-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UMO7TU8KyJoRdcdiFVNe27EHnEzgxrYO6WwSOj6vJ1hnpijSb2bFMTPTKHL3pfHa jeXDTFL2/5yG4hZBUqTKrg== 0000909143-99-000139.txt : 19990809 0000909143-99-000139.hdr.sgml : 19990809 ACCESSION NUMBER: 0000909143-99-000139 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990802 GROUP MEMBERS: GLACIER CAPITAL LIMITED GROUP MEMBERS: IEO HOLDINGS LIMITED GROUP MEMBERS: INFINITY INVESTORS LIMITED GROUP MEMBERS: INFINITY INVESTORS LTD GROUP MEMBERS: SUMMIT CAPITAL LIMITED SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VISUAL EDGE SYSTEMS INC CENTRAL INDEX KEY: 0001015172 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 133778895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49607 FILM NUMBER: 99675355 BUSINESS ADDRESS: STREET 1: 2424 NORTH FEDERAL HIGHWAY STREET 2: SUITE 100 CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5617507559 MAIL ADDRESS: STREET 1: 2424 NORTH FEDERAL HIGHWAY STREET 2: SUITE 100 CITY: BOCA RATON STATE: FL ZIP: 33431 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INFINITY INVESTORS LTD CENTRAL INDEX KEY: 0000930022 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: MEMORIAL SQUARE STREET 2: P O BOX 556 CHARLESTON CITY: NEVIS WEST INDIES MAIL ADDRESS: STREET 1: 27 WELLINGTON ST CITY: CORK IRELAND SC 13D 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. _____)* VISUAL EDGE SYSTEMS, INC. - ----------------------------------------------------------------- - (Name of Issuer) Common Stock, par value $.01 per share - ----------------------------------------------------------------- (Title of Class of Securities) 928430 10 7 - ----------------------------------------------------------------- (CUSIP Number) Stuart J. Chasanoff, Esq. HW Partners, L.P. 1601 Elm Street, Suite 4000 Dallas, Texas 75201 (214) 720-1600 - ----------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 2, 1999 - ----------------------------------------------------------------- (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-1(b)(3) or (4), check the following box. [X] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for the 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 the disclosures provided in a prior cover page. The information required in 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). CUSIP NUMBER 928430 10 7 (1) Name of Reporting Persons. Infinity Investors Limited I.R.S. Identification Nos. of Above Persons (entities only) N/A (2) Check the Appropriate Box if a (a) [ ] Member of a Group (see instructions) (b) [X] (3) SEC Use Only (4) Source of Funds (see instructions) WC (5) Check if Disclosure of Legal [ ] Proceedings is Required Pursuant to Items 2(d) or 2(e) (6) Citizenship or Place of Organization Nevis, West Indies Number of Shares (7) Sole Voting 10,758,256 Power Beneficially (8) Shared Voting 117,842 Owned by Each Power Reporting Person (9) Sole Dispositive 9,782,256 Power with: (10) Shared Dispositive 117,842 Power (11) Aggregate Amount Beneficially Owned 10,876,098 by Each Reporting Person (12) Check if the Aggregate Amount in [X] Row (11) Excludes Certain Shares (see instructions) (13) Percent of Class Represented by 54.4% Amount in Row (11) (14) Type of Reporting Person (see instructions) CO CUSIP NUMBER 928430 10 7 (1) Name of Reporting Persons IEO Holdings Limited I.R.S. Identification Nos. of Above Persons (entities only) (2) Check the Appropriate Box if a (a) [ ] Member of a Group* (b) [X] (3) SEC Use Only (4) Source of Funds (see instructions) WC (5) Check if Disclosure of Legal [ ] Proceedings is Required Pursuant to Items 2(d) or 2(e) (6) Citizenship or Place of Organization Nevis, West Indies Number of Shares (7) Sole Voting 40,417 Power Beneficially (8) Shared Voting 10,835,681 Owned by Each Power Reporting Person (9) Sole Dispositive 40,417 Power with: (10) Shared Dispositive 9,859,681 Power (11) Aggregate Amount Beneficially Owned 10,876,098 by Each Reporting Person (12) Check if the Aggregate Amount in [X] Row (11) Excludes Certain Shares (see instructions) (13) Percent of Class Represented by 54.4% Amount in Row (11) (14) Type of Reporting Person (see instructions) CO CUSIP NUMBER 928430 10 7 (1) Name of Reporting Persons Glacier Capital Limited I.R.S. Identification Nos. of Above Persons (entities only) (2) Check the Appropriate Box if a (a) [ ] Member of a Group* (b) [X] (3) SEC Use Only (4) Source of Funds (see instructions) WC (5) Check if Disclosure of Legal [ ] Proceedings is Required Pursuant to Items 2(d) or 2(e) (6) Citizenship or Place of Organization Nevis, West Indies Number of Shares (7) Sole Voting 38,712 Power Beneficially (8) Shared Voting 10,837,386 Owned by Each Power Reporting Person (9) Sole Dispositive 38,712 Power with: (10) Shared Dispositive 9,861,386 Power (11) Aggregate Amount Beneficially Owned 10,876,098 by Each Reporting Person (12) Check if the Aggregate Amount in [ ] Row (11) Excludes Certain Shares (see instructions) (13) Percent of Class Represented by 54.4% Amount in Row (11) (14) Type of Reporting Person (see instructions) CO CUSIP NUMBER 928430 10 7 (1) Name of Reporting Persons Summit Capital Limited I.R.S. Identification Nos. of Above Persons (entities only) (2) Check the Appropriate Box if a (a) [ ] Member of a Group* (b) [X] (3) SEC Use Only (4) Source of Funds (see instructions) WC (5) Check if Disclosure of Legal [ ] Proceedings is Required Pursuant to Items 2(d) or 2(e) (6) Citizenship or Place of Organization Nevis, West Indies Number of Shares (7) Sole Voting 38,713 Power Beneficially (8) Shared Voting 10,837,385 Owned by Each Power Reporting Person (9) Sole Dispositive 38,713 Power with: (10) Shared Dispositive 9,861,385 Power (11) Aggregate Amount Beneficially Owned 10,876,098 by Each Reporting Person (12) Check if the Aggregate Amount in [X] Row (11) Excludes Certain Shares (see instructions) (13) Percent of Class Represented by 54.4% Amount in Row (11) (14) Type of Reporting Person (see instructions) CO SCHEDULE 13D ------------ Filed Pursuant to Rule 13d-1 ITEM 1. Security and Issuer. -------------------- This Statement on Schedule 13D ("Statement") relates to common stock, $.01 par value (the "Common Stock"), of VISUAL EDGE SYSTEMS, INC., a Delaware corporation ("Issuer"). The principal executive offices of the Issuer are located at 24211 North Federal Highway, Suite 100, Boca Raton, Florida 33431. This Statement remands and restates in its entirety the Statement on Schedule 13G originally filed by the "Reporting Persons" (as defined herein) on April 14, 1998, as amended February 8, 1999 and June 6, 1999. ITEM 2. Identity Background and. ------------------------ (a) Pursuant to Rule 13d-1(a) of Regulation 13D of the General Rules and Regulations Promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), this Statement is hereby filed jointly by Infinity