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): January 29, 1997.
NET LNNX, INC.
........................................................................
(Exact name of Registrant as specified in its charter)
Pennsylvania 0-14614 23-1726390
........................................................................
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
324 Datura Street, Suite 150, West Palm Beach, Florida 33401
........................................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 659-1196
........................................................................
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) Disposition of TrueNet, Inc.
On January 31, 1997 Net Lnnx, Inc. (the "Company") entered into a Sale
and Purchase Agreement with The Banana Corporation, Inc. ("BCI") to transfer
to BCI One Hundred Percent (100%) of the common stock and assets of the
Company's wholly owned subsidiary, TrueNet Corporation ("TrueNet"), a Florida
corporation. TrueNet operates as an internet service provider in West Palm
Beach, FL. The transaction was negotiated at "arms length" and the
consideration paid represents a fair market value.
As consideration for the TrueNet stock and asset transfer, BCI
transferred to the Company Ten Percent (10%) (100,000 shares) of BCI's common
stock which, pursuant to agreement, is restricted for a period of Thirty Six
(36) months. The restrictions may lapse in the event of certain events. BCI
reserved the right to repurchase from the Company up to Fifty Thousand
(50,000) shares of such common stock at a price of $1.50 per share within One
(1) year of the date of execution of the Sale and Purchase Agreement. BCI
also granted the Company an option, in the event BCI does not exercise the
abovementioned repurchase option, to purchase an additional Ten Percent (10%)
(100,000 shares) of the common stock of BCI, at a price of $1.50 per share.
(b) Disposition of Communications/USA, Inc.
On January 31, 1997, the Shareholders of the Company approved the
Purchase Agreement dated January 17, 1997 between the Company and Palm
Capital, Inc. ("Palm") to transfer to Palm 2,550,000 shares of
Communications/USA, Inc. ("Comm/USA"), a Florida corporation, which
represented One Hundred Percent (100%) of the Company's ownership interests of
Comm/USA (the "Transaction"). Comm/USA, through its wholly owned subsidiary
CommTel/USA, Inc., owns and operates Voice-Tel franchises which comprises the
West Coast of Florida from Tampa Bay to Naples, and the East Coast of Florida
from Cocoa to Stuart. Voice-Tel is in the interactive voice messaging
industry and sells its products to both local customers and national
accounts.
The Transaction was negotiated at "arms length" and the consideration
paid represents a fair market value. Raul E. Balsera ("Balsera") and Robert
Feiman ("Feiman"), both officers and shareholders of Palm, were both affiliate
shareholders of the Company prior to the Transaction. Also, Balsera served as
Chief Financial Officer for the Company and Comm/USA prior to the Transaction.
As consideration for the Comm/USA stock transfer, Palm agreed to deliver to
the Company any and all of the Company's stock held by Palm, Balsera and
Feiman, plus any and all options or other rights to the Company's common
stock, plus the sum of $500,000, secured by 1,250,000 shares of Comm/USA
common stock. The consideration is payable as follows: (i) the sum of $25,000
in cash; and (ii) a 7% interest promissory note in the amount of $475,000 with
12 monthly payments of $9,000 per month, 12 monthly payments of $12,000 per
month, and a balloon payment of the balance due on March 1, 1999. Palm also
agreed to the assumption of Comm/USA's liabilities.
As of the date of filing of this Form 8-K, the Company presently has no
operations. It is actively targeting acquisition candidates for merger or
acquisition purposes; however, no letter
<PAGE>
of intent or any other agreement has as of yet been entered into between the
Company and any targeted acquisition candidate.
Item 5. Other Events.
(a) On January 31, 1997, at a special meeting of the Company's director's,
among other actions and resolutions, the following actions and resolutions
occurred and were passed by the Company's directors:
1. the Company's bylaws were amended to increase the number of
directors of the Company to five, and to permit the existing board to fill the
vacancies until the next annual meeting of the shareholders;
2. the Company's officers were authorized to reincorporate the
Company under the laws of the State of Delaware;
3. Robert C. Hackney, the sole director, appointed Ronald W. Hayes,
Jr. and Ronald Perella as directors;
4. Robert C. Hackney tendered his resignation as a director, which
was accepted by the board. Mr. Hackney's resignation was not due to a
disagreement on any matter relating to the Company's operations, policies or
practices.
5. Ronald W. Hayes, Jr. and Ronald Perella, as directors, appointed
Frederick Hall as the Company's third director;
6. Ronald Perella, Secretary and a director of the Company, was
appointed Executive Vice-President of the Company;
Item 7. Financial Statements and Exhibits.
Exhibits.
1. Sale and Purchase Agreement between the Company and The Banana
Corporation, Inc.
