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) December 31, 1996
NET LNNX, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 333-5862 23-1726390
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
324 Datura Street, Suite 150, West Palm Beach, Florida 33410
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(561)832-8832
(Former name or former address, if changed since last report.)
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ITEM 1. CHANGE IN CONTROL OF THE REGISTRANT
On December 31, 1996, the Company entered into a Stock
Purchase Agreement with R H Financial Services, Inc., of 408 Gulf Road, North
Palm Beach, Florida 33408, to sell 500,000 shares of newly issued common stock
of the Company, or approximately 25.6% of the issued and outstanding common
stock of the Company. Simultaneously, R H Financial Services, Inc. executed a
Voting Trust Agreement with Robert C. Hackney, giving R H Financial Services,
Inc. the right to vote an additional 314,000 shares of the Company's common
stock for a period of two years. R H Financial Services, Inc. controls the
voting rights to approximately 41.7% of the issued and outstanding common
stock of the Company.
R H Financial Services, Inc. has agreed to pay consideration totalling
$300,000, payable $25,000 at closing on December 31, 1996, $25,000 on January
14, 1997, $50,000 on January 31, 1997, and $50,000 on each of March 31,
June 30, September 30 and December 31, 1997. The source of the funds was from
the Company's equity capital.
On January 4, 1997, Ronald W. Hayes, Jr., President of R H Financial
Services, Inc. was also appointed President of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Attached hereto is a copy of the Stock Purchase Agreement
between the Company and R H Financial Services, Inc. along with a
copy of the Voting Trust Agreement referred to in Item 1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NET LNNX, INC.
/s/ Ronald W. Hayes, Jr.
Ronald W. Hayes,Jr., President
Date: January 9, 1997
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into this 31st day of December
1996, by and among R H FINANCIAL SERVICES, 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 OF STOCK
Subject to the terms and conditions of this Agreement, the Corporation
hereby sells, assigns, transfers and delivers to the Purchaser, 500,000 newly
issued restricted shares of common stock of Net Lnnx, Inc.
SECTION 2
CONSIDERATION FOR TRANSFER AND CLOSINGS
At the closing on December 31, 1996, and in full consideration for the
assignment, transfer and delivery to the Purchaser, the Purchaser will deliver
to the Corporation, the sum of $300,000, payable as follows at Closing: The
sum of $25,000 in cash on or before January 6, 1996, $25,000 on or before
January 14, 1996, (when due diligence shall have been completed), and
promissory notes for a total of $250,000 payable $50,000 on January 31, 1997,
$50,000 on March 31, 1997, $50,000 on June 30, 1997 and $50,000 on September
30, 1997, and $50,000 on December 31, 1996.
The Closing shall be held at 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.
SECTION 3
REPRESENTATIONS AND WARRANTIES BY THE CORPORATION
1. Corporation's Representations and Warranties. The Corporation
represents and warrants to and agrees with Purchaser as follows:
(a) Corporate Organization and Good Standing. Net Lnnx, Inc. is a
corporation duly organized, and validly existing under the laws of the
Commonwealth of Pennsylvania, and has full corporate power and authority to
carry out its business as it is now being conducted and to own and lease
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property, and is duly qualified or authorized to do business and is in good
standing in each jurisdiction in which the character and location of the
properties owned or leased by it or the nature of business transacted by it
makes those qualifications or authorizations necessary, except for
jurisdictions in which the failure to be so qualified or authorized or to be
in good standing would not, individually or in the aggregate, have a material
adverse effect on the business or financial condition of Net Lnnx, Inc. Net
Lnnx, Inc. is not presently being challenged as to its right to do business
as presently conducted in any jurisdiction.
(b) Authority. The Corporation has full legal right, power, and
authority to sell, assign and transfer the shares of common stock to
Purchaser, and the delivery of such Shares to the Purchaser pursuant to the
provisions of this Agreement will transfer valid title thereto, free and clear
of all liens, encumbrances, claims, and restrictions of every kind.
(c) No Violation. Net Lnnx is not, and by the execution and
performance of this Agreement, will not be, in breach of any term or provision
of or in default under, and no event has occurred that with the lapse of time
or action by a third party could result in a default under, any outstanding
indenture, mortgage, contract or agreement to which Net Lnnx is a party or to
which Net Lnnx may be subject, or under any provision of its articles of
incorporation or Bylaws. The execution and performance of this Agreement by
Net Lnnx will not violate any order, injunction, decree, statute, rule or
regulation applicable to Net Lnnx or any of its properties or assets.
(d) Title. Net Lnnx owns good and merchantable title free and clear
of any liens, claims, encumbrances, options, charges or assessments to all of
its properties and other assets used in connection with its business,
including, but not limited to, those reflected in the balance sheet of Net
Lnnx and subsidiaries as of September 30, 1996. Net Lnnx carries such
insurance with reputable insurers in respect of its properties and businesses
as is customary for similar businesses and as is adequate for the business
conducted by Net Lnnx.
SECTION 4
MISCELLANEOUS
1. 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
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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.
2. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Florida.
3. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4. 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.
5. 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. Confirmation of execution by telex or by telecopied facsimile
signature page shall be binding upon any party so confirming or
telecopying.
6. 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 of 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 of any such
suit, action or proceeding in such courts.
7. Amendments. The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by the
party as to whom enforcement of any such amendment, supplement, waiver 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.
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Signed and Delivered in the presence of:
CORPORATION:
NET LNNX, INC.
By: /s/Robert C. Hackney
ROBERT C. HACKNEY
PURCHASER:
R H FINANCIAL SERVICES, INC.
By: /s/Ronald W. Hayes, Jr.
RONALD W. HAYES, JR., PRESIDENT
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VOTING TRUST AGREEMENT
This Voting Trust Agreement, made this 31st day of December 1996, between
Robert C. Hackney, hereinafter called the "Stockholder", and R H Financial
Services, Inc., hereinafter called the "Trustee".
RECITALS
A. The Stockholder represents that he is the owner of 314,000 shares of
capital Stock of Net Lnnx, Inc., a Pennsylvania corporation, hereinafter
called the "Corporation."
B. In order to provide for the smooth and efficient operation of the
Corporation, to prevent conflicts, and to avoid deadlocks, the Stockholder
deem it to be in the best interests of the Corporation and of all the
Stockholders thereof that this Agreement be executed.
NOW, THEREFORE, in consideration of the foregoing recitals, the
Stockholder, in consideration of the mutual promises contained herein, hereby
agree with the Trustee, and the Trustee hereby agree with the Stockholder, as
follows:
Section One. Transfer of Stock to Trustee.
The Stockholder shall deposit the number of shares of capital stock
referred to above and the certificates therefor, together with sufficient
instruments duly executed for the transfer thereof to the Trustee, and shall
receive in exchange therefor certificates hereinafter provided for. Upon
the making of such deposit, all shares represented by the stock certificates
so deposited shall be transferred on the books of the Corporation to the name
of the Trustee, who is hereby authorized and empowered to cause such transfers
to be made, and also to cause any further transfers to be made that may become
necessary, due to a change in the identity of any Trustee, as hereinafter
provided.
Section Two. Trustee's Control Over Stock.
During the period this Agreement remains in force, the Trustee shall
possess legal title to the shares deposited, and shall be entitled to exercise
all rights whatsoever, including the right to vote in person or by proxy, in
respect of any and all deposited shares. However, the holder of a Trust
Certificate issued by the Trustee shall be entitled to receive payments equal
to any and all dividends collected by the Trustee with respect to shares of
stock deposited by him.
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Section Three. Voting Trust Certificate.
On deposit by the Stockholder of a certificate or certificates for shares
of stock hereunder, accompanied by instruments of transfer, the Trustee shall
deliver to such Stockholder a Voting Trust Certificate for the same number of
shares of stock as that represented by the certificate or certificates
deposited. Such Voting Trust Certificates shall be in substantially the
following form:
VOTING TRUST CERTIFICATE
NO. 001 314,000 Shares
This certifies that Robert C. Hackney has deposited Three Hundred
Fourteen Thousand (314,000) shares of the capital stock of Net Lnnx, Inc. with
the undersigned as Trustee under a Voting Trust Agreement dated December 31,
1996, between holders of capital stock of Net Lnnx, Inc. and their heirs,
assigns and successors, and the undersigned, as Trustee. This certificate and
the interest represented hereby is transferable only on the books of the
Trustee upon presentation and surrender hereof. The holder of this
certificate takes it subject to all the terms and conditions of the aforesaid
Voting Trust Agreement and becomes a party to such Agreement and is entitled
to the benefits thereof.
Executed by the undersigned Trustee on the day of
, 1996.
R H Financial Services, Inc., Trustee
By: Ronald W. Hayes, Jr., President
Section Four. Additional Stock
After this Agreement has taken effect, the Trustee may from time to time
receive any additional fully paid shares of the capital stock of the
Corporation on the same terms and conditions as are set forth in this
Agreement and in respect to such shares so received the Trustee shall issue
and deliver certificates substantially in the form set forth above, entitling
the holder to all the rights above specified.
Section Five. Dividends
All dividends that may accrue on the stock deposited hereunder shall be
distributed pro rata among the holders of the Voting Trust Certificates, in
the proportion they are entitled thereto.
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Section Six. Rights of Trustee
During the period this Agreement remains in effect, the Trustee shall
possess and shall be entitled to exercise, in person or by proxy, all rights
and powers of absolute owners in respect to all the stock of the Corporation
deposited with him, including the right to vote on, to take part in, and
consent to, any corporate or stockholders' actions of any kind whatsoever,
and to receive dividends and distributions on the stock. The Trustee's
right to vote shall include the right to vote for the election of directors
and in favor of or in opposition to any resolution or proposed action of any
character whatsoever that may require the consent of Stockholders.
Section Seven. Election of Directors
For so long as this Agreement may remain in effect, the Trustee hereunder
shall vote the stock deposited hereunder to effect the election of and to
continue in office a Board of Directors consisting of Ronald W. Hayes, Jr.,
Robert C. Hackney, and any such additional persons as the Trustee shall
designate.
