AmeriNet Xxxxx.xxx, Inc.
Accredited Investor Subscription Agreement
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OR REGULATIONS OF
ANY STATE OR OTHER JURISDICTION. RATHER, THEY ARE OFFERED IN RELIANCE ON THE
EXEMPTION FROM REGISTRATION REQUIREMENTS IMPOSED BY THE SECURITIES ACT PROVIDED
BY SECTION 4(6) THEREOF. IF STATE LAW IS NOT PREEMPTED UNDER APPLICABLE FEDERAL
LAW PERTAINING TO THE EXEMPTION UNDER SECTION 4(6) OF THE SECURITIES ACT, THE
SECURITIES REFERRED TO IN THIS SUBSCRIPTION AGREEMENT WILL ALSO BE OFFERED, SOLD
TO AND ACQUIRED BY THE HOLDER IN A TRANSACTION EXEMPT UNDER SECTION 517.061(11)
OF THE FLORIDA SECURITIES & INVESTOR PROTECTION ACT (THE "FLORIDA ACT"). THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA ACT AND IF IT HAS NOT BEEN
PREEMPTED BY APPLICABLE FEDERAL LAW, THEN ALL FLORIDA RESIDENTS HAVE THE RIGHT
TO VOID THE PURCHASE WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION
IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW
AGENT OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT RIGHT IS COMMUNICATED TO
SUCH PURCHASER, WHICHEVER OCCURS LATER.
TERMS:
1. General.
(a)(1)(A) This Subscription is part of a limited subscription by current
stockholders of AmeriNet Xxxxx.xxx, Inc. ("AmeriNet"; a publicly held
Delaware corporation formerly known as Equity Growth Systems, inc.,
with a class of securities currently registered under Section 12 of
the Securities Exchange Act of 1934, as amended [the "Exchange Act"]),
all of whom qualify as accredited investors, as that term is defined
in Rule 501 of Securities and Exchange Commission (the "Commission")
Regulation D promulgated under authority of the Securities Act of
1933, as amended ("Rule 501", "Regulation D" and the "Securities Act",
respectively) for an aggregate of up to _______ shares of AmeriNet's
Class A Preferred Stock, $0.01 par value (the "Class A Preferred
Stock").
(B) The attributes, rights and preferences of the Class A Preferred
Stock are set forth on the certificate of designation annexed hereto
and made a part hereof as exibit1(a)(1)(B).
(2)(A) The issuance of the Class A Preferred Stock is to be effected
without registration under the Securities Act pursuant to the
exemptive provisions of Section 4(6) of Securities Act, providing for
the issuance of restricted securities solely to accredited investors;
however, if it has not already done so, within 90 days after the
filing by AmeriNet of its report on Commission Form 10-KSB for last
fiscal year (the "Annual Report"), it will also:
(1) File either a proxy statement of Commission Schedule 14-A or an
information statement on Commission Schedule 14-C (both being hereinafter
generically referred to as the "Information Statement[s]") with the
Commission;
(2) Distribute the Information Statement and the Annual Report to the
Accredited Subscribers; and
(3) If legally eligible, prepare and file a registration statement on
Commission Form S-3 registering the shares of AmeriNet's common stock into
which the then
Certain matters discussed in this agreement pertain to "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Such statements involve risks and uncertainties including but not limited to
changes in general economic conditions, access to capital, renegotiation of
terms for acquisitions, abandonment of acquisitions based on due diligence
concerns or post acquisition developments; economic factors and governmental
regulations. Stock are convertible and use its best efforts to have the S-3
registration statement declared effective by the Commission.
(B) Subscription proceeds must be prepaid with the tender of the
executed form of this Agreement, and will be accepted by AmeriNet on
an Agreement per Agreement basis.
(C) The initial __________ shares will be offered at a subscription
price of $_.00 per share.
(3) AmeriNet will, immediately following closing on the first
subscriptions accepted in this limited offering, file a Form D with the
Securities and Exchange Commission, as required to permit the contemplated
subscription.
(b)(1) Current information concerning AmeriNet is contained on the SEC's
XXXXX web site on the Internet located at xxx.xxx.xxx (including annual
reports on Form 10-KSB containing certified financial statements, quarterly
reports on Form 10-QSB containing unaudited financial statements and
current reports of Form 8-K updating information, all of which are hereby
incorporated by reference herein and are collectively and generically
hereinafter referred to as the "Exchange Act Reports").
