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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NETWORKS NORTH, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.0467 PER SHARE
(Title of Class of Securities)
629409-40-0
(CUSIP Number)
HAMMOCK GROUP LTD.
PENTHOUSE SUITE
129 FRONT STREET
HAMILTON
BERMUDA HM 12
(441) 296 4545
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
APRIL 3, 2000
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
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
disclosures provided in a prior cover page.
The information required on 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).
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CUSIP No. 629409-40-0 13D Page 2
________________________________________________________________________________
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Hammock Group Ltd.
________________________________________________________________________________
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_] Not Applicable
(b) [_] Not Applicable
________________________________________________________________________________
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) [X]
________________________________________________________________________________
6. Citizenship or Place of Organization
British Virgin Islands
________________________________________________________________________________
7. Sole Voting Power
NUMBER OF 462,893
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY Not applicable
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 462,893
WITH _________________________________________________________________
10. Shared Dispositive Power
Not applicable
________________________________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting Person
462,893
________________________________________________________________________________
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) Not applicable [_]
________________________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
16.2%
________________________________________________________________________________
14. Type of Reporting Person (See Instructions)
CO
________________________________________________________________________________
Corporation............................................................. CO
Partnership............................................................. PN
Individual.............................................................. IN
Other................................................................... OO
<PAGE>
ITEM 1 SECURITY AND ISSUER
The title of the class of equity securities of Networks North, Inc., a
New York corporation (the "Company"), to which this statement relates is the
Company's Common Stock, par value $0.0467 per share (the "Common Stock"). The
address of the principal executive office of the Company is 14 Meteor Drive,
Etobicoke, Ontario, M9W 1A4.
ITEM 2. IDENTITY AND BACKGROUND
(a) The Reporting Person is Hammock Group Ltd. Exhibit A sets
forth the name, address, present principal occupation, and
citizenship of each officer and director of Hammock Group Ltd.
(b) The business address of Hammock Group Ltd. is Penthouse Suite,
129 Front Street, Hamilton, Bermuda HM12.
(c) Hammock Group Ltd. is an investment holding company and
strategic technology investor.
(d) During the past five years, neither Hammock Group Ltd. nor any
of the executive officers or directors of Hammock Group Ltd.
listed on Exhibit A has been convicted in a criminal
proceeding.
(e) None of the executive officers or directors of Hammock Group
Ltd. listed on Exhibit A in the last five years, been a party
to a civil proceeding of a judicial or administrative body and
as a result of which it was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws, or prohibiting any violation of such
laws.
(f) Hammock Group Ltd. is a corporation organized under the laws
of the British Virgin Islands.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of Common Stock to which this statement is being filed were
acquired for the aggregate purchase price of $1,388,679, the source of which was
working capital funds.
ITEM 4. PURPOSE OF TRANSACTION
Hammock Group Ltd. acquired the shares of Common Stock for investment
purposes and Hammock Group Ltd. holds shares of Common Stock for investment
purposes. From time to time Hammock Group Ltd. may acquire additional shares of
Common Stock or dispose of some or all of the shares of Common Stock owned by
it.
Planned changes were effected to the board of directors and several
officer positions. The board of directors now consists of:
Cameron Chell - Chairman
Frank Killoran - Director
Blair Layton - Director
David Bolink - Director
Don Pagnutti - Director
Adrian Towning - Director
Peter Rona - Director
Officers of the Company are now: Peter Rona - President and Chief
Executive Officer
Don Pagnutti -Executive VP and
Chief Operating Officer
Mark Truman - Secretary and Chief
Financial Officer
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With these new changes, the Network North Inc. board increases from six
to seven.
The Board of Directors approved a Term Sheet whereby V C Advantage
Limited Partnership will invest $3,000,000 by way of a Convertible Debenture
that will bear 10% interest. Conversion of the debenture will be at a price of
$3.00/share. Registration rights are attached to this financing. In connection
with the Convertible Debenture, the Company will issue 50,000 Warrants with each
warrant convertible into one share of common stock of the Company at a price of
$3.00 per share. This financing is subject to shareholder approval. See Exhibit
"C".