2. Purchase Agreement between the Company and Palm Capital, Inc.
3. Resignation of Robert C. Hackney as a director of the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Net Lnnx, Inc.
By:/s/ Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., President
Dated February 14, 1997
SALE AND PURCHASE
AGREEMENT
TRUENET
CORPORATION
TrueNet Corporation
324 Datura Street, Suite 150
West Palm Beach, Florida 33401
Phone: (561) 832-8832
Fax: (561) 832-8388
January 31, 1997
<PAGE>
SALE & PURCHASE AGREEMENT
Parties - This Sale & Purchase Agreement entered into as of the 31st day of
January 1997, is by and between Net Lnnx, Inc., a publicly traded Pennsylvania
Corporation, (Ronald W. Hayes, President), herein called "Seller" of 324
Datura Street, Suite 150, West Palm beach, Florida 33401; and The Banana
Corporation, Inc., a Florida Corporation, (Tarek Kirschen, President) herein
called "Buyer" of Mercede Executive Park, 1802-102 North University Drive,
Plantation, Florida 33322, collectively herein known as Parties.
Agreement - In consideration of the mutual covenants and the respective
undertakings of the Parties hereto, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties
agree, subject to the following terms and conditions, to Sell and Purchase,
respectively, one hundred (100%) percent of the Common Stock of the assets as
identified herein of TrueNet Corporation. TrueNet Corporation, herein called
TrueNet, is a Florida Corporation in good standing, presently operated by the
Seller as an Internet Service Provider (ISP) business in the Commerce Center
at 324 Datura Street, Suite 150, West Palm Beach, Florida 33401.
Sellers Representation - As of the date of this Agreement, the Seller
represents that TrueNet is an operating Internet Service Provider business
legally operating in West Palm Beach; that all hardware, software,
peripherals, and equipment reasonably required to operate the TrueNet ISP
business for dial-up and ISDN accounts, Internet serving, and mail serving are
being transferred to the Buyer under the terms and conditions herein; and that
all material information pertaining to the business, corporation, and
equipment lease obligations has been provided to the Buyer. Further, the
Seller represents that, as of the date of execution of this Agreement,
TrueNet, Inc., has no outstanding obligations, momentarily, contractually, or
otherwise, and the said stock and assets are being transferred to the Buyer
free and clear of all liens and encumbrances, except for equipment lease
obligations specifically listed herein and Customer Service Contracts
transferred herewith.
Seller Stock Transfer - The Seller herewith transfers to the buyer one hundred
(100%) percent of the common stock of TrueNet Corporation, free and clear of
all liens, encumbrances, UCC filings, tax liabilities, employee wages or
withholding taxes, and/or any other liabilities as of the date of this
Agreement, except for equipment lease payment obligations undertaken by the
buyer as herein identified. All corporate records, corporate minute book,
accounting ledgers, financial statements, tax records, and all other related
corporate documents shall be immediately delivered to the buyer upon the
execution of this Agreement, together with the appropriately endorsed stock
certificates.
Trade name Transfer - The Seller herewith transfers to the Buyer all ownership
in and the full exclusive rights to the "TrueNet" trade name, trademark and
logotype, which shall be conveyed free and clear of all liens and
encumbrances.
Operating License - The Seller will permit TrueNet Corporation, under the
ownership of the buyer, to utilize the current city and/or county
occupational/mercantile license(s) required for business operations at the
location, until such time as the said license expires, is renewed by TrueNet
Corporation, or is transferred to the Banana Corporation.
Equipment Transfer - The Seller herewith transfers to the Buyer all of the
equipment listed in Exhibit I of this Agreement, together with any other
equipment remaining on the premises, free and clear of all liens and
encumbrances. Initials in the designated area by both Parties, next to each
individual item on the chart, indicates the respective transfer and receipt.
All warranties, service contracts, manuals, receipts, and other related
documentation and back-up tapes shall be provided to the Buyer.
Equipment Leases - The Seller herewith transfers to the Buyer all of the
equipment listed in Exhibit II of this Agreement, subject to the remaining
lease payments, account balances, and residuals which the Seller represents as
true and accurate. Initials in the designated area by both parties, next to
each individual item on the chart, indicates the respective transfer and
receipt. The Buyer shall assume the responsibility to pay all contract
amounts at current lease rates. Payment shall be made on behalf of the
original Lessee who shall remain on the original lease, at the same time and
manner as listed in the original lease. The Buyer's equipment lease payment
responsibility shall commence April 1st, 1997. The Seller shall be
responsible to pay interim payments and
<PAGE>
for any remaining leased equipment not transferred to the Buyer, and such
payment and/or other obligations under the lease shall be made on a timely
basis as to not affect the Buyer's use of the said equipment throughout the
lease term. All warranties, service contracts, manuals, receipts, and other
related documentation hall be provided to the Buyer.