(2) The information contained in the Exchange Act Reports supersedes and
is hereby deemed to amend any contrary information contained in this
Agreement or the exhibits thereto that predate such filings, but is
superseded by the updating information, if any, annexed hereto and made a
part hereof as exhibit 1(b)(2) (the "Information Update").
(c)(1) The proceeds of this limited offering are to be used to provide
expansion capital for:
(A) Corporations to be acquired by AmeriNet;
(B) AmeriNet's current subsidiaries; and
(C) Working capital for AmeriNet (not more than 10% of the gross
proceeds derived from the limited offering).
(2) AmeriNet may elect to borrow funds required for the purposes
identified in Section 1(c)(1) and to repay such loans using proceeds of
this limited offering.
(3) AmeriNet's management is of the opinion that the net proceeds from the
offering would be sufficient to meet current operating requirements but
that AmeriNet will require substantial additional capital in order to
effect and properly capitalize acquisitions it may make in the future which
it intends to obtain through secondary public offerings or private
placements of its securities in amounts based on the circumstances then
existing; however, no assurances can be provided that either source of
funding will actually become available.
(4)(A) AmeriNet may temporarily invest any unexpended balances on hand
in government securities, certificates of deposit, money market funds.
(B) AmeriNet intends to make such investments only temporarily in
order to avoid any requirement to register AmeriNet under the
Investment Company Act of 1940.
(C) Any income realized from investment of the net proceeds of this
limited offering will be general revenues of AmeriNet.
(5) AmeriNet will provide reports on the actual use of proceeds on a
quarterly basis until all proceeds have been expended, in its periodic
reports to the Commission on Forms 8-K, 10-QSB and 10-KSB.
(d) Certain risks associated with AmeriNet are disclosed in the Exchange
Act Reports and supplemental risks associated with this limited offering
are disclosed in Section 3, all of which must be carefully reviewed by
prospective Accredited Subscribers prior to making an investment decision.
(e) Except as disclosed in the Exchange Act Reports, AmeriNet will not use
any general solicitation or advertising nor will it pay any commissions or
grant any discounts in conjunction with this limited offering.
2. Subscription Consideration.
(a) The undersigned Accredited Subscriber hereby subscribes for _________
shares of the Class A Preferred Stock at $____ per share ($_________ in the
aggregate) and will tender payment in full therefor immediately following
receipt of an executed copy of this Agreement evincing acceptance of this
subscription by AmeriNet.
(b) Within fifteen business days after acceptance of the subscription and
payment for the Class A Preferred Stock, AmeriNet's transfer agent will
issue and deliver to the Accredited Subscriber, at AmeriNet's expense, an
appropriately legended certificate for the Class A Preferred Stock, a form
of AmeriNet's common stock certificates being provided to the Accredited
Subscriber as an exhibit to this Agreement.
(c) If this subscription is not accepted or accepted only in part, then
AmeriNet will return all funds paid by the Accredited Subscriber other than
those allocated to any part of the subscription accepted, within five
business days after the date of rejection or partial acceptance.
3. Accredited Subscriber's Representations, Warranties and Covenants.
As a material inducement to AmeriNet's consideration of the Accredited
Subscriber's offer to acquire Shares of the Class A Preferred Stock, the
Accredited Subscriber represents, warrants and covenants to AmeriNet, as
follows:
(a) The Accredited Subscriber is familiar with the requirements for
treatment as an "accredited investor" under Regulation D and Section 4(6)
of the Securities Act and meets one or more of the definitions of an
"accredited investor" contained in Rule 501 promulgated under authority of
Securities Act and has, alone or together with his Offeree's
Representative, if any, (as hereinafter defined) such knowledge and
experience in financial matters that the Accredited Subscriber is capable
of evaluating the relative risks and merits of this subscription;
(b) The Accredited Subscriber acknowledges that he, she or it has, based
on his, her or its own substantial ex perience, the ability to evaluate the
transactions contemplated hereby and the merits and risks thereof in
general and the suitability of the transaction for the Accredited
Subscriber in particular;
(c)(1) The Accredited Subscriber understands that the offer and issuance of
the Class A Preferred Stock is being made in reliance on the
Accredited Investor's representation that he, she or it has reviewed
all of AmeriNet's Exchange Act Reports, including that contained in
exhibits filed with such reports, as well as that provided in the
exhibits to this Agreement and has become familiar with the
information disclosed therein.
