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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Fronteer Financial Holdings, Ltd.
----------------------------------------
(Name of Issuer)
$0.01 Par Value Common Stock
----------------------------------------
(Title of Class of Securities)
359031 10 1
----------------
(CUSIP Number)
Gary L. Cook, 1700 Lincoln Street, 32nd Floor,
Denver, CO 80203 (303) 860-1700
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 30, 1998
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
CUSIP No. 359031 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Holdings Company Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
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3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
N/A
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong and Singapore
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NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 41,903,046 shares - 75.9%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
41,903,046 shares - 75.9%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
41,903,046 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
75.9%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
HC
-------------------------------------------------------------------------
2
<PAGE>
CUSIP No. 359031 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Finance Company Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
N/A
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
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NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 37,209,905 shares - 67.4%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
37,209,905 shares - 67.4%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
37,209,905 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.4%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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3
<PAGE>
CUSIP No. 359031 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Heng Fung Capital [S] Private Limited
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
N/A
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Singapore
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 41,653,046 shares - 75.4%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
41,653,046 shares - 75.4%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
41,653,046 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
75.4%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------
4
<PAGE>
CUSIP No. 359031 10 1
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Fai H. Chan
-------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
-------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
N/A
-------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
-------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
-------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES - 0 -
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 41,904,046 shares - 75.9%
REPORTING ----------------------------------------------------
PERSON
WITH 9. SOLE DISPOSITIVE POWER
- 0 -
----------------------------------------------------
10. SHARED DISPOSITIVE POWER
41,903,046 shares - 75.9%
--------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
41,903,046 shares
-------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
-------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
75.9%
--------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
-------------------------------------------------------------------------
5
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 to Schedule 13D relates to the $0.01 par value common
stock of Fronteer Financial Holdings, Ltd. ("Issuer"). The purpose of filing
this Amendment is to report the issuance of additional shares of the $0.01 par
value common stock of the Issuer to the Reporting Persons.
ITEM 2. IDENTITY AND BACKGROUND.
I-A. (a) Heng Fung Holdings Company Limited ("Heng Fung Holdings").
(b) The principal office address of Heng Fung Holdings is 10th Floor
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal business of Heng Fung Holdings is a holding company.
(d) During the last five years, Heng Fung Holdings has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Holdings has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Heng Fung Holdings is a Hong Kong corporation.
I-B. (a) Fai H. Chan is a director, Chairman, Managing Director and control
person of Heng Fung Holdings.
(b) The business address of Fai H. Chan is 10th Floor Lippo Protective
Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Fai H. Chan is Chairman and Managing
Director of Heng Fung Holdings Company Limited and its subsidiaries.
(d) During the last five years, Fai H. Chan has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Fai H. Chan has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Fai H. Chan is a Canadian citizen.
I-C. (a) Kwok Jen Fong is a director of Heng Fung Holdings.
(b) The business address of Kwok Jen Fong is 7 Temasek Boulevard,
#43-03 Suntec Tower One, Singapore 038987.
6
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(c) The principal occupation of Kwok Jen Fong is advocate, solicitor
and managing partner of Fong Jeya Partnership.
(d) During the last five years, Kwok Jen Fong has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Kwok Jen Fong has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Kwok Jen Fong is a Singaporean citizen.
I-D. (a) Mabel Keow Yoke Chan is a director and an Executive Director of
Heng Fung Holdings.
(b) The business address of Mabel Keow Yoke Chan is 10th Floor, Lippo
Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Mabel Keow Yoke Chan is Executive
Director of Heng Fung Holdings.
(d) During the last five years, Mabel Keow Yoke Chan has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mabel Keow Yoke Chan has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mabel Keow Yoke Chan is a Canadian citizen.
I-E. (a) Mary-ann Sook Jin Chan is a director and an Executive Director of
Heng Fung Holdings.
(b) The business address of Mary-ann Sook Jin Chan is 10th Floor,
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Mary-ann Sook Jin Chan is an Executive
Director of Heng Fung Holdings.
(d) During the last five years, Mary-ann Sook Jin Chan has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mary-ann Sook Jin Chan has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction required to be reported hereunder.
(f) Mary-ann Sook Jin Chan is a British citizen.
7
<PAGE>
I-F. (a) Suk King Chan is the Secretary of Heng Fung Holdings.
