UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 30, 1999
eVision USA.Com, Inc.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-17637 45-0411501
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1700 Lincoln Street, Suite 3200, Denver, CO 80203
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(Address of principal executive offices) (Zip Code)
(303) 860-1700
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(Registrant's telephone number, including area code)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 30, 1999, eVision USA.com, Inc. ("eVision"or "the Company") entered into
a Stock Purchase Agreement with Ladsleigh Investments Limited, BVI ("Ladsleigh")
whereby eVision agreed to sell and Ladsleigh agreed to purchase 100% of the
stock of a wholly owned subsidiary of eVision, Fronteer Capital, Inc. ("Fronteer
Capital") for $3,000,000, excluding cash of approximately $293,000 and warrants
to purchase equity in a publicly traded company. The purchase price was based on
an independent market valuation of the primary assets held by Fronteer Capital
as of July 30, 1999, and will result in a gain or disposition of approximately
$195,000. The purchase price approximates the market value as of July 30, 1999.
The purchase price will be paid in cash of $150,000 and in the form of a
promissory note for $2,850,000, which bears interest at 14% and is due July 30,
2000. To secure the promissory note, eVision will hold the primary assets of
Fronteer Capital in escrow. To effect the financing of the sale to Ladsleigh,
the Company also entered into a Pledge and Escrow Agreement and Promissory Note
on July 30, 1999. Prior to the transaction, there was no material relationship
between Ladsleigh and the Company or any of its affiliates, any director or
officer of the Company or any associate of any such director or officer.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Not applicable
(b) Pro forma financial information.
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1999.
Pro Forma Condensed Consolidated Statement of Operations for the Six Months
ended March 31, 1999
Pro Forma Condensed Consolidated Statement of Operations for the Year ended
September 30, 1998
The Pro Forma Condensed Consolidated Balance Sheet of eVision as of March 31,
1999 reflects the financial position of the Company after giving effect to the
disposition of the assets discussed Item 2 and assumes the disposition took
place on March 31, 1999. The Pro Forma Condensed Consolidated Statements of
Operations for the year ended September 30, 1998 and the six months ended March
31, 1999 assume that the disposition occurred on October 1, 1997 and are based
on the operations of the Company for the year ended September 30, 1998 and the
six months ended March 31, 1999.
The unaudited pro forma condensed consolidated financial statements have been
prepared by the Company based upon assumptions deemed proper by it. The
unaudited pro forma condensed consolidated financial statements presented herein
are shown for illustrative purposes only and are not necessarily indicative of
the future financial position or future results of operations of the Company or
of the financial position or results of operations of the Company that would
have actually occurred had the transaction been in effect as of the date or for
the periods presented. In addition, it should be noted that the Company's
financial statements will reflect the disposition only from the closing date of
the disposition.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the historical financial statements and related notes
of the Company.
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(c) Exhibits.
2.1 Stock Purchase Agreement by and between eVision and Ladsleigh
Investments Limited, BVI, made as of July 30, 1999.
2.2 Pledge and Escrow Agreement by and between eVision and Ladsleigh
Investments Limited, BVI, made as of July 30, 1999.
2.3 Promissory Note by Ladsleigh Investments Limited, BVI to eVision, made
as of July 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 5, 1999 eVision USA.com, Inc.
By: /s/ Robert H. Trapp
--------------------------------
Robert H. Trapp,
Managing Director
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<TABLE>
<CAPTION>
eVISION USA.COM, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
March 31, (A)
ASSETS 1999 Pro forma
(Unaudited) adjustments Pro forma
---------------- --------------- ----------------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,560,235 150,000 3,710,235
Accounts and notes receivables 2,855,711 2,850,000 5,705,711
Securities owned, at market value 1,793,332 (1,441,554) 351,778
Current maturities of investments in debt securities 210,889 --- 210,889
Other current assets 495,909 (50,000) 445,909
---------------- --------------- ----------------
Total current assets 8,916,076 1,508,446 10,424,522
---------------- --------------- ----------------
Net property, furniture and equipment 1,431,367 --- 1,431,367
Other long term assets 8,810,179 --- 8,810,179
---------------- --------------- ----------------
Total assets 19,157,622 1,508,466 20,666,068
================ =============== ================
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Accounts payable and accrued expenses 4,303,706 (18,000) 4,285,706
Accrued interest payable to related party 207,500 --- 207,500
Current portion of convertible debentures to related party 500,000 --- 500,000
Other current liabilities 437,520 --- 437,520
---------------- ---------------- ----------------
