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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. . . . . . . . . . . . . . . . . . February 18, 1997
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LEGGOONS, INC.
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(Exact name of Registrant as specified in its charter)
Missouri 33-68570 43-1239043
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State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
400 South Lindell Vandalia, Missouri 63382
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(Address of principal executive offices) (Zip Code)
N/A
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(Former name or former address, if changed since last report)
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Item 1. Change in Control of Registrant.
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On February 18, 1997, the Company entered into an Agreement to License
Assets with Home Point of Sales, Inc., a Nevada corporation ("HPOS").
Pursuant to the Agreement to License Assets, the Company has licensed certain
of the assets of HPOS relating to its WAGERING GATE business. The WAGERING
GATE business includes the sales of HPOS manufactured Infinity to wagering
locations; the building of the global wagering GATE, whose business is to
receive incoming data transfer commands from the HPOS HOST Center and other
competitive HOST Centers who have received ATM and SMART card wagering payment
from offsite home or office locations and then who command the wagering GATE
to alert the recipient gaming companies that they have been paid and to
respond back with an acknowledgement of such payment; and, the general
promotion and education of home ATM and SMART card wagering over the Internet
through the HPOS Secure Computer Keyboard or over the telephone through the
HPOS stand alone Infinity unit. The consideration paid for such license was
the issuance of 2,900,000 shares of the common stock of the Company. Of this
amount, 2,755,000 shares, were placed in escrow. Such shares will not be
released from escrow unless and until the bid price of the Company's common
stock is at least $3.00 per share for any twenty consecutive day period as
reported on the NASD's Electronic Bulletin Board or Nasdaq's Small Capital
Market. If such condition does not occur prior to February 10, 1998, the
escrowed shares will be returned to the Company.
In accordance with the Agreement to License Assets, the current members
of the board of directors of the Company have resigned and have been replaced
by Thomas S. Hughes, James S. Clinton, Mary Lou Garcia, Jack M. Hall and James
Torres. Such persons will hold the position until the next annual
shareholders meeting. In addition, the Company's current president (who will
resign effective Febraury 24, 1997, pursuant to the terms of the Agreement to
License Assets) has entered into a one year Consulting Agreement with HPOS.
Item 6 Resignation of Registrant's Directors
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In accordance with the Agreement to License Assets, the current members
of the board of directors of the Company have resigned and have been replaced
by Thomas S. Hughes, James S. Clinton, Mary Lou Garcia, Jack M. Hall and James
Torres. Such persons will hold the position until the next annual
shareholders meeting.
There were no disagreements among the Company and its Board of Directors.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
10.16 Agreement to License Assets
10.17 Escrow Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) LEGGOONS, INC.
(Date) February 20, 1997
BY (Signature) /s/ James S. Clinton
(Name and Title) James S. Clinton, President
and Chief Executive Officer
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AGREEMENT TO LICENSE ASSETS
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This Agreement is made as of the 18th day of February, 1997, between
Leggoons, Inc., a Missouri corporation, and its assigns ("Leggoons"), and Home
Point of Sales, Inc., a Nevada corporation ("HPOS").
WHEREAS, HPOS owns certain devices which will permit members of the
public through the use of the telephone, personal computers and/or wireless
transmission of information to purchase lottery tickets, to engage in
off-track wagering on horse racing and dog racing to place wagers on sporting
and other events, and to engage in casino type gaming including games of
chance and games of skill, and
WHEREAS, Leggoons is interested in acquiring an exclusive, worldwide
license to use, implement and otherwise exploit such devices,
THEREFORE, in exchange for the respective consideration and promises of
the parties as more fully detailed below, IT IS AGREED AS FOLLOWS:
WITNESSETH:
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1. License of Assets.
