As filed with the Securities and Exchange Commission on May 24, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BELLACASA PRODUCTIONS, INC.
---------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 7812 58-2412118
--------------------------- ------------------------- -------------------
(State or Other Jurisdiction (Primary Standard (IRS Employer
of Incorporation Industrial Classification Identification No.)
or Organization) Number)
Universal Studios Universal Studios
100 Universal City Plaza 100 Universal City Plaza
Building #473, Suite 305/307 Building #473, Suite 305/307
Universal City, California 91608 Universal City, California 91608
(818) 733-1467
(Address and Telephone Number of (Address of Principal Place of Business)
Principal Executive Offices)
Frank LaLoggia, President and Chief Executive Officer
Universal Studios
100 Universal City Plaza
Building #473, Suite 305/307
Universal City, California 91608
(818) 733-1467
(Name, Address and Telephone Number of Agent for Service)
------------------------
Copies of all communications to:
James R. Leone, Esq.
James R. Leone P.A.
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
407-805-9200
Fax 407-805-9030
Approximate date of commencement of proposed sale to the public:
as soon as practicable after the effective date of this registration statement.
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class of Amount to be Proposed Proposed Amount of
to be registered registered(1) maximum maximum registration fee
offering price aggregate
per unit/share(2) offering
price(2)
<S> <C> <C> <C> <C>
Units, each comprising one share of Common
stock and one Class A warrant and one
Class B warrant(2)(3) 1,200,000 $ 6.00 $7,200,000 $ 1,900.80
(a) Common stock 1,200,000 -- -- --
(b) Class A warrants to purchase common
stock 1,200,000 -- -- --
(d) Common stock underlying Class A warrants 1,200,000 8.50 10,200,000 2,692.80
Total $ 17,400,000 $ 4,593.60
</TABLE>
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(o) under the Securities Act.
(2) Includes 1,200,000 shares of common stock issuable upon exercise of
the Class A warrants. At the present time we are not registering the
additional 1,200,000 shares of common stock issuable upon exercise of
the Class B warrants.
(3) Pursuant to Rule 416 promulgated under the Securities Act of 1933,
as amended, an indeterminate number of additional shares of common
stock are registered in the event that provisions preventing dilution
are triggered, as provided in the warrants. No additional registration
fee has been paid for these shares of common stock.
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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PROSPECTUS SUBJECT TO COMPLETION, DATED May ___, 2000
[LOGO] BellaCasa
BellaCasa Productions, Inc.
1,200,000 units
We are offering 1,2000,000 units. Each consist of one share of our
common stock, one Class A warrant exercisable at $8.50 for two years and one
Class B warrant exercisable at $10.00 for three years. Each warrant entitles the
holder to acquire one share. The warrants are redeemable under certain
circumstances. The common stock and Class A warrants will immediately trade
separately. We are not registering the Class B warrants at this time.
There is no public market so we have made application to list our
securities for trading on the NASDAQ SmallCap market under the symbols "BCSA"
for our stock and "BCSAW" for our Class A warrants. At a later date, we plan to
make application to list our Class B warrants under the symbol "BCSAZ."
The offering will begin on the date of this prospectus and continue
until all of the securities offered have been sold or such earlier date as we
may choose to close or terminate the offering. There is no required minimum
number of units to be sold. This prospectus may be used by us or by any
broker-dealer who may participate in sales of the units.
Price Table Per Unit Total (4)
Public offering price (1) $ 6.00 $7,200,000
Underwriting commissions (2) .60 720,000
Proceeds before expenses to BellaCasa Productions, Inc. (3) $ 5.40 $6,480,000
1. The offering price was determined by us and bears no relationship to earnings
or equity.
2. The offering is being made directly by us on a "Best-Efforts" basis through
our directors and officers who shall serve without compensation. We also intend
to engage registered broker-dealers in the sale of our securities to assist us
in this offering for which we will pay brokerage commissions of 10% and 3% for
non-accountable expenses.
3. After deducting commissions but before deducting expenses payable by us,
estimated at $380,000, if all the units being offered are sold. (Please see the
"Use of Proceeds" section of this prospectus.)
4. Assumes sale of 1,200,000 units.
This investment involves a high degree of risk and substantial
dilution. You should purchase units only if you can afford a complete loss. We
strongly urge you to read the entire prospectus. You should review the section
titled "High Risk Factors" for a description of the risks involved in our
business and "Dilution" for a description of the dilution to new investors
before making any investment decisions No escrow or trust account will be
established. Your funds are to be paid directly to us. At the time of
subscribing, you will not be able to know how many shares other investors will
purchase.
The information in this prospectus is not complete and may be changed.
We are not permitted to sell the units until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell or a solicitation of an offer to buy these securities in any
state in which the offer or solicitation is not permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 2000
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To buy our securities, please read the prospectus and mail or wire your
funds as described in the enclosed subscription agreement to BellaCasa
Productions, Inc., Universal Studios, 100 Universal City Plaza, Bldg. #473,
Suite 305/307, Universal City, CA 91608.
Our securities are being sold on a "best-efforts" basis. There is no
requirement that any minimum number of unitss be sold. The offering will expire
nine months after the registration statement becomes effective, if not updated
by amendment or terminated sooner. A current prospectus will be available so
long as we continue to offer our securities for sale. Our securities are offered
subject to prior sale, and we reserve the right to reject subscriptions in whole
or in part, or to accept them in any order. No later than 30 days after we
receive your money and your subscription form, you will receive your stock and
warrant certificates and an accepted copy of the subscription agreement, or
return of your funds if rejected.
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TABLE OF CONTENTS
Prospectus Summary ....................................................... 6
Risk Factors ............................................................. 8
Use of Proceeds .......................................................... 13
Dividend Policy .......................................................... 14
Dilution ................................................................. 15
Capitalization ........................................................... 16
Business ................................................................. 17
Our Company .............................................................. 22
Management ............................................................... 27
Indemnification of Directors and Officers................................. 31
Principal Shareholders ................................................... 31
Prior Rule 504 Offering .................................................. 31
Certain Transactions ..................................................... 32
Description of Capital Stock ............................................. 32
Plan of Distribution ..................................................... 35
Transfer Agent ........................................................... 36
Shares Eligible for Future Sale .......................................... 36
Legal Matters ............................................................ 36
Experts .................................................................. 36
Available Information .................................................... 37
Script Summary- "The Giant" .............................................. 38
Script Summary- "Hands" .................................................. 40
Index to Financial Statements ............................................ F-1
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary may not contain all the information important to you.
We strongly urge you to read the entire prospectus, especially the risks of
investing in the units discussed in the "Risk Factors" section and our financial
statements before you decide to purchase the units. We have not authorized
anyone to provide you with information that is different from this prospectus.
Our Company
We are a development stage independent motion picture company organized
in July 1998 under Nevada law. After completing this offering, we plan to
acquire, develop, produce, market and otherwise exploit feature length motion
pictures for distribution to movie theaters and related entertainment markets.
We have not had any operating revenues from operations.
We have acquired from Frank LaLoggia rights to develop the screenplays,
"The Giant" and "Hands", into feature length motion pictures. We are also
reviewing additional literary works with qualities upon which we may develop
successful motion pictures. We do not yet have agreements to acquire such
properties.
Motion picture production probably will require financing in addition
to this offering.
Our principal offices are located at Universal Studios, 100 Universal
City Plaza, Building #473, Suite 305/307, Universal City, California 91608. Our
telephone number is (818) 733-1467 and our fax number is (818) 866-6237.
The Offering
Securities offered by us: Up to 1,200,000 units consisting of
1 share of common stock, 1 Class A
and 1 Class B redeemable warrants
Price: $6.00 per unit
Common stock outstanding
prior to the offering 4,027,750
Common stock outstanding
after the offering 5,227,750 if maximum sold
Warrants: Class A- 2-year redeemable warrant
to purchase 1 share of common stock
at $8.50 per share until July 31,
2002.
Class B- 3-year redeemable warrant
to purchase 1 share of common stock
at $10.00 per share until July 31,
2003. The Class B warrants will not
be freely tradable at the present
time.
Terms: No minimum amount required to be
sold before we use the offering
proceeds.
Plan of distribution: We will use "best-efforts" to sell
our securities without an
underwriter. We will pay 10%
commissions and up to 3% for
expenses on sales by participating
broker-dealers
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Use of proceeds: For motion picture production and
working capital.
Proposed Nasdaq SmallCap market symbols: Common stock - BCSA
Class A Warrants - BCSAW
Class B Warrants - BCSAZ when
registered
Unless otherwise specifically stated, information throughout this prospectus
assumes: 1,200,000 units are sold and excludes 1,000,000 shares reserved for
issuance under our stock option plan.
Summary Financial Information
This summary financial information should be read in conjunction with our
financial statements and notes thereto and other financial information included
elsewhere in this prospectus. The financial information as of March 31, 2000 is
not necessarily indicative of results that may be expected for the entire year.
The following table sets forth our selected financial data for the
periods ending December 31, 1998, December 31, 1999 and March 31, 1999 and March
31, 2000.
Statement of Operations Data:
<TABLE>
<CAPTION>
7/28/99 Year ended Quarter Quarter
(inception) 12/31/99 ended ended
through 12/31/98 3/31/99 3/31/00
<S> <C> <C> <C> <C>
Revenue from operations $ - $ - $ - $ -
Total costs and expenses 11,804 134,116 32,602 37,825
Interest income 412 1,793 658 125
Net loss (11,392) (132,323) (31,944) (37,700)
Net loss per common share outstanding $ (0.01) $ (0.03) $ 0.01 $ 0.01
- ------------------------------------------------ --------------- --------------- -------------- -------------
Weighted average shares outstanding 1,765,750 3,911,500 3,713,500 3,977,500
- ------------------------------------------------ --------------- --------------- -------------- -------------
</TABLE>
The following table indicates a summary of our balance sheet at March
31, 2000:
o on an actual basis; and
o on an adjusted basis to reflect the net proceeds from our sale
of 1,200,000 units at an assumed public offering price of $6.00
per unit, after deducting underwriting commissions and
estimated offering expenses. See "Use of Proceeds."
Balance Sheet Data:
As of As of
March 31, 2000 March 31, 2000
Adjusted
Current assets $ 39,521 6,139,521
Working capital (deficiency) (31,796) 6,068,204
Total assets 44,909 6,144,909
Total liabilities 71,317 71,317
Total shareholders' equity (deficiency) (26,408) 6,073,592
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RISK FACTORS
Please carefully consider these risks. They are some of the factors
that make an investment in our securities risky. Our securities should only be
considered for purchase if you can afford the risk of losing your entire
investment. Prior to purchasing our securities, prospective investors should
carefully consider the following risk factors:
We have a very short operating history upon which you can evaluate our company.
We are a newly organized development stage corporation and have a
limited operating history from which to evaluate our business and prospects. We
have had no revenues. We had a loss of $143,715 from July 28, 1998 (inception)
to December 31, 1999. We also sustained a loss of $37,700 for the three months
ended March 31, 2000. We had a negative net worth of $34,482 and a working
capital deficiency of $31,796 as of March 31, 2000. There can be no assurance
that our future proposed operations will be implemented successfully or that we
will ever have profits. We face all the risks inherent in a new business,
including the expenses, difficulties, complications and delays frequently
encountered in connection with the formation and commencement of operations,
including operational difficulties and capital requirements and management's
potential underestimation of initial and ongoing costs. In evaluating our
business and prospects, these difficulties should be considered.
The motion picture business is highly speculative.
Substantially all of our revenues will be derived from the production
and distribution of our movies. The entertainment industry in general, and the
development, production and distribution of motion pictures, in particular, is
highly speculative and involves a substantial degree of risk. Since each project
is an individual artistic work and its commercial success is primarily
determined by audience reaction, which is volatile and unpredictable, there can
be no assurance that any entertainment property will be profitable. Even if a
production is a critical or artistic success, there is no assurance that it will
be profitable. Relatively few motion pictures return a profit to investors.
There can be no assurance that a motion picture will recoup its production
costs. There is a high degree of risk that any motion picture we produce will
not return all or any portion of our investment. Risks such as labor disputes,
death or disability of a star performer, rapid high technology changes relating
to special effects, shortage of necessary equipment, damage to the film negative
or adverse weather conditions may substantially increase costs and delay or
frustrate completion of production. To some extent, these risks can be limited
by insurance. It is not possible to insure against all risks, and it is
sometimes impossible to continue production, notwithstanding the receipt of
insurance proceeds, if any.
Due to unexpected costs and other factors, actual motion picture
production costs often exceed budgets. In the event of substantial cost
overruns, we may be required to seek additional financing from outside sources
at unpredictable and possibly substantial cost in order to complete production
of a film.
The movie industry is intensely competitive.
Competition in the motion picture industry is intense. We will be
competing with other film producers for scripts, actors, directors as well as
audiences. We will face competition from other varieties of public
entertainment.
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BellaCasa and its competitors are constantly seeking rights to
exceptional literary properties and the services of the best creative personnel.
Virtually all of our competitors are larger than we are, have been in business
longer than we have, and have more resources at their disposal. Some of the
well-known studios we compete with are News Corporation's Twentieth Century Fox,
Time Warner's Warner Bros. (including Turner, New Line Cinema and Castle Rock
Entertainment), Viacom's Paramount, Seagram's Universal, Sony Corp.'s Sony
Pictures (including Columbia and TriStar), Walt Disney Company's Buena Vista,
Touchstone and Miramax and Metro-Goldwyn-Mayer (including MGM Pictures, UA
Pictures, Orion and Goldwyn). We also compete with innumerable smaller
production and distribution companies. The U.S. motion picture industry can be
divided into major studios and independent companies, with the major studios
dominating the industry in the number of theatrical releases. The major studios
are typically large diversified corporations that have strong relationships with
creative talent, exhibitors and others involved in the entertainment industry
and have global film production and distribution capabilities.
The entertainment industry is currently evolving into an industry in
which certain multi-national multi-media firms, because of their control over
key film, magazine, and television content, as well as key network and cable
outlets, will be able to dominate the communications industries in the United
States. These organizations have numerous competitive advantages, such as the
ability to acquire financing for their projects and to make favorable
arrangements for the distribution of completed films.
Our management has limited experience in running a company.
Although Mr. LaLoggia and other members of our management group have
broad experience in making movies, they do not have experience in the actual
running of a company. Upon completion of this offering, we plan to hire several
key executives who have held senior management positions. There is no assurance,
however, that we will be successful in attracting executives with suitable
experience.
We will need to raise additional capital through equity and/or debt offerings.
Motion picture production requires significant capital. In addition to
the proceeds from this offering we will also require certain deferrals of
production costs and/or additional outside financing to produce a motion
picture. Such financing could take the form of co-production or joint venture
arrangements or limited liability companies or partnerships in which we act as
managing member or general partner, additional sales of our securities or an
operating line of credit. No assurance can be given that financing will be
available to us at all or on favorable terms. Unless such additional financing
is available to us, our production activities may be materially adversely
affected and you may lose your entire investment. We believe the proceeds from
this offering will satisfy our capital requirements for the next 12 months. Then
we will have to arrange for additional financing.
Our capital requirements depend on a number of factors, including the
initial acceptance of our motion pictures by distributors and the public and the
costs to advertise. The timing and amount of such capital requirements cannot be
accurately predicted. If our capital requirements vary materially from those
currently planned, we may require additional financing sooner than anticipated.
We have no financing commitments.
We are using the "best-efforts" method of selling the offering without making
any arrangements for escrow of the proceeds.
Our securities will be offered and sold on a "best-efforts" basis.
There is no minimum-offering amount that is required to be sold before we may
use the proceeds of the offering. Funds tendered by prospective purchasers will
not be placed in escrow, but will be available for use by us immediately upon
acceptance, for the purposes and in the amounts as estimated in the section of
this prospectus entitled "Use of Proceeds." Lack of an escrow arrangement could
cause greater risk to the investors in the event that insufficient capital is
raised in the offering. No commitment exists by anyone to purchase all or any
part this offering.
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There is no underwriter for this offering and we are relying on our best-efforts
and possible broker-dealers.
There is no underwriter for this offering. Therefore, you will not have
the benefit of an underwriter's due diligence efforts which would typically
include underwriter involvement in the preparation of information for disclosure
and the pricing of the securities being offered as well as other matters.
Because we have only very limited experience in the public sale of our common
stock, investors may not be able to rely on our ability to consummate this
offering. In addition our securities are being offered on a "best-efforts"
basis. Accordingly, there can be no assurances as to the number of units that
may be sold or the amount of capital that may be raised by this offering.
We will not have the benefit of diversification.
We presently do not have the ability or sufficient capital to develop
and produce a variety of films for distribution. If we cannot diversify, then
the failure of one or two films could have a material adverse impact, causing
shareholders to lose all or a substantial amount of their investment in our
company.
We depend on the continued services of Frank LaLoggia and the rest of our
management team.
Our executive management consists of Frank LaLoggia and Andrew G.
La Marca. Our success depends on their continued employment with our company. We
will continue to be, especially dependent on the services of Frank LaLoggia, our
chairman of the board, president and chief executive officer. Loss of his
services for any substantial time would materially adversely affect our results
of operations and financial condition. Mr. LaLoggia does not have an employment
agreement with us. However, he will own 45.8% of our stock after the offering
and therefore has a major interest in our success. We intend to obtain "key-man"
insurance covering Mr. LaLoggia in the amount of $1,000,000.
Cash dividends are not anticipated on our common stock.
We have not paid and do not anticipate paying any cash dividends in the
foreseeable future.
You will incur immediate, substantial dilution.
Dilution is the difference between the amount you pay for a share of
common stock in this offering and the net tangible book value per share of such
common stock immediately after the offering. If you invest in this offering, you
will incur an immediate and substantial dilution of your investment. In the
future it is possible, we may issue a substantial number of shares of common or
preferred stock which could reduce your percentage of ownership and voting
rights in us.
Payment of stock dividends may lower the market price of our stock.
We plan to pay common stock dividends on our common stock at the rate
of 10% every six months. The market price of our common stock and the exercise
price of our warrants will automatically be reduced to adjust for the stock
dividends. In addition, there is the likelihood that some of the shares
received, as stock dividends will be sold by our shareholders which may further
reduce the price of our common stock.
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There are additional risks in foreign business.
To the extent that we engage in foreign distribution of our films, we
will be subject to all of the additional risks of doing business abroad
including, but not limited to, government censorship, currency fluctuations,
exchange controls, greater risk of "piracy" copying, and licensing or
qualification fees.
Our founder's shares were issued in a non-arm's-length transaction.
The number of shares of common stock issued to our founder, Mr. Frank
LaLoggia, for an interest in two screenplays was agreed to by Mr. LaLoggia and
the other members of the board of directors. The determination of the number of
shares did not result from an arm's-length negotiated transaction.
It is difficult to protect intellectual property.
We plan to copyright all of our film properties and projects. However,
there is no practical protection from the films being copied by others without
payment to our company, especially overseas.
There may be conflicts of interest with our advisory board members.
The members of our Advisory Board are engaged in the entertainment and
motion picture industry. These individuals may engage in activities that are
directly or indirectly competitive with those engaged in by us. Additionally,
certain members of our Advisory Board may have direct business dealings with us
in the future causing the potential for conflicts of interest.
Our stock and warrants may be volatile and lack an active trading market.
Stock markets are subject to significant price fluctuations unrelated
to issuer operating performance. Therefore, the market price of our stock and
warrants may frequently change. Trends in the entertainment industry in general
and the film industry in particular may influence the market volatility of our
securities.
The market prices for securities of companies with limited operating
history, such as BellaCasa, have historically been highly volatile. Significant
volatility in the market price of our common stock and warrants may arise due to
factors such as the fact that our business is still in a development stage and
that we have a negative cash flow. Our stock and warrant price may be volatile
because of a relatively low price per share coupled with a relatively small
public float and a small number of shareholders and warrant holders, and
consequently there may be only limited interest by securities dealers in
maintaining a market for our securities.
As long as there is only a limited public market for our common stock,
the sale of a significant number of shares of our stock at any particular time
may cause a decline in the price of the stock and of the warrants.
There can be no assurance that an active trading market will develop or
that you will be able to resell your shares and warrants at prices equal to or
greater than the offering price for the units.
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The offering price of our common stock and warrants was not based on book value
or earnings.
The offering price of our securities was determined arbitrarily by our
board of directors. The board did not base the offering price on relationships
to book value or earnings but did consider our potential and prospects, our
needs as well as the state of the financial markets and the developments in the
motion picture industry. As a result, purchasers of our securities may be
exposed to a substantial risk of decline in the market price of the securities
after this offering, should such a market develop.
Our management owns a significant percentage of our voting stock.
Upon completion of this offering, our officers and directors will own
49.6 % of our outstanding stock. Under Nevada law, they will have the ability to
exert significant influence on the election of all of our directors. This
concentration of ownership may also have the effect of delaying, deterring or
preventing a change in control. If you purchase our securities, you may have no
effective voice in our management. Please see "Principal Shareholders".
Future sales of our common stock may depress our stock price.
Sales of substantial amounts of our common stock in the public market
could adversely affect the market price of our securities. As of April 30,2000,
4,027,750 shares of our common stock were outstanding. The shares and Class A
warrants being offered as part of the units in this prospectus will be
immediately eligible for sale in the public market without restriction. Of the
total shares to be outstanding upon completion of this offering, 2,645,250 will
be subject to the resale limitations of Rule 144 promulgated under the
Securities Act.
Management has discretion in the use of the proceeds of this offering.
Our success will be substantially dependent on our management team's
use of the offering proceeds. Proceeds from this offering will be used as
described in "Use of Proceeds", where we reserve the right to use the offering
proceeds if such use is necessary and in the best interest of our Company and
our shareholders. You will be entrusting your funds to our management team with
only limited information.
There are risks associated with expenses incurred in protecting directors and
officers from liability.
Our articles of incorporation allow us to reimburse our officers and
directors for damages they may be subject to, resulting from a breach of their
fiduciary duties to our shareholders. Our articles of incorporation also require
us to advance money to any officer or director if the law does not prevent us
from doing so. We may experience significant cash flow problems if we are
required to either reimburse, or advance money, to our officers or directors for
such purposes. Please see "Indemnification of Directors and Officers."
You could lose your right to exercise your warrants if we exercise our right to
redeem the warrants.
Under some circumstances, we may redeem all of the warrants at nominal
cost. If you are a warrant holder and we call for redemption, to the extent we
redeem your warrants, you will lose your right to purchase shares in accordance
with the terms of your warrants. Furthermore, the threat of redemption could
force you to: exercise your warrants at a time when it may be
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disadvantageous for you to do so; sell your warrants at the then current market
price when you might otherwise wish to hold them; or accept the redemption price
which will be substantially less than the market value of your warrants at the
time of redemption.
Please see "Description of Securities - Warrants" for the conditions
under which we may redeem the warrants. We will not call the warrants for
redemption if a current prospectus is not available for the exercise of the
warrants.
Our preferred stock may make a takeover difficult.
Our board of directors is authorized to create and issue shares of
preferred stock with terms subject to the approval of our shareholders.
Preferred stock could negatively affect the voting power or other rights of
common stockholders. Also, our board of directors might conceivably create
preferred stock to prevent a third party from taking control of our company. We
do not plan to issue any shares of preferred stock, but we may choose to in the
future. In certain circumstances, the issuance of preferred stock could have the
effect of decreasing the market price of our common stock and warrants. Please
see "Description of Securities - Preferred Stock".
You should not rely on our forward-looking statements.
This prospectus contains forward-looking statements that are subject to
risks and uncertainties, and are based on assumptions as to certain facts that
may actually differ from the assumptions. Discussions containing forward-looking
statements may be found in "Prospectus Summary," "Risk Factors," and "Business,"
as well as within this prospectus generally. In addition, when used in this
prospectus, the words "believes," "intends," "plans," "anticipates," "expects"
and similar expressions are intended to identify forward-looking statements.
Actual results could differ materially from those described in the
forward-looking statements as a result of the assumptions not occurring as
planned and the risk factors set forth in this section and the information
provided in this prospectus generally. We do not intend to update any
forward-looking statements.
USE OF PROCEEDS
Assuming an offering price of $6.00 per unit, if we sell all 1,200,000
units being offered, we estimate that we will receive net proceeds of
$6,100,000, after deductions for underwriting commissions and the estimated
expenses of the offering. If less than the maximum number of shares is sold, we
will receive less.
We intend to use the net proceeds as follows: $5,500,000, or
approximately 90%, for production of "The Giant", our first motion picture, and
$600,000, or 10%, for working capital and general corporate purposes. Any
additional proceeds we may receive from the exercise of the Class A and B
warrants will be used primarily for motion picture production. Motion picture
production costs during the production period include payroll expense for actors
and stunt men and production staff including photographic and sound crews and
set construction workers as well as wardrobe and makeup personnel. There are
costs for the use of the various kinds of equipment including camera, sound and
transportation equipment. Travel and living expenses account for a substantial
part of any budget when scenes are shot on location. It is expected that many of
the scenes in the production of "The Giant" will be filmed in Italy. During the
post-production period, we must make outlays for editing, music and laboratory
expenses. In the distribution stage, public and marketing are major expenses. In
the production of any movie, it is important to maintain strict adherence to a
well-conceived realistic budget.
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If we do not sell the maximum number of unitd offered there will be an
impact upon our operations. If the proceeds of this offering are insufficient to
enable us to develop our business, we may have to borrow funds from banks and
other lenders or make other financial arrangements, including but not limited to
the sale of additional securities in order to produce or co-produce motion
pictures. No assurance can be given, however, that any such loans or
arrangements will successfully be made or that any such funds will be available
to us.
Working capital is the amount of our current assets, such as cash,
receivables and work in process, in excess of our current liabilities, such as
accounts payable. Working capital may be used to pay the salaries and expenses
of employees, including management personnel, although management has not
received any salary to date.
Depending upon the availability of star actors and others, we may use
part of the money allocated for motion picture production for advance payments
to secure the services of a particular actor or actors when production begins.
There is no assurance that, even if we offer advance payments that will be
placed in escrow, we will be able to secure the services of a star actor.
We reserve the right to use the proceeds for different purposes if we
believe such a change is necessary and in the best interests of the Company and
its shareholders.
Based upon current plans and assumptions relating to our business plan,
we anticipate that the proceeds of this offering will satisfy our capital
requirements for a period of approximately 12 months following completion of
this offering. However, if our plans change or our assumptions prove to be
inaccurate, we may need to seek additional financing sooner than currently
anticipated or curtail our operations. For information concerning the methods,
which we intend to employ to obtain the additional funds necessary to produce
our motion pictures, please see "The Company--Financing Strategy."
Pending expenditures of the proceeds of the offering, we may make
temporary investments in interest-bearing accounts, certificates of deposits,
United States Government obligations or money market accounts.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock.
We presently intend to reinvest earnings to fund the production of motion
pictures and to develop and expand our business and, therefore, we do not
anticipate paying cash dividends on our common stock in the foreseeable future.
The declaration of cash dividends in the future will be at the discretion of our
board of directors and will depend upon our earnings, capital requirements and
financial position, general economic conditions and other pertinent factors.
We do plan, however, to declare dividends in the form of stock at the
rate of 10% every six months for the next five years. Each semi-annual dividend
will be paid on the increased number of shares so that for the first year the
annualized stock dividends will be the equivalent of 21%.
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DILUTION
A company's net tangible book value per share consists of its total
tangible assets minus its total liabilities, divided by the total number of
shares of common stock outstanding. As of March 31, 2000, we had a negative net
tangible book value of $ (27,927) or about $(0.01) per share.
As of March 31, 2000, after adjusting for the issuance of 1,200,000
units in this offering (at an assumed offering price of $6.00 per unit) and the
receipt by us of the net proceeds from this offering, then our as adjusted net
tangible book value would have been approximately $6,072,073 or about $1.16 per
share of common stock.
This represents an immediate increase in net tangible book value of
about $1.17 per share to the existing shareholders and an immediate dilution of
$4.84 per share to the new investors purchasing shares in this offering.
