from an unaffiliated person. We believe
our facilities are adequate for our present purposes.
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<PAGE>
EMPLOYEES
As of the date of this prospectus, we, in addition to our two officers, have
one part-time employee who is employed in an administrative capacity.
PERIODIC REPORTING AND AUDITED FINANCIAL STATEMENTS
We have registered our securities under the Exchange Act and therefore have
certain reporting obligations, including the requirement that we file annual and
quarterly reports with the SEC. In accordance with the requirements of the
Exchange Act, we intend to furnish to our stockholders annual reports containing
financial statements audited and reported on by our independent accountants.
We will not acquire a target business if audited financial statements cannot
be obtained for such target business. Additionally, our management will provide
stockholders who acquired their shares of common stock subsequent to the date of
this prospectus with audited financial statements, prepared in accordance with
generally accepted accounting principles, of the prospective target business as
part of the proxy solicitation materials sent such stockholders to assist them
in assessing the target business. Our management believes that the requirement
of having available audited financial statements for the target business will
not materially limit the pool of potential target businesses available for
acquisition.
21
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Our current directors and officers are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ------------------------------------------
<S> <C> <C>
Lawrence Burstein......................... 56 President, Treasurer and Director
John Cattier.............................. 67 Director
Barry Ridings............................. 47 Director
Norman Leben.............................. 39 Secretary and Director
</TABLE>
LAWRENCE BURSTEIN has served as our president and a director since our
inception. Since March 1996, Mr. Burstein has been president and a principal
stockholder of Unity Venture Capital Associates Ltd. For approximately ten years
prior to 1996, Mr. Burstein was the president, a director and principal
stockholder of Trinity Capital Corporation, a private investment banking
concern. Trinity ceased operations upon the formation of Unity Venture in 1996.
Mr. Burstein is a director of:
- T.H.Q., Inc., which develops and markets video games for Sony, Nintendo
and Sega;
- Brazil Fast Food Corporation, the owner and operator of the second largest
fast food restaurant chain in Brazil;
- CAS Medical Systems, Inc., which manufactures and markets blood pressure
monitors and other disposable products principally for the neonatal
market;
- MNI Group, Inc., which principally manufactures and distributes
nutritional supplements;
- I.D. Systems, Inc., which designs, develops and produces a wireless
monitoring and tracking system which uses radio frequency technology; and
- Quintel Communications, Inc., which is a direct marketing company that
develops and operates Internet-based marketing companies.
Mr. Burstein received an L.L.B. from Columbia Law School.
JOHN CATTIER has been a director since our inception. Since May 1996,
Mr. Cattier has been a director and a shareholder of Unity Venture. Mr. Cattier
has been an independent consultant since January 1985. From 1957 to
December 1984, Mr. Cattier was associated with White Weld & Co. and with Credit
Suisse White Weld, predecessor companies to Credit Suisse First Boston,
investment bankers, in various capacities. Mr. Cattier was a stockholder of
Trinity Capital Corporation prior to its cessation of operations in 1996.
Mr. Cattier is chairman of the board of directors of Heptagon Investments
Limited, an investment company. Mr. Cattier received a B.A. from Yale
University.
BARRY RIDINGS has been a director since our inception. Since July 1999,
Mr. Ridings has been a managing director of Lazard Freres, investment bankers.
Previously and from March 1990, he was a managing director of Alex. Brown &
Sons, investment bankers. From June 1986 to March 1990, Mr. Ridings was a
managing director of Drexel Burnham Lambert, investment bankers. Mr. Ridings was
a stockholder of Trinity Capital Corporation prior to its cessation of
operations in 1996. Mr. Ridings is a director of:
- Furr's/Bishop's, a cafeteria restaurant chain;
- Noodle Kidoodle, an operator of specialty toy stores;
- Seaman's Furniture, a retail furniture store;
- Siem Industries, interests in oil, gas and shipping; and
- New Valley Corp., formerly known as Western Union.
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<PAGE>
Mr. Ridings was also a director of SubMicron Systems Corporation, which
manufactured semi-conductor capital equipment. SubMicron filed a voluntary
petition under Chapter 11 of the Federal Bankruptcy Code and is currently in
liquidation. Mr. Ridings received an M.B.A. from Cornell University.
NORMAN LEBEN has been our secretary and a director since our inception.
Mr. Leben is, and since 1988 has been, a partner of Dalessio, Millner & Leben,
certified public accountants. Prior to 1998 and from 1985, Mr. Leben was engaged
in the acquisition, management, syndication and operation of real estate and
other emerging marketing businesses. Prior to 1985, Mr. Leben was employed by
Laventhol & Horwath, certified public accountants. Mr. Leben received a B.B.A.
from George Washington University.
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Directors receive no
compensation for serving on our board other than reimbursement of reasonable
expenses incurred in attending meetings. Officers are elected annually by our
board and serve at the discretion of our board. We have not, nor do we intend
to, enter into employment agreements with any of our officers.
EXECUTIVE COMPENSATION
No officer has received any cash compensation from us since inception for
services rendered. Other than the $7,500 monthly administrative fee payable to
Unity Venture commencing on the date of this prospectus, no compensation of any
kind, including finders and consulting fees, will be paid to any of our
affiliated existing stockholders, for services rendered to us prior to or in
connection with the business combination; provided, however, that such persons
shall be entitled to receive, upon completion of the business combination,
commissions for monies raised by them for us in connection with the business
combination, at rates that are no less favorable to us than those which we would
pay to unaffiliated third parties. In addition, our officers and directors will
receive reimbursement for any out-of-pocket expenses incurred in connection with
activities on our behalf. There is no limit on the amount of such reimbursable
expenses and there will be no review of the reasonableness of such expenses by
anyone other than our board, which includes two members who are officers and who
may seek reimbursement.
STOCK OPTION PLAN
Our 2000 Stock Option Plan was adopted by both our board of directors and a
majority in interest of our stockholders on March 20, 2000. The plan provides
for the granting of options which are intended to qualify either as incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986 or as options which are not intended to meet the requirements of such
section. The total number of shares of common stock reserved for issuance under
the plan is 255,000. Options to purchase shares may be granted under the plan to
persons who, in the case of incentive stock options, are our employees,
including officers, or, in the case of nonstatutory stock options, are our
employees, including officers, or non-employee directors.
The plan provides for its administration by our board or a committee chosen
by the board, which has discretionary authority, subject to certain
restrictions, to determine the number of shares issued pursuant to incentive
stock options and nonstatutory stock options and the individuals to whom, the
times at which and the exercise price for which options will be granted.
The exercise price of all incentive stock options granted under the plan
must be at least equal to the fair market value of such shares on the date of
the grant or, in the case of incentive stock options granted to the holder of
more than 10% of our common stock, at least 110% of the fair market value of
such shares on the date of the grant. The maximum exercise period for which
incentive stock options may be granted is ten years from the date of grant or
five years in the case of an individual owning
23
<PAGE>
more than 10% of our common stock. The aggregate fair market value determined at
the date of the option grant, of shares with respect to which incentive stock
options are exercisable for the first time by the holder of the option during
any calendar year, shall not exceed $100,000.
No options may be granted under the plan prior to the completion of a
business combination.
CONFLICTS OF INTEREST
Potential investors should be aware of the following potential conflicts of
interest:
- None of our officers and directors are required to commit their full time
to our affairs and, accordingly, such persons may have conflicts of
interest in allocating management time among various business activities.
- In the course of their other business activities, certain of our officers
and directors may become aware of investment and business opportunities
which may be appropriate for presentation to us as well as the other
entities with which they are affiliated. Such persons may have conflicts
of interest in determining to which entity a particular business
opportunity should be presented.
- Certain of our officers and directors may in the future become affiliated
with entities, including other blank check companies, engaged in business
activities similar to those intended to be conducted by us.
- Messrs. Burstein, Leben and Cattier are each directors and, together with
Mr. Ridings, shareholders of Unity Venture, which is engaged principally
in making investments in privately held companies.
- Since each of our directors owns shares of our common stock which will be
released from escrow only if a business combination is successfully
completed, our board may have a conflict of interest in determining
whether a particular target business is appropriate to effect a business
combination, as it has significant discretion in determining the fair
market value of a target business and whether a target business is
suitable for a proposed business combination.
In general, officers and directors of a corporation incorporated under the
laws of the State of Delaware are required to present certain business
opportunities to such corporation. Under Delaware law, officers and directors
generally are required to bring business opportunities to the attention of such
corporation if:
- such corporation could financially undertake the opportunity;
- the opportunity is within the corporation's line of business; and
- it would not be fair to the corporation and its stockholders for the
opportunity not to be brought to the attention of such corporation.
Accordingly, as a result of multiple business affiliations, certain of our
officers and directors may have similar legal obligations relating to presenting
certain business opportunities to multiple entities. In addition, conflicts of
interest may arise in connection with evaluations of a particular business
opportunity by the board of directors with respect to the foregoing criteria.
There can be no assurance that any of the foregoing conflicts will be resolved
in our favor.
In order to minimize potential conflicts of interest which may arise from
multiple corporate affiliations, each of Messrs. Burstein, Leben, Ridings and
Cattier have agreed in principle to present to us for our consideration, prior
to presentation to any other entity, any business opportunity which, under
Delaware law, may reasonably be required to be presented to us, until the
earlier of a business combination or our liquidation. To further minimize
potential conflicts of interest, we are restricted
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<PAGE>
from pursuing any transactions with entities affiliated with any of our officers
or directors without the prior approval of a majority of our disinterested
directors.
In connection with any stockholder vote relating to approval of a business
combination, all of our existing stockholders, including all of our officers and
directors, have agreed to vote their respective shares of common stock in
accordance with the vote of the majority in interest of our other stockholders.
In addition, such stockholders have agreed to waive their respective rights to
participate in any liquidation distribution but only with respect to those
shares of common stock acquired by such persons prior to this offering.
25
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of our common stock as of March 31, 2000 and as adjusted to reflect
the sale of our common stock included in the units offered by this prospectus,
by:
- each person known by us to be the owner of more than 5% of the outstanding
shares of common stock;
- each of our officers and directors; and
- all our officers and directors as a group.
The definition of beneficial ownership includes securities which may be
acquired by a person within 60 days from the date on which beneficial ownership
is to be determined upon the exercise of options, warrants or convertible
securities. None of the persons named in the table own any options, warrants, or
convertible securities, except each of such persons owns Class A warrants. The
table does not include shares issuable upon exercise of Class A warrants since
such warrants are not exercisable until the completion of a business
combination.
Unless otherwise indicated, we believe that all persons named in the table
have sole voting and investment power with respect to all shares of common stock
beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND
PERCENTAGE
OF OUTSTANDING SHARES
-----------------------
AMOUNT OF BENEFICIAL BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OFFERING OFFERING
- ------------------------------------ -------------------- -------- --------
<S> <C> <C> <C>
Lawrence Burstein.................................... 247,125(1) 33.0% 10.1%
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue--Suite 1500
New York, New York 10016
John Cattier......................................... 204,930(1)(2) 27.3% 5.3%
Forestal El Taruman
Km 51 Ruta #15
Rocha, Uruguay
Norman Leben......................................... 91,875(1) 12.3% 3.8%
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue--Suite 1500
New York, New York 10016
Barry Ridings........................................ 6,750 * *
16 Erwin Park
Montclair, New Jersey 07902
All officers and directors as a group (4 persons).... 400,680(1)(2) 53.4% 16.4%
</TABLE>
- ------------------------
* Less than 1%
(1) Includes 75,000 shares of common stock owned by Unity Venture, over which
shares Messrs. Burstein, Leben and Cattier share voting and investment
power.
(2) Includes 84,375 shares held by Heptagon Investments Ltd. and 1,680 shares
held by an affiliate of Heptagon. Mr. Cattier is chairman of Heptagon's
board of directors and exercises voting and dispositive control over
approximately 12.4% of Heptagon's shares of capital stock. Mr. Cattier
disclaims any voting or dispositive power over these shares. Also includes
43,875 shares owned by
26
<PAGE>
Cricket Services, Ltd., over which shares Mr. Cattier exercises voting and
dispositive control. Both Heptagon and Cricket are private investment
companies.
The shares of our common stock and warrants owned prior to the date of this
prospectus by:
- all of our executive officers and directors and their affiliates; and
- all persons owning 5% or more of our currently outstanding shares of
common stock,
representing in the aggregate approximately 53% of the outstanding common stock
and all of the outstanding warrants immediately prior to this offering, will be
placed in escrow with American Stock Transfer & Trust Company, as escrow agent,
until the earlier of:
- six months following the completion of a business combination; or
- our liquidation.
In addition, our executive officers and directors and their affiliates,
collectively, have agreed to purchase 125,000 units in this offering. If all
these units are purchased by our four directors and officers, their holdings as
a group after this offering would increase to 600,000 shares, or 24.5% of the
outstanding shares of common stock. These 125,000 units will be placed in escrow
with American Stock Transfer & Trust Company for the same period as the common
stock and warrants owned prior to the date of this prospectus will be held in
escrow.
During the escrow period, such persons will not be able to sell their
securities, but will retain all other rights as our stockholders, including,
without limitation, the right to vote such shares of common stock. All other
existing stockholders have agreed not to sell their respective shares of common
stock until the completion of a business combination. If we are unable to effect
a business combination and liquidate, none of our existing stockholders will
receive any portion of the liquidation proceeds with respect to common stock
owned by such existing stockholders prior to the date of this prospectus. The
executive officers, directors and their affiliates who purchase the 125,000
units as described above will receive a portion of such liquidation proceeds
with respect to the common stock which forms a part of such 125,000 units.
Messrs. Burstein, Leben and Cattier, as well as Unity Venture, may be deemed
to be "parents" and "promoters" of the Company, as such terms are defined under
the Federal securities laws.
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<PAGE>
CERTAIN TRANSACTIONS
On March 20, 2000, we issued an aggregate of 400,680 shares of common stock
at a purchase price of $.0001 per share, to the following persons:
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES RELATIONSHIP TO US
- ---- --------- --------------------------------
<S> <C> <C>
Lawrence Burstein............... 172,125 Our president, treasurer and one
of our directors.
Heptagon Investments Ltd. and
affiliates.................... 86,055 An affiliate of John Cattier,
one of our directors.
Unity Venture................... 75,000 An affiliate of Messrs.
Burstein, Leben and Cattier.
Cricket Services Ltd............ 43,875 An affiliate of Mr. Cattier.
Norman Leben.................... 16,875 Our secretary and one of our
directors.
Barry Ridings................... 6,750 One of our directors.
</TABLE>
On March 20, 2000, we issued an aggregate of 200,000 Class A warrants to the
following directors:
<TABLE>
<CAPTION>
NUMBER OF
NAME CLASS A WARRANTS
- ---- ----------------
<S> <C>
John Cattier................................................ 59,167
Norman Leben................................................ 59,167
Lawrence Burstein........................................... 59,166
Barry Ridings............................................... 22,500
</TABLE>
These warrants were issued in consideration for future services to be rendered
by such persons on our behalf. Such Class A warrants and the common stock
underlying such Class A warrants have been registered pursuant to the
registration statement of which this prospectus forms a part. Such Class A
warrants are identical to the warrants offered in this offering but are not
redeemable by us and have cashless exercise rights.
We are obligated to pay Unity Venture, commencing on the date of this
prospectus, a monthly fee of $7,500 for general and administrative services
pursuant to an agreement which may be canceled by us upon 30 days' prior written
notice. Such fee includes the use of approximately 500 square feet of office
space in premises occupied by Unity Venture. Dalessio, Millner & Leben, an
accounting firm which is an affiliate of Mr. Leben, affords Unity Venture the
use of such space at a monthly rental of $2,000. Messrs. Burstein, Leben and
Cattier are each directors and, together with Mr. Ridings, shareholders of Unity
Venture.
Unity Venture has made non-interest demand loans aggregating approximately
$55,000 to us as of the date of this prospectus to cover expenses related to
this offering. We intend to repay these loans from the proceeds of this
offering.
Dalessio, Millner & Leben has performed bookkeeping, tax and accounting
services for certain of the blank check companies of which certain of our
directors have been directors and shareholders, from their dates of inceptions
through the completion of their respective business combinations, and is
expected to perform similar services for us at an aggregate cost of
approximately $12,000 per annum. Dalessio, Millner & Leben may also be paid to
engage in financial due diligence activities for us in connection with our
evaluation of prospective target companies for a business combination.
Other than the $7,500 monthly administrative fee, no compensation of any
kind, including finders and consulting fees, will be paid to any of our existing
stockholders or any affiliate of such
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<PAGE>
stockholders, for services rendered to us prior to or in connection with the
business combination; provided, however, that such persons shall be entitled to
receive, upon completion of the business combination, commissions for monies
raised by them for us in connection with the business combination, at rates that
are no less favorable to us than those which we would pay to unaffiliated third
parties.
All ongoing transactions between us and any of our officers and directors or
their respective affiliates, as well as any future transactions, will be on
terms believed by us to be no less favorable than are available from
unaffiliated third parties and will be subject to prior approval in each
instance by a majority of the members of our board who do not have an interest
in the transaction.
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<PAGE>
DESCRIPTION OF SECURITIES
GENERAL
We are authorized to issue 20,000,000 shares of common stock, par value
$.0001, and 5,000 shares of preferred stock, par value $.01. As of the date of
this prospectus, 750,000 shares of common stock are outstanding, held of record
by 31 persons. No shares of preferred stock are currently outstanding.
UNITS
Each unit consists of one share of common stock and one Class A warrant.
Each Class A warrant entitles the holder to purchase one share of common stock
and one-half of one Class B warrant. The common stock and Class A warrants will
begin to trade separately on the 90th day after the date of this prospectus
unless Gaines, Berland informs us of its decision to allow earlier separate
trading, provided that in no event can the common stock and Class A warrants be
traded separately until we file with the SEC an audited balance sheet reflecting
our receipt of the proceeds of this offering.
COMMON STOCK
Our stockholders are entitled to one vote for each share held of record on
all matters to be voted on by stockholders. There is no cumulative voting with
respect to the election of directors, with the result that the holders of more
than 50% of the shares voted for the election of directors can elect all of the
directors. Our stockholders are entitled to receive dividends when, as and if
declared by our board out of funds legally available. In the event of our
liquidation, dissolution or winding up, our stockholders, except as noted in the
next sentence, are entitled to share ratably in all assets remaining available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the common
stock. Upon our failure to effect our initial business combination, our existing
stockholders have agreed to waive their rights to share in any such distribution
with respect to common stock owned prior to the offering. Our stockholders have
no conversion, preemptive or other subscription rights and there are no
redemption provisions applicable to the common stock. All of the outstanding
shares of common stock are, and the shares of common stock included in the
units, when issued and paid for as set forth in this prospectus, will be, fully
paid and nonassessable.
PREFERRED STOCK
Our certificate of incorporation authorizes the issuance of 5,000 shares of
a blank check preferred stock with such designation, rights and preferences as
may be determined from time to time by our board of directors. Accordingly, our
board of directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
common stock, although the underwriting agreement prohibits, prior to a business
combination, from issuing preferred stock which participates in any manner in
the proceeds of the trust fund, or which votes as a class with the common stock
on a business combination. We may issue some or all of such shares in connection
with a business combination. In addition, the preferred stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing
a change in control of us. Although we do not currently intend to issue any
shares of preferred stock, there can be no assurance that we will not do so in
the future.
30
<PAGE>
WARRANTS
Each Class A warrant entitles the registered holder to purchase one share of
our common stock and one-half of one Class B warrant at a price of $5.00,
subject to adjustment in certain circumstances, at any time commencing on the
later of:
- the completion of a business combination; or
- one year from the date of this prospectus,
and ending at 5:00 p.m., New York City time, six years from the date of this
prospectus, at which time the Class A warrants will expire.
Each Class B warrant, if and when issued, entitles the registered holder to
purchase one share of our common stock at a price of $7.50 per share, subject to
adjustment in certain circumstances, at any time commencing on the later of:
- the completion of a business combination; or
- one year from the date of this prospectus,
and ending at 5:00 p.m., New York City time, six years from the date of this
prospectus, at which time the Class B warrants will expire.
We may call the Class A warrants and the Class B warrants for redemption,
each as a class, in whole and not in part, at our option and with the prior
consent of Gaines, Berland Inc., at a price of $.05 per warrant at any time
after the warrants become exercisable upon not less than 30 days' prior written
notice, provided that the reported last sale price of the common stock equals or
exceeds $7.50 per share, with respect to the Class A warrants, and $10.00 per
share, with respect to the Class B warrants, for the 20 consecutive trading days
ending on the third day prior to the notice of redemption to warrantholders. The
warrantholders shall have exercise rights until the close of business on the
date fixed for redemption.
The warrants will be issued in registered form under a warrant agreement
between us and American Stock Transfer & Trust Company, as warrant agent.
Reference is made to said warrant agreement, which has been filed as an exhibit
to the registration statement of which this prospectus is a part, for a complete
description of the terms and conditions applicable to the warrants.