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Subject to the terms and conditions below set forth, HPOS hereby conveys
to Leggoons an exclusive, worldwide license to use, implement and exploit all
of the assets of HPOS's business which is being conducted and/or proposed
under the name "BETTING, INC." whose business shall include the sales of HPOS
manufactured Infinity to wagering locations; the building of the Global
Wagering GATE, whose business is to receive incoming data transfer commands
from the HPOS HOST Center and other competitive HOST Centers who have received
ATM and SMART card wagering payment from off site home or office locations and
then who command the Wagering GATE to alert the recipient gaming companies
that they have been paid and to respond back with an acknowledgement of such
payment; and, the general promotion and education of home ATM and SMART card
wagering over the Internet through the HPOS Secure Computer Keyboard or over
the telephone through the HPOS stand alone Infinity unit (the "Business").
Without limiting the generality of the foregoing, the assets to be licensed
are as follows:
(a) Intangibles. All of the intangible assets of the Business,
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including but not limited to all devices, applications, products, patents,
patent applications, copyrights, tradenames, contracts, contract rights, any
and all distribution rights used or held by HPOS for use in the wagering
Business; approvals, consents, and authorizations required for the lawful
ownership, operation and maintenance of the Business (the "Instruments")
including access through HPOS's INFINITY system; all of the trade, goodwill,
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and other intangible assets of the Business including customer files, the
business name "Wagering Gate" and any and all other contract rights of HPOS
pertaining to the Business (all collectively called the "Intangibles").
(b) Tangibles. All of the tangible assets of the Business, including
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but not limited to all tangible personalty, inventory and other personal
property (all collectively called the "Tangibles") used or held for use in the
Business.
The Intangibles and Tangibles are collectively called the "Assets," and
are more particularly described on Exhibit "A" to the extent practicable. All
of HPOS's assets used in the Business are intended to be licensed to Leggoons
by the transaction contemplated hereby, whether or not described on Exhibit
"A."
2. Consideration.
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(a) Amount and Time of Payment. The total price for all of the
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Assets licensed, subject to adjustment, shall be 2,900,000 shares of
unregistered common stock of Leggoons which represents approximately 51% of
the outstanding common stock of the Leggoons as of the date hereof.
(b) Shares Subject to Cancellation. 95% of the shares of common
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stock issued to HPOS are to be delivered to an Escrow Agent and are subject to
cancellation on February 10, 1998 in the event the bid price of the common
stock of Leggoons is not at least $3.00 per share for any 20 consecutive day
period as reported on the NASD's Electronic Bulletin Board or Nasdaq's
SmallCap Market from the date hereof through February 10, 1998, which price is
to be adjusted ratably for stock splits and recapitalization.
(c) Option Shares. In the event that the bid price for the common
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stock of Leggoons is more than $3.00 per share for any 20 consecutive day
period, then HPOS shall have the option to purchase up to 13,822,000
additional shares of the Leggoons's common stock at an exercise price of $.30
per share. The shares granted under this option may not be issued unless and
until the number of the Leggoons's authorized common shares is increased in
accordance with the requirements of Missouri corporate law.
(d) Ownership Interest. It is the intention of the parties hereto
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that if and when any additional shares of the common stock of Leggoons are
issued to the public or any employees, HPOS' ownership interest in Leggoons
shall be and remain no less than sixty percent (60%) and that ownership
interest of the current shareholders of Leggoons shall, at that time, be no
less than ten percent (10%).
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3. Assignment and Assumption of Operational Contracts.
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Upon execution of this Agreement by both of the parties hereto (the
"Closing Date"), HPOS shall assign all of the written agreements, permits and
licenses relating to the operation of the Business which are listed on Exhibit
"A" attached hereto and incorporated herein by reference ("Operational
Contracts") and Leggoons shall assume all of HPOS's rights and obligations
thereunder. All fees arising under such Operational Contracts for all periods
of time prior to the Closing Date shall be the obligation of HPOS and all fees
arising for the period of time after the Closing Date shall be the obligation
of Leggoons.