(2) The Accredited Subscriber is fully aware of the material risks
associated with becoming an investor in AmeriNet and confirms that he,
she or it was previously informed that all documents, records and
books pertaining to this investment have been available from AmeriNet
and that all documents, records and books pertaining to this
transaction requested by the Accredited Subscriber have been made
available to the Accredited Subscriber.
(d) The Accredited Subscriber has had an opportunity to ask questions of
and receive answers from the officers of AmeriNet concerning:
(1) The terms and conditions of this Subscription Agreement and the
transactions contemplated hereby, as well as the affairs of AmeriNet
and related matters; and
(2) Any arrangements or proposed arrangements of AmeriNet in conjunction
with this limited offering that are not identical to those relating to
all subscribers to this limited offering.
(e) The Accredited Subscriber has had an opportunity to obtain additional
information necessary to verify the accuracy of the information referred to
in subparagraphs (a), (b), (c) and (d) hereof, as well as to supplement the
information in the Exchange Act Reports, as called for by Florida Rule
3E-500.005 [which describes information that would meet the informational
provisions of Section 517.061(11), Florida Statutes].
(f) The Accredited Subscriber has provided AmeriNet with personal and
business financial information which he, she or it agrees demonstrates the
Accredited Subscriber's general ability to bear the risks of the subject
trans action and suitability as a subscriber in a private offering and the
Accredited Subscriber hereby affirms the correctness of such information,
including, without limitation, the representations in the form of
investment letter annexed hereto and made a part hereof as exhibit 3(f).
(g) The Accredited Subscriber acknowledges and is aware that:
(1) The Class A Preferred Stock is a speculative investment with no
assurance that AmeriNet will be successful, or if successful, that
such success will result in payments to the Accredited Subscriber or
to realization of capital gains by the Accredited Subscriber on
disposition of the Class A Preferred Stock or of the shares of
AmeriNet common stock into which it is convertible;
(2) The Class A Preferred Stock being subscribed for and the shares of
common stock into which they are convertible have not been registered
under the Securities Act or under any state securities laws,
accordingly the Accredited Subscriber may have to hold such common
stock and may not be able to liquidate, pledge, hypothecate, assign or
transfer it; and
(3) While AmeriNet has agreed, if legally available, to file an S-3
registration statement with the Commission registering the shares of
AmeriNet common stock into which the shares of Class A Preferred Stock
outstanding at the time the S-3 registration statement becomes
effective are convertible and to use its best efforts to have the
Commission declare the S-3 registration statement effective, the
Commission and not AmeriNet will determine when and if, the S-3
registration statement will become effective.
(h) The Accredited Subscriber has obtained his, her or its own oral
opinion from his, her or its legal counsel to the effect that after an
examination of the transactions associated herewith and the applicable law,
no action needs to be taken by either the Accredited Subscriber or AmeriNet
in conjunction with this Subscription and the issuance of the Class A
Preferred Stock in conjunction therewith, other than such actions that have
already been taken in order to comply with the securities law requirements
of the Accredited Subscriber's state of domicile, other than such actions
or such restrictions on actions as have in fact been taken or avoided, as
the case requires; and
(i)(1) The certificates for the Class A Preferred Stock and the certificates
for any shares of AmeriNet's common stock into which they are
converted which are not subject to a then effective registration
statement filed with the Commission in compliance with the
requirements of the Securities Act, will bear restrictive legends and
AmeriNet's transfer agent will be instructed not to transfer the
subject securities unless they have been registered pursuant to
Sections 5 and 6 of the Securities Act or an opinion of counsel to the
Accredited Subscriber satisfactory to legal counsel to AmeriNet and
AmeriNet's president has been provided, to the effect that the
proposed transaction is exempt from registration requirements imposed
by the Securities Act, the Exchange Act and any applicable state or
foreign laws.
(2) The legend shall read as follows: "The securities represented by this
certificate were issued without registration under the Securities Act
of 1933, as amended, or comparable state laws in reliance on the
provisions of Section 4(6) of such act, and comparable state law
provisions. These securities may not be transferred pledged or
hypothecated unless they are first registered under applicable
federal, state or foreign laws, or the transaction is demonstrated to
be exempt from such requirements to AmeriNet's satisfaction."