The exercise price and number of shares of common stock issuable on exercise
of the warrants are subject to adjustment in certain circumstances including in
the event of a stock dividend, or our recapitalization, reorganization, merger
or consolidation. However, the warrants are not subject to adjustment for
issuances of common stock at a price below their respective exercise prices.
We have the right, in our sole discretion, to decrease the exercise price of
the warrants for a period of not less than 30 days on not less than 30 days'
prior written notice to the warrantholders. In addition, we have the right, in
our sole discretion, to extend the expiration date of the warrants on five
business days' prior written notice to the warrantholders.
The warrants may be exercised upon surrender of the warrant certificate on
or prior to the expiration date at the offices of the warrant agent, with the
exercise form on the reverse side of the warrant certificate completed and
executed as indicated, accompanied by full payments of the exercise price by
certified check, payable to us, to the warrant agent for the number of warrants
being exercised. The warrantholders do not have the rights or privileges of
holders of common stock.
No warrants will be exercisable unless at the time of exercise we have filed
with the SEC a current prospectus covering the shares of common stock issuable
upon exercise of such warrants and such shares have been registered or qualified
or deemed to be exempt under the securities laws of the state of residence of
the holder of such warrants. We have agreed to meet these conditions and to
maintain
31
<PAGE>
a current prospectus relating thereto until the expiration of the warrants,
subject to the terms of the warrant agreement. However, there is no assurance
that we will be able to do so.
No fractional shares will be issued upon exercise of the warrants. However,
if a warrantholder exercises all warrants then owned of record by him, we will
pay to such warrantholder, in lieu of the issuance of any fractional share which
is otherwise issuable to such warrantholder, an amount in cash based on the
market value of the common stock on the last trading day prior to the exercise
date.
DIVIDENDS
We have not paid any dividends on our common stock to date and do not intend
to pay dividends prior to the completion of a business combination. The payment
of dividends in the future will be contingent upon our revenues and earnings, if
any, capital requirements and general financial condition subsequent to
completion of a business combination. The payment of any dividends subsequent to
a business combination will be within the discretion of our then board of
directors. It is the present intention of our board of directors to retain all
earnings, if any, for use in our business operations and, accordingly, our board
does not anticipate declaring any dividends in the foreseeable future.
OUR TRANSFER AGENT AND WARRANT AGENT
The transfer agent for our securities and warrant agent for our warrants is
American Stock Transfer & Trust Company, 40 Wall Street, New York, New York
10005.
SHARES ELIGIBLE FOR FUTURE SALE
GENERAL
Upon the completion of this offering, we will have 2,450,000 shares of
common stock outstanding, or 2,705,000 shares if the underwriters'
over-allotment option is exercised in full. Of these shares, the 1,700,000
shares sold in this offering, or 1,955,000 shares in the event of the exercise
of the over-allotment option, will be freely tradeable without restriction or
further registration under the Securities Act, except for any shares purchased
by one of our "affiliates" which, in general, is a person who has a control
relationship with us which will be subject to limitations of Rule 144. All of
the remaining 750,000 shares are restricted securities under Rule 144, in that
such shares were issued in private transactions not involving a public offering.
None of such shares will be eligible for sale under Rule 144 prior to March 20,
2001. Notwithstanding this:
- our affiliated existing stockholders have agreed not to sell their
respective shares of common stock acquired prior to the date of this
prospectus prior to six months following the completion of a business
combination; and
- our non-affiliated existing stockholders have agreed not to sell their
respective shares of common stock acquired prior to the date of this
prospectus prior to the occurrence of a business combination.
An additional 200,000 shares of common stock, which have been registered
pursuant to the registration statement of which this prospectus forms a part,
are issuable upon the exercise of the Class A warrants issued to
Messrs. Burstein, Leben, Cattier and Ridings. Such warrants are identical to the
warrants offered in this offering but are not redeemable by us and have cashless
exercise rights. The holders have agreed not to sell the shares underlying these
warrants prior to six months following the completion of a business combination.
32
<PAGE>
RULE 144
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned restricted
shares of our common stock for at least one year would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of either of the following:
- 1% of the number of shares of common stock then outstanding, which will
equal 24,500 shares immediately after this offering; and
- the average weekly trading volume of the common stock on The Nasdaq Stock
Market during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us.
RULE 144(k)
Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at the time of or at any time during the three months preceding a
sale, and who has beneficially owned the restricted shares proposed to be sold
for at least two years, including the holding period of any prior owner other
than an affiliate, is entitled to sell such shares without complying with the
manner of sale, public information, volume limitation or notice provisions of
Rule 144. Therefore, unless otherwise restricted, shares covered by Rule 144(k)
may be sold immediately upon the completion of this offering.
33
<PAGE>
UNDERWRITING
Subject to the terms and conditions contained in the underwriting agreement,
we have agreed to sell to each of the underwriters named below, and each of the
underwriters, for which Gaines, Berland Inc. and EarlyBirdCapital are acting as
representatives, have severally, and not jointly, agreed to purchase on a firm
commitment basis the number of units offered in this offering set forth opposite
their respective names below:
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF UNITS
- ------------ ---------------
<S> <C>
Gaines, Berland Inc.........................................
EarlyBirdCapital............................................
---------
Total............................................... 1,700,000
=========
</TABLE>
A copy of the underwriting agreement has been filed as an exhibit to the
registration statement of which this prospectus forms a part.
We have been advised by the representatives that the underwriters propose to
offer the units to the public at the initial offering price set forth on the
cover page of this prospectus. They may allow some dealers who are members of
the NASD, and some foreign dealers, concessions not in excess of $ per unit and
such dealers may reallow a concession not in excess of $ per unit to other
dealers who are members of the NASD and to some foreign dealers. Upon completion
of this offering, the offering price, the concession to selected dealers and the
reallowance to other dealers may be changed by the representatives. We have been
informed by the representatives that they do not expect discretionary sales by
the underwriters to exceed 5% of the units offered by this prospectus.
We have agreed to pay to the representatives an expense allowance on a
non-accountable basis equal to 3% of the gross proceeds derived from the sale of
the units offered in this offering. We paid an advance on this allowance in the
amount of $25,000.
We have also granted to the underwriters an option, exercisable during the
45-day period commencing on the date of this prospectus, to purchase from us at
the offering price, less underwriting discounts and the non-accountable expense
allowance, up to an aggregate of 255,000 additional units for the sole purpose
of covering over-allotments, if any. The underwriters may exercise that option
if the underwriters sell more units than the total number set forth in the table
above. If any units are purchased pursuant to this option, the underwriters will
severally purchase shares in approximately the same proportion as set forth in
the table above.
In connection with this offering, we have granted Gaines Berland for a
period of three years from the date of this prospectus the right to have its
designee present at all meetings of our board of directors. Such designee will
be entitled to the same notices and communications sent by us to our directors
and to attend directors' meetings, but will not have voting rights. Gaines
Berland has not named such designee as of the date of this prospectus.
In connection with this offering, we have agreed to sell to the
underwriters, for nominal consideration, an option to purchase up to an
aggregate of 170,000 units. The units issuable upon exercise of the unit
purchase option are identical to those offered by this prospectus except that
the warrants contained in the unit purchase option expire five years from the
date of this prospectus. The unit purchase option is exercisable initially at
$6.60 per unit for a period of four years commencing one year from the date of
this prospectus. The unit purchase option may not be transferred, sold, assigned
or hypothecated during the one-year period following the date of this
prospectus, except to
34
<PAGE>
underwriters and selected dealers and to officers and partners of the
underwriters or the selected dealers. The unit purchase option grants to holders
certain demand and "piggy back" rights for periods of five and seven years,
respectively, from the date of this prospectus with respect to the registration
under the Securities Act of the securities directly and indirectly issuable upon
exercise of the unit purchase option.
We have engaged the underwriters, on a non-exclusive basis, as our agents
for the solicitation of the exercise of the warrants. To the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of
the SEC, we have agreed to pay the underwriters for bona fide services rendered
a commission equal to 5% of the exercise price for each warrant exercised more
than one year after the date of this prospectus if the exercise was solicited by
the underwriters. In addition to soliciting, either orally or in writing, the
exercise of the warrants, such services may also include disseminating
information, either orally or in writing, to warrantholders about us or the
market for us securities, and assisting in the processing of the exercise of
warrants. No compensation will be paid to the underwriters in connection with
the exercise of the warrants if:
- the market price of the underlying shares of common stock is lower than
the exercise price;
- the holder of the warrants has not confirmed in writing that the
underwriters solicited such exercise;
- the warrants are held in a discretionary account;
- the warrants are exercised in an unsolicited transaction; or
- the arrangement to pay the commission is not disclosed in the prospectus
provided to warrantholders at the time of exercise.
Rules of the Securities and Exchange Commission may limit the ability of the
underwriters to bid for or purchase shares before the distribution of the shares
is completed. However, the underwriters may engage in the following activities
in accordance with the rules:
- STABILIZING TRANSACTIONS. The underwriters may make bids or purchases for
the purpose of pegging, fixing or maintaining the price of the shares, so
long as stabilizing bids do not exceed a specified maximum.
- OVER-ALLOTMENTS AND SYNDICATE COVERAGE TRANSACTIONS. The underwriters may
create a short position in the shares by selling more shares than are set
forth on the cover page of this prospectus. If a short position is created
in connection with the offering, the representatives may engage in
syndicate covering transactions by purchasing shares in the open market.
The representatives may also elect to reduce any short position by
exercising all or part of the over-allotment option.
- PENALTY BIDS. If the representatives purchase shares in the open market in
a stabilizing transaction or syndicate coverage transaction, they may
reclaim a selling concession from the underwriters and selling group
members who sold those shares as part of this offering.
Stabilization and syndicate covering transactions may cause the price of the
securities to be higher than they would be in the absence of these transactions.
The imposition of a penalty bid might also have an effect on the prices of the
securities if it discourages resales of the securities.
Neither we nor the underwriters makes any representation or prediction as to
the effect that the transactions described above may have on the prices of the
securities. These transactions may occur on the OTC Bulletin Board, in the
over-the-counter market or on any trading market. If any of these transactions
are commenced, they may be discontinued without notice at any time.
Before this offering there has been no public market for any of our
securities. The public offering price of the units and the terms of the warrants
were negotiated between us and the representatives,
35
<PAGE>
and is based upon our financial and operating history and condition, our
prospects for the industry we are in and prevailing market conditions.
Each of our officers and directors has agreed with the underwriters that
such officers and directors and/or their respective affiliates, collectively,
will purchase 125,000 units in this offering. Such purchases will be made to
demonstrate the confidence held by our officers and directors of our ultimate
ability to effect a business combination.
Although it is not obligated to do so, the underwriters may introduce us to
potential target businesses or assist us in raising additional capital, as needs
may arise in the future. We are not under any contractual obligation to engage
the underwriters to provide any services for us after completion of this
offering, but if it does, it may pay the underwriters a finder's fee or other
compensation.
We have agreed to indemnify the underwriters against some liabilities,
including civil liabilities under the Securities Act, or to contribute to
payments the underwriters may be required to make in this respect.
LEGAL MATTERS
Legal matters in connection with this offering are being passed upon for us
by Cooperman Levitt Winikoff Lester & Newman, P.C., New York, New York. Graubard
Mollen & Miller, New York, New York, is acting as counsel for the underwriters
in connection with this offering. A member of Cooperman Levitt beneficially owns
6,750 shares of our common stock.
EXPERTS
The financial statements included in this prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
36
<PAGE>
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1, which includes exhibits, schedules and amendments,
pursuant to the Securities Act of 1933, with respect to this offering of our
securities. Although this prospectus, which forms a part of the registration
statement, contains all material information included in the registration
statement, parts of the registration statement have been omitted as permitted by
rules and regulations of the SEC. We refer you to the registration statement and
its exhibits for further information about us, our securities and this offering.
The registration statement and its exhibits can be inspected and copied at the
SEC's public reference room at:
Room 1024, Judiciary Plaza,
450 Fifth Street, N.W.,
Washington, D.C. 20549-1004,
and at the SEC regional offices located at:
7 World Trade Center,
Suite 1300,
New York, New York 10048,
and
Northwest Atrium Center,
500 West Madison Street, 14th Floor,
Chicago, Illinois 60661.
The public may obtain information about the operation of the public
reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a web site at http://www.sec.gov which contains the Form S-1 and other
reports, proxy and information statements and information regarding issuers that
file electronically with the SEC.
37
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................... F-1
FINANCIAL STATEMENTS:
Balance Sheet as of March 31, 2000........................ F-2
Statement of Operations for the Period from March 17, 2000
(Date of Inception) through March 31, 2000.............. F-3
Statement of Changes in Shareholders' Equity (Deficit) for
the Period from March 17, 2000 (Date of Inception)
through March 31, 2000.................................. F-4
Statement of Cash Flows for the Period from March 17, 2000
(Date of Inception) through March 31, 2000.............. F-5
NOTES TO FINANCIAL STATEMENTS............................... F-6 - F-11
</TABLE>
38
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Unity Emerging Technology Venture One Ltd.:
We have audited the accompanying balance sheet of Unity Emerging Technology
Venture One Ltd. (a Delaware corporation in the development stage) as of
March 31, 2000, and the related statements of operations, changes in
shareholders' equity (deficit) and cash flows for the period from inception
(March 17, 2000) to March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Unity Emerging Technology
Venture One Ltd. as of March 31, 2000, and the results of its operations and its
cash flows for the period from inception (March 17, 2000) to March 31, 2000, in
conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying financial
statements, the Company is a development stage enterprise with no significant
operating results to date. The factors discussed in Note 1 to the financial
statements raise a substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regards to those matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
ARTHUR ANDERSEN LLP
New York, New York
May 9, 2000
F-1
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
BALANCE SHEET
MARCH 31, 2000
<TABLE>
<S> <C>
ASSETS
CASH........................................................ $250
----
Total assets............................................ $250
====
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Advances from affiliate................................... $175
----
Total current liabilities............................... 175
====
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 5,000 shares authorized,
no shares issued........................................ --
Common stock, $.0001 par value, 20,000,000 shares
authorized, 750,000 shares issued and outstanding....... 75
Additional paid-in capital................................ --
Deficit accumulated during the development stage.......... --
----
Total shareholders' equity (deficit).................... 75
----
Total liabilities and shareholders' equity (deficit).... $250
====
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-2
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH MARCH 31, 2000
<TABLE>
<S> <C>
REVENUES.................................................... $ --
--------
EXPENSES:...................................................
General and administrative................................ --
--------
Total expenses.......................................... --
--------
Net loss................................................ $ --
========
NET LOSS PER COMMON SHARE--BASIC AND DILUTED................ $ --
========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING--BASIC
AND DILUTED............................................... 750,000
========
</TABLE>
The accompanying notes are an integral part of this statement.
F-3
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH MARCH 31, 2000
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE
-------------------- PAID-IN DEVELOPMENT
SHARE PER VALUE CAPITAL STAGE TOTAL
-------- --------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Issuance of stock to original founders for cash
at par value................................. 750,000 $75 $ -- $ -- $75
Net loss for the period from March 17, 2000
(date of inception) through March 31, 2000... -- -- -- -- --
------- --- ------ ------ ---
BALANCE, March 31, 2000........................ 750,000 $75 $ -- $ -- $75
======= === ====== ====== ===
</TABLE>
The accompanying notes are an integral part of this statement.
F-4
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 17, 2000 (DATE OF INCEPTION)
THROUGH MARCH 31, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ --
----
Net cash used in operating activities................... --
----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.................... 75
Advances from affiliates.................................. 175
----
Net cash provided by financing activities............... 250
----
Net increase in cash....................................
CASH, beginning of period................................... --
----
CASH, end of period......................................... $250
====
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
1. ORGANIZATION AND OPERATIONS
Unity Emerging Technology Venture One Ltd. (the "Company") was incorporated
in the State of Delaware on March 17, 2000, for the purpose of raising capital
which is to be used to effect a business combination (the "Business
Combination"). The Company is currently in the development stage. All activity
of the Company to date relates to its formation and proposed fund raising.
The Company's ability to commence operations is contingent upon obtaining
financing through a public offering (the "Proposed Offering") of the Company's
Common Stock. Note 2 discusses the details of the Proposed Offering.
The Proposed Offering can be considered a "blind pool." Blind pool offerings
are inherently characterized by an absence of substantive disclosures relating
to the use of the net proceeds of the offering. Consequently, although
substantially all of the proceeds of the Proposed Offering are intended to be
utilized to effect a Business Combination, the proceeds are not specifically
designated for this purpose. Upon completion of this Proposed Offering,
approximately 90% of the net proceeds, after payment of underwriting discounts
and commissions and the underwriters' nonaccountable expense allowance, will be
held in an interest-bearing trust account ("Trust Account") until the earlier of
(1) the consummation of a Business Combination or (2) the liquidation of the
Company in the event that the Company does not effect a Business Combination
within 24 months from the consummation of the offering. Notwithstanding the
foregoing, if the Company enters into a letter of intent, an agreement in
principle or a definitive agreement to effectuate a Business Combination prior
to the expiration of such 24-month period, the Company's Certificate of
Incorporation provides that the Company will be afforded up to an additional six
months following the expiration of the initial 24-month period to consummate
such Business Transaction. Moreover, since the Company has not yet identified an
acquisition target (the "Target"), investors in the Proposed Offering will have
virtually no substantive information available for advance consideration of any
specified Business Combination.
The Proposed Offering is not being conducted in accordance with Rule 419,
which was adopted by the Securities and Exchange Commission (the "Commission")
to strengthen the regulation of securities offered by "blank check" companies. A
blank check company is defined as (a) a development stage company that has no
specific business plan or has indicated that its business plan is to engage in a
merger or acquisition with an unidentified company and (b) a company which
issues securities that, among other things, (i) are not quoted in the Nasdaq
system or (ii) in the case of a company which has been in continuous operation
for less than three years, has net tangible assets of less than $5,000,000.
Although the Company is a "blank check" company, it does not believe that
Rule 419 will be applicable to it in view of the fact that upon its receipt of
the net proceeds of this offering, the Company's net tangible assets will exceed
$5,000,000. Accordingly, investors in this offering will not receive the
substantive protection provided by Rule 419. Additionally, there can be no
assurances that the United States Congress will not enact legislation which will
prohibit or restrict the sale of securities of "blank check" companies.
As a result of its limited resources, the Company will, in all likelihood,
have the ability to effect only a single Business Combination. Accordingly, the
prospects for the Company's success will be entirely dependent upon the future
performance of a single business.
F-6
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
1. ORGANIZATION AND OPERATIONS (CONTINUED)
The Company will not effect a Business Combination unless the fair market
value of the Target, as determined by the Board of Directors of the Company in
its sole discretion, based upon valuation standards generally accepted by the
financial community including, among others, book value, cash flow, and both
actual and potential earnings, is at least equal to 80% of the net assets
(assets less liabilities) of the Company at the time of such acquisition.
Upon the completion of the Proposed Offering, the Company will not satisfy
the criteria for qualifying its securities in the Nasdaq system. The Company's
securities will be traded in the over-the-counter market. It is anticipated that
they will be quoted on the OTC Bulletin Board, a NASD sponsored and operated
inter-dealer automated quotation system for equity securities not included in
The Nasdaq Stock Market, as well as in the NQB Pink Sheets published by National
Quotation Bureau Incorporated. The OTC Bulletin Board was introduced as an
alternative to "pink sheet" trading of over-the-counter securities. Although the
Company believes that the OTC Bulletin Board has been recognized by the
brokerage community as an acceptable alternative to the NQB Pink Sheets, there
can be no assurance that the liquidity and prices of the Units in the secondary
market will not be adversely affected.
Furthermore, there is no assurance that the Company will be able to
successfully effect a Business Combination. As discussed previously, if the
Company is unable to effect a Business Combination within 24 months of the
consummation of the Proposed Offering, excluding a possible six month extension,
the Company's Certificate of Incorporation provides for the Company's
liquidation unless the Company determines to seek stockholder approval to
continue the Company's existence. If the Company were to expend all of the net
proceeds of the Proposed Offering not held in the Trust Account prior to
liquidation, but recognizing that such net proceeds could become subject to the
claims of creditors of the Company which could be prior to the claims of
stockholders of the Company, it is possible that the Company's liquidation value
may be less than the amount in the Trust Account, inclusive of any net interest
income thereon.
Moreover, all of the Company's present stockholders have agreed to waive
their respective rights to participate in any such liquidation distribution on
shares owned prior to the Proposed Offering.
If the Company is unable to acquire control of an operating business or
businesses, it may be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Act"). The Company is unable to
predict what effect registration under such Act would have, but it believes that
its ability to pursue its current business plan could be adversely affected as a
result. The most significant difference with respect to financial statement
presentation and disclosure requirements for companies registered under the Act
would require the investments held by the Company to be adjusted to market value
at the balance sheet date. The Company believes that its anticipated principal
activities, which will involve acquiring control of an operating company, will
not subject the Company to regulation under the Act.
