Agreement of Merger
& Plan of Reorganization
By & Among
AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a publicly held Delaware corporation with a class of
securities registered under Section 12(g) of the Securities Exchange Act of
1934, as amended American Internet Technical Center, Inc., a Florida
corporation; and, ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation.
Table of Contents
Article I: The Merger
1.1 The Merger; Definitions
1.2 Effective Date & Time
1.3 Effect of the Merger
1.4 Articles of Incorporation; Bylaws
1.5 Directors and Officers
1.6 Maximum Shares to Be Issued; Effect on Capital Stock
1.7 Dissenting Shares
1.8 Surrender of WRI Common Stock Certificates
1.9 No Further Ownership Rights in WRI's Securities
1.10 Lost, Stolen or Destroyed WRI Common Stock Certificates
1.11 Tax Consequences and Accounting Treatment
1.12 Taking of Necessary Action; Further Action
Article II: Representations and Warranties of WRI
2.1 Organization of WRI
2.2 WRI's Capital Structure
2.3 Subsidiaries & Affiliated Businesses
2.4 Authority
2.5 WRI's Financial Statements
2.6 No Undisclosed Liabilities
2.7 No Changes
2.8 Tax and Other Returns and Reports
2.9 Restrictions on Business Activities
2.10 Title of Properties; Absence of Liens and Encumbrances; Condition of
Equipment
2.11 Intellectual Property
2.12 Agreements, Contracts and Commitments
2.13 Interested Party Transactions
2.14 Governmental Authorization
2.15 Litigation
2.16 Accounts Receivable
2.17 Minute Books
2.18 Environmental and OSHA
2.19 Brokers' and Finders' Fees
2.20 Labor Matters
2.21 Insurance
2.22 Compliance with Laws
2.23 Complete Copies of Materials
2.24 Binding Agreements; No Default
2.25 Regulation S-B Data
2.26 FIRPTA
2.27 Employee Benefit Plans
2.28 Distribution Agreements
2.29 Representations Complete
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Article III: Representations And Warranties of AmeriNet And American Internet
3.1 Organization, Standing and Power
3.2 Capital Structure
3.3 Authority
3.4 AmeriNet's Financial Statements
3.5 Broker's and Finders' Fees
3.6 Exchange Act Reports
3.7 Ownership of WRI's Common Stock
3.8 Litigation
3.9 Limited Activities
Article IV: Conduct Prior to The Effective Time
4.1 Conduct of Business of WRI
4.2 No Solicitation
4.3 Conduct of Business of AmeriNet
Article V: Covenants
5.1 Report on Form 8-K
5.2 Meeting of WRI's Stockholders
5.3 Access to Information
5.4 Confidentiality
5.5 Expenses
5.6 Public Disclosure
5.7 Consents
5.8 Affiliate Agreements
5.9 Legal Requirements
5.10 Blue Sky Laws
5.11 Best Efforts; Additional Documents and Further Assurances
5.12 Employment Agreements
5.13 Expansion Capital
5.14 ▇▇▇▇▇▇ Option
5.15 Issuance of Performance Based Shares
5.16 WRI Board of Directors
5.17 Credit for Time Employed
Article VI: Conditions to The Merger
6.1 Conditions to Obligations of Each Party to Effect the Merger
6.2 Additional Conditions to Obligations of WRI
6.3 Additional Conditions to the Obligations of AmeriNet and American
Internet
Article VII: Survival of Representations And Warranties; Escrow
7.1 Survival of Representations and Warranties
7.2 Escrow Arrangements
Article VIII: Termination, Amendment And Waiver
8.1 Termination
8.2 Effect of Termination
8.3 Amendment
8.4 Extension; Waiver
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Article IX: General Provisions
9.1 Interpretation
9.2 Notice
9.3 Merger of All Prior Agreements Herein
9.4 Survival
9.5 Severability
9.6 Governing Law
9.7 Indemnification
9.8 Dispute Resolution
9.9 Benefit of Agreement
9.10 Further Assurances
9.11 Counterparts
9.12 License
Schedules:
Schedule 1.4 Forms of Articles of Incorporation and Bylaws for Surviving
Corporation
Schedule 1.5 Officers and directors of the Surviving Corporation
Schedule 2.2(B) WRI's Capital Structure
Schedule 2.5(A) Financials
Schedule 2.8(A) Tax Disclosure Schedule
Schedule 2.10(A) Real Property
Schedule 2.10(C) Equipment
Schedule 2.11 Intellectual Property
Schedule 2.12 Contracts and Agreements
Schedule 2.12(A)(12)Loan, Credit or Guarantee Agreements
Schedule 2.14 Governmental Authorization
Schedule 2.15 Litigation
Schedule 2.19 Brokers' and Finders' Fee
Schedule 2.20 List of Employees
Schedule 2.21 Insurance
Schedule 2.27 Employee Benefit Plans
Schedule 2.28 Distribution Agreements
Schedule 3 Exception to AmeriNet Representations or Warranties
Schedule 4.1 Disclosure Schedule re Conduct of Business
Schedule 5.7 Third Party Consents
Schedule 5.8 Affiliates
Schedule 5.12 List and Summary of Employment Agreements
Schedule 5.13 Use of Proceeds
Schedule 5.16 Projections
Schedule 6.3(L) Non-accredited Investors
Exhibits:
Exhibit 2.11 Confidentiality Agreements
Exhibit 2.25 WRI Regulation S-B Disclosure Data
Exhibit 5.8 Affiliate Agreement
Exhibit 5.12 Copies of Employment Agreements
Exhibit 6.2(D) American Internet & AmeriNet Legal Opinion
Exhibit 6.3(E) WRI Legal Opinion
Exhibit 7.2(A) Escrow Data
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Agreement of Merger
& Plan of Reorganization
This Agreement of Merger & Plan of Reorganization (the "Agreement") is made
and entered into by and among AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a publicly held Delaware
corporation with a class of securities registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended ("AmeriNet" and the "Exchange Act,"
respectively), American Internet Technical Center, Inc., a Florida corporation
and wholly-owned subsidiary of AmeriNet ("American Internet") and ▇▇▇▇▇▇▇.▇▇▇,
Inc., a Florida corporation ("WRI;" AmeriNet, American Internet and WRI being
sometimes hereinafter collectively referred to as the "Parties" or generically
as a "Party").
Preamble:
WHEREAS, the board of directors of AmeriNet, American Internet and WRI
believe it is in the best interests of each corporation and their respective
stockholders that WRI and American Internet combine into a single company
through the statutory merger of WRI with and into American Internet
(subsequently operating as ▇▇▇▇▇▇▇.▇▇▇, Inc.; the "Merger") and, in furtherance
thereof, have approved the Merger; and
WHEREAS, pursuant to the terms of the Merger, as hereinafter set forth,
among other things, all of the outstanding and reserved securities of WRI
("WRI's Common Stock") would be converted into 531,000 shares of AmeriNet's
common stock, $0.01 par value ("AmeriNet's Common Stock") as hereinafter
described; and
WHEREAS, the Parties intend that AmeriNet invest up to $300,000 within 120
days after completion of the Merger and the filing of required reports with the
United States Securities and Exchange Commission; and
WHEREAS, the Parties intend that the current majority stockholder of WRI
retain the right, for a period of two years starting on the 182nd day following
completion of the Merger, to exchange all of his AmeriNet securities issued
pursuant to this Agreement, including dividends or distributions based on the
ownership thereof, for between seventy and eighty percent of the Surviving
Corporation's Common Stock, as hereinafter described; and
WHEREAS, AmeriNet, American Internet and WRI desire to make certain
representations and warranties and other agreements in connection with the
Merger and their subsequent operating and business relationships; and
WHEREAS, the Parties intend, by executing this Agreement, to adopt a plan
of reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended:
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:
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Witnesseth:
Article I
The Merger
1.1 The Merger; Definitions.
(A) The Merger.
At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement and the Florida Merger Laws, WRI
shall be merged with and into American Internet, the separate corporate
existence of WRI shall cease and American Internet shall continue as the
surviving corporation albeit under the name "▇▇▇▇▇▇▇.▇▇▇, Inc."
(B) Definitions.
(1) Affiliate: An entity or person that controls, is controlled by or is
under common control with another person.
(2) Aggregate WRI Capital Stock Number: The "Aggregate WRI Capital Stock
Number" shall mean the aggregate number of shares of WRI's Capital
Stock outstanding immediately prior to the Effective Time.
(3) Aggregate Share Number: The "Aggregate Share Number" is 531,000.
(4) Blue Sky Laws: The laws of the several states regulating transactions
in securities.
(5) Capital Stock: The generic term used for equity securities, whether
common, preferred or otherwise.
(6) Commission: The United States Securities and Exchange Commission.
(7) Code: The Internal Revenue Code of 1986, as amended.
(8) Escrow Number: The "Escrow Number" shall be that number of shares of
AmeriNet Common Stock equal to the Aggregate Share Number multiplied
by twenty percent.
(9) Exchange Act: The Securities Exchange Act of 1934, as amended.
(10) Exchange Act Reports: All reports filed by AmeriNet with the
Commission pursuant to Sections 12(g), 13 and 15(d) of the Exchange
Act.
(11) Exchange Ratio: The "Exchange Ratio" shall mean the quotient obtained
by dividing (x) 531,000 by (y) the Aggregate WRI Capital Stock Number.
(12) Florida Corporate Merger Laws: Sections 607.1101, 607.1103, 607.1105,
607.1106, 607.1301, 607.1302 and 607.1320, Florida Statutes
(13) Knowledge: When used to qualify a representation or warranty, the word
"knowledge" or any derivations or variations thereof, whether in the
form of a word or phrase, shall mean knowledge after reasonable
inquiry by an executive officer of the legal entity on whose behalf
the assertion is made and will include information that such legal
entity should have had in the exercise of reasonable diligence.
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(14) Material: When used to qualify a representation or warranty, the word
"material" or any derivations or variations thereof, whether in the
form of a word or phrase, shall mean material on the occasion
referenced as well as on an aggregate basis with other similar
matters.
(15) NASD: The National Association of Securities Dealers, Inc., a Delaware
corporation and self regulatory organization registered with the
Commission.
(16) OTC Bulletin Board: The over the counter bulletin board operated by
but not a part of the NASD.
(17) Securities Act: The Securities Act of 1933, as amended.
(18) Ten-Day Average Price: The "Ten-Day Average Price" shall, if the
subject shares are freely tradeable, be the average closing
transaction price of a share of AmeriNet Common Stock for the ten most
recent days that AmeriNet Common Stock has traded ending on the
trading day prior to the Effective Time, as reported on the OTC
Bulletin Board, and if they are issued as unregistered restricted
securities not eligible for immediate resale under Commission Rule
144, 50% of such result.
(19) Surviving Corporation: American Internet operating under the name
"▇▇▇▇▇▇▇.▇▇▇, Inc.", after the Merger.
(20) Tax: For the purposes of this Agreement, a "Tax" or, collectively,
"Taxes," means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts and any
obligations under any agreements or arrangements with any other person
with respect to such amounts.
(21) WRI Stockholders' Meeting: The meeting of WRI's stockholders called to
approve this Agreement, or the corresponding action taken by written
consent in lieu of stockholders' meeting to the extent consistent with
applicable laws and WRI's constituent documents.
(22) Additional defined terms are specified in certain sections and
subsections below and are characterized by the use of initial letter
capitalization.
1.2 Effective Date & Time.
(A) As promptly as practicable after the satisfaction or waiver of the
condition s set forth in Article VI, the Parties shall cause the
Merger to be consummated by filing a Certificate of Merger (the
"Certificate of Merger") with the Secretary of State of the State of
Florida, in such form as required by, and executed in accordance with
the relevant provisions of the Florida Corporate Merger Laws.
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(B) The effective date and time of the Merger shall be 5:00 o'clock p.m.,
on the day of acceptance by the officer designated by the Secretary of
State of the State of Florida for such purpose, of the Certificate of
Merger, which shall so provide (the "Effective Date" and the
"Effective Time," respectively).
(C) The closing of the transactions contemplated hereby (the "Closing")
shall take place at 10:00 o'clock a.m., at the offices of AmeriNet's
Counsel, on the Effective Date, or at such different time, date and
place as the Parties may unanimously agree to in writing.
1.3 Effect of the Merger.
(A) At the Effective Time, the effect of the Merger shall be as provided
under the Florida Corporate Merger Laws.
(B) Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time all the property, rights, privileges, powers and
franchises of WRI and American Internet shall vest in the Surviving
Corporation, and all debts, liabilities and duties of WRI and American
Internet shall become the debts, liabilities and duties of the
Surviving Corporation.
1.4 Articles of Incorporation: Bylaws.
Provided that they have been amended to conform to the forms of articles of
incorporation and bylaws set forth in Schedule 1.4:
(A) Unless otherwise determined by AmeriNet prior to the Effective Time,
at the Effective Time the Articles of Incorporation of WRI, as in
effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation until thereafter amended
as provided by law and such Articles of Incorporation; and
(B) The Bylaws of WRI, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
1.5 Directors and Officers.
Subject to the requirements of Section 5.16, the directors of WRI
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of WRI
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified; provided that such officers and directors
are comprised of the persons listed in Schedule 1.5
1.6 Maximum Shares to Be Issued: Effect on Capital Stock.
(A) The number of shares of AmeriNet Common Stock to be issued in exchange for
the cancellation of all of the WRI Common Stock (WRI's only securities of
any kind) shall be determined immediately prior to the Effective Time and
shall be equal to the Aggregate Share Number; provided, however, that such
Aggregate Share Number shall be adjusted as provided in this Section 1.6
and in Section 1.7.
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(B) Subject to the terms and conditions of this Agreement, as of the Effective
Time, by virtue of the Merger and without any action on the part of
American Internet, WRI or the holder of any of the following securities:
(1) Conversion of WRI's Securities.
Each share of WRI common stock, par value one dollar per share ("WRI's
Common Stock") outstanding immediately prior to the Effective Time
[other than any shares of WRI's Common Stock to be canceled pursuant
to this Section 1.6 and any Dissenting Shares (as defined and to the
extent provided in Section 1.7) will be canceled and extinguished and
be converted automatically into the right to receive that number of
shares of AmeriNet Common Stock equal to the Exchange Ratio upon
surrender of the certificate representing such share of WRI's Common
Stock in the manner provided in Section 1.8.
(2) Cancellation of AmeriNet-Owned and WRI-Owned Stock.
Each share of WRI's Common Stock owned by American Internet, AmeriNet,
WRI or any direct or indirect wholly owned subsidiary of AmeriNet or
of WRI immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.
(3) Stock Options & Warrants.
Neither WRI nor American Internet have any outstanding common stock
purchase options, warrants or obligations to issue any of its
securities and will have none immediately prior to the Effective Date.
(4) Common Stock of American Internet.
Each certificate of American Internet evidencing ownership of any
shares of its Capital Stock shall continue to evidence ownership of
such shares of Capital Stock of the Surviving Corporation, all of
which will be held by AmeriNet.
(5) Adjustments to Exchange Ratio.
The Exchange Ratio shall be adjusted to reflect fully the effect of
any stock split, reverse split, stock dividend (including any dividend
or distribution of securities convertible into AmeriNet Common Stock
or WRI's Common Stock), reorganization, recapitalization or other like
change with respect to AmeriNet Common Stock or WRI's Common Stock
occurring after the date hereof and prior to the Effective Time and
the exercise of any Dissenters' Rights.
(6) Fractional Shares.
No fraction of a share of AmeriNet Common Stock will be issued, but in
lieu thereof each holder of shares of WRI's Stock who would otherwise
be entitled to a fraction of a share of AmeriNet Common Stock (after
aggregating all fractional shares of AmeriNet Common Stock to be
received by such holder) shall be entitled to receive from AmeriNet a
whole share of AmeriNet Common Stock.
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1.7 Dissenting Shares.
(A) Notwithstanding any provision of this Agreement to the contrary, any shares
of WRI's Common Stock held by a holder who has demanded and perfected
appraisal rights for such shares in accordance with Florida Corporate
Merger Laws and who, as of the Effective Time, has not effectively
withdrawn such appraisal rights ("Dissenting Shares"), shall not be
converted into or represent a right to receive AmeriNet Common Stock
pursuant to Section 1.6, but the holder thereof shall only be entitled to
such rights as are granted by the Florida Corporate Merger Laws.