(b) The business address of Suk King Chan is Hang Seng Building, Rooms
706-707, 77 Des Voeux Road Central, Hong Kong.
(c) The principal occupation of Suk King Chan is Senior Manager,
Corporate Services, and Consultant of Graham H.Y. Chan & Co., CPA.
(d) During the last five years, Suk King Chan has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Suk King Chan has not been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Suk King Chan is a Chinese citizen.
I-G. (a) Man Tak Lau is the Financial Controller of Heng Fung Holdings.
(b) The business address of Man Tak Lau is 10th Floor Lippo Protective
Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
(c) The principal occupation of Man Tak Lau is Financial Controller of
Heng Fung Holdings.
(d) During the last five years, Man Tak Lau has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Man Tak Lau has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Man Tak Lau is a British, Hong Kong citizen.
I-H. (a) Robert H. Trapp is a director of Heng Fung Holdings.
(b) The business address of Robert H. Trapp is 1700 Lincoln Street,
32nd Floor, Denver, Colorado 80203.
(c) The principal occupation of Robert H. Trapp is Managing Director
of the Issuer and President of American Fronteer Financial Corporation.
(d) During the last five years, Robert H. Trapp has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
8
<PAGE>
(e) During the last five years, Robert H. Trapp has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Robert H. Trapp is a Canadian citizen.
II. (a) Fai H. Chan.
(b) through (f) - See Item I-B above.
III-A. (a) Heng Fung Capital [S] Private Limited ("Heng Fung Private").
(b) The principal office address of Heng Fung Private is 7 Temasek
Boulevard, #43-03 Suntec Tower One, Singapore 038987.
(c) The principal business of Heng Fung Private is an investment
holding company.
(d) During the last five years, Heng Fung Private has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Private has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Heng Fung Private is a Singaporean corporation.
III-B. (a) Fai H. Chan, a director, Chairman and Managing Director of Heng
Fung Private.
(b) through (f) - See Item I-B above.
III-C. (a) Mabel Keow Yoke Chan is a director of Heng Fung Private.
(b) through (f) - See Item I-D above.
III-D. (a) Kwok Jen Fong is a director of Heng Fung Private.
(b) through (f) - See Item I-C above.
III-E. (a) Heng Fung Holdings is sole shareholder of Hung Fung Private.
(b) through (f) - See Item I-A above.
IV-A (a) Heng Fung Finance Company Limited ("Heng Fung Finance").
(b) The principal office address of Heng Fung Finance is 10th Floor
Lippo Protective Tower, 231-235 Gloucester Road, Wan Chai, Hong Kong.
9
<PAGE>
(c) The principal business of Heng Fung Finance is finance.
(d) During the last five years, Heng Fung Finance has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Heng Fung Finance has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction required to be reported hereunder.
(f) Heng Fung Finance is a Hong Kong corporation.
IV-B.(a) Fai H. Chan is a director, Chairman and Managing Director of Heng
Fung Finance.
(b) through (f) - See Item I-B above.
IV-C.(a) Mabel Keow Yoke Chan is a director and Secretary of Heng Fung
Finance.
(b) through (f) - See Item I-D above.
IV-D.(a) Man Tak Lau is a director of Heng Fung Finance.
(b) through (f) - See Item I-G above.
IV-E.(a) Heng Fung Private is the sole shareholder of Hung Fung Finance.
(b) through (f) - See Item III-A above.
10
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Amendment No. 2 to Schedule 13D, Heng Fung
Holdings, through its subsidiaries, Heng Fung Private and Heng Fung Finance,
beneficially owns 41,903,046 shares ("Shares") of the Common Stock of the Issuer
which constitute approximately 75.9% of the outstanding Common Stock of the
Issuer.
In December 1997, Heng Fung Finance purchased from the Company a $4,000,000
10% Convertible Debenture and received an option to purchase up to an additional
$11,000,000 10% Convertible Debenture. Subsequently, Heng Fung Finance partially
exercised the option and purchased additional 10% Convertible Debentures
totaling $2,500,000. On September 23, 1998, Heng Fung Finance and the Company
agreed to amend the terms of the remaining $8,500,000 of the $11,000,000 10%
Convertible Debenture by increasing the interest rate to 12%, changing the
conversion price to the lower of $.35 or the fair market value per share, and
changing the default conversion price to $0.10 per share. Also on September 23,
1998, Heng Fung Finance partially exercised its option to purchase $8,500,000 of
12% Convertible Debentures by purchasing a $500,000 12% Convertible Debenture
from the Company.