Total current liabilities 5,448,726 (18,000) 5,430,726
---------------- ---------------- ----------------
Long-term debt, net of current portion 77,095 --- 77,095
Convertible debentures 6,691,444 --- 6,691,444
Convertible debentures to related party 7,500,000 --- 7,500,000
Deferred rent concessions 1,597,746 --- 1,597,746
---------------- ---------------- ----------------
Total liabilities 21,315,011 (18,000) 21,297,011
---------------- ---------------- ----------------
Minority interest in subsidiaries 1,300,624 --- 1,300,624
Total stockholders' deficit (3,458,013) 1,526,466 (1,931,567)
---------------- ---------------- ----------------
Total liabilities and stockholders' deficit $ 19,157,622 1,526,446 20,666,068
================ ================ ================
</TABLE>
(A) Represents elimination of primary assets and liabilities of Fronteer
Capital, Inc. sold to Ladsleigh Investments Limited, BVI. Also includes
recording cash payment of $150,000 and promissory note of $2,850,000
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<TABLE>
<CAPTION>
eVISION USA.COM, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months
Ended
March 31, (A)
1999 Pro forma
(Unaudited) adjustments Pro forma
---------------- --------------- ----------------
<S> <C> <C> <C>
Revenue $ 18,180,068 (333,917) 17,846,151
Cost of sales and operating expenses:
Cost of sales 10,969,461 --- 10,969,461
General and administrative 7,281,444 (21,033) 7,260,411
Depreciation and amortization 208,841 --- 208,841
---------------- --------------- ----------------
Total operating expenses 18,459,746 21,033 18,438,713
---------------- --------------- ----------------
Operating loss (279,678) (354,950) (592,562)
Other expense, net (448,279) 201,716 (246,563)
---------------- --------------- ----------------
Loss before minority interest and income taxes (727,957) (153,234) (839,124)
Minority interest in earnings (129,148) --- (129,148)
---------------- --------------- ----------------
Loss from continuing operations before income taxes (857,105) (153,234) (968,272)
Income tax expense (79,169) --- (79,169)
---------------- --------------- ----------------
Net loss (936,274) (153,234) (1,047,441)
================ =============== ================
Weighted average number of common shares outstanding 17,875,490 17,875,490
================ ===============
Loss per common share - basic and diluted: $ (0.05) (0.06)
================ ================
</TABLE>
(A) Represents the elimination of unrealized gain on investments of $333,917,
general and administrative expenses of $21,033 and recognition of accrued
interest receivable of $201,716.
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<TABLE>
<CAPTION>
eVISION USA.COM, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended
September 30, (A)
1998 Pro forma
Consolidated adjustments Pro forma
-------------- ---------------- ----------------
<S> <C> <C> <C>
Revenue ............................................................. $ 27,387,304 -- 27,387,304
Cost of sales and operating expenses:
Cost of sales ..................................................... 18,585,095 -- 10,521,902
General and administrative ........................................ 13,359,245 (29,428) 13,329,817
Unrealized loss on investment ..................................... 1,751,792 (1,751,792) --
Depreciation and amortization ..................................... 389,234 -- 389,234
----------- ----------- -----------
Total operating expenses ....................................... 34,085,366 (1,781,220) 32,304,146
----------- ----------- -----------
Operating loss .............................................. (6,698,061) 1,781,220 (4,916,841)
Other income (expense), net .......................................... (120,248) 405,445 285,197
----------- ----------- -----------
Loss before minority interest and income taxes .................... (6,818,309) 2,186,665 (4,631,644)
Minority interest in loss ......................................... 129,363 -- 129,363
----------- ----------- -----------
Loss from continuing operations before income taxes ............... (6,688,946) 2,186,665 (4,502,281)
Income tax expense ................................................ (290,320) -- (290,320)
----------- ----------- -----------
Loss from continuing operations ................................... (6,979,266) 2,186,665 (4,792,601)
=========== =========== ===========
Weighted average number of common shares outstanding ....... 16,459,515 16,459,515
=========== ===========
Loss from continuing operations per common share -
basic amd diluted ................................................. $ (.42) (.29)
=========== ===========
</TABLE>
(A) Represents elimination of general and administrative expenses and
unrealized loss on investment and recognition of interest income on the
note receivable.
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EXHIBIT INDEX
Exhibit Description Page No.
2.1 Stock Purchase Agreement by and between eVision and
Ladsleigh Investments Limited, BVI, made as of July 30,
1999.
2.2 Pledge and Escrow Agreement by and between eVision and
Ladsleigh Investments Limited, BVI, made as of July 30,
1999.
2.3 Promissory Note by Ladsleigh Investments Limited, BVI
to eVision, made as of July 30, 1999.
7
STOCK PURCHASE AGREEMENT
AGREEMENT, made July 30, 1999, between eVision USA, COM.INC. (the "Seller")
and LADSLEIGH INVESTMENTS LIMITED, BVI (the "Purchaser").
R E C I T A L S:
The Seller is the owner of all of the issued and outstanding shares of
FRONTEER CAPITAL, INC. (the "Company").