2. PROPOSED PUBLIC OFFERING OF SECURITIES
The Proposed Offering calls for the Company to offer for public sale up to
1,700,000 units (the "Units") at a price of $6.00 per Unit. Each Unit consists
of one share of the Company's Common
F-7
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
2. PROPOSED PUBLIC OFFERING OF SECURITIES (CONTINUED)
Stock, $.0001 par value and one Class A Redeemable Warrant. Each Class A
Redeemable Warrant entitles the holder to purchase from the Company one share of
Common Stock at an exercise price of $5.00, subject to adjustment, and one-half
of a Class B Warrant, commencing on the later of (i) the consummation of a
Business Combination, or (ii) one year from the effective date of the Prospectus
and ending six years after the effective date of the Proposed Offering (the
"Effective Date"). Each Class B Redeemable Warrant, when issued, will entitle
the holder to purchase from the Company one share of Common Stock at an exercise
price of $7.50, subject to adjustment. The Class A redeemable Warrants and
Class B Redeemable Warrants will be redeemable at the option of the Company, and
with the consent of the underwriters of the Proposed Offering (the
"Underwriters") each as a class, in whole or not in part, upon 30 days' notice
at any time after the Redeemable Warrants become exercisable, only in the event
that the last sale price of the Common Stock is at least $7.00 per share with
respect to the Class A Redeemable Warrant(s), and $10.00 with respect to the
Class B Redeemable Warrants for 20 consecutive trading days ending on the third
day prior to notice of redemption, at a price of $.05 per Class A Redeemable
Warrant or Class B Redeemable Warrant. The securities comprising the Units will
not be separately transferable until 90 days after the date of the Company's
Prospectus unless one of the Underwriters, informs the Company of its decision
to allow separate trading, but in no event will the Underwriter allow separate
trading of the securities comprising the Units until the preparation of an
audited balance sheet of the Company reflecting receipt by the Company of the
proceeds of this offering.
The Company has granted the Underwriters an option, exercisable within 45
business days from the Effective Date, to purchase up to 255,000 additional
Units at $6.00 per Unit. This option is solely for the purpose of covering
overallotments.
In connection with the Proposed Offering, the Company will sell to the
Underwriters and their designees, for nominal consideration, Unit Purchase
Option(s) (the "Underwriters' UPO") to purchase up to 170,000 Units at an
exercise price of $6.60 per Unit. The Underwriters' UPO will be exercisable for
a period of four years commencing one year from the Effective Date of the
Company's Prospectus.
The Company has granted its executive officers and directors 200,000
Class A Warrants (the "Directors' Warrants") in consideration of future services
to be rendered on behalf of the Company. The Directors' Warrants are not
exercisable until the consummation by the Company of a Business Combination and
are not redeemable by the Company. The Company did not recognize any expense
with regards to these warrants as the value was deemed to be immaterial.
All of the Company's present stockholders have agreed to vote their
respective shares of Common Stock in accordance with the vote of the majority of
all nonaffiliated future stockholders of the Company with respect to a Business
Combination.
In addition, the Common Stock owned by all of the executive officers and
directors of the Company, their affiliates and by all persons owning 5% or more
of the currently outstanding shares of Common Stock has been placed in escrow
until the earlier of (i) the occurrence of a Business Combination, or (ii) the
Liquidation Date. During the escrow period, such stockholders will not be able
to sell or otherwise transfer their respective shares of Common Stock, but
retain all other rights as
F-8
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
2. PROPOSED PUBLIC OFFERING OF SECURITIES (CONTINUED)
stockholders of the Company, including, without limitation, the right to vote
such shares of Common Stock.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NET INCOME (LOSS) PER COMMON SHARE
The Company computes net income (loss) per common share in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" and
SEC Staff Accounting Bulletin No. 98 ("SAB No. 98"). Under the provisions of
SFAS No. 128 and SAB No. 98, basic net income (loss) per common share ("Basic
EPS") is computed by dividing net income (loss) by the weighted average number
of common shares outstanding. Diluted net income (loss) per common share
("Diluted EPS") is computed by dividing net income (loss) by the weighted
average number of common shares and dilutive common share equivalents then
outstanding. SFAS No. 128 requires the presentation of both Basic EPS and
Diluted EPS on the face of the statements of operations.
Diluted EPS for the period from March 17, 2000 (date of inception) through
March 31, 2000 does not include the impact of warrants then outstanding, as the
effect of their inclusion would be antidilutive.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation under the provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," and elected to continue
the accounting set forth in APB No. 25, "Accounting for Stock Issued to
Employees," and to provide the necessary pro forma disclosures as if the fair
value method has been applied. No pro forma disclosures have been made as the
Company has not issued any stock options and the pro forma of all warrants
granted was deemed to be immaterial under the Black-Scholes Valuation Model.
The Company accounts for nonemployee stock-based awards in which goods or
services are the consideration received for the equity instruments issued based
on the fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more readily determinable.
4. CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of Common Stock. The Company's Board of Director's has the
power to issue any or all of the authorized but unissued Common Stock without
stockholder approval. The Company currently has no
F-9
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
4. CAPITAL STOCK (CONTINUED)
commitments to issue any shares of Common Stock other than as described in the
Proposed Offering; however, the Company will, in all likelihood, issue a
substantial number of additional shares in connection with a Business
Combination. To the extent that additional shares of Common Stock are issued,
dilution to the interests of the Company's stockholders participating in the
Proposed Offering will occur.
The Board of Directors of the Company is empowered, without stockholder
approval, to issue up to 5,000 shares of "blank check" preferred stock (the
"Preferred Stock") with dividend, liquidation, conversion, voting or other
rights which could adversely affect the voting power or other rights of the
holders of the Company's Common Stock.
5. RELATED PARTY TRANSACTIONS
The Chairman of the Board of Directors and the President of the Company are
the principal shareholders, officers and directors of Unity Venture Capital
Associates Ltd. ("Unity") which owns shares in the Company. Beginning with the
effective date of the Proposed Offering, the Company will be obligated to pay
Unity a monthly fee of $7,500 for general and administrative services, including
the use of office space in premises occupied by Unity. Subsequent to March 31,
2000, Unity advanced the Company $55,000 which will be repaid from the proceeds
of the Proposed Offering.
At March 31, 2000, a member of the Company's legal counsel owned 6,750
shares of the Company's Common Stock.
6. STOCK OPTION PLAN
On March 17, 2000, the Company's Board of Directors approved a stock option
plan (the "Plan"). The Plan, which is subject to shareholder approval, provides
for issuance of up to 255,000 options (the "Options") to acquire shares of the
Company's Common Stock.
The Options are intended to qualify either as incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986 or as options which are not intended to meet the
requirements of such section ("Nonstatutory Stock Options"). The Options may be
granted under the Plan to persons who, in the case of Incentive Stock Options,
are key employees (including officers) of the Company, or, in the case of
Nonstatutory Stock Options, are key employees (including officers) and
nonemployee directors of the Company, except that Nonstatutory Stock Options may
not be granted to a holder of more than 10% of the total voting power of the
Company.
The exercise price of all Incentive Stock Options granted under the Plan
must be at least equal to the fair market value of such shares on the date of
grant or, in the case of Incentive Stock Options granted to the holder of 10% or
more of the Company's Common Stock, at least 110% of the fair market value of
such shares on the date of grant. The exercise price of all Nonstatutory Stock
Options granted under the Plan shall be determined by the Board of Directors of
the Company at the time of grant. The maximum exercise period for which the
Options may be granted is ten years from the date of grant (five years in the
case of Incentive Stock Options granted to an individual owning more than 10% of
the Company's Common Stock). The aggregate fair market value (determined at the
date of
F-10
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
(A DEVELOPMENT STAGE ENTITY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
6. STOCK OPTION PLAN (CONTINUED)
the option grant) of such shares with respect to which Incentive Stock Options
are exercisable for the first time by the holder of the option during any
calendar year shall not exceed $100,000.
7. INCOME TAXES
Income taxes are accounted for in accordance with SFAS No. 109, "Accounting
for Income Taxes." Under this method, deferred income taxes are determined based
on differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year-end, and are measured based on enacted
tax rates and laws that will be in effect when the differences are expected to
reverse. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
8. CONTINGENCY
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act. The Company has
also agreed to pay to the Underwriters an expense allowance on a nonaccountable
basis equal to 3% of the gross proceeds derived from the sale of the Units
underwritten (including the sale of any Units subject to the Underwriters'
overallotment option).
F-11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
1,700,000 UNITS
---------------------
PROSPECTUS
---------------------
GAINES, BERLAND INC.
EARLYBIRDCAPITAL, INC.
, 2000
You may rely only on the information contained in this prospectus. We have not
authorized anyone to provide information or to make any representations
different from that contained in this prospectus. Neither the delivery of this
prospectus nor the sale of units means that information contained in this
prospectus is correct after the date of this prospectus. This prospectus is an
offer to sell or solicitation of an offer to buy these securities in any
circumstances under which the offer or solicitation is not authorized or is
unlawful.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth various expenses, other than underwriting
discounts, which will be incurred in connection with the offering. Other than
the SEC registration fee, NASD filing fee and the non-accountable expense
allowance of Gaines Berland Inc., amounts set forth below are estimates:
<TABLE>
<S> <C>
SEC registration fee........................................ $8,763.68
NASD filing fee............................................. $3,819.60
Nonaccountable expense allowance**.......................... 306,000
Blue sky fees and expenses.................................. *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Transfer and Warrant Agent fees............................. *
Escrow Agent Fees........................................... *
Miscellaneous expenses...................................... *
---------
$
=========
</TABLE>
- ------------------------
* To be filed by amendment to this Registration Statement.
** Assumes no exercise of the Underwriters' over-allotment option.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of the Certificate of Incorporation of Unity Emerging
Technology Venture One Ltd. ("Registrant") provides with respect to the
indemnification of directors and officers that Registrant shall indemnify to the
fullest extent permitted by Sections 102(b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such Sections
grant Registrant the power to indemnify. Article SEVENTH of the Certificate of
Incorporation of Registrant also provides that no director shall be liable to
the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transaction from which the director derived an improper
personal benefit, it being the intention of the foregoing provision to eliminate
the liability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by Section 102(b)(7) of Delaware
General Corporation Law, as amended from time to time.
Reference is made to Section of the Underwriting Agreement, which provides
for indemnification of the officers and directors of Registrant under certain
circumstances.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth information relating to all securities of
Registrant sold by it since March 17, 2000, the date of Registrant's inception.
All of such shares of common stock were purchased on March 20, 2000 at a price
of $.0001 per share:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
- ---- ----------------
<S> <C>
Lawrence Burstein........................................ 172,125
Unity Venture Capital Associates Ltd..................... 75,000
Jerome Baron............................................. 13,500
Murdock & Company........................................ 33,750
Cricket Services Ltd..................................... 43,875
Richard Kress & Cheryl Kress JTWROS...................... 5,060
Stephen Verchick......................................... 36,500
Richard Braver........................................... 5,060
Dan Brecher IRA/RO....................................... 11,810
Barry Ridings............................................ 6,750
Carl L. Norton........................................... 10,125
Financiera & Inversionista Xana.......................... 13,500
Ian Barnett.............................................. 5,060
Henry Rothman............................................ 6,750
Donald Rabinovitch....................................... 5,900
David Vozick............................................. 5,900
Tarzana Associates....................................... 4,000
Jonathan Rothchild....................................... 1,680
Equity Interest Inc...................................... 1,680
Domaco Venture Capital Fund.............................. 1,680
KGM Associates........................................... 5,680
Sagres Group Ltd......................................... 6,750
Cowen & Company--Custodian for Stanley Hollander IRA..... 33,750
Ronald Koenig............................................ 33,750
Heptagon Investments Ltd................................. 84,375
Jay Haft................................................. 11,810
Ira Roxland.............................................. 6,750
Steven Millner........................................... 16,875
Norman Leben............................................. 16,875
Heptagon Capital Management, Inc......................... 1,680
Michael Karfunkel........................................ 36,000
George Karfunkel......................................... 36,000
-------
TOTAL.................................................. 750,000
=======
</TABLE>
On March 20, 2000, we issued Class A warrants to the following affiliates in
consideration for future services to be rendered by such persons on our behalf:
<TABLE>
<CAPTION>
NUMBER OF
NAME CLASS A WARRANTS
- ---- ----------------
<S> <C>
John Cattier................................................ 59,167
Norman Leben................................................ 59,167
Lawrence Burstein........................................... 59,166
Barry Ridings............................................... 22,500
</TABLE>
II-2
<PAGE>
Exemption from registration under the Securities Act of 1933, as amended, is
claimed for the sales of common stock referred to above in reliance upon the
exemption afforded by Section 4(2) of the Securities Act for transactions not
involving a public offering. Each certificate evidencing such shares of Common
Stock bears an appropriate restrictive legend and "stop transfer" orders are
maintained on Registrant's stock transfer records there against. None of these
sales involved participation by an underwriter or a broker-dealer.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a list of Exhibits filed herewith as part of the
Registration Statement:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement between Registrant and the
Underwriters*
3.1 Certificate of Incorporation of Registrant
3.2 By-laws of Registrant
4.1 Form of certificate evidencing shares of Common Stock
4.2 Form of certificate evidencing Class A Warrants
4.3 Form of certificate evidencing Class B Warrants
4.4 Form of Unit Purchase Option between Registrant and the
Underwriters*
4.5 Form of Warrant Agreement between Registrant and American
Stock Transfer & Trust Company, as escrow agent
5.1 Opinion of Cooperman Levitt Winikoff Lester & Newman, P.C.*
10.1 2000 Stock Option Plan
10.2 Form of Trust Agreement by and between Registrant and The
Bank of New York
10.3 Form of Insider's Letter*
10.4 Form of Escrow Agreement by and among Registrant, Lawrence
Burstein, John Cattier, Cricket Services, Ltd., Barry
Ridings, Norman Leben, Unity Venture Capital
Associates Ltd. ("Unity") and American Stock Transfer &
Trust Company
10.5 General and Administrative Services Agreement, dated as of
March 20, 2000, by and between Registrant and Unity*
10.6 Form of Officer/Director Unit Purchase Agreement with the
Representative of the Underwriters*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Cooperman Levitt Winikoff Lester & Newman, P.C.
(to be included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of
Part II of this Registration Statement)
27.1 Financial Data Schedule
</TABLE>
- ------------------------
* To be filed by amendment.
(b) Financial Statement Schedules.
Financial statement schedules are omitted because the conditions requiring
their filing do not exist or the information required thereby is included in the
financial statements filed, including the notes thereto.
ITEM 17. UNDERTAKINGS
Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-3
<PAGE>
(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 the registration statement.
(2) That for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(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 provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to Item 14 of this Part II to the registration statement, or
otherwise, Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or controlling
person of 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, 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 such
indemnification by it is against the public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(6) That for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(7) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 10th day of May, 2000.
<TABLE>
<S> <C> <C>
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By: /s/ LAWRENCE BURSTEIN
-----------------------------------------
Lawrence Burstein, PRESIDENT
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Lawrence Burstein and Norman Leben, and each or
either of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities to approve, sign and file with the U.S.
Securities and Exchange Commission and any other appropriate authorities the
original of any and all amendments (including post-effective amendments) to this
Registration Statement and any other documents in connection therewith, granting
unto each said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
------------------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LAWRENCE BURSTEIN
------------------------------------------- President, Director, Principal May 10, 2000
Lawrence Burstein Executive Officer
/s/ NORMAN LEBEN Secretary, Director, Principal
------------------------------------------- Financial and Accounting May 10, 2000
Norman Leben Officer
/s/ JOHN CATTIER
------------------------------------------- Director May 10, 2000
John Cattier
------------------------------------------- Director
Barry Ridings
</TABLE>
II-5
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
The undersigned, being of legal age, in order to form a corporation under
and pursuant to the laws of the State of Delaware, does hereby set forth as
follows:
FIRST: The name of the corporation is UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD. (hereinafter the "Corporation").
SECOND: The address of the initial registered and principal office of
the Corporation in this state is c/o United Corporate Services, Inc., 15 East
North Street, in the City of Dover, County of Kent, State of Delaware 19901, and
the name of the registered agent at said address is United Corporate Services,
Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the corporation laws
of the State of Delaware.
FOURTH: (a) AUTHORIZED SHARES. The total number of shares of capital
stock which the Corporation shall have authority to issue is twenty million five
thousand (20,005,000), which shall consist of 20,000,000 shares, $.0001 par
value, designated as Common Stock and five thousand (5,000) shares, $.01 par
value, designated as Preferred Stock.
Number of Shares Par Value
---------------- ---------
20,000,000 .0001
5,000 .01
(b) PREFERRED STOCK. Shares of Preferred Stock may be issued from time to
time in series or otherwise and the Board of Directors of the Corporation is
hereby authorized, subject to the limitations provided by law, to establish and
designate series, if any, of the Preferred Stock, to fix the number of shares
constituting any such series, and to fix the voting powers, designations, and
relative, participating, optional, conversion, redemption and other rights of
the shares of Preferred Stock or series thereof, and the qualifications,
limitations and restrictions thereof, and to increase and to decrease the number
of shares of Preferred Stock constituting any such series. The authority of the
Board of Directors of the Corporation with respect to shares of Preferred Stock
or any series thereof shall include but shall not be limited to the authority to
determine the following:
<PAGE>
I. The designation of any series.
II. The number of shares initially constituting any such series.
III. The rate or rates and the times at which dividends on the
shares of Preferred Stock or any series thereof shall be paid, and whether
or not such dividends shall be cumulative, and, if such dividends shall be
cumulative, the date or dates from and after which they shall accumulate.
IV. Whether or not shares of the Preferred Stock or series
thereof shall be redeemable, and, if such shares shall be redeemable, the
terms and conditions of such redemption, including but not limited to the
date or dates upon or after which such shares shall be redeemable and the
amount per share which shall be payable upon such redemption, which amount
may vary under different conditions and at different redemption dates.
V. The amount payable on the shares of Preferred Stock or
series thereof in the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; PROVIDED, HOWEVER, that the
holders of such shares shall be entitled to be paid, or to have set apart
for payment, not less than $.01 per share before the holders of shares of
the Common Stock or the holders of any other class of stock ranking junior
to the Preferred Stock as to rights on liquidation shall be entitled to be
paid any amount or to have any amount set apart for payment; PROVIDED,
FURTHER, that, if the amounts payable on liquidation are not paid in full,
the shares of all series of the Preferred Stock shall share ratably in any
distribution of assets other than by way of dividends in accordance with
the sums which would be payable in such distribution if all sums payable
were discharged in full.
VI. Whether or not the shares of Preferred Stock or series
thereof shall have voting rights, in addition to the voting rights
provided by law, and, if such shares shall have such voting rights, the
terms and conditions thereof, including but not limited to the right of
the holders of such shares to vote as a separate class either alone or
with the holders of shares of one or more other class or series of
Preferred Stock and the right to have more than one vote per share.
VII. Whether or not a sinking fund shall be provided for the
redemption of the shares of Preferred Stock or series thereof, and, if
such a sinking fund shall be provided, the terms and conditions thereof.
VIII. Whether or not a purchase fund shall be provided for the
shares of Preferred Stock or series thereof, and, if such a purchase fund
shall be provided, the terms and conditions thereof.
2
<PAGE>
IX. Whether or not the shares of Preferred Stock or series
thereof shall have conversion privileges, and, if such shares shall have
conversion privileges, the terms and conditions of conversion, including
but not limited to any provision for the adjustment of the conversion rate
or the conversion price.
X. Any other relative rights, preferences, qualifications,
limitations and restrictions.
(c) COMMON STOCK.
I. DIVIDENDS. Subject to the preferential dividend rights
applicable to shares of Preferred Stock, the holders of shares of Common
Stock shall be entitled to receive only such dividends as may be declared
by the Board of Directors.
II. LIQUIDATION. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after
distribution in full of the preferential amounts to be distributed to the
holders of shares of Preferred Stock, the holders of shares of Common
Stock shall be entitled to receive all of the remaining assets of the
Corporation available for distribution to holders of Common Stock, ratably
in proportion to the number of shares of the Common Stock held by them.
III. VOTING RIGHTS. Except as otherwise required by statute or as
otherwise provided in this Certificate of Incorporation, the holders of
shares of Common Stock shall be entitled to vote on all matters at all
meetings of the stockholders of the Corporation, and shall be entitled to
one vote for each share of Common Stock entitled to vote at such meeting,
voting together with the holders of shares of the Preferred Stock who are
entitled to vote, if any such shares are then outstanding and not as a
separate class.
FIFTH: The name and address of the incorporator are as follows:
Name Address
---- -------
Ira Roxland 800 Third Avenue
New York, New York 10022
SIXTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the Corporation
and of its directors and stockholders:
(a) The number of directors of the Corporation shall be such as from
time to time shall be fixed by, or in the manner provided in the by-laws.
Election of directors need not be by ballot unless the by-laws so provide.