Assumed public offering price per unit $6.00
Net negative tangible book value
per share before offering ($0.01)
Increase per share due to offering 1.17
------
As adjusted net tangible book value
per share after offering 1.16
-----
Dilution per share of common stock to
investors in this offering $4.84
-----
The following table summarizes, as of March 31, 2000 the number and
percentage of shares of common stock purchased from our company, the amount and
percentage of the consideration paid and the average price per share paid by
existing shareholders and by new investors pursuant to this offering. The
calculation below is based upon an assumed initial public offering price of
$6.00 per unit, before deducting the estimated underwriting commissions and
offering expenses paid by our company.
Average
Shares Purchased Total Consideration Price
Number Percent Amount Percent Per Share
Existing stockholders 4,027,750 77.0% $ 175,132 2.4% $0.04
New investors 1,200,000 23.0 7,200,000 97.6 6.00
----
Total 5,227,750 100.0 7,375,132 100.0
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CAPITALIZATION
The following table sets forth the capitalization of our Company at
March 31, 2000 on an actual and as adjusted basis, to give effect to the sale of
this offering. The as adjusted column shows our capitalization adjusted to
reflect the issuance of the 1,200,000 units in this offering (at an assumed
public offering price of $6.00 per unit). This table should be read in
conjunction with our financial statements included in this prospectus.
March 31, 2000
Actual As Adjusted
------ -----------
Long-term debt $ - $ -
Stockholders' equity
Preferred stock, par value $.0001 -
25,000,000 shares authorized -
Common stock, par Value $.0001
50,000,000 shares authorized
4,027,750 issued and outstanding 403
5,227,750 issued and outstanding 523
Additional paid-in capital 174,729 6,274,609
Deferred compensation ( 15,125) (15,125)
Accumulated deficit (181,415) (181,415)
Stockholder receivable (5,000) (5,000)
Total stockholders' equity (deficiency) $ (26,408) $6,073,592
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BUSINESS
Overview
Our company, BellaCasa Productions, Inc. was recently formed to operate
as a motion picture studio. We plan to acquire, produce and market motion
pictures for distribution to movie theaters and ancillary markets.
Description of Motion Picture Industry
General
Movies have been a popular form of entertainment since before
World War I. It has been a steady growth industry since the first silent movie.
In its release for 1998, the Motion Picture Association of America, which only
issues U.S. statistics, reported that box office receipts in the United States
grew nearly 50% since 1990 to nearly $7 billion. The number of admissions to
movie theatres in the United States was approximately 1.5 billion up from 1.2
billion in 1990. The motion picture industry in the United States has changed
substantially over the last 30 years and continues to evolve rapidly. With the
advent of network, broadcasting television alliances, cable television and home
video, the market has expanded faster than at any other time. Movies are being
bought for pay-television cable networks as well as for the traditional outlets
of theaters and network television. With the expansion of audience markets,
distribution is no longer limited to the major distributors and the broadest
possible audience appeal. With this media expansion, less general, more specific
audiences can be sought and profitably exploited such as for science fiction or
horror films or films geared to children or to women.
Historically, the major studios financed, produced and distributed the
vast majority of American-made motion pictures. More recently, independent
producers have produced many of the motion picture releases. Today, much of the
financing and distribution of significant motion pictures remains in the control
of the major studios. Many of the major Hollywood film production companies have
become part of large conglomerate business operations, or have, for a variety of
reasons, diversified their operations. As a result, these companies have adopted
a policy of producing only a relatively small number of films each year.
Consequently, many smaller, independent film production companies, much like our
company, have been established in recent years.
The following general description is a simplified overview of the
complex process of producing motion pictures and is intended as an aid in
understanding the film industry and does not describe what will necessarily
occur in the case of any particular motion picture. The general description
applies to independent film companies, as well as to major motion picture
studios. The business of BellaCasa will involve the actual development and
production of motion pictures.
The procedures and practices described in the following generalized
discussion relating to the motion picture industry are intended only to provide
a background against which the business of our company may be evaluated. There
can be no assurance that the procedures and practices described in the following
generalized discussion will apply in any particular instance to the business of
BellaCasa.
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Production of Motion Pictures
During the filmmaking process, which takes approximately 12 to 24
months from the start of the development phase to theatrical release, a film
progresses through several phases. The four stages of motion picture production
are development, pre-production, principal photography and post-production.
After the movie producer completes that process, the film is distributed and
marketed. The following is a brief summary of each stage of production.
Development and Pre-production
In the development stage of a motion picture project, literary material
for the project is acquired, either through an option to acquire such rights, or
by engaging the writer to create original literary material. If the literary
material is not in script form, a writer must be engaged to create a script. The
script must be sufficiently detailed to provide the production company and
others participating in the financing of a motion picture with enough
information to estimate the cost of producing the motion picture. Only a small
percentage of projects in development will become completed motion pictures.
During the pre-production stage, the production company hires creative personnel
including the principal cast members. It also uses this time to establish
shooting locations and schedules. The production company also prepares the
budget and secures the necessary financing. Pre-production activities are
usually more expensive than the development process. In cases involving unique
or desired talent, commitments must be made to keep performers available for the
picture. The pre-production stage of each motion picture will extend for
approximately two months.
Principal Photography and Post-production
The process of principal photography is the actual filming of a motion
picture. During principal photography, almost all of the film footage is shot,
although additional scenes may be added during post-production. This part of the
making of a movie together with creating special effects is the most costly
stage of producing a motion picture. Principal photography generally takes from
eight to twelve weeks to complete. Bad weather at locations, the illness of a
cast or crew member, disputes with local authorities or labor unions, a
director's or producer's decision to shoot scenes for artistic reasons, and
other often unpredictable events can seriously delay the scheduled completion of
principal photography and substantially increase its costs. If a motion picture
reaches the principal photography stage, it usually will be completed. Following
principal photography is the post-production stage. During post-production, the
motion picture film is edited to its final form. Music is added, as is dialogue
and special effects. Music and film action are synchronized during this stage as
the film is brought to its completed form. The picture negative is then readied
for the production of release prints. While the post-production stage may extend
for any period, depending upon editing difficulties or the addition of new
material, on the average, post-production may take from approximately 2 to 4
months. Most motion pictures that reach the post-production stage are eventually
completed and distributed.
Distribution of Motion Pictures
One of the most important aspects of the motion picture industry is
distribution. Once a film is produced it must be distributed. Motion picture
revenues are derived from the worldwide licensing of a motion picture to several
distinct markets, each having its own distribution network and potential for
profit. The selection of the distributor for each of our feature films will
depend upon a number of factors. Our most basic criterion is whether the
distributor has the ability to secure bookings for the exhibition of the film on
satisfactory terms. We will consider whether, when and in what amount the
distributor will make advances to us. We will also consider the amount and
manner of computing distribution fees and the extent to which the distributor
will guarantee certain print, advertising and promotional expenditures. We do
not commit to raising substantial funds such as by this offering for the actual
production of a particular film unless we believe that adequate distribution
arrangements for the film can be made.
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Most of the revenues produced by a film are usually generated during
the first five years after the film's initial domestic theatrical release.
Movies that are commercially successful may continue to generate revenues beyond
five years from the re-licensing of distribution rights in certain media,
including television and home video, and from the licensing of distribution
rights with respect to new media and technologies. The timing of revenues
received from the various sources varies from film to film. The markets for film
product have been undergoing rapid changes due to technical and other
innovations. As a consequence, the sources of revenue available have been
changing rapidly and the relative importance of the various markets as well as
the timing of such revenue have also changed and can be expected to continue to
change.
The following is a brief summary of each of the sources of revenue from
motion pictures and the distinct distribution process associated with each. We
expect our movies to generate revenue from all of these sources.
Theatrical Distribution
The distributor and theatrical exhibitor generally enter into license
agreements providing for the payment by the exhibitor to the distributor of a
percentage of box office receipts after deducting the exhibitor's overhead or a
flat amount. The percentage generally ranges from 35-60% and may change for each
week the film plays in a specific theater, depending on the motion picture's
success at the box office. The balance, known as the gross film rental, is
remitted to the distributor. The distributor then retains a distribution fee
from the gross film rental and recovers the costs of distributing the film,
consisting primarily of advertising, marketing, and production cost, and the
cost of manufacturing release prints. The balance, if any, after recouping any
advance or minimum guarantee previously paid is then paid to the producer based
on a predetermined split between the producer and distributor.
Theatrical Distribution - United States
Recently, United States theatrical exhibition has generated a declining
percentage of the total income earned by most pictures largely because of the
increasing importance of cable and pay television, home video and other
ancillary markets. Nevertheless, the total revenues generated in the United
States theatrical market are still increasing and are still likely to account
for a large percentage of revenues for a particular film. In addition,
performance in the United States theatrical market generally has a profound
effect on the value of the picture in other media and other markets. For a
picture's initial theatrical release, the United States theater exhibitor will
usually pay to a distributor a percentage of the box office receipts which is
negotiated based upon the expected appeal of the motion picture. The percentage
of box office receipts remitted to the distributor is known as film rentals and
customarily diminishes during the course of the picture's theatrical run.
Typically, the distributor's share of total box office receipts over the entire
initial theatrical release period will average between 35 to 60 percent; the
exhibitor will retain the remaining 40 to 65 percent. The exhibitor will also
retain all receipts from the sale of food and drinks at the theater.
Occasionally, an exhibitor will pay to the distributor a flat fee or percentage
of the box office receipts against a guaranteed amount.
Theatrical Distribution-Foreign
While the value of the foreign theater market varies due to currency
exchange rate fluctuations and the political conditions in the world or specific
territories, it continues to provide a significant source of revenue for
theatrical distribution. Because this market is comprised of a multiplicity of
countries and, in some cases, requires the making of foreign language versions,
the distribution pattern stretches over a longer period of time than does the
United States theatrical market. Major studios usually distribute motion
pictures in foreign countries through local entities. Distribution fees to these
firms usually vary between 35 and 40 percent depending upon the territory or
financial arrangements. These local entities generally will be either wholly
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owned by the distributor, a joint venture between the distributor and another
motion picture company, or an independent agent or sub-distributor. These local
entities may also distribute motion pictures of other producers, including some
major studios. Film rental agreements with foreign exhibitors take a number of
different forms, but typically provide for payment to a distributor for a fixed
percentage of box office receipts or a flat amount. Risks associated with
foreign distribution include fluctuations in currency values and government
restrictions or quotas on the percentage or receipts that may be paid to the
distributor, the remittance of funds to the United States and the importance of
motion pictures to a foreign country.
Home Video
A motion picture typically becomes available for videocassette and
digital videodisk or DVD distribution within four to six months after its
initial domestic theatrical release. Home video distribution consists of the
promotion and sale of videocassettes and DVD to local, regional and national
video retailers who rent or sell cassettes and disks to consumers primarily for
home viewing. Most films are sold at a wholesale price to video rental stores,
which rent the cassettes and DVD to consumers. Owners of films generally do not
share in rental income. Following the initial marketing period, selected films
are re-marketed at a wholesale price for sale in cassette or DVD form to
consumers. These "sell-through" arrangements are used most often with films that
will appeal to a broad marketplace or to children. Some films are initially
offered at a price designed for sell-through rather than rental when it is
believed that the ownership demand by consumers will result in a sufficient
level of sales to justify the reduced margin on each cassette or DVD sold.
The home video market in the Unites States and abroad has experienced
substantial growth in the past several years and film industry analysts predict
a period of continued growth. There are indications, however, that accessing
movies "on demand" on a pay per view basis may be a viable alternative to video
rental as new technology is developed in the future. This development may impact
video rentals but would likely be offset by comparable increases in pay per view
usage and profit margins due to lower distribution costs and lower prices for
viewers plus the convenience of faster selection and at home selection.
Certain foreign territories in particular have seen increased
utilization of home video units due to the relative lack of diversified
television programming. Sales of videocassettes have increased in such markets
in recent years. Although growth in this area may slow because of an increase in
television programming in such foreign territories, receipts from home video in
these markets can be expected to continue to be significant. Home video
arrangements in international territories are similar to those in domestic
territories except that the wholesale prices may differ.
Television
Television rights are generally licensed first to pay-per-view for an
exhibition period within six to nine months following initial U.S. theatrical
release. Within twelve to fifteen months after the initial domestic release the
rights are then licensed to pay television, then in certain cases to free
television for an exhibition period, and then to pay television again. These
films are then syndicated to either independent stations or basic cable outlets.
Cable and Pay Television
Pay television rights include rights granted the cable, direct
broadcast satellite, pay-per-view and other services paid for by subscribers.
Pay television companies have entered into output contracts with one or more
major motion picture production companies on an exclusive or non-exclusive basis
to insure themselves a continuous supply of motion picture programming. Some pay
television services have required exclusivity as a precondition for such
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contracts. Pay-per-view television allows subscribers to pay for individual
programs, including recently released movies, on a per use basis. Pay television
allows cable television subscribers to view such channels as HBO, Showtime, The
Movie Channel, Lifetime, and A&E, which are offered by their cable system
operators for a monthly subscription fee. Since groups of motion pictures are
typically packaged and licensed for exhibition on television over a period of
time, revenues from these television licensing "packages" may be received over a
period that extends beyond five years from the initial domestic theatrical
release of a particular film. Motion pictures are also packaged and licensed for
television broadcast in international markets.
The pay television market is characterized by a large number of sellers
and few buyers. However, the number of motion pictures utilized by these buyers
is extremely large and a great majority of motion pictures that receive
theatrical exhibition in the United States are shown on pay television.
Network Television
In the United States, broadcast network rights are granted to ABC, CBS,
Fox, NBC or other entities formed to distribute programming to a large group of
stations. The commercial television networks in the United States license motion
pictures for a limited number of exhibitions during a period that usually
commences two to three years after a motion picture's initial theatrical
release. During recent years, only a small percentage of motion pictures have
been licensed to network television, and the fees paid for such motion pictures
have declined. This decline is generally attributed to the growth of the pay
television and home video markets, and the ability of commercial television
networks to produce or acquire made-for-television motion pictures at a lower
cost than license fees previously paid for theatrical motion pictures.
Television Syndication
Distributors also license the right to broadcast a motion picture on
local, commercial television stations in the United States, usually for a period
commencing five years after initial theatrical release of the motion picture,
but earlier if the producer has not entered into a commercial television network
license. This activity, known as syndication, has become an important source of
revenues as the number of, and competition for programming among, local
television stations has increased.
Foreign Television Syndication
Motion pictures are now being licensed in the foreign television market
in a manner similar to that in the United States. The number of foreign
television stations as well as the modes of transmission has been expanding
rapidly, and the value of such markets has been likewise increasing and should
continue to increase.
Producers may license motion pictures to foreign television stations
during the same period they license such motion pictures to television in the
Unites States. Governmental restrictions and the timing of the initial foreign
theatrical release of the motion pictures in a particular country may delay the
exhibition of a motion picture in that country.
International Markets Growth and Tastes
Motion picture distributors and producers derive revenue from
international markets in the same media as domestic markets. The growth of
foreign revenues has been dramatic, and now accounts for more than half of the
total revenues of many films. The increase in revenues is currently being driven
primarily from the growth of television abroad. The increase in foreign
television viewers and foreign revenues is likely to continue. Although the
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increased level of foreign viewers affects the revenues of most films, the
effect is not uniform. Action films and films with major stars benefit most from
foreign revenues as compared to films with uniquely American themes with unknown
actors.
Non-Theatrical and Other Rights
Films may be licensed for use by airlines, schools, public libraries,
community groups, the military, correctional facilities, cruise ships and
others.
We anticipate not only acquiring and producing motion pictures but also
capitalizing on other marketing opportunities associated with these properties.
We intend to exploit all available rights in each film, including the publishing
and promotion of music, the incorporation of original songs on the sound track
for subsequent use in promotion, sound track albums and story-telling records
and the licensing of merchandising rights.
OUR COMPANY
We are a development stage independent motion picture development,
production and marketing company. We were organized to develop and produce
feature length motion pictures. Shortly after our incorporation, we acquired
from Mr. Frank LaLoggia certain rights to two screenplays entitled "The Giant"
and "Hands". Mr. LaLoggia is our founder, president and board chairman. He also
owns nearly 60% of our outstanding common stock. Mr. LaLoggia received his stock
in exchange for the screenplay rights. We intend to produce motion pictures
based on these literary properties. Attached to this prospectus are summaries of
both screenplays. Since inception, our activities have consisted primarily of
raising capital through the sale of our common stock and positioning ourselves
to begin making movies. We have begun to proceed with the pre-production stage
for "The Giant". Our pre-production has included interviewing potential cast
members and supporting staff. We have also made arrangements for the logistics
of filming on location outside of the United States and preparing our budgets.
On completion of this offering, we will proceed with pre-production of
"The Giant" and then begin the principal photography stage.
As part of our acquisition of the screenplay rights, we received more
than 1,500 completed storyboard drawings. Storyboards are visual representations
of each camera setup for use during the course of filming. "The Giant" which
takes place at the end of the 13th century is the story of the creation of the
artistic masterpiece, the sculpture of David, by Michelangelo. Historically, the
citizens of Florence have always referred to the statue as the "Giant". The
excavation of the statue's raw material, an 11-foot by 8-foot rock, in one
piece, was a technological feat for its day. "Hands" is a modern-day thriller
mixed with supernatural elements. The setting for the film is primarily rural
central Italy.
We continue to review other potential film projects. We have not
acquired any options or entered into any agreements regarding any projects other
than "The Giant" and "Hands". We have, however, entered into negotiations to
acquire the rights to produce a movie based on the biography of the legendary
comedy team of Bud Abbott & Lou Costello, as portrayed in "Lou's on First".
There is no assurance that we will be able to acquire these rights.
Business Approach
We are committed to the development and production of high quality
motion pictures that have enduring value in all media. "The Giant" and "Hands"
are examples of the types of movies that meet our standards. No assurance can be
given that we will obtain the necessary funds to produce profitable motion
pictures.
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As an independent producer of feature films, we do not have sufficient
capital to independently finance our own productions. Accordingly, most of our
financial resources will be devoted to financing development activities, which
include the acquisition of underlying literary works such as books and plays,
and commissioning screenplays. We believe a key element in the success of our
company will be Mr. LaLoggia's reputation in the entertainment business and his
access to and relationships with creative talent including actors, writers and
directors.
The ability to create or identify and develop attractive properties
will be important for the success of our company. The feature film industry,
including the major studios, relies heavily on independent producers to identify
projects, which are then developed further or produced and distributed by the
major studios.
We plan to employ a flexible strategy in developing and producing our
motion picture and film properties. We will use our own capital and financial
resources to develop a project to the point where it is ready to go into
production. We will assemble a "package" consisting of the underlying literary
property, a script that is ready for production, and key talent, including a
director and principal cast. We believe that we should be able to secure key
talent based on the attractiveness of the script but we may also offer, as an
added incentive, grants of our stock or options to acquire our stock. We will
then secure the financing to produce the movie and make it available for
distribution. The financing may come from, for example, lenders with profit
participations, advances from distribution companies or accredited investors or
a combination of sources. The benefit of developing a project to this advanced
stage is that we will have maximum leverage in negotiating production and
financing arrangements. Nevertheless, there may be situations when we may
benefit from financial assistance at an earlier stage. These occasions may be
necessary as a result of lengthy development of a script, the desirability of
commissioning a script by a highly paid writer, the acquisition of an expensive
underlying work, or a significant financial commitment to a director or star.
In connection with the production and distribution of a motion picture,
major studios and independent production companies often grant contractual
rights to actors, directors, screenwriters, and other creative and financial
contributors to share in revenues or net profits from the motion picture. Except
for the most sought-after talent, these third-party participators are generally
payable after all distribution fees, marketing expenses, direct production costs
and financing costs are recouped in full. We plan to be flexible in compensating
talent. We are not averse to entering into profit sharing arrangements. We will
also consider the use of our securities to reward the actors and other
participants in a successful motion picture.
Company Goals
Our initial short-term goal is to produce and or co-produce at least
two profitable feature films in the next two years. We expect that our first
film will be "The Giant". We have not yet decided as to which film will be our
second. In the next six to eight months, we expect to begin the principal
photography of "The Giant". The estimated proceeds from this offering will be
insufficient to enable us to produce a feature film without additional outside
financing and deferral of certain production costs. Please see "Use of
Proceeds." Our long-term key goal is to become a major independent film
producer.
For certain films, we plan to enter into co-productions with
experienced and qualified production companies in order to become a consistent
supplier of multiple products to distributors in the world markets. In
connection with co-productions, we do not want to relinquish control of the
project, so we intend to provide up to 50% of the funds required by the
production. We may obtain our share from others such as from borrowings or by
offering participations in other films. With dependable and consistent delivery
of product to these markets, we believe that distribution arrangements can be
structured which will be equivalent to the arrangements made by major studios.
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No assurance can be given that our feature films, if produced, will be
distributed and, if distributed, will return our initial investment or make a
profit. To achieve the goal of producing profitable feature films, we plan to be
extremely selective in our choice of literary property and exercise a high
degree of control over the cost of production. Although we plan to produce films
that will generate substantial box office receipts, we will produce our films in
a fiscally conservative manner. We believe that it is possible for a feature
film to return the initial investment and show a profit based on an average box
office run, with residuals from the sale of ancillary rights adding to cash flow
in future years. By keeping strict control of our costs, we will strive for
consistent and profitable returns on our investment.
Feature Film Production
Feature film production does not require the ownership of expensive
equipment. All the necessary equipment needed to engage in every aspect of the
film production process can be rented or borrowed for the period in which it is
needed. This is standard operating procedure for all production companies within
the industry and we plan to follow this procedure in our productions. Such
rentals and temporary equipment are accounted for in the budget of each film in
what are called the "below the line" costs that are directly charged to the
production or the cost of "manufacturing" the film. We plan to rent whatever
equipment is needed for the shortest period of time and to coordinate its use to
avoid idle time.
Essential to our success will be the production of high quality films
with low to medium budgets ($5 to $25 million) that have the potential to gain
national and international attention. We will not engage in the production of
X-rated material. We plan to make motion pictures that appeal to the tastes of
the vast majority of the movie going public. Our films will be cast into a wide
range of genres. All movies that may be produced will be suitable for domestic
and international theatrical exhibition, pay cable, network and syndicated
television, as well as all other ancillary markets.
The moderate budgets, within which we intend to operate, will serve the
dual purpose of being low enough to limit our downside exposure and high enough
to pay for a feature film with recognizable actors or directors that appeal to
the major markets. The market pull of the talent to be used must justify their
fees by helping to attract advances. Our budgets must remain small enough so
that a large percentage of our capital is not put at risk. We intend to produce
projects with built-in breakeven levels that can be reached with ancillary and
foreign distribution revenue. If the movie crosses-over into a wide national
distribution release, we can potentially generate a large upside because our
share is not limited as with ancillary and foreign revenues.
In order to produce quality motion pictures for relatively modest
budgets, we will seek to avoid the high operating expenses that are typical of
major studio productions. We do not plan on having high overhead caused by large
staffs, interest charges, substantial fixed assets, and the investment in a
large number of projects never produced. We believe we can affect savings
because of better time management than is possible in a major studio production,
by maintaining a smaller, more flexible staff with fewer established
organizational restrictions.
Under our operational plan, primary responsibility for the overall
planning, financing and production of each motion picture will rest with our
officers. For each motion picture we will either employ an independent film
director who will be responsible for, or involved with, many of the creative
elements, such as direction, photography, and editing, or a BellaCasa employee
who is experienced in directing a particular type of film. All decisions will be
subject to budgetary restrictions and our business control, although we will
permit an independent director to retain reasonable artistic control of the
project, consistent with its completion within strict budget guidelines and the
commercial requirements of the picture.
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Financing Strategy
We will not be able to produce a feature film on our own with the
proceeds of this offering without additional outside financing and the deferral
of certain production costs. Wherever possible we will attempt to make
arrangements with providers of goods and services to defer payment until a later
stage in the production and financing cycle. Once a film package has been
assembled, there are various methods to obtain the funds needed to complete the
production of a movie. Examples of financing alternatives include the assignment
of our rights in a film to a joint venture or a co-producer. Also, we may form a
limited liability company or partnership where we will be the managing member or
the general partner. In addition we may obtain favorable pre-release sales or
pre-licensing commitments from various end users such as independent domestic
distributors, foreign distributors, cable networks, and video distributors.
These various techniques, which are commonly used in the industry, can be
combined to finance a project without a major studio financial commitment.
We may use any one or a combination of these or other techniques to
finance our films. We anticipate that any financing method will permit us to
maintain control over the production. There can be no assurance that we will be
able to successfully arrange for such additional financing and to the extent we
are unsuccessful our production activities may be adversely affected.
As part of our financing strategy, we may use some of the proceeds of
this offering that is allocated to movie production to be used as an advance
payment to secure the services of a star actor. This will assure the actor's
services and will assist us in obtaining financing to produce the movie.
Distribution Arrangements
Effective distribution is critical to the economic success of a feature
film, particularly when made by an independent production company. We have not
as yet negotiated agreements for the distribution of our films.
We intend to release our films domestically through existing
distribution companies, primarily independent distributors. We will retain the
right for ourselves to market the films on a territory-by-territory basis
throughout the rest of the world and to market television and other uses
separately. In many instances, depending upon the nature of distribution terms
available, it may be advantageous or necessary for us to license all, or
substantially all, distribution rights through one major distributor.
It is not possible to predict with certainty the nature of the
distribution arrangements, if any, which we may secure for our motion pictures.
Government and Other Regulation
An industry trade association, the Motion Picture Association of
America, assigns ratings for age group suitability for domestic theatrical
distribution of motion pictures under the auspices of its Code and Rating
Administration. The film distributor generally submits its film to the Code and
Rating Administration for a rating. We plan to follow the practice of submitting
our pictures for ratings.
Television networks and stations in the United States as well as some
foreign governments may impose additional restrictions on the content of a
motion picture that may wholly or partially restrict exhibition on television or
in a particular territory.
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We plan to produce our motion pictures so there will be no material
restrictions on exhibition in any major market or media. This policy may require
production of "cover" shots or different photography and recording of certain
scenes for insertion in versions of a motion picture exhibited on television or
theatrically in certain territories.
There can be no assurance that current and future restrictions on the
content of our films may not limit or affect our ability to exhibit our pictures
in certain territories and media.
Theatrical distribution of motion pictures, in a number of states and
certain jurisdictions, is subject to provisions of trade practice laws passed in
those jurisdictions. These laws generally seek to eliminate the practice known
as "blind bidding" and prohibit the licensing of films unless theater owners are
invited to attend screenings of the film first. In certain instances, these laws
also prohibit payment of advances and guarantees to film distributors by
exhibitors.
Intellectual Property Rights
Rights to motion pictures are granted legal protection under the
copyright laws of the United States and most foreign countries. These laws
provide substantial civil and criminal penalties for unauthorized duplication
and exhibition of motion pictures. Motion pictures, musical works, sound
recordings, artwork, and still photography are separately subject to copyright
under most copyright laws. We plan to take appropriate and reasonable measures
to secure, protect, and maintain copyright protection for all of our pictures
under the laws of the applicable jurisdictions. Motion picture piracy is an
industry-wide problem. Our industry trade association provides a piracy hotline
and investigates all piracy reports. The results of such investigations may
warrant legal action, by the owner of the rights, and, depending on the scope of
the piracy, investigation by the Federal Bureau of Investigation with the
possibility of criminal prosecution.
Motion picture piracy is an international as well as a domestic
problem. It is extensive in many parts of the world. In addition to the Motion
Picture Association of America, the Motion Picture Export Association, the
American Film Marketing Association, and the American Film Export Association
monitor the progress and efforts made by various countries to limit or prevent
piracy. In the past, these various trade associations have enacted voluntary
embargoes of motion picture exports to certain countries in order to pressure
the governments of those countries to become more aggressive in preventing
motion picture piracy. The United States government has publicly considered
trade sanctions against specific countries that do not prevent copyright
infringement of American motion pictures. There can be no assurance that
voluntary industry embargoes or United States government trade sanctions will be
enacted. If enacted, such actions may impact the revenue that we realize from
the international exploitation of our motion pictures. If not enacted or if
other measures are not taken, the motion picture industry, including us, may
lose an indeterminate amount of revenue as a result of motion picture piracy.
Competition
The motion picture industry is intensely competitive. Competition comes
from companies within the same business and companies in other entertainment
media that create alternative forms of leisure entertainment. We will be
competing with the major film studios that dominate the motion picture industry.