Leased Equipment Purchase - The Buyer shall have the exclusive right of first
refusal to purchase all of the transferred equipment listed in Exhibit II of
this Agreement outright at the end of the lease at the residual amount and
time frame specified in the original lease(s). The Buyer shall give a 30-day
notice to the Seller prior to the expiration of the lease of its decision to
exercise its purchase option.
Customers - The Seller agrees that all existing lead lists, customer
proposals, and service contracts shall be transferred and remain with the
TrueNet business. The Seller shall not notify, solicit, or otherwise contact
said existing or former prospects or customers for any purpose, without the
express written permission of the Buyer. The Seller shall provide the Buyer a
list of all accounts, both current and former, together with their respective
account and payment records and account information. The Seller will assist
the Buyer, on a reasonable basis until April 1st, 1997, to retain customer
through positive public relations efforts and to obtain referral letters from
existing customers as directed by the Buyer.
Merchant Account - Seller shall assist Buyer in assuming the use and
ownership transfer of TrueNet's merchant account (i.e., Visa, MasterCard,
etc.).
Existing Phone Lines - The Buyer shall assume the responsibility for the
payment of all telephone services necessary to provide ISP service and operate
the business of the execution of this Agreement. The Seller shall cooperate
with the Buyer in transferring the necessary services in a smooth and orderly
fashion as not to interrupt existing customer service or business operations.
At the option of the Buyer, the Seller shall transfer the existing contracts
for both local phone lines and the T1 connection to the Buyer together with
all existing equipment installed/owned by the provider(s) which shall remain
connected on the premises. Buyer shall have a period of not more than 60-days
to establish or transfer such services into a billing account under TrueNet,
Inc. Seller shall immediately pay any outstanding account balances to
telephone providers.
Phone Numbers - The Seller shall provide the Buyer with the continuing use of
its current telephone numbers including its primary Business Number
561-832-8832, Fax Number 561-832-8388, and Dial-up Number 561-832-8880; and
shall assist the Buyer effectuating a transfer of such telephone numbers with
the Telephone company.
Yellow Page Ads - Any prepaid Yellow Page advertising shall be transferred to
the Buyer. The Buyer shall not be responsible for any Yellow Page advertising
contracted by the Seller, unless otherwise agreed to in writing following a
review of the said contracts.
Internet Numbers - The Seller shall provide the Buyer with the continuing use
of its current Internet-related identification and access numbers including
those for servers, domain names, e-mail addresses, URLs, and other
Internet-related numbers presently in place and/or required for the TrueNet
operation. The Seller shall assist the Buyer in effectuating a transfer of
such numbers with InterNic and similar registrars including search engines
listings.
Web Design/Software - The Seller shall provide the Buyer with the continuing
use of TrueNet's WebPage(s) and shall provide a disk copy of the said
WebPage(s), dial-up configuration disk(s), and other materials developed for
Web presence, Web Hosing, and Web marketing together with all operating
systems, utilities, productivity, Web development/accounting, Graphics, or
other software programs presently owed by the Company. The Seller shall
assist the Buyer in effectuating an immediate transfer of the ownership
rights, and licensure of these materials to the Buyer.
Premises Lease - The Buyer will assume the occupation of the existing premises
which comprises approximately 1,250 square feet. The Seller shall remove all
items not being transferred to the Buyer from the premises by January 31,
1997, and shall be relieved of lease obligations upon expiration of such lease
on the same day, subject to the Lease Deposit provision below. The Buyer
shall
<PAGE>
immediately assume premises lease obligations, under a new lease negotiated
with the Commerce Center.
Lease Deposit - The Seller shall provide the Buyer with the continuing use of
its current lease security deposit throughout the period during which the
Seller occupies a space of approximately 64-100 square feet within the TrueNet
office; which period shall not be less than 90-days from the date of this
Agreement. Following the 90-day period and the vacating of the office by the
Seller, the Buyer shall reimburse the Seller in an amount equal to the said
security deposit. At its option, the Buyer can require the Seller to vacate
the premises at any time following security deposit reimbursement and the
expiration of the said 90-day period. During occupation, the Seller shall be
responsible for its own business expenses including telephone service, local
and long-distance phone/fax calls, office supplies, and any other such
expense.
Account Adjustments - Except for Equipment Leases, all current obligations
that are necessary for the continued operation of the Business and accounts
receivable shall be adjusted as of the date of the execution of this
Agreement. The Seller shall provide the Buyer with a complete list of
TrueNet's obligations, contracts, and other expenses originated by the Seller
and necessary for the continued operation of the TrueNet business. The Seller
shall have paid all outstanding obligations, be responsible to pay all
outstanding obligations, or otherwise make arrangement to pay the obligations
or fulfill the said contracts as of the date of the execution of this
Agreement, while immediately releasing TrueNet and/or the Buyer of any such
obligations. The Buyer, at its option may continue with the contracts under
True Net, or terminate contracts it deems unrelated to the service or
unnecessary to the operation and/or replace such service under more favorable
terms and conditions. The Buyer shall be responsible for all continued or
newly-opened accounts as of the date of execution of this Agreement. Current
licenses, registrations, subscriptions, and other prepaid expenses shall be
transferred to the Buyer without adjustment.