3
<PAGE>
(b) The Board of Directors shall have the power without the assent or vote
of the stockholders:
I. To make, alter, amend, change, add to or repeal the By-laws of
the Corporation; to fix and vary the amount to be reserved for any
proper purpose; to authorize and cause to be executed mortgages and
liens upon all or any part of the property of the Corporation; to
determine the use and disposition of any surplus or net profits; and
to fix the times for the declaration and payment of dividends;
II. To determine from time to time whether, and to what times and
places, and under what conditions the accounts and books of the
Corporation (other than the stock ledger) or any of them, shall be
open to the inspection of the stockholders.
(c) The directors in their discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders of the
Corporation or at any meeting of the stockholders of the Corporation called for
the purpose of considering any such act or contract, and any contract or act
that shall be approved or be ratified by the vote of the holders of a majority
of the stock of the Corporation which is represented in person or by proxy at
such meeting and entitled to vote thereat (provided that a lawful quorum of
stockholders be represented thereat in person or by proxy) shall be as valid and
as binding upon the Corporation and upon all the stockholders of the Corporation
as though it had been approved or ratified by every stockholder of the
Corporation, whether or not the contract or act would otherwise be open to legal
attack because of directors' interest, or for any other reason.
(d) In addition to the powers and authorities hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation; subject, nevertheless, to the provisions of the statutes of
Delaware, of this certificate, and to any by-laws from time to time made by the
stockholders; PROVIDED, HOWEVER, that no by-laws so made shall invalidate any
prior act of the directors which would have been valid if such by-law had not
been made.
SEVENTH: (a) The Corporation shall, to the full extent permitted by
Section 145 of the Delaware General Corporation Law, as amended (the "DGCL"),
from time to time, indemnify all persons whom it may indemnify pursuant thereto.
(b) A director of the Corporation shall be personally liable to the
Corporation and to its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
4
<PAGE>
(c) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer, of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of his or her heirs, executors and administrators; PROVIDED,
HOWEVER, that except as provided in paragraph (d) hereof, the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Paragraph SEVENTH shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; PROVIDED, HOWEVER, that if the DGCL requires, the payment of such
expenses incurred by a director or officer in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Paragraph SEVENTH or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(d) If a claim under sub-paragraph (c) of this Paragraph SEVENTH is not
paid in full by the Corporation within thirty days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the DGCL for the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances
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because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard or conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(e) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Paragraph SEVENTH shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
(f) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the DGCL.
EIGHTH: The following paragraphs (a) through (d) shall apply during
the period commencing upon the consummation of the Corporation's initial public
offering of securities ("IPO") and terminating upon the consummation of any
"Business Combination," and, except as provided in subparagraph (c) of this
paragraph EIGHTH, may not be amended during such period. A "Business
Combination" shall mean the acquisition by the Corporation, whether by merger,
exchange of capital stock, asset or stock acquisition or other similar type of
transaction, of any business ("Target Business").
(a) Prior to the consummation of any Business Combination, the
Corporation shall submit such Business Combination to its stockholders for
approval regardless of whether the Business Combination is of a type which
normally would require such stockholder approval under the DGCL. In the event
that the holders of a majority in interest of the outstanding voting stock vote
for the approval of the Business Combination, the Corporation shall be
authorized to consummate the Business Combination; PROVIDED, HOWEVER, that the
Corporation shall not consummate any Business Combination if 20% or more in
interest of the holders of the Public Shares (as hereafter defined) exercise
their conversion rights described in subparagraph (b) of this Paragraph EIGHTH.
(b) In the event that a Business Combination is approved in accordance
with subparagraph (a) of this Paragraph EIGHTH and is consummated by the
Corporation, any holder of shares of Common Stock issued in the IPO ("Public
Shares") who voted against the Business Combination may demand that the
Corporation convert its Public Shares into cash. If so demanded, the Corporation
shall convert such Public Shares at a per-share conversion price equal to the
quotient determined by dividing (i) the amount in the Trust Fund (as defined
below), inclusive of any interest thereon, as of the record date for
determination of stockholders entitled to vote on the Business Combination, by
(ii) the number of Public Shares. "Trust Fund" shall mean that trust account
established by the Corporation at the consummation of its IPO and into which
certain net proceeds of the IPO are deposited.
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(c) In the event that the Corporation does not consummate a Business
Combination by the later of (i) 24 months after the consummation of the IPO or
(ii) 30 months after the consummation of the IPO in the event that an agreement
for a Business Combination was executed but was not consummated within such 24
month period (the later of such dates being referred to as the "Termination
Date"), the officers of the Corporation shall take all such actions as may be
necessary to dissolve and liquidate the Corporation within sixty days of the
Termination Date; PROVIDED, HOWEVER, that the Termination Date may be extended
for one or more terms of finite duration by the affirmative vote of the holders
of a majority in interest of the Public Shares. In the event that the
Corporation is so dissolved and liquidated, liquidating distributions shall be
made only with respect to the Public Shares and the Corporation shall pay no
liquidating distributions with respect to any shares of Common Stock outstanding
prior to the consummation of the IPO.
(d) A holder of Public Shares shall be entitled to receive distributions
from the Trust Fund only in the event of a liquidation of the Corporation or in
the event such holder demands conversion of its shares in accordance with
subparagraph (b) of this Paragraph EIGHTH. In no other circumstances shall a
holder of Public Shares have any right or interest of any kind in or to the
Trust Fund.
NINTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation (other than
the provisions of Article EIGHTH, which may not be amended prior to consummation
of a Business Combination except to the extent provided in subparagraph (c) of
said Paragraph EIGHTH) in the manner now or hereafter prescribed by law, and all
rights and powers conferred herein on stockholders, directors and officers are
subject to this reserved power.
IN WITNESS WHEREOF, the undersigned hereby executes this Certificate and
affirms that the facts set forth herein are true and under the penalties of
perjury this 17th day of March, 2000.
/s/ IRA ROXLAND
----------------------------------
Ira Roxland, Incorporator
<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
OFFICES
SECTION 1. Delaware Registered Office........ 1
SECTION 2. Other Offices..................... 1
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meeting.................... 1
SECTION 2. Special Meetings.................. 1
SECTION 3. Notice of Meetings................ 1
SECTION 4. Quorum and Adjournments........... 2
SECTION 5. Organization...................... 2
SECTION 6. Proxies and Voting of Shares...... 3
SECTION 7. Voting List of Stockholders....... 3
SECTION 8. Consent of Stockholders in Lieu of
Meeting........................... 4
ARTICLE III
DIRECTORS
SECTION 1. Power and Duties of the Board of
Directors......................... 4
SECTION 2. Number and Qualifications......... 4
SECTION 3. Election and Term................. 5
SECTION 4. Regular Meetings; Notice......... 5
SECTION 5. Special Meetings.................. 5
SECTION 6. Notice of Special Meetings........ 5
SECTION 7. Quorum............................ 5
SECTION 8. Organization...................... 6
SECTION 9. Compensation of Directors......... 6
SECTION 10. Committees........................ 6
SECTION 11. Written Consents.................. 7
SECTION 12. Conference Telephone Meetings..... 7
ARTICLE IV
SECTION 1. Number and Election............... 7
SECTION 2. Term of Office and Qualification.. 8
SECTION 3. Other Officers.................... 8
SECTION 4. The President..................... 8
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SECTION 5. Vice Presidents................... 8
SECTION 6. The Comptroller................... 8
SECTION 7. Assistant Comptrollers............ 9
SECTION 8. The Secretary..................... 9
SECTION 9. Assistant Secretaries............. 9
SECTION 10. The Treasurer..................... 9
SECTION 11. Assistant Treasurers.............. 10
SECTION 12. Compensation...................... 10
SECTION 13. Bonds............................. 10
ARTICLE V
RESIGNATIONS AND REMOVALS
SECTION 1. Resignations...................... 10
SECTION 2. Removals.......................... 11
ARTICLE VI
VACANCIES
SECTION 1. Among Directors................... 11
SECTION 2. Among Officers, Etc............... 11
ARTICLE VII
NOTICES
SECTION 1. Manner of Giving................. 12
SECTION 2. Waiver of Notice.................. 12
ARTICLE VIII
CAPITAL STOCK
SECTION 1. Form and Issuance................. 12
SECTION 2. Transfers of Stock................ 13
SECTION 3. Lost, Stolen and Destroyed
Certificates...................... 13
SECTION 4. Fixing of Record Date............. 13
ARTICLE IX
NEGOTIABLE INSTRUMENTS, CONTRACTS, ETC.
SECTION 1. Signatures on Checks, Etc......... 14
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SECTION 2. Execution of Contracts, Deeds, Etc 14
SECTION 3. Loans............................. 14
ARTICLE X
CORPORATE SEAL 14
ARTICLE XI
FISCAL YEAR 15
ARTICLE XII
VOTING OF STOCK HELD 15
ARTICLE XIII
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
SECTION 1. Indemnification................... 15
SECTION 2. Insurance......................... 17
ARTICLE XIV
AMENDMENTS 18
<PAGE>
BY-LAWS OF
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
ARTICLE I
OFFICES
SECTION 1. DELAWARE REGISTERED OFFICE. The registered office of the
Corporation in the State of Delaware shall be located at 15 East North Street,
City of Dover, County of Kent, Delaware 19901.
SECTION 2. OTHER OFFICES. The Corporation may have an office or
offices at such other places in the United States or elsewhere as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of stock holders of
the Corporation for the election of directors and for the transaction of such
other business as may properly come before said meeting shall be held on such
date and at such hour and place, within or without the State of Delaware, as
shall be fixed by the Board of Directors with respect to each such meeting and
as shall be stated in the notice thereof.
SECTION 2. SPECIAL MEETINGS. Special meetings of stock holders, for
any purpose or purposes may, except as otherwise prescribed by law or in the
Certificate of Incorporation, be called at any time by the President or by the
Board of Directors to be held on such date and at such hour and place, within or
without the State of Delaware, as shall be stated in the notice thereof, and the
President or a Vice President or the Secretary shall call such a meeting
whenever stockholders, holding not less than a majority of all of the
outstanding stock of the corporation entitled to vote at such meeting, shall
make written application therefor, stating the purpose or purposes of the
meeting applied for, which application shall be filed with the office of the
Secretary.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise provided or
permitted by law or in the Certificate of Incorporation or in these By-laws,
written notice of all meetings of stockholders, stating the place, date and hour
and in general terms only, the purpose or purposes thereof, shall be given by
the President or a Vice President or the Secretary or an Assistant Secretary to
each stockholder of record having voting power in respect of the business to be
transacted thereat, either by serving
<PAGE>
such notice upon him personally or by mailing or telegraphing the same to him at
his address as it appears on the records of the Corporation, at least ten days
but not more than sixty days before the date of the meeting, and the Secretary
or an Assistant Secretary or the transfer agent or agents of the Corporation
shall make affidavit as to the giving of such notice.
SECTION 4. QUORUM AND ADJOURNMENTS. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat, present in person or
by proxy, shall be required to and shall constitute a quorum at all meetings of
the stockholders for the transaction of business, except as otherwise provided
by law, by the Certificate of Incorporation or by these By-laws. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting of the time and place of the adjourned
meeting, until a quorum shall be present or represented. At such adjourned
meeting any business may be transacted which might have been transacted at the
original meeting. If a quorum be present at any meeting of stockholders and the
meeting is adjourned to reconvene either at a later time on the same date or at
a later date, no notice need be given other than announcement at the meeting,
provided that if any adjournment, whether a quorum is present or not, is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting. When a quorum is
present at any meeting, the vote of the holders of a majority of the stock
having voting power present in person or by proxy shall decide any question
brought before such meeting unless the question is one upon which by express
provision of law or of the Certificate of Incorporation or of these By-laws a
larger or different vote is required, in which case such express provision shall
govern and control the decision of such question. The stockholders present or
represented at any duly called and held meeting at which a quorum is present or
represented may continue to do business until adjournment, notwithstanding the
withdrawal of such number as to leave less than a quorum.
SECTION 5. ORGANIZATION. Each meeting of stockholders shall be
presided over by the President or, in his absence, by a Vice President thereunto
designated by the President or by the Board of Directors, or in the absence of
the President and a Vice President so designated, by any other person selected
to preside by vote of the holders of a majority of the outstanding stock present
in person or by proxy and entitled to vote at the meeting. The Secretary, or in
his absence an Assistant Secretary, or in the absence of both the Secretary and
an Assistant Secretary any person designated by the person presiding at the
meeting, shall act as
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secretary of the meeting.
SECTION 6. PROXIES AND VOTING OF SHARES. At any meeting of
stockholders or whenever the stockholders express consent or dissent to
corporate action in writing without a meeting, each stockholder entitled to vote
any shares on any matter to be voted upon at such meeting or in a written
expression of such consent or dissent may exercise such voting right either in
person or by proxy appointed by an instrument in writing, which shall be filed
with the secretary of the meeting before being voted or with the written
evidence of the consent or dissent, which shall be delivered to the Secretary of
the Corporation for filing with the minutes of proceedings of stockholders of
the Corporation. Such proxies shall entitle the holders thereof to vote at any
adjournment of such meeting (unless a new record date is set by the Board of
Directors), but shall not be valid after the final adjournment thereof. All
questions regarding the qualification of voters, the validity of proxies, and
the acceptance or rejection of votes shall be decided by two inspectors of
election who shall be appointed by the Board of Directors or if not so
appointed, then by the presiding officer of the meeting. No proxy shall be voted
on after three years from its date unless said proxy provides for a longer
period. Except as otherwise expressly required by statute, the vote on any
question need not be by written ballot.
SECTION 7. VOTING LIST OF STOCKHOLDERS. The officer who shall have
charge of the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at said meeting, arranged in alphabetical order
and showing the address and the number of shares registered in the name of each
such stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where said meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof and may be inspected by any
stockholder who is present. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list of
stockholders referred to above or the books of the Corporation, or to vote in
person or by proxy at any meeting of stockholders.
SECTION 8. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action
required or permitted to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of
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<PAGE>
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. Evidence of
such consent in writing shall be delivered to the Secretary of the Corporation
for filing with the minutes of proceedings of stockholders of the Corporation.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. POWER AND DUTIES OF THE BOARD OF DIRECTORS. The business
and affairs of the Corporation shall be managed by or under the direction of the
Board of Directors. The Board may adopt such rules and regulations for that
purpose and for the conduct of its meetings as it may deem proper. The Board
shall exercise and shall be vested with the powers of the Corporation insofar as
not inconsistent with law, the Certificate of Incorporation or these By-laws.
SECTION 2. NUMBER AND QUALIFICATIONS. The number of directors
constituting the whole Board, which shall be defined as the total number of
directors which the Corporation would have if there were no vacancies, shall be
not more than seven or less than one. The whole Board, upon the adoption of
these By-laws, shall consist of four (4) directors. Thereafter the authorized
number of directors, within the limits above specified, shall be determined by
the affirmative vote of a majority of the whole Board given at a regular or
special meeting of the Board of Directors; provided that, if the number so
determined is to be increased or decreased, notice of the proposed increase or
decrease shall be included in the notice of such meeting unless all of the
directors at the time in office are present at such meeting or those not present
shall at any time waive or have waived notice thereof in writing; and provided
further, that the number of directors which shall constitute the whole Board
shall not be reduced to a number less than the number of directors then in
office unless such reduction shall become effective only at and after the next
ensuing meeting of stockholders for the election of directors or upon the
resignation of an incumbent director.
Directors need not be stockholders of the Corporation.
SECTION 3. ELECTION AND TERM. Except as otherwise provided by law or
by these By-laws, the directors of the Corporation elected after the adoption of
these By-laws shall be elected at the annual meeting of stockholders in each
year. Each director shall be elected to serve until the next annual meeting of
stockholders and shall hold office until a successor is duly
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elected and qualified subject to the provisions of ARTICLE V hereof.
SECTION 4. REGULAR MEETINGS; NOTICE. Regular meetings of the Board
of Directors shall be held at such time and place either within or outside of
the State of Delaware, as may be determined by resolution of the Board. No
notice of a regular meeting need be given (any practice or custom to the
contrary notwithstanding) and any business may be transacted at a regular
meeting, held as aforesaid, subject only to the requirements of Section 2 of
this ARTICLE III.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may, unless otherwise expressly provided by law, be called from time
to time by the President, or any Vice President, or by a written call signed by
any one or more directors and filed with the Secretary. Each special meeting of
the Board shall be held at such time and place, either within or outside of the
State or Delaware, as shall be designated in the notice of such meeting.
SECTION 6. NOTICE OF SPECIAL MEETINGS. Notice of a special meeting
of the Board of Directors, stating the place, date and hour thereof, shall,
except as otherwise expressly provided by law or as provided in Section 2 of
ARTICLE VII hereof, be given by mailing or telegraphing the same to each
director at his residence or business address at any time on or before the
second day before the day of the meeting or by delivering the same to him
personally or telephoning the same to him personally at his residence or
business address not later than the day before the day of the meeting, unless,
in case of exigency, the President, or in his absence a Vice President or the
Secretary, shall prescribe a shorter notice to each director at his residence or
business address. Except as otherwise required by statute or these By-laws, no
notice or waiver of notice of a special meeting of the Board need state the
purpose or purposes of such meeting, and any business may be transacted thereat,
any practice or custom to the contrary notwithstanding.
SECTION 7. QUORUM. A majority of the total number of directors at
the time in office but in no event less than one- third of that total number or
less than two directors shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, except that when a Board of
one director is authorized pursuant to the Certificate of Incorporation or these
By-laws, then one director shall constitute a quorum. If less than a quorum be
present at a meeting, the directors present may adjourn the meeting and the
meeting may be held as adjourned without further notice. If a quorum be present
at a meeting and the meeting is adjourned to reconvene either at a later time on
the same date or at a later date, no notice need be given other than
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announcement at the meeting. Except as otherwise provided by law, by the
Certificate of Incorporation or by these By-laws, when a quorum is present at
any meeting of the Board of Directors, a majority of the directors present at
such meeting shall decide any question brought before such meeting and the
action of such majority shall be deemed to be the action of the Board.
SECTION 8. ORGANIZATION. Each meeting of the Board of Directors
shall be presided over by the President, or in his absence, by any director
selected to preside by vote of a majority of the directors present. The
Secretary, or in his absence, an Assistant Secretary, or in the absence of both
the Secretary and an Assistant Secretary, any person designated by the person
presiding over the meeting, shall act as secretary of the meeting.
SECTION 9. COMPENSATION OF DIRECTORS. The Board may, from time to
time in its discretion, by resolution or resolutions passed by a majority of the
whole Board, fix the amounts which shall be payable to the members thereof for
their services in such capacity and provide for the reimbursement of the
reasonable expenses of such members, all of which shall be in addition to any
fees, salaries or other compensation which may be paid or payable to such
members in any other capacity. Members of special or standing committees may be
allowed like reimbursement and compensation for attending committee meetings.
SECTION 10. COMMITTEES. The Board of Directors may, by resolution or
resolutions adopted by a majority of the whole Board, designate an Executive
Committee and one or more other committees. Except as otherwise provided by
these By-laws each committee shall consist of one or more of the directors of
the Corporation. The Board 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. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in said resolution or resolutions, shall have
and may exercise the powers and authority of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-laws of the Corporation. Unless expressly authorized by
resolution or
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resolutions adopted by a majority of the whole Board, no such committee shall
have the power or authority to declare a dividend or to authorize the issuance
of stock. Such other committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board. The
committees shall keep regular minutes of their proceedings and report the same
to the Board when required.
SECTION 11. WRITTEN CONSENTS. Any action required or permitted to be
taken at any meeting of the Board of Directors or by any committee thereof may
be taken without a meeting, if all members of the Board or of such committee, as
the case may be, consent thereto in writing and the writing or writings are
filed with the minutes of proceedings of the Board or committee.
SECTION 12. CONFERENCE TELEPHONE MEETINGS. Members of the Board of
Directors or any committee designated by such Board may participate in a meeting
of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting in this manner shall
constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER AND ELECTION. The officers of the Corporation
shall be elected by the Board of Directors and shall be a President and a
Secretary. The Board of Directors may also elect one or more Vice Presidents, a
Treasurer, a Comptroller and one or more Assistant Comptrollers, Assistant
Secretaries and Assistant Treasurers. One of the officers shall have the duty to
record the proceedings of the meetings of the stockholders and directors in a
book to be kept for that purpose. Any number of offices may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument in
more than one capacity.
SECTION 2. TERM OF OFFICE AND QUALIFICATION. The officers shall be
elected by the Board of Directors at the first meeting thereof after each annual
meeting of stockholders. A meeting of the directors may be held without notice
for this purpose, as well as for the transaction of any other business,
immediately after the annual meeting of stockholders of the Corporation and at
the same place. In the event of the failure so to elect any such officer, such
officer may be elected at any subsequent meeting (regular or special) of the
Board. Each officer, except such officers as may be appointed in accordance with
the provisions of Section 3 of this ARTICLE IV, shall hold office until the next
annual election of officers and until his successor shall have been
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duly elected and qualified, subject, however, to the provisions of ARTICLE V
hereof. None of the officers of the Corporation need be directors.