Some of these firms we compete with include: News Corporation's Twentieth
Century Fox; Time Warner's Warner Bros. (including Turner, New Line Cinema and
Castle Rock Entertainment); Viacom's Paramount Pictures; Seagram's Universal
Studios; Sony Corp.'s Sony Pictures (including Columbia and TriStar); Walt
Disney Company's Buena Vista, Touchstone and Miramax and Metro-Goldwyn-Mayer
(including MGM Pictures, UA Pictures, Orion and Goldwyn). We will also compete
with numerous independent motion picture production companies, television
networks, and pay television systems, for the acquisition of literary
properties, the services of performing artists, directors, producers, and other
creative and technical personnel, and production financing. Nearly all of the
firms we will compete with are organizations of substantially larger size and
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capacity, with far greater financial and personnel resources and longer
operating histories, and may be better able to acquire properties, personnel and
financing, and enter into more favorable distribution agreements. In addition,
our films compete for audience acceptance with motion pictures produced and
distributed by other companies. Our success is dependent on public taste, which
is both unpredictable and susceptible to rapid change.
Facilities
We currently lease approximately 570 square feet of office space from
Universal Studios in Universal City, California. The current monthly rental
amount is $1,753. Our lease began in January 1999 and continues on a
month-to-month basis until terminated by either party with 30 days written
notice. The space is adequate for our purposes at present.
Employees
We currently have no employees. Our officers, including Mr. La Marca
will assume employee status upon completion of this offering. We may utilize
independent contractors and consultants from time to time to assist in
developing, producing and promoting our motion pictures. Independent contractors
are generally paid on a commission, hourly or job-related basis, depending on
the services being performed.
MANAGEMENT
Directors and Executive Officers
The directors and executive officers of the Company are:
Name Age Position
- ---- --- --------
Frank LaLoggia 46 Chairman of the Board, President and Chief
Executive Officer
Katherine Helmond 69 Director
Scott P. Schomer 37 Chief Financial Officer and Director
Andrew G. La Marca (1) 45 Vice President and Chief Operating Officer
Susan Schindler 53 Treasurer, Secretary and Director
(1) Mr. La Marca will assume his duties after this offering becomes effective.
Frank LaLoggia has served as our chairman of the board, president and chief
executive officer since our incorporation in July 1998. From 1974 to July 1998,
Mr. LaLoggia was an independent writer, producer and director. Mr. LaLoggia
began making short films at the age of sixteen. Among the awards he garnered for
his early efforts are the Photographic Society of America Award, the Gold Medal
Award from the Atlanta Film Festival, the Cine Eagle Award and the Francis Scott
Key Award from the Boston Film Festival. Mr. LaLoggia's first feature film,
"Fear No Evil "was produced independently and distributed worldwide by AVCO
Embassy Pictures. His highly acclaimed "Lady in White", which he wrote,
produced, directed and composed the original score for, was also independently
produced and distributed worldwide. Mr. LaLoggia also directed "The Haunted
Heart" which starred Academy Award nominee Diane Ladd and Academy Award winner
Olympia Dukakis.
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Katherine Helmond has been a director of our company since its inception in July
1998. Ms. Helmond has been an actress for nearly 30 years and a director for
more than the past five years. She is an Emmy and Tony Award nominee and winner
of two Golden Globe Awards and both the New York and Los Angeles Drama Critics
Awards. She is best known for her acting roles on the renowned television
series, "Soap", "Who's The Boss" and "Coach". Her movies include Alfred
Hitchcock's "Family Plot"(1978); Terri Gilliam's "Time Bandits"(1981),
"Brazil"(1985) and his recent "Fear and Loathing in Las Vegas"(1998); Robert
Wise's "The Hindenberg"(1975), and Frank LaLoggia's "Lady in White"(1988).
Scott P. Schomer has been a director of our company and our chief financial
officer since August 1999. In September 1999, he started an independent private
law practice. From June 1998 to August 1999, he was general counsel for Century
West Financial Corporation, a real estate investment company. For the previous
six years, he was a litigation attorney with the Los Angeles law firm of Allen,
Matkins, Leck, Gamble & Mallory, LLP. Mr. Schomer, a member of the California
Bar, has served since 1997 as a Judge of the Los Angeles Municipal Court. He has
also been president of the Los Angeles Center for Law and Justice. Mr. Schomer
is a graduate of Western Michigan University and received his law degree from
Boston University.
Andrew G. La Marca has agreed to join our company as vice president and chief
operating officer after the SEC declares this offering effective. He has been
involved in the production of motion pictures for the past 15 years. From March
1999 to October 1999, he was the line producer of "Gun Shy" for Fortis Films and
Walt Disney Company. From January 1997 through June 1998, he was employed by
Paramount Pictures Corporation as the line producer of "The Out of Towners" and
the production manager of "Odd Couple II-Travelin' Light". From January 1996 to
January 1997, Orion Pictures employed Mr. La Marca as the line producer for the
movie "Eight Heads in a Duffel Bag." From January 1995 to January 1996, he was
co-producer of the movie "Ace Ventura-When Nature Calls" for Morgan Creek
Productions. From January 1994 to January 1995, he was employed by Walt Disney
Company as co-producer of "The Puppet Masters".
Susan Schindler has been our treasurer, secretary and director since
May 1999. From 1989 to February 1999, Ms. Schindler was the owner and president
of "Brainwash", a San Francisco nightclub and cafe that also is a full-service
laundromat. From April 1997 to the present, she has been a managing member of
ATM Providers, LLC, a company that sells and places automated teller machines.
She is a graduate of University of California at Berkeley.
Board of Directors and Committees
All directors hold office until the next annual meeting of the
shareholders and the election of their successors. Officers are elected annually
by the board of directors and serve at the discretion of the board.
Our board of directors will establish two standing committees, an audit
committee and a compensation committee, the members of which have not yet been
appointed. Our audit committee will (a) recommend to the entire board of
directors the independent public accountants to be engaged by us, (b) review the
plan and scope of our annual audit, (c) review our internal controls and
financial management policies with our independent public accountants and (d)
review all related party transactions.
The compensation committee will review and recommend to our board,
(a) the compensation and benefits to be paid to our officers and directors,
(b) administer our stock option plan, (c) approve the grant of options under the
stock option plan and (d) establish and review general policies relating to
compensation and benefits of our employees.
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Board of Advisors
We have a four-member board of advisors. Members of this board possess
extensive experience in the motion picture industry, where they have worked
individually and collectively in a variety of disciplines related to the
industry. They serve at the behest of the board of directors and are available
to give advice in all areas of the motion picture industry. Their term of office
will not exceed a period of five years.
The members of our board of advisors generally receive a one-time
issuance of 12,500 shares of our common stock. A total of 62,500 shares of our
common stock were issued to Messrs. Levy, Carpenter, Dobson, and Bancalari when
they joined the advisory board. The shares were issued in reliance on the
private placement exemption under the Securities Act of 1933, as amended. Such
shares will not be available for sale in the open market without registration
except in reliance upon Rule 144 under the Act. Please see "Risk Factors",
"Shares Eligible for Future Sale" and "Certain Transactions".
The following are brief biographical summaries of the members of our board of
advisors.
Norman Levy has held prominent positions in the motion picture industry
for nearly 30 years. Mr. Levy has been president and chief executive officer of
Creative Film Enterprises, a motion picture financing, production and
distribution company since January 1991. From 1985 to December 1990, he was
chairman of New Century/Vista Film Company. From 1980 to 1985, he served in
various executive and management positions with Twentieth Century Fox including
president of 20th Century Fox Entertainment and vice chairman of the holding
company, 20th Century Fox Corporation. During his tenure at 20th Century Fox,
Mr. Levy oversaw the production and distribution of such films as "Return of the
Jedi", "The Empire Strikes Back", "Romancing the Stone", "Nine to Five" and "The
Verdict". From 1974 to 1980 he was with Columbia Pictures where he served as
president of Columbia Pictures Distributing and Marketing and managed the
distribution and marketing of the critically acclaimed and financially
successful films "Close Encounters of The Third Kind", "Midnight Express", "Taxi
Driver", "Funny Lady", and "The China Syndrome". From 1967 to 1974, Mr. Levy
held various executive positions at National General Pictures, which he joined
after having been employed by Universal Pictures in various administrative and
sales positions beginning in 1957. Mr. Levy is a voting member of the Executive
Branch of the Academy of Motion Picture Arts and Sciences.
Russell Carpenter served as director of our company from July 1998 to
July 1999. Mr. Carpenter, A.S.C., is an Academy Award winner. He was director of
photography of "Titanic", directed by James Cameron, and received the Oscar for
Best Cinematography. This was the third time he and Mr. Cameron have worked
together. In addition to the action-comedy "True Lies", he was director of
photography for the multimedia footage for "Terminator 2 - 3D, on view at
Universal Studios' Orlando theme park. In contrast to his action credits, "The
Indian in the Cupboard" revealed an intimate photographic style developed by Mr.
Carpenter for the delicacy of the story. He was the director of photography for
"Hard Target", "Attack of the 50 Ft. Woman", "The Lawnmower Man", "Perfect
Woman", "Solar", the haunting "Lady in White", and the recently released "Money
Talks" with Stan Winston directing. Mr. Carpenter photographed the Michael
Jackson music video "Ghosts". He recently completed photography for "The
Negotiator".
Vini Bancalari is the president and founder of Elite Entertainment,
Inc., a company that specializes in the restoration and distribution of classic
films. Elite has released in laser disc and optical disc format-DVD, a
well-respected collection of genre film classics to the home video market.
Elite's recent contract for digital transfer of the film library of Hammer Film
Productions Limited has placed the company into the realm of classic genre
cinema. Among the titles Elite has remastered and distributed on laserdisc or
DVD are "Night of the Living Dead", " Nightmare on Elm Street", "The Evil Dead",
"Re-Animator", "Dracula-Prince of Darkness", "Quartermass and the Pit", "The
Devil Rides Out" and Frank LaLoggia's classic ghost tale, "Lady in White".
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Jimmy Dobson is president and co-founder of Indie P.R, considered to be
among the most respected boutique public relations firms in the entertainment
industry. He has created publicity campaigns for many films, television shows
and individual clients including "X-Files" and its star David Duchovny. Some of
Mr. Dobson's clients include actors Roseanne, Kirstie Alley, Diane Ladd, Carol
Burnett and Andrew Dice Clay. His music clients have included Grace Jones, The
Grateful Dead and The Beach Boys.
EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS
We have not paid any salaries to any of our officers or directors. We
do not intend to pay any officer or director annual compensation exceeding
$100,000 during the next 12 months.
We do not presently have any employment agreements. We may enter into
employment agreements with certain officers, directors or other key personnel in
the future. Mr. LaLoggia will own 45.8% of our stock after the offering and
therefore he has a major interest in our success.
Directors' compensation
Directors who are also employees receive no additional compensation for
attendance at board meetings. Non-employee directors will receive $500 for
attendance at each board meeting or committee meeting. Our directors will be
reimbursed for reasonable expenses incurred in attending meetings. No director's
fees have been paid to date. Directors may also be granted stock options under
our stock option plan. We anticipate that our board will hold regularly
scheduled quarterly meetings.
STOCK OPTION PLAN
On July 29, 1998, our board of directors and a majority of our
shareholders adopted the 1998 BellaCasa Productions, Inc. stock option plan. The
plan authorizes the granting options to purchase up to 1,000,000 shares of
common stock. The board's responsibility includes the selection of option
recipients, as well as, the type of option granted and the number of shares
covered by the option and the exercise price. No options have been granted under
the plan.
Plan options may either qualify as non-qualified options or incentive
stock options under Section 422 of the Internal Revenue Code. Any incentive
stock option granted under the plan must provide for an exercise price of at
least 100% of the fair market value on the date of such grant and a maximum term
of ten years. If the employee owns more than 10% of our stock, the exercise
price of any incentive option granted must be at least 110% of fair market value
and must be exercised within five years after the grant.
All of our officers, directors, key employees and consultants will be
eligible to receive non-qualified options under the plan. Only officers,
directors and employees who are formally employed by BellaCasa are eligible to
receive incentive options.
All incentive options are non-assignable and non-transferable, except
by will or by the laws of descent and distribution. If an optionee's employment
is terminated for any reason other than death, disability or termination for
cause, the stock option will lapse on the earlier of the expiration date or
three months following the date of termination. If the optionee dies during the
term of employment, the stock option will lapse on the earlier of the expiration
date of the option or the date one-year following the date of death. If the
optionee is permanently and totally disabled within the meaning of Section
22(e)(3) of the Internal Revenue Code, the plan option will lapse on the earlier
of the expiration date of the option or one year following the date of such
disability.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation and by-laws indemnify our directors and
officers to the fullest extent permitted by Nevada corporation law. Insofar as
indemnification for liability arising under the Securities Act may be permitted
to directors, officers, and controlling persons, we are aware that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act of 1933 and is unenforceable.
PRINCIPAL SHAREHOLDERS
The following table describes certain information regarding certain
individuals who beneficially own our common stock on March 31, 2000. In general,
a person is considered a beneficial owner of a security if that person has or
shares the power to vote or direct the voting of such security, or the power to
dispose of such security. A person is also considered to be a beneficial owner
of any securities of which the person has the right to acquire beneficial
ownership within 60 days.
The individuals included in the following table are (i) people who we
know beneficially own or exercise voting or control over 5% or more of our
common stock, (ii) each of our directors, and (iii) all executive officers and
directors as a group.
Percentage Percentage
Name Shares Beneficially Before After
Owned Offering Offering
Frank LaLoggia 2,394,350 59.4% 45.8%
Katherine Helmond 25,000 ** **
Scott P. Schomer 25,000 ** **
Susan Schindler 25,000 ** **
Andrew G. La Marca 125,000 3.1 2.4
All directors and executive
officers (5 persons) as a group 2,594,350 64.4% 49.6%
(1) Mr. La Marca will assume his positions with us after this offering
becomes effective.
(2) The address of all directors and executive officers is:
100 Universal City Plaza, Building 473, Suite 305/307,
Universal City, CA 91608
** Less than 1%
PRIOR RULE 504 OFFERING
In July 1998, we commenced and completed an offering of common stock at
$0.0002 per share, pursuant to Rule 504 of Regulation D under the Act. A total
of 700,000 shares of our stock was sold for $140.
In December 1998, we commenced an offering of common stock at $0.20 per
share pursuant to Rule 504 of Regulation D under the Act. Management sold
682,500 shares of our stock for a total of $136,500. The sale was completed in
January 1999.
All of the above transactions have been adjusted retroactively to give
effect to the 1 for 2 reverse split, which was approved by our board of
directors in April 2000.
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CERTAIN TRANSACTIONS
Upon our formation, we issued 2,457,500 shares to our founder, Mr.
LaLoggia. The consideration for these shares was a license to Mr. LaLoggia's
ownership rights in two screenplays, "The Giant" and "Hands". Mr. LaLoggia
acquired his interest in "The Giant" from an unrelated party in exchange for the
right to receive 5% of the total budget of the associated film up to a maximum
of $750,000 if the film is ultimately produced. We acquired the rights to "The
Giant" subject to that agreement. The ownership rights to the two screenplays
were recorded on our balance sheet at the nominal amount of $492 without
allocation. As part of "The Giant" acquisition, we also received more than 1,500
storyboard drawings, which are completed visual representations of the camera
setups to be used in the film "The Giant".
We also issued 187,500 shares to directors and certain individuals who
comprise our advisory board as payment for services over their appointed terms.
The payment is recorded as compensation expense as services are provided. The
shares were valued at $0.20 per share. These shares were issued as follows: on
December 9, 1998; Katherine Helmond-25,000, David Tochman (later resigned)-
25,000, Lorie Zerweck (later resigned)-25,000, Russell Carpenter-25,000, Vini
Bancalari-12,500, Jimmy Dobson-12,500 and Norman Levy-12,500, on August 4, 1999;
Susan Schindler-25,000, Andrew La Marca-25,000. On August 17, 1999 Ms. Zerweck's
shares were returned to us and reissued to Scott Schomer.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 50,000,000 shares of common
stock, and 25,000,000 shares of preferred stock, each having a par value of
$0.0001 per share.
As of March 31, 2000, there were 4,027,750 shares of our common stock
issued and outstanding. None of our preferred stock has been issued. We had 63
shareholders on March 31,2000. Upon the completion of this offering, there will
be 5,227,750 shares of common stock and no preferred stock outstanding. There
will also be 1,200,000 Class A warrants and 1,200,000 Class B warrants
outstanding to purchase a total of 2,400,000 additional shares of our common
stock.
All material provisions of our capital stock are summarized in this
prospectus. However, the following description is not complete and is subject to
applicable Nevada law and to the provisions of our articles of incorporation and
bylaws. We have filed copies of these documents as exhibits to the registration
statement of which this prospectus forms a part.
Common Stock
You and all other holders of common stock are entitled to one vote for
each share held of record on all matters to be voted on by stockholders. You
have no cumulative voting rights with respect to the election of directors, with
the result that the holders of more than 50% of the shares voting for the
election of directors can elect all of the directors then up for election. You
and all other holders of common stock are entitled to receive dividends and
other distributions when, as and if declared by the board of directors out of
funds legally available, based upon the percentage of our common stock you own.
You should not expect to receive any cash dividends on your shares in the
foreseeable future. Our board plans to issue 10% stock dividends every six
months on our common stock. We have set aside from our authorized and unissued
common stock 10,000,000 shares to be available for stock dividends for the next
five years. The shares set aside will be sufficient to cover the stock dividends
to be paid on the shares to be outstanding after the completion of this offering
as well as for the additional shares that may be purchased by warrant holders
because of the adjustments for stock dividends.
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Upon our liquidation or dissolution, you and all other holders of our
common stock will be entitled to share in the distribution of all assets
remaining after payment of all debts, liabilities and expenses, and after
providing for each class of stock, if any, having preference over our common
stock. You 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, including the shares
being offered, will be fully paid and non-assessable. Our directors, at their
discretion, may borrow funds without your prior approval, which potentially
further reduces the liquidation value of your shares.
Our common stock has no preemptive rights. The absence of these rights
could, upon our sale of additional shares of common stock, result in the
dilution of your percentage ownership. Preemptive rights generally are not used
in modern corporations because they delay, complicate and increase the cost of
financing by the sale of stock or convertible securities.
PREFERRED STOCK
Pursuant to our articles of incorporation, our board of directors,
without shareholder approval, is authorized to issue preferred stock in one or
more series. It can fix the number of shares constituting any series, and can
fix the terms, including the rights pertaining to dividends, conversions,
voting, redemption and liquidation.
If we issue preferred stock, it may have the effect of discouraging,
delaying, or preventing a change in control of our company. The rights and
privileges of our common stockholders are subject to, and may be adversely
affected by, the rights of the holders of our preferred stock. We do not have
plans to issue any shares of preferred stock at the present time.
WARRANTS
The Class A and Class B warrants will be issued in accordance with the
warrant agreement between Atlas Stock Transfer Corporation, the warrant agent,
and us. Each Class A warrant will entitle the holder to purchase one share of
our common stock upon payment of $8.50 prior to its expiration date. Each Class
B warrant will entitle the holder to purchase one share of our common stock upon
payment of $10.00 prior to its expiration date. The Class A warrants will expire
at 5:00 PM Eastern Time July 31, 2002. The Class B warrants will expire at 5:00
PM Eastern Time July 31, 2003. Other than the exercise price and the expiration
date there are no differences between the Class A warrants and Class B warrants.
The Class A warrants are being registered in this offering. The Class B warrants
may be registered in the future.
Commencing immediately, we may redeem your warrants upon 30 days notice
at $0.02 per warrant when the closing bid price of the common stock equals or
exceeds $9.50 in the case of the Class A warrants and $11.00 in the case of the
Class B warrants for 20 consecutive trading days ending three days prior to the
mailing of the notice of redemption. You will have the right to exercise your
warrants until the close of business on the date fixed for redemption. If we
redeem any of the warrants, then we must redeem all of the warrants remaining
unexercised at the end of the redemption period.
The exercise price of the warrants and the number of shares of common
stock that may be issued upon the exercise of the warrants will be adjusted upon
the occurrence of specific events, including stock dividends, stock splits,
combinations or reclassifications of our common stock. We plan to issue 10%
stock dividends every six months. Consequently the number of shares that may be
acquired by the holder of the warrants will increase on a cumulative basis every
six months by 10% and the exercise price will be reduced on a cumulative basis
every six months by approximately 9.09%. Additionally, an adjustment would be
made in the case of a reclassification or exchange of common stock,
consolidation or merger other than a consolidation or merger in which we are the
surviving corporation, or sale of all or substantially all of our assets, in
order to enable warrant holders to acquire the kind and number of shares of
stock or other securities or property receivable in such event by a holder of
the number of shares of common stock that might otherwise have been purchased
upon the exercise of the warrant.
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The warrants are in registered form and may be presented to the warrant
agent for transfer, exchange or exercise at any time on or prior to their
expiration date, at which time they will be void and have no value. If a market
for the warrants develops, the holder may sell the warrants instead of
exercising them. There can be no assurance, however, that a market for the
warrants will develop or, if developed, will continue.
The warrants are not exercisable unless, at the time of the exercise,
we have a current prospectus covering the shares of common stock issuable upon
exercise of the warrants, and such shares have been registered, qualified or
deemed to be exempt under the securities or blue sky laws of the state of
residence of the exercising holders of the warrants. Although we have undertaken
to use our best efforts to have all of the shares of common stock issuable upon
exercise of the warrants registered or qualified on or before the exercise date
and to maintain a current prospectus relating thereto until the expiration of
the warrants, there can be no assurance that we will be able to do so.
Although the securities will not knowingly be sold to purchasers in
jurisdictions in which the securities are not registered or otherwise qualified
for sale, investors in such jurisdictions may purchase warrants in the secondary
market or investors may move to jurisdictions in which the shares underlying the
warrants are not so registered or qualified during the period that the warrants
are exercisable. In such event, we would be unable to issue shares to those
persons desiring to exercise their warrants, and holders of warrants would have
no choice but to attempt to sell the warrants in jurisdictions where such sale
is permissible or allow them to expire unexercised.
The holder of any warrant may exercise the warrant by surrendering the
warrant certificate to the warrant agent, with the subscription form properly
completed and executed, together with payment of the exercise price. No
fractional shares will be issued upon the exercise of the warrants. The exercise
price of the warrants bears no relationship to any objective criteria of value
and should in no event be regarded as an indication of any future market price
of the securities offered in this offering.
We and the warrant agent may make such modifications to the warrants as
we consider necessary and desirable that do not adversely affect the interests
of the warrant holders. We may, in our sole discretion, lower the exercise price
of the warrants for a period of no less than 30 days on not less than 30 days
prior written notice to the warrant holders. Modification of the number of
shares that may be acquired upon the exercise of any warrant, the exercise
price, other than as provided in the preceding sentence, and the expiration date
with respect to any warrant requires the consent of at least two-thirds of the
outstanding warrants.
Holders of the warrants have no voting rights until such time as the
warrants are exercised and our underlying common stock is issued to the holder.
Upon the issuance of our common stock to the holders of the warrants, the
holders shall have the same rights as any other shareholder owning our common
stock.
34
<PAGE>
PLAN OF DISTRIBUTION
No person or group has made any commitment to purchase any or all of
our securities being offered. Our officers and directors will use their best
efforts to find purchasers for our securities. We cannot state at this point how
many units will be sold.
Determination of the Offering Price
Prior to this offering, there has been no market for our common stock,
and, as a development stage company, we have essentially had no substantial
business operations to date. The offering price was determined arbitrarily by
our board of directors. The board did not base the offering price on
relationships to book value or earnings but did consider our potential and
prospects, our needs as well as the state of the financial markets and the
developments in the motion picture industry.
We reserve the right to reject any subscription in full or in part, and
to terminate the offering at any time.
No person, individual or group has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this prospectus. Any information or
representations not in the prospectus must not be relied on as having been
authorized by our officers or us. This prospectus is not an offer to sell, or a
solicitation of an offer to buy, any of the units it offers to any person, in
any jurisdiction in which that offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale shall, under any circumstances, create
any implication that the information in this prospectus is correct as of any
date later than the date of this prospectus.
No Minimum-Offering and No Escrow Account
Our securities will be offered and sold on a "best-efforts" basis.
There is no minimum-offering amount that is required to be sold before we may
use the proceeds of the offering. Funds tendered by prospective purchasers will
not be placed in escrow, but will be available for use by us immediately upon
acceptance, for the purposes and in the amounts as estimated in the section of
this prospectus entitled "Use of Proceeds." Lack of an escrow arrangement could
cause some risk to the investors in the event that insufficient capital is
raised in the offering.
Self-underwriting
There is no underwriter for this offering. Therefore, you will not have
the benefit of an underwriter's due diligence efforts which would typically
include the underwriter being involved in the preparation of information for
disclosure and the pricing of the common stock being offered as well as other
matters. As we have only very limited experience in the public sale of our
common stock, investors may not be able to judge our ability to consummate this
offering. In addition, the units are being offered on a "best-efforts" basis.
Accordingly, there can be no assurances as to the number of shares of common
stock that may be sold or the amount of capital that may be raised by this
offering.
Use of Broker-Dealers to Sell Units
We expect that one or more NASD member firms will assist us in the sale
of our securities. As of the date of this prospectus, we have not entered into
any agreement or arrangement for the sale of our securities with any broker,
dealer or sales agent. Any underwriters, dealers or agents who participate in
the distribution of our stock may be deemed to be "underwriters" under the
Securities Act and any discounts, commissions or concessions received by them
may be deemed to be underwriting discounts and commissions under the Securities
Act. We anticipate paying a 10% commission or underwriting fee to such brokers
or dealers and up to 3% for non-accountable expenses.
35
<PAGE>
In order to comply with the applicable securities laws of certain
states, our units will be offered or sold in those states through registered or
licensed brokers or dealers in those states. In certain states, securities may
not be offered or sold unless they have been registered or qualified for sale in
those states or an exemption from such registration or qualification requirement
is available.
TRANSFER AGENT
Atlas Stock Transfer Corporation, 5899 South State St., Salt Lake City,
Utah 84107 is the transfer agent for our common stock. Upon completion of the
offering, it will also be the warrant agent for our Class A and Class B
warrants.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have 5,227,750 shares of
issued and outstanding common stock and warrants to acquire 2,400,000 shares of
common stock. The common stock and Class A warrants sold in this offering will
be freely transferable without restrictions or further registration under the
Securities Act, except for any of our shares purchased by an "affiliate".
"Affiliate" is defined by the Securities Act and specifies whether certain
shares are subject to the resale limitations of Rule 144 promulgated under the
Securities Act.
Generally, shares of stock owned by insiders, officers, directors and
those individuals who purchased shares in private transactions are restricted
securities and may be sold under Rule 144, in brokerage transactions and or
market maker transactions, after one year provided they comply with the Rule 144
volume limitations. Under Rule 144, sales in a three-month period are limited to
an amount equal to the greater of either one percent of our issued and
outstanding common stock or the average weekly trading volume of the common
stock during the four weeks prior to such sale. Rule 144 also permits the sale
of shares without any quantity limitation by a person who is not our affiliate
and who has satisfied a two-year holding period.
There will be approximately 2,645,250 shares of stock that are
restricted securities as that term is defined in Rule 144 nearly all of which
has been held for more than one year. Future sales under Rule 144 may have an
adverse effect on the market price of the shares of common stock.
LEGAL MATTERS
James R. Leone, P.A., Heathrow, Florida, our securities counsel, will
pass on the validity of the common stock and warrants being offered by us. Mr.
Leone will receive 26,667 shares of restricted stock from us as partial payment
for his legal services.
EXPERTS
Parks, Tschopp, Whitcomb & Orr, P.A., independent certified public
accountants, have audited our financial statements to the extent and for the
periods set forth in their report. Our financial statements are included in this
prospectus in reliance upon their report, given upon their authority as experts
in accounting and auditing.
36
<PAGE>
AVAILABLE INFORMATION
We have filed with the SEC a registration statement on Form SB-2
relating to the securities being offered. This prospectus, which is part of the
registration statement, does not contain all of the information included in the
registration statement and the exhibits and schedules. For further information
about us and about our securities, reference is made to the registration
statement, including the exhibits and schedules. Statements contained in this
prospectus concerning the provisions or contents of any contract, agreement or
any other document referred to are not necessarily complete. With respect to
each such contract, agreement or document filed as an exhibit to the
registration statement, reference is made to such exhibit for a more complete
description of the matters involved.