As a result of the above, the Shares include 7,529,412 shares underlying
the presently convertible $4,000,000 10% Convertible Debenture owned by Heng
Fung Finance, 2,459,016 shares underlying a presently convertible $1,500,000
debenture owned by Heng Fung Finance, 1,639,344 shares underlying the presently
convertible $1,000,000 10% Convertible Debenture owned by Heng Fung Finance,
1,428,571 shares underlying the presently convertible $500,000 12% Convertible
Debenture owned by Heng Fung Finance, and 22,857,143 shares underlying
$8,000,000 of 12% Convertible Debentures that Heng Fung Finance has the right to
purchase and that will be convertible at any time after they are purchased. Fai
H. Chan, an officer and director of the Issuer and an officer and director of
Heng Fung Holdings, Heng Fung Private and Heng Fung Finance, beneficially owns
approximately 10.73% of the outstanding stock of Heng Fung Holdings.
Accordingly, Mr. Chan may be deemed to have shared voting and dispositive power
over the Shares, and as a result, he is considered to be a beneficial owner of
the Shares.
(b) Heng Fung Holdings, through its subsidiaries, Heng Fung Private and
Heng Fung Finance, has shared voting and dispositive power over the Shares. Fai
H. Chan has shared voting and dispositive power over the Shares. Heng Fung
Private, by itself and through its subsidiary, Heng Fung Finance, has shared
voting and dispositive power over 41,653,046 of the Shares. Heng Fung Finance
has shared voting and dispositive power over 37,209,905 of the Shares.
(c) On August 6, 1998, Heng Fung Finance partially exercised its option and
purchased a $1,000,000 10% Convertible Debenture. On September 25, 1998, Heng
Fung Finance partially exercised its amended option and purchased a $500,000 12%
Convertible Debenture. However, the exercise of the options to purchase the
$1,000,000 10% Convertible Debenture and the $500,000 12% Convertible Debenture
did not change the number of Shares beneficially owned by the Reporting Persons.
In July 1998, 190,327 and 30,055 shares of the Common Stock of the Issuer
were issued to Heng Fung Finance in payment of $101,111.11 and $18,333.33 of
interest due on June 30, 1998, on the $4,000,000 10% Convertible Debenture and
the $1,500,000 10% Convertible Debenture, respectively. In October 1998,
192,418, 62,842, 25,501 and 2,852 shares of the Common Stock of the Issuer will
be issued to Heng Fung Finance in payment of $102,222.22, $30,333.33, $15,556.56
and $1,000.00 of interest due on September 30, 1998, on the $4,000,000 10%
Convertible Debenture, the $1,500,000 10% Convertible Debenture, the $1,000,000
10% Convertible Debenture and the $500,000 12% Convertible Debenture,
respectively.
11
<PAGE>
On November 18, 1998, Heng Fung Holdings entered into an agreement with the
Issuer whereby Heng Fung Holdings agreed to guarantee payment of cash dividends
on Series B Preferred Stock that the Issuer is offering for sale in a private
offering. In exchange for the guaranty, the Issuer agreed to issue to Heng Fung
Holdings, 250,000 shares of the Issuer's Common Stock, in addition to other
consideration in the event Heng Fung Holdings has to make payments pursuant to
the guaranty.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
41,903,046 shares.
(e) Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Agreement to File One Statement on Schedule 13D.
Exhibit 2 - Closing Agreement among Fronteer Financial Holdings, Ltd., Heng
Fung Finance Company Limited, Heng Fung Capital [S] Private Limited and certain
shareholders of Fronteer Financial Holdings, Ltd., dated December 17, 1997,
incorporated by reference to Exhibit 2 to the Reporting Person's Schedule 13D
filed March 11, 1998.
Exhibit 3 - $4,000,000 10% Convertible Debenture Purchase Agreement dated
December 17, 1997, incorporated by reference to Exhibit 3 to the Reporting
Person's Schedule 13D filed March 11, 1998.
Exhibit 4 - Stock Purchase Agreement between R. A. Fitzner and Heng Fung
Capital [S] Private Limited dated December 17, 1997 (for 3,556,777 shares),
incorporated by reference to Exhibit 4 to the Reporting Person's Schedule 13D
filed March 11, 1998.