4. Term of the License. The license being granted hereunder shall
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terminate on February 10, 1998 unless the bid price of the common stock of the
Leggoons is at least $3.00 per share for any 20 consecutive day period as
reported on the NASD's Electronic Bulletin Board or Nasdaq's SmallCap Market
from the date hereof through February 10, 1998, which price is to be adjusted
ratably for stock splits and recapitalization and HPOS receives the escrowed
shares. Should the conditions of escrow be met and the shares delivered, this
license shall remain in effect until thereafter cancelled by mutual consent of
the parties.
In the event that as of February 10, 1998, the License is terminated
pursuant to this Agreement, then the Escrow Agent shall return all Leggoons
shares held in escrow to Leggoons. Leggoons will return to HPOS, BETTING INC.
in its entirety, including but not limited to the Assets set forth on Exhibit
A and described in paragraph 1 herein. Any good will established by Leggoons
operating as BETTING INC. will belong exclusively to HPOS and will revert back
to HPOS.
5. Representations and Warranties of HPOS.
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To induce Leggoons to enter into this Agreement (which term, as used
herein, includes all Exhibits hereto) HPOS represents and warrants to Leggoons
that:
(a) Authority. HPOS is duly and fully qualified to transact business
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in the State of California as its business is currently conducted, and has
full power and authority to execute, deliver, perform this Agreement, and sell
the Business and assets pertinent thereto and described herein.
(b) No Breach or Violation. The execution, delivery and
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performance of this Agreement will not result in: (i) a breach or violation
by HPOS of, nor (ii) constitute default by HPOS under, nor (iii) create or
impose any lien or security interest upon any of the Assets pursuant to, any
Instrument, statute, ordinance, rule, regulation, agreement, instrument, or
order to which HPOS is a party or by which HPOS is bound. This Agreement
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constitutes the legal, valid, and binding obligation of HPOS, enforceable in
accordance with its terms.
(c) Title to Assets. HPOS is the owner of the Business with the full
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right to sell or dispose of it. HPOS has title to the Assets, free and clear
of any interest to secure payment or performance of an obligation, or which
retains or reserves such an interest for such purpose. On the Closing Date,
HPOS shall convey to Leggoons good and marketable title to the Business, free
and clear of all mortgages, liens, or other encumbrances, whether contingent
or otherwise. To the best of HPOS's knowledge, no third party consents are
required of HPOS to enter into this Agreement or to perform any of its
obligations. HPOS does not know, nor does it have reasonable grounds to know,
of any basis for assertion against it of any material claim or liability of
any nature.
(d) Material Contracts. There are no contracts (including written
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employment contracts), permits or agreements of any kind which materially
affect the Business. Leggoons shall not assume any obligation whatsoever
under any undisclosed agreements (whether written or oral). On the Closing
Date, HPOS shall assign to Leggoons each and all of the contracts, permits and
agreements set forth on Exhibit A. HPOS represents and warrants that it is a
party to each of the contracts, permits and agreements set forth on Exhibit A
with the full power and authority to assign each to Leggoons.
(e) Patents and Copyrights. HPOS has received no notice and
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otherwise has no reason to know of any claimed violation with respect to the
use of its products, devices, applications, business name or with respect to
the names of any of its products.
(f) Legal and Governmental Proceedings. To HPOS's best knowledge
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there is no litigation, legal, equitable (through arbitration or otherwise),
or administrative action pending or threatened which might affect in a
material and adverse way HPOS, the Business, the consummation of the purchase
and sale described in this Agreement, or Leggoons's right to enjoy quiet title
to the assets being purchased by Leggoons pursuant to this Agreement.
(g) No Misstatements or Omissions. No representation or warranty by
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HPOS contained herein contains any untrue statement of a material fact or
omits to state any fact necessary to make any of the statements contained in
such representations and warranties not misleading.
