UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE BRIAN H. CORP.
(Name of small business issuer
in its charter)
Nevada 6770 11-327-0747
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
63 Wall Street, Suite 1801, New York, NY 10005 (212) 344-1600
(Address and telephone number of principal executive offices)
63 Wall Street, Suite 1801, New York, NY 10005
(Address of Principal place of business or
intended principal place of business)
Joel Schonfeld, 63 Wall Street, Suite 1801, New York, NY (212) 344-1600
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public as soon as practicable after
the effective date of this Registration Statement and Prospectus.
By: Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
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.
<PAGE>
CALCULATION OF REGISTRATION FEE
No registration fee is due on a Reconfirmation Offering under Rule 419.
<PAGE>
Cross Reference Sheet Pursuant to Rule 404 (c)
Showing the Location In Prospectus of
Information Required by Items of Form SB-2
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
1. Front of Registration Statement Front of Registration
and Outside Front Cover of Statement and outside
Prospectus front cover of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus of Prospectus and Outside
Front cover Page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Prospectus Summary -
Price Determination of Offering Price;
Risk Factors
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Not Applicable
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
<PAGE>
Part I Information Required in Prospectus Caption in Prospectus
12. Description of Securities Description of Securities
13. Interest of Named Experts and Legal Opinions; Experts
Counsel
14. Disclosure of Commission Position Statement as to
on Indemnification Indemnification
for Securities
Act Liabilities
15. Organization Within Last Management, Certain
Five Years Transactions
16. Description of Business Business
17. Management's Discussion and Management's Discussion and
and Analysis or Plan of Analysis
Operation
18. Description of Property Not Applicable
19. Certain Relationships and Related Certain Transactions
Transactions
20. Market for Common Stock and Prospectus Summary
Related Stockholder Matters
21. Executive Compensation Executive Compensation
<PAGE>
PROSPECTUS
THE BRIAN H. CORP.
(a Nevada corporation)
RECONFIRMATION OFFER
This Prospectus relates to the Reconfirmation Offer of 12,500 shares of
The Brian H. Corp. ("Brian") sold in Brian's initial public offering (the
"Shares" or "Common Stock"). Pursuant to Rule 419 ("Rule 419") of the
Securities Act of 1933, as amended (the "Securities Act"), shareholders
representing at least 80% of Brian's maximum offering proceeds ($40,000) must
elect to reconfirm their investments (the "Reconfirmation Offer"). (See
"INVESTORS RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419"). Such
shareholders will vote on the Reconfirmation Offer, as described in the
post-effective amendment to Form SB-2. The 80% shall be measured 20 days from
the effective date of this Prospectus. Once an investor has sent his/her
Letter of Reconfirmation to Brian, such Letter of Reconfirmation may not be
revoked.
Pursuant to an agreement and plan of Acquisition between Brian and Frama
S.r.l., a corporation organized and existing under the laws of Italy
("Frama"), dated December 10, 1996 (the "Acquisition Agreement"), 100% of
Frama shall be acquired by Brian on the Effective Date (as defined in the
Acquisition Agreement) and Frama will be a wholly owned subsidiary of Brian.
Thus, all Frama quota holders shall become shareholders of Brian as a result
of the Acquisition.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" COMMENCING
AT PAGE
THE BRIAN SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Brian has filed with the Commission a Registration Statement on Form SB-2
under the Securities Act with respect to the common shares offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to Frama and the shares of common stock offered
hereby, reference is made to the Registration Statement, exhibits and
schedules.
Additional information, as it relates to Brian is available upon request
from Schonfeld & Weinstein, L.L.P., 63 Wall Street, Suite 1801, New York, New
York 10005; and as it relates to Frama, is available upon request from Mr.
Ettore Cesaraccio, SGI Capital Corp., 767 Fifth Avenue, New York, New York
10022.
The Date of this Prospectus is
<PAGE>ENFORCEMENT OF CERTAIN CIVIL LIABILITIES
Frama s.r.l. is a corporation organized under the laws of Italy and
maintains its principal place of business in Milan, Italy and holds all of its
assets outside of the United States. Frama has appointed Ettore Cesaraccio as
its agent in the United States upon whom service of process against it may be
made for matters relating to this offering. It is uncertain whether the
courts in the jurisdiction where Frama's property is located would enforce
either (I) a judgment obtained in a court in the United States in an action
against Frama predicated upon the civil liability provisions of the Federal
securities laws or (ii) liabilities, in an original action, predicated solely
upon the Federal securities laws.
. <PAGE>
TABLE OF CONTENTS
Page #
PROSPECTUS SUMMARY
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION
UNDER RULE 419
RISK FACTORS
ACQUISTION
USE OF PROCEEDS
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
CERTAIN TAX CONSIDERATIONS
DESCRIPTION OF SECURITIES
PRINCIPAL SHAREHOLDERS
CERTAIN TRANSACTIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
THE BRIAN H. CORP. FINANCIAL STATEMENTS
FRAMA, S.R.L. FINANCIAL STATEMENTS
THE BRIAN H. CORP. AND FRAMA, S.R.L.
FORMA CONDENSED BALANCE SHEET
<PAGE>PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified by the more detailed information and consolidated
financial statements (including notes thereto) appearing elsewhere in this
Prospectus. Investors should carefully consider the information set forth
under the heading "Risk Factors". Unless otherwise indicated, the capital
structure, the number of shares outstanding and the per share data and
information in this Prospectus have been adjusted to give effect to the Merger
described herein.
The Brian H. Corp.
The Brian H. Corp. ("Brian") was incorporated in the State of Nevada on
January 23, 1995 for the sole purpose of acquiring or merging with an
unspecified operating business. Brian has no operating assets and has not
engaged in any business activities, other than to seek out and investigate
other businesses for potential merger or acquisition.
On October 23, 1995, Brian commenced a "blank check" offering pursuant to
Rule 419 ("Rule 419") promulgated under the Securities Act of 1933, as
amended, which generated $50,000 in gross proceeds from approximately 75
different investors (the "Rule 419 Investors"). Pursuant to Rule 419, all of
the gross proceeds from that offering, less 10%, and the Brian Shares
purchased by the Rule 419 Investors, are being held in escrow pending (I)
distribution of a prospectus to each of them describing any prospective
business acquisition by Brian and (ii) the subsequent confirmation by the
holders of at least 80% of the shares owned by the Rule 419 Investors that
they elect to remain investors. (See "INVESTORS RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419").
The executive offices of Brian are located at 63 Wall Street, Suite 1801,
New York, New York 10005. The telephone number is (212) 344-1600.
Frama S.r.l.
Frama S.r.l. was incorporated in Italy under Section 149133, File 3783
of the Law of the Republic of Italy. Italian law on 1994. The
sole business of the company is the acquisition of trademarks. The company
currently holds two trademarks, Fantic Motor trademark and Garelli trademark.
Both trademarks re related to motorcycles produced by Fantic Garelli S.p.A.
("Fantic Garelli") (See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS"). Pursuant to a royalty agreement dated
April 28, 1995 between Frama and Fantic Garelli, Frama receives 1.5% on net
sales by Fatic Garelli for all products for which Frama owns the trademarks up
to 20 billion lire (approximately $13,000,000)and 1% thereafter. Fantic
Garelli guarantees Frama a minimum of 120,000,000 lire (approximately $77,000)
annually. The royalty agreement is for a five year period, renewable for an
additional five years. The executive offices of Frama are located in Italy at
Milano, Corsco, Genova 5. .
Reconfirmation Offering Conducted in Compliance with Rule 419
Brian is a blank check company and, consequently, this Reconfirmation
Offering is being conducted in compliance with the Commission's Rule 419. The
Rule 419 Investors have certain rights and will receive the substantive
protection provided by the rule. To that end, the securities purchased by
investors and the funds received in Brian's initial public offering are
deposited and held in an escrow account established pursuant to Rule 419 (the
"Escrow Account"), and shall remain in the Escrow Account until an acquisition
meeting specific criteria is completed (hereinafter the "Deposited Funds" and
"Deposited Securities".) Before the acquisition can be completed and before
the Deposited Funds and Deposited Securities can be released to Brian and the
Rule 419 Investors, respectively, Brian is required to update the Registration
Statement with a post-effective amendment, and within five days after the
effective date thereof, Brian is required to furnish the Rule 419 Investors
with the prospectus produced thereby containing the terms of a reconfirmation
offer and information regarding the proposed acquisition candidate and its
business, including audited financial statements. According to Rule 419,
investors must have no fewer than 20 and no more than 45 days from the
effective date of the post-effective amendment to decide to reconfirm their
investment and remain an investor or, alternately, require the return of their
investment, minus certain deductions. Each Rule 419 Investors shall have 20
days from the date of this prospectus to reconfirm his/her investment in
Brian. Any Rule 419 Investor not making any decision within said 20 day
period will automatically have his/her investment funds returned. The rule
further provides that if Brian does not complete an acquisition meeting the
specified criteria within 18 months of the effective date of its initial
public offering, all of the Deposited Funds in the Escrow Account must be
returned to Rule 419 Investors. (See "Investors' Rights and Substantive
Protection Under Rule 419 - - Reconfirmation Offering.")
Reconfirmation Offer
This prospectus relates to a reconfirmation by Brian shareholders of
their investments in Brian. Pursuant to Rule 419, the proceeds of Brian's
initial public offering and the securities purchased pursuant thereto, both of
which are currently held in the Escrow Account, will not be released from the
Escrow Account until (1)Brian executes an agreement for an acquisition or
merger meeting certain criteria; (2) a post-effective amendment which includes
the terms of the reconfirmation offer, as well as information about the
Acquisition Agreement and audited financial statements is filed; and (3) Brian
conducts a reconfirmation offer pursuant to which shareholders representing
80% of Brian's initial public offering proceeds elect to reconfirm their
investments. This 80% shall be computed twenty (20) days after the effective
date of this post-effective amendment. Once an investor has sent his/her
Letter of Reconfirmation to Brian, such Letter of Reconfirmation may not be
revoked. In the event the Rule 419 Investors do not vote to reconfirm the
offering, the escrowed proceeds shall be returned to investors on a pro rata
basis. Such funds will be returned within 5 days of failure to approve the
Acquisition.
Terms of the Acquisition Agreement
The terms of the Acquisition are set forth in the Acquisition Agreement
and consummation of the Acquisition is conditioned upon, among other things,
the acceptance of the Reconfirmation Offer by holders of at least 80% of the
shares owned by the Rule 419 Investors. (See "PROSPECTUS SUMMARY -
Reconfirmation Offer"). As a result of the consummation of the Acquisition,
Frama will be a wholly owned subsidiary of Brian. Upon consummation of the
Acquisition, (I) each shareholder who holds shares of Brian's common stock
registered pursuant to a registration statement declared effective by the
Securities and Exchange Commission on October 23, 1995 ("Registered Common
Stock") prior to the Acquisition and who accepts the Reconfirmation Offer
shall continue to hold his or her share certificate(s) representing Brian's
Registered Common Stock; and (ii) each stockholder of Registered Common
Stock who rejects the Reconfirmation Offer will be paid his or her pro rata
share of the amount in the Escrow Account of approximately $3.60 per share.
Pursuant to the Acquisition Agreement, shares representing 43% of Brian's
issued and outstanding shares shall be issued in exchange for 100% of the
quotas of Frama. Additionally, 29,000 shares of Brian's common stock shall be
deposited into an escrow account maintained by Atlantic Liberty Savings Bank,
which escrowed shares shall be released to the former Frama shareholders if
Frama achieves $5,000,000.00 in revenue by December 31, 1997. In the event
Frama does not achieve $5,000,000.00 in revenue by December 31, 1997, these
escrowed shares shall be returned to the treasury of Brian. (See
"ACQUISITION"- Terms and Conditions of Acquisition)
Approval of the Acquisition Agreement
The Brian Board of Directors believes that the Acquisition represents
a good investment opportunity for Brian's shareholders and recommends that
the Rule 419 Investors elect to accept the Reconfirmation Offering. Brian's
Board of Directors recommends that Rule 419 Investors, when determining
whether or not to reconfirm their investments, also consider, inter alia,
Frama's working capital and other financial conditions, including Frama's
intention to achieve $5,000,000.00 in revenue by December 31, 1997, (See
"ACQUISITION"- Terms and Conditions of Acquisition) and the potential for
growth or expansion and the potential for profit.
The Acquisition Agreement was approved by sole Director of Frama by
written consent dated December 10, 1996. The Acquisition Agreement was
confirmed by the unanimous consent of the directors of Brian.
Accounting Treatment
The Acquisition will be accounted for the Company as a reverse
acquisition in accordance with accounting principles generally accepted in the
United States. Brian intends to operate Frama as a wholly-owned subsidiary
after the Acquisition.
High Risk Factors
Investments in the securities of Brian are highly speculative, involve a
high degree of risk, and only persons who can afford the loss of their entire
investment should vote to (See "ACQUISITION"- Terms and Conditions of
Acquisition) reconfirm their investments. (See "RISK FACTORS.")
Use of Proceeds
In its initial public offering, Brian generated $50,000 in proceeds.
10% ($5,000) of the Deposited Funds was released to the Company prior to this
Reconfirmation Offering. (See "Investors' Rights and Substantive Protection
Under Rule 419 - Reconfirmation Offering.") Brian intends to use this sum for
expenses incurred in the offering, including, but not limited to, accounting
expenses, transfer agent fees, printing fees, certificate of good standing.
The remaining $45,000 will remain in the non-interest-bearing escrow account
maintained by Atlantic Liberty Savings Bank, which bank acts as escrow agent
pursuant to Rule 419 of Regulation C. No portion of the Deposited Funds has
been or will be expended to Acquire Frama. The Deposited Funds will be
transferred to Brian pursuant to the Acquisition Agreement when, and if, a
business combination is effected. (See "USE OF PROCEEDS.")
Certain Income Tax Consequences
In management's opinion, the Acquisition is intended to qualify as a
"tax-free reorganization" for purposes of the United States federal income tax
so that stockholders of Brian subject to United States tax will not recognize
gain or loss from the transaction. In addition, the transaction is not
intended to result in the recognition of gain or loss to either Frama or
Brian in the respective jurisdiction s where each of them is subject to
taxation. NO OPINION OF COUNSEL NOR A RULING FROM THE INTERNAL REVENUE
SERVICE HAS BEEN OBTAINED IN REFERENCE TO THE FOREGOING. THE FOREGOING IS
FOR GENERAL INFORMATION ONLY AND BRIAN STOCKHOLDERS SHOULD CONSULT THEIR OWN
TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE ACQUISITION TRANSACTION
TO THEM.
INVESTORS' RIGHTS AND SUBSTANTIVE PROTECTION UNDER RULE 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that in a blank check offering, offering proceeds,
after deduction for underwriting commissions, underwriting expenses and dealer
allowances, and the securities purchased by investors in such an offering, be
deposited into an escrow or trust account governed by an agreement which
contains certain terms and provisions specified by the rule. Under Rule 419,
the Deposited Funds and Deposited Securities will be released to Brian and to
the 419 Investors, respectively, only after Brian has met the following three
basic conditions. First, Brian must execute an agreement(s) for an
acquisition or merger meeting certain prescribed criteria. Second, Brian must
file a post-effective amendment to its registration statement which includes
the terms of a reconfirmation offer that must contain conditions prescribed by
the rule. The post-effective amendment must also contain information
regarding the acquisition or merger candidate(s) and its business(es),
including audited financial statements. Third, Brian must conduct the
reconfirmation offer and satisfy all of the prescribed conditions, including
the condition that a certain minimum number of investors must elect to remain
investors. After Brian submits a signed representation to the escrow agent
that the requirements of Rule 419 have been met, and after the acquisition or
merger is consummated (including a separate shareholder vote to approve the
Acquisition), the escrow agent can release the Deposited Funds and Deposited
Securities.
Accordingly , Brian has entered into an escrow agreement with Atlantic
Liberty Savings Bank (the "Escrow Agent") which provides that:
(1) The proceeds are to be deposited into the Escrow Account maintained
by the Escrow Agent promptly upon receipt. Rule 419 permits 10% of the
Deposited Funds to be released to Brian prior to the reconfirmation offering.
The Deposited Funds and any dividends or interest thereon, if any, are to be
held for the sole benefit of the investors and can only be invested in bank
deposits, in money market mutual funds or federal government securities or
securities for which the principal or interest is guaranteed by the federal
government.
(2) All securities issued in connection with the offering and any other
securities issued with respect to such securities, including securities issued
with respect to stock splits, stock dividends or similar rights are to be
deposited directly into the Escrow Account promptly upon issuance. The
identity of the investors are to be included on the stock certificates or
other documents evidencing the Deposited Securities. The Deposited Securities
held in the Escrow Account are to remain as issued and are to be held for the
sole benefit of the investors' who retain the voting rights, if any, with
respect to the Deposited Securities held in their names. The Deposited
Securities held in the Escrow Account may not be transferred, disposed of nor
any interest created therein other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986 or Table 1 of the Employee Retirement
Income Security Act.