Exhibit 5 - Stock Purchase Agreement between R. A. Fitzner and Heng Fung
Capital [S] Private Limited dated December 17, 1997 (for 312,261 shares),
incorporated by reference to Exhibit 5 of Reporting Person's Schedule 13D filed
March 11, 1998.
Exhibit 6 - Stock Purchase Agreement between Dorothy Englebrecht and Heng
Fung Capital [S] Private Limited dated December 17, 1997, incorporated by
reference to Exhibit 6 to Reporting Person's Schedule 13D filed March 11, 1998.
Exhibit 7 - Stock Purchase Agreement between Stephen M. Fishbein and Heng
Fung Capital [S] Private Limited dated December 17, 1997, incorporated by
reference to Exhibit 7 to Reporting Person's Schedule 13D filed March 11, 1998.
Exhibit 8 - Stock Purchase Agreement between Robert L. Long and Heng Fung
Capital [S] Private Limited dated December 17, 1997, incorporated by reference
to Exhibit 8 to Reporting Person's Schedule 13D filed March 11, 1998.
12
<PAGE>
Exhibit 9 - Amendment No. 1 to $4,000,000 10% Convertible Debenture
Purchase Agreement dated September 23, 1998 between Fronteer Financial Holdings,
Ltd. and Heng Fung Finance Company Limited.
Exhibit 10 - Guaranty Agreement dated November 18, 1998 between Fronteer
Financial Holdings, Ltd. and Heng Fung Holdings Company Limited.
13
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
HENG FUNG HOLDINGS COMPANY LIMITED
a Hong Kong corporation
Date: November 12, 1998
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
/s/ Fai H. Chan
-----------------------------------------------
Fai H. Chan, individually
HENG FUNG CAPITAL [S] PRIVATE LIMITED
a Singaporean corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
HENG FUNG FINANCE COMPANY LIMITED
a Hong Kong corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
9
Exhibit 1
Agreement to File One Statement on Schedule 13D
Pursuant to Rule 13d-1(f)(1)(iii) of the Securities Exchange Act of 1934,
as amended, the undersigned agree that the Amendment No. 2 to Schedule 13D to
which this Exhibit is attached is filed on behalf of each of the undersigned.
HENG FUNG HOLDINGS COMPANY LIMITED
a Hong Kong corporation
Date: November 12, 1998
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
/s/ Fai H. Chan
-----------------------------------------------
Fai H. Chan, individually
HENG FUNG CAPITAL [S] PRIVATE LIMITED
a Singaporean corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
HENG FUNG FINANCE COMPANY LIMITED
a Hong Kong corporation
By: /s/ Fai H. Chan
-------------------------------------------
Fai H. Chan, Chairman and Managing Director
Exhibit 9
AMENDMENT NO. 1 TO $4,000,000
10% CONVERTIBLE DEBENTURE
PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO $4,000,000 10% CONVERTIBLE DEBENTURE PURCHASE
AGREEMENT ("Agreement") is made and entered into this 23 day of September, 1998,
by and between FRONTEER FINANCIAL HOLDINGS, LTD. ("Seller") and HENG FUNG
FINANCE COMPANY LIMITED ("Purchaser").
R E C I T A L S
A. Purchaser and Seller entered into a $4,000,000 10% Convertible Debenture
Purchase Agreement on December 17, 1997 ("Original Agreement").
B. Paragraph 1.5 of the Original Agreement provided Purchaser the option of
purchasing an additional convertible debenture for up to $11,000,000 ("Option").
Subsequent to the Original Agreement, Purchaser exercised a portion of the
Option and purchased a total of $2,500,000 of convertible debentures.
C. Purchaser and Seller desire to amend the Original Agreement by setting
special terms for the remaining $8,500,000 of convertible debentures purchased
pursuant to exercise of the Option.
NOW THEREFORE, in consideration of the premises and agreements contained
herein, the parties hereto do hereby agree as follows:
1. Amendment. The form of 12% Convertible Debenture attached hereto as
Exhibit A shall be the form for the remaining $8,500,000 of convertible
debentures purchased pursuant to exercise of the Option.
2. Maturity. Upon receipt of written notice from Purchaser to Seller of
Purchaser's option to purchase a debenture pursuant to this Agreement, prior to
the purchase Purchaser and Seller must mutually agree upon a maturity date of
such debenture.
