Superseder & Exchange Agreement
This Superseder & Exchange Agreement (the "Agreement") is made and entered into
by and among AmeriNet Xxxxx.xxx, Inc., a publicly held Delaware corporation with
a class of securities registered under Section 12(g) of the Exchange Act
("AmeriNet"); The Yankee Companies, Inc., a Florida corporation ("Yankees");
Xxxxxxx.xxx, Inc., a Florida corporation ("WRI"); and, Xxxxxxx X. Xxxxxx ("Xx.
Xxxxxx;" AmeriNet, Yankees, WRI and Xx. Xxxxxx being sometimes hereinafter
collectively referred to as the "Parties" or generically as a "Party").
Preamble:
WHEREAS, Xx. Xxxxxx was the promoter, parent, founder and controlling
stockholder of Xxxxxxx.xxx, Inc., a former Florida corporation that was merged
into American Internet Technical Center, Inc., a Florida corporation ("Old WRI"
and "American Internet," respectively) and currently serves as a member of WRI's
board of directors and as WRI's president and chief executive officer, and in
such roles, on November 11, 1999, participated in a reorganization involving the
merger of Old WRI into American Internet, a subsidiary of AmeriNet pursuant to
Code Section 368(a)(2)(D), as a result of which Old WRI, by operation of law
became, an integrated component of American Internet, which became WRI; and all
of Old WRI's capital stock was converted into 500,380 shares of AmeriNet's
common stock (the "Old WRI Stockholders' AmeriNet Shares"); and
WHEREAS, AmeriNet has loaned WRI $512,217 in expansion and operating funds
(the "AmeriNet Loans") but WRI has been unable to meet the projections pursuant
to which the AmeriNet Loans were provided, and AmeriNet advised WRI that it
would not make any further funds available to it; and
WHEREAS, WRI, Xx. Xxxxxx and AmeriNet submitted their disagreements to
mediation and have agreed to amicably resolve their differences as set forth
below; and
WHEREAS, in order to induce Yankees, which serves as strategic consultant
to AmeriNet and as its principal creditors, to release a lien on all of WRI's
assets and securities which Yankees currently holds, AmeriNet and WRI have
requested that Yankees accept the consideration set forth below; and
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the Parties, intending to be legally bound, hereby agree as follows:
Witnesseth:
Article I
Definitions
The following terms or phrases, as used in this Agreement, will have the
following meanings:
(A) Accredited Investor:
An investor that meets the requirements for treatment as an accredited
investor, as defined in Rule 501(a) of Commission Regulation D, which
provides as follows:
Accredited investor. "Accredited investor" will mean any person who comes
within any of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the time of the
sale of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act, or any savings
and loan association or other institution as defined in section
3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to
section 15 of the Securities Exchange Act of 1934; any insurance
company as defined in section 2(13) of the Act; any investment
company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of
that Act; Small Business Investment Company licensed by the U.S.
Small Business Administration under section 301(c) or (d) of the
Small Business Investment Act of 1958;
any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; employee benefit
plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan
fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company,
or registered investment adviser, or if the employee benefit plan
has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
(2) Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(4) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of
that issuer;
(5) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(6) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same
income level in the current year;
(7) Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described
in ss.230.506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
investors.
(B)
(1) Aggregate AmeriNet Investment: All sums invested in WRI by
AmeriNet, including funds advanced, liabilities paid directly and
the aggregate amount of the AmeriNet Loans immediately prior to
the Closing.
(2) Class A Bonds The loan vehicle to be provided by New WRI to
Yankees, as described in Article II, Section (D)(3)(d).
(C) (1) Closing: The effectuation of the transactions called for by this
Agreement, including exchange of securities, execution of
instruments, stock certificates, stock powers, releases and other
documents.
(2) Closing Date: The date on which the Closing takes place.
(D) Code:
The Internal Revenue Code of 1986, as amended.
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(E) Commission:
The United States Securities and Exchange Commission
(F) XXXXX:
The Commission's electronic data gathering and retrieval system accessible
by the public at the Commission's website located at xxxx://xxx.xxx.xxx.
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(G) Exchange Act:
The Securities Exchange Act of 1934, as amended.
(H) Exchange Act Reports: The reports on Commission Forms 10-SB, 10-KSB, 10-QSB
and 8-K and Commission Schedules 14A and 14C, that AmeriNet is required to
file pursuant to Sections 13, 14, 15(d) and 12(g) of the Exchange Act.
(I) Florida Act:
The Florida Securities and Investor Protection Act
(J) Florida Rule:
Florida Rule 3E-500.005, which provides as follows: Disclosure requirements
of Section 517.061(11)(a)3., Florida Statutes.
(1) Transactions by an issuer which do not satisfy all of the
conditions of this rule will not raise any presumption that the
exemptions provided by Section 517.061(11), Florida Statutes is
not available for such transactions. Attempted compliance with
this rule does not act as an election; the issuer can also claim
the availability of Section 517.061(11), Florida Statutes,
outside this rule.
(2) The determination as to whether sales of securities are part of a
larger offering (i.e., are deemed to be integrated) depends on
the particular facts and circumstances. In determining whether
sales should be regarded as part of a larger offering and thus
should be integrated, the facts described in Rule 3E-500.01
should be considered.
(3) Although sales made pursuant to Section 517.061(11), Florida
Statutes, and in compliance with this rule, are exempt from the
registration provisions of this Act, such exemption does not
avoid the antifraud provisions of Sections 517.301 and 517.311,
Florida Statutes.