Seller Stock Transfer - The Buyer herewith transfers to the Seller ownership
of ten (10%) percent of the common stock (100,000 shares) of the Banana
Corporation, Inc., (or its Successor) a Florida corporation, with 1,000,000
authorized shares of founder's common stock. The appropriately endorsed stock
certificates shall be transferred no later than 60 days following the
execution of this Agreement, together with the Company's standard shareholder
agreement which must be authorized by the Seller at the time of such
transfer. The said shareholder agreement shall restrict the sale of this
stock for a 36-month period, except in the event of the exercise of the
Buyer's repurchase provision described in the next section.
Stock Re-Purchase Provision - Prior to the expiration of one year from the
execution of this Agreement, the Seller (Net Lnnx) agrees that the Buyer
(Banana Corp.), at its option, may re-purchase its common stock at a price of
$1.50 per share up to fifty (50%) percent of the shares of stock originally
transferred to the Seller (50,000 shares). If the Buyer exercises this
re-purchase provision, the Seller's Stock Purchase Option described in the
next section shall be considered null and void. Upon timely notification from
the Buyer, the Parties agree to enter into an agreement for the repurchase of
the said stock, which transaction shall close no later than 6-months following
the full execution of the repurchase agreement.
Stock Purchase Option - At the time of a secondary offering, but in no event
later than the expiration of one year from the execution of this Agreement,
whichever occurs first, the Buyer agrees that the Seller may purchase
additional stock, equally from the Company's, excluding shares owned by Net
Lnnx, Inc., at a price of $1.50 per share upon to a maximum of 100,000 shares
equal to an additional ten (10%) percent ownership share at the founder level
prior to any dilution (based on the current 1,000,000 shares in the Company, whi
ch may be adjusted). This Option is subordinate to the above Stock
Re-Purchase Provision, regardless of the order of notification.
Press Releases - All press releases by Net Lnnx, Inc. relating to the
ownership transfer of TrueNet require the prior approval of Banana Corp.,
Inc., which approval will not be unreasonably withheld.
Location - The Buyer agrees to operate the Internet Service Provider business,
and continue to maintain the Equipment listed herein at its current location
until such time as the liste equipment is fully paid for and ownership is
transferred to the Buyer by the leasing company who presently holds a security
interest therein. The location may not be changed without the Seller's prior
written consent, which consent shall not be unreasonably withheld provided
that any relocation is within 75 miles of the present location, and does not
interrupt the operation of the business for more than sixty (60) calendar days
from the
<PAGE>
time of closing the original location to the opening of the new location.
Unfair Competition - The Seller agrees, in the event it continues to operate
or subsequently begins to operate any other business, not to use any
reproduction or colorable imitation of the Proprietary Marks, Trade Dress,
methods of operation or undertake any other conduct either in connection with
such other business or the promotion thereof, which is likely to cause
confusion, mistake or deception, or which is likely to dilute the Buyer's
rights in and to the Proprietary Marks. In addition, the Seller agrees not to
utilize any designation of origin or description or representation which
falsely suggests or represents an association or connection with TrueNet,
Banana On-Line, The Banana Corporation or any of affiliates so as to
constitute unfair competition. This section shall not be deemed to relieve,
directly or indirectly, the Seller's obligations under the section(s) below.