At your request, we will provide you, without charge, a copy of any
information incorporated by reference in this prospectus. If you want more
information, write or call us at: BellaCasa Productions, Inc., Universal
Studios, 100 Universal City Plaza, Bldg. #473, Suite 305/307, Universal City,
California 91608. Our telephone number is (818) 733-1467 and our fax number is
(818) 866-6237.
Our fiscal year ends on December 31. We will furnish our shareholders
annual reports containing audited financial statements and other appropriate
reports. In addition, we will become a reporting company and file annual,
quarterly and current reports, proxy statements or other information with the
SEC and Nasdaq. You may read and copy any reports, statements or other
information we file at the SEC's public reference room in Washington D.C. You
can request copies of these documents, upon payment of a duplicating fee, by
writing to the SEC, 450 Fifth Street, N.W., Washington DC 20549. Please call the
SEC at (800) SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on the SEC's
website at http://www.sec.gov.
37
<PAGE>
Script Summary
"THE GIANT" (a synopsis)
MICHELANGELO BUONARROTI, the preeminent artist of the Italian Renaissance, aged
twenty-six years, sits atop a huge block of marble being drawn by ten teams of
oxen into the city of Florence. The stone, referred to as "The Giant," was cut
some forty years earlier and has now been chosen for MICHELANGELO'S most
ambitious project to date, "The David", a seventeen-foot tall nude sculpture of
the Biblical youth who slew Goliath and set his people free.
VITTORIO PIERENTINO, an adolescent of sixteen years with dreams in his head,
leaves a tearful note to his beloved father and runs away from his small family
farm to seek out his idol, MICHELANGELO, and become his apprentice. When
VITTORIO meets MICHELANGELO, the temperamental genius is not interested in an
apprentice and plays a practical joke on his admirer that results in the boy
getting his nose broken by a foreman's punch. VITTORIO'S persistence and loyalty
eventually pay off and MICHELANGELO agrees to accept him as a "servant," and
nothing more.
The work on the statue proceeds slowly at first. MICHELANGELO prays for guidance
and makes many sketches, which he hides from artists LEONARDO DA VINCI and
RAPHAEL SANTI when they come to visit, for fear his ideas will be stolen.
VITTORIO settles in nicely, and becomes a favorite of THE GIRAFFE, the long
necked and bizarrely out of place creature, that haphazardly roams the streets
of Florence. THE GIRAFFE was a gift to the city from the sultan of
Constantinople.
MICHELANGELO fondly reminisces of his days at the court of LORENZO DE' MEDICI,
the great art patron and benefactor. LORENZO singled out MICHELANGELO to live in
his house after being impressed by the young artist's first sculpture, "The Head
of the Faun." It was at LORENZO'S palace where MICHELANGELO's passion for being
a sculptor emerged and where he was educated in the arts and humanities.
MICHELANGELO fares well with "The David". The charcoal sketch he makes on the
block's facade helps him immeasurably. Much of the lower body has now taken
form. MICHELANGELO has much fun showing off "DAVID's" sexual parts to the town's
wealthy, yet snooty, matrons when they come to visit with the Governor SODERINI,
who is sponsoring the statue and paying for the work in order to establish his
devotion to the arts.
Melancholy, however, begins to overcome MICHELANGELO. Thoughts of his dead
mother haunt the struggling artist. Taking the hammer and chisel in a blind
rage, he proceeds to pound away madly at the statue. VITTORIO is awakened and
rushes to stop his master from destroying the work.
38
<PAGE>
Startled by the realization that he might have destroyed the marble without
VITTORIO'S intervention, MICHELANGELO determines he will now do whatever is
necessary to finish the sculpture. He bribes the gravedigger LUCA in order to
gain access to corpses for anatomical dissection, a practice strongly forbidden.
MICHELANGELO dissects the bodies by night in a hidden cave, an act that
horrifies VITTORIO when he discovers it. The dissection provides MICHELANGELO
with the knowledge he needs to complete the hand of "The David", but the soul of
the statue as embodied by the face and the eyes continues to elude him.
MICHELANGELO is called to the jail to bail out his brother, who has been
arrested for the drunken debauchery of three sisters. The sound of painful cries
draws him to a nearby cell where he is taken aback by the fierce and
extraordinary beauty emanating from the mercilessly flogged prisoner within;
this is THE WARRIOR.
THE WARRIOR is mute and unable to defend himself against the false charges that
have imprisoned him. SODERINI admits his evidence is weak and says he might have
to free the prisoner. MICHELANGELO is not about to have the final inspiration he
needs disappear and threatens to demolish "The David" unless THE WARRIOR remains
in jail so that he might capture his likeness on parchment. MICHELANGELO
exclaims, "I've found my head!" SODERINI acquiesces to MICHELANGELO'S demands.
MICHELANGELO creates the sketches he needs to complete his work just before THE
WARRIOR manages to escape.
The town is readying for the unveiling of "The David". MICHELANGELO has made
good on his promise to complete "The David" on the anniversary of SODERINI'S
re-election. Hundreds of Florentines excitedly make their way to the Piazza
della Signoria for the unveiling of the statue.
Among the adoring crowd is a poor farmer who is trying to negotiate his cart
through the tumultuous fanfare. He slowly makes his way to the statue.
"VITTORIO!" he yells, when he finally sees his son. For the first time in three
years, they reunite in a tearful embrace. When VITTORIO asks, "How did you find
me?" his father presents him with a handwritten letter from MICHELANGELO. The
note reads:
"Dear Sir: It is with no small amount of sadness that I write to inform you of
the whereabouts of your son. He came to me wanting to become a great artist, not
knowing that within himself he already harbored a "greatness" that neither I,
nor any other man, could ever hope to give him: A great soul filled, to an
enormous capacity, with love and devotion. The greater portion of which, he
reserves for you, his father. I envy you. I envy him for what you've, no doubt,
inspired by your love. Such a great love, equal in both parts, must not be
separated any longer. Come to take him home. Respectfully, Michelangelo
Buonarrroti, a sculptor in Florence."
After reading the letter, VITTORIO is overwhelmed by MICHELANGELO's love and
concern. His decision made, he turns to give MICHELANGELO a final glance. He
climbs atop the cart to rejoin his father and return to the farm where he will
hopefully seek out his true destiny.
The cart carrying VITTORIO and his father begins to leave the piazza on its
journey home. MICHELANGELO, still standing before his "David", now descends into
the crowd. As he does so, the people part to make way for him. "Il Divino
(Divine One)!" they call out. As MICHELANGELO continues to make his way through
the crowd, CAMERA CRANES UP TO REVEAL "The David" STANDING IN THE FOREGROUND,
its back to us, as though watching its creator disappear into the devoted and
cheering throng.
39
<PAGE>
SCRIPT SUMMARY
"HANDS" (a synopsis)
In a Manhattan operating room, trauma surgeon MICHAEL FANTE works desperately to
save the lives of an unknown stab victim and her fetus. He is overwhelmed by the
outcome. The lives he loses are none other than those of his wife and unborn
son.
Two years later, demoralized and devastated, MICHAEL journeys to the home of his
birth.... a remote medieval villa in Italy's central farming region. MICHAEL
inherited half interest in the farm when his parents died, and it is here that
he hopes to rebuild his shattered life.
At first, the daily routine and the antics of the family that runs the farm seem
rejuvenating. MICHAEL even takes a romantic interest in FRANCESCA, the
housekeeper's daughter. But when the two of them drive into the nearby mountain
town of Cocullo, MICHAEL'S legacy starts to unfold in a mysterious way that
ensures a torturous emotional recovery.
It is the day of the festival of the serpents, an ancient Christian ritual
assuring fertile crops and dedicated to St. Domenic, the town's patron saint.
Live serpents cling to religious icons in the procession while the townspeople
themselves are similarly crawling with snakes. As a gesture of good luck, an old
man hands MICHAEL a six-foot serpent. Confused and uncomfortable, MICHAEL
struggles to give the snake back. Once he succeeds in returning it, the old man
and the crowd around him become outraged to find that the reptile has gone limp
and seemingly lifeless. The onlookers grow angry and when they start to crowd
MICHAEL, FRANCESCA hurriedly guides him to the church of St. Domenic were they
seek refuge with FATHER MARINO, the priest who married MICHAEL'S parents.
The good-natured priest explains how during the Dark Ages, when pestilence and
famine ravaged Cocullo, the serpents were revered and protected so they would
rid the town of vermin and disease and assure a bountiful harvest. Tradition
lingers, but the economic fears of the townspeople have now instilled the
festival with a new sense of purpose. Crops have gone bad. The soil is infected
with insects. And the people are ready to take to long-standing superstitions in
order to remedy their misfortune.
MICHAEL returns home to a blood painted figure on his mirror, a serpent wrapped
around its neck like a noose.
Suspicion towards MICHAEL grows when a series of events suggests that he might
possess supernatural powers of healing. A colt is stillborn, but when MICHAEL
retrieves the torn uterine lining from its throat with his hands, the animal
breathes. During the harvest, the foreman ANGELO accidentally cuts his hand with
a machete. MICHAEL compresses the wound with his own hand and the bleeding cut
repairs itself. Believing MICHAEL can cure him, the blind boy PAOLO insists that
MICHAEL lay his hands on his eyes. MICHAEL does so and the boy's sight is
restored, but not until MICHAEL also has him treated for his diabetes.
MICHAEL seeks his return to happiness by marrying the beautiful FRANCESCA. Their
wedding night is marred, however, by a bloody nightmare and a real snake attack.
MICHAEL kills the snake and confronts ANGELO with it. ANGELO'S infatuation with
FRANCESCA has caused him to hate MICHAEL from the moment he arrived. It was he
who painted the threatening figure on MICHAEL'S mirror and planted the snake in
the bedroom. His jealousy has reached its limits and the two engage in a
fearsome fight. MICHAEL is injured and ANGELO is banished from the villa. Later,
FRANCESCA tells ANGELO that she is pregnant with MICHAEL'S child. ANGELO vows to
FRANCESCA that she shall have her child, but Cocullo shall also have its savior
and its economic prosperity restored.
40
<PAGE>
To take his revenge, ANGELO meets with fellow members of "The Society", a
secretive group taken to meetings in dimly lit cellars. MR. MAGGIO, PAOLO'S
father, defends MICHAEL and pleads with "The Society" not to return to the sins
of the past. He is hanged for his treason, an act that drives his wife mad and
leads to her commitment in the convent's asylum overseen by FATHER MARINO.
When MICHAEL visits MRS. MAGGIO in the asylum, he sees an old woman named MARIA
scribbling Italian surnames on the wall. Each name is preceded by a calendar
year. He recognizes her as the old woman he has seen doing the same thing on the
tombstones of the babies in the Cemetery of the Infants. The woman's baby, like
so many at that time, was buried in the cemetery. The graves in the cemetery are
unmarked as the babies were stillborn of prostitutes and considered unworthy of
baptism and the company of the sanctified. MICHAEL'S curiosity leads him to the
Bureau of Records in Rome where he is astonished to discover that a BENEDETTO
FANTE was born on his birth date - a still birth. He wonders if he could
possibly have had a brother.
MRS. MAGGIO recovers and warns FRANCESCA that "The Society" will kill MICHAEL
and his child unless they are exposed to the police. FRANCESCA listens in
disbelief as MRS. MAGGIO explains how MICHAEL was the 100th child born at the
time when 100 children were to be sacrificed to the creed of "The Society" for
the sake of the town's agricultural abundance. Instead of MICHAEL, a harlot's
child was provided - Maria's child. "The Society" now believes that MICHAEL'S
freedom cost them their economic prosperity. MRS. MAGGIO proceeds to go to the
police with FRANCESCA, but on their way "The Society" stages a cattle run. MRS.
MAGGIO is mercilessly trampled to death, but the pregnant FRANCESCA is whisked
off to the convent.
"Society" members pick up a pregnant prostitute named MONICA and take her to the
Cemetery of the Infants. There they brutally cut her baby from her belly, just
as they did to MARIA many years before. MARIA is in the cemetery at the time and
goes to comfort the dying MONICA. MICHAEL makes his way home from Rome. He hears
the sounds of MARIA's wailing voice, rushes to the cemetery, and sees the
inscription MARIA has written on one of the tombstones. It reads: "Fante -
1947". MARIA screams that the priest and the Holy Sisters are responsible.
At the convent, FRANCESCA gives birth to a baby boy. A nun quickly takes the
baby away to "Society" members and exchanges it for MONICA'S dead baby.
FRANCESCA weeps inconsolably when she is given news that her baby is stillborn
and as proof is handed MONICA'S dead baby. CARMELLO, a "Society" member, runs to
the church sacristy where he hopes to pick up PAOLO from FATHER MARINO. CARMELLO
has orders to kill PAOLO for fear of his having knowledge of "The Society's"
plans. FATHER MARINO pleads with CARMELLO to save the boy's life. MICHAEL rushes
into the sacristy and lunges at FATHER MARINO, demanding to know the truth about
whether he had a brother. CARMELLO pulls out a knife and is shot by FATHER
MARINO in self-defense.
FATHER MARINO tells MICHAEL that the Benedetto child did not die, that MICHAEL
is the Benedetto child. He was born the same day as MARIA'S bastard child. Later
they called him MICHAEL for fear the truth might be discovered. FATHER MARINO
explains how he sacrificed MARIA'S child to "The Society" so that MICHAEL and
his parents could escape to begin a new life in America. He urges him to hurry
to the "Cave of the Madonna" where his child's life is in danger. MICHAEL flees
with PAOLO, but before CARMELLO is dead he reaches again for his knife and hurls
it into FATHER MARINO who dies just before dialing the police.
PAOLO leads MICHAEL to the cave where they hear the sound of a baby crying.
Michael sees his newborn son naked and lying within a hand woven basket. ANGELO
is slowly lowering the basket by rope into a snake pit, filled with hundreds of
venomous serpents. Clearly, it is now up to MICHAEL to save the life of his son.
His fate and that of his family is solely in his HANDS.
41
<PAGE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Table of Contents
Independent Auditors' Report...............................................F-2
Financial Statements:
Balance Sheets.....................................................F-3
December 31, 1999
March 31, 2000 (Unaudited)
Statements of Operations...........................................F-4
Year ended December 31, 1999
Three months ended March 31, 2000 (Unaudited)
Period from July 28, 1998 (inception) through
March 31, 2000 (Unaudited)
Statements of Stockholders' Equity.................................F-5
Year ended December 31, 1999
Three months ended March 31, 2000 (Unaudited)
Period from July 28, 1998 (inception) through
March 31, 2000 (Unaudited)
Statements of Cash Flows...........................................F-6
Year ended December 31, 1999
Three months ended March 31, 2000 (Unaudited)
Period from July 28, 1998 (inception) through
March 31, 2000 (Unaudited)
Notes to Financial Statements..............................................F-7
F-1
<PAGE>
Independent Auditors' Report
The Board of Directors
BellaCasa Productions, Inc.:
We have audited the accompanying balance sheet of BellaCasa Productions, Inc. (a
development stage company) as of December 31, 1999 and 1998 and the related
statement of operations, stockholders' equity, and cash flows for the year ended
December 31, 1999 and the periods from July 28, 1998 (date of inception) through
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BellaCasa Productions, Inc. (a
development stage company) as of December 31, 1999 and 1998, and the results of
its operations and its cash flows for the year ended December 31, 1999 and the
periods from July 28, 1998 (date of inception) through December 31, 1999 and
1998, in conformity with generally accepted accounting principles.
Parks, Tschopp, Whitcomb & Orr, P.A.
/s/ Parks, Tschopp, Whitcomb & Orr, P.A.
May 5, 2000
Maitland, Florida
F-2
<PAGE>
<TABLE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Balance Sheets
Assets
<CAPTION>
March 31,
December 31, December 31, 2000
1998 1999 (Unaudited)
-------------------- -------------------- --------------------
Current assets:
<S> <C> <C> <C>
Cash $ 60,804 4,162 19,521
Prepaid offering costs - 20,000 20,000
-------------------- -------------------- --------------------
Total current assets 60,804 24,162 39,521
Investment in screenplays (note 2) 492 492 492
Office furniture and equipment, net (note 4) 1,611 3,125 3,377
Intangible assets, net of accumulated
amortization of $593 and $704 2,075 1,630 1,519
-------------------- -------------------- --------------------
64,982 29,409 44,909
==================== ==================== ====================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 1,276 2,492 2,492
Advances from stockholder (note 3) 20,000 4,000 68,825
Other current liabilities - 12,000 -
-------------------- -------------------- --------------------
Total current liabilities 21,276 18,492 71,317
-------------------- -------------------- --------------------
Stockholders' equity (notes 6, 7 and 8):
Common stock, $.0001 par value, authorized
50,000,000 shares, issued and outstanding 3,531,500
4,027,750 and 4,027,750 shares 354 403 403
Preferred stock, $.0001 par value, authorized
25,000,000 shares, no shares issued and outstanding. - - -
Additional paid in capital 75,078 174,729 174,729
Deficit accumulated during the development stage (11,392) (143,715) (181,415)
Deferred compensation (note 4) (20,334) (15,500) (15,125)
Stockholder receivable - (5,000) (5,000)
-------------------- -------------------- --------------------
Total stockholders' equity 43,706 10,917 (26,408)
-------------------- -------------------- --------------------
$ 64,982 29,409 44,909
==================== ==================== ====================
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
<TABLE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Statements of Operations
<CAPTION>
Period from
July 28, 1998
Period from (inception)
July 28, 1998 Three months Three months through
(inception) through Year Ended March 31, 1999 March 31, 2000 March 31, 2000
December 31, 1998 December 31, 1999 (Unaudited) (Unaudited) (Unaudited)
------------------ ----------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Revenue $ - - - - -
Costs and expenses:
Product development and marketing - (20,957) (5,053) (5,988) (26,945)
Interest expense (784) - - (784)
General and administrative (11,020) (113,159) (27,549) (31,837) (156,016)
------------------ ----------------- ---------------- ---------------- --------------
Total costs and expenses (11,804) (134,116) (32,602) (37,825) (183,745)
Interest income 412 1,793 658 125 2,330
------------------ ----------------- ---------------- ---------------- --------------
Net loss $ (11,392) (132,323) (31,944) (37,700) (181,415)
================== ================= ================ ================ ==============
Net loss per share $ (0.01) $ (0.03) $ (0.01) $ (0.01) $ (0.06)
================== ================= ================ ================ ==============
Weighted average number of shares
outstanding $ 1,765,750 3,911,500 3,713,500 3,977,500 3,041,622
================== ================= ================ ================ ==============
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
<TABLE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
Period from July 28, 1998 (inception) through December 31, 1999
Three months ended March 31, 2000 (Unaudited)
<CAPTION>
Additional Total
Common Stock Paid In Accumulated Deferred Stockholder Stockholders'
Shares Amount Capital Deficit Compensation Receivable Equity
--------- ------ ---------- ----------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Common stock isued for
contributed assets 2,457,500 246 246 - - - 492
Common stock issued to directors/
advisors for services (note 3) 137,500 14 27,486 - (27,500) - -
Deferred compensation earned - - - - 7,166 - 7,166
Common stock issued for cash 700,000 70 70 - 140
Common stock issued for cash 236,500 24 47,276 - - - 47,300
Net loss - - - (11,392) - - (11,392)
--------- ------ ---------- ----------- ------------ ----------- --------------
Balances at December 31, 1998 3,531,500 354 75,078 (11,392) (20,334) - 43,706
Common stock issued to directors
for services (note 3) 50,000 5 9,995 - (10,000) - -
Deferred compensation earned - - - - 14,834 - 14,834
Common stock issued for services 250 - 500 - - - 500
Common stock issued for cash 446,000 44 89,156 - - (5,000) 84,200
Net loss - - - (132,323) - - (132,323)
--------- ------ ---------- ----------- ------------ ----------- --------------
Balances at December 31, 1999 4,027,750 403 174,729 (143,715) (15,500) (5,000) 10,917
Common stock issued to directors
for services (note 3) - - - - - - -
Deferred compensation earned - - - - 375 - 375
Common stock issued for cash - - - - - -
Net loss - - - (37,700) - - (37,700)
--------- ------ ---------- ----------- ------------ ----------- --------------
Balances at March 31, 2000 4,027,750 403 174,729 (181,415) (15,125) (5,000) (26,408)
========= ====== ========== =========== ============ =========== ==============
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
<TABLE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
Period from
Period from July 28, 1998
July 28, 1998 Three Months Three Months (inception)
(inception) Ended Ended through
through Year Ended March 31, March 31, March 31,
December 31, December 31, 1999 2000 2000
1998 1999 (Unaudited) (Unaudited) (Unaudited)
----------- ------------ ------------- ------------ -----------
Cash flows from operating activities:
<S> <C> <C> <C> <C> <C>
Net loss $ (11,392) (132,323) (37,596) (37,700) (181,415)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 327 1,115 279 669 2,111
Common stock issued for services 7,166 14,834 5,373 - 22,000
Change in operating assets and liabilities:
Accounts payable and accrued expenses 1,276 1,216 - - 2,492
Prepaid offering costs - (20,000) - - (20,000)
Advances from stockholder - 4,000 - (4,000) -
Other liabilities - 12,000 - (12,000) -
Common stock issued for services - 500 - - 500
----------- ------------ ------------- ------------ -----------
Net cash used in operating activities (2,623) (118,658) (31,944) (53,031) (174,312)
----------- ------------ ------------- ------------ -----------
Cash flows from investing activities:
Organization costs (2,223) - - - (2,223)
Purchase of property and equipment (1,790) (2,184) (2,184) (435) (4,409)
----------- ------------ ------------- ------------ -----------
Net cash used in investing activities (4,013) (2,184) (2,184) (435) (6,632)
----------- ------------ ------------- ------------ -----------
Cash flows from financing activities:
Proceeds from issuance of common stock 47,440 84,200 23,797 - 131,640
Proceeds from issuance of stockholder note payable 20,000 - - 68,825 88,825
Repayment of principal on stockholder note payable - (20,000) - - (20,000)
----------- ------------ ------------- ------------ -----------
Net cash provided by financing activities 67,440 64,200 23,797 68,825 200,465
----------- ------------ ------------- ------------ -----------
Net increase (decrease) in cash 60,804 (56,642) (10,331) 15,359 19,521
----------- ------------ ------------- ------------ -----------
Cash at beginning of period - 60,804 60,804 4,162 -
----------- ------------ ------------- ------------ -----------
Cash at end of period $ 60,804 4,162 50,473 19,521 19,521
=========== ============ ============= ============ ===========
Supplementary disclosure of cash flow information:
Cash paid for interest $ - 784 - - 784
=========== ============ ============= ============ ===========
Cash paid for income taxes $ - - - - -
=========== ============ ============= ============ ===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
December 31, 1999
March 31, 2000 (unaudited)
(1) Summary of Significant Accounting Policies
(a) Nature of development stage operations
BellaCasa Productions, Inc., (BellaCasa or the Company) was formed
on July 28, 1998 as a Nevada Corporation. The Company has been
organized with the intent to operate in the entertainment industry
specifically in connection with the production and distribution of
motion pictures.
The Company's activities to date have consisted primarily of
organizational and equity fund raising activities.
(b) Property and equipment
Property and equipment are recorded at cost and depreciated over
the estimated useful lives of the assets which range from three to
five years, using the straight-line method.
(c) Intangible assets
Organization costs are amortized over a five-year period using the
straight-line method.
(d) Income taxes
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to temporary differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Changes in tax rates are
recognized in the period that includes the enactment date.
F-7 (Continued)
<PAGE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
(1), Continued
Development stage operations from inception through March 31, 2000,
resulted in net operating losses. It is uncertain whether any tax
benefit of the net operating loss will be realized in future
periods. Accordingly, no income tax provision or benefits have been
recognized in the accompanying financial statements.
The net operating loss carryforwards at March 31, 2000 available to
offset taxable income in future periods amount to approximately
$175,000 which will expire in 2019.
(e) Use of Estimates
Management of the Company has made certain estimates and
assumptions relating to the reporting of assets and liabilities and
the disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(f) Earnings per Common Share
Earnings per common share have been computed based upon the
weighted average number of shares outstanding during the period
presented. Common stock equivalents resulting from the issuance of
stock options have not been included in the per share calculations
because such inclusion would not have a material effect on earnings
per common share.
(g) Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" (SFAS 123) which sets forth
accounting and disclosure requirements for stock-based compensation
arrangements. The new statement encourages but does not require,
companies to measure stock-based compensation using a fair value
method, rather than the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"). The
Company has adopted the disclosure requirements of SFAS 123 and has
elected to continue to record stock-based compensation expense
using the intrinsic value approach prescribed by APB No. 25.
Accordingly, the Company computes compensation cost for each
employee stock option granted as the amount by which the quoted
market price of the Company's common stock on the date of grant
exceeds the amount the employee must pay to acquire the stock. The
amount of compensation cost, if any, will be charged to operations
over the vesting period.
F-8 (Continued)
<PAGE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
(1), Continued
(h) Cash Flows
For purposes of cash flows, the Company considers all highly liquid
debt instruments with original maturities of three months or less
to be cash equivalents.
(2) Investment in Screenplays
During the period ended December 31, 1999 and 1998, the principal
stockholder contributed two motion picture screenplays in exchange for
2,457,500 shares of common stock. The contributed screenplays are
identified as "Hands" and "The Giant." Pursuant to an agreement with an
unrelated third party, the rights, title and interest in the Giant were
transferred to the principal stockholder in exchange for the right to
receive 5% of the total budget of the associated film limited to a
maximum of $750,000 if the film is ultimately produced.
(3) Advances from Stockholder
Advances from stockholder amounting to $20,000 at December 31, 1998
were repaid with interest at 10%. Advances outstanding at December 31,
1999 (amounting to $4,000) were non-interest bearing and were repaid in
2000. All of the advances discussed herein were unsecured.
In January 2000, the principal stockholder advanced $68,825 to the
Company. The advances are payable upon the consummation of additional
equity capital offerings. In addition, the advances are non-interest
bearing and due on demand.
(4) Deferred Compensation
The Company has issued 187,500 shares to Directors and certain
individuals which comprise a Board of Advisors, as payment for services
to be provided over their appointed terms. Accordingly, the payment is
recorded as compensation expense during the period such services are
provided.
F-9
<PAGE>
BELLACASA PRODUCTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
(5) Property and Equipment
Property and equipment consists of the following:
December 31, March 31,
1999 2000
---- ----
Production equipment $ 3,974 4,409
Less accumulated depreciation (849) (1,032)
------ ------
$ 3,125 3,377
======= =====
(6) Private Placement Memorandum
During 1998, the Company issued a private placement memorandum pursuant
to Rule 504 of Regulation D under the Federal Securities Act of 1933.
Terms of the amended memorandum provide for an offering of up to
1,365,000 (682,500 shares given the effect of reverse stock split - see
note 8) shares of common stock at an offering price of $0.10 per share
($0.20 per share given the effect of the reverse stock split).
As of December 31, 1998, the Company had sold 236,500 shares of stock
resulting in proceeds of $47,300 in connection with this offering. In
1999, the Company completed the offering by selling the remaining
shares available which resulted in additional proceeds of approximately
$89,000.
(7) Stock Option Plan
In July 1998, the Company adopted the BellaCasa Productions, Inc. 1998
Stock Option Plan (Plan). The Plan provides for the issuance of up to
1,000,000 shares for options over a ten-year period. Under provisions
of the Plan, the purchase price for a share of stock subject to the
options shall not be less then 100% of the fair market value of the
stock at the date of grant. As of December 31, 1999 and March 31, 2000
no options had been granted under the Plan.
(8) Reverse Stock Split
In April 2000, the Board of Directors authorized a 1 for 2 reverse
stock split to all holders of record at that date. All share and
per-share amounts in the accompanying financial statements have been
restated to give effect to the stock split.
F-10
<PAGE>
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful. The information in this
prospectus is current only as of the date of this prospectus.
BELLACASA PRODUCTIONS, INC.