(4) The provisions of this rule will apply only to transactions which
are consummated with persons in the State of Florida.
(5) The requirements of Sections 517.061(11)(a)(3), Florida Statutes,
that each purchaser, or his representative be provided with or
given reasonable access to full and fair disclosure of all
material information will be deemed to be satisfied if either
paragraphs (5)(a) or (5)(b) are complied with:
(a) Access to or Furnishing of Information. Reasonable access
to, or the furnishing of, material information will be
deemed to have been satisfied if prior to the sale a
purchaser is given access to the following information:
1. All material books and records of the issuer; and
2. All material contracts and documents relating to the
proposed transaction; and
3. An opportunity to question the appropriate executive
officers or partners.
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(6) In the case of an issuer that is subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the provisions of paragraph (5)(b) of this rule will
be deemed satisfied by providing the following:
(a) The information contained in the annual report required to
be filed under the Securities Exchange Act of 1934 or a
registration statement on Form S-1 [CCH Federal Securities
Law Reporter P. 7121 ] under the Securities Act of 1933,
whichever filing is the most recent required to be filed,
and the information contained in any definitive proxy
statement required to be filed pursuant to Section 14 of the
Securities Exchange Act of 1934 and in any reports or
documents required to be filed by the issuer pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934, since the filing of such annual report or registration
statement; and
(b) A brief description of the securities being offered, the use
of the proceeds from the offering, and any material changes
in the issuer's affairs which are not disclosed in the
documents furnished.
(K) (1) American Internet:
WRI prior the merger with Old WRI.
(2) New WRI:
WRI, as structured immediately following the Closing.
(3) Old WRI:
Xxxxxxx.xxx, Inc., a Florida corporation with an independent
existence prior to November 11, 1999, which was merged into
American Internet.
(4) WRI:
The corporation that survived the merger of Old WRI and American
Internet.
(L) Reorganization:
The corporate events effected in reliance on Section 368(a)(2)(D) of the
Code which took place on or about November 11, 1999, between AmeriNet, WRI
Acquisition and Old WRI, as a result of which WRI became a wholly owned
subsidiary of AmeriNet and the former Old WRI securities holders became
AmeriNet securities holders.
(M) Reorganization Agreement:
The agreement between AmeriNet and all of the former stockholders of Old
WRI closed on or about November 11, 1999, pursuant to Old WRI was merged
into American Internet creating WRI, all of the Old WRI securities were
converted into AmeriNet securities and WRI became a wholly owned subsidiary
of AmeriNet, a copy of the Reorganization Agreement having been filed with
the Commission at its XXXXX website.
(N) Securities Act:
The Securities Act of 1933, as amended.
(O) Service:
The United States Internal Revenue Service.
(P) All undefined financial terms will have the meanings ascribed to them by
generally accepted accounting practices, consistently applied on the
accrual basis of accounting, as modified by rules of the Commission
including Regulations SB and SK.
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(Q) Additional terms characterized by initial capital letters are defined in
this Agreement immediately following their first use.
Article II
Operative Provisions
Subject to the condition precedent that all actions required to be taken in
order to comply with the securities and other laws of each state having
jurisdiction over the transactions called for under this Agreement, the Parties
hereby agree as follows:
(A) Xx. Xxxxxx hereby agrees to:
(1) Immediately return all of the AmeriNet Shares he received in
conjunction with the merger of Old WRI into American Internet (500,380
shares), and any other securities or distributions he received as a
consequence of having held AmeriNet Shares, to AmeriNet and to waive
any obligations of any kind that AmeriNet or its affiliates have to
him or to any of his affiliates; and
(2) Release AmeriNet and its affiliates from any obligations to him or his
affiliates, from the beginning of time until the Closing on this
Agreement, other than the obligations specifically undertaken by
AmeriNet pursuant to this Agreement.
(B) In consideration for return of Xx. Xxxxxx'x AmeriNet Shares, the covenants
of New WRI set forth below and the other actions performed or to be
performed by Xx. Xxxxxx, WRI and New WRI, as required by this Agreement,
AmeriNet hereby agrees to:
(1) (a) Convert the WRI Loans to additional paid in capital of New WRI;
(b) Cause a recapitalization of WRI prior to Closing so that its
authorized securities are forward split from 7,500 shares, $1.00
per share par value (as is the current case), to 15,000,000
shares, $0.0005 par value per share (the "New WRI Shares";
(c) At Closing, convey to:
1. Xx. Xxxxxx, 3,875,000 of the New WRI Shares, in reliance on
the exemptive provisions of Section 4(6) of the Securities
Act and the Florida Rule;
2. Xxxxxxx X. Xxxx, Esquire, New WRI's general counsel ("Xx.
Xxxx"), 500,000 of the New WRI Shares, in reliance on the
exemptive provisions of Section 4(6) of the Securities Act
and the Florida Rule;
3. A qualified stock plan under the Code for the benefit of
employees of New WRI not directly or indirectly related to
Xx. Xxxxxx (the "Employee Plan"), 250,000 of the New WRI
Shares, in reliance on the exemptive provisions of Section
4(6) of the Securities Act and the Florida Rule; and
4. Yankees, 1,500,000 of the New WRI Shares, in reliance on the
exemptive provisions of Section 4(6) of the Securities Act
and the Florida Rule, in consideration of Yankees release of
all the New WRI Shares from its lien, provided that all such
shares will be included in the first notification statement
or registration statement on Commission Form SB-2 (or if
eligible, Form SB-1, or any successor forms thereto) filed
for or on behalf of New WRI with the Commission.