4. Responsibility.
(a) The officers of AmeriNet will endeavor to exercise their best judgment
in the conduct of all matters arising under this Subscription Agreement;
provided, however, that this provision shall not enlarge, limit or
otherwise affect the liability of AmeriNet or its officers.
(b) The Accredited Subscriber shall indemnify and hold harmless AmeriNet;
any corporation or entity affiliated with AmeriNet; the officers, directors
and employees of any of the foregoing; or any professional adviser thereto,
from and against any and all loss, damage, liability or expense, including
costs and reasonable attorney's fees at trial or on appeal, to which said
entities and persons may be subject or which said entities and persons
incur by reason of or in connection with any misrepresentation made by the
Accredited Subscriber, any breach of any of the Accredited Subscriber's
warranties or the Accredited Subscriber's failure to fulfill any of the
covenants or agreements under this Subscription Agreement.
5. Survival of Representations, Warranties and Agreements.
The representations, warranties, covenants and agreements contained herein
shall survive the delivery of and the payment for the Class A Preferred Stock
being subscribed for.
6. Notices.
Any and all notices, designations, consents, offers, acceptances or any
other communication provided for herein shall be given in writing by registered
or certified mail which shall be addressed in the case of AmeriNet to AmeriNet
Xxxxx.xxx, Inc.; The Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx
000-X; Xxxx Xxxxx, Xxxxxxx 00000; Priority Attention: Secretary; and, in the
case of the Accredited Subscriber, to the address set forth at the end of this
Agreement, or to the address appearing on the books of AmeriNet or to such other
address as may be designated by the Accredited Subscriber or AmeriNet in
writing.
Accredited Subscriber Information
Please Print the following Information
Accredited Subscriber's Name: _______________________________________
Accredited Subscriber's Address: _______________________________________
Accredited Subscriber's Telephone Number:_______________________________________
Accredited Subscriber's Tax ** Number: _________________________________ ______
* If applicable (e.g., if the Subscriber is a corporation, partnership, joint
venture, etc.)
** FEIN or Social Security number
-
7. Miscellaneous.
(a) This Agreement shall be governed by, construed and enforced in
accordance within the laws of the State of Delaware, both substantive,
procedural (except for choice of law provisions) and remedial.
(b) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement shall be binding on and shall inure to the benefit of
the Parties and their respective successors, assigns, executors and
administrators, but this Agreement and the respective rights and
obligations of the Parties hereunder shall not be assumable by any Party
hereto without the prior written consent of the other.
(d) This Agreement represents the entire understanding and agreement
between the Parties hereto with respect to the subject matter hereof; and
cannot be amended, supplemented or modified except by an instrument in
writing signed by the Party against whom enforcement of any such amendment,
supplement or modification is sought.
(e) The failure of any provision of this Agreement shall in no manner
affect the right to enforce the other provisions of same, and the waiver of
any Party of any breach of any provision of this Agreement shall not be
construed to be a waiver by such Party of any succeeding breach of such
provision or waiver by such Party of any breach of any provision.
* * *
In Witness Whereof, I have executed this Agreement on behalf of the
Accredited Subscriber this ___ day of _____________________, 2000.
Accredited Subscriber
------------------------------------------
(Print or Type Name)
By: _________________________________
(Signature)
Subscription Accepted:
AmeriNet Xxxxx.xxx, Inc.
Dated: __________________, 2001.
By: _______________________
Xxxxxx X. Xxxxxxx
President
Attest: _______________________
Xxxxxxx X. Xxxxxxx
Secretary
Exhibit Index
Exhibit Description
1(a)(1)(B) Certificate of Designation
1(b)(2) Information Update
2(a) Form of the Class A Preferred Common Stock Certificate
3(f) Investment Letter
Exhibit 1(a)(1)(B)
CERTIFICATE OF DESIGNATION
PREFERENCES & RIGHTS OF CLASS A PREFERRED STOCK
AmeriNet Xxxxx.xxx, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does by
its president and its secretary and under its corporate seal hereby certify as
follows:
FIRST: That by the certificate of incorporation duly filed in the State of
Delaware, as currently amended, the Corporation is "authorized to
issue 5,000,000 shares of preferred stock, $0.01 par value, the
attributes of which are to be determined by resolution of the
Corporation's Board of Directors from time to time, prior to issuance,
in conformity with the requirements of Section 151 of the Delaware
General Corporation Law."