6. Leggoons's Representations and Warranties.
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(a) Organization and Authority. To induce HPOS to enter into this
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Agreement, Leggoons represents and warrants to HPOS that Leggoons is a
corporation duly organized, validly existing, and in good standing under the
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laws of the State of Missouri and where otherwise required; has full corporate
power and authority to execute, deliver and perform this Agreement and has
taken all action required by law and otherwise to authorize said execution,
delivery and performance. This Agreement constitutes the legal, valid and
binding obligation of the Leggoons enforceable in accordance with its terms.
(b) Leggoons is a reporting company with the SEC pursuant to Section
12(g) of the Securities Exchange Act of 1934, is current on its filings
thereunder and its reports (annual, quarterly and periodic) are accurate in
all material respects. Copies of the reports filed with the SEC during the
past 12 months have been furnished to HPOS.
(c) Legal and Governmental Proceedings. Except as stated in its
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reports filed with the SEC, there are no outstanding judgments against
Leggoons or its assets, and there are no actions, suits, or litigation
pending, or, to Leggoons's knowledge, threatened against Leggoons or its
assets, either before or by any Federal, state, or municipal court or other
governmental authority or instrumentality or involving any arbitration
tribunal or any other third party.
(d) No Misstatements or Omissions. No representation or warranty by
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Leggoons contained herein contains any untrue statement of a material fact or
omits to state any material fact necessary to make the statements contained in
such representations and warranties not misleading.
7. HPOS's Obligations.
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On execution, HPOS herewith delivers to Leggoons such instruments as may
be necessary to vest in Leggoons the licenses being granted hereunder.
8. Leggoon's Obligations.
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On execution, Leggoons will cause the following events to occur:
(a) Delivery of Certificates. Leggoons shall deliver to HPOS
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two certificates, both in restricted form, issued in the name of HPOS in the
amounts of 145,000 and 2,755,000 respectively, the latter to be held by The
First National Bank of Omaha, Escrow Agent, pursuant to the terms of the
Escrow Agreement of this same date. As long as the 2,755,000 shares remain in
the hands of Escrow Agent, HPOS shall have the right to vote such shares at
all duly called shareholders meetings.
(b) Resignation of Board of Directors and Officers. Leggoons
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shall deliver to HPOS the resignations of its board of directors and officers.
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9. HPOS' Acknowledgement and Release. HPOS herein acknowledges the
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existence of Leggtron Holdings, Inc., a Colorado corporation and a wholly
owned subsidiary of Leggoons ("Leggtron"). The only asset which will be held
by Leggtron is certain shares of the common stock of Infinitron Investments
International, Inc. It is contemplated that at a certain time in the future,
Leggtron will distribute the shares of Infinitron to the holders of record of
Leggoon's common stock as of January 31, 1997. HPOS herein acknowledges that
it has no right to participate in such distribution and releases any and all
claims it may have against Leggoons, Leggtron and/or each of their management
relating to or arising from such distribution.
10. Indemnification.
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(h) HPOS covenants and agrees to save Leggoons and its affiliates
harmless from all claims and liability (i) relating to the ownership and
operation by HPOS of the Business and the Assets for the period prior to the
Closing or (ii) arising from any breach of any representation or warranty by
HPOS in this Agreement or in any Instrument of Transfer or any other breach by
HPOS of this Agreement or any Instrument of Transfer.
(i) Leggoons covenants and agrees to save HPOS and its affiliates
harmless from all claims and liability (i) relating to Leggoons's ownership
and operation of the Business and the Assets from and after the Closing or
(ii) arising from any breach of any representation or warranty by Leggoons in
this Agreement or in any Instrument of Transfer or any other breach by
Leggoons of this Agreement or any Instrument of Transfer.
11. Noncompetition.
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HPOS covenants and agrees that, for the period commencing on the Closing
Date and continuing until the fifth (5th) anniversary thereof, HPOS shall not,
directly or indirectly, manage, operate, join, control, participate, or become
interested in, or be connected with (as an employee, consultant, partner,
officer, director, shareholder, or investor in any business in direct
competition with the wagering Business, as defined herein, licensed by
Leggoons from HPOS operating in the United States of America or in any other
country where Leggoons will conduct wagering operations.