(d) After registration of the New WRI Shares with the Commission
pursuant to Section 12(g) of the Act, as required below, then:
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1. If legally permitted pursuant to Staff Legal Bulletin Number
5 of the Commission's Division of Corporate Finance,
distribute 1,375,000 of the New WRI Shares to AmeriNet's
stockholders of record as of the earliest date legally
permitted under applicable Delaware corporate law and
applicable securities laws and regulations, including,
without limitation, Commission Rule 10b-17; or, if not so
legally permitted
2. Distribute 1,375,000 of the New WRI Shares to
AmeriNet's stockholders of record as of the earliest date
legally permitted under applicable Delaware corporate law
and applicable securities laws and regulations, including,
without limitation, Commission Rule 10b-17, after their
registration with the Commission on Form SB-2 (or, if
legally available, Form SB-1 or any successor forms
thereto), as required below.
(e) Transfer the remaining 7,500,000 New WRI Shares to Xxxx X.,
Perry, Esquire, as escrow agent for the parties (the "Escrow
Agent"), for release on the following terms:
1. 2,500,000 of the New WRI Shares (less up to 250,000 shares
that Xx. Xxxxxx may, in his discretion, instead allocate to
the Employee Plan) will be conveyed to Xx. Xxxxxx, if prior
to December 31, 2001, New WRI attains and documents in
audited financial statements for New WRI, prepared on the
accrual basis and in accordance with GAAP, consistently
applied, and, Commission Regulations SB or SK, as
applicable, net, pre-tax profits (excluding interest on the
Class A Bonds) of $50,000 for the first complete fiscal year
following the Closing;
2. 2,500,000 of the New WRI Shares (less up to 250,000 shares
that Xx. Xxxxxx may, in his discretion, instead allocate to
the Employee Plan) will be conveyed to Xx. Xxxxxx, if prior
to December 31, 2002, New WRI attains and documents in
audited financial statements for New WRI, prepared on the
accrual basis and in accordance with GAAP, consistently
applied, and, Commission Regulations SB or SK, as
applicable, net, pre-tax profits (excluding interest on the
Class A Bonds) of $75,000 for the second complete fiscal
year following the Closing;
3. 2,500,000 of the New WRI Shares (less up to 250,000 shares
that Xx. Xxxxxx may, in his discretion, instead allocate to
the Employee Plan) will be conveyed to Xx. Xxxxxx, if prior
to December 31, 2003, New WRI attains and documents in
audited financial statements for New WRI, prepared on the
accrual basis and in accordance with GAAP, consistently
applied, and, Commission Regulations SB or SK, as
applicable, net, pre-tax profits (excluding interest on the
Class A Bonds) of $112,500 for the third complete fiscal
year following the Closing;
4. During any of the years that New WRI fails to attain the
foregoing net, pre-tax profits, the shares that would have
been conveyed to Xx. Xxxxxx will instead be issued as a
stock dividend to all of WRI's stockholders of record as of
the earliest date after determination that Xx. Xxxxxx was
not entitled to distribution legally permitted under
applicable Florida corporate law and applicable securities
laws and regulations, including, without limitation,
Commission Rule 10b-17, such distribution, if legally
permitted, to be made in reliance on the exemptive
provisions set forth in Staff Legal Bulletin Number 5 of the
Commission's Division of Corporate Finance, or otherwise,
after registration with the Commission on Commission Form
SB-2 or any successor form thereto.
(C) In consideration for the Agreements of Xx. Xxxxxx and AmeriNet in Sections
2(A) and 2(B), New WRI hereby agrees as follows:
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(1) It will take all actions required by it in order to assure compliance
with the provisions of Sections 2(A) and 2(B) of this Agreement,
including requirements for registration of its securities with the
Commission under Section 12(g) of the Exchange Act, Section 5 of the
Securities Act and any applicable state securities laws or
regulations.
(2) It will refrain from taking any action that would violate or
facilitate the violation of any of the provisions of Sections 2(A) and
2(B) of this Agreement;
(3) It hereby waives any obligations of any kind that AmeriNet, Yankees or
their affiliates have to it, and releases AmeriNet, Yankees and their
affiliates from any obligations to it, from the beginning of time
until the Closing on this Agreement, other than the obligations
specifically undertaken by AmeriNet and Yankees pursuant to this
Agreement.
(4) It will, on a continuing basis, assure that a designee of AmeriNet is
a full voting member of the new WRI board of directors.
(5) For a period of two years following the Closing:
(a) No additional New WRI securities will be authorized or issued
without the prior written consent of AmeriNet and Yankees,
provided, however, that: such consent may not be withheld:
1. As to up to 250,000 shares per year issuable to the Employee
Plan pursuant to the provisions of this Agreement, provided
that no such shares may be issued without a required vesting
period of at least one year; and
2. If the authorization or issuance would not result in a
decrease in either the net tangible value per share or the
stockholders' equity per share of New WRI's Capital Stock.