Hammock Group Ltd. has no other plans, which relate to or would result
in any of the items listed in paragraphs (a) through (j) of Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date hereof, Hammock Group Ltd. owns of record
462,893 shares of Common Stock, or 16.2% of the Company's
issued and outstanding shares of Common Stock;
(b) Hammock Group Ltd. has the power to direct the vote and the
power to direct the disposition of the 462,893 shares of
Common Stock that is owned beneficially by it;
(c) Not Applicable;
(d) No person other than Hammock Group Ltd. is known to have the
right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, any
securities owned by Hammock Group Ltd.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
In an Agreement of Purchase and Sale dated April 3, 2000, NetStar
Enterprises Inc. agreed to sell 462,893 shares of Common Stock of Networks North
Inc. to Hammock Group Ltd.
In an understanding between Hammock Group Ltd. and HDL Capital
Corporation and Jeffrey Kirsch, Hammock Group Ltd. paid a fee of $250,000 USD
plus Canadian Goods and Services Tax of 7% to HDL Capital Corporation and
Jeffrey Kirsch for terminating any rights to the Common Stock that they had
under the Letter of Agreement of January 12, 2000 with NetStar Enterprises Inc.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Attached as Exhibit A to this filing is a list of officers and
directors of Hammock Group Ltd.
Attached as Exhibit B to this filing is the Agreement of Purchase and
Sale, dated April 3, 2000, between Hammock Group Ltd. and NetStar Enterprises
Inc.
Attached as Exhibit C to this filing is the Term Sheet in connection
with a financing by V C Advantage Limited Partnership which has been approved by
the Board of Directors of Networks North, Inc.
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SIGNATURE.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
April 13, 2000
-------------------------
Date
/S/ PAUL LEMMON
-------------------------
Signature
Paul Lemmon, Director
-------------------------
Name & Title
-------------------------
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
<PAGE>
<TABLE>
Exhibit "A"
OFFICERS AND DIRECTORS OF HAMMOCK GROUP LTD.
<CAPTION>
- ----------------------- --------------- --------------------------------------------------
PRESENT PRINCIPAL
NAME CITIZENSHIP OCCUPATION
- ----------------------- --------------- --------------------------------------------------
<S> <C> <C>
Paul D Lemmon Canadian Managing Director, Voyager Group of Companies
7 Cedar Vale Lane
Devonshire
Bermuda DV06
- ----------------------- --------------- --------------------------------------------------
Sarah A Fellows British Executive Assistant, Voyager Group of Companies
#2 Berkley Road
Pembroke
HM07
Bermuda
- ----------------------- --------------- --------------------------------------------------
</TABLE>
<PAGE>
Exhibit "B"
AGREEMENT OF PURCHASE AND SALE
DATED this 3rd day of April, 2000
B E T W E E N:
HAMMOCK GROUP LTD., a company incorporated under the laws of
British Virgin Islands, with registered offices at PENTHOUSE
SUITE, 129 FRONT STREET, HAMILTON, HM12, BERMUDA
(hereinafter referred to as the "Purchaser")
and -
NETSTAR ENTERPRISES INC., a company incorporated under the
laws of Canada with registered offices at 2225 Sheppard Avenue
East, Suite 100, Toronto, Ontario M2J 5C2
(hereinafter referred to as the "Vendor")
WHEREAS Vendor beneficially owns 925,787 shares of the capital stock of
Networks North, Inc. (the "Company");
AND WHEREAS The Purchaser wishes to purchase 462,893 shares (the
"Shares") from the Vendor and the Vendor wishes to sell the Shares to Purchaser;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT:
1. PURCHASE AND SALE OF SHARES
- -- ---------------------------
a) On the terms and subject to the fulfilment of the conditions hereof,
the Vendor will sell and transfer to the Purchaser, and the Purchaser
will purchase and accept from Vendor, all, and not less than all, the
Shares in consideration of the Purchase Price (as defined in
subparagraph (b) below).
b) The price payable by the Purchaser to the Vendor for the Shares is U.S.