3. Confirmation of Terms of Original Agreement. In all other respects the
Original Agreement dated December 17, 1997, shall remain unaffected, unchanged
and unimpaired by reason of the foregoing amendment.
1
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IN WITNESS WHEREOF, the parties have caused this agreement to be made
effective on the day and year first above written.
SELLER:
FRONTEER FINANCIAL HOLDINGS, LTD.,
a Colorado corporation
By: /s/ Gary L. Cook
-------------------------------------
Gary L. Cook, Secretary and Treasurer
PURCHASER:
HENG FUNG FINANCE COMPANY
LIMITED., a Hong Kong corporation
By: /s/ Fai H. Chan
-------------------------------------
Its: Chairman
2
<PAGE>
EXHIBIT A TO
AMENDMENT NO. 1 TO $4,000,000
10% CONVERTIBLE DEBENTURE
PURCHASE AGREEMENT
FORM OF 12% CONVERTIBLE DEBENTURE
THE SECURITIES REPRESENTED BY THIS DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE CORPORATION.
FRONTEER FINANCIAL HOLDINGS, LTD.
12% Convertible Debenture Due
-----------------
$
--------------- --------------, ------
FOR VALUE RECEIVED, Fronteer Financial Holdings, Ltd., a corporation duly
organized and existing under the laws of the State of Colorado (the
"Corporation"), hereby promises to pay to the order of Heng Fung Finance Company
Limited ("Holder") the principal sum of _____________ (________________), with
interest from the date hereof at the rate of 12% per annum. Interest only shall
be payable on the _________ day of __________, ______, with the final payment of
the entire unpaid principal balance and all accrued and unpaid interest, if not
sooner paid, due and payable on the _______ day of ____________, ____ (the
"Maturity Date"). At the election of Holder, interest due hereunder may be paid
in shares of the Common Stock of the Corporation. The Common Stock shall be
valued at the Market Conversion Price (as hereinafter defined) as of the
business day before the date the interest is due.
The unpaid principal amount of this Convertible Debenture ("Debenture") and
all accrued and unpaid interest hereon shall be due and payable by the
Corporation to the Holder on the Maturity Date.
The Holder shall have the right, exercisable at the Holder's option at any
time and from time to time up to and including the Maturity Date (except that,
if this Debenture shall be called for prepayment in full by the Corporation and
the Corporation shall not thereafter default in the making of the prepayment,
such right shall terminate at the close of business on the business day next
preceding the date fixed for prepayment), to convert all or any part of the
unpaid principal amount hereof into fully paid and non-assessable shares of
Common Stock of the Corporation at the Conversion Price, as defined below, upon
surrender or partial surrender of this Debenture to the Corporation at its
principal place of business. If so required by the Corporation, this Debenture,
upon surrender or partial surrender for conversion as aforesaid, shall be duly
endorsed by or accompanied by instruments of transfer, in form satisfactory to
the Corporation, duly executed by the Holder or by Holder's duly authorized
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attorney. The Corporation shall not be required to issue fractional shares of
Common Stock of the Corporation, but shall make adjustment therefor in cash
based upon the Conversion Price of the Common Stock of the Corporation as of the
date of conversion. The certificate representing the shares of Common Stock
issued upon conversion shall contain a legend restricting the transfer thereof
similar to the legend that appears on the top of this Debenture.
The term "Conversion Price", as used with reference to any share of Common
Stock on any specified date, shall mean the lesser of $0.35 or the Market
Conversion Price. The Market Conversion Price shall be determined as follows:
(i) if such stock is listed and registered on any national securities
exchange or traded on The Nasdaq Stock Market ("Nasdaq"), the average
closing sales price over the ten consecutive trading days prior to the date
of conversion on such exchange or Nasdaq;
(ii) if such stock is not at the time listed on any such exchange or
traded on Nasdaq but is traded on the OTC Bulletin Board, or if not, on the
over-the-counter market as reported by the National Quotation Bureau or
other comparable service, the average of the closing bid and asked prices
for such stock over the ten consecutive trading days prior to the date of
conversion; or
(iii) if clauses (i) and (ii) above are not applicable, the fair value
per share of such stock as determined in good faith and on a reasonable
basis by the Board of Directors of the Corporation and, if requested, set
forth in a certificate delivered to the holder of this Debenture upon the
conversion hereof.