Competition with the Buyer - The Seller agrees that the Buyer would be unable
to protect its Confidential Information against unauthorized use or disclosure
and would be unable to encourage a free exchange of ideas and information
within its business or franchisees system if the Seller, a stockholder in the
Buyer's company, were permitted to hold interests in any Competitive
Business. Therefore, the Seller covenants that during a 36-month period
following the execution of this Agreement, except as otherwise provided in
this Agreement or approved in writing by the Buyer, that the Seller will not
directly or indirectly, as owner, officer, director, employee, agent, lender,
investor, broker, consultant, franchisee or in any other similar capacity
whatsoever be connected in any manner with the ownership, management,
operation or control, or conduct of a Competitive Business within the United
States (provided that this restriction shall not apply to a 5% or less
beneficial interest in a publicly-held corporation). The Seller acknowledges
and confirms that the length of the term and geographical restrictions
contained in this Section are fair and reasonable and are not the result of
overreaching, duress or coercion of any kind. The Seller further acknowledges
and confirms that its full, uninhibited and faithful observance of each of the
covenants contained in this Section will not cause any undue hardship,
financial or otherwise, and that enforcement of each of the covenants
contained in this Section will not impair its ability to obtain employment
commensurate with its abilities and on terms fully acceptable to its or
otherwise to obtain income required for the comfortable support of its or its
family, and the satisfaction of the needs of its creditors. The Seller
acknowledges and confirms that its special knowledge of the business of an
Internet Service Provider and/or Internet-related retail store/cafe (and
anyone acquiring such knowledge through the Seller) is such as would cause the
Buyer and its business serious injury and loss if it (or anyone acquiring such
knowledge through the Seller) were to use such knowledge to the benefit of a
competitor or were to compete with the Buyer or any of its company-owned ISPs
and/or Internet related retail stores, catalog distributors, multilevel
distributors, or franchisees. In the event that any court shall finally hold
that the time or territory or any other provision stated in this Section
constitutes an unreasonable restriction upon the Buyer, the Seller agrees that
the provisions of this Agreement shall not be rendered void, but shall apply
as to time and territory or to such other extent as such court may judicially
determine or indicate constitutes a reasonable restriction under the
circumstances involved.
Diversion of Business and Interference with the Buyer - The Seller covenants
that a 36-month period following the execution of this Agreement, except as
otherwise provided in this Agreement or approved in writing by the Buyer that
the Seller will not directly or indirectly, solicit or otherwise attempt to
induce, by combining or conspiring with, or attempting to do so, or in any
other manner influence any Business Affiliate of the Buyer to terminate or
modify his, her or its business relationship with the Buyer or to compete
against the Buyer; or in any manner wrongfully interfere with, disturb,
disrupt, decrease or otherwise jeopardize the business of the Buyer.
Miscellaneous Terms and Conditions
A) Amendments. The provisions of the Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by the
Party s to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to the Agreement.
B) Binding Effect. All of the terms and provisions of the Agreement,
whether so express or not, shall be binding upon, inure to the benefit of, and
be enforceable by the Parties and their respective administrators, executors,
legal representative, heirs, successors and permitted assigns.
C) Severability. If any provision of the Agreement or any other Agreement
entered into pursuant hereto is contrary to, prohibited by or deemed invalid
under applicable law or regulation, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full
force ad effect so far as possible.
D) Survival. All covenants, agreements, representations and warranties
made herein or otherwise made in writing by any party pursuant hereto shall
survive the execution and delivery of the Agreement and the consummation to
the transactions contemplated hereby.
E) Waivers. The failure or delay of any Party at any time to require
performance by another Party of any provision of the Agreement, even if known,
shall not affect the right of such Party to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by
any Party of any breach of any provision to the Agreement should not be
construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power
or remedy under the Agreement. No notice to or demand on any party in any
case shall, of itself, entitle such party to any other or further notice of
demand in similar or other circumstances.
F) Third Parties. Unless expressly stated herein to the contrary, nothing
in the Agreement, whether express or implied, is intended to confer rights or
remedies under or by reason of the Agreement to any person other than the
Parties hereto and their respective administrators, executors, other legal
representatives, heirs, successors and permitted assigns.
G) Jurisdiction and Venue. The Parties acknowledge that a substantial
portion of negotiations and anticipated performance and execution of the
Agreement occurred or shall occur in Palm Beach County, Florida, and that,
therefore, without limiting the jurisdiction or venue of any other federal or
state courts, each of the Parties irrevocably and unconditionally (a) agrees
that any suit, action or legal proceeding arising out of or relating to the
Agreement may be brought in the courts of record of the State of Florida in
Palm Beach County or the court of the United States, Southern District of
Florida; (b) consents to the jurisdiction of each such court in any suit,
action or proceeding; (c) waives any objection which it may have to the laying
of venue of any such suit, action or proceeding in any of such courts.
H) Enforcement Costs. If any legal action or other proceeding is brought
for the enforcement of the Agreement or because of an alleged dispute, breach,
default, or misrepresentation in connection with any provision of the
Agreement, the successful or prevailing Party or Parties shall be entitled to
recover reasonable attorneys fees, sales and use taxes, court costs and all
expenses even if not taxable as a court cost (including without limitation,
all such fees, taxes, costs and expenses incident to arbitration, appellate,
bankruptcy and post-judgment proceedings), incurred in that action or
proceeding, in addition to any other relief to which such Party or Parties may
be entitled. Attorneys' fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and all
other charges billed by the attorney to the prevailing Party.
I) Governing Law. The Agreement and all transactions contemplated by the
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of Florida with regard to principles of
conflicts of laws.