(b) New WRI will continue to be subject to the restrictions on
affiliated transactions imposed by Section 607.0901, et. seq.,
Florida Statutes; and
(c) AmeriNet, Yankees and their designees will have a right of first
refusal to subscribe for all future issuances of equity
securities or securities convertible into equity securities by
New WRI or its successors in interest other than those issuable
as contemplated by this Agreement (the "Right of First Refusal"),
such right to be exercised within thirty business days after
receipt of a notice of a firm offer, such notice to include a
copy of the offer and all related materials (the "Financing
Notice").
1. Exercise of the right of first refusal will be affected by
tender of a notice accepting the offer and closing on the
exercise will be in accordance with the terms of the offer.
2. The failure on any occasion to exercise the right of first
refusal will not be a waiver of future rights thereto.
3. If the right of first refusal is not exercised, New WRI may
accept the third party offer but only in accordance with the
terms presented to and declined by AmeriNet and Yankees.
(d) Neither New WRI, Xx. Xxxxxx or their affiliates will, directly or
indirectly, make any sales of customers or customer data without
the prior approval of AmeriNet and, AmeriNet will have a right of
first refusal in conjunction with any such sales.
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(D) In consideration for the New WRI Shares to be issued to Yankees pursuant to
the terms of this Agreement, Yankees hereby agrees as follows:
(1) It will, at Closing, release its lien on all of WRI's securities and
assets, as required to permit the effectuation of the transactions
contemplated by this Agreement; provided, however, that such release
will not reduce or affect in any manner, the obligations of AmeriNet
to Yankees for which such lien was granted.
(2) It will make the services of its personnel available to New WRI,
without charge on a reasonable, as required basis, to assist New WRI's
general counsel and auditors to prepare and file the registration
statements, notifications and reports with the Securities and Exchange
Commission called for by this Agreement, until at least December 31,
2001.
(3) Yankees hereby agrees to loan New WRI up to $5,000 to pay for the
actual, out of pocket auditing costs associated with reports on
Commission Forms 10-QSB and up to $15,000 to pay for the actual, out
of pocket auditing costs associated with reports on Commission Forms
10-SB or 10-KSB until December 31 2002, provided that Xx. Xxxxxx and
New WRI hereby covenant and agree, as follows
(a) Yankees will not provide funds for costs resulting from delays by
Xx. Xxxxxx, AmeriNet or New WRI to provide complete and accurate
information to the auditors or anyone else entitled thereto, on a
timely basis, time being of the essence, all such expenses, if
any, to be paid promptly by New WRI and Xx. Xxxxxx;
(b) In the aggregate, Yankees will not be required to loan New WRI
more than $60,000; and
(c) Yankees obligation to make the foregoing loans will terminate in
the event that New WRI fails to:
1. Comply on a timely basis with applicable laws, including,
without limitation, applicable securities, internal revenue,
communications or trade laws;
2. Develop business goals or projections acceptable to Yankees;
or
3. Meet stated business goals or projections by more than 20%
(d) The loans called for by this Section will be in the form of
purchases of New WRI convertible bonds (the "Class A Bonds")
having the following attributes:
1. The Class A Bonds will be secured by all of the assets of
New WRI;
2. Each Class A Bond will yield interest, until maturity, at
the annual rate, compounded monthly, of 8% and thereafter,
if not paid on a timely basis, at the highest rate of
interest permitted under applicable law;
3. Each Class A Bond will be convertible, at the option of the
holder, into shares of New WRI's capital stock in an amount
derived at by dividing the principal amount of the Class A
Bond plus accrued but unpaid interest and dividing it by the
lesser of: 50% of the last transaction price for New WRI's
common stock as quoted on the OTC Bulletin Board operated by
the NASD on the trading day preceding provision of the funds
by Yankees for which the Class A Bond was issued or, 50% of
the last transaction price for New WRI's common stock as
quoted on the OTC Bulletin Board operated by the NASD during
the trading day preceding the date Yankees informs New WRI
of its intention to exercise its conversion rights (the
"Conversion Date"), whichever will result in the issuance of
the greater number of New WRI shares of Common Stock;
provided, however, that, if as a result of such
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conversion the aggregate New WRI Common Stock held by
Yankees would exceed 29.99% of the total New WRI Common
Stock outstanding, then New WRI will have the right, in lieu
of permitting such conversion by written notice of election
delivered to the holder within five business days following
the Conversion Date, of paying the holder a sum equal to
150% of the principal balance and accrued interest on the
subject Class A Bond, as of the Conversion Date, such
payment to be either:
A. Tendered within ten business days after the Conversion
Date or
B. In ten equal monthly installments over a period of ten
fiscal months, commencing on the Conversion Date, but
yielding additional interest during such period at the rate
of one percent per month, subject to acceleration in the
event that any installment is not paid when due, time being
of the essence, and, in the event of default, the holder
being entitled to retain all payments made as liquidated
damages and to receipt of twice the number of shares of New
WRI Comm Stock on conversion as the holder would have
received had conversion been effected on the original
Conversion Date, plus such other remedies, at law or in
equity, as may be awarded by a tribunal of competent
jurisdiction.
4. The Class A Bonds will be due and payable in one balloon
installment of principal and accrued interest on the 730th
day following the date on which Yankees tendered the funds
for which the Class A Bond was issued.
5. The shares of common stock underlying the Class A Bonds will
be registered with the Commission as required by Section 5
of the Securities Act, using Commission Form S-3 within a
reasonable time after their issuance, provided that New WRI
is then eligible to use Commission Form S-3.