$3.00 per Share for a total purchase price of U.S. $1,388,679 (the
"Purchase Price").
c) At 12:00pm (EST) on April 3, 2000 at the offices of the Vendor, the
Purchaser will pay to the Vendor, by certified cheque, the Purchase
Price and the Vendor will deliver to the Purchaser a share certificate
representing the Shares.
d) Immediately following payment by the Purchaser to the Vendor
(satisfactory to the Vendor) of the Purchase Price, Vendor will deliver
to the Purchaser, resignations of the following directors of the
Company: Lorne Stephenson and Mary Currie.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
- -- -------------------------------------------
The Purchaser hereby represents and warrants to Vendor that:
<PAGE>
a) this Agreement, when executed and delivered by Purchaser, will
constitute a valid and binding agreement of Purchaser in accordance
with its terms. None of the execution and delivery of this Agreement,
the consummation of the transactions contemplated by this Agreement and
the compliance with or fulfilment of the terms and provisions of this
Agreement, will conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under the
Purchaser's constating documents or by-laws, any instrument, agreement,
mortgage, judgement, order, award or decree;
b) the Purchaser is not insolvent, has not committed an act of bankruptcy,
proposed a compromise or arrangement of its creditors generally, had
any petition or receiving order in bankruptcy filed against it, taken
any proceedings with respect to a compromise or arrangement or to have
a receiver appointed over any part of its assets, had an encumbrancer
take possession of any of its property, or had an execution or distress
become enforceable or levied upon any of its property; and
c) the Purchaser is buying the Shares as principal for its own account
without a view to distribution.
3. REPRESENTATIONS AND WARRANTIES OF VENDOR
- -- ----------------------------------------
The Vendor hereby represents and warrants to Purchaser that:
a) this Agreement, when executed and delivered by Vendor, will constitute
a valid and binding agreement of Vendor in accordance with its terms.
None of the execution and delivery of this Agreement, the consummation
of the transactions contemplated by this Agreement and the compliance
with or fulfilment of the terms and provisions of this Agreement ,will
conflict with or result in a breach of the terms, conditions or
provisions of or constitute a default under the Vendor's constating
documents or by-laws, any instrument, agreement, mortgage, judgement,
order, award or decree;
b) the Vendor is not insolvent, has not committed an act of bankruptcy,
proposed a compromise or arrangement of its creditors generally, had
any petition or receiving order in bankruptcy filed against it, taken
any proceedings with respect to a compromise or arrangement or to have
a receiver appointed over any part of its assets, had an encumbrancer
take possession of any of its property, or had an execution or distress
become enforceable or levied upon any of its property;
c) there are no outstanding agreements, calls, commitments, options,
subscriptions, warrants or other rights or privileges held by a third
party and granted by Vendor entitling it to acquire the Shares;
d) Vendor is the registered and beneficial owner and holder of the Shares
and has good and marketable title to the Shares, free and clear of all
encumbrances or claims of any kind and Vendor has not received any
notice of any adverse claim with respect to the Shares;
e) Vendor is not a "non-resident" of Canada under the INCOME TAX ACT
(CANADA);
f) Vendor acquired the Shares for its own account and not with a view to
distribution. In offering and selling the Shares to Purchaser, Vendor
is acting for its own account, and not as agent of the Company or as an
underwriter or distributor of the Shares.
4. RECEIPT FOR SHARES
- -- ------------------
The Purchaser hereby authorizes Morrison Brown Sosnovitch LLP to receive the
certificate representing the Shares on the Purchaser's behalf and to execute the
Vendor's form of receipt on behalf of the Purchaser.
<PAGE>
5. AGREEMENT CONDITIONAL
- -- ---------------------
The obligations of the Vendor hereunder, are conditional upon the Vendor's
successful completion of a sale of 462,893 shares to Hammock Group Ltd. on April
3, 2000.
6. GOVERNING LAWS
- -- --------------
This Agreement shall be interpreted and construed in accordance with the laws of
the Province of Ontario and the parties attorn to the jurisdiction of the Courts
of the Province of Ontario.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of day and year first written above.
HAMMOCK GROUP LTD.