1,200,000 UNITS
(EACH UNIT CONSISTING OF
ONE SHARE OF COMMON STOCK,
ONE CLASS A REDEEMABLE WARRANT AND
ONE CLASS B REDEEMABLE WARRANT)
------------------------
UNTIL _______________, 2000 (25 DAYS AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS THAT BUY, SELL OR TRADE THESE SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
42
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by BellaCasa Productions, Inc. in
connection with the issuance and distribution of the securities being registered
(other than underwriting commissions and underwriter's expenses) are as follows:
SEC registration fee... $ 4,593
NASDAQ SmallCap Listing Fee
NASD Filing Fee
Blue Sky fees and expenses...
Legal fees and expenses...
Accounting fees and expenses...
Printing and engraving expenses...
Transfer agent fees and expenses...
Miscellaneous expenses...
Total... $ 164,000
----------
ITEM 25. INDEMNIFICATION OF OFFICERS AND DIRECTORS
None of our directors will have personal liability to BellaCasa or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director involving any act or omission since provisions have been made in our
articles of incorporation limiting such liability. These provisions shall not
eliminate or limit the liability of a director or officer to BellaCasa or its
stockholders for acts or omissions, which involve intentional misconduct, fraud,
or a knowing violation of law. There is also no limitation of liability if the
director or officer derived an improper personal benefit or if the Nevada
statutes specifically preclude limiting liability as in the case of paying
dividends in violation of Section 78.300 of the Nevada Revised Statutes.
The bylaws provide for indemnification of our directors, officers, and
employees for any liability arising out of company activities if they were not
engaged in willful misfeasance or malfeasance. In the case of settlement,
indemnification will apply only when the board approves such settlement and
reimbursement as being in the best interests of the corporation. Our bylaws
limit the liability of directors to the maximum extent permitted by the Nevada
Revised Statutes Section 78.751.
Our officers and directors are accountable as fiduciaries, which means
they are required to exercise good faith and fairness in all dealings affecting
us. In the event that a shareholder believes the officers and/or directors have
violated a fiduciary duty to BellaCasa, the shareholder may be able to bring a
class action or derivative suit to enforce the shareholder's rights.
Insofar as indemnification arising under the Securities Act may be
permitted to directors and officers under our articles of incorporation, bylaws,
contract or statute, we have been advised that in the opinion of the Commission
that such indemnification is against public policy and is, therefore,
unenforceable.
43
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The Company sold the following shares of common stock since its
incorporation on July 28, 1998:
With the formation of BellaCasa, we issued 2,457,500 shares to our
founder, Mr. LaLoggia. The consideration for these shares was Mr. LaLoggia's
ownership rights in two screenplays, "The Giant" and "Hands". Mr. LaLoggia
acquired his interest in "The Giant" from an unrelated party in exchange for the
right to receive 5% of the total budget of the associated film up to a maximum
of $750,000 if the film is ultimately produced. We acquired the rights to "The
Giant" subject to that agreement. The ownership rights to the screenplays were
recorded on our balance sheet at the nominal amount of $492. As part of the
acquisition of "The Giant", we also received more than 1,500 storyboard drawings
which are completed visual representations of the camera setups to be used in
the film "The Giant". Mr. LaLoggia was at the time of the transaction and is
still president, chief executive officer and chairman of the board of the
Company. The stock was issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act.
We issued 187,500 shares to directors and certain individuals who
comprise our advisory board as payment for services over their appointed terms.
The payment is recorded as compensation expense as services are provided. The
shares were valued at $0.20 per share. These shares were issued as follows: on
December 9, 1998; Katherine Helmond-25,000, David Tochman (later resigned)-
25,000, Lorie Zerweck (later resigned)-25,000, Russell Carpenter-25,000, Vini
Bancalari-12,500, Jimmy Dobson-12,500 and Norman Levy-12,500, on August 4, 1999;
Susan Schindler-25,000, Andrew La Marca-25,000. On August 17, 1999 Ms. Zerweck's
shares were returned to us and reissued to Scott Schomer. In August 1999, we
issued 250 shares, for services rendered, valued at $500.
Each of the above individuals who acquired shares of our stock was
provided with or had access to financial and other information concerning
BellaCasa Productions, Inc. and had the opportunity to ask questions concerning
our company and its operations. All of these transactions were private
transactions not involving a public offering and were exempt from the
registration provisions of the Act pursuant to Section 4(2). Sales of the
securities were without the use of an underwriter, and the certificates
evidencing the securities relating to the transactions bear restrictive legends
permitting transfer only upon registration or an exemption under the Act.
In July 1998, we commenced and completed an offering of common stock at
$0.0002 per share, pursuant to Rule 504 of Regulation D under the Act. A total
of 700,000 shares of our stock was sold by management for $140. Each of the
investors was provided with and had access to financial and other information
concerning us and had the opportunity to ask questions about our operations and
us. Accordingly, the issuance of these securities was exempt from the
registration requirements of the Securities Act of 1933, as amended, pursuant to
Section 3(b).
In December 1998, we commenced an offering of common stock at $0.20 per
share pursuant to Rule 504 of Regulation D under the Act. Management sold
682,500 shares of our stock for a total of $136,500. The sales were completed in
January 1999. Each of the investors was provided with and had access to
financial and other information and had the opportunity to ask questions
concerning our company and its operations. Accordingly, the issuance of these
securities was exempt from the registration requirements of the Act pursuant to
Section 3(b).
All of the above transactions have been adjusted retroactively to give
effect to the 1 for 2 reverse split, which the directors approved in April 2000.
44
<PAGE>
ITEM 27. EXHIBITS
Exhibits Description of Document
1.1 Form of subscription agreement*
1.2 Form of public warrant agreement *
3.1 Articles of Incorporation of BellaCasa Productions, Inc.
3.2 Bylaws of BellaCasa Productions, Inc.
4.1 Specimen of common stock certificate
4.2 Form of Class A common stock purchase warrant *
4.3 Form of Class B common stock purchase warrant *
5.1 Opinion of James R. Leone, P.A. *
10.1 Agreement for the acquisition of screenplay rights to "Hands" and
"The Giant" by and between Frank LaLoggia and BellaCasa
Productions, Inc. *
10.2 Agreement regarding transfer of rights to the screenplay, "The
Giant", by and among Frank LaLoggia, BellaCasa Productions, Inc.
and New Sky Communications Inc. *
10.3 Office Lease Agreement between Universal City Studios, Inc. and
BellaCasa Productions, Inc. effective January 4, 1999.
10.4 BellaCasa Productions, Inc. 1998 Stock Option Plan
23.1 Consent of Parks, Tschopp, Whitcomb & Orr, P.A., Certified Public
Accountants
23.2 Consent of James R. Leone, P.A. (contained in such firm's opinion
filed as Exhibit 5.1) *
27.1 Financial Data Schedule for year ended December 31, 1998
27.2 Financial Data Schedule for year ended December 31, 1999
27.3 Financial Data Schedule for three months ended March 31, 2000
* To be filed with amendment
45
<PAGE>
ITEM 28. UNDERTAKINGS
BellaCasa Productions, Inc. undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) Reflect in the prospectus any facts or events, which,
individually or together, represent a fundamental change in the
information set forth in the registration statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration of the securities offered, and
the offering of such securities at that time to be the initial bona fide
offering; and
(3) File a post effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
46
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, this
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on our behalf by the undersigned, in the City of
Agoura, State of California, on May 24, 2000.
BellaCasa Productions, Inc.
/s/ Frank LaLoggia
----------------------
Frank LaLoggia, President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
In accordance with the Securities Act of 1933, this registration was
signed by the following persons in the capacities and on the dates indicated.
/s/ Frank LaLoggia 05/24/00
----------------------
Frank LaLoggia, President,
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
/s/ Katherine Helmond 05/24/00
-----------------------
Katherine Helmond
Director
/s/ Scott P. Schomer 05/24/00
-----------------------
Scott P. Schomer
Chief Financial Officer and Director
/s/ Susan Schindler 05/24/00
---------------------
Susan Schindler
Treasurer, Secretary and Director
47
Filed In the office of the
Secretary of state of the State of Nevada
July 28, 1998 No. C17858-98
Dean Heller, Secretary of State
Articles of Incorporation
(Pursuant to NRS 78)
Office of the Secretary of State
Capitol Complex
Carson City, Nevada 89710
Telephone (702) 687-5203
1. The name of the Corporation is: BellaCasa Productions, Inc.
2. The name of the Resident Agent is: State Agent and Trasfer Syndicate, Inc.
Mailing Address: 318 North Carson Street, Suite 214, Carson City, NV 89701.
3 The number of shares that the corporation is authorized to issue and the par
value of the shares shall be 50.000,000 common shares with a par value of
$0.0001, and 25,000.000 preferred shares with par value of $0.0001. The
corporation is authorized to issue bonds, debentures, warrants and options. The
common and preferred stock both to "take on any characteristic that the Board of
Directors directs".
4 The first board of directors shall consist of 3 and the names and addresses
are as follows: Frank LaLoggia, 28970 Crags Drive, Malibu Lake, CA 91301 Laurie
Zerweck, 11693 San Vicente Boulevard #551, Los Angeles, CA 90049 David Tochman,
28970 Crags Drive, Malibu Lake, CA 91301
5. The purpose of the corporation shall be for the transaction of any lawful
business, and to promote and conduct any legitimate object or purpose allowed
pursuant to NRS 78.030.
6. Personal Liability (check one) XX Accept Decline
---- ----
A provision eliminating or limiting the personal liability of directors,
officers or stockholders for damages for breach of fiduciary duty as a director
or officer, but such provision must not eliminate or limit the liability of a
director or officer for (a) Acts or omissions which involve intentional
misconduct, fraud, or knowing violation of law; or (b) The payments of
distributions in violation of NRS 78.300.
7. OTHER MATTERS: Any other matters to be included in these articles may be
noted on separate pages and incorporated by reference herein as a part of these
articles; Number of pages attached
1
<PAGE>
8 The names and addresses of each of the incorporators signing the articles:
/s/
- --------------------------------
Courtney M. Montiel
c/o Accelerated Information & Document Filing, Inc
90 State Street, Suite 836
Albany, NY12207
Subscribed and sworn to before me on
July 28, 1998
/s/
-------------------------------------
Khristine E. Peacock
Notary Public State of New York
Appointed in County of Saratoga
Commission Expires 3/14/2000
Registration Number 01PE4917314
I, State Agent & Trasfer Syndicate, Inc., hereby accept appointment as Resident
Agent for the above named corporation.
/s/ Gwen M. Currie
- --------------------------
State Agent & Trasfer Syndicate, Inc.
Dated: July 28, 1998
2
BYLAWS
BellaCasa Productions, Inc
ARTICLE I - OFFICERS
The registered office of the corporation in the state of Nevada shall be located
in the city and state designated in the Articles of Incorporation The
corporation may also maintain offices at such other places within or without the
state of Nevada as the Board of Directors may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings: (Chapter 78.310)*
The annual meeting of the shareholders of the Corporation shall be held at the
time fixed, from time to time, by the Directors.
Section 2- Special Meetings: (Chapter 78.310)
Special meetings of the shareholders may be called by the Board of Directors or
such person or persons authorized by the Board of Directors and shall be held
within or without the state of Nevada.
Section 3- Place of meetings: (Chapter 78.310)
Meetings of shareholders shall be held at the registered office of the
Corporation, or at such other places, within or without the state of Nevada as
the Directors may from time to time fix. If no designation is made, the meeting
shall be held at the Corporations registered office in the state of Nevada.
Section 4- Notice of Meetings: (Section 78.3700)
(a) Written or printed notice of each meeting of shareholders, whether annual or
special, signed by the president, vice president or secretary, stating the time
when and place where it is to be held, as well as the purpose or purposes for
which the meeting is called, shall be served either personally or by mail, by or
at the direction of the president, the secretary, or the officer, or the person
calling the meeting, not less than ten or more than sixty days before the date
of the meeting, unless the lapse of the prescribed time shall have been waived
before or after the taking of such action, upon each shareholder of record
entitled to vote at such meeting, and to any other to whom the giving of notice
may be required by law If mailed, such notice shall be deemed to be given when
deposited in the United States mail, addressed to the share holder as it appears
on the share transfer records of the Corporation or to the current address,
which the shareholder has delivered to the corporation in a written notice.
*Unless otherwise stated herein, all references to "Sections" in these Bylaws,
refer to those sections contained in Title 78 of the Nevada Private Corporations
Law
1
<PAGE>
(b) Further notice to a shareholder is not required when notice of two
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to him or her during the period
between those two consecutive annual meetings; or all, and at least two payments
sent by first-class mail of dividends or interest on securities during a
12-month period have been mailed addressed to him or her at his or her address
as shown on the records of the Corporation and have been returned undeliverable.
Section 5 Quorum: (Section 78.320)
(a) Except as otherwise provided herein, or by law, or in the articles of
Incorporation (such Articles and any amendments thereof being hereinafter
collectively referred to as the "Articles of Incorporation"), a quorum shall be
present at all meetings of shareholders of the Corporation, if the holders of a
majority of the shares entitled to vote on that matter are represented at the
meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder from the meeting, after the
commencement of a meeting, or the refusal of any shareholder represented in
person or by proxy to vote, shall have no effect on the existence of a quorum,
after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the
shareholders present may adjourn the meeting.
Section 6- Voting and Acting: (Section 78.320 & 78.350)
(a) Except as otherwise provided by law, the Articles of Incorporation, or these
Bylaws, any corporate action, the affirmative vote of the majority of shares
entitled to vote on that matter
and represented either in person or by proxy at a meeting of shareholders at
which a quorum is present, shall be the act of the shareholders of the
Corporation.
(b) Except as otherwise provided by statute, the Certificate of Incorporation,
or these Bylaws, at each meeting of shareholders, each shareholder of the
Corporation entitled to vote thereat, shall be entitled to vote for each
registered share in his or her name on the books of the Corporation.
(c) Where appropriate communication facilities are reasonably available, any or
all shareholders shall have the right to participate in any shareholders'
meeting, by means of conference telephone or any means of communications by
which all persons participating in the meeting are able to hear each other.
Section 7 Proxies: (Section 78.355)
Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so either in person or by proxy, so long as such proxy is
executed in writing by the shareholder himself, his authorized officer,
director, employee, or agent, or by causing the signature of the stockholder to
be affixed to the writing by any reasonable means, including, but not limited
to, a facsimile signature, or by his attorney-in-fact there unto duly authorized
in writing. Every proxy shall be revocable at will unless the proxy
conspicuously states that it is irrevocable and the proxy is coupled with an
interest, A telegram, telex, cablegram, or similar transmission by the
shareholder, or a photographic, photostatic, facsimile, shall be treated as a
valid proxy, and treated as a substitution of the original proxy, so long as
such transmission is a complete reproduction executed by the shareholder. If it
is determined that the telegram, cablegram or other electronic transmission is
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valid, the persons appointed by the Corporation to count the votes of
shareholders and determine the validity of Proxies and ballots or other persons
making those determinations must specify the information upon which they relied.
No proxy shall be valid after the expiration of six months from the date of its
execution, unless otherwise provided in the records of the Corporation. If any
shareholder designates two or more persons to act as Proxies, a majority of
those persons present at the meeting, or, if one is present, then that one has
and may exercise all of the powers conferred by the shareholder upon all of the
persons so designated unless the shareholder provides otherwise.
Section 8 Action Without a Meeting: (Section 78.320)
Unless otherwise provided for in the Articles of Incorporation of the
Corporation, any action to be taken at any annual or shareholders meeting, may
be taken without a meeting, without prior notice and without a vote if written
consents are signed by majority of the shareholder of the Corporation, except
however if a different proportion of voting power is required by law, the
Articles of Incorporation or these bylaws, then that proportion of written
consent is required Such written consents must be filed with the minutes of the
proceedings of the shareholders of the Corporation.
ARTICLE III - BOARD OF DIRECTORS
Section 1-Number, Term, Election, and Qualifications (Section 78.115, 78.330)
(a) The first Board of Directors and all subsequent boards of the Corporation
shall consist of a minimum of one and a maximum of seven directors, unless and
until otherwise determined by vote of a majority of the entire board of
directors. The Board of Directors or shareholders all has the power, in the
interim between annual and special meetings of the shareholders, to increase or
decrease the number of directors of the Corporation, A director need not be a
shareholder of the Corporation unless the Certificate of Incorporation of the
Corporation or these bylaws shall require.
(b) Except as may otherwise be provided herein or in the Articles of
Incorporation, the members of the Board of Directors of the Corporation shall be
elected at the first annual shareholders meeting and at each annual meeting
thereafter, unless their terms are staggered in the Articles of Incorporation of
the Corporation or these bylaws, by a plurality of the votes cast at a meeting
of shareholders, by the holders of shares entitled to vote in the election.
(c) The first Board of Directors shall hold office until the first annual
meeting of shareholders and until the successors have been duly elected and
qualified or until there is a decrease in the number of directors, Thereinafter,
directors will be elected at the annual meeting of shareholders and shall hold
office until the annual meeting of the shareholders next succeeding his
election, unless their terms are staggered in the Articles of Incorporation of
the Corporation (so long as at least one - forth in number of the Directors of
the Corporation are elected at each annual shareho1ders meeting) or by these
bylaws, or until his prior death, resignation or removal, Any director may
resign at any time upon written notice of such resignation to the Corporation
(d). All directors all the Corporation shall have equal voting power unless the
Articles of Incorporation of the Corporation provides that the voting power of
individual Directors or classes of directors are greater than or less than that
of any other individual directors or classes of directors, and the different
voting powers may be stated in the Articles of Incorporation or may be dependent
upon any fact or event that may be ascertained outside the Articles of
Incorporation if the manner in which the fact or event may operate on those
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voting powers is stated in the Articles of Incorporation. If the Articles of
Incorporation provide that any directors must have voting power greater than or
less than other directors of the Corporation, every reference in these bylaws to
a majority or other proportion of Directors shall be deemed to refer to majority
or other proportion of the voting power of all the Directors or classes of
Directors, as may be required by the Articles of Incorporation.
Section 2 Duties and Powers: (Section 78.120)
The Board of Directors shall be responsible for the control and management of
the business and affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except such as those stated under and
Nevada state law, are in the Articles of Incorporation or by these bylaws,
expressly conferred upon or reserved to the shareholders or any other person or
persons named therein.
Section 3 Regular Meetings; Notice: (Section 78.310)
(a) A regular meeting of the board of directors shall be held either within or
without the state of Nevada at such time and at such place as the board shall
fix.
(b) No notice shall be required of any regular meeting of the Board of Directors
and, if given, need not specify the purpose of the meeting, provided, however,
that in case the board of directors shall fix or change the time or place of any
regular meeting when such time and place was fixed before such change, notice of
such action shall be given to each Director who shall not have been present at
the meeting at which such action was taken within the time limited, and in the
manner set forth in these bylaws with respect to Special meetings, unless such
notice shall be waived in the manner set forth in these bylaws.
Section 4- Special Meetings; Notice; (Section 78.310)
(a) Special meetings of the Board of Directors shall be held at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required statute, written notice of Special meetings
shall be mailed directly to each Director, addressed to him or her at their
residence or usual place of business, or delivered orally, with sufficient time
for the convenient assembly of directors thereat, or shall be sent to him or her
at such place by telegram, radio or cable, or shall be delivered to him
personally or given to him or her orally, not later than the day before the day
on which the meeting is to be held, If mai1ed, the notice of any special meeting
shall be deemed to be delivered on the second day after it is deposited in the
United States mail, so addressed, with postage prepaid. If notice is given by
telegram, it shall be deemed to be delivered when the telegram is delivered to
the telegraph company. A notice, or waiver of notice, except as required by
these bylaws, need not specify the business to be transact or the purpose or
purposes of the meeting.
(c) Notice of any special meeting shall not be required to be given to any
Director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5 - Chairperson:
The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of Directors. If there shall be no Chairperson, or he or
she shall be absent, then the President shall preside, and in his absence, any
other director chosen by the Board of Directors shall preside.
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Section 6- Quorum and Adjournments: (Section 78.315)
(a) At all meetings of the Board of Directors, or any committee thereof, the
presence of a majority of the board, or such committee thereof, shall constitute
a quorum for the transaction of business. Except as otherwise provided by law,
by the Certificate of Incorporation, or these bylaws.
(b) A majority of the Directors present at the time and place of any regular or
special meeting, although less than a quorum made adjourn the same from time to
time without notice, whether or not a quorum exists. Notice of such adjourned
meeting shall be given to the Directors not present at the time of adjournment
and, unless the time and place of the adjourned meeting are announced at the
time of the adjournment, to the Directors whom was present at the adjourned
meeting.
Section 7 -Manner of Acting: (Section 78.315)
(a) At all meetings of the Board of Directors, each Director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or
these bylaws, action approved by a majority of the votes of the Directors
present at any meeting of the Board or any committee thereof, at which a quorum
is present shall be the act of the Board of Directors or any committee thereof.
(c) Any action authorized in writing made prior to or subsequent to such action,
by all of the Directors entitled to vote thereon and filed with the minutes of
the Corporation shall be the act of the Board of Directors, or any committee
thereof, and have the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board or committee for all
purposes.
(d) Where appropriate communications facilities are reasonably available, any or
all directors shall have the right to participate in any Board of Directors
meeting, or committee of the
Board of Directors meeting, by means of conference telephone or any means of
communications by which all persons participating in the meeting are able to
hear each other.
Section 8- Vacancies: (Section 78.335)
(a) Unless otherwise provided for by the Articles of Incorporation, any vacancy
in the Board of Directors occurring by reason of an increase in the number of
directors, or by reason of death, resignation, disqualification, removal, or
inability to act of any director, or other, shall be filled by an affirmative
vote of a majority of the remaining directors, though less than a
quorum of the board or by a sole remaining director, at any regular meeting or
special meeting of the Board of Directors called for that purpose except
whenever the shareholders of any class or classes or series thereof are entitled
to elect one or more Directors by the Certificate of Incorporation of the
Corporation, vacancies and newly created directorships of such class or classes
or series may be filled by a majority of the Directors elected by such class or
classes or series thereof then in office, or by a sole remaining Director so
elected.
(b) Unless otherwise provided for by law, the Articles of Incorporation or these
Bylaws, when one or more Directors shall resign from the board and such
resignation is effective at a future date, a majority of the directors, then in
office, including those who have so resigned, shall have the power to fill such
vacancy or vacancies, the vote otherwise to take effect when such resignation or
resignations shall become effective.
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Section 9- Resignation: (Section 78.335)
A Director may resign at any time by giving written notice of such resignation
to the Corporation.
Section 10- Removal: (Section 78.335)
Unless otherwise provided for by the Articles of Incorporation, one or more or
all the Directors of the Corporation may be removed with or without cause at any
time by a vote of two-thirds of the shareholders entitled to vote thereon, at a
special meeting of the shareholders called for that purpose, unless the Articles
of Incorporation provide that Directors may only be removed for cause, provided
however, such Director shall not be removed if the Corporation states in its
Articles of Incorporation that its Directors shall be elected by cumulative
voting and there are a sufficient number of shares cast against his or her
removal, which if cumulatively voted at an election of Directors would be
sufficient to elect him or her. If a Director was elected by a voting group of
shareholders, only the shareholders of that voting group may participate in the
vote to remove that director.
Section 11 - Compensation: (Section 78.140)
The Board of Directors may authorize and establish reasonable compensation of
the Directors for services to the corporation as Directors, including, but not
limited to attendance at any annual or special meeting of the Board.
Section 12 - Committees: (Section 78.125)
Unless otherwise provided for by the Articles of Incorporation of the
Corporation, the Board of Directors, may from time to time designate from among
its members one or more committees, and alternate members thereof, as they deem
desirable, each consisting of one or more members,
with such powers and authority (to the extent permitted by law and these Bylaws)
as may be provided in such resolution. Unless the Articles of Incorporation or
Bylaws state otherwise, the Board of Directors may appoint natural persons who
are not Directors to serve on such committees authorized herein. Each such
committee shall serve at the pleasure of the Board and, unless otherwise stated
by law, the Certificate of Incorporation of the Corporation or these Bylaws,
shall be governed by the rules and regulations stated herein regarding the Board
of Directors.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office: (Section
78.130)
(a) The Corporation's officers shall have such titles and duties as shall be
stated in these Bylaws or in a resolution of the Board of Directors which is not
inconsistent with these Bylaws. The officers of the Corporation shall consist of
a President, Secretary, and Treasurer, and also may have one or more Vice
Presidents, Assistant Secretaries, and Assistant Treasurers, and other such
officers as the Board of Directors may from time to time deem advisable. Any
officer may hold two or more offices in the Corporation.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting if
shareholders.
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(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his or her successor shall
have been duly elected and qualified, subject to earlier termination by his or
her death, resignation, or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Corporation.
Section 3 - Removal:
Any officer elected by the Board of Directors may be removed, either with or
without cause, and a successor elected by the Board at any time, and any officer
or assistant officer, if appointed by another officer, may likewise be removed
by such officer.
Section 4 - Vacancies:
A vacancy, however caused, occurring in the Board and any newly created
Directorships resulting from an increase in the authorized number of Directors,
may be filled by the Board of Directors.
Section 5 - Bonds:
The Corporation may require any or all of its officers or Agents to post a bond,
or otherwise, to the Corporation for the faithful performance of their positions
or duties.
Section 6 - Compensation:
The compensation of the officers of the Corporation shall be fixed from time to
time by the Board of Directors.
ARTICLE V - SHARES OF STOCK
Selections I - Certificate of Stock: (Section 78.235)
(a) The shares of the Corporation shall be represented by certificates or shall
be uncertified shares.
(b) Certificated shares of the Corporation shall be signed, (either manually or
by facsimile), by officers or agents designated by the Corporation for such
purposes, and shall certify the number of shares owned by him or her in the
Corporation. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then a
facsimile of the signatures of the officers or agents, the transfer agent or
transfer clerk or the registrar of the Corporation may be printed or
lithographed upon the certificate in lieu of the actual signatures. If the
Corporation uses facsimile signatures of its officers and agents on its stock
certificates, it cannot act as registrar of its own stock, but its transfer
agent and registrar may be identical if the institution in those dual capacities
countersigns or otherwise authenticates any stock certificates in both
capacities. If any officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he or she were such officer at the date of its issue.
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(c) If the corporation issues uncertificated shares as provided for in these
Bylaws, within a reasonable time after the issuance or transfer of such
uncertificated shares, and at least annually thereafter, the Corporation shall
send the shareholder a written statement certifying the number of shares by such
shareholder in the Corporation.
(d) Except as otherwise provided by law, the rights and obligations of the
holders of uncertificated shares and the rights and obligations of the holders
of certificates representing shares of the same class and series shall be
identical.
Section 2- Lost or Destroyed Certificates: (Section 104.8405)
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 if the owner:
(a) so requests before the Corporation has notice that the shares have been
acquired by a bona fide purchaser.
(b) files with the corporation a sufficient indemnity bond; and
(c) satisfies such other requirements including evidence of such loss, theft, or
destruction, as may be imposed by the Corporation.
Section 3- Transfers of Shares: (Section 104.8401, 104.8406 & 104.8416)
(a) Transfers or registration of transfers of the shares of the Corporation
shall be made on the stock transfer books of the Corporation by the registered
holder thereof, or by his or her attorney duly authorized by a written power of
attorney; and in the case of shares represented by certificates, only after the
surrender to the corporation of the certificates representing such shares with
such shares properly endorsed, with such evidence of the authenticity of such
endorsement, transfer, authorization and other matters as the Corporation may
reasonably require, and the payment of all stock transfer taxes due thereon.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and, accordingly, shall
not be bound to recognize any legal, equitable, or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4- Record Date: (Section 78.215 & 78.350)
(a) The Board of Directors may fix, in advance, which shall not be more than
sixty days before the meeting or action requiring a determination of
shareholders, as the record date for the determination of shareholders entitled
to receive notice of, or to vote at, any meeting of shareholders, or to consent
to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividends, or allotment of any
rights, or for the purpose of any other action. If no record date is fixed, the
record date for shareholders entitled to notice of meeting shall be at the close
of business on the day preceding the day on which notice is given, the day on
which the meeting is held, or if notice is waived, at the close of business on
the day before the day on which the meeting is held.
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(b) The Board of Directors may fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted for
shareholders entitled to receive payment of any dividend or other distribution
or allotment of any rights of shareholders entitled to exercise any rights in
respect of any change, conversion, or exchange of stock, or for the purpose of
any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholder's meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting.
