Conversion Agreement
This Conversion Agreement (the "Agreement") is made and entered into by and
among AmeriNet Group.com, Inc., a publicly held Delaware corporation with a
class of securities registered under Section 12(g) of the Exchange Act
("AmeriNet") and, ABC Company, a __________ corporation ("ABC"), AmeriNet and
ABC being sometimes hereinafter collectively referred to as the "Parties" or
generically as a "Party").
Preamble:
WHEREAS, in order for AmeriNet to more effectively organize its operations
and acquire promising operating companies, it needs to reduce its current
indebtedness; and
WHEREAS, ABC has agreed to converting $_________ of the debt currently owed
by AmeriNet to ABC (the "AmeriNet Debt") into equity at the rate of $_____ per
share of AmeriNet's Class A preferred stock, $0.01 per share par value (the
"Preferred Stock"):
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, shall 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" shall 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) Commission: The United States Securities and Exchange Commission.
(C) Exchange Act: The Securities Exchange Act of 1934, as amended.
(D) 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.
(E) Florida Act: The Florida Securities and Investor Protection Act.
(F) 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 shall 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 shall 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 shall 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 shall 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. ....
(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
shall 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 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.
(G) Securities Act: The Securities Act of 1933, as amended.
Article II
Conversion
(A) ABC hereby converts $________ of the AmeriNet Debt into shares of AmeriNet
unregistered Preferred Stock, at a conversion price of $_____ per share,
the transaction being effected without registration under the Securities
Act or the Florida Act, based on the exemption from registration provided
by Section 4(6) of the Securities Act and Section 517.061(11) of the
Florida Act.
(B) In consideration for ABC' conversion of the AmeriNet Debt, AmeriNet hereby
agrees to issue to ABC the ____ shares of AmeriNet' Preferred Stock
subscribed for hereby.
(C) As a material inducement to AmeriNet's consideration of ABC' offer to
convert AmeriNet Debts into the ABC' shares, ABC represents, warrants and
covenants to AmeriNet, as follows:
(1) ABC 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 its
advisors or representatives, if any, such knowledge and
experience in financial matters that ABC is capable of evaluating
the relative risks and merits of this subscription, the text of
Rule 501(a) being set forth, in full, above;
(2) ABC acknowledges that it has, based on 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 it in particular;
(3) (a) ABC understands that the offer and issuance of AmeriNet
Stock is being made in reliance on ABC's representation that
it has reviewed AmeriNet's Exchange Act Reports and, has
become familiar with the information disclosed therein,
including that contained in exhibits filed therewith.
(b) ABC is fully aware of the material risks associated with
becoming an investor in AmeriNet and confirms that 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 it have been
made available to it;
(4) ABC has had an opportunity to ask questions of and receive
answers from the officers of AmeriNet concerning the terms and
conditions of this Agreement and the transactions contemplated
hereby, as well as the affairs of AmeriNet and related matters;
(5) ABC 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;
(6) ABC has represented to AmeriNet that it has the general ability
to bear the risks of the subject trans action and that it is a
suitable investor for a private offering and ABC hereby affirms
the correctness of such information to AmeriNet, including,
without limitation, the representations in the form of the
investment letter annexed hereto and made a part hereof as
exhibit 3(D)(6);
(7) ABC acknowledges and is aware that:
(a) The AmeriNet Stock is a speculative investment with no
assurance that AmeriNet will be successful, or if
successful, that such success will result in payments to ABC
or to realization of capital gains by ABC on disposition of
the AmeriNet Stock; and
(b) The AmeriNet Stock to be issued to it has not been
registered under the Securities Act or under any state
securities laws, accordingly ABC may have to hold such
Preferred Stock and may not be able to liquidate, pledge,
hypothecate, assign or transfer it;
(8) ABC has obtained its own opinion from 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 ABC or AmeriNet in conjunction with this Agreement and the
issuance of the AmeriNet Stock in conjunction therewith, other
than such actions as have already been taken in order to comply
with the securities law requirements of ABC' state of domicile,
including the safe harbor provided in conjunction with compliance
with the Florida Rule; and
(9) (a) The certificates for the AmeriNet Stock 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 Section 6 of the
Securities Act or an opinion of counsel to ABC 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.
(b) 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."
Article III
General Provisions
3.1 Interpretation.
(A) When a reference is made in this Agreement to Schedules or Exhibits, such
reference shall be to a Schedule or Exhibit to this Agreement unless
otherwise indicated.
(B) The words "include," "includes" and "including" when used herein shall 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 shall 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 shall 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.
3.2 Notice.
(A) All notices, demands or other communications given hereunder shall be in
writing and shall 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:
(1) To AmeriNet:
AmeriNet Group.com, Inc.
Crystal Corporate Center; 2500 North Military Trail, Suite 225-C;
Boca Raton, Florida 33431
Attention: Edward C. Dmytryk
Telephone (561) 998-3435, Fax (561) 998-3425;
and, e-mail ed@amerinetgroup.com;
(2) ABC:
ABC Limited LTD
Address
or such other address or to such other person as any Party shall 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 Yankee Companies, Inc., a Florida
corporation ("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 ABC and AmeriNet 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 shall 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.
3.3 Merger of All Prior Agreements Herein.
(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 shall be
of no force or effect.
3.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and the Reorganization
and shall be effective regardless of any investigation that may have been
made or may be made by or on behalf of any Party.
3.5 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 shall
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, shall not be affected thereby.
3.6 Governing Law.
This Agreement shall be construed in accordance with the substantive and
procedural laws of the State of Florida (other than those regulating
taxation and choice of law).
3.7 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 shall 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.