Per: /S/ PAUL D LEMMON
Name: Paul D Lemmon
Title: Director
NETSTAR ENTERPRISES INC.
Per: /S/ LORNE C. STEPHENSON
Name: Lorne C. Stephenson
Title: Executive Vice President - Administration
Per: /S/ MARY CURRIE
Name: Mary Currie
Title: Vice President - Finance and Planning
<PAGE>
Exhibit "C"
NETWORKS NORTH INC.
US$3 MILLION
10% UNSECURED CONVERTIBLE DEBENTURE
ISSUER: Networks North Inc, a New York corporation
14 Meteor Drive, Toronto, Ontario, M9W 1A4
PURCHASER: VC Advantage Limited Partnership, an Ontario
limited partnership
365 Bay Street, 10th Floor
Toronto, Ontario M5H 2V2
AGGREGATE AMOUNT: $3,000,000
SECURITY: Convertible Unsecured Debenture due 3 years from
issue. The Debenture shall bear interest of 10%
per annum, payable upon conversion, redemption or
maturity. Interest is payable in cash
or stock at the Issuer's option
INITIAL CLOSE DATE: Within 30 days following the purchase of 925,787
shares of Networks North Inc. by 870537 Alberta
Limited or its nominee from NetStar Enterprises
Inc.
CONDITIONS TO INITIAL Shall include: (1) that the Issuer shall be a
CLOSING: reporting company under the Securities Exchange
Act of 1934; the common stock shall be quoted on
the Nasdaq Small Cap Market; (2) that the
purchase of 925,787 shares of Networks North Inc.
by 870537 Alberta Limited or its nominee
from NetStar Enterprises Inc. has taken place;
(3) satisfactory completion of the purchaser's
due diligence.
FUNDING AT INITIAL CLOSING: $3,000,000.
CONVERSION: The Convertible Debenture shall be convertible
into common stock of the Issuer from time to time
in such amounts as the Holder may specify, any
time after the Initial Close Date.
CONVERSION PRICE: $3.00 per share.
PURCHASERS' WARRANTS: On the Initial Close Date, the Issuer shall
issue to the Holder Warrants to purchase50,000
shares of common stock at $3.00 per share. The
Warrants shall carry a term of 4 years.
REGISTRATION OF COMMON STOCK: The Issuer shall file a Registration Statement on
Form S-3 covering the common shares underlying
the Convertible Debenture, and the common shares
underlying the Holders' Warrants within 30 days
of the Close Date. The Issuer shall cause the
Registration Statement to be declared effective
as soon as possible, and in any event within 90
days after the Initial Close Date. The Issuer
shall cause the Registration Statement to remain
effective until 30 days after the common shares
<PAGE>
underlying the Convertible Debenture have been
converted and the Warrants have been exercised or
expired. The Issuer shall also remain a reporting
company and cause its shares to be quoted on a
Nasdaq market until 30 days after the Convertible
Debenture has been converted and the Warrants
have been exercised or expired.
LIQUIDATED DAMAGES: If the Registration Statement is not filed
within 30 days or declared effective within 90
days, the Issuer shall pay to the Holder
penalties equal to 2% of the outstanding amount
per month, or pro rated portion thereof, until
the Registration Statement is declared
effective.
PLACEMENT AGENT: Thomson Kernaghan & Co. Limited
PLACEMENT FEE: 5% of the gross principal amount of the
Convertible Debentures, payable to the Placement
Agent.
INDEMNIFICATION: The Issuer shall indemnify the Placement Agent
against any and all liability.
PURCHASERS' LEGAL FEES AND The Issuer shall pay the Purchasers' reasonable
EXPENSES: legal fees and expenses.
DEFINITIVE AGREEMENT: The purchase and sale of the Convertible
Debenture is subject to the negotiation and
execution of a definitive agreement containing
such representations, warranties, terms and
conditions as the parties and their respective
counsel may agree.
CURRENCY: All dollar amounts are in $USD.
This term sheet is for preliminary discussion purposes only. It is not an offer
to buy or sell, nor the solicitation of any offer to buy or sell, any
securities. Any agreement between the Issuer and the Purchaser must be in
writing and signed by both parties.