Section 5 - Fractions of Shares/ Scrip: (Section 78.205)
The Board of Directors may authorize the issuance of certificates or payment of
money for fractions of a share, either represented by a certificate or
uncertificated, which shall entitle the
holder to exercise voting rights, receive dividends and participate in any
assets of the Corporation in the event of liquidation, in proportion to the
fractional holdings, or it may authorize the payment in case of the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined; or it may authorize the issuance, subject to such
conditions as may be permitted by law, of scrip in registered or bearer form
over the manual or facsimile signature of an officer or agent of the Corporation
or its agent for that purpose, exchangeable as therein provided for full shares,
but such scrip shall not entitle the holder to any rights of shareholder as
therein provided. The scrip may contain any provisions or conditions that the
corporation deems advisable, If a scrip ceases to be exchangeable for full fare
certificates, the shares that would otherwise have been issuable as provided on
the scrip are deemed to be treasury shares unless the scrip contains other
provisions for their disposition.
ARTICLE VI- DIVIDENDS (Section 78.215 & 78.288)
(a) Dividends may be declared and paid out of any funds available therefore, as
often, in such amounts, and at such time or times as the Board of Directors may
determine and shares may be issued pro rata and without consideration to the
Corporation's shareholders or to the shareholders of one or more classes or
series.
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation,
(ii) a majority of the shareholders of the class or series to be issued
approve the issue, or (iii) there are no outstanding shares of the
class or series of shares that are authorized to be issued.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change by the Board of Directors from time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL (Section 78.065)
The corporate seal, if any, shall be in such form as shall be prescribed and
altered, from time to time, by the Board of Directors. The use of a seal or
stamp by the Corporation on corporate documents is not necessary and the lack
thereof shall not in any way affect the legality of a corporate document.
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ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All Bylaws of the Corporation shall be subject to alteration or repeal, and new
Bylaws may be made, by a majority vote of the shareholders at the time entitled
to vote in the election of Directors even though these Bylaws may also be
altered, amended, or repealed by the Board of Directors.
Section 2- By Directors: (Section 78.120)
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, Bylaws of the Corporation.
ARTICLE X - WAIVER OF NOTICE
Whenever any notice is required to be given by law, the Articles of
Incorporation or these Bylaws, a written waiver signed by the person or persons
entitled to such notice, whether before or after the meeting by any person,
shall constitute a waiver of notice of such meeting.
ARTICLE XI - INTERESTED DIRECTORS: (Section 78.140)
No contact or transaction shall be void or voidable if such transaction is
between the Corporation and one or more of its Directors or officers, or between
the Corporation and any other corporation, partnership, association, or other
organization in which one or more of its Directors or officers, are Directors or
Officers, or have financial interest, when such Director or Officer is present
at or participates in the meeting of the Board, or the committee of the
shareholders which authorizes the contract or transaction or his, her, or their
votes are counted for such purpose if:
(a) The material facts as to his, her, or their relationship or interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested voters, even though the
disinterested Directors be less than a quorum; or
(b) The material facts as to his, her, or their relationship or relationships or
interest or interests and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or,
(c) The contract or transaction is fair to the Corporation as of the time it is
authorized, approved, or ratified by the Board of Directors, a committee of the
shareholders; or
(d) The fact of the common directorship, office or financial interest is not
disclosed or known to the Director or Officer at the time the transaction is
brought before the Board of Directors of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the Board of Directors' or committee meeting authorizing the contract
or transaction.
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ARTICLE XII - ANNUAL LIST OF OFFICERS, DIRECTORS, AND REGISTERED
AGENT: (Section 78.150 & 78.165)
The Corporation shall, within sixty days after the filing of its Articles of
Incorporation with the Secretary of State, and annually thereafter on or before
the last day of the month in which the anniversary date of incorporation occurs
each year, file with the Secretary of State a list of its President, Secretary,
Treasurer, and all of its Directors, along with the post office box or street
address, either residence or business, and a designation of its resident agent
in the state of Nevada Such list shall be certified by an officer of the
Corporation.
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SPECIMEN COMMON STOCK CERTIFICATE- FRONT
Not Valid Unless Countersigned By Transfer Agent
Incorporated Under The Laws Of The State Of Nevada
BellaCasa Productions, Inc.
Number ( ) Shares ( )
Authorized Stock 50,000,000 Shares $.0001 par value
See Reverse for certain Definitions. CUSIP 07820R 10 3
This Certifies that is the Registered holder of shares
BellaCasa Productions, Inc.
Transferable only on the books of the corporation by the holder hereof in person
or by Attorney upon surrender of this certificate properly endorsed.
In Witness Whereof, the said corporation has caused this certificate to be
signed by its duly authorized officers and its corporate seal to be hereunto
affixed.
Dated:
Secretary Corporate Seal President
Transfer Agent and registrar: Countersigned and registered
Atlas Stock Transfer Corporation By
5899 South State Street
Salt Lake City, Utah 84107 Authorized Signature
SPECIMEN STOCK CERTIFICATE-REVERSE
The Following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-------Custodian--------
TEN ENT- as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with under Uniforms Gifts to Minor
right of survivorship and not as Act.....................
tenants in common (State)
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) 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 Signature
Notice: The signature in this assignment must correspond with the name written
upon the face of the certificate, in every particular, without alteration or
enlargement, or any change whatever.
Signature Guaranteed By:
(Please have signature guaranteed by a
National Bank through its officer or by
a member firm of a major stock
exchange.)
OFFICE. LEASE
This LEASE, made this 8th day of January 1999, and effective as of
January 4,1999, is between Universal City Studios, Inc. ("Landlord"), 100
Universal City Plaza, Universal City, California 91608 and BellaCasa Productions
("Tenant"), c/o Frank LaLoggia, 28970 Crags Drive, Malibu Lake, California
91301, for the premises herein described.
1. DEFINITIONS
The terms below have the following meanings:
(a) Lease:
This document, including those Exhibits A, B, C and D attached
hereto and made a part hereof (collectively, the "Lease").
(b) Building/Premises:
Building 473, 3rd Floor, Offices 305 and 307 for a total of
570 square feet
(c) Term:
The term ("Term") shall commence on January 4, 1999, and
continues on a month-to-month tenancy until terminated as of
the last day of any calendar month by written notice by either
party to the other party, given at least thirty (30) days in
advance.
(d) Rent:
The office rent ("Rent") to be paid by Tenant hereunder shall
be as follows:
(i) 570 square feet, computed on the basis of $41.00 per
square foot, per year, for an annual rent of $23,370;
(less a 10% discount), for an annual rent of
$21,033.00.
(ii) $21,033.00 divided by 12 months, for a monthly Rent
of $1,752.75.
(e) Security Deposit:
Tenant shall, upon execution of this Lease, deposit with
Landlord a Security Deposit in the amount of N/A.
(f) Tenant Parking:
Based upon availability, reserved on-lot parking at $110.00
per space, per month; and, unreserved parking at $75.00 per
space, per month.
<PAGE>
2. LEASE OF PREMISES
Landlord hereby leases the Premises to Tenant for the Term in
consideration of Tenant's assumption of Tenant's obligations under this
Lease, including without limitation Tenant's obligation to pay Rent.
3. RENT
Tenant shall pay Landlord the Monthly Rent specified in Paragraph 1(d)
hereinabove in lawful money of the United States. The Monthly Rent
shall be paid in advance on the first day of each calendar month during
the Term, at the office of Landlord or at such other place as Landlord
may from time to time designate in writing, except that the first
installment of Monthly Rent shall be paid upon the execution hereof.
The Rent shall be paid without deduction or set-off. Rent payable for
any portion, less than all, of a calendar month shall be a pro rata
portion of the Monthly Rent.
4. SECURITY DEPOSIT
Tenant has deposited with Landlord the sum specified in Paragraph 1(e)
as security for the full and faithful performance of every provision of
this Lease to be performed by Tenant. If Tenant defaults with respect
to any provision of this Lease, including but not limited to, the
provisions relating to the payment of Rent, Landlord may use, apply or
retain all or any part of this Security Deposit for the payment of any
rent, interest or other sum in default, or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of
Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within five (5) days after written demand,
deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount and Tenant's failure to do so
shall be deemed a material breach of this Lease. Landlord shall not be
required to keep this Security Deposit separate from its general funds,
and Tenant shall not be entitled to interest. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by
him, the Security Deposit, or any balance thereof, shall be returned to
Tenant (or, at Landlord's option, to the last assignee of Tenant's
interest hereunder) at the expiration of the Term and after Tenant has
vacated the Premises.
5. PARKING
Subject to the provisions of Exhibit A, Tenant shall pay for parking at
the monthly rate set forth in Paragraph 1 hereinabove, as such rate may
be changed from time to time, subject to cancellation by Tenant in
whole or in part at any time upon not less than thirty (30) days
written notice. Landlord reserves the right to relocate Tenant's
parking, upon prior written notice to Tenant. In addition, reasonable
amounts of visitor parking will be available on a first-come,
first-served basis at prevailing visitor parking rates and validation
rates. In the event that Tenant loses a Lot Access card, the
replacement cost is Thirty-Five Dollars ($35.00) per card.
6. USE
Tenant shall use and occupy the Premises for general office purposes
and shall not use or occupy the Premises for any other purpose without
the prior written consent of Landlord.
<PAGE>
7. CONDITION OF PREMISES
Tenant acknowledges that neither Landlord nor any of Landlord's agents
have made any representation or warranty with respect to the Building
or the Premises or with respect to the suitability of either for the
conduct of Tenant's business or profession. Landlord has no obligation
to alter, remodel, repair, improve, decorate or paint the Premises or
any part thereof. The taking of possession of the Premises by Tenant
shall conclusively establish that the Premises and said Building were
at such time in good and satisfactory condition.
8. ALTERATIONS
Tenant shall make no alterations, additions, or improvements to the
Premises without the prior written consent of Landlord. In that regard,
should Landlord approve any request for an addition, alteration or
modification to the Premises, Tenant shall be obligated to remove the
same upon the expiration of this Lease and restore the Premises to its
condition existing on the date hereof.
9. CARE OF PREMISES
Tenant shall take good care of the Premises and fixtures therein and
shall make all repairs thereto or to the Building which are made
necessary as a result of any misuse or neglect by Tenant or by Tenant's
agents or employees or by Tenant's visitors while in the Premises. All
such repairs shall be at least equal in quality to the original work.
Landlord may make any such repairs which are not promptly made by
Tenant and may charge the cost thereof to Tenant.
10. BUILDING SERVICES
Landlord shall furnish to the Premises, during usual business hours (8
a.m. to 6 p.m. on business days excluding Saturday, Sundays and
holidays), reasonable amounts of air conditioning and heat, and shall
furnish at all times a reasonable amount of electric current for normal
lighting and fractional horsepower office machines, water for lavatory
and drinking purposes, and janitorial and maintenance services.
Tenant agrees not to engage in any activity or to use any apparatus or
device in, upon, or about the Premises which may in any way increase
the amount of any of the foregoing usually furnished to the Premises.
11. TELEPHONES/FAX/MODEMS
Tenant shall pay Landlord promptly upon receipt of invoice(s) for
Tenant's telephone/fax/modem service charges and/or installation
charges (at Studio's standard rates for telephone calls made and basic
telephone/fax/modem instrument service and/or installation charges)
incurred as a result of Tenant's occupancy at the Premises.
12. ACCESS
Landlord and its agents shall have the right to enter the Premises, by
master key if necessary, at all reasonable times for the purpose of
examining or inspecting the same, showing the same to prospective
purchasers or tenants of the Building, and making such alterations,
repairs, improvements or additions to the Premises or to the Building
as Landlord may deem necessary or desirable.
<PAGE>
13. DAMAGE TO PROPERTY; INJURY TO PERSONS
Tenant agrees to indemnify, defend, and hold Landlord together with its
parent and affiliated companies, free and harmless against and from any
and all claims, damages, liabilities, losses, costs and expenses
arising from Tenant's use of the Premises or the conduct of Tenant's
business or profession or from anything done, in or about the Premises,
and shall further indemnify, defend and hold harmless Landlord against
and from any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under
the terms of this Lease, or arising from any act or negligence of the
Tenant, or of Tenant's agents, contractors, servants, licensees,
invitees or employees, and from and against all costs, attorneys' fees,
expenses and liabilities incurred in or concerning any such claim or
any action or proceeding brought thereon. If any action or proceeding
is brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. Tenant, as a material part
of the consideration to Landlord, hereby assumes all risk of damage to
property or injury to persons, in, upon or about the Premises from any
cause other than Landlord's sole negligence and Tenant hereby waives
all claims in respect thereof against Landlord. Tenant hereby waives
all rights of subrogation on behalf of any insurance company insuring
its interests in any real or personal property, so long as said waiver
does not violate any terms or conditions of any such insurance policy.
In addition, Tenant hereby agrees to be solely and fully responsible to
Universal Studios, Inc. and its Affiliates (collectively, for the
purposes of this paragraph, "Universal") for any loss of or damage to
Universal's property, whether personal or real, while such property is
in the use, custody, care and/or control of any of Tenant's employees,
officers, subcontractors, licensees or invitees, and shall pay to
Universal the full repair or replacement value of any such personal or
real property which is damaged, destroyed or otherwise suffers a loss
if such damage or loss is, directly or indirectly, caused by the
negligent (whether active or passive), wanton or intentional
misconduct of Tenant, its employees, officers, subcontractors,
licensees or invitees.
14. ASSIGNMENTS AND SUBLETTING
This Lease shall not, be sold, assigned, or hypothecated by Tenant or
by operation of law, and Tenant may not transfer this Lease, or sublet
the Premises or any part thereof or permit same to be occupied by
anyone other than Tenant or Tenant's employees without the prior
written consent of Landlord, which such consent shall be given or
withheld in Landlord's sole discretion; any attempt by Tenant to do so
without such prior written consent shall be void and at Landlord's
option shall terminate this Lease.
15. DEFAULTS
The occurrence of either the following shall constitute a material
breach of this Lease:
(a) The vacation or abandonment of the Premises by Tenant;
(b) A failure by Tenant to pay the Rent, or to make any other
payment required to be made by Tenant hereunder, or to comply
with any other provision of this Lease where such failure
continues for ten (10) days or more;
Landlord shall not be deemed to be in default in the
performance of any non-monetary obligation required to be
performed by Landlord hereunder unless: (i) Landlord fails to
commence performance of such non-monetary obligation within
thirty (30) days after written notice from Tenant specifying
Landlord's non-performance; and/or (ii) Landlord fails
thereafter to diligently prosecute the same to completion.
<PAGE>
16. REMEDIES
In the event of any material default or breach by Tenant, Landlord at
any time thereafter, at Landlord's option and without limiting
Landlord's exercise of any other right or remedy which Landlord may
have under law or equity by reason of such default or breach, with or
without notice or demand, may re-enter the Premises with or without
process of law and take possession of the same and of all equipment and
fixtures of Tenant therein, and expel or remove Tenant and all other
parties occupying the Premises, using such force as may be reasonably
necessary to do so, without being liable to any prosecution for such
re-entry or for the use of such force. In addition Landlord may:
(a) without terminating this Lease, at any time and from time to
time relet the Premises or any part thereof for the account of
Tenant, for such term, upon such conditions and at such rental
as Landlord may deem proper;
(b) give written notice to Tenant of Landlord's election to
terminate this Lease. Landlord shall thereupon be entitled to
recover from Tenant (1) the unpaid Rent up to and including
the date of termination, plus interest, {2) the excess, if
any, of the Rent and other charges required to be paid by
Tenant hereunder for the balance of the Term (if this Lease
had not been so terminated) over the then reasonable rental
value of the Premises for the same period, plus interest and
(3) any other amount necessary to compensate Landlord for
damages caused by or resulting from Tenant's breach, plus
interest.
17. RULES AND REGULATIONS
Tenant and all persons entering and/or using the Premises at Tenant's
request or with Tenant's permission shall observe faithfully and comply
strictly with such rules and regulations as Landlord may from time to
time reasonably adopt for the safety, care and cleanliness of the
Building or the preservation of good order therein, as more fully set
forth in Exhibit "C" attached hereto. Landlord shall not be liable to
Tenant for violation of any such rule or regulation by any other tenant
in the Building.
18. JURISDICTION
This Lease shall be governed by and construed pursuant to the laws of
the State of California for contracts wholly executed and fully
performed within the State of California.
19. END OF TERM
At the expiration of the Term, Tenant shall surrender the Premises to
Landlord in as good condition and repair as reasonable and proper use
will permit clean and free of debris. Tenant may remove, and at
Landlord's request shall remove, all of Tenant's trade fixtures,
personal property and signs, provided such removal will not
structurally injure the Premises, and Tenant agrees to restore the
Premises to its original condition, reasonable wear and tear excepted.
Also at the expiration of the Term, Tenant shall return to Landlord all
keys to the Premises and to the Building. Tenant understands and agrees
that if Tenant fails to return all keys to Landlord, Landlord may elect
to re-key the Building and/or Premises and charge Tenant for the full
cost thereof, in addition, the replacement cost for lost keys is $20.00
per key.
<PAGE>
20. OUIET POSSESSION
Upon Tenant's paying the rent and other charges and observing and
performing of all the covenants, conditions and provisions on Tenant's
part, Tenant shall have quiet possession of the Premises for the entire
Term, subject to the provisions of this Lease. This Lease, however,
shall at all times be subject and subordinate to any and all now
effective or hereafter executed deeds of trust or ground leases which
may now or hereafter affect Landlord's estate in the real property of
which the Premises are a part.
21. NOTICES
Any notice required or permitted to be given hereunder may be given by
personal delivery or sent by Certified or Registered Mail addressed to
Tenant at the Premises or to Landlord c/o Office Space Management,
Building 480/3,100 Universal City Plaza, Universal City, California
91608, as the case may be (with a copy of the notice to Landlord sent
to the attention of Studio Business Affairs, Building 507A/4, at the
same address). Either party may by written notice to the other party
specify a different address for notice purposes, except that Landlord
may in any event always use the Premises as Tenant's address for notice
purpose.
22. INSURANCE
Tenant agrees to secure, maintain, and pay the premium for the
following insurance coverage during the entire Term of this Lease,
together with any special endorsements as specified:
(a) Statutory Workers' Compensation or State approved Self
Insurance and Employer's Liability with a limit of liability
not less than $1,000,000 each accident, $1,000,000 policy
limit, $1,000,000 each employee, for all persons employed by
Tenant who may come onto or occupy the demised premises.
Tenant shall have its carrier waive any right of subrogation
thereunder against Universal Studios, Inc. and its Affiliates.
(b) Commercial/Comprehensive General Liability, and Commercial
Auto Liability for all Owned, Non Owned, or Hired vehicles
which are brought onto or used adjacent to the Premises. The
General Liability must be written on a CGOO01 11/85 ISO form
or broader, with no additional exclusions, and shall include
Personal & Advertising Injury, Blanket Contractual Liability,
Broad Form Property Damage, Fire Legal Liability, Severability
of Interest, Primary and Not Contributory Endorsement, and XCU
(Explosion, Collapse, and Underground), with a limit of
liability not less than $3,000,000 per occurrence. The limit
of liability for the Commercial Auto Liability shall not be
less than $1,000,000 Combined Single Limit.
(c) Tenant shall cause its liability carrier(s) in subparagraph
(b) hereinabove to name Universal Studios, Inc. and its
Affiliates as Additional Insureds, but only as respects the
occupancy of Tenant in the Premises.
(d) Evidence of Property Insurance with Special Form Causes of
Loss on Replacement Cost basis, attached to a Lender's Loss
Payable Endorsement, with adequate limits of loss to cover
Universal Studios, Inc. and its Affiliates' Real and Personal
Property. In addition, Evidence of Personal Property Insurance
as respects Tenant's personal property including but not
limited to Furniture, Fixture, Equipment, Improvements, and
Office Contents, whether owned, leased, or rented, while on
Landlord's premises. This latter coverage shall include a
Waiver of Subrogation against Universal Studios, Inc. and its
Affiliates.
<PAGE>
All insurance policies shall be written by A+ Best rated insurance
companies which are reasonably satisfactory to Landlord. Tenant shall
provide prior to occupancy, and annually thereafter, satisfactory
original certificates of insurance on standard Accord forms or other
forms acceptable to Landlord, as well as endorsements, and/or copies of
insurance policies, evidencing Tenant's compliance with the minimum
requirements as specified hereinabove.
The certificate(s) of insurance supplied by Tenant to Landlord shall
specify thirty (30) days written notice of cancellation for
non-renewal, failure to renew, non-payment of insurance premium(s), or
material reduction. In the event Tenant fails to obtain any insurance
as required in this Lease, Landlord may obtain such insurance on behalf
of Tenant and the cost thereof shall be paid by Tenant as additional
rent with the first payment of rent which is due subsequent to
Landlord's incurring any such costs.
In the event that Tenant should desire to perform any production
activities on Landlord's property, Tenant is required to comply with
the additional, production-related insurance requirements established
by Landlord. It is Tenant's obligation to inquire of Landlord what
these requirements are, and to provide a satisfactory certificate of
insurance therefor, prior to the commencement of any such production
activities.
23. PAST DUE OBLIGATIONS
Any amount due from Tenant to Landlord hereunder which is not paid when
due shall be subject to a late charge in the amount of 6% of the amount
unpaid and shall in addition bear interest at the maximum rate then
permitted by law calculated from the due date until paid. Payment of
such late charge or interest or both shall not excuse or cure any
default by Tenant. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant.
24. HOLDING OVER
If Tenant holds over and beyond the Term of this Lease with or without
the consent of Landlord, such holding shall be construed as a tenancy
at will, subject to the terms and conditions of this Lease except that
Tenant will pay rent during the entire holdover period at a rate which
is equal to two times the Monthly Rent in effect during the last month
of the Term and shall also be liable for any damages or other costs
incurred by Landlord as a result of such holding over.
25. INABILITY TO PERFORM
This Lease and the obligations of Tenant hereunder shall not be
affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so because of strike,
other labor troubles or any other cause beyond the reasonable control
of Landlord.
26. NAME
Tenant shall not use the name of the Building for any purpose other
than as the address of the business or profession to be conducted by
Tenant in the Premises.
<PAGE>
27. SEVERABILITY
Any provision of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provisions shall remain in full force
and effect.
28. ATTORNEY'S FEES
If Landlord or Tenant should bring suit for any relief against the
other arising out of this Lease, then all costs and expenses, including
reasonable attorney's fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of such
other party shall be deemed to have accrued on the date of the
commencement of such action, and shall be enforceable whether or not
the action is prosecuted to judgment.
29. ADDITIONAL GOODS/SERVICES
Tenant agrees to pay for any goods and/or services it may request from
Landlord, beyond those which are specifically provided to Tenant under
the provisions of this Lease, at Landlord's standard and customary
charges therefor.
30. TIME OF ESSENCE
Time is of the essence with respect to the performance of every
provision of the Lease in which time of performance is a factor.
31. HEADINGS
The captions contained in this Lease are for convenience only and shall
not be considered in the construction or interpretation of any
provision.
32. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS
This Lease contains all of the agreements of the parties hereto with
respect to the subject of this Lease, and no prior agreement or
understanding pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except
by an agreement in writing signed by the parties hereto or their
respective successors in interest.
IN WITNESS WHEREOF the parties have executed this Lease the day and year first
above written.
"Landlord"
UNIVERSAL CITY STUDIOS, INC.
By: /s/ Terry White
--------------------
Vice President
"Tenant"
BELLACASA PRODUCTIONS
By: /s/ Frank LaLoggia
-----------------------
Title: President, CEO
<PAGE>
EXHIBIT "A"
PARKING AGREEMENT
TENANT or persons designated by TENANT shall be entitled to parking as provided
in Paragraph l(f) of the Lease, as such rate and/or parking locations may change
from time to time, upon advance notice from LANDLORD. TENANT may validate
visitor parking by such method of methods as the undersigned may approve, at the
validation rate generally applicable to visitor parking.
A condition of any parking shall be compliance by the parker with parking rules
and regulations, including any sticker or other identification system
established by LANDLORD as its Parking Operator. LANDLORD reserves the right to
modify and/or adopt such other reasonable and nondiscriminatory rules and
regulations as it deems necessary for the operation. LANDLORD may refuse to
permit any person who violates the within rules to park in the parking facility,
and any violation of the rules shall subject the car to removal. In either of
said events, LANDLORD shall refund a pro rata portion of the current parking
rate and the sticker, or any other form of identification supplied by LANDLORD,
will be returned to LANDLORD. LANDLORD shall have no obligation to provide any
parking spaces for campers, trailers, motor homes or other non-standard sized
vehicles.
RULES AND REGULATIONS
1. Hours shall be 7:00 A.M. to 7:00 P.M., on Monday through Friday,
excluding holidays.
2. Cars must be parked entirely within the painted stall lines.
3. All directional signs and arrows must be observed.
4. The speed limit shall be 15 miles per hour.
5. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles;
(c) where "no parking" signs are posted;
(d) on ramps;
(e) in crosshatched area;
(f) in such other areas as may be designated by LANDLORD or
Landlord's Parking Operator.
6. Parking stickers or any other device or form of identification supplied
by LANDLORD shall remain the property of LANDLORD. Such parking
identification device must be displayed as requested and may not be
mutilated in any manner. The serial number of the parking
identification device may not be obliterated. Devices are not
transferable and any device in the possession of any unauthorized
holder will be void. There will be a replacement charge to the TENANT
or person designated by TENANT of $35.00 for loss of any magnetic
parking card. Any automobile parked without such identification device
or stickers may be towed away at the expense of the OWNER as provided
by the applicable City or County Ordinance.
<PAGE>
7. Monthly rate for rental of parking space is payable one (1) month in
advance and must be paid prior to the first day of each month. Failure
to do so will automatically cancel parking privileges and a charge at
the prevailing daily rate will be due. No deductions or allowances from
the monthly rate will be made for days customer does not use parking
facilities.
8. Parking managers or attendants are not authorized to make or allow any
exceptions to these Rules and Regulations.
9. Every parker is required to park and lock his own car. All
responsibility for damage to cars is assumed by the parker.
10. Loss or theft of parking identification devices from automobiles must
be reported to the garage manager immediately, and a lost or stolen
report must be filed by the customer at that time.
(a) Any parking identification devices reported lost or stolen
found on any unauthorized car will be confiscated and the
illegal holder will be subject to prosecution.
(b) Lost or stolen devices found by the purchaser must be reported
to the office of LANDLORD or its Parking Operator immediately
to avoid confusion.
11. Spaces rented to persons are for the express purpose of parking one (1)
automobile per space. Washing, waxing, cleaning or servicing of any
vehicles by the customer and/or his agents is prohibited.
12. The LANDLORD or its Parking Operator reserves the right to refuse the
sale of monthly stickers or other parking identification devices to any
TENANT or person and/or his agents or representatives who willfully
refuse to comply with the above Rules and Regulations and all unposted
City, State or Federal ordinances, laws or agreements.
13. LANDLORD shall not be liable and TENANT hereby waives any and all
claims for theft, fire damage, or loss of use to any automobile or
motor vehicles or for articles left therein while parked in any of
LANDLORD's parking facilities.
14. LANDLORD shall not be liable to TENANT for damages or otherwise, not
shall LANDLORD be in default hereunder, because of TENANT's inability
to park in the parking facility and/or any assigned space therein due
to force majeure or any other cause beyond LANDLORD's control, and
there shall be no abatement of the parking charge unless such condition
continues for at least five (5) consecutive business days.
15. TENANT agrees to acquaint all persons to whom TENANT assigns parking
spaces with these Rules and Regulations.
EXHIBIT "A"
Page 2 of 2
<PAGE>
EXHIBIT "B"
STANDARDS FOR UTILITIES AND SERVICES
The following are the Standards for Utilities and Services. LANDLORD reserves
the right to adopt such reasonable non-discriminatory modifications and
additions hereto as it deems appropriate.
As long as TENANT is not in default under any of the terms, covenants,
conditions, provisions or agreements of this Lease, LANDLORD shall, subject to
limitations and provisions hereinafter set forth in this Exhibit B:
(a) ELEVATORS:
Provide manual or automatic elevator facilities during usual
business hours from 8:00 A.M. to 6:00 P.M. and have at least
one (1) elevator available at all other times.