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds and the Deposited
Securities can be released, Brian must first execute an agreement to acquire
an acquisition candidate(s) or merge with a merger candidate(s) meeting
certain specified criteria. The agreement(s) must provide for the
acquisition(s), merger(s) of a business(es) or assets for which the fair value
of the business represents at least 80% of the maximum offering proceeds. The
agreement(s) must include, as a condition precedent to their consummation, a
requirement that the number of investors representing 80% of the maximum
offering proceeds must elect to reconfirm their investment. For purposes of
the offering, the fair value of the business(es) or assets to be acquired must
be at least $40,000 (80% of $50,000).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s), merger(s) of a
business(es) meeting the above criteria has been executed, Rule 419 requires
Brian to update the registration statement with a post-effective amendment.
The post-effective amendment must contain information about the proposed
acquisition candidate(s) and its business(es), including audited financial
statements, the results of this Reconfirmation Offering and the use of the
funds disbursed from the Escrow Account. The post-effective amendment must
also include the terms of the reconfirmation offer mandated by Rule 419. The
reconfirmation offer must include certain prescribed conditions which must be
satisfied before the Deposited Funds and Deposited Securities can be released
from the Escrow Account.
Reconfirmation Offering
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Pursuant to Rule 419, the terms of the
reconfirmation offer must include the following conditions:
(1) The prospectus contained in the post-effective amendment will be sent
to each Rule 419 Investor whose securities are held in the Escrow Account
within 5 days after the effective date of the post-effective amendment.
(2) Each investor will have no fewer than 20 and no more than 45 days
from the effective date of the post-effective amendment to notify Brian in
writing that the investor elects to remain an Rule 419 Investor. The 80% vote
will be measured 20 days from the Effective Date. Rule 419 Investors who
submit their Letter of Reconfirmation to Brian shall not have the right to
revoke such letter.
(3) If Brian does not receive written notification from an investor
within 20 days following the Effective Date, the pro rata portion of the
Deposited Funds (and any related interest or dividends) held in the Escrow
Account on such Rule 419 Investor's behalf will be returned to the investor
within 5 days by first class mail or other equally prompt means.
(4) The acquisition(s) will be consummated only if a minimum number of
Rule 419 Investors representing 80% of the maximum offering proceeds equaling
$40,000 elect to reconfirm their investment.
(5) If a consummated acquisition has not occurred by April 23, 1997 (18
months from the date of original prospectus), the Deposited Funds held in the
Escrow Account shall be returned to all Rule 419 Investors on a pro rata basis
within 5 days by first class mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be released to Brian and
the Rule 419 Investors, respectively, after:
(1) The Escrow Agent has received a signed representation from Brian and
any other evidence acceptable by the Escrow Agent that:
(a) Brian has executed an agreement for the acquisition of or
merger with a Target Business for which the fair market value of the business
represents at least 80% of the maximum offering proceeds and has filed the
required post-effective amendment;
(b) The post-effective amendment has been declared effective, the
mandated reconfirmation offer having the conditions prescribed by Rule 419 has
been completed and that Brian has satisfied all of the prescribed conditions
of the reconfirmation offer.
(2) The acquisition of, or merger with, a business (including shareholder
approval of the merger or acquisition) with the fair value of at least 80% of
the maximum proceeds.
Risk Factors
Investment in the securities offered hereby involves a high degree of
risk. Prospective investors should carefully consider, together with the
other information appearing in this Prospectus, the following factors, among
others, in evaluating the Company and its business before purchasing the
securities offered by this Prospectus or reconfirming their investments in
Brian.
<PAGE>
No Developing or Marketing Experience.
Currently, Frama's sole source of income is derived from a royalty agreement
it has entered into with Fantic Garelli pursuant to which Frama receives a
royalty on sales of products sold by Fantic Garelli for which it holds the
trademarks. Frama has no experience in developing or marketing these
products, and failure of Fantic Garelli to develop and/or market these
products will have a material adverse effect on Frama's business.
No Tangible Product/Dependence on a Single Product
Since Frama acquires trademarks it does not produce an actual product.
Brian currently holds two trademarks: Fantic Motor Trademark and Garelli
Trademark. These trademarks represent motorcycles produced by Fantic Garelli.
Pursuant to a royalty agreement with Fantic Garelli, Frama receives 1.5% of
net sales made by Fantic Garelli on products for which Frama owns the
trademarks up to 20 billion lire (approximately $13,000,000), and 1%
thereafter. Fantic Garelli guarantees Frama a minimum of 120,000,000 lire
(approximately $77,000) annually. Frama is a company separate and apart from
either of these two companies. Frama is therefore dependent on the sales of
Fantic and Garelli, companies over which it has no control. Failure of either
Fantic and/or Garelli to produce and/or market their products would have a
material adverse effect on Frama.
Enforcement of Certain Civil Liabilities and Authorized Representative in the
United States
Frama's sole officer and director, Marina Sala, is a resident of Italy.
Consequently, it may be difficult for United States investors to effect
service within the United States upon Ms. Sala, or to realize in the United
States upon judgments of courts of the United States predicated upon civil
liabilities under the United States Securities Act of 1933, as amended (the
"Securities Act"). A judgment of a court of the United States predicated
solely upon such civil liabilities would probably be enforceable in Italy by
an Italian court if the United States court in which the judgment was obtained
had jurisdiction in the matter as determined by the Italian court. There is
substantial doubt whether an original action could be brought successfully in
Italy against Ms. Sala or Frama predicated solely upon such civil
liabilities. The Authorized Agent to receive service of process in the United
States on behalf of Frama is Ettore Cesaraccio.
Control of the Company
After consummation of the Acquisition, the current shareholders of Brian
will control the vote of approximately 57% of Brian's issued and outstanding
common shares. However, upon Frama achieving revenue of at least $5 million
dollars for the calendar year 1997, 29,000 shares of Brian to be held in
escrow will be released to the former Frama quota holders. The current
shareholders of Brian will then lose control of the company and the former
Frama quota holders will then hold 53% of Brian's issued and outstanding
common stock. As a result, the former Frama quota holders will have the
ability to control the outcome of substantially all issues submitted to
Brian's shareholders. (See "PRINCIPAL SHAREHOLDERS." and "ACQUISITION- TERMS
AND CONDITIONS OF THE ACQUISITION AGREEMENT)
Dilution
The holders of the restricted common shares of Brian have acquired their
interest in Brian at an average cost per share which was significantly less
than that which the public investors paid for their securities. Consequently,
the public investors will bear the majority of the risk of any loss that may
be incurred in Brian's operations. A confirmation of the investment in the
Common Stock will result in an immediate substantial dilution of the
investor's investment.
Lack of Public Market for Securities/Probable Inability to Resell Securities
Prior to the closing of the Acquisition, there will have been no public
trading market for Brian's Common Stock. Given the small size of the initial
public offering, the relatively minimal public float, and lack of
participation of a professional underwriter, there is only a very limited
likelihood of any active and liquid public trading market developing for the
shares. If such a market does develop, the price of Brian's common stock may
be volatile. Thus, investors run the risk that they will never be able to
sell their Shares. In any even, there are additional state securities laws
preventing resale transactions. No potential market makers have been
solicited by Brian. There can be no assurances that any broker will ever
agree to make a market in Brian's securities. (See "DESCRIPTION OF
SECURITIES")
Future Sales of Common Stock
Except for the shares of common stock purchased by the public investors
in Brian's initial public offering, all of Brian's Common Stock held by the
insiders of Brian and the common shares to be issued to Frama quota holders
are "restricted securities" as that term is defined in Rule 144 under the
Securities Act of 1933, as amended, and under certain circumstances may be
sold without registration pursuant to such Rule. Brian is unable to predict
the effect that sales made under Rule 144, or otherwise, may have on the then
prevailing market price of the Common Shares. Brian is under no obligation to
take any action in furtherance of making Rule 144 or any other exemption
available.
Competition
Frama faces competition from other trademark companies. Other companies
may have greater resources and ability to acquire trademarks at a lower cost
or with more favorable royalty agreements. There can be no assurances that
such competitors will not have a material adverse effect on the business or
financial condition of Frama.
No Dividends and None Anticipated
Brian has not paid any dividends and does not contemplate or anticipate
paying any dividends on its common stock in the foreseeable future.
Arbitrary Offering Price
The price at which the Brian's Shares had been offered to the public in
Brian's initial public offering has been arbitrarily determined by Brian.
There is no relationship between the initial offering price of the Shares to
Brian's assets, book value, net worth or other economic or recognized criteria
of value. In no event, should the offering price be regarded as an indication
of any future market price of the securities.
Possible Future Rule 144 Sales
There are currently 120,000 Brian restricted common shares. The
restricted Brian shares and the common shares to be issued to Frama
shareholders are "restricted securities" as defined by Rule 144 of the
Securities Act of 1933, as amended. Under Rule 144, restricted securities
which have been benefically owned for at least two years may be sold in
brokers' transactions or directly to market makers, subject to certain
quantity and other limitations. Generally, a person may sell, under Rule 144,
in any three-month period, an amount equal to the greater of (I) the average
weekly trading volume, if any, of the common stock during the four calendar
weeks preceding the sale or (ii) 1% of the Company's outstanding common
stock. After the Acquisition, Brian will have oustanding 281,915 shares of
Common Stock, including 29,000 shares held in escrow (See "ACQUISITION-TERMS
AND CONDITIONS OF ACQUISITION AGREEMENT"). Shares beneficially owned for
three years by non-affiliates of the Company may be sold without regard to
these quantity or other limitations. The possibility of sales of substantial
amounts of such stock could have a depressive effect on the price of the comon
stock in any market which may develop. The earliest possible date upon which
resales of presently outstanding securities may be made pursuant to Rule 144
is when the insiders' shares are released from the escrow account established
pursuant to Rule 419.
Conflicts of Interest
The Brian's officers and directors are engaged in various business
ventures. Thus, there may be conflicts of interest in the allocation of time
between the Company's business and such other businesses. These activities
may conflict with the interests of the Company. As a result of their other
interests, they may personally benefit from decisions or recommendations made
with respect to the business of the Company. Whereas conflicts may arise,
management is aware of its fiduciary duty to Brian and will act in good faith
and endeavor on an equitable basis to resolve any conflicts which may arise,
on an equitable basis. Furthermore, Joel Schonfeld, a director in Brian, is
also counsel to Brian.
Caution to Public Investors
For all of the aforesaid reasons, and others set forth herein, these
securities involve a high and substantial degree of risk. Any public investor
considering approving the Acquisition should be aware of these and other
factors as set forth in this Prospectus. No public investor considering
approving the Acquisition should do so if he anticipates a need for immediate
return on his investment. The Acquisition should only be approved by
investors who can afford to absorb a total loss and have no need for immediate
return on their investments.
Dependence on Qualified Personnel and Key Individuals
Upon completion of the Acquisition, Brian's officers and directors will
resign, and new officers and directors will be appointed. While Brian expects
that the employment of Frama's current officers and directors will continue,
there is no guarantee that such persons will remain in their respective
positions. Neither Brian nor Frama can assure current Brian shareholders of
the qualifications of such persons to run a publicly owned company. Frama is
dependent on certain key officers, employees and directors. The loss of the
services of any of such persons during this period could adversely affect
Brian's prospects after its Acquisition of Frama. See, "MANAGEMENT -
Directors and Executive Officers."
Determination of the Ratio of Shares in the Acquisition Transaction; No
Independent Valuation
The number of Brian shares to be issued in exchange for 100% interest in
Frama pursuant to the Acquisition Agreement was determined by negotiation
between Frama and Brian and does not necessarily bear any relationship to
Frama's asset value, net worth or other established criteria of value and
should not be considered indicative of the actual value of Frama.
Furthermore, neither Frama nor Brian has obtained either an appraisal of
Frama's or Brian's securities or an opinion that the Acquisition is fair from
a financial perspective.
Failure of Sufficient Number of Investors to Reconfirm Investment.
The Acquisition cannot be consummated unless, in connection with the
reconfirmation offering required by Rule 419, the Rule 419 Investors
representing 80% of the maximum offering proceeds elect to reconfirm their
investments. Rule 419 Investors must affirmatively elect to reconfirm their
investments; no response within the twenty day period Brian must grant its
shareholders to reconfirm will be viewed as a vote not to reconfirm. If,
after completion of the reconfirmation offering being conducted pursuant
hereto, a sufficient number of Rule 419 Investors do not reconfirm their
investment, the Acquisition will not be consummated. In such event, none of
the deposited securities held in escrow will be issued and the deposited funds
will be returned to Rule 419 Investors on a pro rata basis. As a consequence,
since Brian expects to use the 10% allowed to it pursuant to Rule 419, the
Rule 419 Investors will be returned only 90% of their invested funds.
Lack of Diversification.
If this Acquisition is consummated, Brian will be involved in no other
business combination. This lack of diversification may subject Brian
shareholders to economic fluctuations within those industries in which Brian
conducts business.
ACQUISITION
Background of the Acquisition Agreement
Brian was organized on January 23, 1995 in order to provide a vehicle to
acquire or merge with a business or company. On October 23, 1995, Brian
commenced a "blank check" offering pursuant to Rule 419 ("Rule 419")
promulgated under the Securities Act of 1933, as amended. The purpose of the
offering was to cause Brian to become a publicly held reporting company under
the Securities Exchange Act of 1934, as amended. The offering was successful
in raising $50,000 in gross proceeds from Rule 419 Investors. Pursuant to
Rule 419, $45,000 of the net proceeds from that offering, the 120,000
restricted shares of common stock and 12,500 Brian shares purchased by the
Rule 419 Investors, were placed in escrow pending (I) distribution of a
prospectus to each of the Rule 419 Investors describing any prospective
business acquisition by Brian and (ii) the subsequent reconfirmation by the
holders of at least 80% of the shares owned by the Rule 419 Investors that
they have elected to remain investors.
In the event approval of the Acquisition is not obtained from at least
80% of the Rule 419 Investors, then the shares deposited in the Rule 419
Escrow will not be released to the Rule 419 Investors. Instead, the $45,000
net offering proceeds in the Rule 419 Escrow will be released to the Rule 419
Investors in proportion to their investment, at approximately $3.60 per
share. The Rule 419 Investors paid $4.00 per share in Brian's initial public
offering.
Pursuant to Rule 419, the value of Frama of the assets of Frama must
represent at least 80% of the maximum offering proceeds, or $40,000. Based
upon Frama's audited financial statements for the period ended December 31,
1996, Frama has net worth of not less than $40,000.00.
Terms and Conditions of Acquisition Agreement
STOCKHOLDERS OF BRIAN WISHING TO OBTAIN A COPY OF THE ACQUISITION AGREEMENT,
WHICH IS INCORPORATED INTO THIS PROSPECTUS BY REFERENCE, MAY OBTAIN ONE
WITHOUT CHARGE BY WRITING TO SCHONFELD & WEINSTEIN, ATTENTION: JOEL SCHONFELD,
63 WALL STREET, SUITE 1801, NEW YORK, NEW YORK 10005.
Pursuant to the Acquisition Agreement, Brian will acquire 100% of Frama's
stock and Frama will become a wholly owned subsidiary of Brian. Consummation
of the transaction contemplated by the Acquisition Agreement (the
"Acquisition") is conditioned upon, among other things, reconfirmation by
holders of least 80% of the shares owned by the Rule 419 Investors. Upon
consummation of the Acquisition, (I)Brian will own 100% interest in Frama, and
Frama will then become a wholly owned subsidiary of Brian. At the time of
this Acquisition, Frama shall have a minimum of $50,000.00 U.S. in capital and
income of at least $75,000.00 for the current year. In exchange for its 100%
interest in Frama, Brian shall issue to the former Frama quota holders 120,415
shares of Brian in the same proportion said quota holders held interests in
Frama. Brian, the parent company, shall have issued and outstanding 281,915
shares of Common Stock; 120,415 (representing 43% of Brian) to be held by
former Frama quota holders in proportion to the amount that each of said quota
holders previously held interests in Frama, and 132,500 (representing 47% of
Brian) to be held by current Brian stockholders, and 29,000 shares
(representing 10% of Brian) to be held in escrow until December 31, 1997 or
sooner if the revenue figures are obtained as stated herein. If on or before
December 31, 1997 Brian's consolidated financials reach revenues of a minimum
of $5,000,000.00, the escrowed shares shall be released from escrow to the
former Frama quota holders. Furthermore, if on or before December 31, 1997,
Brian's revenue on a consolidated basis, reach or exceed $5,000,000.00, the
120,000 non-freely tradeable shares held by certain shareholders of Brian will
be reduced to 50,000. The remaining 70,000 shares will be apportioned as
follows: 15,000 shares to Rose-Marie Fox; 15,000 shares to Andreas O. Tobler;
30,000 shares to Ettore Cesaraccio and 10,000 shares to Schonfeld & Weinstein,
L.L.P. Thus, former Frama quota holders shall hold 53% of Brian issued and
outstanding common stock, consultants and counsel shall hold 24.8% and Brian
shareholders shall hold 22.2%. In the event Brian's revenues, on a
consolidated basis, do not reach $5,000,000.00 during the calendar year of
1997, the escrowed shares shall be returned to the treasury of Brian, and none
of the aforementioned 70,000 shares shall be transferred. The Acquisition is
to be done in such a manner as to be tax-free to all parties involved; (ii)
each Rule 419 investor who rejects the Reconfirmation Offer will be paid his
or her pro rata share of the amount in the Escrow Account of approximately
$3.60 per share; (iii) consummation of the Acquisition is not subject to any
governmental approvals.