(e) In addition to the foregoing, in the event that Yankees arranges
or provides funding for New WRI (whether in the form of debt or
equity) on terms more beneficial than those reflected in New
WRI's current principal financing agreements, Yankees will be
entitled, at its election, to either:
1. A fee equal to 25% of such savings, on a continuing basis;
or
2. If Yankees funding is provided though Yankees or any
affiliates thereof, a discount of 10% from the contemporary
offering price for the subject securities, if they are
issuable as free trading securities, or, a discount of 50%
from the contemporary offering price for the subject
securities, if they are issuable as restricted securities
(as the term restricted is used for purposes of SEC Rule
144); or
3. If funding is provided by any person or group of persons
introduced to New WRI by Yankees or persons associated with
Yankees, directly or indirectly, but is not provided by
Yankees or its principals as described in the preceding sub
section, then Yankees will be entitled to an introduction
fee equal to 5% of the aggregate proceeds so obtained; and
(f) In the event that Yankees generates business for New WRI, then,
on any sales resulting therefrom, Yankees will be entitled to a
commission equal to 10% of the gross income derived by New WRI
therefrom, on a continuing basis.
(g) In the event that Yankees or any affiliate thereof arranges for
an acquisition of or by New WRI, then Yankees will be entitled to
compensation equal to 10% of the compensation paid
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for such acquisition payable, at New WRI's option, in cash or
common stock of the surviving or parent publicly held entity, in
addition to any compensation negotiated and received from the
acquired entity or its affiliates.
(h) In the event that New WRI's operations are not successful and
they are terminated in a manner rendering New WRI as a publicly
held corporation without material business operations, Yankees
will have and is hereby irrevocably granted, the right to convert
any outstanding amounts owed to Yankees by New WRI into
additional shares of New WRI's capital stock of all classes and
series, in an amount sufficient so that after such conversion,
Yankees will hold one share more than 50% of all outstanding and
reserved shares (reserved shares being defined for this purpose
as shares allocated for future issuance under binding agreements
or arrangements [e.g., options, warrants, conversion features])
of each class and series of New WRI capital stock.
(i) Upon request of Yankees, New WRI will engage its legal counsel to
promptly prepare any reports which Yankees is required to file
with the Securities and Exchange Commission As a result of New
WRI's reporting status, including Securities and Exchange
Commission Forms 3, 4 and 5, Schedules 13(d) and 13(g), and will
submit all such reports to Yankees for prompt execution and
timely filing with the Securities and Exchange Commission. It
will be the responsibility of Yankees to provide the information
required to prepare any such reports to New WRI upon each request
for preparation of such report and all such information provided
by Yankees will be true and correct.
(E) Notwithstanding anything in this Agreement to the contrary, without its
prior written consent the equity interest in New WRI allocated to
AmeriNet's stockholders and Yankees will not be reduced below 20% during
the 365 day period immediately following the Closing, and the aggregate net
tangible book value of their aggregate equity interest, in the event its
equity interest is reduced below 20% prior to the 730th day following
closing, will not be less than a sum equal to the Aggregate AmeriNet
Investment, plus a sum equal to one percent of the Aggregate AmeriNet
Investment per month, since the Closing Date, New WRI being required to
issue to the order of AmeriNet, such additional shares of its equity
securities as may be required from time to time, to maintain such minimum
aggregate net tangible book value.
(F) As a material inducement to each Parties entry into this Agreement, each of
the Parties hereby represents to the others that the representing Party:
(1) 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(a) promulgated under authority of Securities Act
and has, alone or together with his, her or its advisors or
representatives, if any, such knowledge and experience in financial
matters that he she or it is capable of evaluating the relative risks
and merits of the transactions contemplated hereby, the text of Rule
501(a) being set forth, in full, above;
(2) Acknowledges that he, she or it has, based on his, her or its own
substantial experience, the ability to evaluate the transactions
contemplated hereby and the merits and risks thereof in general and
the suitability of the transaction for him, her or it in particular;
(3)
(a) Understands that the offer and transfer or issuance of the
securities involved is being made in reliance on the Party's
representation that he, she or it has reviewed all of AmeriNet's
reports filed with the Commission during the past 12 months and
posted on the Commission's Internet web site (xxx.xxx.xxx) under
the XXXXX Archives sub site, and has become familiar with the
information disclosed therein, including that contained in
exhibits filed with such reports;
(b) Is fully aware of the material risks associated with becoming an
investor in New WRI and confirms that he, she or it was
previously informed that all documents, records and books
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pertaining to this investment have been available from WRI and
that all documents, records and books pertaining to this
transaction requested by him, her or it have been made available
to him, her or it;
(4) Has had an opportunity to ask questions of and receive answers from
the officers of WRI concerning the terms and conditions of this
Agreement and the transactions contemplated hereby, as well as the
affairs of WRI, the contemplated affairs of New WRI and related
matters;
(5) 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 called for by the Florida Rule;
(6) Has represented that he, she or it has the general ability to bear the
risks of the subject transaction and that he, she or it is a suitable
investor for a private offering and hereby affirms the correctness of
such information, including, without limitation, the representations
in the form of the investment letters annexed hereto and made a part
hereof as exhibit 3(E)(6), an original of which (bearing modifications
required to personalize the letter as to gender, etc., will be
executed by such Party and tendered to New WRI concurrently with the
Closing;
(7) Is aware that:
(a) The securities involved are a speculative investment with no
assurance that New WRI will be successful, or if successful, that
such success will result in payments to such Party or to
realization of capital gains by such Party on disposition of the
securities involved; and
(b) The securities to be issued to him, her or it have not been
registered under the Securities Act or under any state securities
laws, accordingly such Party may have to hold such securities and
may not be able to liquidate, pledge, hypothecate, assign or
transfer them;
(8) Has obtained his, her or its own opinion from his, her or its own
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 any Party in conjunction with this Agreement and
the issuance of the securities involved in conjunction therewith,
other than such actions as have already been taken in order to comply
with the securities law requirements of his, her or its state of
domicile; and
(9) (a) Except for shares issued in reliance on Staff Legal Bulletin
Number 5 of the Commission's Division of Corporate Finance or
registered with the Commission, certificates for the securities
involved will bear restrictive legends and New WRI's transfer
agent will be instructed not to transfer the subject securities
unless they have been registered pursuant to Section 5 of the
Securities Act or an opinion of counsel to such Party
satisfactory to legal counsel to New WRI and New WRI's chief
executive officer 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;
(b) The legend will read substantially 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 New WRI's satisfaction."