(b) HVAC
Provide to the Premises, during usual business hours (8 a.m.
to 6 p.m. on business days excluding Saturdays, Sundays and
holidays), heating, ventilation, and air conditioning (HVAC),
when in the judgment of LANDLORD it may be required for the
comfortable occupancy of Premises for general office purposes.
The HVAC system achieves maximum cooling when the sliding
glass doors and drapes are closed. LANDLORD shall not be
responsible for room temperatures if TENANT does not keep all
sliding glass doors and drapes in the Premises closed, if
TENANT's lighting and receptacle load exceed those listed in
Paragraph (c) hereof, or if the Premises or portions thereof
are used for other than the particular use for which they were
originally designed.
Landlord shall, upon reasonable advance notice from Tenant,
furnish Tenant HVAC services at any time or times other than
the regular hours specified above. Such overtime service shall
be furnished to Tenant at a reasonable hourly rate card cost
to be established by Landlord.
(c) ELECTRICITY:
Furnish to the Premises, during the times specified in
Paragraph (a) hereof, electric current as required by the
Building standard office lighting and receptacles
(approximately three (3) watts per square foot).
(d) WATER:
Furnish water for drinking fountains and restrooms provided by
LANDLORD.
(e) JANITORIAL:
Provide janitorial services to the Premises, provided the same
are used exclusively as offices, and are kept reasonable in
order by TENANT. If Premises are not used exclusively as
offices, they shall be kept clean and in order by TENANT, at
TENANT's expense, and to the satisfaction of LANDLORD. TENANT
shall pay to LANDLORD the cost of removal of any TENANT's
refuse and rubbish, to the extent that the same exceeds the
refuse and rubbish usually attendant upon the use of Premises
for general office purposes.
<PAGE>
No data processing equipment, other special electrical
equipment, air conditioning or heating units, or plumbing
additions (Additional Equipment) shall be installed, nor shall
any changes to the Building HVAC, electrical or plumbing
systems be made without prior written approval of LANDLORD and
LANDLORD reserves the right to designate and/or approve the
contractor to be used. In the event TENANT desires to add
Additional Equipment in the Premises, such Additional
Equipment shall be at TENANT's sole cost and expense,
including installation, connection to Building systems,
operational costs and maintenance. During the term of this
Lease, provided that TENANT is not then in default hereunder,
LANDLORD agrees to provide TENANT, and TENANT agrees to pay
the cost of, the necessary utilities from the Building systems
for the operation of such Additional Equipment.
TENANT shall be responsible for any and all damages of any
kind or nature to the Premises, Building, Common Areas, or
other TENANTs' Premises (including without limitation, real
and personal property) and for injuries of any kind or nature
to any person arising out of, or as a result of, such
Additional Equipment, its operation, maintenance, or
installation.
<PAGE>
EXHIBIT "C"
RULES AND REGULATIONS WHICH CONSTITUTE A PART OF THE LEASE
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any
purpose other than ingress and egress. All doors opening onto public
corridors, plazas and patios shall be kept closed, except when in use
for egress or ingress.
2. No awnings or other projections shall be attached to the outside walls
of the Building. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door
of the Premises other than LANDLORD standard drapes. All electric
ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be fluorescent, of a quality, type, design and bulb color
approved by LANDLORD. Neither the interior nor exterior of any windows
shall be coated or otherwise sunscreened without written consent of
LANDLORD.
3. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by any TENANT on any part of the
Premises of the Building without the prior written consent of the
LANDLORD. In the event of the violation of the foregoing by any TENANT,
LANDLORD may remove same without any liability, and may charge the
expense incurred in such removal to the TENANT violating this rule.
Interior signs on doors and directory tablet shall be inscribed,
painted or affixed for each TENANT by the LANDLORD at the expense of
such TENANT, and shall be a size, color and style acceptable to the
LANDLORD. The directory tablet will be provided exclusively for the
display of the name and location of TENANTS only. Nothing may be placed
on the exterior of corridor walls or corridor doors other than
LANDLORD's standard lettering.
4. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into halls, passageways or other public places in
the Building shall not be covered or obstructed by any TENANT.
5. The toilets and wash basins and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed,
and no sweepings, rubbish, rags, or other substances shall be thrown
therein. All damages resulting from any misuse of the fixtures shall be
borne by the TENANT who, or whose servants, employees, agents, visitors
or licensees, shall have caused the same.
6. No TENANT shall mark, paint, drill into, or in any way deface any part
of the Premises or the Building. No boring, cutting or stringing of
wires or laying of linoleum or other similar floor coverings shall be
permitted, except with the prior written consent of the LANDLORD and as
the LANDLORD may direct.
7. No bicycles, vehicles, birds or animals of any kind shall be brought
into or kept in or about the Premises. No cooking shall be done or
permitted by any TENANT on the Premises, except that the preparation of
coffee, tea, hot chocolate and similar items for TENANTS and their
employees shall be permitted provided power shall not exceed that
amount which can be provided by a 30 amp circuit. No TENANT shall cause
or permit any unusual or objectionable odors to be produced or permeate
the Premises.
<PAGE>
8. The Premises shall not be used for manufacturing or for the storage of
merchandise, except as such storage may be incidental to the use of the
Premises for general office purposes. No TENANT shall occupy or permit
any portion of his Premises to be occupied as an office for a public
stenographer or typist or for the manufacture of sale of liquor,
narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express
written consent of LANDLORD. No TENANT shall engage or pay any
employees on the Premises, except those actually working for such
TENANT on the Premises, nor advertise for laborers giving any address
at the Premises. The Premises shall not be used for lodging or
sleeping, or for any immoral or illegal purposes.
9. No TENANT shall make, or permit to be made, any unseemly or disturbing
noises, or odors, or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them,
whether by the use of any musical instrument, radio, phonograph,
unusual noise, or in any other way.
10. No TENANT nor any of TENANT's servants, employees, agents, visitors or
licensees, shall at any time bring or keep upon the Premises any
inflammable, combustible or explosive fluid, chemical or substance.
11. All persons operating vehicles or working within the confines of the
Studio property shall comply with the reasonable directions of the
Studio's security personnel which are designed to insure the safety and
security of all persons and businesses, as well as the smooth operation
of the Studio.
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EXHIBIT "D"
SQUARE FOOTAGE DEFINITIONS AND CALCULATIONS
The square footage of the Premises has been calculated on the basis of
Rentable Area. The following definitions shall apply in said calculation:
1. USEABLE AREA shall mean the following area or areas of space within the
Premises, calculated as follows:
(a) Useable Area for a Single-tenant Floor shall mean the area
exclusively used and occupied by Tenant calculated by
measuring from the center line of the outer glass wall of the
Building to the center line of the opposite glass wall and
shall include all areas within such outside walls; excepting,
however, toilet rooms, electrical and mechanical closets, and
fan, air-conditioning and maintenance rooms, public stairs,
elevator shafts, elevator machine rooms, flues, vents, stacks,
pipe shafts and vertical ducts and their enclosing walls
(measured to the centerline of such walls).
(b) Useable Area for a Multi-tenant Floor shall mean the area
exclusively used and occupied by Tenant calculated by
measuring from the center line of the outer glass wall of the
Building to the center line of partitions which separate
adjoining Common Areas or adjoining premises (as the case may
be), with no deductions therefrom for columns or projections
necessary to the Building.
2. RENTABLE AREAS shall mean the following area or areas of space within
the Premises or the Building, calculated as follows:
(a) Rentable Area for a Single-tenant Floor shall be determined by
measuring from the center line of the outer glass wall of the
Building to the center line of the opposite outer glass wall
and shall include all areas within such outside walls,
including, without limitation, all toilet rooms, elevator
lobbies, corridors, janitor closets, electrical and mechanical
closets, and fan, air conditioning and maintenance rooms, and
shall exclude only the areas within the Building occupied by
public stairs, fire towers, elevator shafts, elevator machine
rooms, flues, vents, stacks, pipe shafts, and vertical ducts
and their enclosing walls, measured to the center line of such
walls, but including in rentable square feet any such service
areas which are for the exclusive use or specific benefit of
the tenant, such as special stairs, shafts or elevators. No
deductions shall be made for columns or projections necessary
to the Building.
(b) Rentable Area for a Multi-tenant Floor shall be determined by
measuring from the center line of the outer glass wall of the
Building to the center line of the wall separating areas
leased by or held for lease to other tenants or Common Areas
located on the same floor plus Tenant's Proportionate Share
(as defined hereinbelow), of the Common Areas on such floor,
other than public stairs, fire towers, elevator shafts,
elevator machine rooms, flues, vents, stacks, pipe shafts and
vertical ducts and their enclosing walls measured to the
center line of such walls. No deductions shall be made for
columns or projections necessary to the Building.
<PAGE>
3. COMMON AREAS means, on individual floors of the Building, the areas
devoted to corridors, foyers, lobbies, electrical and telephone
closets, restrooms, mechanical rooms, janitor closets and other similar
facilities when used in common with other tenants.
4. TENANT'S PROPORTIONATE SHARE means, for a tenant on any given
multi-tenant floor, an equitable percentage allocation of the Common
Areas on such floor, derived by comparing the Useable Area of Tenant's
Premises with the remaining Useable Area on said floor which is either
leased or available for lease to other tenants.
BELLACASA PRODUCTIONS, INC.
1998 STOCK OPTION PLAN
1. PURPOSE
This BellaCasa Productions, Inc. 1998 Stock Option Plan ("the Plan") is
intended to promote the interests of the Corporation by providing eligible
individuals who are responsible for the management, growth and financial success
of the Corporation or who otherwise render valuable services to the Corporation
with the opportunity to acquire a proprietary interest, or increase their
proprietary interest, in the Corporation and thereby encourage them to remain in
the service of the Corporation.
Capitalized terms used herein shall have the meanings ascribed to
such terms in Paragraph 5.
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board. The Board, however,
may at any time appoint a committee ("Committee") of two (2) or more Board
members and delegate to such Committee one or more of the administrative powers
allocated to the Board pursuant to the provisions of the Plan. Members of the
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time. The Board may also at any
time terminate the functions of the Committee and reassume all powers and
authority previously delegated to the Committee.
(b) The Plan Administrator (either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper plan administration and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option grants or share
issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or share issuance.
3. ELIGIBILITY
(a) The persons eligible to receive option grants pursuant to the Plan
(each an "Optionee") are limited to the following:
(1) key employees (including officers and directors) of the Corporation
(or its parent or subsidiary corporations, if any) who render services which
contribute to the success and growth of the Corporation (or any parent or
subsidiary corporations) or which may reasonably be anticipated to contribute to
the future success and growth of the Corporation (or any parent or subsidiary
corporations);
(2) the non-employee members of the Board or the non-employee members
of the board of directors of any parent or subsidiary corporations; and
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(3) those consultants or independent contractors who provide valuable
services to the Corporation (or any parent or subsidiary corporations).
(b) The Plan Administrator shall have full authority to determine, with
respect to the option grants made under the Plan, which eligible individuals are
to receive option grants, the number of shares to be covered by each such grant,
the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times at which each granted option is to
become exercisable and the maximum term for which the option may remain
outstanding.
4. STOCK SUBJECT TO THE PLAN
(a) The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock, $0.0001 par
value (the "Common Stock"). The maximum number of shares which may be issued
over the term of the Plan shall not exceed Three Million (3,000,000) shares of
Common Stock. The total number of shares issuable under the Plan shall be
subject to adjustment from time to time in accordance with the provisions of
Section 4(c).
(b) Shares subject to (i) the portion of one or more outstanding
options which are not exercised or surrendered prior to expiration or
termination and (ii) outstanding options canceled in accordance with the
cancellation-regrant provisions of Section 9 will be available for subsequent
option grants or stock issuances under the Plan.
(c) In the event any change is made to the Common Stock issuable under
the Plan by reason of any stock dividend, stock split, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without receipt of consideration, then appropriate adjustments shall be
made to (i) the aggregate number and/or class of shares issuable under the Plan
and (ii) the aggregate number and/or class of shares and the option price per
share in effect under each outstanding option in order to prevent the dilution
or enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
(d) Common Stock issuable under the Plan may be subject to such
restrictions on transfer, repurchase rights or other restrictions as may be
determined by the Plan Administrator.
5. DEFINITIONS
The following definitions shall apply to the respective capitalized
terms used herein:
BOARD means the Board of Directors of BellaCasa Productions, Inc.
CODE means the Internal Revenue Code of 1986, as amended.
CORPORATION means BellaCasa Productions, Inc. and its successors.
CORPORATE TRANSACTION means one or more of the following transactions:
(a) a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state of the Corporation's incorporation, (b) the sale, transfer or other
disposition of all or substantially all of the assets of the Corporation, or (c)
any reverse merger in which the Corporation is the surviving entity but in which
fifty percent (50%) or more of the Corporation's outstanding voting stock is
transferred to holders different from those who held the stock immediately prior
to such merger.
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EMPLOYEE means an individual who is in the employ of the Corporation or
one or more Parent or Subsidiary corporations (if any). An optionee shall be
considered to be an Employee for so long as such individual remains in the
employ of the Corporation or one or more Parent or Subsidiary corporations,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance.
EXERCISE DATE shall be the date on which written notice of the exercise
of an outstanding option under the Plan is delivered to the Corporation. Such
notice shall be in the form of a stock purchase agreement.
FAIR MARKET VALUE of a share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(a) If the Common Stock is at the time listed or admitted to trading on
any stock exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the stock exchange
determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Common Stock on such exchange
on the date in question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.
(b) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-counter market, the
Fair Market Value shall be the mean between the highest bid and the lowest asked
prices (or, if such information is available, the closing selling price) per
share of Common Stock on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through its NASDAQ National Market System or any successor system. If there are
no reported bid and asked prices (or closing selling price) for the Common Stock
on the date in question, then the mean between the highest bid and lowest asked
prices (or closing selling price) on the last preceding date for which such
quotations exist shall be determinative of Fair Market Value.
(c) If the Common Stock is at the time neither listed nor admitted to
trading on any stock exchange nor traded in the over-the-counter market, or if
the Plan Administrator determines that the valuation provisions of subparagraphs
(a) and (b) above will not result in a true and accurate valuation of the Common
Stock, then the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator shall deem
appropriate under the circumstances.
INCENTIVE OPTION means an Incentive Stock Option which satisfies the
requirements of Section 422 of the Code.
NON-STATUTORY OPTION means an option not intended to meet the statutory
requirements prescribed under the Code for an Incentive Option.
PARENT corporation means any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
such corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
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PERMANENT DISABILITY means the inability of an individual to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
12 months.
PLAN means this BellaCasa Productions, Inc 1998 Stock Option Plan.
PLAN ADMINISTRATOR means the Board or the Committee, to the extent the
Committee is responsible for plan administration in accordance with Section 2.
SERVICE means the performance of services for the Corporation or one or
more Parent or Subsidiary corporations by an individual in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, unless a different meaning is specified in the option
agreement evidencing the option grant or the purchase agreement evidencing the
purchased option shares. An Optionee shall be deemed to remain in Service for so
long as such individual renders services to the Corporation or any Parent or
Subsidiary corporation on a periodic basis in the capacity of an Employee, a
non-employee member the board of directors or an independent consultant or
advisor.
SUBSIDIARY corporation means each corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
TEN PERCENT SHAREHOLDER means the owner of stock (as determined under
Section 424(d) of the Code) possessing ten percent or more of the total combined
voting power of all classes of stock of the Corporation or any Parent or
Subsidiary corporation.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by action of
the Plan Administrator and may, at the discretion of the Plan Administrator, be
either Incentive Options or Non-Statutory Options. Each granted option shall be
evidenced by one or more instruments in the form approved by the Plan
Administrator; PROVIDED, HOWEVER, that each such instrument shall comply with
and incorporate the terms and conditions specified below. In addition, each
instrument evidencing an Incentive Option shall be subject to the applicable
provisions of Section 7.
(a) OPTION PRICE
(1) The option price per share shall be fixed by the Plan
Administrator.
(2) The option price shall become immediately due upon exercise of the
option, and subject to the provisions of Section 11, shall be payable in cash or
check drawn to the Corporation's order. Should the Corporation's outstanding
Common Stock be registered under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "1934 Act") at the time the option is exercised, then the
option price may also be paid as follows:
(A) in shares of Common Stock held by the optionee for the requisite
period necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or
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<PAGE>
(B) through a special sale and remittance procedure pursuant to which
the Optionee (i) is to provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds, an amount sufficient to cover the
aggregate option price payable for the purchased shares plus all applicable
Federal and State income and employment taxes required to be withheld by the
Corporation by reason of such purchase and (ii) concurrently provides written
directives to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to effect the sale transaction.
(b) TERM AND EXERCISE OF OPTIONS
Each option granted under the Plan shall be exercisable at
such time or times, during such period, and for such number of shares as shall
be determined by the Plan Administrator and set forth in the stock option
agreement evidencing such option. However, no option granted under the Plan
shall have a term in excess of ten (10) years from the grant date.
(c) TERMINATION OF SERVICE
(1) The Plan Administrator shall have complete discretion to limit the
period of time that an option granted under the Plan may be exercised should the
Optionee cease to remain in Service for any reason (including death or Permanent
Disability). In no event, however, shall any such option be exercisable after
the specified expiration date of the option term. During such limited period of
exercisability, the option may not be exercised for more than that number of
shares (if any) for which such option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of such period or (if
earlier) upon the expiration of the option term, the option shall terminate and
cease to be exercisable.
(2) Notwithstanding subsection (1) above, the Plan Administrator shall
have complete discretion, exercisable either at the time the option is granted
or at the time the Optionee ceases Service, to allow one or more outstanding
options held by the Optionee to be exercised, during the period of
exercisability following the Optionee's cessation of Service, not only with
respect to the number of shares for which the option is exercisable
(3) Notwithstanding any provision of this Plan to the contrary, any
options granted under this Plan shall terminate as of the date the Optionee
ceases to be in the Service of the Corporation if the Optionee was terminated
for "cause" or could have been terminated for "cause." If the Optionee has an
employment or a consulting agreement with the Corporation, the term "cause"
shall have the meaning given that term in the employment or consulting
agreement. If the Optionee does not have an employment or consulting agreement
with the Corporation, or if such employment or consulting agreement does not
define the term "cause," the term "cause" shall mean: (A) misconduct or
dishonesty that materially adversely affects the Corporation, including without
limitation (i) an act materially in conflict with the financial interests of the
Corporation, (ii) an act that could damage the reputation or customer relations
of the Corporation, (iii) an act that could subject the Corporation to
liability, (iv) an act constituting sexual harassment or other violation of the
civil rights of coworkers, (v) failure to obey any lawful instruction of the
Board or any officer of the Corporation and (vi) failure to comply with, or
perform any duty required under, the terms of any confidentiality, inventions or
non-competition agreement the Optionee may have with the Corporation, or (B)
acts constituting the unauthorized disclosure of any of the trade secrets or
confidential information of the Corporation, unfair competition with the
Corporation or the inducement of any customer of the Corporation to breach any
contract with the Corporation. The right to exercise any option shall be
suspended automatically during the pendency of any investigation by the Board,
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or its designee, and/or any negotiations by the Board, or its designee, and the
Optionee, regarding any actual or alleged act or omission by the Optionee of the
type described in this paragraph.
(d) SHAREHOLDER RIGHTS. An Optionee shall have none of the rights of a
shareholder with respect to any shares covered by the option until such Optionee
shall have exercised the option and paid the option price.
(e) TRANSFERABILITY. Unless otherwise specified in the Agreement
relating to an option, options granted hereunder may be transferable (i) by will
or the laws of descent and distribution, (ii) pursuant to beneficiary
designation procedures approved by the Company, (iii) pursuant to a domestic
relations order, (iv) to one or more family members of the optionee, (v) to a
trust or trusts for the exclusive benefit of the optionee and/or one or more
family members of the optionee, (vi) to a partnership in which the optionee
and/or one or more family members of the optionee are the only partners, (vii)
to a limited liability company in which the optionee and/or one or more family
members of the optionee are the only members, or (viii) to such other persons or
entities as may be specified in the agreement relating to an option or approved
in writing by the Committee prior to such transfer. Except to the extent
permitted by the preceding sentence, each option may be exercised during the
optionee's lifetime only by the optionee or the optionee's legal representative
or similar person. Except as permitted by the second preceding sentence, (i) no
option granted hereunder shall be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process and (ii)
upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any option granted hereunder, such option and all rights
thereunder shall immediately become null and void.
7. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan. Incentive Options may only be granted
to individuals who are Employees. Options which are specifically designated as
Non-Statutory Options when issued under the Plan shall NOT be subject to such
terms and conditions.
(a) OPTION PRICE. The option price per share of the Common Stock
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the grant
date; provided, if the individual to whom the option is granted is at the time a
Ten Percent Shareholder, then the option price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value of the Common Stock on
the grant date.
(b) DOLLAR LIMITATION. The aggregate Fair Market Value (determined as
of the respective date or dates of grant) of the Common Stock for which one or
more options granted to any Employee under this Plan (or any other option plan
of the Corporation or any Parent or Subsidiary corporation) may for the first
time become exercisable as Incentive Stock Options under the Federal tax laws
during any one calendar year shall not exceed the sum of one hundred thousand
dollars ($100,000). To the extent the Employee holds two or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability thereof as Incentive Options under
the Federal tax laws shall be applied on the basis of the order in which such
options are granted.
(c) OPTION TERM FOR TEN PERCENT SHAREHOLDER. No option granted to a Ten
Percent Shareholder shall have a term in excess of five (5) years from the grant
date.
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(d) ACCELERATED TERMINATION OF OPTION TERM. The option term shall
terminate prior to the expiration date established by the Plan Administrator
should any of the following provisions become applicable:
(1) Except as otherwise provided in subparagraph (2) or (3) below,
should an Optionee cease to remain in Service while his/her option is
outstanding, then the period for exercising his/her option shall be reduced to a
three (3) month period commencing with the date of such cessation of Service,
but in no event shall such option be exercisable at any time after the
expiration date. Upon the expiration of such three (3) month period or (if
earlier) upon the expiration date, the option shall terminate and cease to be
outstanding.
(2) Should the Optionee die while his/her option is outstanding,
his/her option shall cease to be exercisable, upon the EARLIER of (a) the
expiration of the twelve (12) month period measured from the date of Optionee's
death or (b) the expiration date of the option. Upon the expiration of such
twelve (12) month period or (if earlier) upon the expiration date, the option
shall terminate and cease to be outstanding.
(3) Should the Optionee become Permanently Disabled and cease by reason
thereof to remain in Service while his/her option is outstanding, then the
Optionee shall have a period of twelve (12) months (commencing with the date of
such cessation of Service) during which to exercise his/her option, but in no
event shall this option be exercisable at any time after the expiration date of
the option. Upon the expiration of such limited period of exercisability or (if
earlier) upon the expiration date, his/her option shall terminate and cease to
be outstanding.
(4) During the limited period of exercisability applicable under
subparagraphs (1), (2), or (3) above, the Optionee's option may be exercised for
any or all of the option shares in which the Optionee, at the time of cessation
of Services, is vested in accordance with the exercise/vesting provisions
specified in his/her stock option documents.
(e) TRANSFERABILITY. An Incentive Option shall not be transferable
otherwise than by will or the laws of descent and distribution and may be
exercisable during the Optionee's lifetime only by such Optionee or the
Optionee's legal representative or similar person.
Except as modified by the preceding provisions of this Section 7, all
the provisions of the Plan shall be applicable to the Incentive Options granted
hereunder.
8. CORPORATE TRANSACTION
(a) In the event of any Corporate Transaction, each option outstanding
under the Plan shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless assumed by the successor
corporation or parent thereof.
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(b) In connection with any such Corporate Transaction, the Plan
Administrator may, at its sole discretion, (i) accelerate each or any
outstanding option under the Plan so that each or any such option shall,
immediately prior to the specified effective date for such Corporate
Transaction, become fully exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and may be exercised for all
or any portion of such shares, (ii) arrange for each or any outstanding option
to either to be assumed by the successor corporation or parent thereof or to be
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation or parent thereof, (iii) arrange for the option to be
replaced by a comparable cash incentive program of the successor corporation
based on the option spread (the amount by which the Fair Market Value of the
shares of Common Stock at the time subject to the option exceeds the option
price payable for such shares) or (iv) take none of the actions described in
clauses (i), (ii) or (iii) above and allow the option to terminate as provided
in Section 2(a) above. The determination of comparability under clauses (ii) and
(iii) above shall be made by the Plan Administrator, and such determination
shall be final and conclusive.
(c) The exercisability as Incentive Stock Options under the Federal tax
laws of any options accelerated in connection with the Corporate Transaction
shall remain subject to the applicable dollar limitation of subsection 7(b).
(d) If the outstanding options under the Plan are assumed by the
successor corporation (or parent thereof) in the Corporate Transaction or are
otherwise to continue in effect following such Corporate Transaction, then each
such assumed or continuing option shall, immediately after such Corporate
Transaction, be appropriately adjusted to apply and pertain to the number and
class of securities or other property that would have been issuable to the
option holder, in consummation of the Corporate Transaction, had the option been
exercised immediately prior to such Corporate Transaction.
(e) The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
9. CANCELLATION AND NEW GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefore new options under the Plan covering the same or different
numbers of shares of Common Stock but having, in the case of an Incentive
Option, an option price per share not less than one hundred percent (100%) of
such Fair Market Value per share of Common Stock on the new grant date, or, in
the case of a Ten Percent Shareholder, not less than one hundred and ten percent
(110%) of such Fair Market Value.
10. EXTENSION OF EXERCISE PERIOD
The Plan Administrator shall have full power and authority to extend
(either at the time when the option is granted or at any time while the option
remains outstanding) the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service, from the limited
period set forth in the option agreement, to such greater period of time as the
Plan Administrator may deem appropriate under the circumstances. In no event,
however, shall such option be exercisable after the specified expiration date of
the option term.
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11. LOANS
(a) The Plan Administrator may assist any Optionee (including an
Optionee who is an officer or director of the Corporation) in the exercise of
one or more options granted to such Optionee under the Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by:
(1) authorizing the extension of a loan from the Corporation to such
Optionee, or
(2) permitting the Optionee to pay the option price for the purchased
Common Stock in installments over a period of years.
(b) The terms of any loan or installment method of payment (including
the interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans or installment payments may be
granted with or without security or collateral; however, any loan made to a
consultant or other non-employee director must be secured by property other than
the purchased shares of Common Stock. In all events, the maximum credit
available to each may not exceed the SUM of (i) the aggregate option price
payable for the purchased shares less the aggregate par value for such shares
plus (ii) any Federal and State income and employment tax liability incurred by
the Optionee in connection with such exercise.
(c) The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under the financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions the Board in its discretion deems appropriate.
12. AMENDMENT OF THE PLAN AND AWARDS
(a) The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever. However, no such
amendment or modification shall adversely affect the rights and obligations of
an Optionee with respect to options at the time outstanding under the Plan, nor
adversely affect the rights of any Participant with respect to Common Stock
issued under the Plan prior to such action, unless the Optionee consents to such
amendment. In addition, the Board shall not, without the approval of the
Corporation's shareholders, amend the Plan to (i) materially increase the
maximum number of shares issuable under the Plan (except for permissible
adjustments under Section 4(c)), (ii) materially increase the benefits accruing
to individuals who participate in the Plan, or (iii) materially modify the
eligibility requirements for participation in the Plan.
(b) Options to purchase shares of Common Stock may be granted under the
Plan which are in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under the Plan are
held in escrow until there is obtained shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock available for
issuance under the Plan. If such shareholder approval is not obtained within
twelve (12) months after the date the initial excess issuances are made, then
(i) any unexercised options representing such excess shall terminate and cease
to be exercisable and (ii) the Corporation shall promptly refund to the
Optionees the option price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow.
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13. EFFECTIVE DATE AND TERM OF PLAN
(a) The Plan shall become effective when adopted by the Board and
approved by the Corporation's shareholders. If such shareholder approval is not
obtained within twelve (12) months after the date of the Board's adoption of the
Plan, then all options previously granted under the Plan shall terminate, and no
further options shall be granted. Subject to such limitation, the Plan
Administrator may grant options under the Plan at any time after the effective
date and before the date fixed herein for termination of the Plan.