Investors Limited ("Infinity"), IEO Holdings Limited ("IEO"), Glacier Capital Limited ("Glacier") and Summit Capital Limited ("Summit") (the "Reporting Persons"). Additionally, pursuant to Instruction C to Schedule 13D, information is included herein with respect to the following persons (collectively, the "Controlling Persons"): Infinity Emerging Opportunities Limited ("Emerging"), HW Partners, L.P. ("HW Partners"), HW Finance, L.L.C. ("HW Finance"), HW Capital, L.P. ("HW Capital"), HW Capital G.P., L.L.C. ("HW Capital LLC"), Lion Capital Partners, L.P. ("Lion"), Mountain Capital Management, L.L.C. ("Mountain"), Sandera Partners, L.P. ("Sandera"), Sandera Capital Management, L.P. ("S.C.M."), Sandera Capital, L.L.C. ("Capital"), Randall Fojtasek ("Fojtasek"), Clark K. Hunt ("C. Hunt"), Mark E. Schwarz ("Schwarz") and Barrett Wissman ("Wissman"). The Reporting Persons and the Controlling Persons are sometimes hereinafter collectively referred to as the "Item 2 Persons." The Reporting Persons have included as Appendix A to their original Statement on Schedule 13G an agreement in writing that this Statement is filed on behalf of each of them. (b) and (c) REPORTING PERSONS The Reporting Persons are Nevis, West Indies Corporations. The principal business of each Reporting Person is the purchase, sale, exchange, acquisition and holding of investment securities. The principal address of each Reporting Person, which also serves as its principal office, is Hunkins Waterfront Plaza, Main Street, P.O. Box 556, Charlestown, Nevis, West Indies. The names, business addresses, principal occupations or employments and citizenships of each officer and director of the Reporting Persons are set forth on Schedule A attached hereto and incorporated herein by reference. CONTROLLING PERSONS Pursuant to Instruction C to Schedule 13D of the Act, information with respect to the Controlling Persons is set forth below. The principal address of each Controlling Person, which also serves as such person's principal office, is 1601 Elm Street, Suite 4000, Dallas, Texas 75201. Infinity: --------- No single shareholder has a controlling interest in Infinity. HW Partners is a Texas limited partnership, the principal business of which is acting as advisor to Infinity and activities related thereto. HW Finance is a Delaware limited liability company, the principal business of which is serving as the general partner of HW Partners and activities related thereto. Wissman is the Manager of HW Finance. The principal occupation of Wissman is financial management. IEO: ---- IEO is 100% owned by Emerging. Emerging is a Nevis, West Indies corporation, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. No single shareholder has a controlling interest in Emerging. HW Capital is a Texas limited partnership, the principal business of which is acting as advisor to IEO, Glacier and Summit and activities related thereto. HW Capital LLC is a Texas limited liability company, the principal business of which is serving as the general partner of HW Capital and activities related thereto. C. Hunt and Wissman are the Managers of HW Capital LLC. Glacier: -------- Glacier is a Nevis, West Indies corporation that is 100% owned by Lion. Its principal business is the purchase, sale, exchange, acquisition and holding of investment securities. The directors of Glacier Capital Limited are James A. Loughran and Cofides S.A. Lion is a Texas limited partnership, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. Mountain is a Texas limited liability company, the principal business of which is serving as the general partner of Lion and activities related thereto. C. Hunt, Wissman and Fojtasek are the Managers of Mountain. The principal occupation of C. Hunt, Wissman and Fojtasek is financial management. HW Capital is a Texas limited partnership, the principal business of which is acting as an advisor to IEO, Glacier and Summit and activities related thereto. HW Capital LLC is a Texas limited liability company, the principal business of which is serving as the general partner of HW Capital and activities related thereto. C. Hunt and Wissman are the Managers of HW Capital LLC. Summit: ------- Summit is a Nevis, West Indies corporation that is 100% owned by Sandera. Its principal business is the purchase, sale, exchange, acquisition and holding of investment securities. The directors of Summit Capital Limited are Cofides S.A. and James A. Loughran. Sandera is a Texas limited partnership, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. SCM is a Texas limited partnership, the principal business of which is serving as the general partner of Sandera and activities related thereto. Capital is a Texas limited liability company, the principal business of which is servicing as the general partner of SCM and activities related thereto. C. Hunt, Schwarz and Wissman are the Managers of Capital, and Schwarz, Wissman and C. Hunt are its principal officers. The principal occupation of C. Hunt, Wissman and Schwarz is financial management. HW Capital owns 100% of Capital. HW Capital is a Texas limited partnership, the principal business of which is acting as an advisor to IEO, Glacier and Summit and activities related thereto. HW Capital LLC is a Texas limited liability company, the principal business of which is serving as the general partner of HW Capital and activities related thereto. C. Hunt and Wissman are the Managers of HW Capital LLC. (d) and (e) During the last five (5) years, no Item 2 Person has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) and no Item 2 Person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction such that, as a result of such proceeding, any Item 2 Person was or is subject to a judgment, decree of final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Fojtasek, C. Hunt, L. Hunt, Schwarz and Wissman are citizens of the United States. ITEM 3. Source and Amount of Funds or Other Consideration. --------------------------------------------- Pursuant to a Securities Purchase Agreement, dated as of June 13, 1997, (as amended as described herein, the "Agreement"), among the Issuer and Infinity, Emerging, Sandera Partners, L.P. and Lion Capital Partners, L.P. (collectively the "Funds"), the Funds purchased the following securities from the Issuer: (i) 8.25% unsecured convertible notes (the "Notes") in the aggregate principal amount of $7,500,000 with a maturity date of three years from the date of issuance, subject to the mandatory automatic exchange of $5 million of the Notes for Preferred Stock, par value $.01 per share, which Notes were convertible into shares of Common Stock (the "Note Conversion Shares") at any time and from time to time commencing January 1, 1998 at the option of the holder thereof subject to certain limitations on conversion set forth