(B) Notwithstanding the provisions of subsection (A), if any holder of shares
of WRI's Common Stock who demands appraisal of such shares under the
Florida Corporate Merger Laws shall effectively withdraw the right to
appraisal, then, as of the later of the Effective Time and the occurrence
of such event, such holder's shares shall automatically be converted into
and represent only the right to receive AmeriNet Common Stock, without
interest thereon, upon surrender of the certificate representing such
shares.
(C) (1) WRI shall give AmeriNet:
(a) Prompt notice of any written demands for appraisal of any shares
of WRI's Common Stock, withdrawals of such demands, and any other
instruments served pursuant to the Florida Corporate Merger Laws
and received by WRI; and
(b) The opportunity to participate in all negotiations and
proceedings which take place prior to the Effective Time with
respect to demands for appraisal under the Florida Corporate
Merger Laws.
(2) WRI shall not, except with the prior written consent of AmeriNet,
voluntarily make any payment before the Effective Time with respect to
any demands for appraisal of WRI's Common Stock or offer to settle or
settle any such demands.
(D) The Aggregate Share Number shall be reduced to reflect the quantity of
AmeriNet Common Stock that would have been issued to person's electing to
exercise Dissenters's Rights.
(E) All payments to WRI Stockholders that exercise Dissenters' Rights shall be
made by WRI.
1.8 Surrender of WRI Common Stock Certificates.
(A) Exchange Agent.
Unless otherwise determined by AmeriNet prior to the Effective Time,
Liberty Transfer Co., Inc., of Huntington, New York shall serve as the
Exchange Agent for the Merger.
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(B) AmeriNet to Provide Common Stock.
Promptly after the Effective Time, AmeriNet shall instruct the Exchange
Agent to reserve the shares of AmeriNet Common Stock to be issued in
accordance with Section 1.6 in exchange for outstanding shares of WRI's
Capital Stock.
(C) Exchange Procedures.
(1) Promptly after the Effective Time, the Surviving Corporation, shall
cause to be mailed to each holder of record of a certificate or
certificates (the "WRI Common Stock Certificates") which immediately
prior to the Effective Time represented outstanding shares of WRI's
Capital Stock whose shares were converted pursuant to this Agreement
and by operation of law into the right to receive shares of AmeriNet
Common Stock pursuant to Section 1.6:
(a) A letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the WRI Common Stock
Certificates shall pass, only upon delivery of the WRI Common
Stock Certificates to the Exchange Agent and shall be in such
form and have such other provisions as AmeriNet may reasonably
specify); and
(b) Instructions for use in effecting the surrender of the WRI Common
Stock Certificates in exchange for certificates representing
shares of AmeriNet Common Stock.
(2) Upon surrender of a WRI Common Stock Certificate for cancellation to
the Exchange Agent or to such other agent or agents as may be
appointed by AmeriNet, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions
thereto, the holder of such WRI Common Stock Certificate shall be
entitled to receive in exchange therefor a certificate representing
the number of whole shares of AmeriNet Common Stock (less the number
of shares of AmeriNet Common Stock to be deposited in the Escrow Fund
on such holder's behalf pursuant to Article VII hereof) to which such
holder is entitled pursuant to Section 1.6, and the WRI Common Stock
Certificate so surrendered shall forthwith be canceled.
(3) As soon as practicable after the Effective Time, and subject to and in
accordance with the provisions of Article VII hereof, AmeriNet shall
cause to be distributed to the Escrow Agent (as defined in Article
VII) a certificate or certificates representing that number of shares
of AmeriNet Common Stock equal to the Escrow Number which shall be
registered in the name of the Escrow Agent.
(4) Such shares shall be beneficially owned by the holders on whose behalf
such shares were deposited in the Escrow Fund but shall be available
to compensate AmeriNet for certain damages as provided in Article VII.
(5) Until so surrendered, each outstanding WRI Common Stock Certificate
that, prior to the Effective Time, represented shares of WRI's Common
Stock will be deemed from and after the Effective Time, for all
corporate purposes, other than the payment of dividends, to evidence
the ownership of the number of full shares of AmeriNet Common Stock
into which such shares of WRI's Common Stock shall have been converted
in accordance with Section 1.6.
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(D) Distributions With Respect to Unexchanged Shares.
(1) No dividends or other distributions declared or made after the
Effective Time with respect to AmeriNet Common Stock with a record
date after the Effective Time will be paid to the holder of any
unsurrendered WRI Common Stock Certificate with respect to the shares
of AmeriNet Common Stock represented thereby until the holder of
record of such WRI Common Stock Certificate shall surrender such WRI
Common Stock Certificate.
(2) Subject to applicable law, following surrender of any such WRI Common
Stock Certificate, there shall be paid to the record holder of the
certificates representing whole shares of AmeriNet Common Stock issued
in exchange therefor, without interest, at the time of such surrender,
the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole
shares of AmeriNet Common Stock.
(E) Transfers of Ownership.
If any certificate for shares of AmeriNet Common Stock is to be issued in a
name other than that in which the certificate surrendered in exchange
therefor is registered, it will be a condition of the issuance thereof that
the certificate so surrendered will be properly endorsed and otherwise in
proper form for transfer and that the person requesting such exchange will
have paid to AmeriNet or any agent designated by it any transfer or other
Taxes required by reason of the issuance of a certificate for shares of
AmeriNet Common Stock in any name other than that of the registered holder
of the certificate surrendered, or established to the satisfaction of
AmeriNet or any agent designated by it that such Tax has been paid or is
not payable.
(F) No Liability.
Notwithstanding anything to the contrary in this Section 1.8, none of the
Exchange Agent, the Surviving Corporation, or any Party hereto shall be
liable to a holder of shares of AmeriNet Common Stock or WRI's Capital
Stock for any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
1.9 No Further Ownership Rights in WRI's Securities.
(A) All shares of AmeriNet Common Stock issued upon the surrender for exchange
of shares of WRI's Capital Stock in accordance with the terms hereof
(including any cash paid in respect thereof) shall be deemed to have been
issued in full satisfaction of all rights pertaining to all of WRI's
securities, including, without limitation, all shares of WRI's Capital
Stock, and there shall be no further registration of transfers on the
records of the Surviving Corporation of shares of WRI's securities which
were outstanding or reserved immediately prior to the Effective Time.
(B) If, after the Effective Time, WRI Common Stock Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article I.
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1.10 Lost, Stolen or Destroyed WRI Common Stock Certificates.
In the event any certificates evidencing shares of WRI's Capital Stock
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of AmeriNet Common
Stock and cash for fractional shares, if any, as may be required pursuant to
Section 1.6; provided, however, that AmeriNet may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
AmeriNet or the Exchange Agent with respect to the certificates alleged to have
been lost, stolen or destroyed.
1.11 Tax Consequences and Accounting Treatment.
(A) It is intended by the Parties that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Code and the
Parties agree that if modification of the terms of this Agreement in a
non-material manner to attain such qualification is necessary, they will
negotiate in good faith to make such required modifications.
(B) (1) The Parties intend that this reorganization qualify them to prepare
their certified financial statements on a consolidated basis and the
Parties agree that if modification of the terms of this Agreement in a
non-material manner to attain such qualification is necessary, they
will negotiate in good faith to make such required modifications.
(2) The Parties acknowledge that because of the ▇▇▇▇▇▇ Option contained in
Section 5.14, the transaction may not be accounted for as a pooling of
interests and will be accounted for as a purchase.
1.12 Taking of Necessary Action: Further Action.
If, at any time after the Effective Time, any such further action is
necessary or desirable to carry out the purposes of this Agreement including,
without limitation:
(i) the vesting in the Surviving Corporation of full right, title and
possession to all assets, property, rights, privileges, powers and
franchises of WRI and American Internet;
(ii) compliance with the requirements of Code Section 368; and,
(iii) use of consolidated financial statements for the certified financial
statement of AmeriNet and the Surviving Corporation; the officers and
directors of AmeriNet, WRI and American Internet are fully authorized
in the name of their respective corporations or otherwise to take, and
will take, all such lawful and necessary action.
Article II
Representations and Warranties of WRI
WRI hereby represents and warrants to AmeriNet and American Internet, as a
material inducement to their entry into this Agreement, subject to the
exceptions specifically disclosed in the schedules (referencing the appropriate
section number) supplied by WRI to AmeriNet and certified by WRI (the "WRI's
Schedules"), as follows:
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2.1 Organization of WRI.
(A) WRI is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida.
(B) WRI has the corporate power to own its property and to carry on its
business as now being conducted and as proposed to be conducted by WRI.
(C) WRI is duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the business, assets (including
intangible assets), financial condition, or results of operations of WRI.
(D) WRI has delivered a true and correct copy of its articles of incorporation
and bylaws (or similar governing instruments), each as amended to date, to
counsel for AmeriNet.
2.2 WRI's Capital Structure.
(A) The authorized Capital Stock of WRI consists of 7,500 shares of Common
Stock, par value one dollar per share.
(B) All 7,500 shares of WRI Common Stock are currently issued and outstanding,
and are held by the persons, and in the amounts, set forth on Schedule
2.2(B).
(C) All outstanding shares of WRI Common Stock are duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights
created by statute, the Articles of Incorporation or Bylaws of WRI or any
agreement to which WRI is a party or is bound.
(D) WRI has no options, warrants, calls, rights, commitments or agreements of
any character to which WRI is a party or by which it is bound obligating
WRI to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the WRI Common
Stock or obligating WRI to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement.
2.3 Subsidiaries & Affiliated Businesses.
(A) WRI has no subsidiaries and does not otherwise own any shares of stock or
any interest in, or control, directly or indirectly, any other corporation,
partnership, association, joint venture or business entity.
(B) There are no affiliated corporations involved with WRI in providing goods
or services either between themselves or to third parties, directly or
indirectly.
2.4 Authority.
(A) WRI has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
(B) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of WRI, subject only to the approval of the
Merger and the other transactions contemplated hereby, by WRI's
stockholders as contemplated by Section 6.1(A).
Page 50
(C) This Agreement has been duly executed and delivered by WRI and subject to
the proper authorization of this Agreement by the respective boards of
directors of AmeriNet and American Internet and its due execution and
delivery by AmeriNet and American Internet to WRI, constitutes the valid
and binding obligation of WRI.
(D) The execution and delivery of this Agreement by WRI does not, and the
consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material
benefit under (i) any provision of the Articles of Incorporation or Bylaws
of WRI or (ii) any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
WRI or its properties or assets.
(E) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality ("Governmental Entity"),
is required by or with respect to WRI in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger
with the Florida Secretary of State and (ii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable state and federal securities laws and the laws of
any foreign country.
2.5 WRI's Financial Statements.
(A) Schedule 2.5(A) includes WRI's unaudited financial statements (balance
sheets, income statements and statements of cash flows) as of and for the
fiscal year ending June 30, 1999 and for the three months ended September
30, 1999 (collectively, the "WRI Financial Statements").
(B) The WRI Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a basis consistent throughout the
periods indicated.
(C) The WRI Financial Statements present fairly the financial condition and
operating results of WRI as of the dates and during the periods indicated
therein, subject to normal year-end audit adjustments, which will not be
material in the aggregate.
(D) The unaudited balance sheet of WRI as of September 30, 1999 is hereinafter
referred to as "WRI's Balance Sheet."
(E) The WRI Financial Statements can and will be audited as required to comply
with the requirements for material acquisitions under Commission Regulation
S-B in a manner permitting AmeriNet to comply with its obligation under the
Exchange Act to provide information concerning WRI in current reports on
Commission Form 8-K.
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2.6 No Undisclosed Liabilities.
WRI does not have any material liabilities or obligations, either accrued
or contingent (whether or not required to be reflected in financial statements
in accordance with generally accepted accounting principles), and whether due or
to become due, which individually or in the aggregate, (i) have not been
reflected in the WRI Balance Sheet (including the notes thereto) or (ii) have
not been specifically described in this Agreement or in the WRI Schedules.
2.7 No Changes.
Since the date of the WRI Financial Statements there has not been, occurred
or arisen any:
(A) Transaction by WRI except in the ordinary course of business as conducted
on that date;
(B) Capital expenditure by WRI, either individually or in the aggregate,
exceeding $5,000;
(C) Destruction, damage to, or loss of any assets (including without limitation
intangible assets) of WRI (whether or not covered by insurance), either
individually or in the aggregate, exceeding $5,000;
(D) Labor trouble or claim of wrongful discharge, sexual harassment or other
unlawful labor practice or action;
(E) Change in accounting methods or practices (including any change in
depreciation or amortization policies or rates, any change in policies in
making or reversing accruals, or any change in capitalization of software
development costs) by WRI;
(F) Declaration, setting aside, or payment of a dividend or other distribution
in respect to the shares of WRI, or any direct or indirect redemption,
purchase or other acquisition by WRI of any of its shares;
(G) Increase in the salary or other compensation payable or to become payable
by WRI to any of its officers, directors or employees, or the declaration,
payment, or commitment or obligation of any kind for the payment, by WRI,
of a bonus or other additional salary or compensation to any such person;
(H) Acquisition, sale or transfer of any asset of WRI except in the ordinary
course of business;
(I) Formation, amendment or termination of any distribution agreement or any
material contract, agreement or license to which WRI is a party, other than
termination by WRI pursuant to the terms thereof;
(J) Loan by WRI to any person or entity, or guaranty by WRI of any loan except
for expense advances in the ordinary course of business consistent with
past practice;
(K) Waiver or release of any material right or claim of WRI, including any
write-off or other compromise of any material account receivable of WRI;
Page 52
(L) The notice or, to WRI's knowledge, commencement or threat of commencement
of any governmental proceeding against or investigation of WRI or its
affairs;
(M) Other event or condition of any character that has or would, in WRI's
reasonable judgment, be expected to have a material adverse effect on WRI;
(N) Issuance, sale or redemption by WRI of any of its shares or of any other of
its securities;
(O) Change in pricing or royalties set or charged by WRI except for discounts
extended in the ordinary course of business consistent with past practice;
or
(P) Negotiation or agreement by WRI to do any of the things described in the
preceding clauses (A) through (O) (other than negotiations with AmeriNet
and its representatives regarding the transactions contemplated by this
Agreement).
2.8 Tax and Other Returns and Reports.
(A) Tax Returns and Audits.
(1) WRI has accurately prepared and timely filed all required federal,
state, local and foreign returns, estimates, information statements
and reports ("Returns") relating to any and all Taxes relating or
attributable to WRI or its operations and such Returns are true and
correct in all material respects and have been completed in accordance
with applicable law in all material respects.
(2) WRI has timely paid all Taxes required to be paid with respect to such
Returns and has withheld with respect to its employees all federal and
state income Taxes, FICA, FUTA and other Taxes it is required to
withhold.
(3) The accruals for Taxes on the books and records of WRI are sufficient
to discharge the Taxes for all periods (or the portion of any period)
ending on or prior to the Effective Time.
(4) WRI has not been delinquent in the payment of any Tax nor, except as
set forth in Schedule 2.8(A), is there any Tax deficiency outstanding,
proposed or assessed against WRI, nor has WRI executed any waiver of
any statute of limitations on or extending the period for the
assessment or collection of any Tax.
(5) No audit or other examination of any Return of WRI is presently in
progress. Except as set forth in Schedule 2.8(A), WRI does not have
any liabilities for unpaid federal, state, local and foreign Taxes,
whether asserted or unasserted, known or unknown, contingent or
otherwise and WRI has no knowledge of any basis for the assertion of
any such liability attributable to WRI, or their respective assets or
operations. WRI is not (nor has it ever been) required to join with
any other entity in the filing of a consolidated Tax Return for
federal Tax purposes or a consolidated or combined Return or report
for state Tax purposes.
(6) WRI is not a party to or bound by any Tax indemnity, Tax sharing or
Tax allocation agreement.
(7) WRI has provided, or made available, to AmeriNet or its legal counsel
copies of all federal, provincial and state income and all sales and
use Tax Returns of WRI for all periods since its date of
incorporation.
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(8) There are (and as of immediately following the Closing there will be)
no liens on the assets of WRI relating to or attributable to Taxes.