SECTION 3. OTHER OFFICERS. The Board of Directors may also appoint
such other officers and agents as it may deem necessary for the transaction of
the business of the Corporation. Such officers and agents shall hold office for
such period, have such authority and perform such duties as shall be determined
from time to time by the Board.
SECTION 4. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation, shall have general and active management of the
business and affairs of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The President
shall, if present, preside at all meetings of stockholders and of the Board of
Directors, and shall also have the powers and duties delegated to him by these
By-laws and the laws of Delaware and such other powers and duties as the Board
of Directors may from time to time determine.
SECTION 5. VICE PRESIDENTS. In the absence or inability to act of
the President, any Vice President designated by the Board of Directors shall
perform all the duties and may exercise all the powers of the President. Each
Vice President shall perform such other duties as from time to time may be
assigned to him by the Board of Directors or the President or as may be
prescribed by these By-laws.
SECTION 6. THE COMPTROLLER. The Comptroller shall have
responsibility for the accounting procedures and practices of the Corporation
and shall keep or cause to be kept at the principal office of the corporation,
and shall be responsible for the keeping of, correct financial records of the
business and transactions of the Corporation and at all reasonable times shall
exhibit such record to any of the directors of the Corporation upon application
at the office of the Corporation where such records are kept. He shall also
perform all the duties incident to the office of Comptroller and such other
duties as from time to time may be assigned to him by the Board of Directors,
the President or the Vice President.
SECTION 7. ASSISTANT COMPTROLLERS. In the absence of the
Comptroller, or in case of his inability to act, an Assistant Comptroller
designated by the President or by the Board of Directors shall perform all the
duties of the Comptroller and, when so acting, shall have all the powers of the
Comptroller. The Assistant Comptrollers shall perform such other duties as from
time to time shall be assigned to them by the Board of Directors, the President
or the Comptroller.
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SECTION 8. THE SECRETARY. The Secretary shall have the duty to
record or cause to be recorded in books kept for that purpose the proceedings of
the meetings of the Corporation including those of the stockholders, the Board
of Directors and all committees designated by the Board of Directors; shall see
that all notices are duly given in accordance with the provisions of these
By-laws and as required by law; shall be custodian of the records (other than
those financial records kept by the Comptroller) and of the seal of the
Corporation and see that the seal is affixed to all documents the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these By-laws and when so affixed may attest
the same; shall see that the books, reports, statements, certificates and all
other documents and records required by law are properly kept and filed; and in
general, the Secretary shall perform all duties incident to the office of the
Secretary and such other duties as may, from time to time, be assigned to him by
the Board of Directors or the President.
SECTION 9. ASSISTANT SECRETARIES. In the absence of the Secretary,
or in case of his inability to act, an Assistant Secretary designated by the
President or the Board of Directors shall perform all the duties of the
Secretary and, when so acting, shall have all the powers of the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time shall
be assigned to them by the Board of Directors, the President or the Secretary.
SECTION 10. THE TREASURER. The Treasurer shall give such bond with
such surety or sureties for the faithful performance of his duties as the Board
of Directors may require. He shall have charge and custody of and be responsible
for all funds and securities of the Corporation, deposit all such funds in the
name of the Corporation in such banks, trust companies or other depositaries as
shall be selected in accordance with the provisions of these By-laws and have
supervision over all receipts and disbursements of the Corporation and, in the
absence of a Comptroller, have general responsibility for its accounting
procedures and practices; at all reasonable times exhibit his books of account
and records to any of the directors of the Corporation upon application during
business hours at the place where such books and records are kept; receive, and
give receipts for, monies due and payable to the Corporation from any source
whatsoever; and in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the Board of Directors or the President.
SECTION 11. ASSISTANT TREASURERS. Each of the Assistant Treasurers
shall give such bond for the faithful performance of his duties as the Board of
Directors may require. In the absence of the Treasurer, or in case of his
inability to act, an Assistant
9
<PAGE>
Treasurer designated by the President or the Board of Directors shall perform
all the duties of the Treasurer and, when so acting, shall have all the powers
of the Treasurer. The Assistant Treasurers shall perform such other duties as
from time to time may be assigned to them by the Board of Directors, the
President or the Treasurer.
SECTION 12. COMPENSATION. The compensation of all officers, agents
and employees of the Corporation shall be fixed from time to time by the Board
of Directors, or pursuant to authority of general or special resolutions of the
Board. No officer shall be prevented from receiving such salary by reason of the
fact that he is also a director of the Corporation or a member of any committee.
SECTION 13. BONDS. The Board of Directors shall have the power to
require any officer or agent of the Corporation to give a bond for the faithful
discharge of his duties in such form and in such amount and with such surety or
sureties as the Board may deem advisable.
ARTICLE V
RESIGNATIONS AND REMOVALS
SECTION 1. RESIGNATIONS. Any director, officer or agent of the
Corporation may, subject to contrary provision in any applicable contract,
resign at any time by giving written notice to the Board of Directors or to the
President or to the Secretary of the Corporation, and any member of any
committee may resign at any time by giving notice either as aforesaid or to the
committee of which he is a member or to the chairman thereof. Any such
resignation shall take effect at the time specified therein or, if the time be
not specified, upon receipt thereof; and unless otherwise specified therein,
acceptance of such resignation shall not be necessary to make it effective.
SECTION 2. REMOVALS. The holders of a majority of the shares
entitled to vote at an election of directors may remove any director or the
entire Board of Directors, with or without cause, at any meeting called for the
purpose, and may elect his or their successors. The Board of Directors by vote
of not less than a majority of the whole Board may remove from office any
officer, employee, agent or member of any committee, elected or appointed by it.
10
<PAGE>
ARTICLE VI
VACANCIES
SECTION 1. AMONG DIRECTORS. Except as otherwise pro vided in the
Certificate of Incorporation, if the office of any director becomes vacant at
any time by reason of death, resignation, retirement, disqualification, removal
from office or other cause, or if any new directorship is created by any
increase in the authorized number of directors, a majority of the directors then
in office, although less than a quorum, or the sole remaining director, may
choose a successor or fill the newly created directorship, and the director so
chosen shall hold office, subject to the provisions of these By-laws, until the
next annual election of directors and until his successor shall be duly elected
and shall qualify. In the event that a vacancy arising as aforesaid shall not
have been filled by the Board of Directors, such vacancy may be filled by the
stockholders at any meeting thereof after such office becomes vacant. If one or
more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office, including those who have so
prospectively resigned, shall have the power to fill such vacancy or vacancies,
the vote thereon to take effect when such resignation or resignations shall
become effective, and each director so chosen shall hold office as herein
provided in the filling of other vacancies.
SECTION 2. AMONG OFFICERS, ETC. If the office of the President, any
Vice President, the Comptroller, the Secretary or the Treasurer, or of any other
officer or agent or member of any committee, becomes vacant at any time by
reason of death, resignation, retirement, disqualification, removal from office,
or otherwise, such vacancy or vacancies shall be filled by the Board of
Directors or as authorized by it.
ARTICLE VII
NOTICES
SECTION 1. MANNER OF GIVING. Whenever under the pro visions of the
laws of the State of Delaware, the Certificate of Incorporation or these
By-laws, notice is required to be given to any director or stockholder, it shall
not be construed to mean personal notice, but such notice may be given by
mailing or telegraphing (including telex or cable or other similar means) the
same to each such director or stockholder at such address as appears on the
books or in the records of the Corporation, and such notice shall be deemed to
be given at the time when the same is thus mailed or telegraphed.
11
<PAGE>
SECTION 2. WAIVER OF NOTICE. Whenever under the provi sions of these
By laws, or of the Certificate of Incorporation, or of any of the laws of the
State of Delaware, the stockholders, directors or members of a committee of
directors are authorized to hold any meeting or take any action after notice or
after the lapse of any prescribed period of time, a waiver thereof, in writing,
signed by the person or persons entitled to such notice or lapse of time,
whether before or after the time of meeting or action stated therein, shall be
deemed equivalent thereto. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders, directors, or
members of any committee of directors need be specified in any written waiver of
notice unless so required by the Certificate of Incorporation or these By-laws.
The presence at any meeting of a person or persons entitled to notice thereof
shall be deemed a waiver of such notice as to such person or persons, except
when such person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. FORM AND ISSUANCE. Certificates of stock shall be issued
in such form as may be approved by the Board of Directors and shall be signed
by, or in the name of the Corporation by, the President or a Vice President, and
by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation certifying the number of shares owned by the
stockholder in the Corporation. Any of or all the signatures on such a
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue unless determined otherwise by the Board generally or in particular
instances.
SECTION 2. TRANSFERS OF STOCK. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate of stock duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. The Board of Directors shall have power and
authority to make such other rules and regulations or amendments thereto as they
may deem expedient concerning the issue, registration and transfer of
certificates of stock and may appoint
12
<PAGE>
transfer agents and registrars thereof.
SECTION 3. LOST, STOLEN AND DESTROYED CERTIFICATES. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon satisfactory proof of that fact by the
person claiming the certificate or certificates for shares to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, at its discretion, and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to publicize the same
in such manner as it shall require and/or to give the Corporation a bond in such
sum as the Board of Directors may direct as indemnity against any claim that may
be made against the Corporation with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed, or the issuance of the new
certificate or certificates.
SECTION 4. FIXING OF RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. Only such stockholders as shall be stockholders of record on the
date so fixed shall be entitled to such notice of, and to vote at, such meeting
and any adjournment thereof, or to receive payment of such dividend or other
distribution, or to receive such allotment of rights, or to exercise such rights
in respect of any such change, conversion or exchange of stock, or to
participate in such other action, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid. If no record date is fixed by the Board
of Directors, the record date shall be determined as provided by the laws of the
State of Delaware. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
13
<PAGE>
ARTICLE IX
NEGOTIABLE INSTRUMENTS, CONTRACTS, ETC.
SECTION 1. SIGNATURES ON CHECKS, ETC. All checks, drafts, bills of
exchange, notes or other instruments or orders for the payment of money or
evidences of indebtedness shall be signed for or in the name of the Corporation
by such officer or officers, person or persons, as the Board of Directors may
from time to time designate by resolution.
SECTION 1. EXECUTION OF CONTRACTS, DEEDS, ETC. The Board of
Directors may authorize any officer or officers, agent or agents, in the name of
and on behalf of the Corporation, to enter into or execute and deliver any and
all deeds, bonds, mortgages, contracts and other obligations or instruments, and
such authority may be general or confined to specific instances.
SECTION 3. LOANS. No loan shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized or ratified by a resolution of the Board of Directors. Such
authorization or ratification may be general or confined to specific instances.
ARTICLE X
CORPORATE SEAL
The seal of the Corporation shall have inscribed thereon the name of
the Corporation, the year of its organization and the word "Delaware". Said seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced in any manner whatsoever.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall be determined by the Board
of Directors.
ARTICLE XII
VOTING OF STOCK HELD
Unless otherwise provided by resolution of the Board of Directors,
the President or any Vice President may from time to time appoint an attorney or
attorneys or agent or agents of the
14
<PAGE>
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporations or associations, or to consent in writing
to any action by any such other corporation or association, and may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed on behalf of the
Corporation and under its corporate seal, or otherwise, such written proxies,
consents, waivers or other instruments as he may deem necessary or proper in the
premises; or any such officer may himself attend any meeting of the holders of
stock or other securities of any such other corporation or association and
thereat vote or exercise any or all other powers of the Corporation as the
holder of such stock or other securities of such other corporation or
association, or may consent in writing to any action by any such other
corporation or association.
ARTICLE XIII
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
SECTION 1. INDEMNIFICATION. (a) Any person made a party or
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative (other
than an 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, shall be
indemnified by the Corporation 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 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 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, or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe that his conduct was
unlawful.
15
<PAGE>
(b) Any person made a party or 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 shall be indemnified by the Corporation 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, except that no indemnification shall be made hereunder in
respect of any claim, issue or matter as to which the person shall be adjudged
liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware 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 circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which said Court
of Chancery or such other court shall deem proper.
(c) To the extent that any person referred to above has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraphs (a) and (b) above, or in defense of any
claim, issue or matter therein, he shall be indemnified by the Corporation
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(d) No indemnification shall be granted under paragraph (a) or (b)
above unless ordered by a court or unless it shall be specifically determined
that indemnification of the person is proper in the circumstances because he has
met the applicable standard if conduct set forth in the applicable paragraph,
which determination shall be made (i) by the Board of Directors of the
Corporation, by not less than a majority vote of a quorum of the whole Board
consisting of directors not parties to the subject action, suit or proceeding;
or (ii) if such quorum is not obtainable, or even if obtainable if directed by
such a quorum of disinterested directors, by independent legal counsel selected
by the Board of Directors in a written opinion; or (iii) by the stockholders
entitled to vote at any meeting by majority vote of the quorum present.
(e) Expenses incurred in defending any action, suit or proceeding by
a person who may be entitled to indemnity under the above provisions may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding if authorized under paragraph (d) above upon receipt of an
undertaking by or on
16
<PAGE>
behalf of the person to whom payment is to be made that he will repay the
amounts advanced if it shall ultimately be determined that he is not entitled to
be indemnified by the Corporation in accordance with the above provisions.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the above provisions shall not be deemed exclusive of any
other rights to which those indemnified or advanced expenses may be entitled
under any provision of the Certificate of Incorporation, By-law, agreement, vote
of stockholders or disinterested directors, insurance agreement, or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
(g) 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 a person.
SECTION 2. INSURANCE. The Board of Directors of the Corporation may,
in its discretion, authorize the Corporation 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 the provisions of Section 1 of this Article XIII.
ARTICLE XIV
AMENDMENTS
All By-laws of the Corporation shall be subject to amendment or
repeal, and new By-laws may be adopted, either
(a) by the affirmative vote of the holders of record of a majority
of the outstanding stock of the Corporation entitled to vote, given at an annual
meeting or at any special meeting of such stockholders, or without any such
meeting of stockholders, by a written consent of stockholders in accordance with
Section 8 of ARTICLE II of these By-laws, or
(b) by the affirmative vote of a majority of the whole Board of
Directors of the Corporation.
17
<PAGE>
EXHIBIT 4.1
<TABLE>
<CAPTION>
<S> <C>
NUMBER SHARES
COMMON STOCK
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CUSIP
This SEE REVERSE FOR
certifies CERTAIN DEFINITIONS
that
</TABLE>
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.0001 PER
SHARE, OF
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
CERTIFICATE OF STOCK
(hereinafter called the "Corporation"), transferable upon the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. This certificate and the shares
represented hereby are issued under and shall be subject to all the provisions
of the Certificate of Incorporation and By-Laws of the Corporation (copies of
which are on file at the office of the Transfer Agent of the Corporation), to
all of which the holder by acceptance hereof assents.
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:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTERSIGNED: By: By:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent /s/Norman Leben /s/Lawrence Burstein
Authorized Officer SECRETARY PRESIDENT
</TABLE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
CORPORATE
SEAL
2000
DELAWARE
*
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
The Corporation will furnish without charge to each stockholder who so
requests, a statement of the powers, designations, preferences and relative,
participating, optional, or other special rights or each class of stock or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
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:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _________ Custodian _________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act______________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, ___________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
__________________________________________________________________________shares
of the capital stock represented by the within Certificate; and do hereby
irrevocably constitute and appoint _____________________________________________
________________________________________________________________________Attorney
to transfer the said stock 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
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
EXHIBIT 4.2
NO. WA VOID AFTER , 2006 WARRANTS
CLASS A REDEEMABLE WARRANT CERTIFICATE
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
THIS CERTIFIES THAT, FOR VALUE RECEIVED CUSIP
or registered assigns (the "Registered Holder") is the owner of the number of
Class A Redeemable Warrants (the "Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.0001 par value, of Unity Emerging Technology Venture One Ltd., a Delaware
corporation (the "Company"), and one-half of one Class B Redeemable Warrant of
the Company at any time from the Commencement Date (as hereinafter defined) to
the Expiration Date (as hereinafter defined) upon the presentation and surrender
of this Warrant Certificate with the Subscription Form on the reverse hereof
duly executed, at the corporate office of American Stock Transfer & Trust
Company, 40 Wall Street, New York, New York 10005, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $5.00, subject to
adjustment (the "Purchase Price"), in lawful money of the United States of
America in cash or by check made payable to the Warrant Agent for the account of
the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated as of , 2000, by
and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock and the
number of Class B Redeemable Warrants subject to purchase upon the exercise of
each Warrant represented hereby are subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.
The term "Commencement Date" shall mean the later of (i) , 2001 or (ii)
the date of the consummation of a merger, exchange of capital stock, asset
acquisition or other similar business combination of the Company with an
operating business. The term "Expiration Date" shall mean 5:00 P.M. (New York
City time) on , 2006. If each such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then such date
shall mean 5:00 P.M. (New York City time) the next following day which in the
State of New York is not a holiday or a day on which banks are authorized to
close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, to
keep such registration statement current, if required under the Act, while any
of the Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder
<PAGE>
exercising this Warrant.
This Warrant shall not be exercisable by a Registered Holder in any state
where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company and with the prior consent of Gaines,
Berland Inc., at a redemption price of $.05 per Warrant, at any time commencing
after the Commencement Date, provided that the last sales price of the Common
Stock shall have, for twenty (20) consecutive trading days ending on the third
day prior to the day that the notice of redemption is given, equaled or exceeded
$7.50 per share (subject to adjustment in the event of any stock splits or other
similar events). Notice of redemption shall be given not less than the thirtieth
day before the date fixed for redemption, all as provided in the Warrant
Agreement. On and after the date fixed for redemption, the Registered Holder
shall have no rights with respect to this Warrant except to receive the $.05 per
Warrant upon surrender of this Certificate.
In accordance with the Warrant Agreement, Gaines, Berland Inc. and
EarlyBirdCapital, Inc., collectively, shall be entitled to receive a commission
equal to 5% of the proceeds received by the Company from the exercise of the
Warrants.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts of
laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
<PAGE>
COUNTERSIGNED: By: By:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent /s/Norman Leben /s/Lawrence
Burstein
Authorized Officer SECRETARY PRESIDENT
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
CORPORATE
SEAL
2000
DELAWARE
*
<PAGE>
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
_____________ Warrants represented by this Warrant Certificate, and to purchase
the securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
and be delivered to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated:_________________________________ X ___________________________________
___________________________________
___________________________________
___________________________________
Address
___________________________________
Social Security or Taxpayer
Identification Number
___________________________________
Signature Guaranteed
___________________________________
The undersigned represents that the exercise of the within Warrant was
solicited by Gaines, Berland Inc. and/or EarlyBirdCapital, Inc. If not
solicited by Gaines, Berland Inc. and/or EarlyBirdCapital, Inc., please write
"unsolicited" in the space below or write the name of the broker/dealer which
solicited your exercise. Unless otherwise indicated, it will be assumed that
the exercise was solicited by Gaines, Berland Inc. and/or EarlyBirdCapital,
Inc.
-------------------------------------
(Write "unsolicited" on above line if
not solicited by Gaines, Berland Inc.
and/or EarlyBirdCapital, Inc.)
Dated: _______________________________ Signature: _____________________________
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED,
- --------------------------------------------------------------------------------
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
___________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints ___________________
________________________________________________________________________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: _________________________________ X _____________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
<PAGE>
Exhibit 4.3
NO. WB VOID AFTER , 2006 WARRANTS
CLASS B REDEEMABLE WARRANT CERTIFICATE
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
THIS CERTIFIES THAT, FOR VALUE RECEIVED CUSIP
or registered assigns (the "Registered Holder") is the owner of the number of
Class B Redeemable Warrants (the "Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.0001 par value, of Unity Emerging Technology Venture One Ltd., a Delaware
corporation (the "Company"), at any time from the Commencement Date (as
hereinafter defined) to the Expiration Date (as hereinafter defined) upon the
presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of American
Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005, as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$7.50, subject to adjustment (the "Purchase Price"), in lawful money of the
United States of America in cash or by check made payable to the Warrant Agent
for the account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated as of , 2000, by
and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.
The term "Commencement Date" shall mean the later of (i) , 2001 or (ii)
the date of the consummation of a merger, exchange of capital stock, asset
acquisition or other similar business combination of the Company with an
operating business. The term "Expiration Date" shall mean 5:00 P.M. (New York
City time) on , 2006. If each such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then such date
shall mean 5:00 P.M. (New York City time) the next following day which in the
State of New York is not a holiday or a day on which banks are authorized to
close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, to
keep such registration statement current, if required under the Act, while any
of the Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder exercising this Warrant.