(b) The Plan shall terminate upon the EARLIER of (i) ten years after
the adoption of the Plan or (ii) the date on which all shares available for
issuance under the Plan have been issued or canceled pursuant to the exercise or
surrender of options granted under the Plan. If the date of termination is
determined under clause (i) above, then no options outstanding on such date
under the Plan shall be affected by the termination of the Plan, and such
securities shall thereafter continue to have force and effect in accordance with
the provisions of the stock option agreements evidencing such Options.
14. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the issuance of
shares of Common Stock under the Plan shall be used for general corporate
purposes.
15. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise or
surrender of any options granted under the Plan shall be subject to the
satisfaction of all applicable Federal, State and local income and employment
tax withholding requirements.
16. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under the
Plan, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
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BELLACASA PRODUCTIONS, INC.
1998 STOCK OPTION PLAN
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the "Option")
made to purchase shares of BellaCasa Productions, Inc. (the "Company") common
stock (the "Common Stock"):
OPTIONEE: _______________________________
GRANT DATE: _____________________________
VESTING COMMENCEMENT DATE: ________________________
TYPE OF STOCK: Common Stock
OPTION PRICE: $________ per share
NUMBER OF OPTION SHARES: ____________________________
EXPIRATION DATE: ______________________________________
TYPE OF OPTION: Incentive / Non-Statutory
EXERCISE SCHEDULE: _____________________________________
Optionee understands and agrees that the Option is granted subject to and in
accordance with the express terms and conditions of the Company's 1998 Stock
Option Plan (the "Plan"). Optionee further agrees to be bound by the terms and
conditions of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A.
Optionee understands that the terms and conditions applicable to any Option
Shares purchased thereunder are as set forth in the Stock Purchase Agreement
attached hereto as Exhibit B.
Optionee hereby acknowledges receipt of a copy of the Plan in the form attached
to this Notice of Grant.
NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in the Plan
shall confer upon the Optionee any right to continue in the Service of the
Company for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company or the Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any time
for any reason whatsoever, with or without cause.
BELLACASA PRODUCTIONS, INC. OPTIONEE:
By: ________________________________ Address: ______________________
_______________________
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EXHIBIT A
BELLACASA PRODUCTIONS, INC.
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Board has adopted the Plan for the purpose of attracting and
retaining the services of selected key employees (including officers and
directors), non-employee members of the Board and consultants and other
independent contractors who contribute to the financial success of the
Corporation.
B. Optionee is an individual who is to render valuable services to the
Corporation, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation's grant
of a stock option to Optionee.
C. Capitalized terms used in this Agreement shall, unless the context
clearly indicates otherwise, have the meaning assigned to such terms in
Paragraph 20 of this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION.
Subject to and upon the terms and conditions set forth in this
Agreement, the Corporation hereby grants to Optionee, as of the Grant Date, a
stock option to purchase up to that number of Option Shares as is specified in
the Grant Notice. The Option Shares shall be purchasable from time to time
during the Option term at the Option Price per share specified in the Grant
Notice.
2. OPTION TERM.
This Option shall expire at the close of business on the Expiration
Date specified in the Grant Notice, unless sooner terminated in accordance with
Paragraphs 5, 6, or 17 hereof; provided, in no event shall this Option have a
maximum term in excess of ten (10) years measured from the Grant Date.
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3. OPTIONS NONTRANSFERABLE; EXCEPTION.
Unless otherwise specified in the Agreement relating to an option,
options granted hereunder may be transferable (i) by will or the laws of descent
and distribution, (ii) pursuant to beneficiary designation procedures approved
by the Company, (iii) pursuant to a domestic relations order, (iv) to one or
more family members of the optionee, (v) to a trust or trusts for the exclusive
benefit of the optionee and/or one or more family members of the optionee, (vi)
to a partnership in which the optionee and/or one or more family members of the
optionee are the only partners, (vii) to a limited liability company in which
the optionee and/or one or more family members of the optionee are the only
members, or (viii) to such other persons or entities as may be specified in the
agreement relating to an option or approved in writing by the Committee prior to
such transfer. Except to the extent permitted by the preceding sentence, each
option may be exercised during the optionee's lifetime only by the optionee or
the optionee's legal representative or similar person. Except as permitted by
the second preceding sentence, (i) no option granted hereunder shall be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process and (ii) upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of any option granted
hereunder, such option and all rights thereunder shall immediately become null
and void. Additional transferability restrictions apply to Incentive Stock
Options in accordance with Paragraph 18(a) hereof.
4. DATES OF EXERCISE.
This Option may not be exercised in whole or in part at any time prior
to the time the Plan is approved by the Corporation's shareholders in accordance
with Paragraph 17. Provided such shareholder approval is obtained, this Option
shall thereupon become exercisable for the Option Shares in one or more
installments as is specified in the Grant Notice. As the Option becomes
exercisable in one or more installments, the installments shall accumulate and
the Option shall remain exercisable for such installments until the Expiration
Date or the sooner termination of the Option term under Paragraph 5 or Paragraph
6 of this Agreement.
5. ACCELERATED TERMINATION OF OPTION TERM.
The option term specified in Paragraph 2 shall terminate (and this
Option shall cease to be exercisable) prior to the Expiration Date should any of
the following provisions become applicable:
(a) Except as otherwise provided in subparagraph (b) or (c) below,
should Optionee cease to remain in Service while this Option is outstanding,
then the period for exercising this Option shall be reduced to a three (3) month
period commencing with the date of such cessation of Service, but in no event
shall this Option be exercisable at any time after the Expiration Date. Upon the
expiration of such three (3) month period or (if earlier) upon the Expiration
Date, this Option shall terminate and cease to be outstanding.
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(b) Should Optionee die while this Option is outstanding, then the
personal representative of the Optionee's estate or the person or persons to
whom the Option is transferred pursuant to the Optionee's will or in accordance
with the law of descent and distribution shall have the right to exercise this
Option. Such right shall lapse, and this Option shall cease to be exercisable,
upon the EARLIER of (i) the expiration of the twelve (12) month period measured
from the date of Optionee's death or (ii) the Expiration Date. Upon the
expiration of such twelve (12) month period or (if earlier) upon the Expiration
Date, this Option shall terminate and cease to be outstanding.
(c) Should Optionee become Permanently Disabled and cease by reason
thereof to remain in Service while this Option is outstanding, then the Optionee
shall have a period of twelve (12) months (commencing with the date of such
cessation of Service) during which to exercise this Option, but in no event
shall this Option be exercisable at any time after the Expiration Date. Upon the
expiration of such limited period of exercisability or (if earlier) upon the
Expiration Date, this Option shall terminate and cease to be outstanding.
(d) During the limited period of exercisability applicable under
subparagraphs (a), (b) or (c) above, this Option may be exercised for any or all
of the Option Shares in which the Optionee, at the time of cessation of Service,
is vested in accordance with the exercise/vesting provisions specified in the
Grant Notice or the special acceleration provisions of Paragraph 6 of this
Agreement.
(e) Notwithstanding any provisions of this paragraph 5 or any other
provision of this Agreement or the Plan to the contrary, any options granted
under the Plan shall terminate as of the date Optionee ceases to be in the
Service of the Corporation if Optionee was terminated for "cause" or could have
been terminated for "cause." If Optionee has an employment or consulting
agreement with the Corporation, the term "cause" shall have the meaning given
that term in the employment or consulting agreement. If Optionee does not have
an employment or consulting agreement with the Corporation, or if such
employment or consulting agreement does not define the term "cause," the term
"cause" shall mean: (1) misconduct or dishonesty that materially adversely
affects the Corporation, including without limitation (i) an act materially in
conflict with the financial interests of the Corporation, (ii) an act that could
damage the reputation or customer relations of the Corporation, (iii) an act
that could subject the Corporation to liability, (iv) an act constituting sexual
harassment or other violation of the civil rights of coworkers, (v) failure to
obey any lawful instruction of the Board or any officer of the Corporation and
(vi) failure to comply with, or perform any duty required under, the terms of
any confidentiality, inventions, or noncompetition agreement Optionee may have
with the Corporation, or (2) acts constituting the unauthorized disclosure of
any trade secrets or confidential information of the Corporation, unfair
competition with the corporation or the inducement of any customer of the
Corporation to breach any contract during the pendency of any investigation by
the Board, or its designee, and/or any negotiations by the Board, or its
designee, and Optionee, regarding any actual or alleged act or omission by
Optionee of the type described in this paragraph.
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6. CORPORATE TRANSACTION.
(a) This Option shall terminate upon the consummation of any Corporate
Transaction, unless expressly assumed by the successor corporation or parent
thereof.
(b) In connection with any such Corporate Transaction, the Plan
Administrator may, at its sole discretion, (i) accelerate this Option so that
this Option shall, immediately prior to the specified effective date for such
Corporate Transaction, become fully exercisable with respect to all of the
Option Shares and may be exercised for all or any portion of such shares, (ii)
arrange for this Option either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof, (iii) arrange
for this Option to be replaced by a comparable cash incentive program of the
successor corporation based on the option spread (the amount by which the Fair
Market Value of the shares of Common Stock at the time subject to the Option
exceeds the Option Price payable for such shares) or (iv) take none of the
actions described in clauses (i), (ii) or (iii) above and allow this Option to
terminate as provided in Paragraph 6(a) above. The determination of
comparability under clauses (ii) and (iii) above shall be made by the Plan
Administrator, and its determination shall be final and conclusive.
(c) The exercisability of this Option as an Incentive Stock Option
under the Federal tax laws (if designated as such in the Grant Notice) shall, in
connection with any such Corporate Transaction, be subject to the applicable
dollar limitation of Paragraph 18.
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES
(a) In the event any change is made to the Corporation's
outstanding Common Stock by reason of any stock split, stock dividend,
combination of shares, exchange or conversion of shares, or other change
affecting the outstanding Common Stock as a class without receipt of
consideration, then appropriate adjustments shall be made to (i) the total
number of Option Shares subject to this Option and (ii) the Option Price payable
per share in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
(b) If this Option is to be assumed or is otherwise to remain
outstanding after the Corporate Transaction, then this Option shall be
appropriately adjusted to apply and pertain to the number and class of
securities that would have been issuable to the Optionee in the consummation of
such Corporation Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to
the Option Price payable per share, provided the aggregate Option Price payable
hereunder shall remain the same.
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8. PRIVILEGE OF STOCK OWNERSHIP.
The holder of this Option shall not have any of the rights of a
shareholder with respect to the Option Shares until such individual shall have
exercised the option and paid the Option Price.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this Option with respect to all or any part of
the Option Shares for which this Option is at the time exercisable, Optionee (or
in the case of exercise after Optionee's death, the Optionee's executor,
administrator heir or legatee, as the case may be) or Transferee (in the case of
certain Incentive Options) must take the following actions:
(1) Execute and deliver to the Secretary of the Corporation the
Purchase Agreement.
(2) Pay the aggregate Option Price for the purchased shares either by
full payment in cash or check, or any other form approved by the Plan
Administrator at the time of exercise in accordance with the provisions of
Paragraph 14.
(3) Furnish to the Corporation appropriate documentation that the
person or persons exercising the Option (if other than Optionee) have the right
to exercise this Option.
(b) Should the Corporation's outstanding Common Stock be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), at the time the Option is exercised, then the Option Price may also
be paid as follows:
(1) in shares of the Common Stock held by the Optionee for the
requisite period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or
(2) through a special sale and remittance procedure pursuant to which
the Optionee (i) is to provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds, an amount sufficient to cover the
aggregate Option Price payable for the purchased shares plus all applicable
Federal and state income and employment taxes required to be withheld by the
Corporation by reason of such purchase and (ii) concurrently provides written
directives to the Corporation to deliver the certificates for the purchased
shares directly to such broker-dealer in order to effect the sale transaction.
(c) Except to the extent the special sale and remittance procedure is
utilized to exercise this Option, payment of the Option Price must accompany the
delivery of the Purchase Agreement. As soon after such payment is practical, the
Corporation shall mail or deliver to Optionee (or to the other person or persons
exercising this Option) a certificate or certificates representing the shares so
purchased and paid for, with the appropriate legend affixed thereto.
(d) In no event may this Option be exercised for any fractional shares.
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10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this Option and the issuance of Option Shares upon
such exercise shall be subject to compliance by the Corporation and the Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Corporation's Common
Stock may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of this Option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and state securities laws.
11. SUCCESSORS AND ASSIGNS.
Except to the extent otherwise provided in Paragraphs 3, 6 and 18(a)
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, administrators, heirs, legal representatives and assigns
of Optionee and the successors and assigns of the Corporation.
12. LIABILITY OF CORPORATION.
(a) If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock that may be issued under the
Plan without shareholder approval, then this Option shall be void with respect
to such excess shares, unless shareholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the applicable provisions of the Plan.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority the Corporation deems necessary to the lawful
issuance and sale of any Common Stock pursuant to this Option shall relieve the
Corporation of any liability with respect to the non-issuance of the Common
Stock as to which such approval shall not have been obtained. The Corporation,
however, shall use its best efforts to obtain all such approvals.
13. NOTICES.
Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation
in care of the Corporate Secretary at its principal corporate offices. Any
notices required to be given or delivered to the Optionee shall be in writing
and addressed to Optionee at the address indicated below Optionee's signature
line on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the US Mail, postage prepaid
and properly addressed to the party to be notified.
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14. LOANS.
The Plan Administrator may, in its absolute discretion and without any
obligation to do so, assist the Optionee in the exercise of this Option by (i)
authorizing the extension of a loan to the Optionee from the Corporation or (ii)
permitting the Optionee to pay the option price for the purchased Common Stock
in installments over a period of years. The terms of any such loan or
installment method of payment (including the interest rate, the requirement for
collateral and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion.
15. CONSTRUCTION.
This Agreement and the Option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest
in this Option.
16. GOVERNING LAW.
The interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of Florida.
17. SHAREHOLDER APPROVAL.
The grant of this Option is subject to approval of the Plan by the
Corporation's shareholders within twelve (12) months after the adoption of the
Plan by the Board. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE
CONTRARY, THIS OPTION MAY NOT BE EXERCISED IN WHOLE OR IN PART UNTIL SUCH
SHAREHOLDER APPROVAL IS OBTAINED. In the event that such shareholder approval is
not obtained, then this Option shall terminate in its entirety and the Optionee
shall have no further rights to acquire any Option Shares hereunder.
18. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION.
In the event this Option is designated an Incentive Stock Option in the
Grant Notice, the following terms and conditions shall also apply to the grant:
(a) An Incentive Option shall not be transferable otherwise than by
will or the laws of descent and distribution and may be exercisable during the
Optionee's lifetime only by such Optionee or the Optionee's legal representative
or similar person.
(b) This Option shall cease to qualify for favorable tax treatment as
an Incentive Stock Option under the Federal tax laws if (and to the extent) this
Option is exercised for one or more Option Shares: (i) more than three (3)
months after the date the Optionee ceases to be an Employee for any reason other
than death or Permanent Disability or (ii) more than one (1) year after the date
the Optionee ceases to be an Employee by reason of Permanent Disability.
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(c) In the event this Option is designated as immediately exercisable
in the Grant Notice, then except in the event of a Corporate Transaction, this
Option shall not become exercisable in the calendar year in which granted if
(and to the extent) the aggregate Fair Market Value (determined at the Grant
Date) of the Common Stock for which this Option would otherwise first become
exercisable in such calendar year would, when added to the aggregate Fair Market
Value (determined as of the respective date or dates of grant) of the Common
Stock for which one or more other post-1986 Incentive Stock Options granted to
the Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary corporations) first become
exercisable during the same calendar year, exceed one hundred thousand dollars
($100,000) in the aggregate. To the extent the exercisability of this Option is
deferred by reason of the foregoing limitation, the deferred portion will first
become exercisable in the first calendar year or years thereafter in which the
one hundred thousand dollar ($100,000) limitation of this Paragraph 18(b) would
not be contravened.
(d) In the event this Option is designated as an installment option in
the Grant Notice, no installment under this Option (whether annual or monthly)
shall qualify for favorable tax treatment as an Incentive Stock Option under the
Federal tax laws if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder will, when added to the aggregate Fair
Market Value (determined as of the respective date or dates of grant) of the
Common Stock for which this Option or one or more other post-1986 Incentive
Stock Options granted to the Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary
corporations) first become exercisable during the same calendar year, exceed one
hundred thousand dollars ($100,000) in the aggregate.
(e) Should the exercisability of this Option be accelerated upon a
Corporate Transaction, then this Option shall qualify for favorable tax
treatment as an Incentive Stock Option under the Federal tax laws only to the
extent the aggregate Fair Market Value (determined at the Grant Date) of the
Common Stock for which this Option first becomes exercisable in the calendar
year in which the Corporate Transaction occurs does not, when added to the
aggregate Fair Market Value (determined as of the respective date or dates of
grant) of the Common Stock for which this Option or one or more other post-1986
Incentive Stock Options granted to the Optionee prior to the Grant Date (whether
under the Plan or any other option plan of the Corporation or any Parent or
Subsidiary corporations) first become exercisable during the same calendar year,
exceed one hundred thousand (100,000) in the aggregate.
(f) To the extent this Option should fail to qualify as an Incentive
Stock Option under the Federal tax laws, the Optionee will recognize
compensation income in connection with the acquisition of one or more Option
Shares hereunder, and the Optionee must make appropriate arrangements for the
satisfaction of all Federal, state or local income tax withholding requirements
and Federal Social Security employee tax requirements applicable to such
compensation income
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19. ADDITIONAL TERMS APPLICABLE TO A NON-STATUTORY STOCK OPTION.
In the event this Option is designated a non-statutory stock option in
the Grant Notice, Optionee hereby agrees to make appropriate arrangements with
the Corporation for the satisfaction of all Federal, state or local tax
withholding requirements and Federal Social Security employee tax requirements
applicable to the exercise of this Option.
20. DEFINITIONS.
The following definitions shall apply to the respective
capitalized terms used herein:
(a) BOARD means the Board of Directors of BellaCasa Productions, Inc.
(b) CODE means the Internal Revenue Code of 1986, as amended.
(c) COMMON STOCK means the Common Stock of BellaCasa Productions, Inc
(d) CORPORATION means BellaCasa Productions, Inc, a Nevada corporation,
and any of its successors.
(e) CORPORATE TRANSACTION means one or more of the following
transactions:
(1) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state of the Corporation's incorporation;
(2) the sale, transfer, or other disposition of all or substantially
all of the assets of the Corporation; or
(3) any reverse merger in which the Corporation is the surviving entity
but in which fifty percent (50%) or more of the Corporation's outstanding voting
stock is transferred to holders different from those who held stock immediately
prior to such merger.
(f) EMPLOYEE means an individual who is in the employ of the
Corporation or any Parent or Subsidiary corporation. An Optionee shall be
considered to be an Employee for so long as such individual remains in the
employ of the Corporation or any Parent or Subsidiary corporation, subject to
the control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.
(g) EXERCISE DATE shall be the date on which the executed Purchase
Agreement for one or more Option Shares is delivered to the Corporation in
accordance with Paragraph 9 of this Agreement.
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(h) FAIR MARKET VALUE of a share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(1) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-counter market, the
Fair Market Value shall be the mean between the highest bid and the lowest asked
prices (or if such information is available, the closing selling price) per
share of Common Stock on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through its NASDAQ National Market System or any successor system. If there are
no reported bid and asked prices (or closing selling price) for the Common Stock
on the date in question, then the mean between the highest bid and the lowest
asked prices (or closing selling price) on the last preceding date for which
such quotations exist shall be determinative of Fair Market Value.
(2) If the Common Stock is at the time listed or admitted to trading on
any stock exchange then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the stock exchange
determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Common Stock on such exchange
on the date in question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.
(3) If the Common Stock is at the time neither listed nor admitted
to trading on any stock exchange nor traded in the over-the-counter market, or
if the Plan Administrator otherwise determines that the valuation provisions of
subparagraphs (a) and (b) above will not result in a true and accurate valuation
of the Common Stock, then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan Administrator
shall deem appropriate under the circumstances.
(i) GRANT DATE means the date specified in the Grant Notice as the date
on which the Option was granted to the Optionee under the Plan.
(j) INCENTIVE STOCK OPTION means an option intended to meet the
statutory requirements of Section 422 of the Code.
(k) NON-STATUTORY STOCK OPTION means an option not intended to meet the
statutory requirements prescribed under the Code for an Incentive Option.
(l) OPTION SHARES means the total number of shares of Common Stock
indicated in the Grant Notice as purchasable under this Option.
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(m) OPTIONEE means the individual identified in the Grant Notice as the
person to whom this Option has been granted under the Plan.
(n) OPTION PRICE means the exercise price per share to be paid by the
Optionee for the exercise of this Option. The Option Price is indicated in the
Grant Notice.
(o) PARENT corporation means any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
(p) PERMANENTLY DISABLED or Permanent Disability means the inability of
an individual to engage in any substantial gainful activity by reason of any
medically-determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
(q) PLAN means the 1998 Stock Option Plan of the Corporation attached
to the Grant Notice.
(r) PLAN ADMINISTRATOR means either the Board or a committee of two or
more Board members, to the extent such committee may at the time be responsible
for Plan administration.
(s) PURCHASE AGREEMENT means the stock purchase agreement, in
substantially the form of Exhibit B to the Grant Notice, which is to be executed
in connection with the exercise of this Option for one or more Option Shares.
(t) SERVICE means the performance of services for the Corporation or
any Parent or Subsidiary corporation by an individual in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor. Accordingly, the Optionee shall be deemed to remain in
Service for so long as such individual renders services to the Corporation or
any Parent or Subsidiary corporation on a periodic basis in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor.
(u) SUBSIDIARY corporation means each corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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EXHIBIT B
BELLACASA PRODUCTIONS, INC.
STOCK PURCHASE AGREEMENT
Agreement made as of this ____ day of __________________, 19__, between
BELLACASA PRODUCTIONS, INC., a Nevada corporation (the "Corporation"), and
_________________________ , the holder of a stock option ("Optionee") under the
Corporation's 1998 Stock Option Plan (the "Plan").
All capitalized terms in this Agreement shall have the meaning assigned to them
in this Agreement or in the Plan, unless otherwise indicated.
A. EXERCISE OF OPTION
1. EXERCISE. Optionee hereby purchases shares of Common Stock (the
"Purchased Shares") pursuant to that certain option (the "Option") granted
Optionee on ____________, 19__ (the "Grant Date") to purchase ______________
shares of Common Stock under the Plan at the exercise price of $_____________
per share (the "Exercise Price").
2. PAYMENT. Concurrently with the delivery of this Agreement to the
Corporate Secretary, Optionee shall pay the Exercise Price for the Purchased
Shares in accordance with the provisions of the Option Agreement and shall
deliver whatever additional documents may be required by the Option Agreement as
a condition for exercise.
B. SECURITIES LAW COMPLIANCE
1. EXEMPTION FROM REGISTRATION. The Purchased Shares have not been
registered under the 1933 Act and are accordingly being issued to Optionee in
reliance upon the exemption from such registration provided by Rule 701 of the
SEC for stock issuances under compensatory benefit plans such as the Plan.
Optionee hereby acknowledges receipt of a copy of the Plan attached to the Grant
Notice.
2. RESTRICTED SECURITIES.
Optionee hereby confirms that Optionee has been informed that the
Purchased Shares are restricted securities under the 1933 Act and may not be
resold or transferred unless the Purchased Shares are first registered under the
Federal securities laws or unless an exemption from such registration is
available. Accordingly, Optionee hereby acknowledges that Optionee is prepared
to hold the Purchased Shares for an indefinite period and that Optionee is aware
that Rule 144 of the SEC issued under the 1933 Act is not presently available to
exempt the resale of the Purchased Shares from the registration requirements of
the 1933 Act.
3. DISPOSITION OF SHARES. Optionee hereby agrees that Optionee shall
make no disposition of the Purchased Shares unless and until there is compliance
with all of the following requirements:
(a) Optionee shall have provided the Corporation with a written summary
of the terms and conditions of the proposed disposition.
B-1
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(b) Optionee shall have complied with all requirements of this
Agreement applicable to the disposition of the Purchased Shares.
(c) Optionee shall have provided the Corporation with written
assurances, in form and substance satisfactory to the Corporation, that (i) the
proposed disposition does not require registration of the Purchased Shares under
the 1933 Act or (ii) all appropriate action necessary for compliance with the
registration requirements of the 1933 Act or of any exemption from registration
available under the 1933 Act (including Rule 144) has been taken.
(d) Optionee shall have provided the Corporation with written
assurances, in form and substance satisfactory to the Corporation that the
proposed disposition will not result in the contravention of any transfer
restrictions applicable to the Purchased Shares.
The Corporation shall not be required (i) to transfer on its books any Purchased
Shares which have been sold or transferred in violation of the provisions of
this Agreement or (ii) to treat as the owner of the Purchased Shares, or
otherwise to accord voting, dividend or liquidation rights to, any transferee to
whom the Purchased Shares have been transferred in contravention of this
Agreement.
4. RESTRICTIVE LEGENDS. In order to reflect the restrictions imposed by
this Agreement upon the disposition of the Purchased Shares, the stock
certificates for the Purchased Shares shall be endorsed with the following
restrictive legend:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares may not be sold or offered for sale
in the absence of (i) an effective registration statement for the shares under
such Act, or (ii) satisfactory assurances to the Corporation that registration
under such Act is not required with respect to such sale or offer."
C. MISCELLANEOUS PROVISIONS.
1. OPTIONEE UNDERTAKING. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Optionee or the Purchased Shares
pursuant to the express provisions of this Agreement.
2. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the express terms and provisions of the
Plan.
3. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules. The parties hereto hereby irrevocably submit to
the jurisdiction of any state or federal court sitting in Los Angeles County,
Florida, in any action or proceeding brought to enforce or otherwise arising out
of or relating to this Agreement, and hereby waive any objection to venue in any
such court and any claim that such forum is an inconvenient forum.
B-2
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4. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure
to the benefit of, and be binding upon the Corporation and its successors and
assignees and Optionee and Optionee's legal representatives, heirs, legatees,
distributees, assignees, and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms and conditions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first indicated above.
BELLACASA PRODUCTIONS, INC. OPTIONEE:
By: ______________________ _____________________________
Title: ___________________
Address: _____________________
_____________________
B-3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
BellaCasa Productions. Inc.:
We consent to the use of our report dated May 5, 2000 in the Registration
Statement on Form SB-2 of BellaCasa Productions, Inc. for the registration of
1,200,000 units, each unit consisting of one share of common stock, one Class A
warrant and one Class B warrant to purchase additional common stock and to the
reference to our firm under the heading "Experts" therein.
Parks, Tschopp, Whitcomb & Orr, P.A.
/s/ Parks, Tschopp, Whitcomb & Orr, P.A.
Maitland, Florida
May 22, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BELLACASA PRODUCTIONS, INC. FOR THE YEAR ENDED DECEMBER
31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-28-1998
<PERIOD-END> DEC-31-1998
<CASH> 60,804
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 60,804
<PP&E> 1,790
<DEPRECIATION> (179)
<TOTAL-ASSETS> 64,982
<CURRENT-LIABILITIES> 21,276
<BONDS> 0
0
0
<COMMON> 354
<OTHER-SE> 75,078
<TOTAL-LIABILITY-AND-EQUITY> 64,982
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,804
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,392)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,392)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,392)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BELLACASA PRODUCTIONS, INC. FOR THE YEAR ENDED DECEMBER
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,162
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,162
<PP&E> 3,974
<DEPRECIATION> (849)
<TOTAL-ASSETS> 29,409
<CURRENT-LIABILITIES> 18,492
<BONDS> 0
0
0
<COMMON> 403
<OTHER-SE> 174,729
<TOTAL-LIABILITY-AND-EQUITY> 29,409
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 134,116
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (132,323)
<INCOME-TAX> 0
<INCOME-CONTINUING> (132,323)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (132,323)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BELLACASA PRODUCTIONS, INC. FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 19,521
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39,521
<PP&E> 4,409
<DEPRECIATION> (1,023)
<TOTAL-ASSETS> 44,909
<CURRENT-LIABILITIES> 71,317
<BONDS> 0
0
0
<COMMON> 403
<OTHER-SE> 174,729
<TOTAL-LIABILITY-AND-EQUITY> 44,909
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 37,825
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (37,700)
<INCOME-TAX> 0
<INCOME-CONTINUING> (37,700)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (37,700)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