The result of the Acquisition, assuming that 80% of the Brian
stockholders reconfirm their investments, is that the stockholders who held
Brian shares prior to the Acquisition will maintain control of Brian until or
before December 31, 1997 provided Frama's revenue for the calendar year
exceeds $5,000,000.00. If Frama achieves revenues of $5,000,000.00 or more by
December 31, 1997, the 29,000 shares in escrow will be released to the former
Frama shareholders. Only then will the former Frama shareholders have a
majority of Brian's issued outstanding stock and control of Brian.
Stockholders of Brian desiring to accept the Reconfirmation Offer are
directed to sign the enclosed Letter of Reconfirmation form and return it to
Schonfeld & Weinstein, Attention: Joel Schonfeld, Esq., 63 Wall Street, Suite
1801, New York, New York 10005, who will forward each Letter of Reconfirmation
to the Atlantic Liberty Savings, Brian's escrow agent. Any Brian stockholder
who fails to return his or her form so that it is received by Mr. Schonfeld
by (20 days from the date hereof) will be deemed to
have rejected the Reconfirmation Offer and will automatically be sent a check
representing his or her pro rata share of the funds in the Escrow Account for
the benefit of the Rule 419 Investors.
<PAGE>Certain Income Tax Consequences
The Acquisition is intended to qualify as a "tax-free reorganization" for
purposes of the United States federal income tax so that stockholders of Brian
will not recognize gain or loss from the transaction. In addition, the
transaction is not expected to result in the recognition of gain or loss to
either Brian or Frama in the respective jurisdictions where each of them is
subject to taxation. NO OPINION OF COUNSEL NOR A RULING FROM THE INTERNAL
REVENUE SERVICE HAS BEEN OBTAINED IN REFERENCE TO THE FOREGOING. THE
FOREGOING IS FOR GENERAL INFORMATION ONLY AND BRIAN STOCKHOLDERS SHOULD
CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE
ACQUISITION TO THEM.
Fees and Expenses
Each quota holder of Frama shall bear all costs and expenses incurred in
connection with the Acquisition and the Offering, since the only funds
available to Brian are the $45,000 in cash held in escrow pursuant to Rule
419, none of which may be used by either Brian or Frama prior to the
consummation of the Acquisition. Such shareholder has no intention of
receiving reimbursement of such costs and expenses from Frama and Frama has no
obligation to make any reimbursement.
USE OF PROCEEDS
The gross proceeds of Brian's initial public offering was $50,000.
Pursuant to Rule 15c2-4 under the Securities Exchange Act of 1934 (the
"Exchange Act"), all of those proceeds must be held in escrow until all of the
shares are sold. Pursuant to Rule 419 under the Securities Act, after all of
the Shares are sold, 10% of the Deposited Funds ($5,000) may be released from
escrow to Brian. Brian requested release of this 10%. To date, $2,400 has
been expended for accounting fees. Upon the consummation of the Acquisition
and the reconfirmation thereof, which reconfirmation offering must precede
such consummation, pursuant to Rule 419, $50,000 (plus any interest or
dividends received, but less any portion disbursed to Brian pursuant to Rule
419(b)(2)(C)(vi) and any amount returned to investors who did not reconfirm
their investment pursuant to Rule 419 or approximately $45,000) will be
released to Brian to be used as general expense funds.
<PAGE>
SELECTED FINANCIAL DATA
The Brian H. Corp.: 1/1/96 1/1/95
to 12/31/96 to 12/31/95
Net Income from Operations - 0 - - 0 -
Total Current Assets 53,873 18,673
Other Assets 595 595
Total Assets 53,468 19,268
Total Current Liabilities - 0 - - 0 -
Long-term Liabilities - 0 - - 0 -
Dividends - 0 - - 0 -
Total Stockholders equity 52,468 19,268
Frama, S.r.l. 1/1/96
to 12/31/96
Net Income from Operations 2,441
Total Current Assets 45,521
Other Assets 276,636
Total Assets 322,157
Total Liabilities 312,892
Dividends - 0 -
Total Stockholders equity 9,265
Proforma Consolidated Financial Data (in U.S. Dollars)
1/1/1996
to 12/31/96
Net Income from Operations 2,441
Total Current Assets 98,394
Other Assets 277,231
Total Assets 375,625
Total Current Liabilities 261,087
Long-Term Liabilities 51,805
Dividends - 0 -
Total Stockholders' Equity 62,733
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THE BRIAN H. CORP.
Results of Operations
Brian's public offering was declared effective on October 23, 1995.
Brian offered a total of 12,500 shares (par value $.0001) at an offering price
of $4.00 per share, for an aggregate of $50,000.00. On April 22, 1996 , Brian
closed on 12,500 shares for a total gross proceeds of $50,000.00. Pursuant to
Rule 419 of the Securities Act of 1933, net proceeds of $45,000.00 together
with all securities issued are being held in escrow pending the consummation
of an acquisition or merger.
After the closing of the Acquisition, the business of Brian will consist
of owning and operating Frama. The resources of Brian will be made available
to Frama to fulfill the business purpose of Frama to market its trademarks and
obtain other trademarks. The combined cash resources of Frama and Brian will
be sufficient to run operations.
At December 31, 1996, Brian's current assets amounted to $53,468.20,
while current liabilities amounted to $-0-. In addition, Brian's organization
costs amounted to $595.00 as of December 31, 1996.
FRAMA s.r.l.
General
Frama S.r.l. was incorporated in Italy under Section 149133, File 3783
of the Civil Code of the Republic of Italy on March 22, 1995. The sole
business of the company is the acquisition of trademarks. The company
currently holds two trademarks, Fantic Motor trademark and Garelli trademark.
Both trademarks are related to motorcycles produced by Fantic Garelli S.p.A.
("Fantic Garelli"). Pursuant to a royalty agreement dated April 28, 1995
between Frama and Fantic Garelli, Frama receives 1.5% on net sales by Fatic
Garelli for all products for which Frama owns the trademarks up to 20 billion
lire (approximately $13,000,000) and 1% thereafter. Fantic Garelli
guarantees Frama a minimum of 120,000,000 lire (approximately $77,000)
annually. The royalty agreement is for a five year period, renewable for an
additional five years.
The Garelli trademark is related to the Gary and Mosquito motorcycles; it
was registered in the International Register on June 27, 1995, and in the
Italian Trademark Register on May 24, 1995. The Fantic Motor trademark is
related to the Fantic Motorcycle, and was registered in the International
Register on June 27, 1995 and in the Italian Trademark Register on May 24,
1995.
Results of Operations
Frama had net income of $2,441.00 in 1996, with revenues of $196,906. Frama's
quota capital was completely subscribed on March 22, 1995, with 1% subsribed
by Constantino Anghileri, 13% by Silvio Mandelli, and 86% by Marina Sala,
Frama's sole officer and director.
<PAGE>BUSINESS
General
Frama S.r.l. was incorporated in Italy under Section 149133, File 3783
of the Civil Code of the Republic of Italy on March 22, 1995. The sole
business of the company is the acquisition of trademarks. The company
currently holds two trademarks, Fantic Motor trademark and Garelli trademark.
Both trademarks are related to motorcycles produced by Fantic Garelli S.p.A.
("Fantic Garelli"). Pursuant to a royalty agreement dated April 28, 1995
between Frama and Fantic Garelli, Frama receives 1.5% on net sales by Fatic
Garelli for all products for which Frama owns the trademarks up to 20 billion
lire (approximately $13,000,000) and 1% thereafter. Fantic Garelli
guarantees Frama a minimum of 120,000,000 lire (approximately $77,000)
annually. The royalty agreement is for a five year period, renewable for an
additional five years.
The Garelli trademark is related to the Gary and Mosquito motorcycles; it
was registered in the International Register on June 27, 1995, and in the
Italian Trademark Register on May 24, 1995. The Fantic Motor trademark is
related to the Fantic Motorcycle, and was registered in the International
Register on June 27, 1995 and in the Italian Trademark Register on May 24,
1995.
While it intends to acquire additional trademarks, Frama currently owns only
the tradmarks for Fantic Motor and Garelli. Frama cannot guarantee that it
will acquire additional trademarks, nor can it guarantee that Fantic Garelli
S.p.A., which manufactures the Fantic Moror and Garelli products, will
continue to sell its products, the sales of which currently supply Frama with
its sole source of income.
Competition
Frama is engaged in a business whereby it competes with similar
businesses to purchase trademarks. Frama is a relatively new company which
holds only two trademarks. There is no assurance Frama will be able to
purchase other trademarks and successfully compete against its competitors for
the purchase of such trademarks. Such competitors may have greater access to
capital, be more familiar with the industry, and may be more widely
recognized by potential sellers of trademarks.
Legal Proceedings
Frama is not a party to any legal proceedings.
MANAGEMENT
Directors and Executive Officers
Set forth below is certain information regarding the directors and
executive officers of Brian and Frama. While the officers and directors of
Brian are expected to resign upon consummation of the Acquisition, the sole
officer and director of Frama is expected to serve in the same position after
consummation of the Acquisition.
BRIAN
Set forth below is information regarding the officers and directors of
the Brian.
Name Age Position with
Brian
Daniel Wainick 66 President, Director
Theresa DiDato 55 Secretary, Director
Barry Horowitz 54 Director
Joel Schonfeld 62 Director
Biography
Daniel Wainick, 66, has been President and a director of Brian since the
Brian's organization. Since 1968, Mr. Wainick has been President of Metro Tag
& Label, Inc., a label manufacturer. Mr. Wainick received a B.S. in Marketing
Administration from New York University.
Theresa DiDato, 55, has been Secretary and a director of Brian since March 7,
1995. Ms. DiDato has not worked outside her home since 1965. She received a
diploma from St. Barnabas High School in Bronx, New York, and studied at Bronx
Community College.
Barry Horowitz, 54, has been a director of Brian since July 28, 1995. He has
been an insurance salesman with Insurance Planning Service in Amityville, New
York, since 1965.
Joel Schonfeld, 62, has been a director of Brian since July 28, 1995. Mr.
Schonfeld is an attorney who has practiced law for over thirty years. Mr.
Schonfeld is acting as counsel for Brian for this offering. He is a graduate
of Adelphi University and Brooklyn Law School.
Frama
Set forth below is information regarding the sole officer and director of
Frama:
Name Age Position with the Company
Marina Sala 36 President, Director
Biography
Marina Sala, 36, has been President and a director of Frama since March 1995.
Prior to that, Ms. Sala worked as a homemaker. Ms. Sala is a graduate of the
Liceo Linguistics of Lecco, Italy.
Executive Compensation
Brian
Brian has not compensated any officers, directors or employees to date.
Frama
Frama has not paid any executive compensation and no executive
officers are entitled to compensation to date.
CERTAIN TAX CONSIDERATIONS
United States Taxes
The following discussion is based on current law and is
provided for general information. The discussion addresses the United States
federal income taxation of a United States person (that is, a United States
citizen or resident, a United States corporation, a United States partnership
or an estate or trust subject to United States tax on all of its income
regardless of source) making an investment (a "U.S. Investor") in Frama's
Common Shares such as is being made of Brian.
As of the date hereof, Frama does not anticipate that it
could be deemed a "controlled foreign corporation," a "personal holding
company" or a "foreign personal holding company" within the meaning of the
Code. The future acquisition of shares of Frama by certain U.S. persons which
is not presently anticipated might, however, cause Frama to fall within one or
more of such definitions in which case Brian might be subjected to U.S. tax
with respect to Frama's current or accumulated earnings and profits even
though actual dividends have not been paid.
A U.S. Investor receiving a distribution on Brian
Common Stock will be required to include such distribution in gross income as
a taxable dividend to the extent such distribution is paid from current or
accumulated earnings and profits of Frama as determined under the Code. Such
dividend income will generally be subject to the separate limitation for
"passive income" for purposes of the foreign tax credit limitation. U.S.
Investors that are corporations will not be eligible to claim "deemed paid"
foreign tax credit unless it own ten percent or more of Frama's Common
Shares. Brian will be the sole shareholder of Frama after the proposed
Acquisition.
Under certain exceptions, gain or loss on the sale or
exchange of the Common Shares will be treated as capital gain or loss if held
as a capital asset. Such capital gain or loss will be long-term gain or loss
if the U.S. Investor has held the Common Shares for more than one year at the
time of the sale or exchange.
Brain shareholders are advised to consult their own tax advisors
with respect to their particular circumstances and with respect to the effects
of state, local or foreign tax laws to which they may be subject, including
the possible application of the "personal holding company," foreign personal
holding company," "controlled foreign corporation" and "passive foreign
investment company" rules under the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations promulgated thereunder.
DESCRIPTION OF SECURITIES
BRIAN
Common Stock
Brian is authorized to issue ten million (10,000,000) shares of common
stock, $.0001 par value per share, of which 132,500 shares were issued and
outstanding as of the date of this prospectus. This number includes the
12,500 shares of Registered Common Stock subject to the Reconfirmation
Offering. Each outstanding share of common stock of Brian is entitled to one
vote, either in person or by proxy, on all matters that may be voted upon by
the owners thereof at meetings of the stockholders.
The holders of Brian common stock (i) have equal ratable rights to
dividends from funds legally available therefor, when, as and if declared by
the Board of Directors of Brian; (ii) are entitled to share ratably in all of
the assets of Brian available for distribution to holders of common stock upon
liquidation, dissolution or winding up of the affairs of Brian; (iii) do not
have preemptive, subscription or conversion rights, or redemption or sinking
fund provisions applicable thereto; and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
All shares of registered Common Stock which are the subject of this
Reconfirmation Offering, when issued, will be fully paid for and
non-assessable, with no personal liability attaching to the ownership
thereof. The holders of shares of common stock of Brian do not have
cumulative voting rights, which means that the holders of more than 50% of
such outstanding shares voting for the election of directors can elect all of
the directors of Brian if they so choose and, in such event, the holders of
the remaining shares will not be able to elect any of Brian's directors. At
the completion of the Reconfirmation Offering, the present officers and
directors and present shareholders of Brian will beneficially own 57% of the
then outstanding shares, with the former Frama shareholders in possession of
43% of Brian's stock. However, 29,000 shares of Brian Common Stock shall be
placed in escrow upon consummation of the Acquisition and released to the
former Frama shareholders only when and if Frama achieves revenues of at least
$5,000,000.00 for the calendar year ending December 31, 1997. Upon release
of the 29,000 shares to the former Frama shareholders, former Frama
shareholders shall hold 53% of the issued and outstanding Brian Common Stock.
Additionally, in the event Frama achieves revenues of $5,000,000 or more by
December 31, 1997, 70,000 of the 120,000 non-publicly held shares shall be
transferred to certain consultants and counsel, leaving Brian shareholders
with 22.2% of Brian (4.4% of which shall be owned by the Rule 419 Investors).
In the event Frama does not achieve revenues of $5,000,000.00 or more for the
calendar year ending December 31, 1997, the escrowed shares shall be released
to Brian's treasury. (See "ACQUISITION-Terms and Conditions of Acquisition").
Reports to Stockholders
Brian intends to continue to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable at the end of
each fiscal year. Brian's fiscal year ends on December 31st.
Non-Cumulative Voting
The holders of shares of Brian Common Stock do not have cumulative voting
rights, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors
to be elected, if they so chose. In such event, the holders of the remaining
shares will not be able to elect any of Brian's directors. Brian's current
shareholders will own 57% of the common shares outstanding after the
Acquisition since 29,000 shares to be held by former Frama shareholders will
be in escrow until December 31, 1997. After that date and conditions met as
outlined in the Acquisition Agreement, the escrowed shares will be released
and the former Frama shareholders will then own 53% of the issued and
outstanding shares.
Dividends
Brian was only recently organized, has no earnings, and has paid no
dividends to date. Since Brian was formed as a blank check company with its
only intended business being the search for an appropriate Business
Combination, Brian does not anticipate having any earnings until such time
that a Business Combination is reconfirmed by the stockholders. However,
there are no assurances that upon the consummation of a Business Combination,
Brian will have earnings or issue dividends. Therefore, it is not expected
that cash dividends will be paid to stockholders until after a Business
Combination is reconfirmed.
Transfer Agent
Brian has appointed Oxford Transfer Co., 115 North Maryland Avenue, Suite
130, Glendale, California as the Transfer Agent for Brian.
FRAMA
Equity
Frama was established on March 22, 1995 with a quota capital of 30,000,000
lire; 30,000 quotas with a face value of 1,000 lire each. Frama's quota
capital has been completely subscribed. There are currently four (4) quota
holders, including Marina Sala, Frama's sole officer and director, who owns a
quota of 25,800,000 lire, or 86% of Frama's authorized capital.