SECOND: That pursuant to the authority vested in the Board of Directors by the
certificate of incorporation, the board of directors at a meeting duly
convened an held on the 29th day of June, 2000, adopted the following
resolution:
RESOLVED, that the Board of Directors hereby creates and designates the
initial series of Preferred Stock, $0.01 par value, of the Corporation,
authorizes the issuance thereof, and fixes the designation and amount thereof
and the preferences and relative, participating, optional and other special
rights of such shares, and the qualifications, limitations or restrictions
thereof as follows:
1.1 Designation and amount.
The shares of the initial class of Preferred Stock shall be
designated "Class A Preferred Stock, (hereinafter sometimes
called "Preferred Stock"), and the number of shares which may
be issued shall be 500,000.
1.2 Dividends.
(A) The holders of shares of the Preferred Stock shall be entitled to
receive, out of the assets of the Corporation legally available
therefore, and as and when declared by the Board of Directors,
dividends of every kind declared and paid to holders of the
Corporation's Common Stock, at a rate per share twenty times that paid
per share of Common Stock.
(B) Each such dividend shall be paid to the holders of record of
shares of the Preferred Stock as they appear on the stock register of
the Corporation on the last day of the month next preceding the
payment date thereof.
1.3 Conversion.
The holders of shares of the Preferred Stock shall have the
right, at their option, to convert all or any part of such
shares into shares of Common Stock of the Corporation at any
time on and subject to the following terms and conditions:
(A) The shares of Preferred Stock shall be convertible at the office
of transfer agent for the Preferred Stock (the "Transfer Agent"), and
at such other place or places, if any, as the Board of Directors of
the Corporation may designate, into fully paid and non-assessable
shares (calculated as to each conversion to the nearest 1/100th of a
share) of Common Stock.
(B) The number of shares of Common Stock issuable upon conversion of
each share of the Preferred Stock shall be equal to the greater of:
(1) Twenty shares of Common Stock (the "Set Conversion Rate"); or
(2) The number of shares of Common Stock obtained by dividing the
gross price at which the preferred shares were issued by the
Corporation (the "Issuance Price") by 80% of the closing price
for the Corporation's Common Stock, as reported on the public
stock market or securities exchange (in both cases, registered as
such by the United States Securities Exchange Commission [the
"Commission"]) having the highest average trading volume in the
Corporation's securities (for purposes of illustration, the
following, being acceptable: The New York Stock Exchange the
NASDAQ Stock Market, the American Stock Exchange, the OTC
Bulletin Board operated by the NASD, the Electronic Pink Sheets
operated by the National Daily Quotation System, Inc.), on the
day the notice of conversion provided to the Corporation is
executed and dated by the holder with medallion signature
guarantee (the "Market Conversion Rate").
(C) The Set Conversion Rate shall be subject to adjustment from time
to time in certain instances as hereinafter provided.
(D) No payment or adjustment shall be made in respect of dividends on
the Common Stock or the Preferred Stock upon conversion of shares of
the Preferred Stock.
(E) No fractional shares of Common Stock will be issued, rather, one
fractional share per holder will be rounded up to a whole share.
(F) Before any holder of shares of the Preferred Stock shall be
entitled to convert the same into Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed and dated to the
Corporation with a medallion signature guarantee, at the office of the
Transfer Agent or at such other place or places, if any, as the Board
of Directors of the Corporation has designated, and shall give written
notice to the Corporation at said office or place that he elects to
convey the same and shall state in writing therein the name or names
(with addresses) in which he wishes the certificate or certificates
for Common Stock to be issued.
(G) The Corporation will, as soon as practicable thereafter, issue
and deliver at said office or place to such holder of shares of the
Preferred Stock, or to his nominee or nominees, certificates for the
number of full shares of Common Stock to which he shall be entitled as
aforesaid.
(H) Shares of the Preferred Stock shall be deemed to have been
converted as of the close of business on the date of the medallion
signature guarantee on the certificate surrendered for conversion as
provided above so long as it is received by the Corporation or the
Corporation's transfer agent no later than the tenth business day
thereafter, and the person or persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock as of the close of
business on such date.