J) Entire Agreement. The Agreement, its Exhibits, its Addendum (if any),
and all other written agreements related to this Agreement and expressly
referenced in this Agreement, represents the entire understanding and
agreement among the Parties with respect to the subject matter hereof, and
supersedes all other negotiations, understandings and representations (if any)
mad by and among such Parties. No representations, inducements, promises or
agreements, oral or otherwise, if any, not embodied in this Agreement, its
Exhibits and all other written agreements related to this Agreement and
expressly referenced in this Agreement shall be of any force and effect.
K) Interpretation. Each of the parties acknowledge that they have been or
have had the opportunity to have been represented by their own counsel
throughout the negotiations and at the execution of this Agreement and all of
the other documents executed incidental to this Agreement and, therefore, none
of the parties shall, while this Agreement is effective or after its
termination, claim or assert that any of the provisions of this Agreement or
any of the other documents should be construed against the drafter of this
Agreement or any of the other documents.
<PAGE>
L) Receipt of Completed Agreement. The Parties acknowledge the receipt of
a completed copy of this Agreement and all related agreements, containing all
materials terms, with all blanks filled in (except for the date, signatures
and any minor matters not material to the agreements) prior to the execution
of this Agreement.
M) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient in writing, and if sent be registered mail to
either Party at his or its last known address.
N) Indemnification. Parties will indemnify and hold Constructive Ideas,
Inc. and Fred C. Kriss harmless for any claims initiated by themselves or by
any customers, suppliers, investors, lenders, or other third parties arising
out of its relationship with the Parties.
O) Further Assurances. The Parties agree to execute and deliver such
further and other transfers, assignments, and documents, and to do all matters
and things that are legally required or reasonably necessary to effectuate the
intentions of this Agreement. This provision shall survive the closing.
P) Authority. The Parties acknowledge that they are corporate officers
of, and have the legal authority to obligate, their respective corporations to
this Agreement on which the full and proper name of Corporation(s) and
officer's title appear at the signature line below.
Q) Executed Agreement Copies. The Parties agree that a fully executed copy
of this agreement has been delivered to each party immediately upon its mutual
acceptance.
Acceptance - Intending to be legally bound, the above terms and conditions are
accepted by both parties on date indicated.
Agreed for Banana Corporation, Inc.: /s/Tarek Kirschen, President
Date: 01/31/97
Agreed for Net Lnnx, Inc. /s/Ronald W. Hayes, President
Date: 01/31/97
<PAGE>
<TABLE>
<CAPTION>
Exhibit I - Equipment Purchase Q Serial Description Initial
N
<S> <C> <C> <C> <C>
Terminal Server (30 modems) 1 Livingston Portmaster
Patch Panel & Cable 1
Local Network & Hub (Ethernet) 13-com FMS2
StarPlus Digital Phone System 5
& Phones
White Board 1
Right Angle Desks (1) 3
Desk (1) 1
Desk Chairs (1) 3
Casual Chairs (1) 3
Lateral File (1) 1
5-Shelf Unit (1) 1
Typing Table 1
Literature Rack 1
____________________________________
Note 1 - Matching sets - dark colored office furniture
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit II - Equipment Leases Serial Q Cost/ Price Total Rent Initial
N 1000
<S> <C> <C> <C> <C> <C> <C> <C>
Internet Server HP 5-133LC4441149 1 39.32 10,327 406
Internet Server HP 5-133LC 4141152 1 39.32 10,317 406
Internet Server HP 5-133LC
Router (Cisco 2501) 25508885 1 48.44 2,400 115
Modem USRobotics Sportster 28.8 44 48.44 187 216
ISDN Router - Ascend 6121446 1 48.44 16,825 815
(96/128K)
UPS SmartModem 700 (APC) 595127910885 1 48.44 398 12.20
UPS SmartModem 700 (APC) 596017969490 1 48.44 398
UPS SmartModem 700 (APC) 596017969488 1 48.44 398
UPS SmartModem 700 (APC) S76017969492 1 48.44 398
UPS SmartModem 700 (APC) 595127916738 1 48.44 398
UPS SmartModem 700 (APC) 596027254561 1 48.44 398
Copier - Panasonic ADF JFBGG311377 1 132.92
HP Fax - 700 (CS530A) MY5AQA304S 1 23.18
HP5/166 Desktop US61051257 1 5,954 5954 240
Workstation(1)
HP5/166 Desktop US61058412 1
Workstation(1)
HP5/166 Desktop
Workstation(1)
Monitor 15" (HP-1024) KR54865827 1 48.44 413 413 20
Monitor 15" (HP-1024) KR54865829 1 48.44 413 413 20
Monitor 15" (HP-1024) 1 48.44 413 413 20
Monitor 15" (HP-1024) 1 48.44 413 413 20
HP DeskJet Color Printer 1
Modem Racks Cabinet (APC) 4
________________________________/
Note 1 - Includes CPU, Keyboard, Mouse, Case, Components
</TABLE>
<PAGE>
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is entered into this 17th day of January 1997, by
and among PALM CAPITAL, INC. (hereinafter referred to as the "Purchaser") and
NET LNNX, INC., (hereinafter referred to as the "Seller" or the
"Corporation").