The parties hereto agree that in the event that the scope of the covenant
set forth in this paragraph is deemed too broad in any court proceeding, the
court may reduce such scope to that which it deems reasonable under the
circumstances.
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12. Miscellaneous.
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(a) Construction. The language in all parts of this Agreement
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shall, in all cases, be construed as a whole, according to its fair meaning,
and neither strictly for nor against either HPOS or Leggoons. The
unenforceability or invalidity of any paragraph or subparagraph of this
Agreement shall not affect the validity of the Agreement. When the context so
requires in this Agreement, the singular number includes the plural and vice
versa.
(b) Captions. The paragraph captions and headings in this
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Agreement are for convenience and reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
(c) Multiple Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when counterparts which together contain the signatures of each
party hereto shall have been delivered to HPOS and Leggoons. In proving this
Agreement it shall not be necessary to produce or account for more than one
such counterpart.
(d) Entire Agreement. This Agreement represents the entire
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understanding of the parties, supersedes all other and prior memoranda and
agreements between the parties and may not be modified or amended, except by a
written instrument bilaterally executed designating specifically the terms and
provisions so modified and amended. There are no representations, warranties,
covenants, promises or agreements on the part of either party to the other
hereto which are not explicitly set forth herein.
(e) Expenses of the Parties. All expenses incurred by or on
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behalf of the parties in connection with the authorization, preparation and
consummation of this Agreement, including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants employed by the
parties hereto in connection with the authorization, preparation, execution
and consummation of this Agreement, shall be borne solely by the party who
shall have incurred the same.
(f) Finders and Brokers. Each party hereto represents and warrants
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to the other party that it has not incurred any obligations or liabilities,
contingent or otherwise, for brokerage or finder's fees or agent's commissions
or other like payment in connection with this Agreement or the transactions
contemplated hereby for which any party will have any liability. Each party
hereto agrees to indemnify and hold the other party hereto harmless against
and in respect of any breach by it of the provisions of this Paragraph (f).
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(g) Binding Effect. This Agreement shall be binding upon and shall
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inure to the benefit of the parties hereto, and their respective successors
and assigns. Any breach of this Agreement is subject to action only in State
District Court at Omaha, Nebraska, for damages, actual and punitive, specific
enforcement and mandatory injunctive relief and HPOS agrees not to object to
action in State District Court at Omaha hereunder based on an inconvenient
forum or venue or similar objections.
(h) Applicable Law. This Agreement shall be construed in accordance
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with the laws of the State of Nebraska.
(i) Cumulative Rights and Remedies. Except as expressly provided
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herein to the contrary, each and all of the rights and remedies allowed at law
and in equity in like case, shall be cumulative, and the exercise of one right
or remedy shall not be exclusive of the right to exercise or resort to any and
all other rights or remedies provided for in this Agreement or at law or in
equity.
(j) Further Assurances. Each party hereto, at its own expense,
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agrees in order to consummate the transaction provided for herein and to
accomplish the purpose of this Agreement, to execute all documents and take
all such other action, whether prior to, at or after the Closing, as may be
necessary or proper to complete the provisions set forth in this Agreement.
(k) Prevailing Party. The prevailing party in any legal proceedings
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brought to enforce any rights under this Agreement shall be entitled to
reimbursement of all reasonable costs and expenses, including, but not limited
to, attorneys' fees at all judicial levels.