If any payment of interest or any payment of principal and interest, as the
case may be, is not paid by the Corporation within five (5) business days after
the date on which such payment shall have become due and payable under this
Debenture or upon the bankruptcy or receivership of the Corporation (each, an
"Event of Default"), the Holder may, by giving written notice to the
Corporation, declare the unpaid principal amount hereof and all accrued and
unpaid interest hereon to be immediately due and payable and upon such
declaration, the unpaid principal amount hereof and all accrued and unpaid
interest hereon shall be and become immediately due and payable. Upon the
occurrence and continuance of an Event of Default and upon notice from Holder to
the Corporation, the rate of interest on this Debenture shall increase from 12%
per annum to 18% per annum and the Conversion Price shall change to $0.10 per
share of Common Stock.
Notwithstanding anything contained herein, Holder shall not be entitled to
convert any part of the unpaid principal amount hereof into fully paid and
nonassessable shares of Common Stock of the Corporation if, at the time of
conversion, the Corporation does not have sufficient shares of Common Stock
authorized that are not issued and outstanding or reserved for issuance. In such
event, the Holder shall only be entitled to convert such part of the unpaid
principal amount hereof into such number of fully paid and nonassessable shares
of Common Stock of the Corporation that is equal to the number of shares of
Common Stock that are not issued and outstanding and not reserved for issuance.
Upon the occurrence of any such election to convert, in the event the
Corporation does not have a sufficient number of unissued and reserved shares of
Common Stock authorized, the Corporation agrees to call a meeting of its
shareholders to be held as soon as possible to propose an amendment to the
Corporation's Articles of Incorporation to increase the number of shares of
Common Stock that the Corporation is authorized to issue to enable the Holder to
complete the Holder's requested conversion. Nothing contained herein shall
prevent the Corporation from issuing and reserving for issuance such number of
shares of the Corporation's Common Stock as the Board of Directors of the
Corporation deems appropriate, in its sole discretion, after the date hereof
whether or not such issuance or reservation would prevent the Holder from
exercising the Holder's conversion rights contained herein.
Should the indebtedness represented by this Debenture or any part thereof
be collected at law or in equity, or in bankruptcy, receivership or any other
court proceedings (whether at the trial or appellate level), or should this
Debenture be placed in the hands of attorneys for collection upon the occurrence
of an Event of Default, the Corporation agrees to pay, in addition to the
principal and interest due and payable hereon, all costs of collection,
including reasonable attorneys' fees.
This Debenture may be prepaid, in part or in whole, at the option of the
Corporation, at any time or from time to time prior to the Maturity Date, to the
Holder without premium or penalty, together with accrued interest to the date
fixed for prepayment; provided, however, that prepayment in full of this
Debenture by the Corporation shall require not less than 30 nor more than 60
days prior notice of prepayment to the Holder.
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Subject to compliance with the provisions of the Securities Act of 1933, as
amended, this Debenture is transferable in the manner authorized by law. Upon
surrender of this Debenture for transfer, accompanied by a written instrument of
transfer in form satisfactory to the Corporation, a new Debenture or Debentures,
for a like aggregate principal amount, will be issued to the transferee.
Prior to the transfer of this Debenture, the Corporation may deem and treat
the Holder hereof as the absolute owner hereof (whether or not this Debenture
shall be overdue) for the purpose of receiving payment of or on account of the
principal hereof and interest hereon, and for all other purposes, and the
Corporation shall not be affected by any notice to the contrary.
Except as expressly provided for herein, the Corporation hereby waives
presentment, demand, notice of demand, protest, notice of protest and notice of
dishonor and any other notice required to be given by law in connection with the
delivery, acceptance, performance, default or enforcement.
This Debenture shall be governed and construed in accordance with the laws
of the State of Colorado.
IN WITNESS WHEREOF, Fronteer Financial Holdings, Ltd. has caused this
Debenture to be signed by a duly authorized officer on the date first above
written.
FRONTEER FINANCIAL HOLDINGS, LTD.
By:
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Exhibit 10
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is given by HENG FUNG HOLDINGS
COMPANY LIMITED, a Hong Kong corporation (the "Guarantor"), for the benefit of
the purchasers ("Investors") of the shares of Series B Preferred Stock to be
offered by FRONTEER FINANCIAL HOLDINGS, LTD., a Colorado corporation ("Issuer"),
pursuant to a confidential offering memorandum. In consideration of the
substantial direct and indirect benefits, the Guarantor, as a major beneficial
shareholder of the Issuer, will derive therefrom, the Guarantor gives the
following guaranty to the Investors.