1.4 Adjustments
(A) The Set Conversion Rate in effect at any time shall be subject to
adjustment as follows:
(1) The Set Conversion Rate in effect at the time of the record or
effective date for the following listed events shall be
proportionately adjusted so that the holder of any share of the
Preferred Stock surrendered for conversation after such time
shall be entitled to receive the kind and amount of shares which
he would have owned or have been entitled to receive had such
share of the Preferred Stock been converted immediately prior to
such time:
(a) If the Corporation declares a dividend on its Common Stock in shares
of its capital stock;
(b) If the Corporation subdivides its outstanding shares of Common Stock;
(c) If the Corporation combines its outstanding shares of Common Stock
into a smaller number of shares; or
(d) If the Corporation issues by reclassification of its Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing corporation) any shares
of its capital stock.
(2) Such adjustment shall be made successively whenever any event
listed above shall occur.
(3) In case the Corporation shall issue rights or warrants to all
holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than
the closing price for the Corporation's Common Stock, as reported
on the public stock market or securities exchange [as described
in Section 1.3(B)(2)], if the underlying shares of Common Stock
are to be pre-registered with the Commission (the "Current Market
Price"), or 50% of the Current Market Price if the underlying
shares of Common Stock are to be issued without registration
pursuant to exemptions from applicable securities laws
restricting their transferability as provided in Commission Rule
144 (the "Current Private Placement Price"), in each case on the
date fixed for the determination of stockholders entitled to
receive such rights or warrants, the Set Conversion Rate shall be
reduced by multiplying the Set Conversion Rate by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchaser would
purchase at such Current Market Price or Current Private
Placement Price (as the case may be) and the denominator shall be
the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for
such determination.
(4) In case the Corporation shall distribute to all holders of its
Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Corporation is the
continuing corporation) evidences of its indebtedness or assets
(excluding dividends or other distributions paid out of earned
surplus) or subscription rights or warrants (excluding those
referred to in Section 1.4(A)(3) above), the Set Conversion Rate
shall be adjusted so that the same shall equal the price
determined by multiplying the Set Conversion Rate in effect
immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on the date
fixed for such determination less the then fair market value (as
determined by the Board of Directors of the Corporation, whose
determination shall be conclusive and described in a Board
Resolution of the Corporation filed with the Transfer Agent) of
the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the
Common Stock, such adjustment to become effective immediately
prior to the opening of business of the day following the date
fixed for the determination of stockholders entitled to receive
such distribution.
(5) All calculations under this Section 1.4 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may
be.
(6) In case of any consolidation or merger of the Corporation with or
into any other corporation (other than a consolidation or merger
in which the Corporation is the continuing corporation), or in
case of any sale or transfer of all or substantially all of the
assets of the Corporation, the holder of each share of the
Preferred Stock shall after such consolidation, merger, sale or
transfer have the right to convert such share of the Preferred
Stock into the kind and amount of shares of stock and other
securities and property which such holder would have been
entitled to receive upon such consolidation, merger, sale or
transfer if he had held the Common Stock issuable upon the
conversion of such share of the Preferred Stock immediately prior
to such consolidation, merger, sale or transfer.
(B) In the event that at any time, as a result of an adjustment made
pursuant to this Section 1.4, the holder of any share of the Preferred
Stock surrendered for conversation shall become entitled to receive
any securities other than shares of Common Stock, thereafter the
amount of such other securities so receivable upon conversion of any
share of the Preferred Stock shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock set forth in the
foregoing subsections of this Sections 1.3 and the provisions of this
Section 1.3 with respect to the Common Stock shall apply on like terms
to any such other securities.