Dividends
Frama was only recently organized and has paid no dividends to date.
Frama does not intend to pay dividends in the foreseeable future.
The rights of Frama's quota holders are governed by Civil Code of Italy
and Frama's articles of incorporation.
<PAGE>
PRINCIPAL SHAREHOLDERS
BRIAN
The following table sets forth certain information regarding the
beneficial ownership of the Brian's Common Stock as of the date of this
Prospectus by (I) each person known to Brian to beneficially own 5% or more of
Brian's Common Stock, (ii) each director of Brian and (iii) all directors and
executive officers of Brian as a group. All information with respect to
beneficial ownership has been furnished to Brian by the respective director,
executive officer or 5% shareholder, as the case may be.
Amount and Nature of Amount and Nature of
Beneficial Ownership Beneficial Ownership
Prior to the Acquisition(1) After the Acquisition(7)
Number Percent Number Percent
Beneficial Owners of Shares of Class of Shares of Class
Theresa DiDato(4) 20,000 15.1% 20,000 7%
20 Chalmers Blvd.
Amawalk, NY 10501
Barry Horowtiz(5)(6) 20,000 15.1% 20,000 7%
67 South Ketcham Ave.
Amityville, NY 11701
B. Alicia Campos(6) 20,000 15.1% 20,000 7%
841 Keystone Circle
Northbrook, IL 60062
Daniel Wainick(4) 20,000 15.1% 20,000 7%
6500 New Horizons Blvd.
Amityville, NY 11701
Vic Weinstein(3) 20,000 15.1% 20,000 7%
280 Carol Close
Tarrytown, NY 10591
Joel Schonfeld(2) 13,334 10.1% 13,334 4.7%
63 Wall Street
Suite 1801
New York, NY 10005
Andrea Weinstein(2)(3) 6,666 5.0% 6,666 2.3%
63 Wall Street
Suite 1801
New York, NY 10005
Total Officers 73,334 55.3% 73,334 26%
and Directors (4 Persons)
__________________________
(1) May be deemed "Promoters" of Brian, as that term is defined under the
Securities Act of 1933.
(2) Mr. Schonfeld is counsel to Brian, and Ms. Weinstein is his partner. Mr.
Schonfeld is also a director of Brian.
(3) Vic Weinstein is the father of Andrea Weinstein, partner to Joel
Schonfeld, counsel for Brian, as well as one of its directors.
(4) Ms. DiDato is Secretary and a director of Brian, and Mr. Wainick is
President and a director of Brian.
(5) Mr. Horowitz is a director of Brian.
(6) Mr. Horowitz and Ms. Campos are clients of Mr. Schonfeld.
(7) Based on 281,915 shares to be outstanding after the acquisition. These
figures do not reflect a reduction in shares if Frama achieves revenue of
$5,000,000.00 by December 31, 1997.
None of the current stockholders have received or will receive any extra
special benefits that were not shared equally (pro rata) by all holders of share
s of Brian's stock.
CERTAIN TRANSACTIONS
The Brian H. Corp. was incorporated in New York on January 23,
1995. On January 26, 1995, Brian issued 120,000 shares of common stock, par
value $.0001. On October 23, 1995, Brian's initial public offering was
declared effective by the Securities and Exchange Commission. Pursuant to
this offering, 12,5000 shares of common stock were offered at $4.00 per share
on a "best efforts, all or nothing basis." As a result of the public offering,
$50,000.00 was raised. This offering closed on July 31, 1996.
INFORMATION CONCERNING BRIAN
Brian has heretofore filed the following with the Commission pursuant to
the Securities Act:
(1) Annual Report on Form 10-KSB for the fiscal year ended December 31,
1995;
(2) Quarterly Report on Form 10-QSB for the quarterly period ended March
31, 1996;
(3) Quarterly Report on Form 10-QSB for the quarterly period ended June
30, 1996; and
(4) Quarterly Report on Form 10-QSB for the quarterly period ended
September 30, 1996.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon
for Brian by Schonfeld & Weinstein, 63 Wall Street, Suite 1801, New York, New
York, counsel to Brian.
EXPERTS
The financial statements of Frama included in this prospectus have
been audited by Deloitte & Touche, independent auditors, Palazzo Carducci, Via
Olona, 2, 20123 Milano, Italy, as stated in their reports appearing herein,
and are included in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing. The financial statements of
Brian for the years ended December 31, 1995 and December 31, 1996 included in
this Prospectus have been so included in reliance on the report of Boykoff &
Bell, P.C., Certified Public Accountants, 2 Skyline Drive, Hawthorne, New York
10552, given on the authority of said firms as an expert in accounting and
auditing.
LITIGATION
Brian knows of no litigation pending, threatened or contemplated, or
unsatisfied judgements against it, or any proceedings in which it is a party.
Brian knows of no legal actions pending or threatened or judgements entered
against Brian's officer and directors in their capacity as such.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Articles of Incorporation of Brian provide indemnification of
directors and officers and other corporate agents to the fullest extent
permitted pursuant to the laws of Nevada. The Articles of Incorporation also
limit the personal liability of Brian's directors to the fullest extent
permitted by the Nevada Revised Statutes. The Nevada Revised Statutes contain
provisions entitling directors and officers of Brian to indemnification from
judgments, fines amounts paid in settlement and reasonable expenses, including
attorney's fees, as the result of an action or proceeding in which they may be
involved by reason of being or having been a director or officer of Brian,
provided said officers or directors acted in good faith.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Brian pursuant to the foregoing provisions, or otherwise, Brian has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Brian of expenses incurred
or paid by a director, officer or controlling person of Brian in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, Brian will, unless in the opinion of its counsel, the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
FURTHER INFORMATION
Brian is subject to the reporting requirements of the Securities Exchange
Act of 1934 (the "Exchange Act") and in accordance therewith will file
periodic reports, proxy statements and other information with the Securities
and Exchange Commission (the"Commission"). Such periodic reports, proxy
statements and other information filed by Brian can be inspected without
charge at the Public Reference Room maintained by the Commission at 450 Fifth
Street, NW, Washington, D.C. 20549. Copies of such material can be obtained
at prescribed rates upon request from the Public Reference Section of the
Commission at 450 Fifth Street, NW, Washington, D.C. 20549.
Brian has filed with the Commission in Washington, D.C., a Registration
Statement under the Securities Act with respect to the Common Stock offered by
this Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to Brian and this offering, reference is made to the
Registration Statement, including the exhibits filed therewith, copies of
which may be obtained at prescribed rates from the Commission at the public
reference facilities maintained by the Commission. Descriptions contained in
this Prospectus as to the contents of any contract or other document filed as
an exhibit to the Registration Statement are not necessarily complete and each
such description is qualified by reference to such contract or document.
<PAGE>The Brian H. Corp.
Financial Statements
(A development stage company)
For the periods January 23, 1995 (date of inception)
To December 31, 1995, and January 1, 1996 to
December 31, 1996
THE BRIAN H. CORP.
INDEX TO AUDITED FINANCIAL STATEMENTS
PAGE
* Independent Auditor's Report................1F
* Balance Sheet...............................2F
* Statements of Operations....................3F
* Statements of Stockholders' Equity..........4F
* Statements of Cash Flows....................5F
* Notes to Financial Statements...............6F-10F
<PAGE>
The Board of Directors
The Brian H. Corp.
26 Court Street, Suite 810
Brooklyn, New York 11242
Independent Auditor's Report
We have audited the accompanying balance sheets of The Brian H. Corp. (a
development stage company) as of December 31, 1996 and 1995, and the related
statements of operations, stockholders' equity and cash flows for the year
then ended and for the period January 23, 1995 (inception) to December 31,
1995. 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 have conducted our audits 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 audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Brian H. Corp.
(a development stage company) at December 31, 1996 and 1995, and the results
of its operations and its cash flows for the year then ended and for the
period January 23, 1995 (inception) to December 31, 1995, in conformity with
generally accepted accounting principles.
Boykoff and Bell, P.C.
Certified Public Accountants
Dated: February 6, 1997
Hawthorne, New York
<PAGE>
THE BRIAN H. CORP.
(a development stage company)
BALANCE SHEETS
ASSETS
December 31, 1996 December 31, 1995
Current
Assets:
Cash (Note 4) $ 52,873.20 $ 18,673.40
Other Assets:
Organization costs
(Note 2) 595.00 595.00
Total assets $ 53,468.20 $ 19,268.40
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' Equity (Notes
1, 2 and 4); 10,000,000
shares, common stock,
$.0001 par value.
Authorized; issued
and outstanding:
123,950 shares as of
December 31, 1995 $ 12.40
132,500 shares as of
December 31, 1996 $ 13.20
Additional paid-in
capital 53,455.00 19,256.00
Total stockholders'
equity 53,468.20 19,268.40
Total liabilities and
stockholders' equity $ 53,468.20 $ 19,268.40
The accompanying notes are in integral part of these financial statements.
- -2F-
<PAGE>
THE BRIAN H. CORP.
(a development stage company)
STATEMENTS OF OPERATIONS
From From
January 23, 1995 January 23,1995
(inception) to For the year ended (inception) to
December 31, 1996 December 31, 1996 December 31,1995
Costs
and Operating Expenses $ 0 $ 0 $ 0
Income from operations $ 0 $ 0 $ 0
Income before Income Taxes
and Extraordinary Items. $ 0 $ 0 $ 0
Net Income $ 0 $ 0 $ 0
Net Income Per Share $ 0 $ 0 $ 0
Net Loss $ 0 $ 0 $ 0
Net Loss Per Share $ 0 $ 0 $ 0
Number of Common
Shares Outstanding 132,500 132,500 123,950
The accompanying notes are an integral part of these financial statements.
- -3F-
<PAGE>
THE BRIAN H. CORP.
(a development stage company)
STATEMENTS OF STOCKHOLDERS' EQUITY
Shares Amount
Initial sale of stock on
January 26, 1995 at .15
per share for cash 120,000 $18,000
Sale of 3950 shares on
December 14, 1995 at
$4.00 per share for cash 3,950 15,800
Total outstanding as of
December 31, 1995 123,950 33,800
Sales of stock on the following
dates at $4.00 per share for cash:
January 11, 1996 800 3,200
February 20, 1996 1,850 7,400
April 17, 1996 250 1,000
April 24, 1996 5,650 22,600
Total stock sold for cash in 1996 8,550 34,200
Total outstanding as of December 31, 1996 132,500 $68,000
The accompanying notes are in integral part of these financial statements.
- -4F-
<PAGE>
THE BRIAN H. CORP.
(a development stage company)
STATEMENTS OF CASH FLOWS
From From
January 23, 1995 January 23, 1995
(inception) to For the year ended (inception) to
December 31, 1996 December 31, 1996 December 31,1995
Increase (Decrease)
in Cash and
Cash Equivalents
Cash Flows from
Investing Activities:
Organizational costs
incurred <$ 595> <$ 595>
Cash flows from
Financing Activities:
Net Proceeds from
Issuance of
Common Stock $ 68,000 $ 34,200 $ 33,800
Deferred Offering Costs < 14,532> <14,532>
Net Cash Provided by
Financing Activities $ 52,873 $ 34,200 $ 18,673
Net Increase in Cash
and Cash Equivalents $ 52,873 $ 34,200 $ 18,673
Cash and Cash Equivalents
at End of Year $ 52,873 $ 52,873 $ 18,673
The accompanying notes are an integral part of these financial statements.
- -5F-
<PAGE>
THE BRIAN H. CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION OF THE COMPANY
The Company was incorporated in Nevada on January 23, 1995.
During 1996, 8550 shares were sold on different dates at
$4.00 per share. The total amount of cash received by the Company from the
sale of all securities was $68,000 as of December 31, 1996.
The Company's business will be to seek potential business ventures
which in the opinion of management will provide a profit to the
Company. Such involvement can be in the terms of the acquisition
of existing businesses and/or the acquisition of assets to
establish businesses for the Company. Present management of the Company does
not expect to become involved as management in the aforementioned businesses
and will hire presently unknown and
unidentified individuals as management for the aforementioned businesses.
The Company's only activities to date have been the acquisition of funds from
the sale of its common stock to its officers, directors, and other investors.
As of December 31, 1996 the Company had not yet commenced operations.
As a result of its limited resources, the Company will, in all likelihood,
have the ability to effect only a single Business Combination. Accordingly,
the prospects for the Company's success will be entirely dependent upon the
future performance of a single business.
The Company's directors and officers are or may become, in their individual
capacities officers, directors, controlling shareholders in a variety of
businesses including other "blank check" companies. There exists potential
conflicts of interest including, among other things, time, effort and
corporate opportunity involved in participation with other business entities.
- -6F-
2. SIGNIFICANT ACCOUNTING POLICIES
Organization costs
Organization costs will be amortized on a straight line basis over a five year
period from the commencement of operations. The total organizational costs
were $ 595 as of December 31, 1996.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. LEASES
The Company has no oral or written leases or freeholds of any kind on any
physical plant. The Company presently uses the offices of Joel Schonfeld at
26 Court Street, Brooklyn, New York 11242 the attorney for the Company and
one of its shareholders at no cost. Such arrangement is expected to continue
after completion of this offering.
4. RULE 419 REQUIREMENTS
Rule 419 requires that offering proceeds after deduction for underwriting
commissions, underwriting expenses and dealer allowances, if any, be deposited
into escrow or trust account (the "Deposited Funds" and "Deposited
Securities," respectively) governed by an agreement which contains certain
terms and provisions specified by the Rule. As of December 31, 1996, the
Company's cash balance of $52,873.20 is being held in escrow. Under Rule 419,
the Deposited Funds and Deposited Securities will be released to the Company
and to the investors, respectively, only after the Company has met the
following three basic conditions. First, the Company must execute an
agreement(s) for an acquisition(s) meeting certain prescribed criteria.
Second, the Company must file a post-effective amendment to the registration
statement which includes the terms of a reconfirmation offer that must contain
conditions prescribed by the rules. The post-effective amendment must also
contain information regarding the acquisition candidate(s) and its
business(es), including audited financial statements. The Agreement(s) must
include, as a condition precedent to their consumption, a requirement that the
number of investors representing 80% of the maximum proceeds must elect to
reconfirm their investments.
- -7F-
Third, the Company must conduct the reconfirmation offer and satisfy all of
the prescribed conditions, including the condition that a certain minimum
number of investors must elect to remain investors. The post-effective
amendment must also include the terms of the reconfirmation offer mandated by
Rule 419. The reconfirmation offer must include certain prescribed conditions
which must be satisfied before the Deposited Funds and Deposited Securities
can be released from escrow. After the Company submits a signed
representation to the Escrow Agent the requirements of Rule 419 have been met
and after the acquisition(s) is consummated, the Escrow Agent can release the
Deposited Funds and Deposited Securities.
Accordingly, the company has entered into an escrow agreement with Atlantic
Liberty Savings (the "Escrow Agent") which provides that:
(1) The net proceeds are to be deposited into an escrow
account maintained by the Trust Company of New York promptly
upon receipt. The deposited proceeds and interest or dividends thereon, if
any, are to be held for the sole benefit of the investors and can only be
invested in bank deposits, in money market mutual funds or federal government
securities or securities for which the principal or interest is guaranteed by
the federal government.
(2) All securities issued in connection with the offering
and any other securities issued with respect to such securities, including
securities issued with respect to stock splits, stock dividends or similar
rights are to be deposited directly into the Escrow Account promptly upon
issuance (the "Deposited Securities") and the identity of the investors are to
be included on the stock certificates or other documents evidencing the
Securities. The Deposited Securities held in the escrow account are to remain
as issued and are to be held for the sole benefit of the investors' who retain
the voting rights, if any, with respect to the securities held in their
names. The Deposited Securities held in the Escrow Account may not be
transferred, disposed of nor any interest created therein other than by will
or the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986 or Table 1 of
the Employee Retirement Income Security Act.
(3) Warrants, convertible securities or other derivative
securities relating to securities held in the Escrow Account may be exercised
or converted in accordance with their terms; provided that, however, the
securities received upon exercise or conversion together with any cash or
other consideration paid in connection with the exercise or conversion are to
be promptly deposited into the Escrow Account.
- -8F-
Prescribed Acquisition Criteria
Rule 419 requires that before the Deposited Funds and the Deposited
Securities can be released, the Company must first execute an agreement to
acquire an acquisition candidate(s) meeting certain specified criteria. The
agreement(s) must provide for the acquisition(s) of a business(es) or assets
for which the fair value of the business represents at least 80% of the
maximum offering proceeds. For purposes of the offering, the fair value of
the business(es) or assets to be acquired must be at least $40,000.
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s) of a business(es)
meeting the above criteria has been executed, Rule 419 requires the Company to
update the registration statement with a post-effective amendment. The
post-effective amendment must contain information about: the proposed
acquisition candidate(s) and its business(es), including audited financial
statements; the results of this offering; and, the use of the funds disbursed
from the Escrow Account. The post-effective amendment must also include the
terms of the reconfirmation offer mandated by Rule 419. The reconfirmation
offer must include certain prescribed conditions which must be satisfied
before the Deposited Funds and Deposited Securities can be released from
escrow.