in the Agreement; (ii) 93,677 shares of Common Stock subject to adjustment; and (iii) five-year warrants to purchase 100,000 shares of Common Stock at an exercise price equal to $10.675. Their warrants were redeemable commencing October 1, 1998 at a redemption price equal to $.10 per share, subject to adjustment based on a 20- day minimum closing bid price of the Common Stock. Pursuant to the Agreement, the Issuer was required to issue additional grant shares (the "Additional Grant Shares") to the Funds in the event that the closing bid price of Common Stock for each trading day during any consecutive 10 trading days from June 13, 1997 through December 31, 1997 did not equal at least $10.00 per share. The Issuer issued 180,296 Additional Grant Shares during the fourth quarter of 1997. Interest payments on the Notes are, at the option of the Issuer, payable in cash or in shares of Common Stock. During 1997 the Issuer issued an aggregate of 65,671 shares (the "Interest Shares") for payment of interest due. During 1998 the Issuer issued an aggregate of 80,989 Interest Shares for payment of interest due. On February 26, 1998, the Issuer entered into the First Amendment to the Securities Purchase Agreement and Related Documents, dated as of December 31, 1997 (the "First Amendment"), among the Issuer and the Funds. Pursuant to the First Amendment, the Funds converted $6 million aggregate principal amount of the Notes into the Issuer's Series A Convertible Preferred Stock (the "Preferred Stock"). In addition, the "Maximum Conversion Price" (as defined in the First Amendment) at which shares of Preferred Stock are convertible into Common Stock was $6.00, subject to adjustment in certain circumstances. Dividends on the Preferred Stock and the Series A- 2 Preferred Stock (as hereafter defined) are, at the option of the Issuer, payable in cash or in shares of Common Stock. During 1998 the Issuer issued an aggregate of 302,755 shares (the "Dividend Shares") for payment of dividends. The remaining $1.5 million of outstanding Notes held by the Funds have become secured debt pursuant to a Security Agreement, dated as of February 6, 1998 (the "Security Agreement"), between the Issuer and H.W. Partners, L.P., as agent for and representative of the Funds. With respect to such $1.5 million in outstanding Notes, the Funds have been granted a security interest in the collateral described in the Security Agreement, which includes all of the Issuer's assets, including, without limitation, unrestricted cash deposit accounts, accounts receivable, inventory and equipment and fixtures (excluding vans). On March 16, 1998, the Issuer sold an additional 1,550 shares of Preferred Stock to the Funds in exchange for marketable securities with an aggregate value of $1,550,000. In connection therewith, the Funds as the holders of the majority of the outstanding Preferred Stock obtained the right to appoint one director to the Issuer's Board of Directors, though they had not named such director as of August 2, 1999. On April 20, 1998, the Issuer redeemed such 1,550 shares of Preferred Stock in exchange for marketable securities with an aggregate value of $1,550,000. As a condition to the consummation of an additional equity financing of the Issuer, the Issuer entered into the Agreement and Second Amendment to Bridge Securities Purchase Agreement and Related Documents (the "Second Amendment"), among the Issuer and the Funds. Pursuant to the Second Amendment, the Funds agreed that they would not convert, prior to December 31, 1998, any shares of Preferred Stock or any principal amount of the Notes into shares of Common Stock, unless a "Material Transaction" (generally defined as a change of control of the Issuer, a transfer of all or substantially all of the Issuer's assets or a merger of the Issuer into another entity) occurs. Further, the Funds agreed that they would not, prior to March 31, 1999, publicly sell any shares of Common Stock owned or acquired by the Funds, unless a Material Transaction occurred; the Funds are permitted, after June 20, 1998 and subject to the Issuer's right of first refusal, to privately sell any shares of Common Stock that they own or acquire, provided the purchaser agrees in writing to be bound by the same resale restrictions. The Funds have granted to the Issuer an option to redeem all of the Preferred Stock and the Notes owned by the Funds. The Issuer is required to redeem all of the Preferred Stock outstanding prior to redemption of any of the Notes. In connection with the Second Amendment, the Funds received 100,000 shares of Common Stock. Furthermore, because the Issuer did not redeem all of the Preferred Stock and Notes owned by the Funds before June 30, 1998, the Funds received 200,000 additional shares of Common Stock. On December 29, 1998, the Issuer entered into the Third Amendment to Bridge Securities and Purchase Agreement and Related Documents (the "Third Amendment"), among the Issuer and the Funds (or, if applicable, their respective transferees). Pursuant to the Third Amendment, the Issuer agreed to retire all of the issued and outstanding shares of the Preferred Stock and, in exchange therefor, issue to the Reporting Persons a new class of Series A-2 Convertible Preferred Stock (the "Series A-2 Preferred Stock"). The Series A- 2 Preferred Stock is senior to the Common Stock with respect to dividends, liquidation and dissolution. Prior to January 1, 2000, no dividends shall accrue or be payable on the Series A-2 Preferred stock. Beginning on January 1, 2000, each share of Series A-2 Preferred Stock shall entitle the holder to an annual dividend of 8.25%, payable on a quarterly basis, which dividend shall increase to 18% in certain situations as specified in the Certificate of Designation with respect to the Series A-2 Preferred Stock. The Third Amendment also revised the conversion price at which the Notes may be convertible into Common Stock and at which the Series A-2 Preferred Stock may be convertible into Common Stock (the "Series A-2 Conversion Shares" and, together with the Note Conversion Shares, the "Conversion Shares"). The "Conversion Price" (as defined in the Third Amendment) applicable to the Notes is $2.50 until January 1, 2000, inclusive, and $1.25 thereafter. The Conversion Price applicable to the Series A-2 Preferred Stock is (i) for the first $2,000,000 of aggregate liquidation preference of the Series A-2 Preferred Stock, $1.25 (ii) for the next $1,000,000 of aggregate liquidation preference of the Series A-2 Preferred Stock, $2.00 until June 30, 1999, inclusive, $1.375 from July 1, 1999 until January 1, 2000, inclusive, $1.25 thereafter, and (iii) for any excess amounts of aggregate liquidation preference of the Series A-2 Preferred Stock, $2.50 until June 30, 1999, inclusive, $2.00 from July 