(C) No adjustment in the Set Conversion Rate shall be required unless
such adjustment would require a change of at least 1% in such price;
provided, however, that any adjustments which by reason of this
Section 1.4(C) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
(D) Whenever the Set Conversion Rate is adjustable as herein
provided:
(1) The Corporation shall promptly file with the Transfer Agent for
the Preferred Stock a certificate of the treasurer of the
Corporation setting forth the adjusted Set Conversion Rate and
showing in reasonably detail the facts upon which such adjustment
is based, including a statement of the consideration received or
to be received by the Corporation for any shares of Common Stock
issued or deemed to have been issued; and
(2) A notice stating that the Set Conversion Rate has been adjusted
and setting forth the adjusted Set Conversion Rate shall
forthwith be required, and as soon as practicable after it is
required, such additional notice shall be deemed to be required
pursuant to this Section 1.4(D)(2) as of the opening of business
on the tenth day after such mailing and shall set forth the Set
Conversion Rate as adjusted at such opening of business, and upon
the mailing of such additional notice no other notice need be
given of any adjustment in the Set Conversion Rate occurring at
or prior to such opening of business and after the time that the
next preceding notice given by mailing became required.
(E) In each of the following instances the Corporation shall cause to
be filed with the Transfer Agent and shall cause to be mailed, first
class postage prepaid, to the holders of record of the outstanding
shares of Preferred Stock, at least 10 days prior to the applicable
record date hereinafter specified, a notice stating the date on which
a record is to be taken for the purpose of such distribution or
rights, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such distribution
or rights are to be determined, or the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up:
(1) If the Corporation shall authorize the distribution to all
holders of its Common Stock of evidences of its indebtedness
or assets (other than dividends or other distributions paid
out of earned surplus); or
(2) If the Corporation shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or
purchase any shares of capital stock of any class or of any
other rights; or
(3) In the event of any reclassification of the Common Stock
(other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation or merger
to which the Corporation is a party and for which approval
of any stockholders of the Corporation is required, or of
the sale or transfer of all or substantially all of the
assets of the Corporation; or
(4) In the event of any reclassification of the voluntary or
involuntary dissolution, liquidation or winding up of the
Corporation.
1.5 Required Corporate Actions
(A) (1) The Corporation will at all times reserve, keep available
and be prepared to issue, free from any preemptive rights,
out of its authorized but unissued Common Stock, solely for
the purpose of effecting conversion of the Preferred Stock,
the full number of shares of Common Stock then issuable upon
the conversion of all outstanding Preferred Stock.
(2) The Corporation shall from time to time, in accordance with
the laws of the State of Delaware, endeavor to amend its
Certificate of Incorporation to increase the authorized
amount of its Common Stock if at any time the Authorized
amount of its Common Stock remaining unissued shall be not
sufficient to permit the conversion of all Preferred Stock.
(3) The Corporation shall, if any shares of Common Stock
required to be reserved for issuance upon conversion of
Preferred Stock pursuant to this section 1.3(F) required
registration with or approval of any governmental authority
under any Federal or state law before such shares may be
issued upon such conversion, endeavor to cause such shares
to be so registered or approved as expeditiously as
possible.
(B) (1) The Corporation will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of
Common Stock on conversion of shares of the Preferred Stock
pursuant hereto.
(2) The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved
in the issue or transfer and delivery of shares of Common
Stock in a name other than that in which the shares of the
Preferred Stock so converted were registered, and no such
issue or delivery shall be made unless and until the person
requesting such issue has paid to the Corporation the amount
of any such tax or has established to the satisfaction of
the Corporation that such tax has been paid.
(C) Whenever reference is made in Sections 1.3. 1.4 or 1.5 to the
issuance or sale of shares of Common Stock, the term "Common Stock"
shall include any stock of any class of the Corporation other than
preferred stock of any class with a fixed (absolutely or by reference
to an adjustment formula) limit on dividends and a fixed amount
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
1.6 Liquidation rights.
In the event of any liquidation or dissolution or winding up of the
Corporation, voluntary or involuntary, the holders of the Preferred Stock
shall be entitled to receive, subject to the rights of any other class of
stock which ranks senior to the Preferred Stock as to distribution of
assets on liquidation, but before any distribution is made on any class of
stock ranking junior to the Preferred Stock as to the payment of dividends
or the distribution of assets (including, without limitation, the
Corporation's Common Stock, a sum per share of Preferred Stock equal to the
Issuance Price per share.
1.7 Voting Rights.
The Preferred Stock shall entitle its holders to twenty votes for every
share held on terms identical to those of holders of twenty shares of
Common Stock, or if there is more than one class or series of Common Stock
outstanding, equal to twenty votes by those of shares of Common Stock
having the greatest voting rights per share.