3.8 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 shall, to the extent legally permitted, be held in
Broward County, Florida, and the prevailing Party shall 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
shall, at the request of any Party, be exclusively resolved through the
following procedures:
(1) (a) First, the issue shall be submitted to mediation before a
mediation service in Broward County, Florida to be selected
by lot from four alternatives to be provided, two by ABC and
two by AmeriNet; and
(b) The mediation efforts shall 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 shall submit the
dispute to binding arbitration before an arbitration service located
in Broward County, Florida to be selected by lot, from four
alternatives to be provided, two by ABC and two by AmeriNet.
(3) (a) Expenses of mediation shall be borne equally by the Parties,
if successful.
(b) Expenses of mediation, if unsuccessful and of arbitration
shall 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 shall be borne equally by the
Parties involved.
3.9 Benefit of Agreement.
The terms and provisions of this Agreement shall 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.
3.10 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.
3.11 Counterparts.
(A) This Agreement may be executed in any number of counterparts.
(B) All executed counterparts shall constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
(C) Execution by exchange of facsimile transmission shall be deemed legally
sufficient to bind the signatory; however, the Parties shall, for aesthetic
purposes, prepare a fully executed original version of this Agreement which
shall be the document filed with the Commission in conjunction with the
contemplated filing of AmeriNet' Form 10-KSB under the Exchange Act.
3.12 License.
(A) This form of agreement is the property of Yankees and has been customized
for this transaction with the consent of Yankees.
(B) The use of this form of agreement by the Parties is authorized hereby
solely for purposes of this transaction.
(C) The use of this form of agreement or of any derivation thereof without
Yankees' prior written permission is prohibited.
In Witness Whereof, AmeriNet and ABC 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 Group.com, Inc.
_________________________________ (A Delaware corporation)
_________________________________ By: _____________________________
Edward C. Dmytryk, President
(Corporate Seal)
Attest: _____________________________
Vanessa H. Lindsey, Secretary
Dated: ____________, 200_
State of Florida }
County of Palm Beach } ss.:
On this ___ day of __________, 200_, before me, a notary public in and for
the county and state aforesaid, personally appeared Edward C. Dmytryk and
Vanessa H. Lindsey, to me known, and known to me to be the president and
secretary of AmeriNet Group.com, 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 Group.com, 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
ABC Company
- ---------------------------------
_________________________________ By: _____________________________
(Corporate Seal)
Dated: ______________________, 200_
State of Florida }
County of Palm Beach } ss.:
On this ___ day of ________, 200_, before me, a notary public in and for
the county and state aforesaid, personally appeared _________________., to me
known, and known to me to be the managing agent of ABC Company, the
above-described corporation, and to me known to be the person who executed the
foregoing instrument, and acknowledged the execution thereof to be their free
act and deed, and the free act and deed of ABC Company, 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
Exhibit 3(D)(6)
ABC' Investment Letter
___________________, 200_
Edward C. Dmytryk
President
AmeriNet Group.com, Inc.
Crystal Corporate Center
200 North Military Trail, Suite 225-C
Boca Raton, Florida 33431
Re.: Conversion of AmeriNet's Obligations for AmeriNet's Securities
Dear Sir:
I hereby certify and warrant that the ABC Company, a __________ corporation
("ABC") for which _______________, is relinquishing all rights to repayment of
$______, together with accrued interest, owed to ABC by AmeriNet, Inc., a
Delaware corporation ("AmeriNet") in consideration for the issuance to ABC of
______ shares of AmeriNet's Preferred Stock (the "AmeriNet Stock,"). I hereby
certify under penalty of perjury that upon receipt of the AmeriNet Stock, ABC
will be acquiring it for its own account for investment purposes without any
intention of selling or distributing all or any part thereof, except in the form
of permissible distributions to its stockholders. I represent and warrant that
ABC qualifies as an accredited investor (s 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, on ABC behalf, am sophisticated in
financial affairs, or have relied on the advice of someone sophisticated in
financial affairs, and ABC is able to bear the economic risks of this investment
and I do not have any reason to anticipate any change in ABC' circumstances,
financial or otherwise, or any other particular occasion or event which should
cause ABC to sell or distribute, or necessitate or require its sale or
distribution of the AmeriNet Stock. No one other than ABC and its stockholders
has any beneficial interest in the AmeriNet Stock.
I further certify that I have consulted with ABC' legal counsel who, after
having been apprized by me of all the material facts surrounding this
transaction, opined to ABC, for the benefit of AmeriNet, that this transaction
was being effected in full compliance with the applicable securities laws of
ABC' state of domicile, based on the exemption provided by Rule 3E-500.005
promulgated under authority of Section 517.061(11) of the Securities Act of
Florida.
I agree that ABC will in no event sell or distribute any of the AmeriNet
Stock unless in the opinion of AmeriNet's counsel (based on an opinion of ABC'
legal counsel) the AmeriNet Stock 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 AmeriNet Stock shall have
been so registered and/or qualified and an appropriate prospectus, shall then be
in effect.
I am fully aware that the AmeriNet Stock is being offered and issued by
AmeriNet to ABC 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 on behalf of
ABC.
In connection with the foregoing, ABC consents to AmeriNet' legending ABC'
certificates representing the AmeriNet Stock to indicate its investment intent
and the restriction on transfer contemplated hereby and to AmeriNet placing a
"stop transfer" order against the AmeriNet Stock in AmeriNet's securities
transfer books until the conditions set forth herein shall have been met.
I acknowledge by my execution hereof that ABC has had access to AmeriNet's
Exchange Act Reports, books, records and properties, and have inspected the same
to my full and complete satisfaction prior to ABC' acquisition of the AmeriNet
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 AmeriNet's records and my questioning
of AmeriNet's officers.
Edward C. Dmytryk
_____________, 200_
I further certify that ABC' domicile is located at the address set forth in
the Agreement.
Very truly yours,
ABC Company
Name & Title