Section Eight. Termination of Voting Trust
On December 31, 1998, unless the Trustee exercises their right, which is
hereby expressly granted to him, to terminate this Agreement at any time prior
to that date, the Trustee shall distribute the stock of the Corporation held
by him to the holders of the Voting Trust Certificates in proportion to their
respective holdings on surrender of their certificates to the Trustee, and
this Agreement shall thereupon terminate.
Section Nine. Sale or Purchase of Stock or Certificate by Trustee
Nothing contained herein shall deprive the Trustee of the privilege to be
enjoyed by other depositors of selling or otherwise disposing of Voting Trust
Certificates as they see fit or of purchasing additional certificates or of
purchasing additional stock and selling it.
Section Ten. Compensation of Trustee
The Trustee shall not be entitled to any compensation.
Section Eleven. Resignation of Trustee
If the Trustee shall resign, be dissolved or liquidated, or otherwise
cannot act, this Trust shall terminate.
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Section Twelve. Voting by Trustee
The Trustee shall have full power to vote for the election of Directors
of the Corporation, on all matters that may require the vote of the
Stockholders.
If any question arises on which the Trustee desires the opinion of the
Voting Trust Certificate Holders, a meeting may be called by the Trustee. At
such meeting, the owners of majority in interest of the Voting Trust
Certificates may indicate their
preference to the Trustee.
Section Thirteen. Trustees' Liability for Negligence
The Trustee shall not be liable for acts or missions in acting on any
paper, document or signature believed by them to be genuine and to have been
signed by the proper party. They shall not be liable for any error of
judgment nor for any mistake of fact or law, nor for anything which they may
do or refrain from doing in good faith, except, however, that the Trustee
shall be liable for his own willful neglect or malfeasance. The Trustee may
consult with legal counsel and any action under this Agreement taken or
suffered in good faith by them in accordance with the opinion of counsel shall
be conclusive on the parties to this Agreement. The Trustee shall at all
times be fully protected and be subject to no liability in respect thereto.
Section Fourteen. Amendment or Termination of Voting Trust
This Agreement may be amended or terminated at any time prior to the
termination date provided herein, by an instrument in writing duly executed
and witnessed by the owners and holders of the trust certificates representing
100 percent of the shares of stock deposited hereunder.
Section Fifteen. Acceptance of Trust by Trustee
The Trustee hereby accept this Trust subject to all the terms and
conditions hereof, and agrees that he will exercise his powers and perform his
duties as herein set forth. Nothing contained herein, however, shall be
construed to prevent the Trustee from resigning and discharging himself from
the Trust.
Section Sixteen. Dissolution or Liquidation
In the event of the dissolution or liquidation, either partial or total,
of the Corporation, the Trustees shall receive the monies, securities, rights
or property to which the Shareholders of the Corporation are entitled, and
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shall distribute it among the Voting Trust Certificate Holders in proportion
to their interests, as shown by the books of the Trustee.
Section Seventeen. Endorsement on Stock
Each certificate representing shares held by any of the parties hereto
shall contain a statement or legend that the shares represented by the
certificate are subject to the provisions of a Voting Trust Agreement.
Section Eighteen. Severability
This Agreement shall not be severable in any way, but it is specifically
agreed that if any provision should be held to be invalid, the invalidity
shall not affect the validity of the remainder of this Agreement.
Section Nineteen. Entire Understanding
This Agreement contains the entire understanding of the parties hereto
and supersedes any prior agreement, either oral or written, and any amendment
or modification or termination of this Agreement must be in writing and signed
by all the parties hereto.
Section Twenty. Conflict of Interest
The Trustee, any firm or corporation of which he may be a member, agent
or employee, and any corporation, trust or association of which he may be a
trustee, stockholder, director, officer, agent or employee, may contract with,
or become pecuniarily interested, directly or indirectly, in any matter or
transaction to which the Corporation, or any subsidiary or controlled or
affiliated corporation, may be a party, or in which he may be concerned, as
fully and freely as though the Trustee was not Trustee hereunder. The
Trustee, his employees or agents, may act as directors or officers of the
Corporation or any subsidiary or controlled or affiliated corporation.
Section Twenty-One. Records
The counterpart of the Voting Trust Agreement and the copy of such record
so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such counterpart
and such copy of such record shall be subject to examination by any holder of
record of Voting Trust Certificates either in person or by agent or attorney,
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at any reasonable time for any proper purpose.
Section Twenty-Two. Construction
This Agreement is intended by the parties to be governed and construed in
accordance with the laws of the State of Florida.
Section Twenty-Three. Benefit
This Agreement shall be binding on and inure to the benefit of the heirs,
executors, administrators and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.
Signed in the Presence of:
WITNESS: TRUSTEE:
R H FINANCIAL SERVICES, INC.
By: /s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., President
WITNESS: STOCKHOLDER:
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/s/Robert C. Hackney
Robert C. Hackney