The Seller desires to sell 100,000.00 shares and the Purchasers desire to
buy such shares, on the terms herein stated.
1. Subsequent to the sale of the shares by the Seller pursuant to this
Agreement, Purchasers will own One Hundred (100%) Percent of the issued and
outstanding stock of the Company.
2. The Company is engaged in the business of investments. NOW,
THEREFORE, in consideration of the Recitals and mutual covenants herein
contained, the parties herein agree as follows:
1. SALE OF SHARES: The Seller shall sell, transfer, assign and set over to
the Purchasers and the Purchasers shall purchase and acquire from the Seller
100,000.00 shares of FRONTEER CAPITAL, INC., free and clear of all liens,
security interests, restrictions and encumbrances whatsoever which represents
One hundred (100%) Percent of all the shares of FRONTEER CAPITAL, INC.
2. PURCHASE PRICE: The purchase price for all of such shares is as follows:
(a) Three Million and 00/100 ($3,000,000.00) Dollars paid five (5%)
percent at the time of closing and the balance payable over a one (1) year term.
(b) One Hundred (100%) percent of the stock shall be held in escrow by
the Seller as security for the payment pursuant to the Balloon Note.
(c) Seller shall take back a Note in the sum of $2,850,000.00 which
Note shall be executed at the time of closing.
3. CLOSING DATE: The closing shall take place on July 30, 1999 at the law
office of DeMarrais & Schandler, Esqs., located at 235 Main Street, Hackensack,
New Jersey. At the closing, the Seller shall deliver to the Purchasers, free and
clear of all encumbrances, certificates for the Company's shares referred to in
Paragraph 1, in negotiable form to be held in escrow pursuant to the Pledge and
Escrow Agreement. The Purchasers shall deliver to the Seller a certified check
or trust check in the amount of One Hundred Fifty Thousand and 00/100
($150,000.00) Dollars.
4. DEFAULT BY SELLER: If the Seller shall fail or refuse to deliver any of
the shares to the Purchasers at the closing, the Purchasers, without prejudice
to their rights against the Seller, may refuse to consummate this Agreement and
terminate all their obligations hereunder.
5. REPRESENTATIONS AND WARRANTIES: The Seller represents and warrants to
the Purchasers as follows:
(a) Corporate Status. The Company is, and will be on the closing date,
a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware and is duly qualified and in good standing under
the Laws of any foreign jurisdiction where the failure to be so qualified would
have a material adverse effect on its ability to perform its obligations under
this Agreement and all agreements and instruments delivered pursuant hereto.
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(b) Subsidiaries. The Company has no subsidiaries.
(c) Capitalization. The Seller is the legal and beneficial owner of
said shares and free and clear of any liens, security interest, option or other
charge or encumbrance. The Company has no outstanding subscriptions, contracts,
options, warrants or other obligations to issue, sell or otherwise dispose of,
or to purchase, redeem or otherwise acquire any of its shares.
(d) Title to shares. The Seller is and will be on the closing date the
owner, free and clear of any encumbrances, of the number of the Company's shares
set forth in subparagraph (c) of this paragraph. Seller has full power,
authority and legal right and all necessary authorizations to transfer, assign
and sell the shares to Purchasers and there are no other shares of the Company
owned or claimed by any other person or entity.
(e) At the time of Closing, Purchasers' shares shall have been duly
authorized and validly issued and fully paid and non-assessable and Purchasers
shall be at the time of closing, the legal and beneficial owners of the shares
free and clear of any lien, security interest, option or other charge or
encumbrance.
(f) The Seller has delivered to the Purchasers the balance sheet of
the Company as of July 19, 1999, together with related statements of income of
the Company for the prior years (collectively, the " Statements").
(g) The Statements are true and correct in all material respects and
have been prepared in accordance with generally accepted accounting principles
in effect during the periods involved, except as otherwise indicated therein,
and fully and fairly present the condition of the Company as of the dates
thereof and fully and fairly present the results of the operations of the
Company for the periods indicated.
(h) There has not been any material adverse change in the condition,
or otherwise, of the Company or in the results of its operations subsequent to
the preparation of said Statements.
(i) The Company has filed or caused to be filed all Federal, State,
local and other tax returns, reports and declarations required to be filed in
respect of the Company's business, and has paid or reserved for all income,
franchise, sales, unemployment, withholding, social security, workers'
compensation and all other federal, state and local taxes which have been or
shall become due with respect to all taxable periods ending on or prior to the
date of the closing or pursuant to any assessment received by it in connection
with said returns, which failure to file would have a materially adverse effect
on the business of the Company and the ability of Seller to perform his
obligations under this Agreement.