Reconfirmation Offering
The reconfirmation offer must commence after the effective date of the
post-effective amendment. Pursuant to Rule 419, the terms of the
reconfirmation offer must include the following conditions;
(1) The prospectus contained in the post-effective
amendment will be sent to each investor whose securities
are held in the Escrow Account within 5 business days after the effective date
of the post-effective amendment.
(2) Each investor will have no fewer than 20 and no
more than 45 business days from the effective date of the post-effective
amendment to notify the Company in writing that the investor elects to remain
an investor.
(3) If the Company does not receive written notification
from any investor within 45 business days following the effective date, the
pro rata portion of the Deposited Funds (and any related interest or
dividends) held in the Escrow Account on such investor's behalf will be
returned to the investor within 5 business days by first class mail or other
equally prompt means.
- -9F-<PAGE>
(4) The acquisition(s) will be consummated only if a
minimum number of investors representing 80% of the maximum
offering proceeds ($40,000) elect to reconfirm their investment.
(5) If a consumated acquisition(s) has not incurred by
April 23, 1997, the Deposited Funds held in the Escrow Account shall be
returned to all investors on a pro rata basis within 5 business days by first
class mail or other equally prompt means.
Release of Deposited Securities and Deposited Funds
The Deposited Funds and Deposited Securities may be released to the
Company and the investors, respectively, after;
(1) The Escrow Agent has received a signed representation from the
Company and any other evidence acceptable by the Escrow Agent that:
(a) The Company has executed an agreement for the acquisition(s) of
a Business(es) for which the par value of the business represent at least 80%
of the maximum offering proceeds and has filed the required post-effective
amendment;
(b) The post-effective amendment has been declared effective, that
the mandated reconfirmation offer having the conditions prescribed by Rule 419
has been completed and that the Company has satisfied all of the prescribed
conditions of the reconfirmation offer.
(2) The acquisition(s) of the business(es) with the fair value of at
least 80% of the maximum proceeds is consummated.
5. RELATED PARTY TRANSACTIONS
Joel Schonfeld, Esq. and his associate, Andrea Weinstein, Esq., are principal
shareholders of the Company. Joel Schonfeld's fee for legal services rendered
in the organization of the Company and for the sale of its stock was $12,000.
Mr. Schonfeld was also reimbursed $595 for incorporation and filing fees.
- -10F-
<PAGE>
Frama s.r.l..
Financial Statements
For the periods March 22, 1995 (date of inception)
to December 31, 1995; and January 1, 1996 to
December 31, 1996
<PAGE>
FRAMA Srl
FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996 AND 1995
(amounts expressed in US dollar)
BALANCE SHEET
ASSETS
1996 1995
Current assets:
Cash and cash equivalent 476 679
Other receivable 44,718 76,599
Prepaid expenses 327
Total current assets 45,521 77,278
Due from quotaholders 9,465
Intangible fixed assets
Start up expenses 1,883 2,528
Trademarks 274,753 415,772
Total intangible assets 276,636 418,300
Total assets 322,157 505,043
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable 257,954 173,604
Other payable 3,132 11,358
Total current liabilities 261,086 184,962
Medium long term liabilities
Accounts payable 51,805 300,362
Medium long term
liabilities 51,805 300,362
Equity:
Exchange difference
reserve -12,105 2,556
Quotaholders equity 18,930 18,930
Net income (loss) 2,441 -1,767
Total quotaholders equity 9,266 19,719
Total liabilities and
equity 322,157 505,043
<PAGE>
STATEMENT OF INCOME
1996 1995
Value of production
Revenues from services 196,906 103,640
Total value of production 196,906 103,640
Production costs
Depreciation expenses 141,664 93,374
Other operating costs 52,147 12,057
Total Production costs 193,811 105,431
Operating income 3,095 -1,791
Interest income 0 24
Income before income taxes 3,095 -1,767
Provision for income taxes 654 0
Net income (loss) 2,441 -1,767
<PAGE>FRAMA Srl
NOTES TO THE FINANCIAL STATEMENTS
1.ORGANIZATION
The accompanying financial statements present the financial position, results
of operations of Frama Srl, a Company located in Milano, Corso Genova, 5. The
Company had been established on March 22, 1995 with a quota capital of $18,930
completely subscribed, for the purpose of marketing royalties to third
parties. The value of those royalties is completely linked to the Fantic
Garelli S.p.A. performance, a related party.
2.BASIS OF PREPARATION
The financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America (US GAAP).
3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
Due from quotaholders
Represents the amount still to be paid in relation to the quota capital,
expressed at the face value.
Intangible assets
Intangible assets are made up of start up costs related to Company
establishment, and by trademarks.
Start up costs are amortized over a period of five years.
The trademarks are valued at cost which is lower than the estimated market
value and are amortized based on an estimated useful life of four years.
Revenues
Represent royalties earned on the trademarks in use by Fantic Garelli S.p.A.,
the formal producer and distributor of the motorcycles.
Accounts receivable and payable
Accounts receivable and payable are stated at their face value.
4. INTANGIBLE ASSETS
Intangible assets consist of the following:
Cost Accumulated Residual value
Amortization
Start up expenses 3,139 1,256 1,883
Trademarks 508,535 233,782 274,753
Total 511,674 235,038 276,636
Start up expenses primarily consists of lawyer costs incurred in connection
with the Company's establishment.
The composition of the Trademarks is as follows:
Garelli trademark 252,410
Fantic trademark 252,410
Acquisition costs 3,715
Total cost 508,535
.The Garelli Trademark had been purchased by the Company on April 28,
1995 from Merchant Broker SpA (which in 1996 because Fantic Garelli S.p.A.),
the formal producer and distributor of the motorcycles.
The original purchase of the trademark from the formal owner, "Gruppo Industrial
e Gareilli S.p.A., in liquidation and in Concordato Preventivo" had been made
on February 19, 1992 by Merchant Broker. The total amount paid for the
trademark and the related equipment's for the motorcycles production was
$408,297.
.The Garelli Trademark is related to the Gary and Mosquito motorcycles:
it had been registered under the number 528,019 (Gary) and 262,226 (Mosquito)
in the international register (Organization Mondiale de la propriete
intelectuelle) on June 27, 1995 and in the Italian Trademark Register under
the numbers 495,828, 406,397 and 529,187 on May 24, 1995.
.The Fantic Motor Trademark had been purchased by the formal owner
"Frantic Motor in Liquidation" on March 23, 1995.
.The Fantic Motor Trademark is related to the Fantic Motor motorcycles:
it had been registered under the number 435,034 in the international register
(Organization Mondiale de la propriete intelectualle) on June 27, 1995 and in
the Italian Trademark Register under the number 307,516 on May 24, 1995.
The payments of the above mentioned trademarks are due in six monthly
installments from September 30, 1995 through March 31, 1998. The Trademark
relative to Fantic Garelli has been paid in full as of December 31, 1996.
5.ROYALTIES AGREEMENT
The Garelli and Fantic Motor Trademarks as specified in note 4, are given in
use to Fantic Garelli S.p.A. based upon a royalties agreement dated April 28,
1995.
The agreement states that the Company will earn a royalty of 1.5% of the first
20 billion of revenues, and of 1% of any revenues above such amount from the
subscription date for 5 years and is renewable for an additional 5 years.
An estimated minimum royalties of approximately $78,400 is expected to be
received by the Company, despite the turnover reached every year.
Based on such agreement the Company has recorded royalties income for the year
ended December 31, 1996 of approximately $197,000, which is calculated based
on the Fantic Garelli S.p.A. turnover for the year ended December 31, 1996.
6.QUOTAHOLDERS EQUITY
The quota capital is represented by 30,000 quotas with a face value of 0.63
each, totaling to $18,930.
The quota capital had been entirely subscribed on March 22, 1995, date of the
Company establishment in the following terms:
Quotaholders Amount subscribed Percentage
Anghileri Costantino 189 1%
Mandelli Silvio 2,461 13%
Sala Marina 16,280 86%
Total 18,930 100%
The formal Company Director is Sala Marina.
7.RELATED PARTIES
The following relation exist between the quotaholders of the Company and the
ones of Fantic Garelli S.p.A., being the latest a related party.
Shareholders Amount subscribed Percentage
Cieffe Srl 293,973 45%
Sala Marina 123,033 18.90%
Perego Maria 81,659 12.50%
Mandelli Franco 81,659 12.50%
Anghileri Costantino 32,664 5%
V&A Service Sas 27,220 4.10%
Pozzoli Franco 13,065 2%
Total 653,273 100%
8.OTHER RECEIVABLE
This amount primarily represents the year end receivables for VAT paid in
relation to the trademarks purchases.
This amount also includes a receivable for approximately $900 from Fantic
Garelli S.p.A.
9.ACCOUNTS PAYABLE
Accounts payable consists of the following items:
Description Due within one year Due over one year Total
Trademarks 234,345 51,805 286,150
Other 23,609 23,609
Total 257,954 51,805 309,759
The amount paid during the year of $ 164,207 represents a compensation between
the amount to be received by FRAMA S.r.l. in relation to the year royalties
and the amount due to Fantic Garelli S.p.A. in connection with the trademark
payment.
The Company did not yet start payment of the Fantic Motor trademark, this
latest being in liquidation. The past due amount totals to $ 155,414.
10.GOING CONCERN
As explained in note 9 the financial condition of the Company does not allow
the payment of the Fantic Motor trademark. In addition its ability to pay its
current debts is completely dependant from the performance of Fantic Garelli
S.p.A., which is currently experiencing financial difficulties.
In addition if the Company experiences losses, a capital infusion will become
mandatory under Italian law, and the ability of funding sources is
uncertain.<PAGE>
Unaudited Pro Forma Condensed
Consolidated Financial Statements
Introduction
The following unaudited pro forma condensed consolidated balance sheet as of
December 31, 1996 and the unaudited pro forma condensed consolidated statement
of operations for the year then ended, reflect the pro forma condensed
consolidated financial statements of The Brian H., Corp., and Frama, Srl.
giving effect to the pro forma adjustments described herein as though the
merger with Frama, Srl. dated December 10, 1996 had been consummated at
December 31, 1996 for the condensed consolidated balance sheet and at January
1, 1996 for the condensed consolidated statement of operations.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the notes thereto and with the historical financial
statements of the Brian H., Corp. as filed in its annual report on form 10-KSB
and the financial statements of Frama, Srl. included elsewhere herein. See
"Index to Financial Statements". The unaudited pro forma condensed
consolidated statement of operations is not necessarily indicative of
operating results that would have been achieved had the merger actually been
consummated at January 1, 1996 and should not be construed as indicative of
future operations.
Under the terms of the merger agreement, The Brian H., Corp. will issue
149,415 shares of its common stock in exchange for all of the quotaholders'
equity of Frama, Srl. The transaction is being accounted for as a reverse
acquisition whereby, Frama, Srl. is the acquirer for accounting purposes.
Pro Forma Condensed Consolidated Balance Sheet
(unaudited)
The Brian H., Frama, Srl.
Corp. (in U.S.dollars) Adjustments Proforma
Assets
Current:
Cash and cash
equivalents $ 52,873 $ 476 $ 53,349
Other receivables 44,718 44,718
Prepaid expenses 327 327
Other assets:
Trademarks 274,753 274,753
Startup and deffered
offering costs 595 1,883 2,478
$ 53,468 $322,157 - $375,625
Liabilities and
Stockholders' Equity
Current:
Accounts payable,
current portion $257,954 $257,954
Other payables 3,133 3,133
261,087 261,087
Long-term liabilities:
Accounts payable,
net of current portion 51,805 51,805
$312,892 - $312,892
Stockholders' Equity:
Common stock $ 13 $ 18,930 (1)<18,930> $ 28
(1) 15
Additional paid-in
capital 53,455 (1) 18,930 72,370
(1)< 15>
Retained earnings(deficit) - < 9,665> - <9,665>
$ 53,468 $ 9,265 - $ 62,733
$ 53,468 $322,157 - $375,625
See accompanying notes to pro forma condensed consolidated financial
statements.
<PAGE>
Pro Forma Condensed Consolidated Statement of Operations
(unaudited)
The Brian H., Frama, Srl.
Corp. (in U.S.dollars) Adjustments Pro forma
Revenues $ - $196,906 $ - $196,906
Total revenues - 196,906 - 196,906
Expenses:
Selling, general
and administrative 52,147 - 52,147
Provision for
income taxes 654 - 654
Depreciation 141,664 - 141,664
Total expenses - 194,465 - 194,465
Net income $ - $ 2,441 $ - $ 2,441
Net income per share $ .01
Weighted average common
share outstanding 132,500 (2)281,915
See accompanying notes to proforma condensed consolidated financial
statements.
<PAGE>
Notes Pro Forma Condensed Consolidated
Financial Statements
(Unaudited)
1.To record issuance of 149,415 shares of The Brian H., Corp., common stock to
acquire Frama, Srl.
As discussed in the introduction section, the acquisition was recorded as a
reverse acquisition.
2 Represents the weighted average number of shares
of The Brian H. Corp., plus the 149,415 shares issued to the stockholders of
Frama, Srl.
PAGE
<PAGE>PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Section 757 of the Nevada Revised Statutes for Domestic and Foreign
Corporations, provides for the indemnification of Brian's officers, directors
and corporate employees and agents under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
ADVANCEMENT OF EXPENSES. - (1) A corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of the
corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstance of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such court shall deem proper.
(3) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (1) and (2) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) and (2) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(1) and (2) of this section. Such determination shall be made (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (b) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (c) by the
stockholders or (d) if a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion.
(5) The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
(6) The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles
of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to subsection 2 or
for the advancement of expenses made pursuant to subsection 5, may not be made
to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action. (b) Continues
for a person who has ceased to be a director, officer, employee or agent and
inures to the benefit of the heirs, executors and administrators of such a
person.
752.1 of the statute reads as follows: A corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under this section.
If a claim under the above paragraph is not paid in full by Brian within 30
days after a written claim has been received by Brian, the claimant may at
anytime thereafter bring suit against Brian to recover the unpaid amount of
the claim. If the claimant is successful, it is entitled to be paid the
expense of prosecuting such claim, as well.
Brian will, to the fullest extend permitted by Section 757 of the Nevada
Revised Statutes for Domestic and Foreign Corporations, indemnify any and all
persons whom it has the power to indemnify against any and all of the expense,
liabilities and loss, and this indemnification shall not be deemed exclusive
of any other rights to which the indemnitees may be entitled under any By-law,
agreement, or otherwise, both as to action in his/her official capacity and as
to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
persons.
Brian may, at its own expense, maintain insurance to protect itself and any
director,officer, employee or agent of Brian against any such expense,
liability or loss, whether or not Brian would have the power to indemnify such
person against such expense, liability or loss under the Nevada statute.
<PAGE>
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are estimated as
follows:
Securities and Exchange Commission
Registration Fee.........................$ 0
Legal Fees................................$30,000.00
Accounting Fees.......................... $20,000.00
Printing and Engraving................. $ 2,500.00
Miscellaneous.............................$ 500.00
Transfer Agent Fee....................... $ 1,500.00
TOTAL.....................................$54,500.00
Most of these fees and expenses will be paid by Frama.
<PAGE>
Item 26. Recent Sales of Unregistered Securities
Brian issued 120,000 shares on January 26, 1995 to its initial stockholders
for $18,000.
Name/Address Consideration
Shares
Beneficial of Common Price
Owner (1) Stock Purchased(2) Paid
Barry Horowitz 20,000 $3,000
67 South Ketcham Ave.
Amityville, NY 11701
Theresa DiDato 20,000 $3,000
20 Chalmers Blvd.
Amawalk, NY 10501
B. Alicia Campos 20,000 $3,000
841 Keystone Circle
Northbrook, IL 60062
Daniel Wainick 20,000 $3,000
6500 New Horizons Blvd.
Amityville, NY 11701
Vic Weinstein 20,000 $3,000
280 Carol Close
Tarrytown, NY
Joel Schonfeld 13,334 $2,000
63 Wall Street
Suite 1801
New York, NY 11242
Andrea Weinstein 6,666 $1,000
63 Wall Street
Suite 1801
New York, NY 11242
Total Officers 73,334 $11,000
and Directors
(4 persons)
__________________________
(1) May be deemed "Promoters" of Brian, as that term is defined under
the Securities Act of 1933.
(2) These Shares were sold under the exemption of Section 4(2) of the
Securities Act of 1933.
Neither Brian nor any person acting on its behalf offered or sold the
securities by means of any form of general solicitation or general
advertising.
Each purchaser represented in writing that he/she acquired the securities for
his own account. A legend was placed on the certificates stating that the
securities have not been registered under the Act and setting forth the
restrictions on their transferability and sale. Each purchaser signed a
written agreement that the securities will not be sold without registration
under the Act or exemption therefrom.
<PAGE>
EXHIBITS
Item 27.