THIRD: That said resolution of the Corporation's board of directors, and
the creation and authorization of issuance thereby of said series
of 500,000 shares of convertible preferred stock and
determination thereby of the dividend rate, liquidation
preferences, voting rights and provisions in respect to
conversion or exchange of said stock, were duly made by the Board
of Directors pursuant to authority as aforesaid and in accordance
with Sections 103, 151 and 102(4) of the Delaware General
Corporation Law.
Exhibit 1(b)(2)
Information Update
Provided in independent form separate from this Agreement, but the receipt
thereof is hereby acknowledged by the Accredited Subscriber:
Dated: ___________________, 2000
---------------------------
Accredited Subscriber's Signature
Exhibit 2(a)
Form of the Class A Preferred Stock Certificate
Provided in independent form separate from this Agreement, but the receipt
thereof is hereby acknowledged by the Accredited Subscriber:
Dated: __________________, 2000
---------------------------
Accredited Subscriber's Signature
Exhibit 3(f)
Form of Investment Letter
Date: __________________, 2001
Xxxxxx X. Xxxxxxx
President
AmeriNet Xxxxx.xxx, Inc.
The Crystal Corporate Center
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000-X
Xxxx Xxxxx, Xxxxxxx 00000
Re.: Subscription for AmeriNet Class A Preferred Stock
Dear Sir:
I hereby certify and warrant that I am acquiring _______ shares of AmeriNet
Xxxxx.xxx, Inc.'s Class A Preferred Stock $0.01 par value at a price of $_____
per share ("AmeriNet" and the "AmeriNet Stock," respectively). I hereby certify
under penalty of perjury that upon receipt of the Class A Preferred Stock, I
will be acquiring it for my own account for investment purposes without any
intention of selling or distributing all or any part thereof. I represent and
warrant that I currently hold shares of AmeriNet's common stock, that I am an
accredited investor (as that term is defined in Rule 501 of Regulation D
promulgated under authority of the Securities Act of 1933, as amended [the
"Securities Act"]) and that I am sophisticated in financial affairs or have
relied on the advice of someone sophisticated in financial affairs, and that I
am able to bear the economic risks of this investment and I do not have any
reason to anticipate any change in my circumstances, financial or otherwise, nor
any other particular occasion or event which should cause me to sell or
distribute, or necessitate or require my sale or distribution of the Class A
Preferred Stock. No one other than me has any beneficial interest in the Class A
Preferred Stock.
I further certify that I have consulted with my own legal counsel who,
after having been apprized by me of all the material facts surrounding this
transaction, opined to me, for the benefit of AmeriNet, that this transaction
was being effected in full compliance with the applicable securities laws of my
state of domicile.
I agree that I will in no event sell or distribute any shares of the Class
A Preferred Stock or the shares of AmeriNet's common stock into which they are
convertible unless, in the opinion of AmeriNet's legal counsel (based on an
opinion of my legal counsel) the subject securities may be legally sold without
registration under the Securities Act, and/or registration and/or other
qualification under then-applicable state or federal statutes, or the subject
securities shall have been so registered and/or qualified and an appropriate
prospectus, shall then be in effect.
I am fully aware that the Class A Preferred Stock is being offered and sold
by AmeriNet to me in reliance on the exemption provided by Section 4(6) or the
Securities Act which exempts the sale of securities by an issuer solely to
accredited investors, based on my certifications and warranties.
In connection with the foregoing, I consent to your legending my
certificates representing the Class A Preferred Stock to indicate my investment
intent and the restriction on transfer contemplated hereby and to your placing a
"stop transfer" order against the Class A Preferred Stock in AmeriNet's
securities transfer books until the conditions set forth herein shall have been
met.
I acknowledge by my execution hereof that I have had access to your books,
records and properties, and have inspected the same to my full and complete
satisfaction prior to my acquisition of the Class A Preferred Stock. I represent
and warrant that because of my experience in business and investments, I am
competent to make an informed investment decision with respect thereto on the
basis of my inspection of your records and my questioning of your officers.
Xxxxxx X. Xxxxxxx
____________ __,2001
Page 2
I further certify that my domicile is located at the following address:
Accredited Subscriber's Name: ______________________________________
Accredited Subscriber's Address: _______________________________________
Very truly yours,
Accredited Subscriber
(Signature and, if applicable, title)
