1
Exhibit 10.11
DEBT CONVERSION AGREEMENT
THIS AGREEMENT dated as of March 18, 1999, is entered into among Genesis
Partners, Inc., a Florida corporation ("Genesis"), Peachtree FiberOptics,
Inc., a Delaware corporation ("Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"),
an individual.
WHEREAS, the managing agent fees totaling $775,000 ("Debt") as of
December 31, 1998 are due and payable by the Company to Genesis and ▇▇▇▇▇▇▇
pursuant to the Management Agreement dated October 27, 1993, between Genesis
Partners, Inc. and the Company, as amended by the Addendums to the Management
Agreement dated February 28, 1994, October 26, 1995, March 1, 1996 and October
1, 1998, among Genesis Partners, Inc., the Company and ▇▇▇▇▇▇▇ (collectively,
the "Management Agreement") which expires on October 26, 1999;
WHEREAS, the Debt plus any and all reimbursable expenses,
reimbursement for overhead or office/administrative facilities or any and all
other claims Genesis or ▇▇▇▇▇▇▇ may have against the Company (collectively,
"Administrative Debt") have never been paid to Genesis/▇▇▇▇▇▇▇;
WHEREAS, it is in the best interest of the Company to eliminate such
outstanding Debt and Administration Debt to Genesis without requiring any cash
consideration and in order for the Company to attract any potential capital or
merger/acquisition candidates; and
WHEREAS, Genesis and ▇▇▇▇▇▇▇ agree that Genesis shall convert to
common stock of the Company the Debt as provided in this Agreement.
NOW THEREFORE, in consideration of the mutual promises set forth
herein, the parties agree as follows:
1. The Company hereby agrees to allow Genesis to convert $.011273398 of Debt for
one share of common stock of the Company ("Conversion Ratio") up to a maximum
of $775,000 in Debt resulting in a maximum of 68,745,910 common shares of the
Company to be issued to Genesis upon full conversion of such $775,000 in
Debt.
2. Genesis shall be permitted to convert the Debt in whole or part. However,
immediately preceding a merger, acquisition or financing by or of the Company
("Reorganization Event"), such Debt not yet converted shall be automatically
converted ("Full Conversion") in its entirety pursuant to the Conversion
Ratio.
3. ▇▇▇▇▇▇▇ and Genesis agree to forgive, release and forever discharge the
Company for any and all Administrative Debt the Company has incurred or may
incur to ▇▇▇▇▇▇▇ and/or Genesis. Immediately preceding a Reorganization Event
and after the Full Conversion, ▇▇▇▇▇▇▇ and Genesis agree to cancel the
Management Agreement and forever forgive, release and forever discharge the
Company from any and all obligations or fees which may be due under such
Management Agreement.
4. Genesis hereby agrees to convert $75,000 of the Debt pursuant to the
Conversion Ratio into 6,652,830 shares of the Company's common stock. The
Company shall instruct its transfer agent to issue such common shares to
Genesis immediately.
5. In case the Company shall declare any dividend or other distribution upon
its outstanding stock payable in stock or shall subdivide its outstanding
shares of stock into a greater number of shares, then the number of shares
that may thereafter be acquired upon the conversion of the rights represented
hereby shall be increased in proportion to the increase through such
dividend, distribution or subdivision.
6. In case of any (i) reclassification reorganization, stock split or other
change of outstanding stock of the Company, or (ii) consolidation or merger
of the Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and that does
not result in any reclassification, capital reorganization or other change of
the shares issuable upon conversion, then and in such event the Conversion
Ratio shall be deemed to be appropriately adjusted, and the Company shall
cause effective provision to be made, so that the Genesis shall have the
right thereafter, upon conversion of the Debt, to purchase the kind and
amount of shares of stock and other securities and property, if any,
receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance that Genesis would have
received had the Debt been converted in its entirety immediately prior to
such event.
2
7. The Company shall at all times reserve for issuance and/or delivery such
number of common shares as shall be required for issuance or delivery on
conversion of such Debt. In the event, there is not a sufficient amount of
shares available, then the Company shall use its best efforts to resolve such
short fall including the authorization of additional common stock or
effectuating a reverse stock split.
8. Any controversy or claim arising out of, or relating to, this Agreement, to
the making, performance, or interpretation of it shall be settled by
arbitration in Miami, Florida, or as otherwise mutually agreed upon by the
parties, under the commercial arbitration rules of the American Arbitration
Association then existing, and any judgment on the arbitration award may be
entered in any court having jurisdiction over the subject matter of the
controversy. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorney's fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
9. This Agreement shall be governed by and construed in accordance with the laws
of the State of Florida, without reference to the choice of law principles
thereof, as to all matters, including matters of validity, construction,
effect, performance and remedies.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement as of the date and year first above written.
PEACHTREE FIBEROPTICS, INC.
By:
--------------------------------
Authorized Representative
GENESIS PARTNERS, INC.
By:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President/CEO
By:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Individually