(j) All liabilities disclosed. Except to the extent reflected or
reserved against in the Company's balance sheet of July 30, 1999, Seller
represents and warrants that he does not know or have reasonable grounds to know
of any basis for a claim against the Company of any liability of any nature or
in any amount not fully reflected or reserved against in the Statements.
(k) The Company is not in default under any, and the Company has
complied with all statutes, ordinances, regulations, orders, judgments and
decrees of any Court or other governmental agency relating to the Company and
its business and properties, and the Seller has no knowledge of any basis for
any claim for compensation or damages or otherwise arising out of any violation
of the foregoing.
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(l) Each representative and warranty of the Seller herein contained
shall survive the closing for a period of five (5) years from the date hereof,
except for tax matters which shall expire contemporaneously with the expiration
of the applicable limitation, and liability with respect thereto shall not be
affected by an investigation.
(m) Absence of certain changes. Since July 30, 1999, there has not
been (i) any change in the Company's condition, assets, liabilities or business,
other than changes in the ordinary course of business, none of which has been
materially adverse; (ii) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the Company's properties or
business.
(n) Title to assets. The Company has good and marketable title to all
its properties and assets, real and personal, subject to no mortgage, pledge,
lien, encumbrance, security interest, or charge, except for liens shown on the
balance sheet as securing specified liabilities set forth therein.
(o) Conditions of buildings and equipment. All Company buildings and
equipment are in good operating condition and repair and in conformity with all
applicable ordinances and regulations and environmental, building, zoning and
other laws.
(p) Infringements. The sale and distribution of foods and related
products which constitute the Company's operations, do not infringe upon the
trademarks, patents or licenses or any other person, firm or corporation and
there are not now and will not at the date of closing be any suits filed or
threatened against the Seller, or the Company, claiming an infringement of any
patents, trademarks, copyrights or licenses.
(q) Payment obligations. The Company will not on the closing date be
in default in the payment of any of its obligations.
(r) Employment laws. The Company has complied with all applicable
federal and state laws relating to the employment of labor, including the
provisions relating to wages, hours, collective bargaining and the payment of
social security taxes, and is not liable for any arrears of wages, or any tax or
penalties, for failure to comply with any of the foregoing.
(s) Litigation. There are no actions, suits, litigation or proceedings
pending, or to the Seller's knowledge, threatened, against or relating to the
Company, its properties or business, nor does the Seller know or have reasonable
grounds to know of any basis for any such action, or of any governmental
investigation relative to the Company, its properties or business.
(t) Leases, contracts and licenses. Seller represents and warrants
that the transfer of its shares in accordance with the terms of this Agreement
will not constitute a prohibited assignment or transfer of any of its licenses,
leases or contracts, and that all of the foregoing will remain in full force and
effect without acceleration as a result of this transaction.
(u) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will require the consent of
any governmental agency or authority or any other entity or person and neither
such execution and delivery nor such consummation will violate any provision of
the Company's Certificate of Incorporation or By-Laws, or any agreement or
Stockholders Agreement or any statute, ordinance, regulation, order, judgment of
decree of any court or governmental agency, or conflicts with or will result in
any breach of any of the terms of or constitute a default under or result in the
terminations of or the creation of any lien pursuant to the terms of any
agreement or instrument to which the Seller or the Company are a party or by
which the Seller or the Company or any of the Seller's or the Company's assets
are bound.
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(v) Disclosure. No representation or warranty by the Seller in this
Agreement, nor any statement or certificate furnished or to be furnished to the
Purchasers pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
6. ACCESS AND INFORMATION: The Seller shall cause the Company to give to
the Purchasers and Purchasers' counsel, accountants, and other representatives
full access, during normal business hours throughout the period prior to the
closing, to all the Company's properties, books, contracts, commitments, and
records and shall furnish the Purchasers during such period with such
information concerning the Company's affairs as the Purchasers reasonably may
request.
7. CONDUCT OF BUSINESS PENDING CLOSING: The Seller covenants that, pending
the closing:
(a) The Company's business will be conducted only in the ordinary
course and in the manner heretofore operated by it.
(b) No change will be made in the Company's Certificate of
Incorporation or By- Laws, except as may be first approved in writing by the
Purchasers.
(c) No change will be made in the Company's authorized or issued
corporate shares.
(d) No dividend or other distribution or payment will be declared or
made in respect of the Company's corporate shares.
(e) No increase will be made in the compensation payable or to become
payable by the Company to any officer, employee or agent, nor will any bonus
payment or arrangement or other benefits be paid by the Company to or with any
officer, employee or agent.
(f) Except as otherwise requested by the Purchaser, the Seller will
cause the Company to use its best efforts (without making any commitment on the
Purchasers' behalf) to preserve the Company's business organization intact; to
keep available to the Company the services of its present officers and
employees; and to preserve for the Company the goodwill of its suppliers,
customers and others having business relations with the Company.
