SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of The Securities Act of 1934
Date of Report (Date of earliest event reported):
October 27, 1997
CHELMSFORD CAPITAL, LTD.
(Exact name of registrant as specified in its charter)
COLORADO 0-25818 84-1293163
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation or Number Identification No.)
organization)
1055 E. Tropicana Avenue, Suite 700
Las Vegas, Nevada 89119
Address of principal executive offices
Registrant's telephone number: (702)436-1000
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On October 27, 1997, Alan J. Setlin acquired control of the
registrant by purchasing all of the common shares previously owned by
Capital Twain, Inc., a Nevada corporation. in the transaction, Mr.
Setlin acquired 1,189,500 shares of common stock, representing
approximately 86.86% of the issued and outstanding stock. He
subsequently transferred 269,500 shares on a gratuitous basis to certain
family members and business associates. Mr. Setlin retained direct
ownership of 920,000 shares, and may be deemed to be the beneficial
owner of an additional 60,000 shares owned by his spouse. Thus, Mr.
Setlin has direct or indirect beneficial ownership of 980,000 shares,
representing approximately 71.56% of the issued and outstanding stock
of the registrant. The transaction also involved the transfer of 2,695,000
Class A Warrants and 1,347,500 Class B Warrants previously owned by
Capital Twain, Inc., representing approximately 98.39% of each class
of warrants.
The purchase price for the shares was $75,000.00 and was paid by
execution of two promissory notes in the amount of $37,500 each. One
of such notes is payable to Capital Twain, Inc., and the other is payable
to Brownstone Holdings, LLC, a California limited liability company,
in consideration of its release and waiver of any claim it may otherwise
have had against Capital Twain, Inc., for an interest in the shares. The
notes are due and payable upon the first to occur of (i) completion of a
contemplated stock acquisition transaction between the registrant and
Futurenet Online, Inc., pursuant to which the registrant acquires not less
than eighty percent (80%) of the issued and outstanding capital stock of
Futurenet Online International, Inc.; or (ii) December 31, 1997.
The purchase was completed pursuant to the terms of a Stock Purchase
Agreement dated October 27, 1997, between Donald Saunders and Alan
J. Setlin, as Buyer, and Capital Twain, Inc., as Seller. Mr. Saunders
was a named party to the transaction because he agreed to serve as co-
signer of the two promissory notes, but he did not acquire any portion
of the shares which were purchased. Brownstone Holdings, LLC, was
a named party to the Stock Purchase Agreement for purposes of waiving
any claim it may otherwise have had against Capital Twain, Inc., for an
interest in the shares.
In conjunction with the change in control of the registrant, the existing
directors of the registrant resigned, and the following persons were
selected as directors, to fill the remaining unexpired terms of their
predecessors:
<TABLE>
<CAPTION>
Name Position
<S> <C>
Frederick Neebling Chairman
Michael L. Abrams Director
Thomas K. Russell Director
</TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit (2) - Stock Purchase Agreement
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.
CHELMSFORD CAPITAL, LTD.
(Registrant)
November 11, 1997
(Date)
/s/ Frederick Neebling, President
(Signature)
<PAGE>
EXHIBIT 2 - AGREEMENT FOR PURCHASE AND SALE OF
STOCK
THIS AGREEMENT, made and entered into this 27th day of
October, 1997, by and between Capital Twain, Inc., a Nevada
corporation, hereinafter referred to as "Seller," Brownstone Holdings,
LLC, a California limited liability company, hereinafter referred to as
"Brownstone," and Donald Saunders and Alan J. Setlin, hereinafter
collectively referred to as "Buyer."