(9) WRI has no knowledge of any basis for the assertion of any Tax claim
which, if adversely determined, would result in liens on the assets of
WRI.
(10) WRI has no property which is being sold, conveyed or transferred
pursuant to this Agreement which in the hands of AmeriNet would be
treated as being owned by persons other than AmeriNet pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954 as in effect
immediately prior to the enactment of the Tax Reform Act of 1986, or
any analogous provisions of any state law.
(11) None of the assets of WRI are treated as "Tax-exempt use property"
within the meaning of Section 168(h) of the Code.
(12) There is no contract, agreement, plan or arrangement, including but
not limited to the provisions of this Agreement, covering any employee
or former employee of WRI that, individually or collectively, could
give rise to the payment of any amount that would not be deductible
pursuant to Sections 280G, 162 or 404 of the Code.
(B) No Penalty.
WRI is not subject to any penalty by reason of a violation of any order,
rule or regulation of, or a default with respect to any Return, report or
declaration required to be filed with, any Governmental Entity to which it
is subject, which violations or defaults, individually or in the aggregate,
would have a material adverse effect on WRI.
2.9 Restrictions on Business Activities.
There is no agreement (assuming the Parties thereto other than WRI
performed their respective obligations thereunder as required), judgment,
injunction, order or decree binding upon WRI which has or could reasonably be
expected to have the effect of materially prohibiting or materially impairing
any business practice of WRI, any acquisition of property by WRI or the conduct
of business by WRI as currently conducted or as currently proposed to be
conducted.
2.10 Title of Properties: Absence of Liens and Encumbrances: Condition of
Equipment.
(A) (1) WRI owns no real property.
(2) Schedule 2.10(A) sets forth a true and complete list of all real
property leased by WRI and the aggregate annual rental or other fee
payable under any such lease.
(3) To the knowledge of WRI, all such leases are in good standing, valid
and effective in accordance with their respective terms, and there is
not with respect to WRI under any of such leases, any existing default
or event of default (or event which with notice or lapse of time, or
both, would constitute a default and in respect of which WRI has not
taken adequate steps to prevent such default from occurring), except
where the lack of such good standing, validity and effectiveness or
the existence of such default or event of default would not have a
material adverse effect on WRI.
Page 54
(B) WRI holds good and valid title to, or, in the case of leased properties and
assets, valid leasehold interests in, all of its tangible properties and
assets, real, personal and mixed, used in its business, free and clear of
any liens, charges, pledges, security interests or other encumbrances,
except as reflected in WRI Financial Statements and except for such
imperfections of title and encumbrances, if any, which are not substantial
in character, amount or extent, and which do not materially detract from
the value, or interfere with the present use, of the property subject
thereto or affected thereby.
(C) (1) The equipment (the "Equipment") owned or leased by WRI is listed in
Schedule 2.10(C), except individual pieces of equipment owned by WRI
with an individual value of less than $100.
(2) To the knowledge of WRI, the Equipment is, taken as a whole:
(a) Adequate for the conduct of the business of WRI consistent with
its past practice;
(b) Suitable for the uses to which it is currently employed;
(c) In good operating condition;
(d) Regularly and properly maintained, reasonable wear and tear
excepted; and
(e) Not obsolete, dangerous or in need of renewal or replacement,
except for renewal or replacement in the ordinary course of
business.
2.11 Intellectual Property.
(A) (1) WRI owns, or is licensed to use, all patents, trademarks, trade names,
service marks, copyrights, and any applications therefor, maskworks,
net lists, schematics, technology, know-how, computer software
programs or applications and tangible or intangible proprietary
information or material [excluding Commercial Software Rights as
defined in Section 2.11(B)(1) below] that are used or currently
proposed to be used in the business of WRI as currently conducted or
as currently proposed to be conducted ("WRI's Intellectual Property
Rights").
(2) Schedule 2.11 sets forth a complete list of all patents, trademarks,
registered and material unregistered copyrights, trade names and
service marks, and any applications therefor, included in WRI
Intellectual Property Rights, and specifies the jurisdictions in which
each such WRI's Intellectual Property Right has been issued or
registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners, together
with a list of all of WRI's currently marketed software products and
an indication as to which, if any, of such software products have been
registered for copyright protection with the United States Copyright
Office and any foreign offices and by whom such items have been
registered.
(3) Schedule 2.11 also sets forth a complete list of (i) any requests WRI
has received to make any such registration, including the identity of
the requestor and the item requested to be so registered, and the
jurisdiction for which such request has been made and (ii) all
licenses, sublicenses and other agreements as to which WRI is a party
and pursuant to which WRI or any other person is authorized to use any
WRI's Intellectual Property Right or other trade secret material to
WRI, and includes the identity of all parties thereto, a description
of the nature and subject matter thereof, the applicable royalty and
the term thereof. WRI is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its
obligations hereunder, in violation of any license, sublicense or
agreement described on such list.
Page 55
(4) WRI is the sole and exclusive owner or licensee of, with all right,
title and interest in and to (free and clear of any liens or
encumbrances), WRI Intellectual Property Rights, and has sole and
exclusive rights (and is not contractually obligated to pay any
compensation to any third party in respect thereof) to the use thereof
or the material covered thereby in connection with the services or
products in respect of which WRI Intellectual Property Rights are
being used.
(5) To the knowledge of WRI, no claims with respect to WRI Intellectual
Property Rights have been asserted or are threatened by any person,
nor, to the knowledge of WRI, is there any valid grounds for any bona
fide claims (i) to the effect that the manufacture, sale, licensing or
use of any product as now used, sold or licensed or proposed for use,
sale or license by WRI infringes on any copyright, patent, trade ▇▇▇▇,
service ▇▇▇▇ or trade secret, (ii) against the use by WRI of any
trademarks, trade names, trade secrets, copyrights, patents,
technology, know-how or computer software programs and applications
used in WRI's business as currently conducted or as proposed to be
conducted, or (iii) challenging the ownership, validity or
effectiveness of any of WRI Intellectual Property Rights.
(6) All trademarks, service marks and copyrights held by WRI are valid and
subsisting.
(7) To the knowledge of WRI, there is no material unauthorized use,
infringement or misappropriation of any of WRI Intellectual Property
Rights by any third party, including any employee or former employee
of WRI.
(8) WRI has not been sued or charged as a defendant in any claim, suit,
action or proceeding which involves a claim of infringement of any
patents, trademarks, service marks, copyrights or violation of any
trade secret or other proprietary right of any third party and which
has not been finally terminated prior to the date hereof nor does it
have any knowledge of any such charge or claim, and there is not any
infringement liability with respect to, or infringement or violation
by, WRI of any patent, trademark, service ▇▇▇▇, copyright, trade
secret or other proprietary right of another.
(9) To WRI's knowledge, no WRI's Intellectual Property Right or product of
WRI is subject to any outstanding order, judgment, decree, stipulation
or agreement restricting in any manner the licensing thereof by WRI.
(10) There is no outstanding order, judgment, decree or stipulation on WRI,
and WRI is not party to any agreement, restricting in any manner the
licensing of WRI's products by WRI.
(11) WRI has not entered into any agreement to indemnify any other person
against any charge of infringement of any WRI's Intellectual Property
Right.
(12) Each current and former employee of and consultant to WRI has signed a
confidentiality agreement substantially in WRI's standard form as
certified by WRI, delivered to AmeriNet and included in Exhibit 2.11.
(B) (1) "Commercial Software Rights" means packaged commercially available
software programs generally available to the public through retail
dealers in computer software which have been licensed to WRI pursuant
to end-user licenses and which are used in WRI's business but are in
no way a component of or incorporated in any of WRI's products and
related trademarks, technology and know-how.
Page 56
(2) To the best of WRI's knowledge, WRI has not breached or violated the
terms of its license, sublicense or other agreement relating to any
Commercial Software Rights and has a valid right to use such
Commercial Software Rights and has a valid right to use such
Commercial Rights under such license and agreements.
(3) WRI is not, nor will it be as a result of the execution and delivery
of this Agreement or the performance of its obligations hereunder, in
violation of any license, sublicense or agreement relating to
Commercial Software Rights.
(4) No claims with respect to the Commercial Software Rights have been
asserted or, to the knowledge of WRI, are threatened by any person
against WRI, nor to the knowledge of WRI is there any valid grounds
for any bona fide claims (i) to the effect that the manufacture, sale,
licensing or use of any product as now used, sold or licensed or
proposed for use, sale or license by WRI infringes on any copyright,
patent, trade ▇▇▇▇, service ▇▇▇▇ or trade secret, (ii) against the use
by WRI of any trademarks, trade names, trade secrets, copyrights,
patents, technology, know-how or computer software programs and
applications used in WRI's business as currently conducted or as
proposed to be conducted, or (iii) challenging the validity or
effectiveness of any of WRI's rights to use Commercial Software
Rights.
(5) To the knowledge of WRI, there is no material unauthorized use,
infringement or misappropriation of any of the Commercial Software
Rights by WRI or any employee or former employee of WRI during the
period of their employment.
(6) To the knowledge of WRI, no Commercial Software Right is subject to
any outstanding order, judgment, decree, stipulation or agreement
restricting in any manner the use thereof by WRI.
2.12 Agreements, Contracts and Commitments.
(A) Except as specifically disclosed in Schedule 2.12, WRI does not have, is
not a party to nor is it bound by:
(1) Any collective bargaining agreements;
(2) Any agreements that contain any unpaid severance liabilities or
obligations;
(3) Any bonus, deferred compensation, incentive compensation, pension,
profit-sharing or retirement plans, or any other employee benefit
plans or arrangements;
(4) Any employment or consulting agreement, contract or commitment with an
employee or individual consultant or salesperson or consulting or
sales agreement, contract or commitment with a firm or other
organization, not terminable by WRI on thirty days notice without
liability, except to the extent general principles of wrongful
termination law may limit WRI's ability to terminate employees at
will;
(5) Agreement or plan, including, without limitation, any stock option
plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement;
Page 57
(6) Any fidelity or surety bond or completion bond;
(7) Any lease of personal property having a value individually in excess
of $2,000;
(8) Any agreement of indemnification or guaranty not entered into in the
ordinary course of business;
(9) Any agreement, contract or commitment containing any covenant limiting
the freedom of WRI to engage in any line of business or compete with
any person;
(10) Any agreement, contract or commitment relating to capital expenditures
and involving future obligations in excess of $5,000 in any single
instance or $20,000 in the aggregate;
(11) Any agreement, contract or commitment relating to the disposition or
acquisition of assets not in the ordinary course of business or any
ownership interest in any corporation, partnership, joint venture or
other business enterprise;
(12) Any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the
borrowing of money or extension of credit, including guaranties
referred to in Schedule 2.12(A)(12) hereof;
(13) Any purchase order or contract for the purchase of raw materials or
acquisition of assets involving $1,000 or more in any single instance
or $20,000 or more in the aggregate;
(14) Any construction contracts;
(15) Any distribution, joint marketing or development agreement;
(16) Any other agreement, contract or commitment which involves $2,000 or
more in any single instance or more than $20,000 in the aggregate and
is not cancelable without penalty within thirty (30) days other than
standard end-user licenses of WRI's products and services in the
ordinary course of business consistent with past practice, or
(17) Any agreement which is otherwise material to WRI's business.
(B) (1) WRI has not breached, or received any claim or threat that it has
breached, any of the terms or conditions of any agreement, contract or
commitment to which it is bound (including those set forth in any of
WRI Schedules) in such manner as would permit any other party to
cancel or terminate the same.
(2) Each agreement, contract or commitment required to be set forth in any
of WRI Schedules is in full force and effect (assuming such agreement,
contract or commitment has been duly authorized, executed and
delivered by the other party or parties thereto) and, except as
otherwise disclosed or defaults fully remedied or resolved, is not
subject to any material default thereunder of which WRI has knowledge
by any party obligated to WRI pursuant thereto.
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2.13 Interested Party Transactions.
No officer, director or stockholder of WRI (nor any parent, sibling,
descendant or spouse of any of such persons, or any trust, partnership,
corporation or other entity (provided, that ownership of no more than one
percent of the outstanding voting stock of a publicly traded corporation shall
not be deemed an "interest in any entity" for purposes of this Section 2.13) in
which any of such persons has or has had an interest), has or has had, directly
or indirectly:
(A) An interest in any entity which furnished or sold, or furnishes or sells,
services or products which WRI furnishes or sells, or proposes to furnish
or sell;
(B) Any interest in any entity which purchases from or sells or furnishes to,
WRI, any goods or services; or
(C) A beneficial interest in any contract or agreement required to be set forth
in Schedule 2.12.
2.14 Governmental Authorization.
(A) Schedule 2.14 accurately lists each material federal, state, county, local
or foreign governmental consent, license, permit, grant, or other
authorization issued to WRI:
(1) Pursuant to which WRI currently operates or holds any interest in any
of its properties; or
(2) Which is required for the operation of its business or the holding of
any such interest (herein collectively called "WRI Authorizations").
(B) WRI Authorizations are in full force and effect and constitute all the
material authorizations required to permit WRI to operate or conduct its
business or hold any interest in its properties.
2.15 Litigation.
(A) Schedule 2.15 attached hereto accurately lists all suits, actions and
legal, administrative, arbitration or other proceedings and governmental
investigations and all other claims, pending or, to WRI's knowledge,
threatened or which WRI expects will ultimately be threatened or commenced.
(B) None of such suits, actions, proceedings, investigations or claims seek to
prevent the consummation of the Merger.
(C) There is no judgment, decree or order enjoining WRI in respect of, or the
effect of which is to prohibit, any business practice or the acquisition of
any property or the conduct of business of WRI.
(D) Schedule 2.15 also lists all suits and legal actions initiated by WRI.
2.16 Accounts Receivable.
(A) All receivables of WRI arose in the ordinary course of business at the
aggregate amounts thereof, are to the best of WRI's knowledge collectible
(except to the extent reserved against as reflected in WRI's Financial
Statements) and are carried at values determined in accordance with
generally accepted accounting principles consistently applied.
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(B) To the knowledge of WRI, none of the receivables of WRI is subject to any
claim of offset, recoupment, setoff or counterclaim and there are no facts
or circumstances (whether asserted or unasserted) that would give rise to
any such claim.
(C) No receivables are contingent upon the performance by WRI of any obligation
or contract except for WRI's maintenance obligations under its maintenance
agreements (although no customer has claimed that WRI has failed to perform
its maintenance obligations).
(D) No person has any lien, charge, pledge, security interest or other
encumbrance on any of such receivables and no agreement for deduction or
discount has been made with respect to any of such receivables.
2.17 Minute Books.
The minute books of WRI made available to counsel for AmeriNet contain a
complete and accurate summary of all meetings of directors and stockholders
since the time of incorporation of WRI, and reflect all transactions referred to
in such minutes accurately in all material respects.
2.18 Environmental and OSHA.
(A) Hazardous Material.
(1) As of the Effective Time, no material amount of any substance that is
regulated by any Governmental Entity or that has been designated by
any Governmental Entity to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without
limitation, PCBs, asbestos, urea-formaldehyde and all substances
listed pursuant to the United States Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended from
time to time, and the United States Resource Recovery and Conservation
Act of 1976, as amended from time to time, and the regulations and
publications promulgated pursuant to said laws (a "Hazardous
Material"), is present in violation of any law in effect on or before
the Effective Time, in, on or under any property, including the land
and the improvements, ground water and surface water thereof, that WRI
or any of its past or present subsidiaries has at any time owned,
operated, occupied or leased (collectively, "WRI's Property").
(2) In any event, WRI does not know of the presence of any Hazardous
Material in, on or under any WRI's Property.
(B) Hazardous Materials Activities.
At no time prior to the Effective Time has WRI transported, stored, used,
manufactured, released or exposed its employees or others to Hazardous
Materials in violation of any law in effect on or before the Effective
Time, nor has WRI disposed of, transferred, sold, or manufactured any
product containing a Hazardous Material (collectively "Hazardous Materials
Activities") in violation of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, the Toxic Substances Control Act of
1976 and any other applicable state or federal acts (including the rules
and regulations thereunder) as in effect on or before the Effective Time.
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(C) Permits.