(g) All debts will be paid as they become due.
(h) Seller shall refrain from making any purchase, sale or lease or
introducing any method of management or operation in respect of the business
except in a manner consistent with its prior practice.
(i) Seller shall refrain from entering into any contract which would
materially and adversely affect the condition of the Company and from making any
change adverse to it in the terms of any contract to which they are presently a
party or by which they or any of their assets is bound, and comply with the
terms and conditions of each such contract and perform all of their obligations
thereunder without default or the occurrence of an event which, upon notice or
passage of time or both, would result in a default.
(j) Seller shall maintain the books and records in accordance with
good business practice, on a basis consistent with prior practice.
(k) The Company will not consolidate or merge with any other business.
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(l) The Company will keep all of its inventory and other property
fully insured against any loss, either by fire, or casualty or theft. If prior
to the closing date such property is totally or substantially damaged by reason
of fire or other casualty or is lost by reason of theft, the Purchasers may, in
the exercise of their sole discretion, terminate this Agreement.
(m) Seller shall maintain and pay all premiums with respect to all
policies of insurance relating to its business as are presently held in its
name, or replace such policies of insurance with comparable policies issued by
reputable, national insurers.
(n) Seller shall comply with all statutes, ordinances, regulations,
orders, judgments and decrees of every Court and governmental agency applicable
to the company and to the conduct of the business and perform all its
obligations with respect thereto without default or without the occurrence of an
event which, upon notice or passage of time or both, would result in a default.
8. ACTIONS NECESSARY TO COMPLETE TRANSACTION: Each party agrees to execute
and deliver al such other documents or instruments and to take any action as may
be reasonably required in order to effectuate the transactions contemplated by
this Agreement.
9. INDEMNIFICATION: The Seller hereby agree to indemnify and hold harmless
the Purchasers from and against any and all losses, claims, demands, damages,
liabilities, obligations, costs and/or expenses, including, without limitation,
reasonable fees and disbursements of counsel (hereinafter referred to
collectively as "Damages"), sustained or incurred by the Purchasers by reason of
the breach of any of the obligations, covenants or provisions, or the inaccuracy
of any of the representations or warranties, made by the Seller pursuant to this
Agreement or any document or instrument delivered hereunder.
10. WAIVER: Any waiver by either party or any breach of any term or
condition of this Agreement shall not be deemed a waiver of any other breach of
such term or condition, nor shall the failure of either party to enforce such
provision constitute a waiver of such provision or of any other provision, nor
shall such action be deemed a waiver or release of any other party for any
claims arising out of or connected with this Agreement.
11. NOTICES: All notices, requests, demands and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered or mailed by registered or certified mail to the address of the
Purchasers or Seller or to such other address as each of the foregoing may
designate in writing.
12. EXPENSES: Each party shall pay the expenses incurred by him or it under
or in connection with this Agreement, including counsel fees and expenses of his
or its representatives, whether or not the transactions contemplated by this
Agreement are consummated.
13. SURVIVAL OF REPRESENTATIONS: The representations, warranties, and
agreements of Seller and Purchasers contained in this Agreement shall survive
the closing, and shall be unaffected by any investigation made by any party at
any time.
14. AMENDMENT: Neither this Agreement nor any term of provision hereof may
be changed, waived, discharged or terminated orally, or in any manner other than
by an instrument in writing signed by the party against which the enforcement of
the change, waiver, discharge or termination is sought.
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15. BINDING EFFECT: This Agreement shall be binding upon and insure to the
benefit of the respective parties, and their successor and assigns, heirs and
personal representatives, except as otherwise expressly provided herein.
16. GOVERNING LAW: This Agreement shall be deemed to be made under and
shall be construed in accordance with the Laws of the State of New Jersey. IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed under
their respective corporate seals in New Jersey, as of the day and year first
above written.
17. EXCLUSIONS: This purchase does not include: (1) present cash in the
business; and (2) Global Med Technological stock and stock options referred to
as "Global."
eVISION USA.COM,INC.