Section 1. The Guaranty. The Guarantor hereby UNCONDITIONALLY AND
IRREVOCABLY GUARANTEES the full and punctual payment by the Issuer to Investors
when due of all cash dividends on the Series B Preferred Stock. As used in this
Guaranty, the term "Obligations" shall refer to the obligations through October
13, 2003 the Guarantor has undertaken and assumed pursuant to this Guaranty.
Section 2. Nature of the Guaranty. This Guaranty: (a) is (i) irrevocable;
(ii) absolute and unconditional; (iii) direct, immediate and primary; and (iv)
one of payment and not just collection; and (b) makes the Guarantor a surety to
Investors and primarily liable with the Issuer.
Section 3. Investors Need Not Pursue Other Rights Before Enforcing
Guaranty. Investors shall be under no obligation to pursue their rights against
the Issuer or against any other guarantor or any other person that is now or
hereafter liable upon or in connection with any of the obligations of the
Guarantor or the Issuer to Investors.
Section 4. Waivers by the Guarantor. The Guarantor hereby waives any and
all notices whatsoever with respect to this Guaranty or with respect to any of
the obligations of the Issuer to Investors, including, but not limited to,
notice of: (i) Investors' acceptance hereof or Investors' intention to act, or
Investors' action, in reliance hereon; (ii) the present existence or future
incurring of any of the Obligations of the Issuer to Investors or any terms or
amounts thereof or any change therein; and (iii) any default by the Issuer.
Section 5. Unenforceability of Obligations of the Issuer. This Guaranty
shall be valid, binding, and enforceable even if the obligations of the Issuer
to Investors which are guaranteed hereby are now or hereafter become invalid or
unenforceable for any reason.
Section 6. No Conditions Precedent. This Guaranty shall be effective and
enforceable immediately upon its execution. The Guarantor acknowledges that no
unsatisfied conditions precedent to the effectiveness and enforceability of this
Guaranty exist as of the date of its execution and that the effectiveness and
enforceability of this Guaranty are not in any way conditioned or contingent
upon any event, occurrence, or happening, or upon any condition existing or
coming into existence either before or after the execution of this Guaranty.
Section 7. Obligations Unconditional. The payment and performance of the
Obligations shall be the absolute and unconditional duty and obligation of the
Guarantor, and shall be independent of any defense or any rights of set-off,
recoupment or counterclaim which the Guarantor might otherwise have against
Investors, and the Guarantor shall pay and perform the Obligations, free of any
deductions and without abatement, diminution or set-off; and until such time as
the Obligations have been fully paid and performed, the Guarantor: (a) shall not
suspend or discontinue any payments provided for in this Guaranty; (b) shall
perform and observe all of the covenants and agreements contained in this
Guaranty; and (c) shall not terminate or attempt to terminate this Guaranty for
any reason. No delay by Investors in making demand on the Guarantor for
satisfaction of the Obligations shall prejudice or in any way impair Investors'
ability to enforce this Guaranty.
Section 8. Defenses Against Issuer. The Guarantor waives any right to
assert against Investors any defense (whether legal or equitable), claim,
counterclaim, or right of set-off or recoupment which the Guarantor may now or
hereafter have against the Issuer.
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Section 9. Expenses of Collection and Attorneys' Fees. The Guarantor shall
pay all reasonable costs and expenses incurred by Investors in collecting sums
due under this Guaranty, including, without limitation, the costs of any lien,
judgment or other record searches, appraisals, travel expenses and the like.
Section 10. Enforcement During Bankruptcy. Enforcement of this Guaranty
shall not be stayed or in any way delayed, as a result of the filing of a
petition under the United States Bankruptcy Code, as amended, or other similar
statutory scheme, by or against the Issuer. Should Investors be required to
obtain an order of the United States Bankruptcy Court or other court of
competent jurisdiction to begin enforcement of this Guaranty after the filing of
a petition under the United States Bankruptcy Code, as amended, or other similar
statutory scheme, by or against the Issuer, the Guarantor hereby consents to
this relief and agrees to file or cause to be filed all appropriate pleadings to
evidence and effectuate such consent and to enable Investors to obtain the
relief requested.