WITNESSETH:
WHEREAS, on or about November 6, 1996, Seller acquired
1,189,500 shares of the issued and outstanding common stock, 2,695,000
of the issued and outstanding Class A Warrants, and 1,347,500 of the
issued and outstanding Class B Warrants of Chelmsford Capital
Corporation, a Colorado corporation, (hereinafter referred to as the
"Corporation") pursuant to the terms of a Stock Purchase Agreement;
and
WHEREAS, Brownstone advanced the sum of $37,500.00 to
Seller which was used by Seller in conjunction with acquisition of the
Shares and Warrants; and
WHEREAS, Seller desires to sell all of the Shares and Warrants
of the Corporation to Buyer free and clear of any claim or interest of
Brownstone in the Shares and Warrants, and Buyer desires to purchase
all of the Shares and Warrants from Seller and to compensate
Brownstone for any claim or interest it may have in such Shares and
Warrants in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, for and in consideration of the mutual
covenants and conditions contained herein, the parties hereto agree as
follows:
1. Sale of Shares and Warrants. Seller hereby sells and
the Buyer hereby purchases all of the Shares and Warrants of the
Corporation for a purchase price of $37,500.00 payable in the manner
specified herein. Simultaneously with the execution of this Agreement,
Seller shall deliver to Buyer certificates representing such Shares and
Warrants together with a properly executed stock power.
2. Payment of Purchase Price. The purchase price for the
Shares and Warrants shall be payable through execution by Buyer of a
promissory note in the form attached hereto as Exhibit A in the principal
amount of $37,500.00. Such promissory note shall be due and payable
in full on the earlier of (i) the date of closing of the contemplated stock
acquisition transaction between the Corporation and Futurenet Online,
Inc., pursuant to which the Corporation acquires not less than eighty
percent (80%) of the issued and outstanding capital stock of Futurenet
Online International, Inc.; or (ii) December 31, 1997.
3. Consent by Brownstone to Sale and Purchase.
Brownstone hereby consents to the sale of the Shares and Warrants by
Seller in accordance with the terms of this Agreement, and hereby
waives any claim or interest it may otherwise have in the Shares and
Warrants. The consideration payable to Brownstone for its waiver of
any claim or interest in the Shares and Warrants shall be execution by
Buyer of a promissory note in the form attached hereto as Exhibit A in
the principal amount of $37,500.00. Such promissory note shall be due
and payable in full on the earlier of (i) the date of closing of the
contemplated stock acquisition transaction between the Corporation and
Futurenet Online, Inc., pursuant to which the Corporation acquires not
less than eighty percent (80%) of the issued and outstanding capital stock
of Futurenet Online International, Inc.; or (ii) December 31, 1997.
4. Representations and Warranties of Seller. Seller makes
the following representations and warranties, each of which is being
relied upon by Buyer.
a. Seller has full power and authority to enter into
this Agreement, and the unqualified right to sell, assign, and deliver the
Shares and Warrants. No consent, approval, authorization, order,
registration, qualification or filing of or with any court or regulatory
authority or any other governmental body is required for the
consummation by Seller of the transaction contemplated by this
Agreement. The Shares and Warrants have not been pledged or
hypothecated, nor has a security interest been created in them, and upon
consummation of the transactions contemplated by this Agreement, the
Buyer will acquire good and valid title to the Shares free and clear of all
liens, claims, options, charges, and encumbrances of whatsoever nature.
b. The execution and delivery of this Agreement by
Seller, and the consummation by Seller of the transactions contemplated
hereby have been duly authorized. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, will constitute a violation or default under any
term or provision of the Articles of Incorporation or Bylaws of the Seller
or of the Corporation, or a violation or default under any contract,
commitment, indenture, other agreement or restriction of any kind or
character to which the Seller or the Corporation is a party, or by which
the Seller or the Corporation is bound.
c. To the best knowledge of Seller, the Corporation
is current in the filing of its periodical reports under the Securities
Exchange Act of 1934.
5. Representations and Warranties of Buyer. Buyer makes
the following representations and warranties, each of which is being
relied upon by Seller and by Brownstone.
a. There is no litigation, proceeding or investigation
pending or threatened against Buyer which questions the validity of this
Agreement or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement. Buyer has no
knowledge of any grounds upon which any such litigation, arbitration,
proceeding or investigation could be based.
b. Buyer is relying upon its own investigation and
knowledge of the business and operations of the Corporation in electing
to purchase the Shares and Warrants of the Corporation, has had such
access to the books, records, and other information relating to the
business and operation of the Corporation that it is able to make a fully
informed decision regarding the merits and risks of purchase of the
Shares and Warrants of the Corporation, and is not relying upon the
representations and warranties of the Seller or of Brownstone for such
purpose.