In consideration of the mutual agreements contained herein, and upon the basis
of the representations and warranties hereinafter set forth, the parties to
this Stock Purchase Agreement do hereby agree as follows:
SECTION 1
PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, the Corporation
hereby sells, assigns, transfers and delivers to the Purchaser, 2,550,000
shares of common stock of Communications/USA, Inc., which represents all of
the ownership interest of Net Lnnx, Inc. in Communications/USA, Inc.
SECTION 2
CONSIDERATION AND CLOSING
2.1 At the closing on January 17, 1997, and in full consideration for the
assignment, transfer and delivery to the Purchaser, the Purchaser will deliver
to the corporation, any and all of the common stock of Net Lnnx, Inc. owned by
the Purchaser, plus any and all options or other rights to the 1,250,000
shares of Communications/USA, Inc. common stock, payable as follows at
Closing:
a. The sum of $25,000 in cash; and
b. A Promissory Note, carrying an interest rate of 7% per annum, for a
total of $475,000, payable as follows:
1) Twelve payments of $9,000 per month, payable on the first of each
month, beginning on March 1, 1998; and
2) Twelve payments of $12,000 per month, payable on the first of each
month beginning on March 1, 1998; and
3) A balloon payment on March 1, 1999 of the balance due as of such
<PAGE>
date.
c. Closing shall be held in escrow pending the written approval of the
Board of Directors of the Corporation and the majority of the shareholders of
the Corporation at a duly noticed and scheduled meeting of the shareholders of
the Corporation. Until said approval is obtained and delivered to the
Purchaser, the payments due to the Corporation under the Promissory Note shall
be abated. The purchaser shall deliver the $25,000 cash payment to the
Corporation upon execution of this Agreement.
2.2 In addition, Net Lnnx, Inc. shall accept the assignment of all
computer leases and the non-residential real estate lease, and shall be
obliged to pay all such sums due under said leases. Purchaser shall assume
the liabilities of Communications/USA, Inc. as specifically set forth on the
attached Exhibit "A". The liabilities set forth on Exhibit "A" shall be paid
by the Purchaser beginning March 1, 1997, by the set-off each moth, for a
period of five (5) months, the sum of $5,000.00 against the monthly payments
due to the Corporation under the Promissory Note as set forth in Section 2.1
of this Agreement. Communications/USA, Inc. shall also be released from the
Consulting Agreement between Communications/USA, Inc. and Robert C. Hackney, a
copy of which is attached hereto as Exhibit "B". Net Lnnx, Inc. shall also be
liable for any non-residential real property leases in the name of
Communications/USA, Inc. for any real property in Palm Beach County, Florida.
2.3 The parties further agree that Raul E. Balsera, who has acted as Chief
Financial Officer for both Communications/USA, Inc. and Net Lnnx, Inc. will
provide all necessary financial information of Communications/USA, Inc. to Net
Lnnx, Inc., in order for Net Lnnx, Inc. to be able to timely comply with any
and all of its reporting requirements under state and/or federal law, and will
assist Net Lnnx, Inc. and cooperate with Net Lnnx, Inc. and its auditors to
provide any reasonable information requested to fulfil its reporting
requirements.
2.4 The outstanding certificate for 100,000 shares of Communications/USA,
Inc. common stock in the name of Palm Partners, LTD shall be canceled and the
certificate shall be delivered at Closing.
2.5 The Closing shall be held in the offices of Net Lnnx, Inc. on the
Closing Date, unless another time or place is mutually agreed upon by the
Corporation and the Purchaser.
2
<PAGE>
SECTION 3
Entire Agreement. This Agreement, and the documents referred to herein,
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations
or covenants except as specifically set forth herein or therein. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any third party any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Florida.
Titles and Subtitles. The titles and subtitles uses in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Conformation of execution by telex or by telecopied facsimile
signature page shall be binding upon any part so confirming or telecopying.
Jurisdiction and Venue. Each of the parties irrevocably and
unconditionally: (a) agrees that any suit, action or other legal proceeding
arising out of or relating to this Agreement may, and to the extent permitted
by the courts of the State of Florida shall be, brought in the courts of
record in the State of Florida in Palm Beach County; (b) consents to the
jurisdiction of such courts in any such suit, action or proceeding; and (c)
waives any objection which it may have to the laying of venue in any such
suit, action or proceeding in such courts.