<PAGE>
This Warrant shall not be exercisable by a Registered Holder in any state
where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company and with the prior consent of Gaines,
Berland Inc., at a redemption price of $.05 per Warrant, at any time commencing
after the Commencement Date, provided that the last sales price of the Common
Stock shall have, for twenty (20) consecutive trading days ending on the third
day prior to the day that the notice of redemption is given, equaled or exceeded
$10.00 per share (subject to adjustment in the event of any stock splits or
other similar events). Notice of redemption shall be given not less than the
thirtieth day before the date fixed for redemption, all as provided in the
Warrant Agreement. On and after the date fixed for redemption, the Registered
Holder shall have no rights with respect to this Warrant except to receive the
$.05 per Warrant upon surrender of this Certificate.
In accordance with the Warrant Agreement, Gaines, Berland Inc. and
EarlyBirdCapital, Inc., collectively, shall be entitled to receive a commission
equal to 5% of the proceeds received by the Company from the exercise of the
Warrants.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts of
laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
<TABLE>
<S> <C> <C>
COUNTERSIGNED: By: By:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent /s/Norman Leben /s/Lawrence Burstein
Authorized Officer SECRETARY PRESIDENT
</TABLE>
<PAGE>
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
CORPORATE
SEAL
2000
DELAWARE
*
<PAGE>
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
_____________ Warrants represented by this Warrant Certificate, and to purchase
the securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or type name and address)
and be delivered to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated: X
---------------------------- -----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Address
-----------------------------------
Social Security or Taxpayer
Identification Number
-----------------------------------
Signature Guaranteed
-----------------------------------
The undersigned represents that the exercise of the within Warrant was
solicited by Gaines, Berland Inc. and/or EarlyBirdCapital, Inc. If not solicited
by Gaines, Berland Inc. and/or EarlyBirdCapital, Inc., please write
"unsolicited" in the space below or write the name of the broker/dealer which
solicited your exercise. Unless otherwise indicated, it will be assumed that the
exercise was solicited by Gaines, Berland Inc. and/or EarlyBirdCapital, Inc.
-----------------------------------
(Write "unsolicited" on above line
if not solicited by Gaines, Berland
Inc. and/or EarlyBirdCapital, Inc.)
Dated: Signature:
---------------------------- ------------------------------
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED,
- --------------------------------------------------------------------------------
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or type name and address)
___________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
________________________________________________________________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: X
---------------------------- -----------------------------------
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
<PAGE>
EXHIBIT 4.5
WARRANT AGREEMENT
Agreement made as of ___________, 2000, between Unity Emerging
Technology Venture One Ltd., a Delaware corporation, with offices at 245 Fifth
Avenue, Suite 1500, New York, New York 10016 ("Company"), and American Stock
Transfer & Trust Company, a New York corporation, with offices at 40 Wall
Street, New York, New York 10005 (herein called "Warrant Agent").
WHEREAS, the Company has determined to issue up to (i) 1,955,000 Class
A Redeemable Warrants ("Class A Warrants"), (ii) 977,500 Class B Redeemable
Warrants ("Class B Warrants," together with the Class A Warrants, the
"Redeemable Warrants"), (iii) 200,000 non-redeemable Class A warrants and
100,000 non-redeemable Class B warrants to the officers and directors
("Directors' Warrants") and (iv) 170,000 non-redeemable Class A warrants and
85,000 non-redeemable Class B warrants issued to Gaines, Berland Inc. and
EarlyBirdCapital, Inc. ("Underwriters") or their designees ("Underwriters'
Warrants," together with the Redeemable Warrants and the Directors' Warrants,
"Warrants") evidencing the right of the holders thereof to purchase an aggregate
of 3,487,500 shares of common stock of the Company, $.0001 par value per share
("Common Stock"), which Warrants will be issued as described in the Company's
Registration Statement on Form S-1, No. 333-__________, declared effective
__________, 1996 ("Registration Statement"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of
the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
1
<PAGE>
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the Warrant Agent
to act as agent for the Company for the Warrants, and the Warrant Agent hereby
accepts such appointment and agrees to perform the same in accordance with the
terms and conditions set forth in this Agreement.
2. WARRANTS.
2.1. FORM OF WARRANT. Each Class A Warrant and Class B Warrant,
respectively, shall be issued in registered form only, shall be in substantially
the forms of Exhibit A and Exhibit B hereto, shall be signed by, or bear the
facsimile signature of, the Chairman of the Board or President and Secretary or
Assistant Secretary of the Company and shall bear a facsimile of the Company's
seal. In the event the person whose facsimile signature has been placed upon any
Warrant shall have ceased to serve in the capacity in which such person signed
the Warrant before such Warrant is issued, it may be issued with the same effect
as if he had not ceased to be such at the date of issuance. No Warrant may be
exercised until it has been countersigned by the Warrant Agent as provided in
Section 2.3 hereof.
2.2. EFFECT OF COUNTERSIGNATURE. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no
effect.
2
<PAGE>
2.3. EVENTS FOR COUNTERSIGNATURE. The Warrant Agent shall countersign a
Warrant only upon the occurrence of either of the following events:
(i) if the Warrant is to be issued in exchange or substitution
for one or more previously countersigned Warrants, as hereinafter
provided, or
(ii) if the Company instructs the Warrant Agent to do so.
2.4. REGISTRATION.
2.4.1. WARRANT REGISTER. The Warrant Agent shall maintain
books ("Warrant Register"), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2. REGISTERED HOLDER. Prior to due presentment for
registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name such Warrant shall be registered upon
the Warrant Register ("registered holder"), as the absolute owner of such
Warrant and of each Warrant represented thereby (notwithstanding any notation of
ownership or other writing on the Warrant Certificate made by anyone other than
the Company or the Warrant Agent), for the purpose of any exercise thereof, and
for all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
2.5. DETACHABILITY OF CLASS A WARRANTS. The Class A Warrants and Common
Stock which comprise the units ("Units") as described in the Registration
Statement will not be separately transferable until the consummation of a
business combination (as described in the Registration Statement ("Business
Combination")).
3
<PAGE>
3. TERMS AND EXERCISE OF REDEEMABLE WARRANTS
3.1. WARRANT PRICE. Each Class A Warrant shall, when countersigned by
the Warrant Agent, entitle the registered holder thereof, subject to the
provisions of such Warrant and of this Warrant Agreement, to purchase from the
Company the number of shares of Common Stock and number of Class B Warrants
stated therein, at the price of $5.50 per whole share, subject to the
adjustments provided in Section 4 hereof. Each Class B Warrant shall, when
countersigned by the Warrant Agent, entitle the registered holder thereof,
subject to the provisions of such Warrant and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock stated therein,
at the price of $7.50 per whole share, subject to the adjustments provided in
Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement
refers to the price per share at which Common Stock may be purchased at the time
a Warrant is exercised.
3.2. DURATION OF WARRANTS. A Warrant may be exercised only during the
period ("Exercise Period") commencing on the later of the consummation by the
Company of a Business Combination or _________, 2001, and terminating on the
earlier to occur of (i) _________, 2006 or (ii) the date fixed for redemption of
such Warrant as provided in Section 6 of this Agreement. Each Warrant not
exercised on or before the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall cease at
the close of business on the Expiration Date. The Company in its sole discretion
may extend the duration of the Warrants by delaying the Expiration Date.
3.3. EXERCISE OF WARRANTS.
3.3.1. PAYMENT. A Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering it, at
the office of the Warrant Agent, or at the office of its successor as Warrant
Agent, in the Borough of Manhattan, City and State of New York, with the
subscription form, as set forth in the Warrant and in substantially the forms of
Exhibit A and Exhibit B hereto, duly executed, and by paying in full, in lawful
money of the United
4
<PAGE>
States, in cash, good certified check or good bank draft payable to the order of
the Company, the Warrant Price for each full share of Common Stock as to which
the Warrant is exercised and any and all applicable taxes due in connection with
the exercise of the Warrant, the exchange of the Warrant for the Common Stock,
and the issuance of the Common Stock.
3.3.2. ISSUANCE OF CERTIFICATES. As soon as practicable after
the exercise of any Warrant, the Company shall issue to the registered holder of
such Warrant a certificate or certificates for the number of full shares of
Common Stock to which he is entitled, registered in such name or names as may be
directed by him, and if such Warrant shall not have been exercised in full, a
new countersigned Warrant for the number of shares as to which such Warrant
shall not have been exercised. Notwithstanding the foregoing, the Company shall
not be obligated to deliver any securities pursuant to the exercise of a Warrant
unless a registration statement under the Securities Act of 1933 with respect to
the securities is then currently effective. Warrants may not be exercised by, or
securities issued to, any registered holder in any state in which such exercise
would be unlawful.
3.3.3. VALID ISSUANCE. All shares of Common Stock issued upon
the proper exercise of a Warrant in conformity with this Agreement shall be
validly issued.
3.3.4. DATE OF ISSUANCE. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant was surrendered and payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
5
<PAGE>
3.3.5. WARRANT SOLICITATION FEE.
(a) The Company has engaged the Underwriters as the
exclusive agents for the solicitation of the exercise of the Warrants. The
Company has also agreed to (i) assist the Underwriters with respect to such
solicitation, if requested by the Underwriters, and (ii) at the Underwriters'
request, provide the Underwriters and direct the Company's transfer and warrant
agent to deliver to the Underwriters, at the Company's cost, lists of the record
and, to the extent known, beneficial owners of, the Company's Warrants.
Accordingly, the Company hereby instructs the Warrant Agent to cooperate with
the Underwriters in every respect in connection with the Underwriters'
solicitation activities, including but not limited to providing to the
Underwriters, at the Company's cost, a list of record and beneficial holders of
the Warrants.
(b) If, upon the exercise of any Warrant (i) the
market price of the Company's Common Stock is greater than the then Warrant
Price, (ii) the exercise of the Warrant was solicited by the Underwriters, and
(iii) the Warrant was not held in a discretionary account, then the Warrant
Agent, simultaneously with the distribution of proceeds to the Company received
upon exercise of the Warrant(s) so exercised, shall, on behalf of the Company,
pay from the proceeds received upon exercise of the Warrant(s), a fee of 5% of
the Warrant Price to the Underwriters. The Underwriters and the Company may at
any time during business hours, examine the records of the Warrant Agent,
including its ledger of original Warrants certificates returned to the Warrant
Agent upon exercise of Warrants.
(c) The provisions of this Section 3.3.5. may not be
modified, amended or deleted without the prior written consent of the
Underwriters.
3.3.6. DIRECTORS' WARRANTS. In connection with certain
services to be performed for the Company, the Company issued, in March 2000,
200,000 Class A warrants which are identical to the Class A Warrants covered by
this Agreement except that they are non-redeemable and cannot be transferred or
exercised until the consummation of a Business Combination. Notwithstanding
6
<PAGE>
anything else to the contrary herein, the Directors' Warrants may only be
exercised after the consummation by the Company of a Business Combination.
4. ADJUSTMENTS.
4.1. STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject
to the provisions of Section 4.5 below, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common Stock
or by a split-up of shares of Common Stock or other similar event, then, on the
effective day thereof, such stock dividend or split-up, the number of shares
issuable on exercise of each Warrant shall be increased in proportion to such
increase in outstanding shares and the then applicable Warrant Price shall be
correspondingly decreased.
4.2. AGGREGATION OF SHARES. If after the date hereof, and subject to
the provisions of Section 4.5, the number of outstanding shares of Common Stock
is decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, after the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
4.3. REORGANIZATION, ETC. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the Warrant holders shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in the Warrants and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented thereby, such shares of stock, securities, or assets as may
be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares
7
<PAGE>
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be in relation to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger, or sale unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing such
assets, shall assume by written instrument executed and delivered to the Warrant
Agent the obligation to deliver to the Warrant holders such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.
4.4. NOTICES OF CHANGES IN WARRANT. Upon every adjustment of the
Warrant Price or the number of shares issuable on exercise of a Warrant, the
Company shall give written notice thereof to the Warrant Agent, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the
occurrence of any event specified in Sections 4.1., 4.2., or 4.3., then, in any
such event, the Company shall give written notice in the manner set forth above
of the record date for such dividend, distribution, or subscription rights, or
the effective date of such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding up or issuance. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for stock, securities, or other
assets deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding up or issuance. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such event.
8
<PAGE>
4.5. NO FRACTIONAL SHARES. Notwithstanding any provision contained in
this Warrant Agreement to the contrary, the Company shall not issue fractional
shares upon exercise of Warrants. If, by reason of any adjustment made pursuant
to this Section 4, the holder of any Warrant would be entitled, upon the
exercise of such Warrant, to receive a fractional interest in a share, the
Company shall, upon such exercise, purchase such fractional interest, determined
as follows:
(i) If the Common Stock is listed on a National Securities
Exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the Nasdaq National Market or Nasdaq SmallCap Market or the OTC
Bulletin Board, the current value shall be the last reported sale price of the
Common Stock on such exchange on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the average of
the closing bid and asked prices for such day on such exchange; or
(ii) If the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported bid
and asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of this Warrant; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current value shall not be an amount determined in such reasonable manner as may
be prescribed by the Board of Directors of the Company.
4.6. FORM OF WARRANT. The form of Warrant need not be changed because
of any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the same Warrant Price and the same number of shares as is
stated in the Warrants initially issued pursuant to this Agreement. However, the
Company may at any time in its sole discretion make any change in the form of
Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in
the form as so changed.
9
<PAGE>
5. TRANSFER AND EXCHANGE OF WARRANTS.
5.1. REGISTRATION OF TRANSFER. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with
signatures properly guaranteed and accompanied by appropriate instructions for
transfer. Upon any such transfer, a new Warrant representing an equal aggregate
number of Warrants shall be issued and the old Warrant shall be cancelled by the
Warrant Agent. The Warrant so cancelled shall be delivered by the Warrant Agent
to the Company from time to time upon request.
5.2. PROCEDURE FOR SURRENDER OF WARRANTS. Warrants may be surrendered
to the Warrant Agent, together with a written request for exchange or transfer,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new
Warrants as requested by the registered holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that in
the event that a Warrant surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not cancel such Warrant and issue new Warrants in
exchange therefor until the Warrant Agent has received an opinion of counsel for
the Company stating that such transfer may be made and indicating whether the
new Warrants must also bear a restrictive legend.
5.3. FRACTIONAL WARRANTS. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant.
5.4. SERVICE CHARGES. No service charge shall be made for any exchange
or registration of transfer of Warrants.
5.5. WARRANT EXECUTION AND COUNTERSIGNATURE. The Warrant Agent is
hereby authorized to countersign and to deliver, in accordance with the terms of
this Agreement, the Warrants required to be issued pursuant to the provisions
hereof, and the Company, whenever required by the Warrant
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Agent, will supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose.
6. REDEMPTION.
6.1. REDEMPTION. Subject to Section 3.3.6 hereof, each of the Class A
Warrants and Class B Warrants may be redeemed, at the option of the Company, as
a whole and not in part, after they become exercisable and prior to their
expiration, at the office of the Warrant Agent, upon the notice referred to in
Section 6.2., at the price of $.05 per Warrant ("Redemption Price"), provided
that the reported high bid price of the Common Stock if the Common Stock is
quoted on the OTC Bulletin Board (or the last sales price of the Common Stock is
quoted on the National Association of Securities Dealers Quotation System or
principally quoted on a securities exchange) has been at least $7.50 with
respect to the Class A Warrants and $10.00 with respect to the Class B Warrants
on each of the twenty (20) consecutive trading days ending on the third business
day prior to the date on which notice of redemption is given. Notwithstanding
the foregoing, the Company may not call the Redeemable Warrants for redemption
without the Underwriters' prior consent. The provisions of this Section 6.1 may
not be modified, amended or deleted without the prior written consent of the
Underwriters.
6.2. DATE FIXED FOR, AND NOTICE OF, REDEMPTION. In the event the
Company shall elect to redeem all or any part of the Redeemable Warrants, the
Company shall fix a date for the redemption. Notice of redemption shall be
mailed by first class mail, postage prepaid, by the Company not less than 30
days from the date fixed for redemption to the registered holders of the
Warrants to be redeemed at their last address as they shall appear on the
registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the registered
holder received such notice.
6.3. EXERCISE AFTER NOTICE OF REDEMPTION. The Redeemable Warrants may
be exercised in accordance with Section 3 of this Agreement at any time after
notice of redemption shall have
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been given by the Company pursuant to Section 6.2. hereof and prior to the time
and date fixed for redemption. On and after the redemption date, the record
holder of the Redeemable Warrants shall have no further rights except to
receive, upon surrender of the Redeemable Warrants, the redemption price.
7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS.
7.1. NO RIGHTS AS STOCKHOLDER. A Warrant does not entitle the
registered holder thereof to any of the rights of a stockholder of the Company,
including, without limitation, the right to receive dividends, or other
distributions, exercise any preemptive rights to vote or to consent or to
receive notice as stockholders in respect of the meetings of stockholders or the
election of directors of the Company or any other matter.
7.2. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If any Warrant is
lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on
such terms as to indemnity or otherwise as they may in their discretion impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination, tenor, and date as the
Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time
enforceable by anyone.
7.3. RESERVATION OF COMMON STOCK. The Company shall at all times
reserve and keep available a number of its authorized but unissued shares of
Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants issued pursuant to this Agreement.
7.4. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission the Registration Statement for the registration, under
the Securities Act of 1933, of, among others, the Warrants and the Common Stock
issuable upon exercise of the Warrants.
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7.5. REGISTRATION OF COMMON STOCK. The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, or
a new registration statement, for the registration, under the Securities Act of
1933, of the Common Stock issuable upon exercise of the Warrants. In either
case, the Company will use its best efforts to cause the same to become
effective and to maintain the effectiveness of such registration statement until
the expiration of the Warrants in accordance with the provisions of this
Agreement. In connection with the filing of such registration statement, the
Company shall disclose in such amendment or new registration statement the
warrant solicitation fee payable to the Underwriters.
8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS.
8.1. PAYMENT OF TAXES. The Company will from time to time promptly pay
all taxes and charges that may be imposed upon the Company or the Warrant Agent
in respect of the issuance or delivery of shares of Common Stock upon the
exercise of Warrants, but the Company shall not be obligated to pay any transfer
taxes in respect of the Warrants or such shares.
8.2. RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.
8.2.1. APPOINTMENT OF SUCCESSOR WARRANT AGENT. The Warrant
Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities hereunder after giving sixty
(60) days' notice in writing to the Company. If the office of the Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a successor Warrant Agent in place of the 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 such resignation or incapacity by
the Warrant Agent or by the holder of the Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any
Warrant may apply to the Supreme Court of the State of New York for the County
of New York for the appointment of a successor Warrant Agent. Any successor
Warrant Agent, whether appointed by
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the Company or by such court, shall be a corporation organized and existing or
qualified to do business under the laws of the State of New York, in good
standing and having its principal office in the Borough of Manhattan, City and
State of New York, and authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by federal or state authority.
After appointment, any successor Warrant Agent shall be vested with all the
authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any successor Warrant
Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities,
duties, and obligations.
8.2.2. NOTICE OF SUCCESSOR WARRANT AGENT. In the event a
successor Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Warrant Agent and the transfer agent for the Common
Stock not later than the effective date of any such appointment.
8.2.3. MERGER OR CONSOLIDATION OF WARRANT AGENT. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
8.3. FEES AND EXPENSES OF WARRANT AGENT.
8.3.1. REMUNERATION. The Company agrees to pay the Warrant
Agent reasonable remuneration for its services as such Warrant Agent hereunder
and will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.
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8.3.2. FURTHER ASSURANCES. The Company and the Warrant Agent
agree to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by the Warrant Agent
or the Company for the carrying out or performing of the provisions of this
Agreement.
8.4. LIABILITY OF WARRANT AGENT.
8.4.1. RELIANCE ON COMPANY STATEMENT. Whenever in the
performance of its duties under this Warrant Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
statement signed by the President of the Company and delivered to the Warrant
Agent. The Warrant Agent may rely upon such statement for any action taken or
suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2. INDEMNITY. The Warrant Agent shall be liable hereunder
only for its own negligence or willful misconduct or any actions taken in bad
faith. The Company agrees to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent in the execution
of this Agreement except as a result of the Warrant Agent's negligence, willful
misconduct, or bad faith.
8.4.3. EXCLUSIONS. The Warrant Agent shall have no
responsibility with respect to the validity of this Agreement or with respect to
the validity or execution of any Warrant (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of Section 4.
hereof or responsible for the manner, method, or amount of any such adjustment
or the ascertaining of the existence of facts that would
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require any such adjustment; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant or
as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.
8.5. ACCEPTANCE OF AGENCY. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
pay to the Company, all moneys received by the Warrant Agent for the purchase of
shares of the Company's Common Stock through the exercise of Warrants.
9. MISCELLANEOUS PROVISIONS.
9.1. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns.
9.2. NOTICES. Any notice, statement or demand authorized by this
Warrant Agreement to be given or made by the Warrant Agent or by the holder of
any Warrant to or by the Company shall be sufficiently given or made if sent by
certified mail, or private courier service, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows:
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue, Suite 1500
New York, New York 10016
Attn: Lawrence Burstein, President
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with a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue, 30th Floor
New York, New York 10022
Attn: Ira I. Roxland, Esq.