1, 1999 until January 1, 2000, inclusive, and $1.25 thereafter. However, upon the occurrence of an Event of Default (as described herein), the Conversion Price applicable to the Series A-2 Conversion Shares (the "Default Conversion Price") is determined according to the following formula, as set forth in the Certificate of Designation, Preferences and Rights of the Series A-2 Convertible Preferred Stock: the formula F/P where F equals the Liquidation Preference (defined as $1,000 per share plus all secured and unpaid dividends on the Series A-2 Convertible Preferred Stock), and P equals the lesser of (x) $6.00 and (y) the product of 77.5% multiplied by the Market Price (defined as the average of the closing bid prices per share of the Conversion Stock as reported by the Bloomberg for the five (5) consecutive trading days preceding the date of determination) on the Conversion Date. The Reporting Persons agreed to a limitation of their conversion rights, such that, unless an Event of Default (as described therein) occurs, they may not convert any amount of convertible instruments that would result in the sum of (a) the number of shares of Common Stock beneficially owned by the Reporting Persons and their affiliates and (b) instruments or exercise of warrants, exceeding 9.99% of the outstanding shares of Common Stock after giving effect to such conversion (the "Resignation or Conversion"). The Third Amendment also removed resale limitations on the Reporting Persons. As an Event of Default has occurred and is continuing, the Limitation on Conversion is now void and the Default Conversion Price currently applies. In addition, in connection with the Third Amendment, the Reporting Persons canceled all outstanding Common Stock purchase warrants of the Issuer still held by them for an aggregate of 16,000 shares of Common Stock. As of May 1, 1999, IEO assigned, transferred and conveyed all of its right, title and interest in the Notes and the Series A-2 Preferred Stock of the Issuer to Infinity. However, IEO still holds an aggregate of 40,417 shares of Common Stock. The securities of the Issuer issued to the Reporting Persons pursuant to the Agreement (including the Conversion Shares, as defined below) are collectively referred to herein as the "Securities". The funds needed to acquire the Securities were derived from the Reporting Persons' working capital accounts. The description contained in this Item 3 of the transactions contemplated by the Agreement described herein between the Issuer and the Reporting Persons are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 99.1 to 99.7 to this Statement. As an Event of Default under the Third Amendment has occurred and is continuing, Infinity intends, pursuant to the provisions of the Agreement, to deliver (on or about August 13, 1999) a notice of conversion of a portion of the Series A-2 Preferred Stock to the Issuer sufficient to obtain 9,600,000 shares of Common Stock at the Default Conversion Price (the "Future Conversion"). No additional funds will be needed to effect the Future Conversion. Infinity has not paid any consideration to any Proxy Stockholder (as defined below) in connection with the execution or delivery of the Voting Agreement (as defined below). ITEM 4. Purpose of Transaction. ----------------------- The Reporting Persons originally acquired beneficial ownership of the Securities for the purpose of investment. However, as set forth above, as the Limitation on Conversion is now void, Infinity anticipates acquiring additional Securities in excess of 20% of the outstanding Common Stock in the form of Series A-2 Conversion Shares in connection with the Future Conversion, and intends to use these Series A-2 Conversion Shares (together with its Common Stock and, if necessary, additional Conversion Shares) to influence control over the management of the Issuer. In addition, pursuant to that certain Voting Agreement dated August 2, 1999, by and among Infinity and Marion Interglobal, Ltd. (the "Voting Agreement"), Infinity has been granted an irrevocable proxy to vote the Common Stock of the Proxy Stockholders (the "Proxy Shares") on any matter submitted to the stockholders of the Company for a vote or approval. The description contained in this Item 4 of the Voting Agreement is qualified in its entirety by reference to the full text of the Voting Agreement, a copy of which is filed as Exhibit 99.9 of this Statement. Upon obtaining the Conversion Shares, Infinity intends to exercise its voting control over its Common Stock and the Proxy Shares to issue a written consent of the majority of the holders of the Company's Common Stock to a) remove the current board of directors of the Company other than Ronald Seale, b) appoint new directors of the Company with the intent of causing thereby termination of the following officers of the Company: the Chief Executive Officer, the President and Chief Operating Officer and the Vice President of Operations. The Reporting Persons also intend to continuously review their investment and the Issuer, and may in the future determine to: (i) acquire additional securities of the Issuer, through conversions of the Notes and/or the Series A-2 Preferred Stock, open market purchases, private agreements or otherwise, (ii) dispose of all or a portion of the Securities of the Issuer owned by them, (iii) consider plans or proposals which would relate to or result in: (a) the acquisition by any person of additional securities of the Issuer, the disposition of Securities of the Issuer; (b) an extraordinary corporate transaction such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the board of directors or management of the Issuer, including any plans or proposals to change the number or terms of directors or to fill any existing vacancies of the board of directors of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) any other action similar to those enumerated above. The Reporting Persons also reserve the right to take other actions to influence the management of the Issuer should they deem such actions appropriate. ITEM 5. Interest in Securities of the Issuer. ------------------------------------- (a) The following table provides the aggregate number and percentage of Common Stock beneficially owned by the Reporting Persons on August 2, 1999 (based on 10,398,440 shares of Common Stock outstanding as reported on the Issuer's Form 10-QSB for the period ended March 31, 1999). For purposes of calculating the number of voting shares and the total percentages listed below, each is calculated as if each Reporting Person has converted all convertible securities held by such Reporting Person into Common Stock as described in Item 4 of this Statement, subject to the total number of shares of Common Stock authorized under the Issuer's Certificate of Incorporation, yielding 20,000,000 shares of Common Stock outstanding: Infinity IEO Glacier Summit Total ------- ---- -------- ------- .