Seller
By: /s/ Robert H. Trapp
---------------------------------
Robert H. Trapp, Managing Director
LADSLEIGH INVESTMENTS LIMITED, BVI
Purchaser
By: /s/ Robert H. Schandler
---------------------------------
Robert H. Schandler, Director
7
PLEDGE AND ESCROW AGREEMENT
THIS AGREEMENT, made this 30th day of July, 1999 by and between LADSLEIGH
INVESTMENTS LIMITED, BVI, Stockholder of FRONTEER CAPITAL, INC., a Delaware
corporation, hereinafter referred to as PLEDGOR, and eVision USA.COM,INC.
hereinafter referred to as PLEDGEE, and eVision USA.COM, INC. hereinafter
referred to as ESCROWEE;
W I T N E S S E T H:
WHEREAS, the Pledgor is the holder of all of the issued and outstanding
stock of Fronteer Capital, Inc., a Delaware corporation, hereinafter referred to
as the CORPORATION; and
WHEREAS, Ladsleigh Investments Limited, BVI has the date hereof obtained
the title to all that certain stock of Fronteer Capital, Inc., a business
located at 1700 Lincoln Street, 32nd floor, Denver, Colorado 80203, and in
connection therewith, has executed and delivered to the Pledgee a promissory
note in the principal sum of Two Million Eight Hundred Fifty Thousand
($2,850,000.00) Dollars; and
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter set forth, and also for and in consideration of the sum
of One ($1.00) Dollar to each of the parties in hand paid, the receipt whereof
is hereby acknowledged, IT IS MUTUALLY AGREED as follows:
1. Ladsleigh Investments Limited, BVI, the stockholder, hereby assigns,
transfers and sets over to the Pledgee, its successors and assigns, all of its
right, title and interest in and to all of the shares of stock outstanding,
authorized and issued in and to Fronteer Capital, Inc., together with all of its
right, title and interest to all dividends therefrom, and all rights of
preemption, or other rights thereto attached, specifically with regard to the
present 100,000 shares issued, as follows: 100,000 unto the Escrowee named
herein.
2. Ladsleigh Investments Limited, BVI, as additional collateral, hereby
assigns over to the Pledgee, all of its right title and interest in and to the
outstanding shares of International Assets Holding Corp., Anex International
Holding Ltd. and Heng Fung Holdings Company, Ltd. owned by Fronteer Capital,
Inc., as follows: 15,620 shares of International Assets Holding Corp, 18,950,000
shares of Anex International Holdings Ltd. and 119,790,000 shares of Heng Fung
Holdings Company, Ltd.
TO HAVE AND TO HOLD, such shares of stock, dividends, income, issues and
rights to the said Pledgee, its successors and assigns, and to it and its own
use forever, but subject, nevertheless, to and upon the following terms,
provisions and conditions:
That, so long as the terms, provisions and conditions of this Agreement
shall be kept, observed and performed by the said Stockholder, the Stockholder
shall have the right to vote the said shares of stock at all meetings of the
Stockholders of Fronteer Capital, Inc., a Delaware corporation, International
Assets Holding Corp., Anex International Holding, Ltd. and Heng Fung Holdings
company, Ltd., provided, however, that without the prior written consent of the
Pledgee, the Stockholder shall note vote, the said shares of stock or any of
them, for any of the following purposes:
(a) To mortgage the property and franchise of the said Corporation;
(b) To guaranty the bonds of another Corporation;
(c) To sell the Franchise and property of the said Corporation;
(d) To consolidate or merge, or to dissolve the said Corporation;
<PAGE>
(e) To increase, reduce or otherwise change, in any manner or form
whatsoever, the present authorized capital stock of the said
Corporation;
(f) To issue any of the unissued stock of the said Corporation or to sell
any of the treasury stock of the said corporation now or hereafter
acquired, or to contract for the sale or to sell or assign or
otherwise transfer any right or contractual right which it may have.
2. That the Stockholder and the said Corporation covenant that, so long as
any part of the said indebtedness shall remain unpaid;
(a) The said Corporation shall and will at all times comply with all acts,
laws, rules, regulations, and order of any national or state legislature,
executive, administrative or judicial body, commissioner or officer exercising
any power of regulation or supervision over the said Corporation or over any
part of any of its assets; and
(b) The Corporation shall and will, at all times, maintain the corporate
organization, and will not permit or suffer any use or nonuse of its corporate
authority and franchise so that its corporate authority and franchise may
become, in any wise, forfeited or forfeitable; and
(c) The Corporation will not assign, transfer, mortgage, hypothecate or
pledge its personal or real property or any substantial part thereof.
3. That the Stockholder covenants and agrees that he shall and will, from
time to time, pay and discharge all the taxes, assessments and government
charges lawfully imposed upon the Fronteer Capital, Inc. stock hereby pledged or
transferred or upon any part thereof, the liens of which might or could be held
prior to the lien of these premises so that the priority of these presents may
be duly and fully preserved, and that the Stockholder shall not and will not do
so or suffer any matter or thing whatsoever, whereby the lien of these presents
might or could be impaired until the promissory note hereby secured, together
with all interest accrued thereon, and all other claims hereunder, shall be
fully paid, satisfied and discharged.
4. That the Stockholder and the said Corporation covenant that if any
action at law or in equity or any other proceedings shall be commenced against
the said Corporation, then, and in such event, they will immediately, in
writing, notify the Pledgee thereof.