WRI currently holds no environmental approvals, permits, licenses,
clearances and consents and none are necessary for the conduct of WRI's
Hazardous Material Activities and other businesses of WRI as such
activities and businesses are currently being conducted.
2.19 Brokers' and Finders' Fees.
Except as set forth in Schedule 2.19, WRI has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
2.20 Labor Matters.
(A) WRI is in compliance in all material respects with all currently applicable
laws and regulations respecting employment, discrimination in employment,
terms and conditions of employment and wages and hours and occupational
safety and health and employment practices, and is not engaged in any
unfair labor practice.
(B) WRI has not received any notice from any Governmental Entity, and to the
knowledge of WRI, there has not been asserted before any Governmental
Entity, any claim, action or proceeding to which WRI is a party or
involving WRI, and there is neither pending nor, to the knowledge of WRI,
threatened any investigation or hearing concerning WRI arising out of or
based upon any such laws, regulations or practices.
(C) WRI has not received notice of and to the best of its knowledge, there are
no pending claims against WRI under any workers compensation plan or policy
or for long term disability.
(D) To the best of WRI's knowledge, it has complied in all material respects
with all applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 and has no obligations with respect to any
former employees or qualifying beneficiaries thereunder.
(E) Schedule 2.20 lists all current employees of WRI and their current salary
and vacation accruals.
2.21 Insurance.
(A) Schedule 2.21 lists all insurance policies and fidelity bonds covering the
assets, business, equipment, properties, operations, software errors and
omissions, employees, officers and directors of WRI as well as all claims
made under any insurance policy by WRI since its incorporation.
(B) There is no claim by WRI pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters
of such policies or bonds.
(C) All premiums payable under all such policies and bonds have been paid and
WRI is otherwise in compliance in all material respects with the terms of
such policies and bonds (or other policies and bonds providing
substantially similar insurance coverage).
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(D) Such policies of insurance and bonds are of the type and in amounts
customarily carried by persons conducting businesses similar to those of
WRI.
(E) WRI does not know of any threatened termination of or material premium
increase with respect to any of such policies.
(F) WRI has never been denied insurance coverage nor has any insurance policy
of WRI ever been canceled for any reason.
2.22 Compliance with Laws.
WRI has not received any notices of violation with respect to and to the
best of its knowledge has complied in all material respects with and is not in
violation in any material respect of any federal, state or local statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its business, assets or properties.
2.23 Complete Copies of Materials.
WRI has delivered or made available true and complete copies of each
document (or summaries of same) which has been requested by AmeriNet or its
counsel.
2.24 Binding Agreements: No Default.
Each of the contracts, agreements and other instruments shown on the
Exhibits and Schedules referred to in this Agreement to which WRI is a party is
a legal, binding and enforceable obligation in favor of or against WRI (assuming
that such contracts, agreements and instruments are binding on all other parties
thereto, WRI having no reason to believe that they are not), in accordance with
its terms, and no party with whom WRI has an agreement or contract is, to WRI's
knowledge, in default thereunder or has breached any material terms or
provisions thereof (subject to all applicable bankruptcy, insolvency,
reorganization and other laws applicable to creditors' rights and remedies and
to the exercise of judicial discretion in accordance with general principles of
equity).
2.25 Regulation S-B Data.
(A) The information supplied in Exhibit 2.25 by WRI for inclusion in the
current report on Commission Form 8-K to be filed with the Commission
within 15 days after the Effective Date and in all other Exchange Act
Reports which AmeriNet will file thereafter fully complies with the
informational requirements pertaining to WRI imposed by Commission Form 8-K
and called for by Regulation S-B other than those pertaining to financial
data which will be supplied by WRI within 60 days after the Merger, and
does contain any statement which, in light of the circumstances under which
it was made, is false or misleading with respect to any material fact, or
that omits to state any material fact necessary in order to make the
statements made therein not false or misleading; or omits to state any
material fact necessary to correct any statement which has become false or
misleading.
(B) If at any time prior to the Effective Time any event relating to WRI or any
of its affiliates, officers or directors should be discovered by WRI which
should be set forth in an amendment or a supplement to the Exchange Act
Reports, WRI shall promptly inform AmeriNet and American Internet.
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(C) Notwithstanding the foregoing, WRI makes no representation or warranty with
respect to any information supplied by AmeriNet or American Internet which
is contained in any of the foregoing documents.
2.26 FIRPTA.
WRI is not, and has not been at any time, a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code.
2.27 Employee Benefit Plans.
(A) Schedule 2.27 lists all employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and all bonus, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee benefit plans,
programs or arrangements, and any current or former employment or executive
compensation or severance agreements, written or otherwise, for the benefit
of, or relating to, any employee of WRI, any trade or business (whether or
not incorporated) which is a member or which is under common control with
WRI (an "ERISA Affiliate") within the meaning of Section 414 of the Code,
or any subsidiary of WRI (together, the "Employee Plans"), and a copy of
each such Employee Plan has been provided to AmeriNet.
(B) (1) None of the Employee Plans promises or provides retiree medical or
other retiree welfare benefits to any person except as required by
applicable law, including but not limited to COBRA;
(2) (a) To the best of WRI's knowledge: all Employee Plans are in
compliance in all material respects with the requirements
prescribed by any and all applicable statutes (including ERISA
and the Code), orders, or governmental rules and regulations
currently in effect with respect thereto (including all
applicable requirements for notification to participants or
beneficiaries or the Department of Labor, Internal Revenue
Service (the "IRS") or Secretary of the Treasury), and WRI has
performed in all material respects all obligations required to be
performed by it under, is not in default under or violation of,
and has no knowledge of any default or violation by any other
party to, any of the Employee Plans;
(b) Each Employee Plan intended to qualify under Section 401(a) of
the Code and each trust intended to qualify under Section 501(a)
of the Code either has received a favorable determination letter
with respect to each such Employee Plan from the IRS or still has
a remaining period of time under applicable Treasury Regulations
or IRS pronouncements in which to apply for such a determination
letter and to make any amendments necessary to obtain a favorable
determination;
(c) No Employee Plan is or within the prior six years has been
subject to, and WRI has not incurred and does not expect to incur
any liability under, Title IV of ERISA or Section 412 of the
Code; and
(d) To the best of WRI's knowledge, nothing in any Employee Plan
precludes or interferes with AmeriNet's ability to cause WRI to
terminate (or consolidate, at AmeriNet's option) any Employee
Plan after the Closing; provided that: (i) the Employee Plans may
be terminated prospectively only, subject to rights accrued by
WRI's employees at the time of such termination and (ii) not more
than sixty days notice may be required to terminate certain
Employee Plans.
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(3) None of the following now exists or has existed within the six-year
period ending on the date hereof with respect to any Employee Plan:
(a) Any act or omission by WRI constituting a violation of Section
402, 403, 404 or 405 of ERISA;
(b) Any act or omission by WRI which constitutes a violation of
Sections 406 and 407 of ERISA and is not exempted by Section 408
of ERISA or which constitutes a violation of Section 4975(c) of
the Code and is not exempted by Section 4975(d) of the Code;
(c) Any act or omission by WRI constituting a violation of Section
503, 510 or 511 of ERISA; or (IV) any act or omission by WRI
which could give rise to liability under Section 502 of ERISA or
under Sections 4972 or 4975 through 4980 of the Code.
(4) (a) Each Employee Plan has been maintained in substantial compliance
with its terms, and all contributions, premiums or other payments
due from WRI or any of its subsidiaries to (or under) any such
Employee Plan have been fully paid or adequately provided for on
the audited WRI's Financial Statements for the most
recently-ended fiscal year.
(b) To the best of WRI's knowledge, all accruals thereon (including,
where appropriate proportional accruals for partial periods) have
been made in accordance with generally accepted accounting
principles consistently applied on a reasonable basis.
(c) There has been no amendment, written interpretation or
announcement (whether or not written) by WRI with respect to, or
change in employee participation or coverage under, any Employee
Plan that would increase materially the expense of maintaining
such plans or arrangements, individually or in the aggregate,
above the level of expense incurred with respect thereto for the
most recently-ended fiscal year.
(5) WRI has made available to AmeriNet complete, accurate and current
copies of all Employee Plans and all amendments, documents,
correspondence and filings relating thereto, including but not limited
to any statements, filings, reports or Returns filed with any
governmental agency with respect to the Employee Plans at any time
within the three-year period ending on the date hereof.
2.28 Distribution Agreements.
No third party or parties have the right to distribute WRI's products or to
market its services except as disclosed in Schedule 2.28, which discloses the
names, addresses, telephone numbers, fax numbers, e-mail addresses and federal
Tax identification numbers of each such person, together with a summary of the
agreements pursuant to which WRI's products are distributed or its services are
marketed.
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2.29 Representations Complete.
None of the representations or warranties made by WRI, nor any statement
made in any Schedule, Exhibit or certificate furnished by WRI pursuant to this
Agreement, when read in its entirety, contains or will contain any untrue
statement of a material fact at the Effective Time, or omits or will omit to
state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.
Article III
Representations and Warranties of AmeriNet and American Internet
AmeriNet and American Internet represent and warrant to WRI as a material
inducement to its entry into this Agreement, subject to the exceptions
specifically disclosed in the schedules supplied and initialed by AmeriNet to
WRI (the "AmeriNet Schedules") or in AmeriNet's Exchange Act Reports, as
follows:
3.1 Organization, Standing and Power.
(A) AmeriNet is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(B) American Internet is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida organized solely to
effect the transactions contemplated by this Agreement immediately prior to
its execution.
(C) Each of AmeriNet and American Internet has the corporate power to own its
properties and to carry on its business as now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified would have a material adverse effect
on AmeriNet and American Internet taken as a whole.
(D) Copies of AmeriNet's and American Internet's articles of incorporation and
bylaws are filed with the Commission as exhibits to AmeriNet's Exchange Act
Reports.
3.2 Capital Structure.
Except as otherwise disclosed in the Exchange Act Reports:
(A) (1) The authorized stock of AmeriNet consists of 20,000,000 shares of
Common Stock, par value $0.01 per share, and 5,000,000 shares of
Preferred Stock, $0.01 par value per share, the attributes of which
are to be determined on a case by case basis by AmeriNet's board of
directors.
(2) AmeriNet had 7,370,026 shares of Common Stock issued and outstanding
as of November 12, 1999 and no shares of Preferred Stock have ever
been issued.
(3) AmeriNet has reserved 4,884,980 shares of Common Stock for issuance
(including those to be issued pursuant to this Agreement) as described
in AmeriNet's 10-QSB for the calendar quarter ended September 30,
1999.
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(4) There are no other options, warrants, calls, rights, commitments or
agreements of any character to which AmeriNet is a party or by which
it is bound obligating AmeriNet to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the Capital Stock of AmeriNet or obligating
AmeriNet to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement, except in conjunction with
acquisitions under negotiation.
(5) Pursuant to AmeriNet's Articles of Incorporation, they may be amended
by action of the board of directors without stockholder approval to
increase the amount of authorized Capital Stock.
(B) The authorized Capital Stock of American Internet consists of 30,000,000
shares of Common Stock, par value $0.001 per share, 100 shares of which, as
of the date hereof, are issued and outstanding and are held by AmeriNet, no
shares being reserved for any purpose, other than as may be required under
ongoing negotiations for other acquisitions or with reference to the ▇▇▇▇▇▇
Option granted in Section 5.14 of this Agreement.
(C) All of AmeriNet's and American Internet's shares of Capital Stock have been
duly authorized, and all of their issued and outstanding shares of Capital
Stock have been validly issued, are fully paid and nonassessable and are
free of any liens or encumbrances other than any liens or encumbrances
created by or imposed upon the holders thereof.
(D) The shares of AmeriNet Common Stock to be issued pursuant to the Merger
will be duly authorized, validly issued, fully paid, and nonassessable.
3.3 Authority.
(A) AmeriNet and American Internet have all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
(B) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of AmeriNet and American Internet.
(C) This Agreement has been duly executed and delivered by AmeriNet and
American Internet and, subject to having also been approved by WRI's board
of directors and properly executed and delivered by WRI, constitutes a
valid and binding obligation of AmeriNet and American Internet.
(D) The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated hereby will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under:
(1) Any provision of the Articles of Incorporation or Bylaws of AmeriNet
and American Internet; or
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(2) Any mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
AmeriNet or its properties or assets, other than any such conflicts,
violations, defaults, terminations, cancellations or accelerations
which individually or in the aggregate would not have a material
adverse effect on the ability of AmeriNet to consummate the
transactions contemplated hereby.
(E) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or with
respect to AmeriNet and American Internet in connection with the execution
and delivery of this Agreement by AmeriNet and American Internet or the
consummation by AmeriNet and American Internet of the transactions
contemplated hereby, except for:
(1) The filing of the Certificate of Merger with the Florida Secretary of
State;
(2) Such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state and
federal securities laws (a Form D Notification Statement) and the laws
of any foreign country; and
(3) Such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not have a material
adverse effect on the ability of AmeriNet to consummate the
transactions contemplated hereby.
3.4 AmeriNet Financial Statements.
(A) All of the AmeriNet Exchange Act Reports since its current management took
office starting in November of 1998, have been filed and are available on
the Commission's Internet web site at ▇▇▇.▇▇▇.▇▇▇ in its ▇▇▇▇▇ Archives
sub-site.
(B) To the best of AmeriNet's knowledge, the Exchange Act Reports comply in all
material respects with the requirements of the Exchange Act, other than in
conjunction with filing deadlines, and do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a subsequently filed document with the Commission or by
information provided by AmeriNet to WRI.
(C) The financial statements of AmeriNet (the "AmeriNet Financial Statements"),
including the notes thereto, included in the report on Commission Form
10-KSB for the period ended June 30, 1999 (the "1999 10-KSB") and for the
three months ended September 30, 1999, comply as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, have been
prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position
of AmeriNet at the date thereof and of its operations and cash flows for
the period then ended.
(D) There has been no change in AmeriNet accounting policies or estimates
except as described in the notes to AmeriNet's Financial Statements or in
subsequently filed Exchange Act Reports.
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(E) AmeriNet has no material obligations (obligations not required to be set
forth in AmeriNet's Financial Statements under generally accepted
accounting principles being deemed not material), other than:
(1) Those set forth in AmeriNet's Financial Statements;
(2) Those resulting from ongoing acquisition activities which developed
after the date of AmeriNet's Financial Statements but are not yet
definite enough to require filing in the Exchange Act Reports;
(3) Those pertaining to confidential letters of intent; or
(4) Those disclosed by AmeriNet to WRI.
(F) To the best of AmeriNet's knowledge, there are no currently outstanding
comment letters from the Commission that have not been responded to and
complied with.
3.5 Broker's and Finders' Fees.
Except as disclosed in the Exchange Act Reports, AmeriNet has not incurred,
and will not incur, directly or indirectly, any liability for brokerag e or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement, the Merger or any transaction contemplated hereby.
3.6 Exchange Act Reports.
(A) The Exchange Act Reports (as defined in Section 3.4 above) including the
current report on Form 8-K to be filed by AmeriNet with the Commission
within 15 days after the Effective Date shall not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements included therein, in light of the
circumstances under which they were made, not misleading.
(B) The information supplied by AmeriNet for inclusion in the Exchange Act
Reports shall not, on the date the Exchange Act Reports are first mailed to
WRI's stockholders, at the time of the WRI Stockholders' Meeting and at the
Effective Time, contain any statement which, at such time and in light of
the circumstances under which it shall be made, is false or misleading with
respect to any material fact, or shall omit to state any material fact
necessary in order to make the statements therein not false or misleading.
(C) If at any time prior to the Effective Time any event relating to AmeriNet,
American Internet or any of their respective affiliates, officers or
directors should be discovered by AmeriNet or American Internet which
should be set forth in a supplement to the Exchange Act Reports, AmeriNet
or American Internet will promptly inform WRI.
(D) Notwithstanding the foregoing, AmeriNet and American Internet make no
representation or warranty with respect to any information supplied by WRI
which is contained in any of the foregoing documents.
(E) Subject to WRI's timely compliance with its disclosure obligations under
this Agreement, the Current Report on Form 8-K pertaining to disclosure of
the Merger shall comply in all material respects as to form and substance
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder.
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3.7 Ownership of WRI's Common Stock.