-------- Common Stock 9,782,256 40,417 38,712 38,713 9,900,098 - ------------- Proxy Shares 976,000 ----- ----- ----- 976,000 - ------------- CONTROLLING PERSONS Each of (1) HW Partners, as advisor to Infinity, and (2) HW Finance, as the general partner of HW Capital, may be deemed to be the beneficial owner the Securities beneficially owned by Infinity (the "Infinity Securities") pursuant to Rule 13d-3 of the Act. In his capacity as a controlling person of HW Finance, Wissman may be deemed to be the beneficial owner of the Infinity Securities. Each of (1) HW Capital, as advisor to each of IEO, Summit and Glacier, and (2) HW Capital LLC, as the general partner of HW Capital, may be deemed to be the beneficial owner of the Securities beneficially owned by each of IEO (the "IEO Securities"), Glacier (the "Glacier Securities") and Summit (the "Summit Securities") pursuant to Rule 13d-3 of the Act. In their capacity as controlling persons of HW Capital LLC, C. Hunt and Wissman may be deemed to be the beneficial owner of the IEO Securities, the Glacier Securities and the Summit Securities pursuant to Rule 13d-3 of the Act. Emerging, as the sole shareholder of IEO, may be deemed to be the beneficial owner of the IEO Securities pursuant to Rule 13d-3 of the Act. Each of Lion, as the sole shareholder of Glacier, Mountain, as the general partner of Lion, and C. Hunt, Wissman and Fojtasek, as the Managers of Mountain, may be deemed to be the beneficial owners of the Glacier Securities pursuant to Rule 13d-3 of the Act. Each of Sandera, as the sole shareholder of Summit, SCM, as the general partner of Sandera, Capital, as the general partner of SCM, C. Hunt, Wissman and Schwarz, as the Managers (and, as applicable, the executive officers) of Capital, and HW Capital, as the 100% holder of Capital, may be deemed to be the beneficial owners of the Summit Securities pursuant to Rule 13d-3 of the Act. (b) REPORTING PERSONS Acting through its advisor, HW Partners, Infinity would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the Infinity Securities and the Proxy Shares. Acting through its advisor, HW Capital, IEO would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the IEO Securities. Acting through its advisor, HW Capital, Glacier would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the Glacier Securities. Acting through its advisor, HW Capital, Summit would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the Summit Securities. CONTROLLING PERSONS Acting through its sole general partner HW Finance, HW Partners would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of Infinity Securities and the Proxy Shares. In his capacity as a controlling person of HW Finance, Wissman would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of Infinity Securities and the Proxy Shares. Acting through its sole general partner HW Capital LLC, HW Capital would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the IEO Securities, the Summit Securities and the Glacier Securities. In their capacities as controlling persons of HW Capital LLC, C. Hunt and Wissman would have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the IEO Securities, the Summit Securities and the Glacier Securities. As sole shareholder of IEO, Emerging would have the sole power to vote or direct the vote and to dispose or to direct the disposition of the IEO Securities. Each of Lion, as the sole shareholder of Glacier, Mountain, as the general partner of Lion, and C. Hunt, Wissman and Fojtasek, as the Managers of Mountain, would have the sole power to vote or to limit the vote and to dispose or to direct the disposition of the Glacier Securities. Each of Sandera, as the sole shareholder of Summit, SCM, as the general partner of Sandera, Capital, as the general partner of SCM, C. Hunt, Wissman and Schwarz, as the Managers (and, as applicable, the executive officers) of Capital, and HW Capital, as the 100% holder of Capital, would have the sole power to vote or to limit the vote and to dispose or to direct the disposition of the Summit Securities. (c) The Reporting Persons have sold an aggregate of 216,000 shares of Common Stock on the open market within the last 60 days. (d) Not applicable. (e) As of May 1, 1999, IEO ceased to be the beneficial owner of more than five percent of the Common Stock. ITEM 6. Contracts, Arrangements, or Understandings or ---------------------------------------------- Relationships with Respect to Securities of the Issuer. ---------------------------------------------- This Statement contains summaries of certain provisions of the Subscription Agreement and its amendments, copies of which have been listed as Exhibits respectively. Such summaries are qualified by, and subject to, the more complete information contained in such agreements. ITEM 7. Material to be Filed as Exhibits. --------------------------------- EXHIBIT NO. TITLE OF EXHIBIT - ----------- ---------------- 99.1 Bridge Securities Purchase Agreement, dated as of June 13, 1997, among the Issuer and Infinity Investors Limited, Infinity Emerging Opportunities Limited, Sandera Partners, L.P. and Lion Capital Partners, L.P. (collectively with their transferees, the "Funds") (Incorporated by reference to Exhibit 99.1 to the Issuer's Current Report on Form 8-K filed June 23, 1997) 99.2 Registration Rights Agreement, dated as of June 13, 1997, among the Issuer and the Funds (Incorporated by reference to Exhibit 99.2 to the Issuer's Current Report on Form 8-K filed June 23, 1997). 99.3 Transfer Agent Agreement, dated as of June 13, 1997, among the Issuer, the Funds and American Stock Transfer & Trust Company (Incorporated by reference to Exhibit 99.3 to the Insurer's Report on Form 8-K filed June 23, 1997). 99.4 First Amendment to Bridge Securities Purchase Agreement and Related Documents, dated as of December 31, 1997, among the Issuer and the Funds (Incorporated by reference to Exhibit 99.1 to the Issuer's Current Report on Form 8-K filed February 9, 1998). 99.5 Second Amendment to Bridge Securities Purchase Agreement and Related Documents, dated as of March 27, 1998, among the Issuer, Infinity Investors Limited, Infinity Emerging Opportunities Limited, Summit Capital Limited (as the transferee of Sandera Partners, L.P.) and Glacier Capital Limited (as the transferee of Lion Capital Partners, L.P.) (Incorporated by reference to Exhibit 10.18 to the Issuer's Annual Report on Form 10-K for the fiscal year ended December 31, 1997). 