Amendments. The provisions of this Agreement may not be amended,
3
<PAGE>
supplemented, waived or changed orally, but only by a writing signed by the
party as to whom enforcement of any such amendment, supplement, wavier or
modification is sought and making specific reference to this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
Agreement on the day and year first above written.
Signed and Delivered
in the presence of:
CORPORATION:
NET LNNX, INC.
By:/s/Robert C. Hackney, President
NET LNNX, INC.
By:/s/Ronald W. Hayes, Jr., President
PURCHASER:
PALM CAPITAL, INC.
By:/s/ Robert Feiman, President
As to paragraph 2.3 only:
/s/Raul E. Balsera
4
<PAGE>
EXHIBIT "A"
ACCOUNTS PAYABLE SUMMARY
$10,474.83 Due Shareholders 9/96
16,182.77 Due Shareholders 12/96
10,905.00 Payroll Taxes 1995
895.00 Unemployment Tax 1995
9,861.43 Other Miscellaneous Payables
3,600.00 Due Shareholders 20 days 1/97
$52,192.03
<PAGE>
CONSULTING AGREEMENT
AGREEMENT made this 1 day of August, 1996, by and between Robert C.
Hackney (hereinafter referred to as "Consultant"), and Communications/USA,
Inc. (hereinafter referred to as the "Company").
WHEREAS, the Consultant desires to act as a consultant to the Company in
connection with management, financial, personal and other business operations
matters; and
WHEREAS, the Company desires to compensate the Consultant for his
services,
NOW THEREFORE, in consideration of the mutual promises, commitments
undertakings and agreements set forth herein and in other arrangements between
the parties, the parties hereto do agree as follows, intending to be legally
bound hereby, with each party binding their respective heirs, executors,
administrators, successors and assigns.
1. Qualification of Consultant. Consultant is known to the Company
as a person who is skilled in financial and business matters, and who has
achieved significant financial success in matters of business and commerce.
The Company operates a growing and expending business and wishes to avail
itself of certain skills and talents of Consultant. While Consultant is
willing, under certain terms and conditions, to assist the Company in its
business affairs, Consultant does not wish to be employed by the Company as an
employee in the typical sense, nor commit himself to a defined periods of time
or responsibility.
2. Duties. The Consultant will make himself available tot he Company
for the purposes of consulting and advising the Company on matters involving
management, financial matters, personnel matters, marketing matters and other
business operations issues which might arise during the term of this
Agreement. Such consulting will be at the reasonable request of the Company,
at the office of Consultant, or, from time to time and on a limited basis, at
the offices of the Company, not to exceed forty hours per moth.
3. Compensation. The Company shall pay a consulting fee to the
Consultant commencing upon execution of this Agreement. The consulting fee
shall consist of $5,000 per month for a period of five years commencing August
1, 1996. Any expenses to be incurred by Consultant must be approved by the
Company in advance.
4. Term. This Agreement shall expire in five years from the date of
this Agreement, unless extended in writing by mutual consent of both parties.
The parties hereto recognize and acknowledge that due to the fact that the
Company will benefit for long periods of time into the future by having the
availability of the Consultant's consulting services, whether or not the
Company utilizes such services, that the compensation to the Consultant should
properly run for a long period of time.
5. Indemnification by Consultant. The Company agrees that it will
provide indemnification to the Consultant against any losses, claims, damages,
liabilities, costs, expenses (including attorney's fees), judgments and
amounts paid in settlement in connection with any threatened, pending or
completed suit, claim, proceeding or investigation arising out of or
pertaining to any action or omission occurring at or after the execution of
this Agreement (including, without limitation, any which arise out of or
relate to this Agreement), to the full extent permitted or required under
Florida law and the Company's By-Laws.
EXHIBIT "B"
<PAGE>
6. Jurisdiction and Venue. This Agreement shall be interpreted and
enforced according to the laws of the State of Florida.
7. Modification. This Agreement may not be amended or modified
except by written agreement signed by all the parties.
8. Construction. This instrument contains the entire agreement
between the parties. There are merged herein all prior and collateral
representations, agreements, promises, and conditions in connection with the
subject matter hereof. This Agreement supersedes all existing agreements or
arrangements between the parties.
9. Execution in Counterparts. This Agreement may be executed in
separate counterparts. Any number of counterparts of this Agreement may be
signed and delivered and constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year above first written.
COMMUNICATIONS/USA, INC.
By: /s/Raul E. Balsera, Chief Executive Officer
CONSULTANT:
/s/Robert C. Hackney
<PAGE>
January 31, 1997
Board of Directors
Net Lnnx, Inc.
324 Datura Street, Suite 150
West Palm Beach, FL 33401
Re: Letter of Resignation From Board of Directors
I hereby resign as a director of Net Lnnx, Inc. as of January 31, 1997.
Sincerely,
/s/Robert C. Hackney