5. That the Stockholder and the said Corporation covenant they will, at any
time and from time to time hereafter, upon the request of the Pledgee, do,
execute, deliver and/or perform all such further acts, deeds and things as shall
be advised, devised or required to effectuate the intention of this agreement
and to secure and confirm to the Pledgee all and singular the property security
and rights hereinafter described, and hereby intended to be assigned,
transferred and conveyed as collateral security, as to render the same and each
portion thereof whether now owned or an equity hereafter secured, subject to the
terms, provisions and conditions in this agreement contained.
6. The Stockholders, Officers and Directors of Fronteer Capital, Inc., a
Delaware corporation, hereby warrant, represent and covenant to and with the
Pledgee: (a) that the said corporation is a corporation which is authorized to
issue only one hundred thousand (100,000) shares of common, no par value stock;
and (b) that there are issued and outstanding one hundred thousand (100,000)
shares of said stock issued as before noted.
7. That in case any one or more of the following events, hereinafter called
"events of default" the following shall happen:
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<PAGE>
(a) Default in payment of the said promissory note, whether at maturity, by
acceleration or otherwise, if default continues for more than fifteen (15) days
and after written notice of default is given to and received by Pledgor by
personal service or certified mail;
(b) Default in the performance or observance of any of the covenants or
agreements contained in Articles 1, 2, 3, 4 and 5 of this collateral security
agreement;
(c) If the said Corporation shall become insolvent, or a petition in
bankruptcy shall be filed against the Corporation, or if a petition for
reorganization whether voluntary or involuntary shall be filed by or against the
said Corporation in any court of competent jurisdiction, or if the said
Corporation as an insolvent shall take advantage of any other relief now or
hereafter permitted by the National Bankruptcy Act or of any state insolvency
laws, or if the said Corporation shall make a general assignment for the benefit
of creditors, of if any order, judgment or decree shall be entered by any court
appointing a receiver of said Corporation, or if any proceeding or action shall
be commenced for the dissolution of said corporation, or if an money judgment or
a judgment for the transfer or delivery of property shall be entered against the
corporation and remain unpaid for over thirty (30) days and an appeal not filed;
8. That upon failure of the said corporation and the stockholder duly and
punctually to pay the said indebtedness or any part thereof as set forth above,
as and when due as hereinbefore provided, or as provided in the said note, then
and in such event the Escrowee shall within fifteen (15) days from the due date,
give written notice to Pledgor, without demand for payment and without
advertising, each and all of which is and are hereby expressly waived, sell any
or all of the said shares of stock at public sale. The proceeds of such sale
shall be applied as far as needed, towards the payment of the whole, of the
indebtedness, together with the interest and expenses of sale. Ten (10) days'
written notice of said sale shall be given to the Pledgor and the default may be
cured within that ten (10) day period. It is expressly understood and agreed
that the Pledgee may itself be the purchaser at any such sale of the whole or
any part of the said shares of stock sold, free from any right or equity of
redemption, such right and equity being hereby expressly waived and released,
and any surplus shall be paid to the Pledgor. The Officers of Fronteer Capital,
Inc. shall execute any and all instruments for the effective transfer of the
stock, and the Officers, by this instrument, upon default as above-described,
shall resign as Director.
9. That no remedy or right herein conferred upon or served to the Pledgee
is intended to be to the exclusion of any other remedy or right, but each and
every such remedy or right shall be cumulative and shall be in addition to every
other remedy or right given hereunder, and now or hereafter existing at law or
in equity.
10. All dividends, which may be declared, are to be paid by the Corporation
to Pledgor until and unless there has been a default as hereinafter provided.
11. Upon payment of the indebtedness to the Pledgee, said Pledgee shall
re-assign and re-transfer to Pledgor the said shares of stock, and this
agreement shall expire.
12. All parties hereto further agree, to pay on demand as well as indemnify
and hold the Escrowee harmless from and against all costs, damages, judgments,
attorneys' fees, expenses, obligations and liabilities of any kind or nature
which in good faith the Escrowee may incur or sustain in connection with or
arising out of this escrow agreement, and the Escrowee is hereby given a lien
upon all the rights, title and interest of each of the undersigned in all
escrowed papers and other property and monies deposited in the escrow to protect
the rights and to indemnity and reimburse him in this agreement.
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<PAGE>
13. That this agreement shall bind the parties hereto, their respective,
heirs, executors, administrators, successors and assigns.