2.0 Acquisition Agreement
24.0 Accountants' Consent to Use Opinion.
99.1 Letter of Reconfirmation
<PAGE>Item 28.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
Effective Date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement, including
(but not limited to) any addition or deletion of managing underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) To deposit into the Escrow Account at the closing, certificates in such
denominations and registered in such names as required by Brian to permit
prompt delivery to each purchaser upon release of such securities from the
Escrow Account in accordance with Rule 419 of Regulation C under the
Securities Act. Pursuant to Rule 419, these certificates shall be deposited
into an escrow account, not to be released until a business combination is
consummated.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
- -This Space is Intentionally Left Blank-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of , State of , on ,199
THE BRIAN H. CORP.
(Registrant)
BY: Daniel Wainick
Daniel Wainick, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
Daniel Wainick
Daniel Wainick DATED Feb. 14, 1997
President, Director
Theresa DiDato
Theresa DiDato DATED Feb. 14, 1997
Secretary, Director
Joel Schonfeld
Joel Schonfeld DATED Feb. 14, 1997
Director
Barry Horowitz
Barry Horowitz DATED Feb. 14, 1997
Director
<PAGE>
AGREEMENT AND PLAN OF ACQUISITION
BY AND AMONG
THE BRIAN H. CORP.
AND
FRAMA S.r.l.
AGREEMENT AND PLAN OF ACQUISITION
AGREEMENT AND PLAN OF ACQUISITION by and between The Brian H. Corp. , a
Nevada corporation,("Brian") and Frama S.r.l., an Italian
corporation,("Frama").
WHEREAS, the Boards of Directors of Brian and Frama, deem it advisable
for the mutual benefit of Brian and Frama, and their respective shareholders,
that Frama be acquired by Brian (the "Acquisition"), and have approved this
Agreement and Plan of Acquisition (the "Agreement"); and
WHEREAS, the Boards of Directors of Brian and Frama have unanimously
resolved to recommend to their shareholders acceptance of the Acquisition
contemplated herein.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for the purpose of
setting forth certain terms and conditions of the Acquisition, and the mode of
carrying the same into effect, Frama and Brian hereby agree as follows:
ARTICLE 1
ACQUISITION AND ORGANIZATION
SECTION 1.1 The Acquisition. As of the Effective Date (as hereinafter
defined), subject to the terms and conditions hereof, Frama shall be merged
with and into Brian as soon as practicable through Brian's acquisition of 100%
of Frama's issued and outstanding shares of Common Stock in exchange for
shares of Common Stock of Brian, the parent company (the "Parent Company").
At the time of this Acquisition, Frama shall have a minimum of $50,000.00 U.S.
in capital and income of at least $75,000.00 for the current year with
exception of that same income as a minimum for the next year. Immediately
after consummation of the Acquisition, the Parent Company shall be and
continue as the public entity, and shall have issued and outstanding 281,915
shares of Common Stock; 149,415 (representing 53% of the Parent Company) to be
held by former Frama stockholders in proportion to the amount that each of
said shareholders previously held shares of Common Stock of Frama, and 132,500
(representing 47% of the Parent Company) to be held by current Brian
stockholders. Of the 149,415 shares of Brian to be issued to former Frama
shareholders, 29,000 shall be held in escrow until December 31, 1997 or sooner
if the sales figures are obtained as stated herein. Until that time, the
former Frama Shareholders will hold 120,415 shares of common stock
(representing 47% of the Parent Company). If on or before December 31, 1997
Brian's consolidated financials reach revenues of a minimum of $5,000,000.00,
the escrowed shares shall be released from escrow to the former Frama
Shareholders. Furthermore, if on or before December 31, 1997,Brian' sales on a
consolidated basis, reach or exceed $5,000,000.00, the 120,000 shares held by
the insider shareholders will be reduced to 50,000. The remaining 70,000 will
be apportioned as follows: 15,000 shares to Rose-Marie Fox; 15,000 shares to
Andreas O. Tobler; 30,000 shares to Ettore Cesaraccio and 10,000 shares to
Schonfeld & Weinstein, L.L.P., 63 Wall Street, Suite 1801, New York, New
York. In the event Brian's sales, on a consolidated basis , does not reach
$5,000,000.00 during the calendar year of 1997 by December 31, 1997, the
escrowed shares shall be returned to the treasury of Brian . Brian and Frama
are herein sometimes referred to as the "Constituent Corporations." The
Acquisition is to be done in such a manner as to be tax-free to all parties
involved.
SECTION 1.2. Effect of Acquisition. The parties agree to the following
provisions with respect to the Acquisition:
(a) Name of Surviving Corporation. After the Acquisition and
Effective Date (as defined in Section 1.2(f) hereof), both entities may retain
their respective names.
(b) Articles of Incorporation. The Articles of Incorporation of
each constituent corporation as in effect immediately prior to the Effective
Date shall from and after the Effective Date be and continue to be the
Articles of Incorporation of the respective constituent corporations until
changed or amended as provided.
(c) By-Laws. The By-Laws of each constituent corporation as in
effect immediately prior to the Effective Date shall from and after the
Effective Date be and continue to be the By-Laws of the respective constituent
corporations until changed or amended as provided by law.
(d) Corporate Organization. All of the issued and outstanding
shares of common stock of Frama shall be acquired by Brian. The Parent
Company shall thenceforth be responsible for all the liabilities and
obligations of each of the Constituent Corporations, with the effect set forth
in the appropriate provisions of Nevada law and the appropriate provisions of
Italian law.
(e) Filing of Articles of Acquisition and Amendment to Articles of
Association. If this Agreement is duly approved by each of the Constituent
Corporations in accordance with the appropriate provisions of Nevada law and
the appropriate provisions of Italian law and the respective Articles or
Certificate of Incorporation and By-laws of the Constituent Corporations and
not terminated pursuant to Article 8 hereof, and approved by the shareholders
of Brian pursuant to Rule 419 under Regulation C of the Securities Act of
1933, as amended ("Rule 419"), as soon as practicable after all other
conditions to the Acquisition set forth in Article 6 hereof shall have been
satisfied or waived, and after Brian's Post-Effective Amendment filed pursuant
to Rule 419 has been declared effective by the Securities and Exchange
Commission and Brian's shareholder reconfirmation has been successfully
completed and the closing of this Agreement (the "Closing") has taken place,
the Acquisition shall be consummated and Articles of Acquisition, to which
this Agreement shall be appended, shall be filed with the appropriate Italian
governmental agency and an amendment to Brian's Articles of Association shall
be filed with the Nevada Secretary of State. The Closing of this Agreement
shall take place at the offices of Schonfeld & Weinstein, L.L.P., 63 Wall
Street, New York, New York 10005, or at such other time, place or date as the
parties may mutually agree.
(f) Further Assurances. If at any time after the Effective Date,
the Parent Company shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other acts or things are necessary, desirable
or proper (a) to vest, perfect or confirm, of record or otherwise, in the
Parent Company, its right, title or interest in, to or under any of the
rights, properties or assets of the Constituent Corporations acquired or to be
acquired as a result of the Acquisition, or (b) otherwise to carry out the
purposes of this Agreement, the Constituent Corporations agree that the Parent
Company and its proper officers and directors shall be authorized to execute
and deliver, in the name and on behalf of the Constituent Corporations, all
such deeds, bills of sale, assignments and assurances and do, in the name and
on behalf of the Constituent Corporations, all such other acts and things
necessary, desirable or proper to best, perfect or confirm its right, title or
interest in, to or under any of the rights, properties or assets of the
Constituent Corporations acquired or to be acquired as a result of the
Acquisition and otherwise to carry out the purposes of this Agreement.
<PAGE>
ARTICLE 2
THE ACQUISITION
SECTION 2.1 Conversion of Shares in the Acquisition.
(a) Issuance of New Shares. On the Effective Date, and upon the
acquisition of 100% of all shares of Common Stock of Frama, Brian shall issue
149,415 shares of its authorized Common Stock to former Frama share holders,
in the same proportion said share holders held shares of Common Stock of
Frama. Brian shareholders shall retain their holdings which, however, will
become diluted with the issuance of the additional share of stock. All those
Brian shares to be issued and outstanding immediately following the Effective
Date shall be registered pursuant to a registration statement to be filed
concurrently with and as part of the Post-Effective Amendment. Thus, after
the Effective Date, the Parent Company shall have 281,915 shares of common
stock issued and outstanding.
(b) On the Effective Date, 29,000 of 149,415 shares of Common Stock,
shall be held in escrow until December 31, 1997. Until that time, the former
Frama Shareholders will hold 120,415 shares of common stock (representing 48%
of the Parent Company).
(c) If on or before December 31, 1997, Brian's revenues on a
consolidated basis, reach or exceed $5,000,000.00, the escrowed shares shall
be released from escrow to the former Frama Shareholders.
(d) If on or before December 31, 1997, Brian's revenues on a
consolidated basis, reach or exceed $5,000,000.00, the 120,000 shares held by
the insider shareholders will be reduced to 50,000. The remaining 70,000 will
be apportioned as follows: 15,000 shares to Rose-Marie Fox; 15,000 shares to
Andreas O. Tobler; 30,000 shares to Ettore Cesaraccio and 10,000 shares to
Schonfeld & Weinstein, L.L.P., 63 Wall Street, Suite 1801, New York, New York.
(e) In the event Brian's revenues on a consolidated basis, do not
reach $5,000,000.00 by December 31, 1997, the escrowed shares shall be
returned to the treasury of the Parent Company.
(f) On the Effective Date, Frama shall have a minimum of $50,000.00
in capital and sales of $75,000.00 per annum.
SECTION 2.2 Further Transfer of Stock. The former Frama stockholders
and the consultants hired by Frama prior to this transaction may distribute
their shares of the Parent Company as they determine in accordance with any
and all applicable state and federal securities laws, and shall provid counsel
to Brian with a list at the time of closing for delivery to the transfer
agent.
SECTION 2.3 Release of Shares and Funds from Escrow.
Pursuant to Rule 419, certificates representing the shares of Common
Stock purchased in Brian's initial public offering which offering was declared
effective by the S.E.C. on October 23, 1995, as well as the funds used to
purchase said shares, are being held in escrow pending consummation of a
Acquisition (the "Deposited Securities" and the "Deposited Funds,"
respectively). Brian has eighteen (18) months in which to consummate a
Acquisition. If a Acquisition is not consummated within that time, the
Deposited Securities and Deposited Funds shall be returned to Brian and Brian
shareholders, respectively. Pursuant to Rule 419, Deposited Securities shall
be released to shareholders and Deposited Funds released to Brian following
effectiveness of a Post-Effective Amendment and a reconfirmation offering
pursuant to which Brian shareholders representing a minimum of 80% of the
offering proceeds of Brian's initial public offering ($40,000) reconfirm their
investments.
SECTION 2.4 Surrender of Certificates. Brian has designated Oxford
Transfer Agency, Inc., 1130 Southwest Morrison, Suite 250, Portland Oregon, as
Transfer Agent (the "Transfer Agent") hereunder. Immediately following
effectiveness of the Post-Effective Amendment and shareholder reconfirmation
offering, the Transfer Agent shall have mailed and/or made available to each
Brian shareholder and each former Frama shareholder notice and letter of
transmittal advising such holder of the effectiveness of the Post-Effective
Amendment and shareholder reconfirmation, and the procedure for surrendering
Frama stock to the Transfer Agent. Frama shall immediately turn in Frama
common stock certificates to the Transfer Agent. Upon the surrender to the
Transfer Agent of such certificates, together with a letter of transmittal,
duly executed and completed in accordance with the instructions thereon, the
Transfer Agent shall promptly convert and issue an aggregate of 149,415 shares
of Brian common stock to former Frama shareholders in exchange for 100% of the
authorized and outstanding shares of Frama. Until so surrendered and
exchanged, each certificate theretofore representing shares shall represent in
the case of Dissenter's Shares, the right to seek appraisal pursuant to the
laws of the state of incorporation of the Constituent Corporation in which the
holder owns stock (if such right has been perfected).
SECTION 2.5 Transfer Agent. Prior to the Offering, Brian shall have
made such arrangements to insure that an adequate number of its shares of
Common Stock have been deposited with the Transfer Agent as necessary in
sufficient time to permit prompt distribution against surrender of Frama stock
certificates as provided hereunder.
SECTION 2.6 Dissenters' Rights. Dissenters' Shares shall not be
converted into the right to receive Common Stock as provided herein unless and
until the holder of such shares withdraws his or her demand for such appraisal
or becomes ineligible for such appraisal, pursuant to the laws of the state of
incorporation of the Constituent Corporation in which the holder owns stock
(if such right has been perfected).<PAGE>
ARTICLE 3
ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER
SECTION 3.1 Confidentiality; Inconsistent Activities. Unless and until
this Agreement has been terminated in accordance with its terms, neither Frama
nor Brian will (i) solicit or encourage, directly or indirectly, any inquiries
or proposals to acquire any
shares of capital stock of Frama or Brian or any significant portion of the
total assets of either Constituent Corporation or any subsidiary or division
of either of the Constituent Corporations (whether by merger, purchase of
assets, tender offer or other similar transaction); (ii) afford any third
party which may be considering the acquisition of any shares of capital stock
of Frama or Brian or any significant portion of the total assets of either
Constituent Corporation, access to the properties, books or records of either
Constituent Corporation except as required by mandatory provisions of law; or
(iii) enter into any discussions or negotiations for, or enter into any
agreement which provides for, the sale of any shares of capital stock of Frama
or Brian or any significant portion of the total assets of Frama or Brian to a
person other than in connection with the transactions contemplated herein.
SECTION 3.2 Reasonable Efforts. Subject to the terms and conditions
hereof, each of the parties hereto agrees to use any and all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary to satisfy the other conditions of Closing set
forth herein.
SECTION 3.3 Conduct of Business by Each of the Constituent Corporations
Pending the Acquisition. Frama and Brian covenant and agree that, prior to
the Effective Date, unless Frama or Brian, respectively, shall otherwise agree
in writing and except as contemplated by this Agreement:
(a) the business of each of the Constituent Corporations shall be
conducted only in the ordinary and usual course and consistent with its past
practice, and neither Frama nor Brian shall purchase or sell (or enter into
any agreement to so purchase or sell) any properties or assets or make any
other changes in the operations of Frama or Brian, respectively, taken as a
whole;
(b) Neither Constituent Corporation shall (i) amend its Articles of
Incorporation or By-Laws, (ii) change the number of authorized or outstanding
shares of its capital stock, except as set forth in Section 2 hereof, or (iii)
declare, set aside or pay any dividend or other distribution or payment in
cash, stock or property in respect of the Shares;
(c) Neither Constituent Corporation shall (i) issue, grant, sell or
pledge or agree or propose to issue, grant, sell or pledge any shares of, or
rights of any kind to acquire any shares of, its capital stock (ii) incur any
indebtedness other than in the ordinary course of business, (iii) acquire
directly or indirectly by redemption or otherwise any shares of its capital
stock of any class or (iv) enter into or modify any contact, agreement,
commitment or arrangement with respect to any of the foregoing.
(d) Each Constituent Corporation shall use its best efforts to
preserve intact its business organizations, to keep available the services of
it and its current officers and key employees, and to preserve the good will
of those having business relationships with it.
(e) Frama and Brian will not (i) increase the compensation payable
or to become payable by it to any of its officers or directors, (ii) make any
payment or provision with respect to any bonus, profit sharing, stock option,
stock purchase, employee stock ownership, pension, retirement, deferred
compensation, employment or other payment plan, agreement or arrangement for
the benefit of its employees, (iii) grant any stock options or stock
appreciation rights or permit the exercise of any stock appreciation right
where the exercise of such right is subject to its discretion, (iv) make any
change in the compensation to be received by any of its officers, or adopt, or
amend to increase compensation or benefits payable under, any collective
bargaining, bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund or arrangement for the benefit of employees, (v)
enter into any agreement with respect to termination or severance pay, or any
employment agreement or other contract or arrangement with any officer or
director or employee of Frama or Brian, respectively, with respect to the
performance of personal services that is not terminable without liability by
it on thirty days' notice or less, (vi) increase benefits payable under its
current severance or termination pay agreements or policies or (vii) make any
loan or advance to, or enter into any written contract, lease or commitment
with, any of its officers or directors;
(f) Neither Frama nor Brian shall assume, guarantee, endorse or
otherwise become responsible for the obligations of any other individual, firm
or corporation or make any loans or advances to any individual, firm or
corporation;
(g) Neither Frama nor Brian shall make any investment of a capital
nature either by purchase of stock or securities, contributions to capital,
property transfers or otherwise, or by the purchase of any property or assets
of any other individual, firm or corporation;
(h) Neither Frama nor Brian shall reduce its cash or short term
investments or their equivalent, other than to meet cash needs arising in the
ordinary course of business, consistent with past practices, or in performing
its obligations under this Agreement; and
(i) Neither Frama nor Brian shall enter into an agreement to do any
of the things described in clauses (a), (b), (c), (e), (f), (g) and (h).
SECTION 3.4 Access and Information.