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Article III
Superseder, Mutual Releases & Closing
(A) The terms of this Agreement supersede the terms of all other agreements
between AmeriNet, WRI and Xx. Xxxxxx and their affiliates, all of which
will be henceforth null and void as if they had never been entered into,
this Agreement being deemed a novation, settlement accord and satisfaction
of all such prior agreements.
(B) In consideration for the exchange of covenants reflected above but
excepting only the obligations created by this Agreement, AmeriNet, WRI and
Xx. Xxxxxx hereby each release, discharge and forgive the other, and each
of the others' subsidiaries, affiliates, members, officers, directors,
partners, agents and employees from any and all liabilities, whether
current or inchoate, from the beginning of time until the date of this
Agreement.
(C) The transactions contemplated by this Agreement, including the
recapitalization of New WRI, issuance of the equity interests in New WRI
and capitalization of New WRI will be effected as soon as possible
following the execution of this Agreement, but in any event, prior to March
31, 2001, and, to the extent possible, the Closing will be effected through
exchange of documents and instruments in escrow, by next day delivery
service, such documents and instruments to be released from escrow
concurrently with confirmation by legal counsel to New WRI that all
transactions contemplated by this Agreement have been completed.
Article IV
General Provisions
4.1 Interpretation.
(A) When a reference is made in this Agreement to schedules or exhibits, such
reference will be to a schedule or exhibit to this Agreement unless
otherwise indicated.
(B) The words "include," "includes" and "including" when used herein will be
deemed in each case to be followed by the words "without limitation."
(C) The headings contained in this Agreement are for reference purposes only
and will not affect in any way the meaning or interpretation of this
Agreement.
(D) The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or
the intent of any provisions hereof.
(E) All pronouns and any variations thereof will be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the
Party or Parties, or their personal representatives, successors and assigns
may require.
(F) The Parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be
construed against the party drafting such agreement or document.
4.2 Notice.
(A) All notices, demands or other communications given hereunder will be in
writing and will be deemed to have been duly given on the first business
day after mailing by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
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(1) To AmeriNet:
AmeriNet Xxxxx.xxx, Inc. Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000-X;
Xxxx Xxxxx, Xxxxxxx 00000 Attention:
Xxxxxx X. Xxxxxxx, President
Telephone (000) 000-0000, Fax (000) 000-0000;
and, e-mail xxxxx@xxxxxxxxxxxxx.xxx; with copies to
Xxxxxxx X. Xxxxxx, Esquire; General Counsel
AmeriNet Xxxxx.xxx, Inc.
0000 Xxxxxxxxx 00xx Xxxxxxx;
Xxxxx, Xxxxxxx 00000
Telephone (000) 000-0000, Fax (000) 000-0000; and,
e-mail, xxxxx@xxxxxxxxxxxxxxx.xxx, and
The Yankee Companies, Inc.
Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000;
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxx Xxxxxx, President
Telephone (000) 000-0000, Fax (000) 000-0000; and,
e-mail lenny@yankeecompanies..com;
(2) To WRI and New WRI
Xxxxxxx.xxx, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 000;
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President
Telephone (000) 000-0000; fax (000) 000-0000;
e-mail Xxxxxxx@Xxxxxxx.xxx
(3) Xx. Xxxxxx:
Xx. Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xxxxx;
Xxxx Xxxxx, Xxxxxxx 00000
Telephone (000) 000-0000; Fax (000) 000-0000;
e-mail xxxx@xxxxxxx.xxx
or such other address or to such other person as any Party will designate
to the other for such purpose in the manner hereinafter set forth.
(B) At the request of any Party, notice will also be provided by overnight
delivery, facsimile transmission or e- mail, provided that a transmission
receipt is retained.
(C) (1) The Parties acknowledge that the Yankees serves as a strategic
consultant to AmeriNet and has acted as scrivener for the Parties in
this transaction but that Yankees is neither a law firm nor an agency
subject to any professional regulation or oversight.
(2) Yankees has advised all of the Parties to retain independent legal and
accounting counsel to review this Agreement and its exhibits and
incorporated materials on their behalf.