As of the date of execution of this Agreement, AmeriNet does not own any
shares of WRI's Common Stock.
3.8 Litigation.
There are no suits, actions or legal, administrative, arbitration or other
proceedings or governmental investigations against AmeriNet pending or, to
AmeriNet's knowledge, threatened, which (i) if determined adversely to AmeriNet,
could be expected to result in a material adverse effect on the financial
condition or results of operations of AmeriNet, or (ii) seek to prevent the
consummation of the Merger.
3.9 Limited Activities
(A) AmeriNet is a holding company with no material operations or assets other
than the shares of its subsidiaries common stock and operations pertaining
to supervision and coordination of the activities of its subsidiaries,
provision of support services for its subsidiaries, acquisition related
activities and compliance with applicable laws, including federal
securities and internal revenue laws.
(B) In amplification of the representation and warranty contained in Section
3.9(A), to the best of AmeriNet's knowledge, it is not in material
violation of any applicable laws, has filed all required Tax reports and
paid all Taxes due.
Article IV
Conduct Prior to the Effective Time
4.1 Conduct of Business of WRI.
(A) During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, WRI
agrees (except to the extent that AmeriNet shall otherwise consent in
writing), to carry on its business in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and, to the
extent consistent with such business, use all reasonable efforts consistent
with past practice and policies to preserve intact WRI's present business
organizations, keep available the services of its present officers and key
employees and preserve their relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings
with it, to the end that WRI's goodwill and ongoing businesses shall be
unimpaired at the Effective Time.
(B) WRI shall promptly notify AmeriNet of any event or occurrence or emergency
not, in the reasonable judgment of WRI, in the ordinary course of business
of WRI, and any event which could, in the reasonable judgment of WRI, have
a material adverse effect on WRI.
(C) Except as expressly contemplated by this Agreement or set forth in Schedule
4.1, WRI shall not, without the prior written consent of AmeriNet:
(1) Enter into any commitment or transaction not in the ordinary course of
business (i) to be performed over a period longer than six (6) months
in duration, or (ii) to purchase fixed assets for a purchase price in
excess of $5,000;
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(2) Grant any severance or termination pay to any director, officer or
employee except (i) payments made pursuant to standard written
agreements outstanding on the date hereof or (ii) in the case of
employees who are not officers, grants which are made in the ordinary
course of business in accordance with WRI's standard past practices;
(3) Except for licenses granted to end-users pursuant to WRI's standard
license agreements, transfer to any person or entity any rights to
WRI's Intellectual Property;
(4) Enter into or amend any agreements pursuant to which any other party
is granted exclusive marketing or other rights of any type or scope
with respect to any products of WRI;
(5) Violate, amend or otherwise modify the terms of any of the contracts
or agreements required to be set forth in WRI Schedules;
(6) Commence any litigation;
(7) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of WRI's Common
Stock, or split, combine or reclassify any of WRI's Common Stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of WRI's Common Stock, or
repurchase or otherwise acquire, directly or indirectly, any shares of
WRI's Common Stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase
of shares at cost in connection with any termination of service to
WRI;
(8) Issue, deliver or sell or authorize or propose the issuance, delivery
or sale of, or purchase or propose the purchase of, any shares of
WRI's Common Stock or securities convertible into, or subscriptions,
rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or
other convertible securities;
(9) Cause or permit any amendments to its articles of incorporation or
bylaws, except as required by this Agreement;
(10) Acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire
or agree to acquire any assets which are material, individually or in
the aggregate, to the business of WRI;
(11) Sell, lease, license or otherwise dispose of any of its properties or
assets which are material, individually or in the aggregate, to the
business of WRI, except in the ordinary course of business;
(12) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities of WRI or guarantee
any debt securities of others;
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(13) Adopt or amend any employee benefit plan, or enter into any employment
contract, pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its
employees;
(14) Revalue any of its assets, including without limitation writing down
the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business;
(15) Pay, discharge or satisfy in an amount in excess of $5,000 in any one
case any claim, liability or obligation (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in WRI Financial Statements
(or the notes thereto);
(16) Make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, file any material
Return or any amendment to a material Return, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable
to any claim or assessment in respect of Taxes; or
(17) Take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(C)(1) through 4.1(C)(16) above, or any
action which would make any of the representations or warranties or
covenants of WRI contained in this Agreement materially untrue or
incorrect.
4.2 No Solicitation.
(A) Prior to the Effective Time, WRI will not (nor will WRI permit any of WRI's
officers, directors, stockholders affiliated with any officer or director
or WRI's agents, representatives or affiliates to) directly or indirectly,
take any of the following actions with any party other than AmeriNet and
its designees:
(1) Solicit, encourage, initiate or participate in any negotiations or
discussions with respect to, any offer or proposal to acquire all or
substantially all of WRI's business and properties or Common Stock
whether by merger, purchase of assets, tender offer or otherwise;
(2) Except as required by law and except for disclosures made to financial
institutions and others in the ordinary course of business, disclose
any information not customarily disclosed to any person other than its
attorneys or financial advisors concerning WRI's business and
properties or afford to any person or entity access to its properties,
books or records, or
(3) Assist or cooperate with any person to make any proposal to purchase
all or any part of WRI's Common Stock or of its assets (other in the
ordinary course of business).
(B) In the event WRI shall receive any offer or proposal, directly or
indirectly, of the type referred to in Section 4.2(A)(1) and (3) above, or
any request for disclosure or access pursuant to clause 4.2(A)(2) above,
WRI shall immediately inform AmeriNet as to any such offer or proposal and
will cooperate with AmeriNet by furnishing any information it may
reasonably request.
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4.3 Conduct of Business of AmeriNet.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement and the Effective Time, as the case
may be, AmeriNet agrees (except to the extent that WRI shall otherwise consent
in writing), that AmeriNet shall promptly notify WRI of any event or occurrence
or emergency which is not in the ordinary course of business of AmeriNet and
which is material and adverse to the business of AmeriNet and its subsidiaries
taken as a whole.
Article V
Covenants
5.1 Report on Form 8-K.
(A) (1) On or before the Effective Time, WRI shall have provided AmeriNet's
legal counsel with a disclosure document containing all of the
information required by Commission Regulation S-B as to WRI and its
officers, directors, stockholders, parents, promoters and control
persons, other than the certified financial information called for
thereby, which may be provided within 60 days following the Effective
Time (the "WRI S-B Disclosure Document").
(2) Within fifteen days following the Effective Time, AmeriNet shall
prepare and file with the Commission a current report on Commission
Form 8-K (the "8-K Report") based on the WRI S-B Disclosure Document,
disclosing the Merger and containing information concerning WRI
required by Commission Regulation S-B.
(B) (1) AmeriNet, with the full cooperation and assistance of WRI, shall make
all necessary filings with respect to the Merger under the Securities
Act and the Exchange Act and the rules and regulations thereunder,
under applicable Blue Sky or similar securities laws, rules and
regulations and shall use all reasonable efforts required approvals
and clearances with respect thereto.
(2) AmeriNet and WRI shall use their reasonable best efforts to secure the
Commission's acceptance of the audited WRI Financial Statements as
complying with the requirements of Regulation S-B, and WRI will make
any reasonable modification's to the WRI Financial Statements which it
can make, at the request of the Commission; and, if required, will use
best efforts to secure required extensions from the Commission of time
in which to provide materials complying with Commission Regulation
S-B.
(C) The provision of the audited WRI Financial Statements on a timely basis in
full compliance with the requirements of Commission Regulation S-B shall
constitute a condition subsequent to the obligations of AmeriNet and
American Internet under this Agreement and in the event of the failure of
such condition subsequent, then, at AmeriNet's sole option:
(1) The Merger may be rescinded, and all funds advanced by AmeriNet to the
Surviving Corporation shall be repaid, with interest at the annual
rate of 8%, to AmeriNet within 30 days after such rescission; or
(2) The Escrow Shares shall be deemed defaulted to AmeriNet and the Merger
shall be restructured in a manner complying with AmeriNet's reporting
and other obligations under the Exchange Act, including the sale by
AmeriNet of the Surviving Corporation.
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5.2 Meeting of WRI's Stockholders.
(A) WRI shall promptly after the date hereof take all action necessary in
accordance with the Florida Corporate Merger Laws and its Articles of
Incorporation and Bylaws to convene a meeting of its stockholders or obtain
a unanimous written consent in-lieu of meeting, as permitted under
applicable law, for the purpose of ratifying this Agreement (the WRI
Stockholders' Meeting).
(B) WRI shall consult with AmeriNet and use all reasonable efforts to hold the
WRI Stockholders' Meeting on a day acceptable to AmeriNet.
(C) In connection with the WRI Stockholders' Meeting, WRI shall prepare and
deliver to its stockholders all information necessary for them to vote at
such meeting on the issue of ratification of this Agreement under the laws
of the United States, the State of Florida and their respective states of
domicile.
5.3 Access to Information.
(A) WRI shall afford AmeriNet and its accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to all:
(1) Of its properties, books, contracts, commitments and records; and
(2) Other information concerning the business, properties and personnel of
WRI as AmeriNet may reasonably request.
(B) WRI agrees to provide to AmeriNet and its accountants, counsel and other
representatives copies of internal financial statements promptly upon
request.
(C) No information or knowledge obtained in any investigation pursuant to this
Section 5.3 shall affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the
Parties to consummate the Merger.
5.4 Confidentiality.
(A) From the date hereof to and including the Effective Time, the Parties shall
maintain, and cause their directors, employees, agents and advisors to
maintain, in confidence and not disclose or use for any purpose, except the
evaluation of the transactions contemplated hereby and the accuracy of the
respective representations and warranties of the Parties contained herein,
information concerning the other Parties and obtained directly or
indirectly from such Parties, or their directors, employees, agents or
advisors, except as was in the possession of such Party prior to obtaining
such information from such other Party as to which the fact of prior
possession such possessing Party shall have the burden of proof and such
information as is or becomes:
(1) available to the non-disclosing Party from third parties not subject
to an undertaking of confidentiality or secrecy;
(2) generally available to the public other than as a result of a breach
by the non-disclosing Party hereunder; or
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(3) required to be disclosed under applicable law.
(B) In the event that the transactions contemplated hereby shall not be
consummated, all such information which shall be in writing shall be
returned to the Party furnishing the same, including to the extent
reasonably practicable, copies or reproductions thereof which may have been
prepared.
5.5 Expenses.
Whether or not the Merger is consummated, all expenses incurred in
connection with the Merger and this Agreement ("Expenses") shall be the
obligation of the Party incurring such expenses.
5.6 Public Disclosure.
Unless otherwise required by law, prior to the Effective Time no disclosure
(whether or not in response to an inquiry) of the subject matter of this
Agreement shall be made by any Party unless approved by AmeriNet and WRI prior
to release, provided that such approval shall not be unnecessarily withheld,
subject, in the case of AmeriNet, to AmeriNet's obligation to comply with
applicable securities laws.
5.7 Consents.
Each of AmeriNet and WRI shall promptly apply for or otherwise seek, and
use its best efforts to obtain, all consents and approvals required to be
obtained by it for the consummation of the Merger, and WRI shall use its best
efforts to obtain all consents, waivers and approvals under any of WRI's
agreements, contracts, licenses or leases in order to preserve the benefits
thereunder for the Surviving Corporation and otherwise in connection with the
Merger; all of such consents and approvals being set forth in Schedule 5.7.
5.8 Affiliate Agreements.
(A) Schedule 5.8 sets forth those persons who are, in WRI's reasonable
judgment, "Affiliates" of WRI (the "Affiliate[s]").
(B) WRI shall provide AmeriNet such information and documents as AmeriNet shall
reasonably request for purposes of reviewing such list.
(C) WRI shall use its best efforts to deliver or cause to be delivered to
AmeriNet, concurrently with the execution of this Agreement (and in any
case prior to the Effective Time) from each of the Affiliates of WRI, an
executed Affiliate Agreement in the form attached hereto as Exhibit 5.8.
(D) AmeriNet shall be entitled to place appropriate legends on the certificates
evidencing any AmeriNet Common Stock to be received by such Affiliates
pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for AmeriNet Common Stock,
consistent with the terms of such Affiliate Agreements, in addition to the
legends and stop transfer instructions placed and issues on all
certificates to be issued to WRI's stockholders in conjunction with the
Merger based on the Parties reliance on Section 4(2) of the Securities Act
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5.9 Legal Requirements.
(A) Each of AmeriNet, American Internet and WRI will take all reasonable
actions necessary to comply promptly with all legal requirements which may
be imposed on them with respect to the consummation of the transactions
contemplated by this Agreement and will promptly cooperate with and furnish
information to any Party hereto in connection with any such requirements
imposed upon such other Party in connection with the consummation of the
transactions contemplated by this Agreement and will take all reasonable
actions necessary to obtain (and will cooperate with the other Parties in
obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any Governmental Entity or other
person, required to be obtained or made in connection with the taking of
any action contemplated by this Agreement.
(B) The foregoing obligations shall not be construed to require WRI to pay
money or other consideration to stockholders of WRI to undue influence such
stockholders to vote in favor of the Merger and the transactions
contemplated hereby.
5.10 Blue Sky Laws.
The Parties shall take such steps as may be necessary to comply with the
securities and Blue Sky Laws of all jurisdictions which are applicable to the
issuance of AmeriNet Common Stock pursuant hereto.
5.11 Best Efforts: Additional Documents and Further Assurances.
(A) Each of the Parties to this Agreement shall use its best efforts to
effectuate the transactions contemplated hereby and to fulfill and cause to
be fulfilled the conditions to closing and the condition subsequent under
this Agreement.
(B) Each Party, at the request of another Party, shall execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation
of this Agreement and the transactions contemplated hereby.
5.12 Employment Agreements.
The individuals set forth on Schedule 5.12 are parties to employment
agreements with WRI in the form contained in composite Exhibit 5.12 hereto (the
"Employment Agreements"), which shall be in full force and effect at the
Effective Time and any other employment or similar agreements with any such
persons shall be deemed superseded thereby, as of the Effective Date.
5.13 Expansion Capital.
Subject to WRI's compliance with its obligations under this Agreement,
including those involving provision of certified financial statements for its
operations for the time period and in the form required by Commission Regulation
S-B for purposes of the Merger, AmeriNet hereby covenants and agrees as follows:
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(A) Agreement to provide expansion capital:
Provided that the Surviving Corporation has complied with its obligations
under this Agreement, AmeriNet shall provide $300,000 in expansion capital
to be expended solely for the purposes set forth in Schedule 5.13, to the
Surviving Corporation:
1. Immediately after the Effective Time of the Merger, the sum of
$100,000,
2. Within 60 days after the completion of a certified audit of WRI's
financial statements complying with the Requirements of Commission
Regulation S-B and accepted by the Commission as filed by AmeriNet in
a current report on Commission Form 8-K (the "8-K Audit"), the sum of
$100,000, and
3. Within 120 days after completion of the 8-K Audit, the sum of
$100,000.
5.14 ▇▇▇▇▇▇ Option:
Subject to compliance with all applicable legal requirements and provided
that the Surviving Corporation has complied with its obligations under this
Agreement, AmeriNet will honor the following described ▇▇▇▇▇▇ Option during the
two fiscal year period immediately following the Effective Date:
(1) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the holder of more than 90% of WRI's Common Stock
immediately prior to the Effective Time ("▇▇. ▇▇▇▇▇▇") shall have the right
to purchase shares of the Surviving Corporation's Capital Stock during
eighteen fiscal month period commencing on the 91st day following the
Effective Time and ending at the close of business on the 730th day
following the Effective Time (the "▇▇▇▇▇▇ Option").