(a) Frama shall afford to Brian and its accountants, counsel and
other representatives full access, during normal business hours throughout the
period prior to the Effective Date, to all of the properties, books,
contracts, commitments and records (including but not limited to tax returns)
of Frama and, during such period, Frama shall furnish promptly to Brian (i) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (ii) all
other information concerning the business, properties and personnel of Frama
that may reasonably be requested. In the event of the termination of this
Agreement, Brian will, and will cause its representatives to, deliver to Frama
all documents, work papers and other material, and all copies thereof,
obtained by it or on its behalf from Frama as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof,
and will hold in confidence all confidential information, and will not use any
such confidential information, until such time as such information is
otherwise publicly available or as it is advised by counsel that any such
information or document is required by law to be disclosed. If this Agreement
is terminated, Brian will deliver to Frama all documents so obtained by it.
(b) Brian shall afford to Frama and its accountants, counsel and
other representatives full access, during normal business hours throughout the
period prior to the Effective Date, to all of the properties, books,
contracts, commitments and records (including but not limited to tax returns)
of Brian and, during such period, Brian shall furnish promptly to Frama (i) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (ii) all
other information concerning the business, properties and personnel of Brian
that may reasonably be requested. In the event of the termination of this
Agreement, Frama will, and will cause its representatives to, deliver to Brian
all documents, work papers and other material, and all copies thereof,
obtained by it or on its behalf from Brian as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof,
and will hold in confidence all confidential information, and will not use any
such confidential information, until such time as such information is
otherwise publicly available or as it is advised by counsel that any such
information or document is required by law to be disclosed. If this Agreement
is terminated, Frama will deliver to Brian all documents so obtained by it.
SECTION 3.5 Notice of Actions and Proceedings. Frama shall promptly
notify Brian, and Brian shall promptly notify Frama of any claims, actions,
proceedings or investigations commenced or, to the best of its knowledge,
threatened, involving or affecting Frama or Brian or any of their property or
assets, or, to the best of its knowledge, against any employee, consultant,
director, officer or shareholder, in his, her or its capacity as such, of
Frama or Brian which, if pending on the date hereof, would have been required
to have been disclosed in writing pursuant to Section 4.4 hereof or which
relates to the consummation of the Acquisition or the transactions
contemplated hereby.
SECTION 3.6 Notification of Other Certain Matters. Frama shall give
prompt notice to Brian, and Brian shall give prompt notice to Frama of:
(a) any notice of, or other communication relating to, a default or
event which, with notice or lapse of time or both, would become a default,
received by Frama or Brian subsequent to the date of this Agreement and prior
to the Effective Date, under any agreement, indenture or instrument material
to the financial condition, properties, business or results of operations of
Frama or Brian taken as a whole to which Frama or Brian is a party or is
subject;
(b) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement; and
(c) any material adverse change in the financial condition,
properties, businesses or results or operations of Frama or Brian, or the
occurrence of an event which, so far as reasonably can be foreseen at the time
of its occurrence, would result in any such change.
SECTION 3.7 Stockholder Meeting of Frama. Frama shall, at a meeting of
its stockholders duly called by the Board of Directors of Frama, to be held as
soon as practicable following execution of this Agreement, present the
following proposals for the authorization and approval of the stockholders of
Frama and recommend their adoption by the stockholders:
a) ratification of this Agreement and authorization of the
consummation of the Acquisition contemplated herein;
SECTION 3.8 Filing of Post-Effective Amendment. Upon signing this
Acquisition Agreement and shareholder approval pursuant to a special meeting
of shareholders, Brian shall promptly file with the Securities and Exchange
Commission a Post-Effective Amendment reflecting the Acquisition as required
by Rule 419.
SECTION 3.9 Reconfirmation Offering. Within five (5) days of
effectiveness of the Post-Effective Amendment, Brian shall issue a
reconfirmation offering to its shareholders. Pursuant to Rule 419, the
Acquisition will be consummated only if a minimum number of investors
representing 80% of the maximum offering proceeds of Brian's initial public
offering ($40,000) elect to reconfirm their investments.
SECTION 3.10 Other Agreements of Brian. Brian shall file with the SEC
any appropriate statements or requirements within the Securities Exchange Act
of 1934, as amended, with respect to the Acquisition, obtain any consents,
amendments to or waivers under the terms of any of Brian's arrangements
required by the transactions contemplated by this Agreement, and defend any
lawsuits or other legal proceedings, whether judicial or administrative and
whether brought derivatively or on behalf of third parties (including
governmental agencies or officials), challenging this Agreement, or the
consummation of the transactions contemplated hereby (provided that the
maximum amount that Brian shall be required to spend on such lawsuits or
proceedings shall be $5,000 in the aggregate).
SECTION 3.11 Brian Stockholder Consent. Brian shall obtain written
consent of two-thirds of its shareholders to take the following actions:
a) ratification of this Agreement and authorization of the
consummation of the Acquisition contemplated herein;
b) issuance of 149,415 shares of Brian common stock to former
Frama shareholders;
d) the tender of resignations of the directors of Brian, whose
resignations are contingent on the consummation of this acquistion. If on
December 31, 1997, Brian's sales, on a consolidated basis, do not reach or
exceed $5,000,000.00 for the calendar year of 1997, Brian's directors as of
that date, shall tender their resignations and the previous directors shall be
reinstalled as directors of Brian. <PAGE> ARTICLE 4
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BRIAN
Brian represents and warrants to, and agrees with Frama as follows:
SECTION 4.1 Organization and Good Standing. Brian is a duly
incorporated and validly existing corporation in good standing under the laws
of the state of its incorporation, with all requisite power and authority
(corporate and other) to own its properties and conduct its business, and is
duly qualified and in good standing as a foreign corporation authorized to do
business.
SECTION 4.2 Authorization; Binding Agreement. Brian has the corporate
power and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by Brian, and subject to any requisite
approval of the Acquisition by the shareholders of Brian, including a
shareholder reconfirmation pursuant to Rule 419, constitutes a valid and
binding agreement of Brian in accordance with its terms.
SECTION 4.3 Capitalization. The authorized capital stock of Brian
consists of 10,000,000 shares of common stock, par value $.0001 per share. On
January 26, 1995, shares of Common Stock were issued to seven (7) insider
shareholders. Brian's public offering, whereby 12,500 shares of Common Stock
were sold at $4.00 per share, closed on July 31, 1995. As of the date hereof,
132,500 shares of common stock are outstanding. All of the outstanding shares
of capital stock of Brian have been duly authorized and validly issued and are
fully paid and nonassessable. Brian is not aware of any voting trusts, voting
agreements or similar understandings applicable to the Shares. Brian does not
have any outstanding options, subscriptions or other rights, agreements or
commitments, which either; (a) obligates Brian to issue, sell or transfer any
shares of the capital stock of Brian or (b) restricts the transfer of or
otherwise relates to the shares of its Common Stock.
SECTION 4.4 Litigation. Except as may be disclosed in the SEC Filings
(as defined in Section 4.5 hereof), or to Frama in writing on or prior to the
date hereof, as of the date hereof there are no claims, actions, proceedings,
or investigations pending or, to the best knowledge of Brian, threatened
against Brian or to the best of Brian knowledge, pending or threatened against
any employee, consultant, director, officer or shareholder, in his, her or its
capacity as such, before any court or governmental or regulatory authority or
body which, if decided adversely, could materially and adversely affect the
financial condition, business, prospects or operations of Brian. As of the
date hereof, neither Brian nor any of its property is subject to any order,
judgment, injunction or decree, which materially and adversely affects the
financial condition, business, prospects or operations of Brian.
SECTION 4.5 Financial Statements and Reports. Brian has provided Frama
with true and complete copies of (a) Brian's Quarterly Reports on Form 10-Q
for the quarters ended , , , (b) copies of
Brian's Registration Statement on Form SB-2 and Prospectus which was declared
effective by the S.E.C. on October 23, 1995, (d) all other reports, statements
and registration statements filed by it with the SEC since October 23, 1995.
The reports, statements and registration statements referred to in the
immediately preceding sentence including any that are filed subsequent to the
date hereof and prior to the effective date are referred to in the Agreement
as the "SEC Filings." As of their respective dates, the SEC Filings did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made, not misleading. The
financial statements of Brian included in the SEC Filings were prepared by an
independent certified public accountant in accordance with generally accepted
accounting principles applied on a consistent basis (except as otherwise noted
in such statements) and present fairly the financial position, results of
operations and changes in financial position of Brian as of the dates and for
the periods indicated subject, in the case of unaudited interim financial
statements, to normal year-end adjustments and any other adjustments described
therein. Brian will have approximately $40,000, consisting of the proceeds
from Brian's initial public offering, currently held in escrow, on deposit in
a bank duly licensed to do business in the State, pursuant to Rule 419 on the
Effective Date.
SECTION 4.6 Absence of Certain Changes or Events. Except as set forth
in the SEC Filings, or as disclosed to Frama in writing, (a) there has not
been any change or any development involving a prospective change, which has
affected or may affect materially and adversely the business, assets or
prospects or the financial position or the results of operations of and its
subsidiaries taken as whole; and (b) Brian has not incurred any indebtedness
for money borrowed, or purchased or sold any material amount of assets, other
than in the ordinary course of business, or entered into any other transaction
other than in the ordinary course of business.
SECTION 4.7 Absence of Breach. Except as may be disclosed to Frama in
writing on or prior to the date hereof, the execution, delivery and
performance by Brian of this Agreement, and the performance by Brian of its
obligations hereunder, will not
(a) subject to the appropriate approval by Brian's shareholders,
conflict with or result in a breach of any of the provisions of its Articles
of Incorporation or By-Laws;
(b) subject to obtaining the governmental and other consents
referred to in Section 4.8 hereof, contravene any law, rule or regulation of
any state or of the United States or any political subdivision thereof or
therein, or any order, writ, judgment, injunction, decree, determination or
award currently in effect, which, singly or in the aggregate, would have a
material adverse effect on Brian;
(c) conflict in any respect with or result in a breach of or
default under any indenture, loan or credit agreement relating to money
borrowed or (iv) conflict in any respect with or result in a breach of or
default under any other indenture, mortgage, lien, lease, agreement, contract
or instrument to which Brian is a party or by which it or any of its
properties may be affected or bound, which, singly or in the aggregate, would
have a material adverse effect on Brian.
SECTION 4.8 Governmental and Other Consents, etc. Subject to the
requisite shareholder approval and any required filings with the Securities
and Exchange Commission, no consent, waiver, approval, license or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States
on the part of Brian is required in connection with the execution or delivery
by Brian of his Agreement or the consummation by the Company of the
transactions contemplated hereby other than (i) filings in the State of Nevada
in accordance with state law thereof and in Italy in accordance with Italian,
(ii) filings under state securities, "Blue Sky" or anti-takeover laws and
(iii) filings with the SEC and any applicable national securities exchange.
SECTION 4.9 Benefits Plans. Except as disclosed in the SEC Filings or
as disclosed in writing to Frama before the date hereof, Brian does not have
any employment agreement with any executive officer of Brian or any incentive
compensation, deferred compensation, profit sharing, stock option, stock
bonus, stock purchase, savings, consultant, retirement, pension or other
"fringe benefit" plan or arrangement with or for the benefit of any officer,
employee, former employee or consultant.
SECTION 4.10 Certain Contracts. Except as disclosed in the SEC Filings
or as disclosed in writing to Frama on or prior to the date hereof, Brian is
not a party to any collective bargaining agreement or any other agreement with
employees of Brian or any of the subsidiaries as a group.
SECTION 4.11 ERISA. Brian has no employee benefit plans, as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
SECTION 4.12 Transactions With Management. Except as disclosed in the
SEC Filings or to Frama in writing on or before the date hereof, Brian is not
now a party to any material contract, lease, loan or commitment with or to any
officer or director, or person owning more than 5% of the outstanding Common
Stock of Brian or any subsidiary of Brian or any affiliate or associate of
such officer, director or person.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF FRAMA
Frama, represent and warrants to, and agrees with Brian as follows:
SECTION 5.1 Organization and Good Standing. Frama is a duly
incorporated and validly existing corporation in good standing under the laws
of the nation of Italy, with all requisite power and authority (corporate and
other) to own its properties and conduct its businesses.
SECTION 5.2 Authorization; Binding Agreement. Frama has the requisite
corporate power and authority to execute and deliver this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by
Frama and constitutes a valid and binding agreement of Frama in accordance
with its terms.
SECTION 5.3 Absence of Breach. The execution, delivery and performance
by Frama of this Agreement, and the performance by Frama of its obligations
hereunder, do not (i) conflict with or result in a breach of any of the
provisions of its articles of incorporation or by-laws, (ii) subject to
obtaining the governmental and other consents referred to in Section 5.4
hereof, contravene any law, rule or regulation of any state or of the United
States or any political subdivision thereof or therein, or any order, writ,
judgment, injunction, decree, determination or award currently in effect,
which, singly or in the aggregate, would have a material adverse effect on
Frama, (iii) conflict in any respect with or result in a breach of or default
under any indenture, loan or credit agreement (appropriate waivers having been
obtained) or any other agreement or instrument to which Frama is a party or by
which Frama properties may be affected or bound, which, singly or in the
aggregate, would have a material adverse effect on Frama.
SECTION 5.4 Governmental and Other Consents, etc. Subject to the
requisite Board of Directors approval, no material consent, approval or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States
or Italy on the part of Frama is required in connection with the execution
delivery by Frama of this Agreement or the consummation by Frama of the
transaction contemplated hereby other than (i) filings in the state of Nevada
in accordance with the laws of that state and in Italy in accordance with the
laws of that nation, thereof, (ii) filings under state securities, "Blue Sky"
or anti-takeover laws, and (iii) filings with the SEC and any applicable
national securities exchange.
SECTION 5.5. Financial Statements. Frama shall provide Brian with
certified consolidated financial statements (including the notes thereto)
which have been prepared by an independent certified public accountant in
accordance with generally accepted accounting principles (as in effect from
time to time) applied on a consistent basis and which present fairly the
consolidated financial position, results of operations and changes in
financial position of Frama.
SECTION 5.6. Capitalization. Frama has a minimum of $50,000.00 U.S.,
plus other assets, including licenses.
SECTION 5.7 Litigation. Except as may be disclosed to Brian in writing
on or prior to the date hereof, as of the date hereof there are no claims,
actions, proceedings, or investigations pending or, to the best knowledge of
Frama, threatened against Frama or to the best of Frama knowledge, pending or
threatened against any employee, consultant, director, officer or shareholder,
in his, her or its capacity as such, before any court or governmental or
regulatory authority or body which, if decided adversely, could materially and
adversely affect the financial condition, business, prospects or operations of
Frama. As of the date hereof, neither BRIAN nor any of its property is
subject to any order, judgment, injunction or decree, which materially and
adversely affects the financial condition, business, prospects or operations
of Frama.
SECTION 5.8 Absence of Certain Changes or Events. Except as disclosed
to Brian in writing, (a) there has not been any change or any development
involving a prospective change, which has affected or may affect materially
and adversely the business, assets or prospects or the financial position or
the results of operations of BRIAN and its subsidiaries taken as whole; and
(b) Frama has not incurred any indebtedness for money borrowed, or purchased
or sold any material amount of assets, other than in the ordinary course of
business, or entered into any other transaction other than in the ordinary
course of business.
SECTION 5.9 Capitalization as of March 1, 1998. The officers and
directors of Frama individually and jointly personally guarantee to Brian
shareholders that as of March 1, 1998 or until sales of Frama/Brian reach
$5,000,000 per annum which ever is sooner, there will be a minimum of
$90,000.00 cash U.S. in the Brian accounts and no additional shares of stock
will be issued except as provided for herein.
ARTICLE 6
CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Acquisition. The respective obligations of each party to effect the
Acquisition shall be subject to the fulfillment at or prior to the Effective
Date of the following conditions:
(a) this Agreement and the transactions contemplated hereby having
been approved and adopted at or prior to the Effective Date by the requisite
vote of the shareholders of the Company as required by applicable law;
(b) no preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States or
any foreign jurisdiction preventing the consummation of the Acquisition shall
be in effect;
SECTION 6.2 Conditions to Obligation of Frama to Effect the
Acquisition. The obligation of Frama to effect the Acquisition shall be
subject to the fulfillment at or prior to the Effective Date of the following
conditions any one or more of which (except Section 6.2(h) and (i)) may be
waived by Brian:
(a) Frama shall have performed in all material respects their
agreements contained in this Agreement required to be performed on or prior to
the Effective Date including those specified in Section 5.5 herein;
(b) Frama shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date, including the surrender of 100% of its issued and
outstanding common stock to Brian upon Brian's issuance of an aggregate of
149,415 shares of its common stock to Frama and Frama having capital of
$50,000.00 as of the Effective Date;
(c) the representations and warranties of Frama set forth in this
Agreement shall be true and correct in all material respects on and as of the
Effective Date as if made on and as of such date, except as contemplated or
permitted by this Agreement.