99.6 Third Amendment to Bridge Securities Purchase Agreement and Related Documents, dated as of December 29, 1998, among the Issuer, Infinity Investors Limited, IEO Holdings Limited (as the transferee from Infinity Emerging Opportunities Limited), Summit Capital Limited (as the transferee of Sandera Partners, L.P.) and Glacier Capital Limited (as the transferee of Lion Capital Partners, L.P.) (Incorporated by reference to Exhibit 99.1 to the Issuer's Current Report on Form 8-K filed January 8, 1999). 99.7 Security Agreement, dated February 6, 1998, between the Issuer and HW Partners, L.P., as agent for and representative of the Funds. (Incorporated by reference to Exhibit 99.2 to the Issuer's Current Report on Form 8-K filed February 6, 1998). 99.8 Assignment Agreement, dated May 1, 1999, between Infinity Investors Limited and IEO Holdings Limited (filed herewith). 99.9 Voting Agreement, dated August 2, 1999, among Infinity Investors Limited and Marion Interglobal, Ltd. (filed herewith). (Signature Page Follows) After reasonable inquiry, and to the best of their knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct. Date: August 2, 1999 INFINITY INVESTORS LIMITED By: HW Partners, L.P., its investment advisor By: HW Finance, L.L.C., its general partner By: /s/ Stuart Chasanoff ------------------------ Name: Stuart Chasanoff Title: Senior Vice President IEO HOLDINGS LIMITED By: HW Capital, L.P., its investment advisor By: HW Capital, L.L.C., its general partner By: /s/ Stuart Chasanoff ------------------------- Name: Stuart Chasanoff Title: Senior Vice President GLACIER CAPITAL LIMITED By: HW Capital, L.P., its investment advisor By: HW Capital, L.L.C., its general partner By: /s/ Stuart Chasanoff -------------------------- Name: Stuart Chasanoff Title: Senior Vice President SUMMIT CAPITAL LIMITED By: HW Capital, L.P., its investment advisor By: HW Capital, L.L.C., its generalpartner By: /s/ Stuart Chasanoff ------------------------- Name: Stuart Chasanoff Title: Senior Vice President Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). SCHEDULE A ----------- Set forth below is the name, citizenship (or place of organization, as applicable), business address and present principal occupation or employment of each director and executive officer of Infinity Investors Limited. Name and Citizenship Present Position or Principal with Place of Organization Business Occupation Reporting ---------- --------- or -------- Employment Person ---------- -------- James A. Loughran 38 Hertford Street Lawyer Director (Irish) London, England W1Y 7TG James E. Martin 38 Hertford Street Accountant Director (British) London, England W1Y 7TG Margareta Hedstrom 38 Hertford Street President (Swedish) Longon, England W1Y and 7TG Treasurer Cofides S.A. 38 Hertford Street Financial Vice (Nevis, West Indies) London, England W1Y Services President 7TG SECORP Ltd. 38 Hertford Street Financial Secretary (Nevis, West Indies) London, England W1Y Services 7TG Set forth below is the name, citizenship (or place of organization, as applicable), business address and present principal occupation or employment of each director and executive officer of IEO Holdings Limited. Name and Citizenship Present Position or Principal with Place of Organization Business Occupation Reporting - --------------------- ---------- or --------- Employment Person ----------- ------- John A. Brooks 38 Hertford Street Solicitor Director, (UK) London, England W1Y President 7TG and Treasurer Suzanne Sheehy 38 Hertford Street Director (Irish) London, England W1Y Secretary and 7TG Secretary Sophia Leacocos 37 Shepherd Street Executive Director (USA) London, England W1Y 7LH Siobhan B. Mareuse 38 Hertford Street Attorney Director (Irish) London, England W1Y 7TG Set forth below is the name, citizenship (or place of organization, as applicable), business address and present principal occupation or employment of each director and executive officer of Glacier Capital Limited. Name and Citizenship Present Position or Principal with Place of Organization Business Occupation Reporting - --------------------- --------- or --------- Employment Person ----------- -------- James A. Loughran 38 Hertford Street Lawyer Director (Irish) London, England W1Y 7TG Cofides S.A. 38 Hertford Street Financial Director (Nevis, West Indies) London, England W1Y Services 7TG James E. Martin 37 Shepherd Street Accountant President (British) London, England W1Y and 7LH Treasurer SECORP Limited 38 Hertford Street Financial Secretary (Nevis, West Indies) London, England W1Y Services 7TG Set forth below is the name, citizenship (or place of organization, as applicable), business address and present principal occupation or employment of each director and executive officer of Summit Capital Limited. Name and Citizenship Present Position or Principal with Place of Organization Business Occupation Reporting - --------------------- --------- or --------- Employment Person ---------- ------- James A. Loughran 38 Hertford Street Lawyer Director (Irish) London, England W1Y 7TG Cofides S.A. 38 Hertford Street Financial Director (Nevis, West Indies) London, England W1Y Services 7TG James E. Martin 37 Shepherd Street Accountant President (British) London, England W1Y and 7LH Treasurer SECORP Limited 38 Hertford Street Financial Secretary (Nevis, West Indies) London, England W1Y Services 7TG EX-99.8 2 ASSIGNMENT AGREEMENT THIS ASSIGNMENT AGREEMENT ("Agreement"), dated effective as of May 1, 1999, between IEO HOLDINGS LIMITED, a Nevis West Indies corporation ("Assignor"), and INFINITY INVESTORS LIMITED, a Nevis West Indies corporation ("Assignee"). RECITALS: A. Infinity Emerging Opportunities Limited ("Emerging"), the parent corporation of Assignor, acquired (i) 291 shares (the "Original Shares") of common stock of Orix Global Communications, Inc. (the "Company"), representing a 12.12% interest in the issued and outstanding shares of common stock of the Company at that time pursuant to that certain Assignment, dated as of June 11, 1998, between Assignee and Emerging, and (ii) a 12.12% interest in the Debenture, dated June 11, 1998, in the original principal amount of $6,000,000, and the Debenture, dated August 19, 1998, in the original principal amount of $850,000, each issued by the Company to Assignee (the "Old Debentures"), pursuant to that certain Participation Agreement, dated June 11, 1998, between Assignee and Emerging (the "First Participation Interest"). B. Emerging contributed to Assignor the Original Shares and the First Participation Interest pursuant to that certain Assignment, dated as of December 9, 1998, between Emerging and Assignor. C. Assignor purchased 909 shares of common stock (the "Purchased Shares") of the Company pursuant to that certain Agreement, dated as of December 9, 1998, between Assignee and Assignor. Following the acquisition of the Purchased Shares, Assignor owned 1,200 shares of common stock of the Company (representing a 33.33% interest in the issued and outstanding shares of common stock of the Company at