(2) The Option exercise price shall be comprised of the full performance of all
of the following:
(a) The full and complete conveyance, without any liens or encumbrances,
to AmeriNet of all of the AmeriNet Common Stock received as a result
of this Merger by ▇▇. ▇▇▇▇▇▇ and his successors in interest and all
other distributions of securities, cash or other assets or rights
received by ▇▇. ▇▇▇▇▇▇ and his successors in interest as a result of
their status as AmeriNet stockholders (the "Exchanged Securities");
and
(b) The repayment by the Surviving Corporation of all funds advanced to it
or its affiliates or designees directly or indirectly by or through
AmeriNet either:
(i) Concurrently with the exercise of the ▇▇▇▇▇▇ Option, together
with interest from the day of funding at the rate of six percent,
per annum, or, at the option of the Surviving Corporation; or
(ii) Over a period of twenty-four consecutive months starting on the
date the ▇▇▇▇▇▇ option is exercised, provided that: interest from
the dates of funding is added to such sums at the rate of eight
percent, per annum, amortized and payable in equal installments,
fist comprised of interest and when all of the interest has been
paid, of principal, the first installment to be tendered on the
date the ▇▇▇▇▇▇ Option is exercised and each subsequent monthly
payment being tendered to AmeriNet, at its principal
administrative offices at the time, on each subsequent monthly
anniversary thereof, time being of the essence; such repayment
obligation is secured through a pledge of assets of the Surviving
Corporation either having a value equal to 150% of the aggregate
indebtedness or comprised of all of the Surviving Corporation's
Capital Stock, in either case using forms of notes and security
agreements mutually agreed to by AmeriNet and the Surviving
Corporation; and, the payment is guaranteed by ▇▇. ▇▇▇▇▇▇.
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(2) The ▇▇▇▇▇▇ Option shall be exercisable by provision of written notice
to AmeriNet by ▇▇. ▇▇▇▇▇▇ of intent to exercise the ▇▇▇▇▇▇ Option,
specifying the repayment option selected and if immediate repayment is
not selected, including a proposed form of note, security agreement,
guarantee and appraisal of the assets being used as security (the
"▇▇▇▇▇▇ Option Notice"); provided, that, in the event that the proper
form of documentation cannot be mutually agreed upon, the issue shall
be promptly submitted to arbitration and the issuance and distribution
of the Surviving Corporation's Capital Stock shall be held in abeyance
until such issue is decided.
(3) Upon receipt of the ▇▇▇▇▇▇ Option Notice, AmeriNet shall authorize,
empower and direct the Surviving Corporation, at the Surviving
Corporation's expense, to register with the Commission pursuant to
Section 6 of the Securities Act and Section 12(g) of the Exchange Act
and with state securities regulatory authorities having jurisdiction
over the distribution contemplated, such amount of the Surviving
Corporation's outstanding Capital Stock as well as such additional
shares of the Surviving Corporation's Capital Stock as will be
necessary to effect the following distribution immediately following
the effective date of both such registration statements as determined
by the Commission and state securities regulatory authorities:
(4) (a) If the election to exercise the ▇▇▇▇▇▇ Option is made within 365
days after the Effective Time, then 80% of the Surviving
Corporation's authorized Capital Stock will be issued to ▇▇.
▇▇▇▇▇▇ and the balance will be issued and distributed to persons
designated by AmeriNet;
(b) If the election to exercise the ▇▇▇▇▇▇ Option is made after the
365th day following the Effective Time, then 70% of the Surviving
Corporation's authorized Capital Stock will be issued to ▇▇.
▇▇▇▇▇▇ and the balance will be issued distributed to persons
designated by AmeriNet.
(5) Notwithstanding anything in this Section 5.15 to the contrary, ▇▇.
▇▇▇▇▇▇ shall have the right to irrevocably waive the ▇▇▇▇▇▇ Option.
(6) Notwithstanding the amount of securities allocated to designees of
AmeriNet under the foregoing ▇▇▇▇▇▇ Option, the shares distributed to
designees of AmeriNet (the "AmeriNet Designees") will be subject to
anti-dilutive rights during the two fiscal years immediately following
completion of the distribution if for any reason the aggregate net
tangible book value of the Surviving Corporation's Securities issued
to the AmeriNet Designees was reduced, in which case additional shares
of the Surviving Corporation's Capital Stock would be immediately
issued to the AmeriNet Designees or their successors in interest, in
an amount sufficient to raise the aggregate net tangible book value of
the Surviving Corporation's securities issued to them to the amount
required to equal their aggregate net tangible book value on their
date of distribution; provided that such obligation would only come
into effect if, without the prior written consent of AmeriNet, the
Surviving Corporation directly or indirectly:
(a) Changed the attributes, rights or preferences of any of its
securities;
(b) Issued non-convertible debt securities requiring payment of
interest at amounts in excess of 5 points higher than the
discount rate then charged by the Federal Reserve;
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(c) Engaged in a corporate restructuring, sale, reorganization, sale
of substantially all of its assets or any other transaction that
would give rise to Dissenters' Rights under applicable law,
either on its own or with any other legal entity; or
(d) Engaged in any transactions with affiliates that fall within the
definition of related party transactions under Commission
Regulation S-B, on terms less favorable than might have been
obtained from third parties.
(7) (a) For a period of two years following exercise of the ▇▇▇▇▇▇
Option, AmeriNet and its designees will have a right of first
refusal to subscri be for all future issuances of equity
securities or securities convertible into equity securities by
the Surviving Corporation or its successors in interest other
than those involving a reasonable quantity of securities under
reasonable employee or director benefit plans eligible for
registration on Commission Form S-8 (the "Right of First
Refusal"), such right to be exercised within ten 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").
(b) 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.
(c) The failure on any occasion to exercise the right of first
refusal shall not be a waiver of future rights thereto.
(d) If the right of first refusal is not exercised, the Surviving
Corporation may accept the third party offer but only in
accordance with the terms presented to and declined by AmeriNet.
5.15 Issuance of Performance Based Shares
In addition to the shares of AmeriNet's Common Stock to be issued in
exchange for the WRI Common Stock as of the Effective Time, provided that the
▇▇▇▇▇▇ Option has been waived or has lapsed unexercised, then AmeriNet will
issue to the persons who held all of the WRI Capital Stock immediately prior to
the Effective Time or their successors in interest (the "Former WRI
Stockholders") additional shares of AmeriNet Common Stock if the Surviving
Corporation has attained the following described pre Tax earning performance
criteria, determined in accordance with generally accepted accounting
principles, consistently applied, in reliance on the exemption from registration
under the Securities Act provided by Section 4(6) thereof:
(A) If during the calendar year ended December 31, 2000, the Surviving
Corporation earns net pre-Tax profits of at least $100,000, AmeriNet shall
issue an additional 50,000 shares of its Common Stock to the Former WRI
Stockholders, allocated among them on a pro rata basis based on their
holdings of WRI Common Stock immediately prior to the Effective Time; and
(B) If during the calendar year ended December 31, 2001, the Surviving
Corporation earns net pre-Tax profits of at least $200,000, AmeriNet shall
issue an additional 50,000 shares of its Common Stock to the Former WRI
Stockholders, allocated among them on a pro rata basis based on their
holdings of WRI Common Stock immediately prior to the Effective Time; and
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(C) If during the calendar year ended December 31, 2002, the Surviving
Corporation earns net pre-Tax profits of at least $300,000, AmeriNet shall
issue an additional 50,000 shares of its Common Stock to the Former WRI
Stockholders, allocated among them on a pro rata basis based on their
holdings of WRI Common Stock immediately prior to the Effective Time.
5.16 WRI Board of Directors.
Subject to: WRI's compliance with its obligations under this Agreement,
including those involving provision of certified financial statements for its
operations for the time period and in the form required by Commission Regulation
S-B for purposes of the Merger; the compliance with the members of WRI's board
of directors with their fiduciary obligations to AmeriNet as WRI's stockholder
and with applicable laws; and, the attainment by WRI of the financial
projections established in Schedule 5.16 (the "Projections"), AmeriNet hereby
covenants and agrees that it well maintain membership on the Successor
Corporation's (hereinafter referred to as "WRI") board of directors in the
following ratio: four fifths of the members would be designees of WRI's Former
Stockholders and one quarter would be designees of AmeriNet, provided, however,
that:
(A) A quorum for meetings of WRI's board of directors and any action by WRI's
board of directors will require the participation of AmeriNet's designees;
and
(B) WRI's board of directors would not, without AmeriNet's prior written
consent specifying the action authorized, be authorized to engage in any
material change in WRI's business not contemplated by the Projections, sell
a material portion of WRI's assets outside the normal course of business,
issue any securities, authorize the borrowing of any funds or pledge of any
assets, for so long as WRI remained a subsidiary of AmeriNet.
5.17 Credit for Time Employed.
For purposes of determining the eligibility of any WRI employee to receive
benefits under any employee benefit plan, or for determining the amount or scope
of any such benefit for which a WRI employee is eligible, the time such employee
was employed by WRI shall be credited to such employee as if such employee had
been employed by the Surviving Corporation for such period; and, in addition,
the Surviving Corporation shall credit WRI employees with all vacation accrued
as of the Effective Time.
Article VI
Conditions to the Merger
6.1 Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each Party to this Agreement to effect the
Merger shall be subject to the satisfaction at or prior to the Effective Time of
the following conditions:
(A) Stockholder Approval.
This Agreement and the Merger and other transactions contemplated hereby
(including without limitation the Employment Agreements) shall have been
approved and adopted by the requisite vote of the stockholders of WRI at
the WRI Stockholders' Meeting.
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(B) No Injunctions or Restraints: Illegality.
No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be
in effect, nor shall any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; nor shall there be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger, which makes the consummation
of the Merger illegal.
(C) WRI Information Required by Commission Regulation S-B
The provision by WRI on a timely basis in full compliance with the
requirements of Commission Regulation S-B of all information concerning its
past operations, including audited WRI Financial Statements, shall
constitute a condition subsequent to the obligations of AmeriNet and
American Internet under this Agreement and in the event of the failure of
such condition subsequent, then, at AmeriNet's sole option:
(1) The Merger may be rescinded, and all funds advanced by AmeriNet to the
Surviving Corporation shall be repaid, with interest at the annual
rate of 8%, to AmeriNet within 30 days after such rescission; or
(2) The Escrow Shares shall be deemed defaulted to AmeriNet and the Merger
shall be restructured in a manner complying with AmeriNet's reporting
and other obligations under the Exchange Act, including the sale by
AmeriNet of the Surviving Corporation.
6.2 Additional Conditions to Obligations of WRI.
The obligations of WRI to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by WRI:
(A) Representations, Warranties and Covenants.
The representations and warranties of AmeriNet in this Agreement shall be
true and correct in all material respects on and as of the Effective Time
as though such representations and warranties were made on and as of such
time and AmeriNet shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by it as of the Effective Time.
(B) Certificate of AmeriNet.
WRI shall have been provided with a certificate executed on behalf of
AmeriNet by its President and its Chief Financial Officer or Treasurer to
the effect that, as of the Effective Time:
(1) All representations and warranties made by AmeriNet and American
Internet under this Agreement are true and complete in all material
respects; and
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(2) All covenants, obligations and conditions of this Agreement to be
performed by AmeriNet and American Internet on or before such date
have been so performed in all material respects.
(C) Satisfactory Form of Legal Matters.
The form, scope and substance of all legal and accounting matters
contemplated hereby and all closing documents and other papers delivered
hereunder shall be reasonably acceptable to counsel to WRI.
(D) Legal Opinion.
WRI shall have received a legal opinion from legal counsel to American
Internet and AmeriNet, substantially in the form of Exhibit 6.2(D) hereto.
(E) No Material Adverse Changes.
There shall not have occurred any event, fact or condition that has had or
reasonably would be expected to have a material adverse effect on AmeriNet.
6.3 Additional Conditions to the Obligations of AmeriNet and American Internet.
The obligations of AmeriNet and American Internet to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by AmeriNet:
(A) Representations, Warranties and Covenants.
(1) The representations and warranties of WRI in this Agreement shall be
true and correct in all material respects on and as of the Effective
Time as though such representations and warranties were made on and as
of such time and WRI shall have performed and complied in all material
respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by it as of the
Effective Time.
(2) AmeriNet shall have no remedy against the Escrow Fund in respect of an
untrue representation or warranty if prior to the Effective Time WRI
delivers to AmeriNet in accordance with Section 9.2 a written
statement:
(a) Advising AmeriNet that an event (a "Post-Execution Event") has
occurred (specifying in reasonable detail such event) subsequent
to the date of execution of this Agreement that would render any
representation or warranty made by WRI in this Agreement untrue
if such representation or warranty were made as of the Effective
Time; and
(b) Confirming that such representation or warranty was true as of
the date of execution of this Agreement, and
(c) AmeriNet subsequently waives the failure to satisfy the condition
set forth in this Section 6.3(A) with respect to such
representation or warranty.
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(B) Certificate of WRI.
AmeriNet shall have been provided with a certificate executed on behalf of
WRI by its President and Chief Financial Officer to the effect that, as of
the Effective Time, all:
(1) Representations and warranties made by WRI under this Agreement are
true and complete in all material respects; and
(2) Covenants, obligations and conditions of this Agreement to be
performed by WRI on or before such date have been so performed in all
material respects.
(C) Third Party Consents.
Any and all consents, waivers and approvals required from third Parties
relating to the contracts and agreements of WRI so that the Merger and
other transactions contemplated hereby do not adversely affect the rights
of, and benefits to, WRI thereunder shall have been obtained.
(D) Satisfactory Form of Legal and Accounting Matters.
The form, scope and substance of all legal and accounting matters
contemplated hereby and all closing documents and other papers delivered
hereunder shall be reasonably acceptable to AmeriNet's counsel (provided
that the condition subsequent concerning the compliance of information
provided by WRI with the requirements of Commission Regulation S-B, on a
timely basis, shall survive the Merger).
(E) Legal Opinion.
AmeriNet shall have received a legal opinion from legal counsel to WRI, in
substantially the form of Exhibit 6.3(E) hereto.
(F) No Material Adverse Changes.
There shall not have occurred any event, fact or condition which has had or
reasonably would be expected to have a material adverse effect on WRI.
(G) Affiliate Agreements.
AmeriNet shall have received from each of the Affiliates of WRI an executed
Affiliate Agreement which shall be in full force and effect.
(H) Dissenters.
The number of shares of WRI's Common Stock held by holders who either (i)
have exercised appraisal rights or (ii) retain the ability to exercise such
appraisal rights shall not exceed nineteen percent of the outstanding WRI's
Common Stock in the aggregate.
(I) Employment Agreements.
The Employment Agreements shall have been duly executed and delivered and
shall be in full force and effect.
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(J) Minimum Net Worth.
WRI shall on the Effective Date have net tangible assets of at least
$150,000.
(K) Confidentiality Agreements.
Each current employee at WRI shall have executed a confidentiality
agreement in the form attached hereto as Exhibit 2.11.
(L) Accredited Investors.
Except as specifically disclosed in Schedule 6.3(L), immediately prior to
the Effective Time, there shall be no stockholders of WRI who are not
"accredited investors," as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act.
Article VII
Survival of Representations and Warranties; Escrow
7.1 Survival of Condition Subsequent, Representations and Warranties.
(A) All conditions subsequent to the Merger and covenants to be performed prior
to the Effective Time, and all representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Merger and continue until the date the audit of AmeriNet's
financial statements for the year ending June 30, 2000 has been completed
and AmeriNet has received a signed opinion from its independent auditors
certifying such financial statements (the "2000 Audit Date").
(B) All covenants to be performed after the Effective Time shall continue
indefinitely.
7.2 Escrow Arrangements.
(A) Escrow Fund.
(1) As soon as practicable after the Effective Time, a portion of the
shares of AmeriNet's Common Stock to be issued in the Merger equal to
the Escrow Number [as defined in paragraph 1.6(B)(7)(iv)] (plus any
additional New Shares [as defined below] as may be issued in respect
thereof after the Closing; collectively, the "Escrow Shares"), without
any act of any stockholder, will be registered in the name of a person
designated from time to time for such purpose by AmeriNet as escrow
agent (the "Escrow Agent") and will be deposited with a financial
institution acceptable to AmeriNet and the Agent [as defined in
Section 7.2(H) below)], such deposit to constitute an escrow fund (the
"Escrow Fund") to be governed by the terms set forth herein and at
AmeriNet's sole cost and expense.
(2) (a) The portion of AmeriNet Common Stock in the Escrow Fund
contributed on behalf of each stockholder of WRI is listed
opposite such stockholders' name on Exhibit 7.2(A).