- and -
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016
Attn: David Alan Miller, Esq.
Any notice, statement or demand authorized by this Agreement to be given or made
by the holder of any Warrant or by the Company to or on the Warrant Agent shall
be sufficiently given or made if sent by certified mail or private courier
service, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10006
Attn: Compliance Department
9.3. APPLICABLE LAW. The validity, interpretation, and performance of
this Agreement and of the Warrants shall be governed in all respects by the laws
of the State of New York, without giving effect to conflict of laws. Each of the
Company and the Warrant Agent hereby agrees that any action, proceeding or claim
against it arising out of, relating in any way to this Agreement shall
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be brought and enforced in the courts of the State of New York of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Warrant Agent hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such process or
summons to be served upon the Company or the Warrant Agent may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
9.2 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon each of the Company and the Warrant Agent in any action, proceeding
or claim. Each of the Company and the Warrant Agent agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys' fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation
therefor.
9.4. PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the registered holders
of the Warrants and, for the purposes of Sections 3.3.5 and 6.1 hereof, the
Underwriters, any right, remedy, or claim under or by reason of this Warrant
Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. All covenants, conditions, stipulations, promises, and agreements
contained in this Warrant Agreement shall be for the sole and exclusive benefit
of the parties hereto and their successors and assigns and of the registered
holders of the Warrants. The parties hereto agree that the Underwriters is
intended to be a third-party beneficiary with respect to Sections 3.3.5 and 6.1,
with all legal rights and remedies available to it as fully as if it were a
party hereto.
9.5. EXAMINATION OF THE WARRANT AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in
the Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his Warrant for inspection by it.
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9.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
9.7. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and are not part of this Warrant Agreement and shall not affect
the interpretation thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under their respective corporate seals as of the day and year
first above written.
Attest: UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
By:
- --------------------- ----------------------------
Lawrence Burstein
President
Corporate Seal
Attest: AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
- --------------------- ----------------------------
George Karfunkel
Executive Vice President
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Exhibit 10.1
UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
2000 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Unity Emerging Technology Venture One Ltd.
2000 Stock Option Plan (the "Plan") is to encourage key employees of Unity
Emerging Technology Venture One Ltd. (the "Company") and of any present or
future parent or subsidiary of the Company (collectively, "Related
Corporations") and other individuals who render services to the Company or a
Related Corporation, by providing opportunities to participate in the ownership
of the Company and its future growth through (a) the grant of options which
qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); and (b) the grant of
options which do not qualify as ISOs ("Non-Qualified Options"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." As used herein, the terms "parent" and "subsidiary"
mean "parent corporation" and "subsidiary corporation," respectively, as those
terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
(a) BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or by a
committee appointed by the Board (the "Committee"); provided that the Plan shall
be administered: (i) to the extent required by applicable regulations under
Section 162(m) of the Code, by two or more "outside directors" (as defined in
applicable regulations thereunder) and (ii) to the extent required by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended, or any
successor provision ("Rule 16b-3"), by a disinterested administrator or
administrators within the meaning of Rule 16b-3. All references in this Plan to
the "Committee" shall mean the Board if no Committee has been appointed. Subject
to ratification of the grant or authorization of each Option by the Board (if so
required by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine to whom (from among the
class of employees eligible under paragraph 3 to receive ISOs) ISOs shall be
granted, and to whom (from among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options) Non-Qualified Options may be
granted; (ii) determine the time or times at which Options shall be granted;
(iii) determine the purchase price of shares subject to each Option, which
prices shall not be less than the minimum price specified in paragraph 6; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) extend the
period during which outstanding Options may
<PAGE>
be exercised; (vii) determine whether restrictions are to be imposed on shares
subject to Options and the nature of such restrictions, if any, and (viii)
interpret the Plan and prescribe and rescind rules and regulations relating to
it. If the Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated as
an ISO. The interpretation and construction by the Committee of any provisions
of the Plan or of any Option granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem advisable. No member of
the Board or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted under it.
(b) COMMITTEE ACTIONS. The Committee may select one of its members
as its chairman, and shall hold meetings at such time and places as it may
determine. A majority of the Committee shall constitute a quorum and acts of a
majority of the members of the Committee at a meeting at which a quorum is
present, or acts reduced to or approved in writing by all the members of the
Committee (if consistent with applicable state law), shall be the valid acts of
the Committee. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan.
(c) GRANT OF OPTIONS TO BOARD MEMBERS. Subject to the provisions of
the first sentence of paragraph 2(a) above, if applicable, Options may be
granted to members of the Board. All grants of Options to members of the Board
shall in all other respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. Consistent with the provisions of the
first sentence of Paragraph 2(a) above, members of the Board who either (i) are
eligible to receive grants of Options pursuant to the Plan or (ii) have been
granted Options may vote on any matters affecting the administration of the Plan
or the grant of any Options pursuant to the Plan, except that no such member
shall act upon the granting to himself or herself of Options, but any such
member may be counted in determining the existence of a quorum at any meeting of
the Board during which action is taken with respect to the granting to such
member of Options.
(d) EXCULPATION. No member of the Board shall be personally liable
for monetary damages for any action taken or any failure to take any action in
connection with the administration of the Plan or the granting of Options under
the Plan, provided that
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this subparagraph 3(c) shall apply to (i) any breach of such member's duty of
loyalty to the Company or its stockholders, (ii) acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of law, (iii)
acts or omissions that would result in liability under Section 174 of the
General Corporation Law of the State of Delaware, as amended, and (iv) any
transaction from which the member derived an improper personal benefit.
(e) INDEMNIFICATION. Service on the Committee shall constitute
service as a member of the Board. Each member of the Committee shall be entitled
without further act on his or her part to indemnity from the Company to the
fullest extent provided by applicable law and the Company's Certificate of
Incorporation and/or By-laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Options thereunder in which he or she may be involved by reason of
his or her being or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of the action, suit or
proceeding.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options may be granted to
any employee, officer or director (whether or not also an employee) or
consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant an Option. The granting of any Option to any individual or entity shall
neither entitle that individual or entity to, nor disqualify such individual or
entity from, participation in any other grant of Options.
4. STOCK. The stock subject to Options shall be authorized but unissued
shares of Common Stock of the Company, par value $.0001 per share (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued pursuant to the Plan is 255,000,
subject to adjustment as provided in paragraph 13. If any Option granted under
the Plan shall expire or terminate for any reason without having been exercised
in full or shall cease for any reason to be exercisable in whole or in part, the
shares of Common Stock subject to such Option shall again be available for
grants of Options under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at any time
on or after March 17, 2000 and prior to March 17, 2010. The date of grant of an
Option under the Plan will be the date specified by the Committee at the time it
grants the Option; provided, however, that such date shall not be prior to the
date on
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<PAGE>
which the Committee acts to approve the grant. Options granted under the Plan
are intended to qualify as performance based compensation to the extent required
under proposed Treasury Regulation Section 1.162-27.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
(a) PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per share
specified in the agreement relating to each Non-Qualified Option granted under
the Plan shall in no event be less than the minimum legal consideration required
therefor under the laws of any jurisdiction in which the Company or its
successors in interest may be organized. Non-Qualified Options granted under the
Plan, with an exercise price less than the fair market value per share of Common
Stock on the date of grant, are intended to qualify as performance based
compensation under Section 162(m) of the Code and any applicable regulations
thereunder. Any such Non-Qualified Options granted under the Plan shall be
exercisable only upon the attainment of a preestablished, objective performance
goal established by the Committee.
(b) PRICE FOR ISOS. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
(c) $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
employee may be granted Options treated as ISOs only to the extent that, in the
aggregate under this Plan and all incentive stock option plans of the Company
and any Related Corporation, ISOs do not become exercisable for the first time
by such employee during any calendar year with respect to stock having a fair
market value (determined at the time the ISOs were granted) in excess of
$100,000. The Company intends to designate any Options granted in excess of such
limitation as Non-Qualified Options.
(d) DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the date of grant or, if the prices or
quotes discussed in this sentence are unavailable for such date, the last
business day for which such prices or quotes are available prior to the date of
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<PAGE>
grant and shall mean (i) the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the Nasdaq National Market, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the Nasdaq National Market. If the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall mean the
fair value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(b). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
(a) VESTING. The Option shall either be fully exercisable on the
date of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
(b) FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable, it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.
(c) PARTIAL EXERCISE. Each Option or installment may be exercised at
any time or from time to time, in whole or in part, for up to the total number
of shares with respect to which it is then exercisable.
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<PAGE>
(d) ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date that any installment of any Option becomes exercisable;
provided that the Committee shall not, without the consent of an optionee,
accelerate the permitted exercise date of any installment of any Option granted
to any employee as an ISO (and not previously converted into a Non-Qualified
Option pursuant to paragraph 16) if such acceleration would violate the annual
vesting limitation contained in Section 422(d) of the Code, as described in
paragraph 6(c).
9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the agreement
relating to such ISO, if an ISO optionee ceases to be employed by the Company
and all Related Corporations other than by reason of death or disability or as
otherwise specified in paragraph 10, no further installments of his or her ISOs
shall become exercisable, and his or her ISOs shall terminate on the earlier of
(a) ninety (90) days after the date of termination of his or her employment, or
(b) their specified expiration dates, except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 16. For purposes of this paragraph 9, employment shall be
considered as continuing uninterrupted during any BONA FIDE leave of absence
(such as those attributable to illness, military obligations or governmental
service) provided that the period of such leave does not exceed 90 days or, if
longer, any period during which such optionee's right to reemployment is
guaranteed by statute. A BONA FIDE leave of absence with the written approval of
the Committee shall not be considered an interruption of employment under this
paragraph 9, provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of the optionee
after the approved period of absence. ISOs granted under the Plan shall not be
affected by any change of employment within or among the Company and Related
Corporations, so long as the optionee continues to be an employee of the Company
or any Related Corporation. Nothing in the Plan shall be deemed to give any
grantee of any Option the right to be retained in employment or other service by
the Company or any Related Corporation for any period of time.
10. DEATH; DISABILITY; BREACH.
(a) DEATH. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her death, any ISO owned by
such optionee may be exercised, to the extent otherwise exercisable on the date
of death, by the estate, personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, until the earlier of
(i) the specified expiration date of the ISO or (ii) one (1) year from the date
of the optionee's death.
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(b) DISABILITY. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any ISO held by him or her on the date
of termination of employment, for the number of shares for which he or she could
have exercised it on that date, until the earlier of (i) the specified
expiration date of the ISO or (ii) one (1) year from the date of the termination
of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or any successor statute.
(c) BREACH. If an ISO optionee ceases to be employed by the Company
and all Related Corporation by reason of a finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the ISO optionee has breached his or her employment or service
contract with the Company or any Related Corporation, or has been engaged in
disloyalty to the Company or any Related Corporation, then, in such event, in
addition to immediate termination of the Option, the ISO optionee shall
automatically forfeit all shares for which the Company has not yet delivered
share certificates upon refund by the Company of the exercise price of such
Option. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture.
11. ASSIGNABILITY. No Option shall be assignable or transferable by the
grantee except by will, by the laws of descent and distribution or, in the case
of Non-Qualified Options only, pursuant to a valid domestic relations order.
Except as set forth in the previous sentence, during the lifetime of a grantee
each Option shall be exercisable only by such grantee.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from
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time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the Committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options by substituting
on an equitable basis for the shares then subject to such Options either (A) the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition, (B) shares of stock of the surviving
corporation or (C) such other securities as the Successor Board deems
appropriate, the fair market value of which shall approximate the fair market
value of the shares of Common Stock subject to such Options immediately
preceding the Acquisition; or (ii) upon written notice to the optionees, provide
that all Options must be exercised, to the extent then exercisable, within a
specified number of days of the date of such notice, at the end of which period
the Options shall terminate; or (iii) terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares subject
to such Options (to the extent then exercisable) over the exercise price
thereof.
(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (c) above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities he or she would
have received if he or she had exercised such Option prior to such
recapitalization or reorganization.
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(d) MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs (a), (b) or (c) with respect to ISOs
shall be made only after the Committee, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code) or would cause
any adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs or would cause adverse tax consequences to the
holders, it may refrain from making such adjustments.
(e) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.
(f) ISSUANCES OF SECURITIES. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(g) FRACTIONAL SHARES. No fractional shares shall be issued under
the Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
(h) ADJUSTMENTS. Upon the happening of any of the events described
in subparagraphs (a), (b) or (c) above, the class and aggregate number of shares
set forth in paragraph 4 hereof that are subject to Options which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise
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price of the Option, (c) at the discretion of the Committee, by delivery of the
grantee's personal recourse note bearing interest payable not less than annually
at no less than 100% of the lowest applicable Federal rate, as defined in
Section 1274(d) of the Code, (d) at the discretion of the Committee and
consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the Option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise, or (e) at the discretion of the
Committee, by any combination of (a), (b), (c) and (d) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (b), (c), (d) or (e) of the preceding
sentence, such discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of an Option shall not have the rights of a
shareholder with respect to the shares covered by such Option until the date of
issuance of a stock certificate to such holder for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
March 17, 2000, subject, with respect to the validation of ISOs granted under
the Plan, to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu thereof, by written consent. If the approval
of stockholders is not obtained on or prior to March 17, 2010, any grants of
ISOs under the Plan made prior to that date will be rescinded. The Plan shall
expire at the end of the day on May 30, 2006 (except as to Options outstanding
on that date). Subject to the provisions of paragraph 5 above, Options may be
granted under the Plan prior to the date of stockholder approval of the Plan.
The Board may terminate or amend the Plan in any respect at any time, except
that, without the approval of the stockholders obtained within 12 months before
or after the Board adopts a resolution authorizing any of the following actions:
(a) the total number of shares that may be issued under the Plan may not be
increased (except by adjustment pursuant to paragraph 13); (b) the benefits
accruing to participants under the Plan may not be materially increased; (c) the
requirements as to eligibility for participation in the Plan may not be
materially modified; (d) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (e) the provisions of paragraph 6(b)
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment pursuant to paragraph 13); (f) the
expiration date of the Plan may not be extended; and (g)
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the Board may not take any action which would cause the Plan to fail to comply
with Rule 16b-3. Except as otherwise provided in this paragraph 15, in no event
may action of the Board or stockholders alter or impair the rights of a grantee,
without such grantee's consent, under any Option previously granted to such
grantee.
16. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
17. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
18. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting or transferability of restricted stock or securities acquired
by exercising an Option, on the grantee's making satisfactory arrangement for
such withholding. Such arrangement may include payment by the grantee in cash or
by check of the amount of the withholding taxes or, at the discretion of the
Committee, by the grantee's delivery of previously held shares of Common Stock
or the withholding from the shares of Common Stock otherwise deliverable upon
exercise of a Option shares having an aggregate fair market value equal to the
amount of such withholding taxes.
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19. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
20. GOVERNING LAW. The validity and construction of the Plan
and the instruments evidencing Options shall be governed by the
laws of Delaware.
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EXHIBIT 10.2
TRUST AGREEMENT dated , 2000 by and
between UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD. (the "Company") and THE
BANK OF NEW YORK (the "Trustee").
-----------------------
The Company's Registration Statement on Form S-1, No. 333- (the
"Registration Statement"), for its initial public offering of securities (the
"IPO") was declared effective by the Securities and Exchange Commission on ,
2000 (such date on which the Registration Statement was declared effective being
referred to as the "Effective Date");
Gaines, Berland Inc. and EarlyBirdCapital, Inc. are the underwriters in
the IPO;
A percentage of the gross proceeds of the IPO will be delivered to the
Trustee to be deposited and held in a trust account for the benefit of the
Company and all of the stockholders of the Company other than the owners of the
shares of the Company's Common Stock outstanding immediately prior to the
Effective Date, all as set forth herein (the amount to be delivered to the
Trustee will be referred to herein as the "Property"); the stockholders for
whose benefit the Trustee shall hold the Property will be referred to as the
"Public Stockholders" and the Public Stockholders and the Company will be
referred to collectively as the "Beneficiaries");
The Company and the Trustee desire to enter into an agreement setting
forth the terms and conditions pursuant to which the Trustee shall hold the
Property;
NOW, THEREFORE, the parties hereto agree as follows:
1. AGREEMENTS AND COVENANTS OF TRUSTEE. The Trustee hereby agrees and
covenants to:
(a) Hold the Property in trust for the Beneficiaries in
accordance with the terms of this Agreement and in a trust account
("Trust Account");
(b) Manage, supervise and administer the Trust Account subject
to the terms and conditions set forth herein;
(c) Make such investments and reinvestments of the Property in
U.S. Government securities and in money market vehicles invested in
U.S. Government securities in a timely manner at the written direction
of the Company. Interest and other earnings on the Property shall be
added to the principal of the Trust Account and shall be included in
the term "Property" as used herein.
(d) Collect and receive, when due, all principal and income
arising from the Property which shall become part of the Property as
the term is used herein;
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(e) Notify the Company of all communications received by it
with respect any Property requiring action by the Company;
(f) Supply any necessary information or documents as may be
requested by the Company in connection with the Company's preparation
of the tax returns for the Trust Account;
(g) Participate in any plan or proceeding for protecting or
enforcing any right or interest arising from the Property if, as and
when instructed by the Company to do so;
(h) Render to the Company and Gaines, Berland Inc., and to
such other persons as the Company may instruct, monthly written
statements of the activities of and amounts in the Trust Account
reflecting all receipts and disbursements of the Trust Account; and
(i) Commence liquidation of the Trust Account only after
receipt of and only in accordance with the terms of a letter
("Termination Letter"), in a form substantially similar to that
attached hereto as either Exhibit A or Exhibit B, signed on behalf of
the Company by its President or Chairman of the Board and Secretary.
The Trustee shall complete the liquidation of the Trust Account and
distribute the Property in the Trust Account only as directed in the
Termination Letter, and in any written instruction contemplated by the
Termination Letter.
2. AGREEMENTS AND COVENANTS OF THE COMPANY. The Company hereby agrees
and covenants to:
(a) Give all instructions to the Trustee hereunder in writing,
signed by the Company's President or Chairman of the Board. In addition, except
with respect to its duties under paragraph 1(i) above, the Trustee shall be
entitled to rely on, and shall be protected in relying on, any verbal or
telephonic advice or instruction which it in good faith believes to be given by
any one of the persons authorized above to give written instructions.
(b) Hold the Trustee harmless and indemnify the Trustee from
and against, any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Trustee in connection with any action,
suit or other proceeding brought against the Trustee involving any claim or
demand, or in connection with any claim or demand, which in any way arises out
of or relates to this Agreement, the services of the Trustee hereunder, or the
Property or any income earned from investment of the Property. Promptly after
the receipt by the Trustee of notice of demand or claim or the commencement of
any action, suit or proceeding, pursuant to which the Trustee intends to seek
indemnification under this paragraph, it shall notify the Company in writing of
such claim (hereinafter referred to as the "Indemnified Claim"). The Trustee
shall have the right to conduct and manage the defense against such Indemnified
Claim, provided, that the Trustee shall obtain the consent of the Company with
respect to the selection of counsel, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing sentence, the Trustee shall not have the
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right to settle any action without the consent of the Company, which consent
shall not be unreasonably withheld. The Company may participate in such action
with its own counsel.
(c) Pay the Trustee an annual fee of 1/2 of 1% of the total
market value of the Trust Account, payable quarterly on a pro rata basis,
PROVIDED, HOWEVER, that each such payment shall represent an entire quarterly
payment. The Company shall pay the Trustee an investment fee of $25.00 for each
purchase or sale of a security made by Trustee hereunder. The Trustee shall also
be compensated for all reasonable expenses that it may incur in the event that
it may submit an application to have the property deposited with the United
States District Court for the Southern District of New York. The Company shall
not be responsible for any other fees or charges of the Trustee except as may be
provided by the foregoing sentences and in paragraphs 2(b) and 3(m) hereof (it
being expressly understood that the Property shall not be used to make any
payments to the Trustee under this Agreement).