Section 11. Remedies Cumulative. All of Investors' rights and remedies
shall be cumulative and any failure of Investors to exercise any right hereunder
shall not be construed as a waiver of the right to exercise the same or any
other right at any time, and from time to time, thereafter.
Section 12. Discharge of Guaranty. This Guaranty shall not be discharged
and the Guarantor shall not be released from liability until all Obligations
have been satisfied in full and the satisfaction of the Obligations is not
subject to challenge or contest. If all or any portion of the Obligations are
satisfied and Investors are required for any reason to pay to any person the
sums used to satisfy the Obligations, the Obligations shall remain in effect and
enforceable to the extent thereof.
Section 13. Termination. This Guaranty may be terminated only in writing by
the Investor.
Section 14. Choice of Law. The laws of the State of Colorado (excluding,
however, conflict of law principles) shall govern and be applied to determine
all issues relating to this Guaranty and the rights and obligations of the
Guarantor, including the validity, construction, interpretation, and
enforceability of this Guaranty and its various provisions and the consequences
and legal effect of all transactions and events which resulted in the issuance
of this Guaranty or which occurred or were to occur as a direct or indirect
result of this Guaranty having been executed.
Section 15. Consent to Jurisdiction; Agreement as to Venue. The Guarantor
irrevocably consents to the non-exclusive jurisdiction of the federal and state
courts located in the State of Colorado. The Guarantor agrees that venue shall
be proper in any such courts.
Section 16. Invalidity of Any Part. If any provision or part of any
provision of this Guaranty shall for any reason be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions or the remaining part of any effective
provisions of this Guaranty, and this Guaranty shall be construed as if such
invalid, illegal, or unenforceable provision or part thereof had never been
contained herein, but only to the extent of its invalidity, illegality, or
unenforceability.
Section 17. Amendment or Waiver. This Guaranty may be amended only by a
writing. No waiver by any of the Investors of any of the provisions of the
Guaranty or any of the rights or remedies of Investors with respect hereto shall
be effective or enforceable unless in writing.
Section 18. Binding Nature. This Guaranty shall inure to the benefit of and
be enforceable by Investors and their successors and assigns, including any
person to whom any of the Investors may transfer their Series B Preferred Stock,
and shall be binding upon and enforceable against the Guarantor and the
Guarantor's successors and permitted assigns.
Section 19. Assignability. Without any notice to Guarantor, this Guaranty
shall automatically be assigned whenever an Investor transfers Series B
Preferred Stock. Upon such assignment, the person who is assigned the Series B
Preferred Stock shall be deemed to be an Investor as such term is defined in
this Guaranty and shall have all of the rights and obligations as an Investor.
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Section 20. Notices. Any notice or demand required or permitted by or in
connection with this Guaranty, without implying the obligation to provide any
notice or demand, shall be in writing at the address set forth below or to such
other address as may be hereafter specified by written notice to Investors by
the Guarantor. Any such notice or demand shall be deemed to be effective as of
the date of hand delivery or facsimile transmission, one (1) day dispatch if
sent by overnight delivery, express mail or federal express, or five (5) days
after mailing if sent by first class mail with postage prepaid.
Section 21. Final Agreement. This Guaranty contains the final and entire
agreement of the Guarantor with respect to the guaranty by the Guarantor of the
Issuer's obligations to Investors. There are no separate oral or written
understanding between Investors and the Guarantor with respect thereto.
Section 22. Tense, Gender, Defined Terms, Captions. As used herein, the
plural shall refer to and include the singular, and the singular, the plural,
and the use of any gender shall include and refer to any other gender. All
captions are for the purpose of convenience only.
Section 23. Seal and Effective Date. This Guaranty is an instrument
executed under seal and is effective and enforceable as of the date set forth
below, independent of the date of actual execution.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, under seal, by one of its duly authorized officers as of the 18th day
of November, 1998.
WITNESS HENG FUNG HOLDINGS COMPANY LIMITED
/s/ By: /s/ Fai H. Chan
- ------------------------------------- ----------------------------------
Fai H. Chan, Managing Director
Address:
Heng Fung Holdings Company Limited
10th Floor, Lippo Protective Tower
231 -235 Gloucester Road
Wan Chai, Hong Kong
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