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(b) The Escrow Fund shall be available to compensate AmeriNet and its
affiliates for any claim, loss, expense, liability or other
damage, including reasonable attorneys' fees that AmeriNet or any
of its affiliates has incurred or reasonably anticipates
incurring by reason of the breach by WRI of any representation,
warranty, covenant or agreement of WRI contained herein,
(collectively, "Losses"), but only to the extent that such Losses
exceed $30,000.
(c) AmeriNet and WRI each acknowledge that such Losses, if any, would
relate to unresolved contingencies existing at the Effective
Time, which if resolved at the Effective Time would have led to a
reduction in the total number of shares of AmeriNet Common Stock
that AmeriNet would have agreed to issue in connection with the
Merger.
(3) Nothing herein shall limit the liability of WRI for any breach of any
representation, warranty or covenant if the Merger does not close.
Resort to the Escrow Fund shall be the exclusive contractual remedy of
AmeriNet and its affiliates for any such breaches and
misrepresentations if the Merger does close; provided, however, that
nothing herein shall limit any noncontractual remedy for fraud.
(B) Escrow Period; Distribution upon Termination of Escrow Periods.
(1) Subject to the following requirements, the Escrow Fund shall remain in
existence until the 2000 Audit Date (the "Escrow Period").
(2) Upon the expiration of such Escrow Period, the Escrow Fund shall
terminate with respect to all Escrow Shares; provided, however, that
the number of Escrow Shares, which, in the reasonable judgment of
AmeriNet, subject to the objection of the Agent and the subsequent
arbitration of the matter in the manner provided in Section 7.2(G)
hereof, are necessary to satisfy any unsatisfied claims specified in
any Officer's Certificate delivered to the Escrow Agent prior to the
expiration of such Escrow Period with respect to facts and
circumstances existing on or prior to the 2000 Audit Date shall remain
in the Escrow Fund (and the Escrow Fund shall remain in existence)
until such claims have been resolved.
(3) As soon as all such claims have been resolved, the Escrow Agent shall
deliver to the Former WRI Stockholders all AmeriNet Common Stock and
other property remaining in the Escrow Fund and not required to
satisfy such claims.
(4) Deliveries of AmeriNet Common Stock and other property to the Former
WRI Stockholders pursuant to this Section 7.2(B) shall be made in
proportion to their respective original contributions to the Escrow
Fund.
(C) Protection of Escrow Fund.
The Escrow Agent shall hold and safeguard the Escrow Fund during the Escrow
Period, shall treat such fund as a trust fund in accordance with the terms
of this Agreement and not as the property of AmeriNet and shall hold and
dispose of the Escrow Fund only in accordance with the terms hereof.
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(D) Distributions; Voting.
(1) (a) Any shares of AmeriNet Common Stock or other equity securities
issued or distributed by AmeriNet (including shares issued upon a
stock split) ("New Shares") in respect of AmeriNet Common Stock
in the Escrow Fund which have not been released from the Escrow
Fund shall be added to the Escrow Fund and become a part thereof.
(b) New Shares issued in respect of AmeriNet Common Stock which have
been released from the Escrow Fund shall not be added to the
Escrow Fund, but shall be distributed to the holders thereof.
(c) When and if cash dividends on AmeriNet Common Stock in the Escrow
Fund shall be declared and paid, they shall not be added to the
Escrow Fund but shall be paid to those on whose behalf such
AmeriNet Common Stock is held who, prior to the Merger, held
WRI's Common Stock.
(2) Each stockholder of WRI shall have voting rights with respect to the
shares of AmeriNet Common Stock contributed to the Escrow Fund on
behalf of such stockholder (and on any voting securities added to the
Escrow Fund in respect of such shares of AmeriNet Common Stock) so
long as such shares of AmeriNet Common Stock or other voting
securities are held in the Escrow Fund.
(E) Claims Upon Escrow Fund.
Subject to the objection procedure established in Section 7.2(F) below, the
Escrow Agent shall deliver to AmeriNet out of the Escrow Fund, as promptly
as practicable, shares of AmeriNet Common Stock or other assets held in the
Escrow Fund in an amount equal to Losses by AmeriNet, provided that
(1) A written claim of loss has been provided by AmeriNet to the Escrow
Agent at any time on or before the last day of the Escrow Period in
the form of a certificate signed by any officer of AmeriNet (an
"Officer's Certificate"), with a copy to WRI:
(a) Stating that AmeriNet has paid or properly accrued or reasonably
anticipates that it will have to pay or accrue Losses, and
(b) Specifying in reasonable detail the individual items of Losses
included in the amount so stated, the date each such item was
paid or properly accrued, or the basis for such anticipated
liability, and the nature of the misrepresentation, breach of
warranty or claim to which such item is related, the Escrow Agent
shall, subject to the provisions of Section 7.2(F) hereof.
(2) For the purposes of determining the number of shares of AmeriNet
Common Stock to be delivered to AmeriNet out of the Escrow Fund
pursuant to Section 7.2(E)(1), the shares of AmeriNet Common Stock
shall be valued at the average last transaction price reported on the
OTC Bulletin Board during the ten trading day period preceding the
Effective Time.
Page 85
(F) Objections to Claims.
(1) At the time of delivery of any Officer's Certificate to the Escrow
Agent, a duplicate copy of such certificate shall be delivered to the
Agent [as defined in Section 7.2(H)] and for a period of thirty (30)
days after such delivery, the Escrow Agent shall make no delivery to
AmeriNet of shares of AmeriNet Common Stock, pursuant to Section
7.2(E) hereof unless the Escrow Agent shall have received written
authorization from the Agent to make such delivery.
(2) After the expiration of such thirty (30) day period, the Escrow Agent
shall make delivery of the shares of AmeriNet Common Stock or other
property in the Escrow Fund in accordance with Section 7.2(E) hereof,
provided that no such payment or delivery may be made if the Agent
shall object in a written statement to the claim made in the Officer's
Certificate, and such statement shall have been delivered to the
Escrow Agent prior to the expiration of such thirty (30) day period.
(G) Resolution of Conflicts; Arbitration.
(1) (a) In case the Agent shall so object in writing to any claim or
claims made in any Officer's Certificate, the Agent and AmeriNet
shall attempt in good faith to agree upon the rights of the
respective Parties with respect to each of such claims.
(b) If the Agent and AmeriNet should so agree, a memorandum setting
forth such agreement shall be prepared and signed by both Parties
and shall be furnished to the Escrow Agent.
(c) The Escrow Agent shall be entitled to rely on any such memorandum
and distribute shares of AmeriNet Common Stock or other property
from the Escrow Fund in accordance with the terms thereof.
(2) (a) If no such agreement can be reached after good faith negotiation,
either AmeriNet or the Agent may demand arbitration of the matter
unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall
not be commenced until such amount is ascertained or both Parties
agree to arbitration; and in either such event the matter shall
be settled by arbitration conducted by three arbitrators.
(b) AmeriNet and the Agent shall each select one arbitrator, and the
two arbitrators so selected shall select a third arbitrator.
(c) The arbitrators shall set a limited time period and establish
procedures designed to reduce the cost and time for discovery
while allowing the Parties an opportunity, adequate in the sole
judgment of the arbitrators, to discover relevant information
from the opposing Parties about the subject matter of the
dispute.
(d) The arbitrators shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions,
including attorneys fees and costs, to the extent as a court of
competent law or equity, should the arbitrators determine that
discovery was sought without substantial justification or that
discovery was refused or objected to without substantial
justification.
Page 86
(e) The decision of a majority of the three arbitrators as to the
validity and amount of any claim in such Officer's Certificate
shall be binding and conclusive upon the Parties to this
Agreement, and notwithstanding anything in Section 7.2(F) hereof,
the Escrow Agent shall be entitled to act in accordance with such
decision and make or withhold payments out of the Escrow Fund in
accordance therewith.
(f) Such decision shall be written and shall be supported by written
findings of fact and conclusions which shall set forth the award,
judgment, decree or order awarded by the arbitrators.
(3) (a) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction. Any such arbitration
shall be held in Broward County, Florida, under the rules then in
effect of the American Arbitration Association.
(b) For purposes of this Section 7.2(G), in any arbitration hereunder
in which any claim or the amount thereof stated in the Officer's
Certificate is at issue, AmeriNet shall be deemed to be the
Non-Prevailing Party in the event that the arbitrators award
AmeriNet less than the sum of 50% of the disputed amount plus any
amounts not in dispute; otherwise, the Former WRI Stockholders as
represented by the Agent shall be deemed to be the Non-Prevailing
Party.
(c) The Non-Prevailing Party to an arbitration shall pay its own
expen ses, the fees of each arbitrator, the administrative fee of
the American Arbitration Association, and the expenses, including
without limitation, reasonable attorneys' fees and costs,
incurred by the other Party to the arbitration.
(H) Agent of the Stockholders: Power of Attorney.
(1) (a) (i) In the event that the Merger is approved, effective upon
such vote, and without further act of any stockholder,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be appointed as agent and
attorney-in-fact (the "Agent") for each stockholder of WRI
(except such stockholders, if any, as shall have perfected
their appraisal rights under the Florida Corporate Merger
Laws, for and on behalf of the Former WRI Stockholders, to
give and receive notices and communications, to authorize
delivery to AmeriNet of AmeriNet Common Stock or other
property from the Escrow Fund in satisfaction of claims by
AmeriNet, to object to such deliveries, to agree to,
negotiate, enter into settlements and compromises of, and
demand arbitration and comply with orders of courts and
awards of arbitrators with respect to such claims, and to
take all actions necessary or appropriate in the judgment of
Agent for the accomplishment of the foregoing.
(ii) Such agency may be changed by the Former WRI Stockholders
from time to time upon not less than thirty (30) days prior
written notice to AmeriNet; provided that the Agent may not
be removed unless holders of a two-thirds interest of the
Escrow Fund agree to such removal and to the identity of the
substituted agent.
(iii) No bond shall be required of the Agent, and the Agent shall
not receive compensation for his or her services.
Page 87
(iv) Notices or communications to or from the Agent shall
constitute notice to or from each of the Former WRI
Stockholders.
(b) The Agent shall be entitled to submit a claim and receive
reimbursement from the Escrow Fund for all reasonable, documented
out-of-pocket expenses incurred by the Agent as a result of his
acting as the Agent; provided, however, that such right to
reimbursement shall be subordinate to AmeriNet's claims on the
Escrow, if any, and shall be paid only after all such claims have
been satisfied.
(c) Any such reimbursement shall be paid in shares of AmeriNet Common
Stock out of the Escrow Fund.
(d) For purposes of such reimbursement of the Agent only, such shares
shall be valued at the average of the closing prices of AmeriNet
Common Stock for the ten trading days ending on the day prior to
the date the Escrow Agent pays such reimbursement amount.
(2) (a) The Agent shall not be liable for any act done or omitted
hereunder as Agent while acting in good faith and in the exercise
of reasonable judgment.
(b) The Former WRI Stockholders on whose behalf shares of AmeriNet
Common Stock were contributed to the Escrow Fund shall severally
indemnify the Agent and hold the Agent harmless against any loss,
liability or expense incurred without negligence or bad faith on
the part of the Agent and arising out of or in connection with
the acceptance or administration of the Agent's duties hereunder,
including the reasonable fees and expenses of any legal counsel
retained by the Agent.
(I) Actions of the Agent.
(1) A decision, act, consent or instruction of the Agent shall constitute
a decision of all the stockholders for whom shares of AmeriNet Common
Stock otherwise issuable to them are deposited in the Escrow Fund and
shall be final, binding and conclusive upon each of such stockholders,
and the Escrow Agent and AmeriNet may rely upon any such decision,
act, consent or instruction of the Agent as being the decision, act,
consent or instruction of each every such stockholder of WRI.
(2) The Escrow Agent and AmeriNet are hereby relieved from any liability
to any person for any acts done by them in accordance with such
decision, act, consent or instruction of the Agent.
(J) Third-Party Claims.
(1) In the event AmeriNet becomes aware of a third-party claim which
AmeriNet believes may result in a demand against the Escrow Fund,
AmeriNet shall notify the Agent of such claim, and the Agent and the
Former WRI Stockholders shall be entitled, at their expense, to
participate in any defense of such claim.
(2) AmeriNet shall have the right in its sole discretion to settle any
such claim; provided, however, that except with the consent of the
Agent, no settlement of any such claim with third-party claimants
shall alone be determinative of the validity of any claim against the
Escrow Fund.
Page 88
(3) In the event that the Agent has consented to any such settlement, the
Agent shall have no power or authority to object under any provision
of this Article VII to the amount of any claim by AmeriNet against the
Escrow Fund with respect to such settlement.
(K) Escrow Agent's Duties.
(1) (a) The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein, and as set
forth in any additional written escrow instructions which the
Escrow Agent may receive after the date of this Agreement which
are signed by an officer of AmeriNet and the Agent, and may rely
and shall be protected in relying or refraining from acting on
any instrument reasonably believed to be genuine and to have been
signed or presented by the proper Party or Parties.
(b) The Escrow Agent shall not be liable for any act done or omitted
hereunder as Escrow Agent while acting in good faith and in the
exercise of reasonable judgment, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence of
such good faith.
(2) The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the Parties or by any other person,
excepting only orders or process of courts of law, and is hereby
expressly authorized to comply with and obey orders, judgments or
decrees of any court. In case the Escrow Agent obeys or complies with
any such order, judgment or decree of any court, the Escrow Agent
shall not be liable to any of the Parties or to any other person by
reason of such compliance, notwithstanding any such order, judgment or
decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
(3) The Escrow Agent shall not be liable in any respect on account of the
identity, authority or rights of the Parties executing or delivering
or purporting to execute or deliver this Agreement or any documents or
papers deposited or called for hereunder.
(4) The Escrow Agent shall not be liable for the expiration of any rights
under any statute of limitations with respect to this Agreement or any
documents deposited with the Escrow Agent.
(5) The Escrow Agent may resign at any time upon giving at least thirty
(30) days written notice to AmeriNet and the Agent to this Agreement;
provided, however, that no such resignation shall become effective
until the appointment of a successor escrow agent which shall be
accomplished as follows:
(a) AmeriNet and the Agent shall use their best efforts to mutually
agree upon a successor agent within thirty (30) days after
receiving such notice.
(b) If the Parties fail to agree upon a successor escrow agent within
such time, AmeriNet shall have the right to appoint a successor
escrow agent authorized to do business in Florida.
Page 89
(c) The successor escrow agent selected in the preceding manner shall
execute and deliver an instrument accepting such appointment and
it shall thereupon be deemed the Escrow Agent hereunder and it
shall without further acts be vested with all the estates,
properties, rights, powers, and duties of the predecessor Escrow
Agent as if originally named as Escrow Agent.
(d) Thereafter, the predecessor Escrow Agent shall be discharged for
any further duties and liabilities under this Agreement.
Article VIII
Termination, Amendment And Waiver
8.1 Termination.
This Agreement may be terminated and the Merger abandoned at any time prior
to the Effective Time, as follows:
(A) By mutual consent of WRI and AmeriNet.
(B) By AmeriNet if it is not in material breach of its obligations under this
Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
WRI and such breach has not been cured within fifteen (15) days after
notice to WRI.
(C) By WRI if it is not in material breach of its respective obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
AmeriNet or American Internet and such breach has not been cured within 15
days after notice to AmeriNet;
(D) By any Party hereto if:
(1) The Closing has not occurred by November 30, 1999;
(2) There shall be a final nonappealable order of a federal or state court
in effect preventing consummation of the Merger;
(3) There shall be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity which would make consummation of the
Merger illegal; or
(4) There shall be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity, which would:
(a) Prohibit AmeriNet's or WRI's ownership or operation of all or a
material portion of the business of WRI, or compel AmeriNet or
WRI to dispose of or hold separate all or a material portion of
the business or assets of WRI or AmeriNet as a result of the
Merger; or
(b) Render AmeriNet, American Internet or WRI unable to consummate
the Merger, except for any waiting period provisions.
(E) Where action is taken to terminate this Agreement pursuant to this Section
8.1, it shall be sufficient for such action to be authorized by the board
of directors (as applicable) of the Party taking such action.