(3) The decision by any Party not to use the services of legal counsel in
conjunction with this transaction will be solely at their own risk,
each Party acknowledging that applicable rules of the Florida Bar
prevent AmeriNet's general counsel, who has reviewed, approved and
caused modifications on behalf of AmeriNet, from representing anyone
other than AmeriNet in this transaction.
(4) Xxxxxxx X. Xxxx, Esquire, has served as legal counsel for WRI and Xx.
Xxxxxx in conjunction with this Agreement and Xxxxxxx X. Xxxxxx,
Esquire, has acted as legal counsel to AmeriNet and Yankees in
conjunction with this Agreement, all parties having been advised of
the conflicts of interest inherent in representation of multiple
parties to a single transaction and after having been so notified,
having waived any impediments to multiple representation in
conjunction therewith.
4.3 Merger of All Prior Agreements Herein.
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(A) This instrument, together with the instruments referred to herein, contains
all of the understandings and agreements of the Parties with respect to the
subject matter discussed herein.
(B) All prior agreements whether written or oral are merged herein and will be
of no force or effect.
4.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein will survive the execution hereof and the Reorganization and
will be effective regardless of any investigation that may have been made or may
be made by or on behalf of any Party.
4.5 Severability.
If any provision or any portion of any provision of this Agreement,
other than one of the conditions precedent or subsequent, or the application of
such provision or any portion thereof to any person or circumstance will be held
invalid or unenforceable, the remaining portions of such provision and the
remaining provisions of this Agreement or the application of such provision or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those to which it is held invalid or unenforceable,
will not be affected thereby.
4.6 Governing Law.
This Agreement will be construed in accordance with the substantive and
procedural laws of the State of Delaware (other than those regulating taxation
and choice of law).
4.7 Indemnification.
(A) Each Party hereby irrevocably agrees to indemnify and hold the other
Parties harmless from any and all liabilities and damages (including
legal or other expenses incidental thereto), contingent, current, or
inchoate to which they or any one of them may become subject as a
direct, indirect or incidental consequence of any action by the
indemnifying Party or as a consequence of the failure of the
indemnifying Party to act, whether pursuant to requirements of this
Agreement or otherwise.
(B) In the event it becomes necessary to enforce this indemnity through an
attorney, with or without litigation, the successful Party will be
entitled to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' fees throughout any negotiations,
trials or appeals, whether or not any suit is instituted.
4.8 Dispute Resolution.
(A) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement any
proceedings pertaining directly or indirectly to the rights or
obligations of the Parties hereunder will, to the extent legally
permitted, be held in Broward County, Florida, and the prevailing Party
will be entitled to recover its costs and expenses, including
reasonable attorneys' fees up to and including all negotiations, trials
and appeals, whether or not any formal proceedings are initiated.
(B) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute will, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (a) First, the issue will be submitted to mediation before a
mediation service in Broward County, Florida to be selected
by lot from four alternatives to be provided, one Yankees,
one by Xx. Xxxxxx, one by AmeriNet and one by New WRI.
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(b) The mediation efforts will be concluded within ten business
days after their initiation unless the Parties unanimously
agree to an extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties will submit
the dispute to binding arbitration before an arbitration service
located in Broward County, Florida to be selected by lot, in the
same manner as set forth for mediation.
(3) (a) Expenses of mediation will be borne equally by the Parties,
if successful.
(b) Expenses of mediation, if unsuccessful and of arbitration
will be borne by the Party or Parties against whom the
arbitration decision is rendered.
(c) If the terms of the arbitral award do not establish a
prevailing Party, then the expenses of unsuccessful
mediation and arbitration will be borne equally by the
Parties involved.
(C) (1) It is agreed that this Agreement will be construed pursuant to
the laws of the State of Florida and, in the event it is
necessary for any party to seek to enforce this Agreement,
jurisdiction will be in the appropriate court or tribunal in
Broward County, Florida and United States Courts for the Southern
District of Florida and that, in the event it is necessary to
enforce this Agreement, the prevailing Party will be entitled to
recover all reasonable costs, expenses, and attorney's fees, and
will be construed as costs for purposes of this Agreement.
(2) The Parties specifically agree and waive any right to a jury
trial in the event that it is necessary for a party to institute
legal proceedings herein.
4.9 Benefit of Agreement.
The terms and provisions of this Agreement will be binding upon and
inure to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees but are not intended to confer upon
any other person any rights or remedies hereunder.
4.10 Further Assurances.
The Parties agree to do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
4.11 Counterparts.
(A) This Agreement may be executed in any number of counterparts.
(B) All executed counterparts will constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
(C) Execution by exchange of facsimile transmission will be deemed legally
sufficient to bind the signatory; however, the Parties will, for
aesthetic purposes, prepare a fully executed original version of this
Agreement which will be the document filed with the Commission.
4.12 License.
(A) This form of agreement is the property of Yankees and has been
customized for this transaction with the consent of Yankees by Xxxxxxx
X. Xxxxxx, Esquire, AmeriNet's general counsel.
(B) The use of this form of agreement by the Parties is authorized hereby solely
for purposes of this transaction.
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(C) The use of this form of agreement or of any derivation thereof without
Yankees' prior written permission is prohibited.
In Witness Whereof, AmeriNet, Yankees, WRI and Xx. Xxxxxx have caused
this Agreement to be executed by themselves or their duly authorized respective
officers, all as of the last date set forth below:
Signed, Sealed and Delivered
In Our Presence:
AmeriNet Xxxxx.xxx, Inc.