6. Liabilities; Indemnification by Buyer. The parties
hereby agree that to the best of their knowledge the Corporation has no
outstanding liabilities as of the date of this Agreement. Notwithstanding
the foregoing, however, to the extent that such liabilities exist, they shall
continue to be obligations of the Corporation after completion of the
purchase and sale of Shares and Warrants specified herein, and Buyer
hereby agrees to indemnify and hold Seller and Brownstone harmless
from liability for any unknown debts and obligations which may be
outstanding as of the date hereof.
7. Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements contained herein shall
survive the Closing.
8. Notices. All notices, letters, requests, demands and other
communications hereunder shall be in writing and shall be deemed to be
duly given if delivered in person or deposited in the United States mail
(registered or certified, return receipt requested) or otherwise actually
delivered:
a. If to Seller:
Capital Twain, Inc.
1055 E. Tropicana Avenue, Suite 700
Las Vegas, Nevada 89119
ATTN: John Baldwin
b. If to Buyer:
Donald Saunders
Alan J. Setlin
c/o Futurenet Online, Inc.
28460 Avenue Stanford
Valencia, CA 91355
c. If to Brownstone:
Brownstone Holdings, LLC
1888 Century Park East, Suite 1015
Los Angeles, CA 90067
ATTN: Gerald Wiener
9. Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties, their heirs, legal
representatives, successors and assigns.
10. Entirety. This Agreement shall be deemed to constitute
the entire agreement of the parties and supersedes any and all prior
agreements, arrangements, or understandings between the parties relating
to the subject matter hereof. No oral understandings, statements,
promises or inducements contrary to the terms of this Agreement exist.
The representations, warranties, covenants and agreements between the
parties shall be as set forth herein, and neither party shall be bound by
any prior, contemporaneous or subsequent statement, condition,
representation or understanding unless the same is set forth in a written
amendment attached hereto.
11. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Colorado.
12. Securities Disclosure by Buyer. Buyer acknowledges and
understands that the Shares and Warrants purchased hereunder have not
been registered under the Securities Act of 1933, as amended, and may
not be resold without compliance with that Act. Buyer further
acknowledges that there is no present public market for the Shares or
Warrants. Buyer has been given access to all information concerning the
business of the Corporation and has been given the opportunity to ask
questions of and receive information from Seller and Brownstone, to its
satisfaction. Buyer understands the substantial risks involved in
purchasing the Shares and the Warrants and has made an informed
judgment to buy the Shares and Warrants.
13. Securities Disclosure by Seller and Brownstone. Seller
and Brownstone acknowledge and understand that the Corporation is a
reporting company under the Securities Exchange Act of 1934, and as
such, that it is a "public shell." Seller and Brownstone further
acknowledge that it is the intention of Buyer, as soon as reasonably
possible following execution of this Agreement, to cause the Corporation
to engage in a stock acquisition transaction pursuant to which it acquires
not less than eighty percent (80%) of the issued and outstanding stock of
Futurenet Online International, Inc., and thereafter to take such steps as
may be necessary or appropriate to establish a public trading market in
the common stock of the Corporation. Notwithstanding the foregoing,
Seller and Brownstone acknowledge that following the execution of this
Agreement and completion of Closing hereunder, they shall have no
interest in the Shares or Warrants except as specified herein, and they
shall have no claim against the Buyer or against the Corporation for or
on account of any increase in market value of the Shares and/or
Warrants resulting from the activities of the Corporation, including, but
not limited to, completion of an acquisition transaction and/or creation
of a public trading market in the securities of the Corporation.
14. Resignation of Officers and Directors. Upon execution
of this Agreement and completion of Closing hereunder, Seller shall take
such steps as may be reasonably necessary or appropriate to cause the
existing officers and directors of the Corporation to resign, and in
conjunction therewith, to cause the existing directors to appoint one or
more successors to serve as directors of the Corporation.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
BUYER:
/s/
Donald Saunders
/s/
Alan Setlin
SELLER:
CAPITAL TWAIN, INC.,
Nevada corporation
/s/ Edward Delorme, President
Acknowledged and Approved:
BROWNSTONE HOLDINGS, LLC, a
California limited liability company
By:/s/ Gerald Wiener
Managing Member