(l) Amendment to or Modifications of Agreement. This Agreement may
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not be amended or modifications made hereto without the prior written consent
of James S. Clinton and Thomas Hughes, or either of their respective executors
or assigns. Any attempt to amend or modify the without such written consent
shall be null and void.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"HPOS"
HOME POINT OF SALE, INC.
a Nevada corporation
By: _____________________________________
Thomas S. Hughes, Chairman of
the Board
"LEGGOONS"
LEGGOONS, INC.
a Missouri corporation
By: _____________________________________
James S. Clinton, President
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EXHIBIT A
ASSETS INCLUDED
1. The name BETTING INC as trademarked by HPOS.
2. The WAGERING GATE as defined in the Agreement.
3. The specific application of WAGERING with an ATM card or SMART card
with the Secure Computer Keyboard. Any other uses of the Secure Computer
Keyboard, such as Bill Pay or Impulse Purchase that are not WAGERING
transactions, are not included.
4. The HPOS developed Merchant Response Software for the specific
application only of transacting Off Site ATM and SMART card WAGERING through
the WAGERING GATE.
5. HPOS' interest in the use of and revenue from the HPOS Personal
Encrypted Remote Financial Electronic Card transaction relating to the
WAGERING Business in all HPOS partner countries.
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ESCROW AGREEMENT
Home Point of Sale, Inc. ("HPOS") and Leggoons, Inc. ("Leggoons") and
First National Bank of Omaha (hereinafter referred to as "Escrow Agent"),
mutually agree as follows:
1. Purpose. This Agreement is for the purposes of providing an
arrangement which will insure that 2,755,000 shares of common stock of
Leggoons deposited with Escrow Agent will be delivered to HPOS or cancelled
pursuant to the terms hereof.
2. Escrow Items. Escrowed pursuant hereto is certificate no.
________ for 2,755,000 shares of common stock of Leggoons.
3. Source of the Leggoons Stock. HPOS and Leggoons have entered into
an agreement for the license by HPOS to Leggoons of 100% of the business and
assets relating to "Wagering Gate" in exchange for certain Leggoons stock.
4. Appointment. HPOS and Leggoons hereby appoint the Escrow Agent to
serve as Escrow Agent for the purposes set forth herein and the Escrow Agent
hereby accepts the appointment. Escrow fee is ___________________.
5. Release of Escrow Items. Escrow items may be released from this
escrow to HPOS only upon notice that on or before February 10, 1998 the common
stock of Leggoons has traded at prices of $3.00 or more for 20 consecutive
trading days as reported by the NASD's Bulletin Board or NASDAQ's SmallCap
Market. Market prices are to be adjusted for stock splits and
recapitalizations. In the event the common stock fails to meet such trading
prices by February 10, 1998, the certificate is to be returned to the Transfer
Agent of Leggoons for cancellation.
6. Escrow Agent's Responsibility. HPOS and Leggoons agree to provide
to the Escrow Agent all information necessary to facilitate the
administration of this Agreement and the Escrow Agent may rely upon any
representation so made. In performing any of his duties hereunder, the Escrow
Agent may not be held to take notice of any terms of any Agreement or rights
with respect thereto unless specifically stated herein. HPOS and Leggoons
hereby agree to indemnify and hold harmless the Escrow Agent against any and
all claims, losses, damages, liabilities, costs and expenses, including
litigation, arising hereunder, which might be imposed or incurred for any acts
or omissions of the Escrow Agent, except for acts or omissions of the Escrow
Agent that involve gross negligence or willful misconduct.
7. Amendments. This Agreement may not, in any manner, be amended or
modified unless the prior written consent of James S. Clinton and Thomas
Hughes, or thier respective executors or assigns, is obtained.
7. Governing Law and Captions. This Agreement shall be governed and
interpreted by the laws of the State of Nebraska. The captions in this
Agreement are included for convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise affect the construction or
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effect of this Agreement.
8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which togeth
er shall constitute one and the same instrument.
Dated: __________________, 1997
HOME POINT OF SALE, INC.
By_________________________________
Thomas S. Hughes, Chairman of
the Board
LEGGOONS, INC.
By_________________________________
James S. Clinton, President
ESCROW AGENT: FIRST NATIONAL BANK
OF OMAHA
By________________________________
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