that time) and Assignee owned 1,200 shares of common stock of the Company (representing a 33.33% interest in the issued and outstanding shares of common stock of the Company at that time). D. Since the issuance of the Old Debentures, the Company has issued to Assignee the following: (i) a Convertible Debenture, dated as of February 9, 1999, in the original principal amount of $390,000 (the "Convertible Debenture"), (ii) an Amended and Restated Debenture, dated as of April 15, 1999, in the original principal amount of $7,050,000 (which amended, restated and superseded the terms of the Old Debentures and reflected an additional $200,000 loan to the Company),(iii) a Debenture, dated as of April 29, 1999, in the original principal amount of $500,000 and (iv) a Debenture, dated April 30, 1999, in the original principal amount of $100,000 (collectively, items (ii) - (iv) being referred to as the "New Debentures"). In connection with the issuance of the New Debentures, Assignor and Assignee each received a Common Stock Purchase Warrant exercisable for 170 shares of common stock of the Company (the "Warrants"). E. Pursuant to prior agreements between Assignor and Assignee, each of Assignor and Assignee agreed that Assignee would participate to Assignor an aggregate 50% interest in the New Debentures and in the Convertible Debenture (in each case after giving effect to the previous First Participation Interest) (the "New Participation Interest"). After giving effect to the issuance of the New Participation Interest, Assignor and Assignee will each own identical interests in the equity and the indebtedness of the Company (with Assignor's interest in such indebtedness being reflected by the Participation Agreement) as follows: (1) New Debentures - an aggregate of $7,650,000 - (50% for each of Assignor and Assignee) (2) Convertible Debentures - an aggregate of $390,000 - (50% for each of Assignor and Assignee) (3) Warrants exercisable for an aggregate of 340 shares of common stock of the Company (170 shares for each of Assignor and Assignee) (4) 2,400 issued and outstanding shares of common stock of the Company (1,200 for each of Assignor and Assignee). F. In consideration of the issuance of the New Participation Interest, Assignor desires to assign to Assignee those certain securities issued by certain entities (collectively, the "Securities") as set forth on SCHEDULES A-1 - A-3 attached hereto, together, in each instance, with all rights and obligations of Assignor set forth in the governing documents, as amended from time to time (collectively, the "Transaction Documents"), executed in connection with the issuance of such Securities, including, without limitation, all security interests, registration rights, indemnity rights and voting rights associated therewith. G. Assignee has agreed to accept the assignment of the Securities and Transaction Documents from Assignor on the terms and conditions hereinafter set forth, and subject to the restrictions (if any) set forth in the Transaction Documents. -2- AGREEMENTS: NOW, THEREFORE, Assignor and Assignee agree as follows: 1. ASSIGNMENT. In consideration of the issuance by Assignee to Assignor of the New Participation Interest, Assignor hereby conveys, transfers and assigns to Assignee the Securities, the Transaction Documents and all of Assignor's right, title and interest thereto and therein, together with all other rights, obligations, restrictions, covenants, benefits and privileges in any way now or hereafter belonging or accruing to the benefit of the Assignor in respect of the Securities and the Transaction Documents. 2. REPRESENTATIONS AND WARRANTIES. (a) Assignor represents and warrants that: (i) this Agreement has been duly authorized by all necessary action on the part of Assignor; and (ii) it is the lawful owner of the Securities and of its rights under the Transaction Documents and it holds legal and equitable title to the Securities free and clear of any and all liens, claims, charges, pledges, encumbrances and security interests (except as set forth in the Transaction Documents). (b) Assignee represents and warrants that: (i) this Agreement has been duly authorized by all necessary action on the part of Assignee; (ii) it has received and reviewed copies of the Securities and Transaction Documents; (iii) it is an accredited investor as defined under Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended; (iv) it is acquiring the Securities and Assignor's rights under the Transaction Documents for its own account for investment and without any view to the sale or further distribution of any part thereof (except as set forth in, or allowed by, the Transaction Documents); and (v) it shall accept the Securities with all rights and privileges and subject to all obligations and restrictions set forth in the Transaction Documents and shall be bound by the terms of such Transaction Documents as if it were an original signatory thereto. -3- EXECUTED the day and year first written above. ASSIGNOR: IEO HOLDINGS LIMITED By: /s/ Suzanne Sheehy -------------------------------- Name: Suzanne Sheehy ------------------------------ Title: Director ---------------------------- ASSIGNEE: INFINITY INVESTORS LIMITED By: /s/ James A. Loughran --------------------------------- Name: James A. Loughran ------------------------------- Title: Director ------------------------------ -4- SCHEDULE A-1 ------------- SCHEDULE OF SECURITIES AURA SYSTEMS, INC. 1. Variable Interest Convertible Note, dated September 30, 1997, in the original principal amount of $1,875,000, executed by Aura Systems, Inc. in favor of Emerging, which has an unpaid principal balance of $1,475,836, together with accrued and unpaid interest thereon of $221,499.92, in each case through and as of April 30, 1999. -5- SCHEDULE A-2 --------------- SCHEDULE OF SECURITIES ADVANCED ENTERTAINMENT CONCEPTS INC. 1. $315,123.95 of principal of that certain Term Loan Promissory Note, dated May 7, 1998, in the original principal amount of $400,000, together with accrued and unpaid interest on such $315,123.95 of principal through April 30, 1999 of approximately $31,644.44, executed by Advanced Entertainment Concepts, Inc. in favor of Emerging. -6- SCHEDULE A-3 ------------- SCHEDULE OF SECURITIES VISUAL EDGE SYSTEMS INC. 1. Convertible Note, dated June 13, 1997 (as amended), in the original and current principal amount of $200,000, executed by Visual Edge Systems Inc. in favor of Emerging, together with accrued and unpaid interest thereon for the month of April 1999 of approximately $1,376.00. 2. 