_________________________________ (A Delaware corporation)
_________________________________ By: _____________________________
Xxxxxx X. Xxxxxxx, President
(Corporate Seal)
Attest: _____________________________
Xxxxxxx X. Xxxxxxx, Secretary
Dated: January ___, 2001
State of Florida }
County of Palm Beach } ss.:
On this __th day of January, 2001, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the president and
secretary of AmeriNet Xxxxx.xxx, Inc., the above-described corporation, and to
me known to be the persons who executed the foregoing instrument, and
acknowledged the execution thereof to be their free act and deed, and the free
act and deed of AmeriNet Xxxxx.xxx, Inc., for the uses and purposes therein
mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of ______________, ____.
{Seal}
--------------------------------
Notary Public
The Yankee Companies, Inc.
_________________________________ (a Florida corporation)
_________________________________ By: _______________________________
Xxxxxxx Xxxxx Xxxxxx, President
(Corporate Seal)
Attest:_______________________________
Xxxxxxx X. Xxxxxxx, Secretary
Dated: January ___, 2001
State of Florida }
County of Palm Beach } ss.:
On this ___th day of January, 2001, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxx Xxxxx Xxxxxx and
Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the president and
secretary of The Yankee Companies, Inc., the above-described corporation, and to
me known to be the persons who executed the foregoing instrument, and
acknowledged the execution thereof to be their free act and deed, and the free
act and deed of The Yankee Companies, Inc., for the uses and purposes therein
mentioned.
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In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____.
(Seal) ____________________________
Notary Public
Xxxxxxx.xxx, Inc.
_________________________________ (a Florida corporation)
_________________________________ By: _____________________________
Xxxxxxx X. Xxxxxx, President
(Corporate Seal)
Attest: _____________________________
Xxxxxxx Xxxx, Secretary
Dated: January ___, 2001
State of Florida }
County of Palm Beach } ss.:
On this ___th day of January, 2001, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxx X. Xxxxxx and
Xxxxxxx Xxxx, to me known, and known to me to be the president and secretary of
Xxxxxxx.xxx, Inc., the above-described corporation, and to me known to be the
persons who executed the foregoing instrument, and acknowledged the execution
thereof to be their free act and deed, and the free act and deed of Xxxxxxx.xxx,
Inc., for the uses and purposes therein mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____.
(Seal) ____________________________
Notary Public
Xx. Xxxxxx
---------------------------------
--------------------------------- ----------------------------
Xxxxxxx X. Xxxxxx
Dated: January ___, 2001
State of Florida }
County of Palm Beach } ss.:
On this ___th day of January, 2001, before me, a notary public in and
for the county and state aforesaid, personally appeared Xxxxxxx X. Xxxxxx, to me
known, and known to me to be the person who executed the foregoing instrument,
and acknowledged the execution thereof to be his free act and deed for the uses
and purposes therein mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____.
(Seal) ____________________________
Notary Public
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Exhibit 3(E)(6)
Form of Investment Letters
Date:
Xxxxxxx X. Xxxxxx
President
New WRI
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Re.: WRI Securities
Dear Xx. Xxxxxx:
I hereby certify and warrant that I am a party to that certain
superseder and exchange agreement to which a form of this letter is annexed as
an exhibit (the "Agreement"), pursuant to which I am acquiring equity securities
of New WRI and I am providing this letter to acknowledge certain matters and to
bind myself by certain agreements required by New WRI, in order to assure that
the issuance of unregistered securities to me complies with applicable
exemptions from securities registration requirements provided under federal
securities laws and the securities laws of my state of domicile.
I hereby certify under penalty of perjury that:
1. Upon receipt of the New WRI securities, I will be acquiring them 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
qualify as an accredited investor (as that term is defined in Rule 501(a)
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 I 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 New WRI securities. No one other than me has any beneficial interest
in the New WRI securities.
2. 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 New WRI, that this transaction was being effected in
full compliance with the applicable securities laws of my state of
domicile.
3. I agree that I will in no event sell or distribute any of the New WRI
securities unless in the opinion of New WRI's counsel (based on an opinion
of my legal counsel) the New WRI securities may be legally sold without
registration under the Securities Act, and/or registration and/or other
qualification under then-applicable State and/or Federal statutes, or the
New WRI securities will have been so registered and/or qualified and an
appropriate prospectus, will then be in effect.
4. I am fully aware that the New WRI securities is being offered and issued by
New WRI 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.
5. In connection with the foregoing, I consent to New WRI's legending my
certificates representing the New WRI securities to indicate my investment
intent and the restriction on transfer contemplated hereby and to New WRI's
placing a "stop transfer" order against the New WRI securities in New WRI's
securities transfer books until the conditions set forth herein will have
been met.
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Xxxxxxx X. Xxxxxx
January __, 2001
Page 2
6. I acknowledge by my execution hereof that I have had access to Exchange Act
Reports that contain material information concerning New WRI's predecessor,
Xxxxxxx.xxx, Inc., and to New WRI's updated financial statements, business
plans and information, books, records and properties, and have inspected
the same to my full and complete satisfaction prior to my acquisition of
the New WRI securities.
7. 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 New WRI's records and my
questioning of New WRI's officers.
I further certify that my domicile is located at the address set forth
in the Agreement.
Very truly yours,
[Entity Name, if applicable
-------------------------
[Name and Title, if applicable]
Signature
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