LADSLEIGH INVESTMENTS LIMITED, BVI
As Stockholder of
FRONTEER CAPITAL, INC., Pledgor
By: /s/ Robert H. Schandler
-------------------------------------------
Robert H. Schandler, Director
eVision USA.COM,INC., Pledgee
By: /s/ Robert H. Trapp
------------------------------------------
Robert H. Trapp, Managing Director
eVision USA.COM,INC., Escrowee
By: /s/ Robert H. Trapp
------------------------------------------
Robert H. Trapp, Managing Director
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PROMISSORY NOTE
U.S. $2,850,000.00 Hackensack, New Jersey
July 30, 1999
FOR VALUE RECEIVED, Ladsleigh Investments Limited, BVI, a corporation
promises to pay in immediately available funds and in lawful monies of the
United States of America, to the order of
eVision USA.Com., Inc.
1700 Lincoln Street, 32nd Floor
Denver, Colorado 80203
or at such place as Lender or the holder hereof may from time to time designate
in writing, the principal sum of Two Million Eight Hundred Fifty Thousand
($2,850,000.00) Dollars ("Loan"), together with interest at the rate of fourteen
(14%) percent per annum, computed from the date hereof, in the following manner
and upon the following terms and conditions:
1. This loan shall be a one (1) year balloon with no payment due until all
accrued interest and principal payments are due, on July 30, 2000.
2. If any one or more of the following events shall occur or be continuing,
it shall be deemed to be an Event of Default entitling the holder to pursue such
remedies as set forth herein and in the Pledge and Escrow Agreement executed
contemporaneously herewith:
(1) The undersigned's failure to make the balloon payment of principal and
interest within thirty (30) days when due;
(2) The entry of any judgment or execution or attachment order which, in
the reasonable opinion of the holder hereof, adversely affects the
credit standing of the undersigned;
(3) The failure of the undersigned to pay any principal or interest on any
other borrowed money obligation when due after giving effect to any
applicable cure or grace period, so that the holder of such obligation
declares, or may declare, such obligation due prior to its stated
maturity because of the undersigned's or any Guarantor's default
thereunder;
(4) The passing of title, legal or equitable, to the property described in
the Security Agreement without the written consent of the undersigned.
(5) Any suspension of the undersigned's transaction of its usual business;
or
(6) Liquidation and/or dissolution of the undersigned.
Upon the occurrence of an Event of Default, then the aforesaid principal sum or
so much thereof as shall then remain unpaid, with all arrearage of interest
thereon, shall, with notice or demand, at the option of the Lender become and be
due and payable immediately thereafter, anything hereinbefore contained to the
contrary notwithstanding.
<PAGE>
4. The undersigned shall be liable for all costs, charges, expenses and
other sums incurred or advanced by the Lender (including legal fees and
disbursements) to preserve the collateral securing this Note, collect the sums
due hereunder, protect the Lender's interest, realized on the collateral.
5. As further security for the performance of the obligations hereunder,
the undersigned hereby gives to Lender a general lien upon the stock. The Lender
shall have the right of set-off, in addition to any other right conferred by
statute or operation of law.
6. The proceeds of this Note shall be utilized for business investment
purposes and as a result, this loan transaction does not fall under the
regulations set forth in 12 CFR Section 226, et seq. In no event, however, shall
the interest charged on the loan exceed that permitted by law.
7. THIS IS A BALLOON NOTE REQUIRING PAYMENT IN FULL ON THE DATE OF MATURITY
AND THE LENDER SHALL BE UNDER NO OBLIGATION TO REFINANCE THE AMOUNT DUE AT THAT
TIME.
8. In the event any provision of this Note is determined by competent
authority to be prohibited or unenforceable in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability, without invalidating the remaining provisions of this Note,
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable any provision in any other jurisdiction.
9. The provisions of this Note shall be governed by and construed in
accordance with the laws of the State of New Jersey.
10. The provisions herein contained shall bind and inure to the benefit of
the undersigned and the Lender and its respective legal representatives,
successors or assigns (provided, however, that the undersigned shall not assign
this Note without first obtaining the written consent of the Lender). Lender (or
any subsequent Assignee) may transfer and assign this Note and deliver the
collateral to the Assignee, who shall thereupon have all the rights of the
Lender; and Lender (or such subsequent Assignee that in turn assigns as
aforesaid) shall then be relieved and discharged of any responsibility or
liability with respect to this Note and said collateral. For the purposes of
this Note, wherever the term Lender shall be used it shall refer to any
subsequent holder, successor or assignee hereof unless the context requires
otherwise.
11. The Lender is in possession of the stock pursuant to a Pledge and
Escrow Agreement. The Lender has reviewed the value of the stock and has
determined that the value of the stock is sufficient to satisfy the loan amount
in the event of default, leaving no deficiency under the Note. The Note is
solely the obligation of Ladsleigh Investment Limited, BVI.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals
or caused these presents to be signed by its duly authorized partners on the day
and year first written above.
LADSLEIGH INVESTMENTS LIMITED, BVI
By: /s/ Robert H. Schandler
----------------------------------------------
Robert H. Schandler, Director
WITNESS:
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