(d) Frama shall have delivered a certificate of its President or its
Chairman of the Board to the effect set forth in paragraphs (a), (b) and (c)
of this Section 6.2;
(e) Frama shall have delivered to Brian copies of resolutions duly
adopted by its Board of Directors approving the execution and delivery of this
Agreement, such resolutions being certified by the Secretary;
(f) No action or preceding before any court or governmental or
regulatory authority or body, United States, federal or state or foreign,
shall have been instituted (and be pending) or threatened by any government or
governmental authority, which seeks to prevent or delay the consummation of
the Acquisition or which challenges any of the terms or provisions of this
Agreement;
(g) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body of by any court of
competent jurisdiction nor any statute, rule, regulation or executive order
promulgated or enacted by any United States federal or state or foreign
governmental authority which prevents the consummation of the Acquisition
shall be in effect;
(h) Frama acknowledges that the Post-Effective Amendment filed with
the S.E.C. after this Agreement is signed must be declared effective by the
S.E.C. and the shareholder reconfirmation offering contained therein shall
have been approved by investors representing a minimum of 80% of the proceeds
of Brian's initial public offering, i.e., $40,000;
(i) The fair market value of Frama is at least $50,000.
(j) Opinion of Counsel to Frama. Brian shall have received an
opinion dated the effective date of this Acquisition
by counsel to Frama, satisfactory to Brian, in
substantially the following form:
i) Frama is a corporation duly incorporated, validly
existing and in good standing under the laws of Italy and has the corporate
power to own all of its properties and assets and carry on its business in all
material respects as it is now being conducted, and is qualified to do
business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification.
ii) The execution and delivery by Frama of this Agreement and
the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result in a breach
of any term or provision of Frama's certificate of incorporation or by-laws or
constitute a default or give rise to a right of termination, cancellation or
acceleration under any material mortgage, indenture, deed of trust, license
agreement, or other obligation or violate any court order, writ, injunction or
decree applicable to Frama, or its properties or assets;
iii) This Agreement has been duly and validly
authorized, executed and delivered and constitutes the legal and binding
obligation of Frama, except as limited by bankruptcy and insolvency laws and
by others laws affecting the rights of creditors generally; and
iv) There are no actions, suits or proceedings pending, or to
the best knowledge of such counsel, threatened by or against Frama or
affecting Frama or its properties, at law or in equity, before any court or
any other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind.
k) Frama shall have appointed
SGI Capital Corp. 767 Fifth Avenue, New York, New York
10022 , as its agent to receive
service of process with respect to any action brought against it in the United
States District Court for the Southern District of New York under the
securities laws of the United States of America or any state of the United
States, or any action brought against it in the Supreme Court of the State of
New York in the County of New York under the Securities Laws of the State of
New York.
SECTION 6.3 Conditions to the Obligation of Brian to Effect the
Acquisition. The obligation of the Brian to effect the Acquisition shall be
subject to the fulfillment at or prior to the Effective Date of the following
conditions, any one or more of which may be waived by Frama:
(a) The representations and warranties of Brian set forth in this
Agreement shall be true and correct in all material respects on and as of the
Effective Date as if made on and as of such date, except as contemplated or
permitted by this Agreement;
(b) Except to the extent such consents are not required at the
Effective Date, Brian shall have received the consents or exemptions, or made
the filings, as the case may be, which were referred to in Section 5.4;
(c) Brian shall have delivered a certificate of its President to
the effect set forth in paragraphs (a) and (b) of this Section 4.8;
(d) Brian shall have delivered to Frama copies of resolutions
duly adopted by the Board of Directors of the Company approving the execution
and delivery of this Agreement, such resolutions being certified by the
Secretary of the Company;
(e) No action or proceeding before any court or governmental or
regulatory authority or body, United States federal or state or foreign, shall
have been instituted (and be pending or threatened) by any government or
governmental authority, which seeks to prevent or delay the consummation of
the Acquisition or which challenges any of the terms or provisions of this
Agreement; and
(f) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body, or by any court of
competent jurisdiction nor any statute, rule, regulation, or executive order
promulgated or enacted by any United States, federal, or state or foreign
government or governmental authority, which prevented the consummation of the
Acquisition or materially and adversely affects the business, financial
condition, or operations of Brian shall be in effect.
(g) Shareholder Approval. The shareholders of Brian upon the
Effective Date of this Acquisition will have duly approved the Acquisition and
the issuance of 149,415 shares of Brian Common Stock pursuant to a
reconfirmation offering in which shareholders representing a minimum of
$40,000 of the proceeds from Brian's initial public offering elect to
reconfirm their investment.
(h) Opinion of Counsel to Brian. Frama shall have received an
opinion dated the effective date of this Acquisition by Schonfeld & Weinstein,
63 Wall Street, Suite 1801, New York, New York 10005, counsel to Brian,
satisfactory to Frama, in substantially the following form:
i) Brian is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nevada and has
the corporate power to own all of its properties and assets and carry on its
business in all material respects as it is now being conducted, and is
qualified to do business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification.
ii) The execution and delivery by Brian of this Agreement and
the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result in a breach
of any term or provision of Brian's certificate of incorporation or by-laws or
constitute a default or give rise to a right of termination, cancellation or
acceleration under any material mortgage, indenture, deed of trust, license
agreement, or other obligation or violate any court order, writ, injunction or
decree applicable to Brian, or its properties or assets;
iii) The authorized capitalization of Brian consists of
10,000,000 shares of common stock, par value $.0001 per share. As of the date
of this Agreement, there are 132,500 shares of common stock issued and
outstanding and as of the Effective Date there will be 281,915 shares of Brian
outstanding;
iv) This Agreement has been duly and validly authorized,
executed and delivered and constitutes the legal and binding obligation of
Brian, except as limited by bankruptcy and insolvency laws and by others laws
affecting the rights of creditors generally; and
v) There are no actions, suits or proceedings pending, or to
the best knowledge of such counsel, threatened by or against Brian or
affecting Brian or its properties, at law or in equity, before any court or
any other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind.
(i) Tax Opinion. BRIAN shall have received an opinion of its tax
counsel, advisor or accountant that the Acquisition to be consummated by the
terms of this Agreement qualifies as a tax-free reorganization as defined
under the Internal Revenue Code of 1986, as amended.
(j) Net Cash. Brian shall have net cash, including the Deposited
Funds, in excess of $40,000 at the Effective Date.
(k) Release of Deposited Funds. On the Effective Date, the
Deposited Funds held in escrow from Brian's initial public offering shall be
released to Brian. Brian shall then immediately deposit these funds, plus any
additional funds held by Brian, into a trust account with Schonfeld &
Weinstein to be disbursed in connection with the tax opinion required herein.
SECTION 6.4 Waiver of Condition; Right to Proceed. Unless stated
otherwise herein, if any of the conditions to the obligations of Frama and
Brian specified in Sections 6.2 and 6.3 hereof has not been satisfied
(excluding Sections 6.2(h) and (i) and 6.2(g)), Frama or Brian, as the case
may be, in addition to any other rights which may be available to them or it,
shall have the right to waive such conditions and to proceed with the
Acquisition (subject to satisfaction of the other conditions contained herein,
unless also waived).
ARTICLE 7
RULE 419 REQUIREMENTS
SECTION 7.1 Acquisition Criteria. Pursuant to Rule 419 under Regulation
C of the Securities Act of 1933, as amended ("Rule 419"), the fair market
value of Frama must represent at least 80% of the maximum offering proceeds of
Brian's initial public offering, i.e., Frama's fair market value must be at
least $40,000 (80% x $50,000). If the fair market value of Frama is
determined by Brian to be less than $40,000, this Agreement shall terminate
immediately.
SECTION 7.2 Post-Effective Amendment. Once the Acquisition Agreement
has been executed, Brian shall update the registration statement with a
Post-Effective Amendment. The Post-Effective Amendment shall contain updated
information concerning Brian and information about Frama and its business,
including audited financial statements; the results of Brian's initial public
offering. The Post-Effective Amendment shall also include the terms of the
reconfirmation offer mandated by Rule 419. The reconfirmation offer shall
include certain prescribed conditions which must be satisfied before Deposited
Securities can be released from escrow. If the Post-Effective Amendment is
not declared effective by the Securities and Exchange Commission and/or the
reconfirmation offering is not complete within 18 months of the date of
effectiveness of Brian's initial public offering, this Agreement shall
terminate automatically.
SECTION 7.3 Reconfirmation Offering. The reconfirmation offer must
commence after the effective date of the Post-Effective Amendment. Pursuant
to Rule 419, the terms of the reconfirmation offer shall include the following
conditions:
(a) The prospectus contained in the Post-Effective Amendment will be
sent to each investor whose securities are held in the Escrow Account within 5
business days after the effective date of the Post-Effective Amendment;
(b) Each investor will have no fewer than 20 and no more than 45
business days from the effective date of the Post-Effective Amendment to
notify Brian in writing that the investor elects to remain an investor;
(c) If Brian does not receive written notification from any investor
within 45 business days following the effective date of the Post-Effective
Amendment, the pro rata portion of the Deposited Funds (and any related
interest or dividends) held in escrow on such investor's behalf will be
returned to the investor within 5 business days by first class mail or other
equally prompt means;
(d) The Acquisition will be consummated only if a minimum number of
investors representing 80% of the maximum offering proceeds ($40,000) elect to
reconfirm their investment;
(e) If the Merger has not occurred by April 23, 1997 (18 months from
the date of the prospectus), the Deposited Funds held in escrow shall be
returned to all investors on a pro rata basis within 5 business days by first
class mail or other equally prompt means, and this Agreement shall be declared
null and void;
SECTION 7.4 Release of Deposited Securities.
The Deposited Securities may be released to Brian and the investors in
Brian's initial public offering, respectively, after:
(a) The Escrow Agent has received a signed representation from Brian
and any other evidence acceptable by the Escrow Agent that:
(i) Brian has executed an agreement for Acquisition of a business
for which the par value of the business represents at least 80% of the maximum
offering proceeds and has filed the required Post-Effective Amendment;
(ii) The Post-Effective Amendment has been declared effective, that
the mandated reconfirmation offer having the conditions prescribed by Rule 419
has been completed and that Brian has satisfied all of the prescribed
conditions of the reconfirmation offer.
(b) The Acquisition of a business with the fair value of at least
80% of the maximum proceeds is consummated.
ARTICLE 8
TERMINATION
SECTION 8.1 Board Action. This Agreement may be terminated at any time
by mutual consent of the Boards of Directors of BRIAN and FRAMA.
SECTION 8.2 Certain Dates. In the event that Brian shall not have
received certified financial statements from Frama and/or this Agreement is
not executed both parties by , this Agreement may be terminated
by either party upon written notice, whether before or after approval of the
Acquisition thereof by the holders of the requisite number of shares of
Brian. This Agreement shall terminate automatically if the Acquisition has
not been consummated by April 23, 1997, eighteen (18) months from the
effective date of Brian's initial public offering, which consummation includes
a declaration of effectiveness by the Securities and Exchange Commission of
Brian's Post-Effective Amendment and successful completion of a shareholder
reconfirmation offering, pursuant to which shareholders representing less than
80% of the proceeds from Brian's initial public offering vote to reconfirm
their investments.
SECTION 8.3 Audited Financial Statements. In the event that Frama's
audited financial statements are materially and adversely inconsistent with
the Frama unaudited financial statements contained herein, Brian shall have
the right to unilaterally terminate this Agreement by the Board of Directors
of Brian notifying Frama and its United States counsel, , of such
termination. Such notice shall be sent to Frama and its United States counsel
prior to the Effective Date.
SECTION 8.4 Effect of Termination. In the event of the termination of
this Agreement, this Agreement shall thereafter become void and have no effect
and no party hereto shall have any liability to any other party hereto or its
shareholders or directors or officers in respect thereof, except for the
obligations of the parties hereto in Section 9.2 hereof.
ARTICLE 9
GENERAL AGREEMENTS
SECTION 9.1 Cooperation. Each of the parties hereto shall cooperate
with the other in every reasonable way in carrying out the transactions
contemplated herein, and in delivering all documents and instruments deemed
reasonably necessary or useful by counsel for any party hereto.
SECTION 9.2 Funds. Each party shall incur all its own costs and
expenses in connection with this Agreement and the transactions contemplated
hereby. After the consummation of the Acquisition, all expenses will be
incurred by the Parent Company.
SECTION 9.3 Survival of Representations and Warranties. All
representations and warranties in this Agreement or in any instrument or
certificate delivered pursuant to this Agreement delivered on or prior to the
Effective Date shall survive the consummation of the Acquisition.
SECTION 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
by messenger, transmitted by telex or telegram or mailed by registered or
certified mail, postage prepaid, as follows:
(a) If to Brian, to:
Daniel Wainick
6500 New Horizon Blvd.
Amityville, New York 11701
With a copy to:
Joel Schonfeld, Esq.
Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
(b) If to Frama, to:
Gianantonio Arnoldi
Frama Sri
Milan,Italy 20121
With a copy to:
Mr. Ettore Cesaraccio
SGI Capital Corp
767 Fifth Avenue
New York, New York 10022.
The date of any such notice shall be the date
hand delivered or otherwise transmitted or mailed.
SECTION 9.5 Amendment. This Agreement (including the documents and
instruments referred to herein or therein) (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof, (b) is not intended to confer upon any other person any rights or
remedies hereunder, and (c) shall not be assigned by operation of law or
otherwise. This Agreement may be amended or modified in whole or in part to
the extent permitted by New York law at any time, by an agreement in writing
executed in the same manner as this Agreement after authorization to do so by
the Board of Directors of Frama and Brian.
SECTION 9.6 Waiver. At any time prior to the Effective Date, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representation and warranties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid is set forth in an
instrument in writing signed on behalf of such party.
SECTION 9.7 Brokers. Frama and Brian represent and warrant that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Acquisition, except as stated
herein or elsewhere in writing.
SECTION 9.8 Publicity. So long as this Agreement is in effect, the
parties hereto shall not issue or cause the publication of any press release
or other announcement with respect to the Acquisition or this Agreement
without the consent of the other party, which consent shall not be
unreasonably withheld or delayed where such release or announcement is
required by applicable law.
SECTION 9.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.10 Successors and Assigns. This Agreement shall be binding
upon and insure to the benefit of and enforceable by the respective successors
and assigns of the parties hereto.
SECTION 9.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>COUNTERPART SIGNATURE PAGE TO
AGREEMENT AND PLAN OF ACQUISITION
BY AND AMONG
THE BRIAN H. GROUP
AND
FRAMA S.R.L
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized officers as of the ____ day of __________, 1996.
FRAMA S.R.L.
By
President
THE BRIAN H. CORP.
By
President
<PAGE>
Deloitte & Touche
Revisione e organizzazione contabile
Palazzo Carducci
Via Olona, 2
20123 Milano, Itali
Re: Frama S.r.l.
Deloitte & Touche, certified public accountants, do hereby consent to the use
of our opinion dated February 11, 1997, to The Brian H. Corp. to be used and
filed in connection with the Post-Effective Amendment Registration Statement
and Prospectus on Form SB-2, as filed with the Securities and Exchange
Commission. I also consent to the use of my name under the caption "Experts"
in the above-mentioned Registration Statement.
Deloitte & Touche
Deloitte & Touche
February 14, 1997
<PAGE>
BOYKOFF AND BELL, P.C.
Certified Public Accountants
2 Skyline Drive
Hawthorne, New York 10532
To The Board of Directors of
The Brian H. Corp.
63 Wall Street, Suite 1801
New York, New York 10005
Re: The Brian H. Corp.
Boykoff & Bell, P.C., certified public accountants, do hereby consent to the
use of our opinion dated February 6, 1997 to The Brian H. Corp. to be used and
filed in connection with the Post-Effective Amendment Registration Statement
and Prospectus on Form SB-2, as filed with the Securities and Exchange
Commission. We also consent to the use of my name under the caption "Experts"
in the above-mentioned Registration Statement only and specifically pertianing
to the periods which our firm prepared audited financial statements.
Boykoff and Bell, P.C.
Dated: February 11, 1997
<PAGE>
THE BRIAN H. CORP.
SHAREHOLDER RECONFIRMATION
To The Board of Directors
of The Brian H. Corp.
63 Wall Street, Suite 1801
New York, New York 10005
The undersigned, owner of shares of The Brian H. Corp. (the
"Shares"), purchased in The Brian H. Corp.'s initial public offering, hereby
acknowledges that these Shares are being held in escrow pursuant to Rule 419
of Regulation C under the Securities Act of 1933, as amended ("Rule 419"). I
further acknowledge that I have 20 days from the effective date of the
post-effective amendment [( )] to notify The Brian H. Corp. that I will
remain an investor in The Brian H. Corp. I am aware that if The Brian H.
Corp. has not received this notice within 20 days following the effective date
of the post-effective amendment, my pro rata funds which are currently held in
escrow shall be sent by first class mail, or other equally prompt means, to me
within five days.
I have read over the post-effective amendment of The Brian H. Corp. and
wish to reconfirm my investment.
Name (print or type) Signature
Street Address
City, State, Zip Code Social Security Number
Phone Number
Please return the enclosed Letter of Reconfirmation to Schonfeld & Weinstein,
63 Wall Street, Suite 1801, New York, New York 10005. The Shareholder
Reconfirmation vote will take place on [ ], 1997. Please make sure this
letter is received by Schonfeld & Weinstein by [ ].
<PAGE>