3. LIMITATIONS OF LIABILITY. The Trustee shall have no responsibility
or liability to:
(a) Take any action with respect to the Property, other than
as directed in paragraph 1 hereof and the Trustee shall have no liability to any
party except for liability arising out of its own gross negligence or willful
misconduct;
(b) Institute any proceeding for the collection of any
principal and income arising from, or institute, appear in or defend any
proceeding of any kind with respect to, any of the Property unless and until it
shall have received instructions from the Company given as provided herein to do
so and the Company shall have advanced or guaranteed to it funds sufficient to
meet any expenses incident thereto;
(c) Change the investment of any Property, other than in
compliance with paragraph 1(c);
(d) Refund any depreciation in principal of any Property;
(e) Assume that the authority of any person designated by the
Company to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company shall have delivered a
written revocation of such authority to the Trustee;
(f) The Company or to anyone else for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, except for its gross
negligence or willful misconduct. The Trustee 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 Trustee), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is believed by the
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Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons. The Trustee shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this agreement
or any of the terms hereof, unless evidenced by a writing delivered to the
Trustee signed by the proper party or parties and, if the duties or rights of
the Trustee are affected, unless it shall give its prior written consent
thereto;
(g) Be responsible for the sufficiency or accuracy of 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 Trustee be responsible or liable to the other
parties hereto or to anyone else in any respect on account of the liability,
authority, or rights of the persons executing or delivering or purporting to
execute or deliver any document or property or this Agreement. The Trustee shall
have no responsibility with respect to the use or application of any funds or
other property paid or delivered by the Trustee pursuant to the provisions
hereof;
(h) Verify the correctness of the information set forth in the
Registration Statement or to confirm or assure that any acquisition made by the
Company or any other action taken by it is as contemplated by the Registration
Statement;
(i) Pay any taxes on behalf of the Trust Account (it being
expressly understood that the Property shall not be used to pay any such taxes
and that such taxes, if any, shall be paid by the Company from funds not held in
the Trust Account); and
(j) The Trustee shall have no duties or responsibilities
except as expressly provided in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee. The Trustee
shall neither be obligated to recognize nor have any liability or responsibility
arising out of any other agreement to which the Trustee is not a party even
though reference thereto may be made herein.
(k) The Trustee shall not be required to, and shall not,
expend or risk any of its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder.
(l) The Trustee shall have no responsibility or liability to
any party hereto or any other person (i) for acting in accordance with or
relying upon any instruction, notice, demand, certificate or document from the
Company or any entity acting on behalf of the Company, (ii) for any
consequential, punitive or special damages, (iii) for the acts or omissions
(other than any constituting gross negligence or wilful misconduct) of its
nominees, correspondents, designees, subagents or subcustodians, or (iv) for an
amount in excess of the value of the Property.
(m) The Trustee may consult with legal counsel at the expense
of the Company as to any matter relating to this Escrow Agreement, and the
Trustee shall not incur any liability in acting in good faith in accordance with
any advice from such counsel.
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(n) The Trustee shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Trustee
(including but not limited to any act or provision of any present or future law
or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
(o) In the event of any ambiguity or uncertainty hereunder or
in any notice, instruction or other communication received by the Trustee
hereunder, the Trustee may, in its sole discretion, refrain from taking any
action other than retain possession of the Property, unless the Trustee receives
written instructions, signed by the Company, which eliminates such ambiguity or
uncertainty.
4. TERMINATION. This Agreement shall terminate as follows:
(a) If the Trustee gives fifteen calendar days prior written
notice to the Company that it desires to terminate this Agreement, the Company
shall use its reasonable efforts to locate a successor trustee. The Company may
remove the Trustee at any time upon giving the Trustee thirty days prior written
notice thereof. At such time that the Company notifies the Trustee that a
successor trustee has been appointed by the Company and has agreed to become
subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not
limited to the transfer of copies of the reports and statements relating to the
Trust Account, whereupon this Agreement shall terminate; provided, however, that
in the event that the Company does not locate a successor trustee within ninety
days of receipt of the resignation notice from the Trustee, the Trustee may
submit an application to have the Property deposited with the United States
District Court for the Southern District of New York.
(b) At such time that the Trustee has completed the
liquidation of the Trust Account in accordance with the provisions of paragraph
1(i) hereof, and distributed the Property in accordance with the provisions of
the Termination Letter, this Agreement shall terminate; or
(c) On such date after , 2003 when the Trustee deposits the
Property with the United States District Court for the Southern District of New
York in the event that, prior to such date, the Trustee has not received a
Termination Letter from the Company pursuant to paragraph 1(i).
5. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflict of laws. It may be executed in several counterparts, each one
of which shall constitute an original, and all collectively shall constitute but
one instrument.
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(b) This Agreement contains the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement or any provision hereof may only be changed, amended, modified or
waived by a writing signed by each of the parties hereto; provided, however,
that no change, amendment or modification may be made without the prior written
consent of GKN Securities Corp.
(c) Any notice, consent or request to be given in connection
with any of the terms or provisions of this Agreement shall be in writing and
shall be sent by express mail or similar private courier services, by certified
mail (return receipt requested), by hand delivery or by facsimile transmission
(followed by telephone confirmation by sending party to receiving party):
If to the Trustee, to:
The Bank of New York
101 Barclay Street
Insurance Trust & Escrow, 12 E
New York, New York 10286
Fax No.: (212) 815-7181
Tel No.: (212) 815-5901
Attention:
If to the Company, to:
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue - Suite 1500
New York, New York 10016
Fax No.: (212) 532-8293
Attention: President
in either case with a copy to:
Gaines, Berland Inc.
Fax. No.: (516)
Attention:
and
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American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Fax No.: (718) 236-4588
Attention: President
Notice will be deemed received the same day (when delivered personally), 5 days
after mailing (when sent by registered or certified mail), or the next business
day (when sent by facsimile transmission or when delivered by overnight
courier). Any party to this Agreement may change its address to which all
communications and notices may be sent hereunder by addressing notices of such
change in the manner provided.
(d) This Agreement may not be assigned by the Trustee without
the consent of the Company.
(e) Each of the Trustee and the Company hereby represents that
it has the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated hereunder.
The Trustee acknowledges and agrees that it shall not make any claims or proceed
against the Trust Account, including by way of set-off, and shall not be
entitled to any funds in the Trust Account.
(f) If at any time the Trustee is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects the Property (including but not
limited to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of the Property), the Trustee may
elect, in its sole discretion, to commence an interpleader action or seek other
judicial relief or orders as it may deem, in its sole discretion, necessary.
(g) The parties hereto consent to the jurisdiction and venue
of any state or federal court located in the City of New York for purposes of
resolving any disputes hereunder. The Company hereby submits to the personal
jurisdiction of and agrees that all proceedings relating hereto shall be brought
in courts located within the City and State of New York. The Company hereby
waives the right to trial by jury and to assert counterclaims (other than any
counterclaim of gross negligence or willful misconduct on behalf of the Trustee
arising under this Agreement) in any such proceedings. The Company waives
personal service of process and consents to service of process by certified or
registered mail, return receipt requested, directed to it at the address last
specified for notices hereunder, and such service shall be deemed completed ten
(10) calendar days after the same is so mailed.
(h) The rights and remedies conferred upon the parties hereto
shall be cumulative, and the exercise or waiver of any such right or remedy
shall not preclude or inhibit the exercise of any additional rights or remedies.
The waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
7
<PAGE>
(i) The Company hereby represents and warrants (a) that this
Agreement has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Agreement by Company do not and will not
violate any applicable law or regulation.
(j) The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
enforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.
(k) Other than as required by law or regulation, no printed or
other material in any language (but excluding prospectus and registration
statements and reports filed by the Company with the Securities and Exchange
Commission or any other governmental or regulatory authority), including
notices, reports, and promotional material which mentions "The Bank of New York"
by name or the rights, powers, or duties of the Trustee under this Agreement
shall be issued by the Company, or on the Company's behalf, without the prior
written consent of the Trustee.
(l) The headings contained in this Agreement are for
convenience of reference only and shall have no effect on the interpretation or
operation hereof.
(m) This Agreement may be executed by each of the parties
hereto in any number of counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have duly executed this Trust Agreement
as of the date first written above.
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By:
-----------------------------
Lawrence Burstein
President
8
<PAGE>
EXHIBIT A
[Letterhead of Company]
[Insert date]
The Bank of New York
Re: TRUST ACCOUNT NO. TERMINATION LETTER
Gentlemen:
Pursuant to paragraph 1(i) of the Trust Agreement between Unity
Emerging Technology Venture One Ltd. (the "Company") and The Bank of New York,
as trustee (the "Trustee"), dated , 2000 (the "Trust Agreement"), this is to
advise you that the Company has entered into an agreement (the "Business
Agreement") with (the "Target Business") to consummate a business combination
with a Target Business (the "Business Combination") on or about [insert date].
The Company shall notify you at least 48 hours in advance of the actual date of
the consummation of the Business Combination (the "Consummation Date").
In accordance with the terms of the Trust Agreement, we hereby
authorize you to commence liquidation of the Trust Account to the effect that,
on the Consummation Date, all of funds held in the Trust Account will be
immediately available for transfer to the account or accounts that the Company
shall direct on the Consummation Date.
On the Consummation Date (i) counsel for the Company shall deliver to
you written notification that the Business Combination has been consummated, and
(ii) the Company shall deliver to you written instructions with respect to the
transfer of the funds held in the Trust Account ("Instruction Letter"). You are
hereby directed and authorized to transfer the funds held in the Trust Account
immediately upon your receipt of the counsel's letter and the Instruction
Letter, in accordance with the terms of the Instruction Letter. In the event
certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company of the same and
the Company shall direct you as to whether such funds should remain in the Trust
Account and distributed after the Consummation Date to the Company. Upon the
distribution of all the funds in the Trust Account pursuant to the terms hereof,
the Trust Agreement shall be terminated.
Very truly yours,
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By:
-------------------------------
Lawrence Burstein, President
By:
-----------------------------
Norman Leben, Secretary
9
<PAGE>
EXHIBIT B
[Letterhead of Company]
[Insert date]
The Bank of New York
Re: TRUST ACCOUNT NO. TERMINATION LETTER
Gentlemen:
Pursuant to paragraph 1(i) of the Trust Agreement between Unity
Emerging Technology Venture One Ltd. (the "Company") and The Bank of New York as
trustee (the "Trustee"), dated November 18, 1996 (the "Trust Agreement"), this
is to advise you that the Board of Directors of the Company has voted to
dissolve and liquidate the Company. Attached hereto is a copy of the minutes of
the meeting of the Board of Directors of the Company relating thereto, certified
by the secretary of the Company.
In accordance with the terms of the Trust Agreement, we hereby
authorize you to commence liquidation of the Trust Account. You will notify the
Company and American Stock Transfer & Trust Company ("Designated Paying Agent")
in writing as to when all of the funds in the Trust Account will be available
for immediate transfer ("Transfer Date"). The Designated Paying Agent shall
thereafter notify you as to the account or accounts of the Designated Paying
Agent that the funds in the Trust Account should be transferred to on the
Transfer Date so that the Designated Paying Agent may commence distribution of
such funds in accordance with the Company's instructions. You shall have no
obligation to oversee the Designated Paying Agent's distribution of the funds.
Upon the payment to the Designated Paying Agent of all the funds in the Trust
Account, the Trust Agreement shall be terminated.
Very truly yours,
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By:
-------------------------------
Lawrence Burstein, President
By:
-----------------------------
Norman Leben, Secretary
10
<PAGE>
EXHIBIT 10.4
ESCROW AGREEMENT dated as of the day
of , 2000 (the "Agreement") by and
among UNITY EMERGING TECHNOLOGY VENTURE
ONE LTD., a Delaware corporation (the
"Company"), LAWRENCE BURSTEIN, NORMAN
LEBEN, CRICKETT SERVICES LTD., JOHN
CATTIER, BARRY RIDINGS and UNITY VENTURE
CAPITAL ASSOCIATES LTD. (collectively, the
"Company Principals") and AMERICAN STOCK
TRANSFER & TRUST COMPANY, a New York limited
purpose trust company (the "Escrow Agent").
------------------
The Company has entered into an Underwriting Agreement dated , 2000
(the "Underwriting Agreement") with Gaines, Berland Inc. and EarlyBirdCapital,
Inc. (the "Underwriters"), pursuant to which, among other matters, the
Underwriters have agreed to purchase from the Company up to an aggregate of
1,955,000 units, including 255,000 units subject to the Underwriters'
over-allotment option (the "Units"), each Unit to consist of (i) one (1) share
of the Company's Common Stock, par value $.0001 per share ("Common Stock"), and
(ii) one (1) Class A Redeemable Common Stock Purchase Warrant (the "Warrant"),
all as more fully described in the Company's definitive Prospectus dated , 2000
comprising part of the Company's Registration Statement on Form S-1 under the
Securities Act of 1933, as amended (File No. 333- ), declared effective on ,
2000 (the "Prospectus").
The Company Principals have agreed as a condition of the consummation
of the sale of the Units to deposit their shares of Common Stock and Warrants of
the Company, as set forth opposite their respective names in Exhibit A attached
hereto (collectively the "Escrow Shares"), in escrow as hereinafter provided.
The Company and the Company Principals desire that the Escrow Agent
accept the Escrow Securities, in escrow, to be held and disbursed as hereinafter
provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Company and the Company Principals
hereby appoint 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 agrees to act in accordance with and subject to such terms.
1
<PAGE>
2. DEPOSIT OF ESCROW SECURITIES. On or before the Closing Date of the
sale of the Units (as defined in the Underwriting Agreement), each of the
Company Principals shall deliver to the Escrow Agent certificates, either
endorsed in blank or accompanied by stock powers endorsed in blank, in either
instance with signatures guaranteed by a commercial bank or a member of the New
York Stock Exchange, Inc. representing his respective Escrow Securities, to be
held and disbursed subject to the terms and conditions of this Agreement. In
addition, all dividends or other distributions payable in equity securities of
the Company or other non-cash property ("Non-Cash Dividends") will be delivered
to the Escrow Agent to hold in accordance with the terms hereof. In the event,
subsequent to a business combination as described in the Prospectus (the
"Business Combination"), there is a stock exchange or other transaction pursuant
to which all the Company's stockholders are given the right to exchange their
Escrowed Securities for property other than cash ("Exchange Securities"), the
Company Principals may instruct the Escrow Agent to make the exchange on their
behalf, in which event, the Exchanged Securities will be delivered to the Escrow
Agent to be held hereunder. As used herein, the term Escrow Securities will be
deemed to include the Non-Cash Dividends and Exchanged Securities, if any.
3. DISBURSEMENT OF THE ESCROW ACCOUNT. Upon the earlier of (i) six
months following the consummation of a Business Combination or (ii) the
liquidation of the Company, the Escrow Agent shall disburse the Common Stock
held by the Escrow Agent to the Company Principals in accordance with their
respective interests therein as set forth upon the aforementioned Exhibit A,
whereupon the Escrow Agent shall be released form further liability hereunder.
Upon the consummation of a Business Combination the Escrow Agent shall disburse
the Warrants held by the Escrow Agent to the Company Principals.
4. RIGHTS OF COMPANY PRINCIPALS IN ESCROW SHARES. The Company
Principals shall retain all of their rights as stockholders of the Company
during such period as the Escrow Shares shall be retained by the Escrow Agent
pursuant to this Agreement including, without limitation, the right to vote such
shares and to receive cash dividends payable thereon, if any. No sale, transfer
or other disposition may be made of any or all of such shares, except by gift to
a member of Company Principal's immediate family; by transfer to a trust, IRA or
401(k) plan, as defined under ERISA, whereby the beneficiary is the Company
Principal or a member of Company Principal's immediate family; by virtue of the
laws of descent and distribution upon death of any Company Principal; or
pursuant to a qualified domestic relations order; PROVIDED, HOWEVER, that such
permissive transfers may be implemented only upon the respective transferees'
written agreement to be likewise bound by the terms and conditions of this
Agreement.
5. CONCERNING THE ESCROW AGENT.
5.1 The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best
2
<PAGE>
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 provisions, 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 persons. 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.
5.2 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 persons
executing or delivering or purporting to execute or deliver any document or
property paid or delivered by the Escrow Agent pursuant to the provisions
hereof. 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.
5.3 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.
5.4 The Escrow Agent shall be indemnified and held harmless by the
Company and the Company Principals, jointly and severally, 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 hereto, notify such parties thereof in writing; but the failure by
the Escrow Agent to give such notice shall not relieve any party from any
liability which such party may have to the Escrow Agent hereunder. In the event
of the receipt of such notice, the Escrow Agent, in its sole discre- tion, may
commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the Escrow Shares or it may deposit the
Escrow Shares with the clerk of any appropriate court or it may retain the
Escrow Shares pending receipt of a final, non-appealable order of a court having
jurisdiction over all of the parties hereto directing to whom and under what
circumstances the Escrow Shares are to be disbursed and delivered.
3
<PAGE>
5.5 Notwithstanding any obligation to make payments and deliveries
hereunder, the Escrow Agent may retain and hold for such time as it deems
necessary such amount of monies or property as it shall from time to time in its
sole discretion deem sufficient to indemnify itself for any loss or expense or
for any amounts due it. For the purposes hereof, the term "expense or loss"
shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim, demand, action, suit or proceeding
settled with the express written consent of the Escrow Agent, and all costs and
expenses, including but not limited to, counsel fees and disbursements paid or
incurred in investigating or defending any such claim, demand, action, suit or
proceeding.
5.6 The Escrow Agent shall be entitled to reasonable compensation from
the Company for all services rendered by it hereunder. The Escrow Agent shall
also be entitled to reimburse- ment from the Company for all expenses paid or
incurred by it in the administration of its duties hereunder including, but not
limited to, all counsel, advisors' and agents' fees and disbursements and all
taxes or other governmental charges.
5.7 From time to time on and after the date hereof, the Company and the
Company Principals shall deliver or cause to be delivered to the Escrow Agent
such further documents and instru- ments 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.
5.8 The Escrow Agent may resign at any time and be discharged from its
duties as escrow agent hereunder by its giving the other parties hereto 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 other parties hereto, jointly, all monies and property held
hereunder (less such amount as the Escrow Agent is entitled to retain pursuant
to Paragraph 5.5) upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new agent is so appointed within the
sixty (60) day period follow-ing the giving of such notice of resignation, the
Escrow Agent may deposit the Escrow Shares with any court it deems appropriate.
5.9 The Escrow Agent shall resign and be discharged from its duties as
escrow agent hereunder if so requested in writing at anytime by the other
parties hereto, jointly, provided, however, that such resignation shall become
effective only upon acceptance of appointment by a successor escrow agent as
provided in paragraph 5.8.
5.10 Notwithstanding anything herein to the contrary, the Escrow Agent
shall not be relieved from liability hereunder for its own gross negligence or
its own willful misconduct.
4
<PAGE>
6. MISCELLANEOUS.
6.1 This Agreement shall for all purposes be deemed to be made
under and shall be construed in accordance with the laws of the State of New
York.
6.2 This Agreement contains the entire agreement of the parties
hereto 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 the charged.
6.3 The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
thereof.
6.4 This Agreement shall be binding upon and inure to the benefit
of the respective parties hereto and their legal representatives, successors and
assigns.
6.5 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, as follows:
If to the Company, to:
Unity Emerging Technology Venture One Ltd.
245 Fifth Avenue, Suite 1500
New York, New York 10016
Attn: Lawrence Burstein, President
with a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C.
529 Fifth Avenue
New York, New York 10017
Attn: Ira I. Roxland, Esq.
If to the Company Principals, to each as follows:
(i) Lawrence Burstein
245 Fifth Avenue, Suite 1500
New York, New York 10016
5
<PAGE>
(ii) Norman Leben
245 Fifth Avenue, Suite 1500
New York, New York 10016
(iii) John Cattier
Forestal El Taruman
Km 51 Ruta #15
Rocha, Uruguay
(iv) Barry Ridings
16 Erwin Park
Montclair, New Jersey 07402
(v) Unity Venture Capital Associates Ltd.
245 Fifth Avenue, Suite 1500
New York, New York 10016
and if to the Escrow Agent, to:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: President
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.
UNITY EMERGING TECHNOLOGY
VENTURE ONE LTD.
By:
----------------------------------
Lawrence Burstein, President
----------------------------------
Lawrence Burstein
6
<PAGE>
----------------------------------
Norman Leben
CRICKETT SERVICES, LTD.
By:
----------------------------------
----------------------------------
John Cattier
----------------------------------
Barry Ridings
UNITY VENTURE CAPITAL ASSOCIATES LTD.
By:
----------------------------------
Lawrence Burstein, President
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Escrow Agent
By:
----------------------------------
7
<PAGE>
EXHIBIT A
NUMBER OF
SHARES OF
NAME COMMON STOCK WARRANTS
- ---- ------------ --------
Lawrence Burstein 172,125 59,166
Norman Leben 16,875 59,167
Crickett Services, Ltd. 43,875 --
John Cattier -- 59,167
Barry Ridings 6,750 22,500
Unity Venture Capital
Associates Ltd. 75,000 --
8
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated May 9, 2000 for Unity Emerging Technology Venture One Ltd. included
in or made a part of this registration statement.
ARTHUR ANDERSEN LLP
New York, New York
May 10, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE ACCOMPANYING FINANCIAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE
AUDITED FINANCIAL STATEMENTS OF UNITY EMERGING TECHNOLOGY VENTURE ONE LTD. AS OF
MARCH 31, 2000 AND FOR THE PERIOD FROM MARCH 17, 2000 (INCEPTION) TO MARCH 31,
2000
</LEGEND>
<CIK> 0001112811
<NAME> UNITY EMERGING TECHNOLOGY VENTURE ONE LTD.
<MULTIPLIER> 1
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> MAR-17-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 250
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 250
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 250
<CURRENT-LIABILITIES> 175
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 250
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