800 shares of preferred stock of Visual Edge Systems Inc., $.01 par value per share, representing a liquidation value of $800,000. No accrued and unpaid dividends are owed thereon. -7- EX-99.9 3 VOTING AGREEMENT THIS VOTING AGREEMENT (this "Agreement") dated as of August 2, 1999, is made and entered into by and among INFINITY INVESTORS LIMITED ("Infinity") and MARION INTERGLOBAL, LTD. ("Marion," and together with Infinity, the "Stockholders"), as the holders of certain of the securities of Visual Edge Systems, Inc., a Delaware corporation (the "Company"). W I T N E S S E T H: WHEREAS, the Stockholders currently own or within ten (10) calendar days shall own, control, directly or through entities which they control, the number of shares of the issued and outstanding shares of common stock of the Company (the "Common Stock") set forth opposite their respective names on SCHEDULE A attached to this Agreement (the shares of Common Stock that are currently owned by the Stockholders or which may be hereafter acquired by them are referred to herein collectively as the "Shares"); and WHEREAS, the Stockholders desire to set forth their agreement with respect to voting such Shares; NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I VOTING; RIGHTS AND DUTIES AS AGENT 1.1 VOTING. During the Term (as hereafter defined) of this Agreement, each of the Stockholders severally agrees to vote any Shares held or controlled by them on any matter submitted to the stockholders of the Company for a vote or approval in such manner as shall be directed in writing by Infinity, and Infinity agrees to vote any Shares held or controlled by it in the same manner as it so directs the Stockholders to vote their Shares. At least two (2) days prior to the announced date of any such vote or approval on any matter in which the stockholders of the Company are entitled to vote, Infinity shall direct the Stockholders of the manner by which each should vote their respective Shares by written notice. If Infinity fails to deliver the Stockholders written notice in the manner contemplated in this Section, the Stockholders shall be entitled to vote their respective Shares in any manner. In the event of the issuance of a written consent of the shareholders of the Company by Infinity, Infinity may act by written consent on behalf of the Stockholders without their prior consent, provided notice of such action is provided to such Stockholders within five (5) business days thereafter. 1.2 NON-LIABILITY OF INFINITY. Infinity shall not incur any responsibility or liability as trustee, fiduciary or otherwise, by reason of the manner in which Infinity directs the Stockholders to vote their Shares. Except as otherwise provided herein, the Stockholders understand and agree -1- that this Agreement may be pleaded by Infinity against any or all of them as a complete bar to any action or suit before any administrative body or court with respect to any claim under federal, state, local, or other law relating to the voting of the Shares, including, without limitation, the manner in which Infinity directs the Stockholders to vote their Shares. Infinity shall not be liable to either of the Stockholders or any third party for any special, indirect, incidental or consequential damages (including, without limitation, lost opportunity costs) arising from or relating to this Agreement. 1.3 OTHER RIGHTS OF STOCKHOLDERS. Except as set forth in this Agreement, each of Infinity and the Stockholders shall have the right to exercise its or his full rights as a stockholder with respect to the Shares registered in its or his name, including, without limitation, the right to sell its or his respective Shares; provided, however, that none of the Stockholders shall sell or transfer any of their shares prior to August 15, 1999. Any transferee of the Shares shall not be bound by any of the terms of this Agreement. 1.4 POWER OF ATTORNEY. Each of the Stockholders hereby irrevocably and severally constitutes and appoints Infinity his agent and attorney-in-fact, with full power of substitution and resubstitution in his name, place and stead, and for his use and benefit, to take or cause to be taken any and all acts, deeds and things concerning the voting of the Shares. 1.5 ADDITIONAL SHARES. If Infinity or any Stockholder receives additional shares of Common Stock, whether by acquisition, stock dividend, stock split or otherwise, such shares shall be subject to the terms of this Agreement. 1.6 TERM. The term of this Agreement shall commence on the date first set forth above and shall continue for 90 days until October 30, 1999, unless Infinity, in its sole discretion, unilaterally releases the Stockholders from their obligations hereunder prior thereto (the "Term"). ARTICLE II MISCELLANEOUS PROVISIONS 2.1 NOTICES. Any notice or communication must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by telecopy. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by hand, courier service, or telecopy, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. For purposes of notice, the addresses of the parties shall be the addresses set forth on Schedule A hereto. Any party may change its address for notice by written notice given to the other parties hereto. -2- 2.2 CONSTRUCTION. The use of the singular number shall include the plural, and the plural number shall include the singular wherever appropriate. 2.3 GOVERNING LAW. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Texas. This Agreement is performable in, and venue of any action relating to or pertaining to this Agreement shall lie in Dallas County, Texas. 2.4 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall constitute an original hereof, but all of which shall constitute one and the same document. 2.5 ATTORNEYS' FEES. If any legal action is brought by any party hereto to enforce the terms and conditions of this Agreement, it is expressly agreed that the party in whose favor a final judgment is entered shall be entitled, in addition to any other relief which may be awarded, to recover from the other party or parties its reasonable attorneys' fees, together with such prevailing party's other costs and reasonable and necessary expenses incurred in connection with such litigation. [Signature Page Follows] -3- IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. INFINITY INVESTORS LIMITED By: /s/ Stuart Chasanoff ------------------------------ Name: Stuart Chasanoff ------------------------------ Title: Attorney-in-Fact ------------------------------ MARION INTERGLOBAL, LTD. By: /s/ Ronald Seale ------------------------------ Name: Ronald Seale Title: Senior Managing Director -4- SCHEDULE A Infinity Investors Limited 180,696 Shares currently owned plus Hunkins Waterfront Plaza 9,600,000 Shares expected to be Main Street issued pursuant to a Notice of P.O. Box 556 Conversion to be submitted to the Charlestown, Nevis, West Indies Company on August 13, 1999 Marion Interglobal, Ltd. 976,000 Shares 12803 Water Point Blvd. Windermere, Florida 34786 -5- -----END PRIVACY-ENHANCED MESSAGE-----