Page 90
8.2 Effect of Termination.
In the event of termination of this Agreement as provided in Section 8.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of AmeriNet, American Internet or WRI or their respective
officers, directors or stockholders, except if such termination results from the
breach by a Party hereto of any of its representations, warranties, covenants or
agreements set forth in this Agreement (it being understood that termination of
this Agreement because of failure of WRI to satisfy the condition set forth in
Section 6.3(A) as a result of the occurrence of a Post-Execution Event shall not
be deemed to be a termination resulting from such a breach of representation or
warranty.)
8.3 Amendment.
(A) This Agreement may be amended by the Parties at any time before or after
approval of matters presented in connection with the Merger by the
stockholders of those parties required by applicable law to so approve but,
after any such stockholder approval, no amendment shall be made which by
law requires the further approval of stockholders of a Party without
obtaining such further approval.
(B) This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the Parties.
8.4 Extension; Waiver.
(A) At any time prior to the Effective Time any Party may, to the extent
legally allowed:
(1) Extend the time for the performance of any of the obligations or other
acts of the other Parties;
(2) Waive any inaccuracies in the representations and warranties made to
such Party contained herein or in any document delivered pursuant
hereto; or
(3) Waive compliance with any of the agreements or conditions for the
benefit of such Party contained herein.
(B) Any agreement on the part of a Party to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such Party.
Article IV
General Provisions
9.1 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."
Page 91
(C) The table of contents and 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.
9.2 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 ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Jordan, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; with a copy to
General Counsel
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail, ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇.
(2) To WRI:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
web site ▇▇▇.▇▇▇▇▇▇▇.▇▇▇;
(3) To Agent:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇;
with a copy to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Page 92
(4) To the Escrow Agent:
To the person designated by AmeriNet at the contact information provided by
AmeriNet from time to time.
(5) To Yankees:
The Yankee Companies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇;
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 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) Because of the inherent conflict of interests involved, 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.
(D) 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
Part 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.
9.3 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.
9.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and the Closing hereon and
shall be effective regardless of any investigation that may have been made or
may be made by or on behalf of any Party.
Page 93
9.5 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.
9.6 Governing Law.
This Agreement shall be construed in accordance with the substantive and
procedural laws of the State of Delaware (other than those regulating Taxation
and choice of law).
9.7 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.
9.8 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) Except for the arbitration procedures outlined in paragraphs 7.2(G)(2) and
7.2(G)(3) which shall govern any arbitration proceeding described therein,
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 six alternatives to be provided, three by AmeriNet and
three by WRI.
Page 94
(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 six
alternatives to be provided, three by AmeriNet and three by WRI.
(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.
9.9 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.
9.10 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.
9.11 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.
9.12 License.
(A) This form of agreement is the property of Yankees and has been customized
for this transaction with the consent of Yankees by G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esquire.
Page 95
(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.
Execution Pages
IN WITNESS WHEREOF, AmeriNet, American Internet and WRI 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 ▇▇▇▇▇.▇▇▇, Inc.
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________ By: _______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attest:______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
Dated: November 11 1999
State of Florida }
County of Palm Beach} ss.:
On this 11th day of November, 1999, before me, a notary public in and for
the county and state aforesaid, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, to me known, and known to me to be the president and
secretary of AmeriNet ▇▇▇▇▇.▇▇▇, Inc., 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 AmeriNet ▇▇▇▇▇.▇▇▇, 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 27th day of August, 2000.
(Seal)
/s/ ▇▇▇▇▇▇▇ ▇. Dikter
--------------------------------
Notary Public
Page 96
American Internet Technical Centers, Inc.
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________ By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Attest:____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
Secretary & General Counsel
Dated: November 11, 1999
State of Florida }
County of Palm Beach} ss.:
On this 11th day of November, 1999, before me, a notary public in and for
the county and state aforesaid, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, to me known, and known to me to be the president and secretary
of American Internet Technical Center, Inc., 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 American Internet Technical Center, 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 27th day of August, 2000.
(Seal)
/s/ ▇▇▇▇▇▇▇ ▇. Dikter
--------------------------------
Notary Public
▇▇▇▇▇▇▇.▇▇▇, Inc.
---------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________ By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Attest:____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary & General Counsel
Dated: November 11, 1999
State of Florida }
County of Palm Beach} ss.:
On this 11th day of November, 1999, before me, a notary public in and for
the county and state aforesaid, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, to me known, and known to me to be the president and secretary
of ▇▇▇▇▇▇▇.▇▇▇, Inc., 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 ▇▇▇▇▇▇▇.▇▇▇,
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 27th day of August, 2000.
(Seal)
/s/ ▇▇▇▇▇▇▇ ▇. Dikter
--------------------------------
Notary Public
Page 97
Schedule 1.4 Forms of Articles of Incorporation and Bylaws for Surviving
Corporation
Articles of Amendment to Articles of Incorporation
of
American Internet Technical Center, Inc.
Pursuant to the provisions of Section 607.1006, Florida Statutes, this
Florida profit corporation does hereby adopt the following articles of amendment
to its Articles of Incorporation:
Witnesseth:
First: Amendments adopted:
At a meeting of the Corporation's Board of Directors a resolution was duly
adopted setting forth a proposed amendment of the Corporation's articles of
incorporation, declaring such amendment to be advisable and calling for action
by the Corporation's stockholders.
The resolution setting forth the proposed amendment is as follows:
"RESOLVED, that the articles currently contained in the Corporation's
articles of incorporation are hereby repealed in their entirety and replaced by
the following amended articles:
ARTICLE I
NAME
The name of the Corporation is:
"▇▇▇▇▇▇▇.▇▇▇, INC. "
ARTICLE II
REGISTERED OFFICE, REGISTERED AGENT & PRINCIPAL ADDRESS
2.1 REGISTERED OFFICE & REGISTERED AGENT,
(a) The street address of the registered office of this Corporation in the
state of Florida is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
situate in ▇▇▇▇▇▇ County, and the name of the initial registered agent
of this Corporation at such address is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(b) The registered agent's telephone number is ▇▇▇-▇▇▇-▇▇▇▇ and its E-Mail
address is Vanessa @▇▇▇▇▇▇▇▇.▇▇▇.
Page 98
2.2 PRINCIPAL OFFICE & MAILING ADDRESS
(a) The Corporation's principal office and principal mailing address is ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) The Corporation's telephone and fax numbers are (▇▇▇) ▇▇▇-▇▇▇▇ and
(▇▇▇) ▇▇▇-▇▇▇▇.
ARTICLE III
PURPOSES
This Corporation is organized for the purpose of transacting any and all
lawful business; PROVIDED, HOWEVER, that it shall not:
(a) Engage in any activities that would subject it to regulation as an
investment company under the Federal Investment Company Act of 1940
(the "Investment Company Act"), as amended, unless it shall have first
qualified and elected to be regulated as a small business DEVELOPMENT
COMPANY PURSUANT TO SECTIONS 54 ET. SEQ., thereof, and limits its
investment company activities to those permitted thereby;
(b) Engage in any activities which would subject the Corporation to
regulation as a broker dealer in securities subject to regulation under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
as an investment advisor subject to regulation under the Investment
Advisors Act of 1940, as amended (the "Investment Advisor's Act"); or
(c) Engage in any other activities requiring the Corporation to comply with
governmental registration and supervision, unless it has completed such
registration and conducts itself in full compliance with such
supervisory requirements.
ARTICLE IV
CAPITAL STOCK
4.1 AUTHORIZED CAPITAL STOCK
(a) The Corporation's equity shall be divided into shares of capital stock,
designated as either common or preferred in accordance with the
applicable provisions of the Florida General Corporation Law, and as
determined by the Corporation's Board of Directors and Stockholders, in
the manner set forth in this Article of Incorporation.
Page 99
(b) The maximum number of shares that this Corporation is authorized to
have outstanding at any time is 20,000,000 shares of common stock, each
share having a par value of $0.001."
4.2 AMENDMENTS TO AUTHORIZED CAPITAL
The Corporation's Board of Directors is hereby authorized, without
stockholder approval, to amend this Certificate from time to time, in order to:
(a) Effect splits or reverse splits of the Corporation's common or
preferred stock; increase the amount of authorized capital stock and
determine the attributes thereof, provided that such amendment may not
detrimentally affect the rights of holders of outstanding capital
stock, other than as a result of pro rata dilution;
(b) Create a class of preferred stock and designate the attributes of such
preferred stock;
(c) Change the name of the Corporation; and,
(d) Such other matters as may be otherwise permitted under then applicable
laws of the State of Florida.
ARTICLE V
INCORPORATORS
The name and addresses of the Corporation's incorporator is ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE VI
BOARD OF DIRECTORS
(a) The number of Directors may be either increased or diminished from time
to time in the manner provided in the Bylaws, but shall never be less
than one.
(b) The name and address of the initial Director of the corporation is
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Page 100
ARTICLE VII
DURATION
This Corporation shall have perpetual existence commencing on the date of
the filing of this Article of Incorporation with the Department of State of
Florida.
ARTICLE VIII
QUORUM FOR STOCKHOLDERS MEETINGS
Unless otherwise provided for in the Corporation's Bylaws, a majority of
the shares entitled to vote, represented in person or by proxy, shall be
required to constitute a quorum at a meeting of stockholders.
ARTICLE IX
INDEMNIFICATION
The Corporation shall indemnify its Officers, Directors and authorized
agents for all liabilities incurred directly, indirectly or incidentally to
services performed for or at the request of the Corporation, and shall advance
funds required for such purposes to the person indemnified, to the fullest
extent permitted under Florida law existing now or hereinafter enacted, subject
to such contractual conditions or limitations as the Corporation and the
indemnified person may have agreed to in a written and subscribed instrument.
ARTICLE X
LIMITATION ON STOCKHOLDER ACTIONS
(a) In the event that this Corporation at any time has more than three
stockholders, none of which owns more than 95% of the Corporation's
outstanding common stock of all classes and series, then the following
provisions shall be applicable as to all stockholders who own less than
50% of the Corporation's outstanding common stock of all classes and
series ("Minority Stockholders"):
(1) Minority Stockholders shall not have a cause of action against
the Corporation's Officers, Directors or agents as a result of
any action taken, or as a result of their failure to take any
action, unless deprivation of such right is deemed a nullity
be cause, in the specific case, deprivation of a right of
action would be impermissibly in conflict with the public
policy of the State of Florida.
Page 101
(2) No Minority Stockholder may assert a derivative cause of
action on behalf of the Corporation, rather, any claims that
would give rise to derivative causes of action shall be
submitted in writing, specifying the nature of the cause of
action and providing all evidence associated with such claim,
to a special committee of the Board of Directors comprised of
members who do not also serve as officers of the Corporation
and are not reasonably involved with the subject cause of
action, or if no such directors are serving, to legal counsel
designated by the Corporation in which no attorney holds
shares of the Corporation's securities, holds any office or
position with the Corporation or is related by marriage or
through siblings, parents or children to any officer or
director of the Corporation, and the decision to litigate, or
not to litigate by such special committee or special counsel
shall be binding on the Corporation and the submitting
Minority Stockholder or Minority Stockholders; unless the
foregoing procedure has not been followed within 90 days after
completion of the submission by the subject Minority
Stockholder.
(3) The fact that this Article shall be inapplicable in certain
circumstances shall not render it inapplicable in any other
circumstances and the Courts of the State of Florida are
hereby granted the specific authority to restructure this
Article, on a case by case basis or generally, as required to
most fully give legal effect to its intent.
ARTICLE XI
AFFILIATED TRANSACTIONS
This Corporation shall not be subject to the restrictions or requirements
for affiliated transactions imposed by Sections 607.0901, Florida Statutes, as
permitted by the waiver provisions of Section 607.0901(5)(b) thereof.
Second: The date of each amendment adopted is: November 11, 1999.
Third: Adoption of Amendments:
The amendments were unanimously adopted by the shareholders. The number of
votes cast for the amendments were sufficient for approval.
IN WITNESS WHEREOF, I have subscribed my name this 11th day of
November, 1999.
SIGNED, SEALED & DELIVERED
IN OUR PRESENCE
-----------------------------
----------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
Page 102
Bylaws
of
▇▇▇▇▇▇▇.▇▇▇, Inc.
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings
(a)(1) The annual meeting of the stockholders of the Corporation, shall be
held at the principal office of the Corporation in the State of
Florida or at such other place within or without the State of Florida
as may be determined by the Board of Directors and as may be
designated in the notice of such meeting.
(2) The meeting shall be held on the 15th day of October of each year or
on such other day as the Board of Directors may specify.
(3) If said day is a legal holiday, the meeting shall be held on the next
succeeding business day not a legal holiday.
(b) Business to be transacted at such meeting shall be the election of
Directors to succeed those whose terms are expiring and such other business
as may be properly brought before the meeting.
(c) In the event that the annual meeting, by mistake or otherwise, shall not be
called and held as herein provided, a special meeting may be called as
provided for in Section 2 of this Article I in lieu of and for the purposes
of and with the same effect as the annual meeting.
SECTION 2. Special Meetings
(a) A special meeting of the stockholders of the Corporation may be called for
any purpose or purposes at any time by the Chairman or President of the
Corporation, by the Board of Directors or by the holders of not less than
10% of the outstanding capital stock of the Corporation entitled to vote at
such meeting.
(b) At any time, upon the written direction of any person or persons entitled
to call a special meeting of the stockholders, it shall be the duty of the
Secretary to send notice of such meeting pursuant to Section 4 of this
Article I. It shall be the responsibility of the person or persons
directing the Secretary to send notice of any special meeting of
stockholders to deliver such direction and a proposed form of notice to the
Secretary not less than 15 days prior to the proposed date of said meeting.
(c) Special meetings of the stockholders of the Corporation shall be held at
such place, within or without the State of Florida, on such dates, and at
such time as shall be specified in the notice of such special meeting.
SECTION 3. Adjournment
(a) When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as
may be reasonably necessary to reconvene the meeting at another place and
time.
Page 103
(b) The presiding officer shall have the power to adjourn any meeting of the
stockholders for any proper purpose, including, but not limited to, lack of
a quorum, securing a more adequate meeting place, electing officials to
count and tabulate votes, reviewing any stockholder proposals or passing
upon any challenge which may properly come before the meetings.
(c) When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place
to which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the
meeting. If, however, after the adjournment the Board fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be
given in compliance with Section 4(a) of this Article I to each stockholder
of record on the new record date entitled to vote at such meeting.
SECTION 4. Notice of Meetings; Purpose of Meeting; Waiver
(a)(1) Each stockholder of record entitled to vote at any meeting shall be
given in person, or by first class mail, postage prepaid, written
notice of such meeting which, in the case of a special meeting, shall
set forth the purpose(s) for which the meeting is called, not less
than 10 or more than 60 days before the date of such meeting.
(2) If mailed, such notice is to be sent to the stockholder's address as
it appears on the stock transfer records of the Corporation, unless
the stockholder shall be requested of the Secretary in writing at
least 15 days prior to the distribution of any required notice that
any notice intended for him or her be sent to some other address, in
which case the notice may be sent to the address so designated.
(3) Notwithstanding any such request by a stockholder, notice sent to a
stockholder's address as it appears on the stock transfer records of
this Corporation as of the record date shall be deemed properly given.
(4) Any notice of a meeting sent by United States mail shall be deemed
delivered when deposited with proper postage thereon with the United
States Postal Service or in any mail receptacle under its control.
(b)(1) A stockholder waives notice of any meeting by attendance, either in
person or by proxy, at such meeting or by waiving notice in writing
either before, during or after such meeting.
(2) Attendance at a meeting for the express purpose of objecting that the
meeting was not lawfully called or convened, however, will not
constitute a waiver of notice by a stockholder who states at the
beginning of the meeting, his or her objection that the meeting is not
lawfully called or convened.
(c) A waiver of notice signed by all stockholders entitled to vote at a meeting
of stockholders may also be used for any other proper purpose including,
but not limited to, designating any place within or without the State of
Florida as the place for holding such a meeting.
(d) Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of stockholders need be specified in any written waiver
of notice.
Page 104
SECTION 5. Closing of Transfer Records; Record Date; Stockholders' List
(a) In order to determine the holders of record of the capital stock of the
Corporation who are entitled to notice of meetings, to vote a meeting or
adjournment thereof, or to receive payment of any dividend, or for any
other purpose, the Board of Directors may fix a date not more than 60 days
prior to the date set for any of the above-mentioned activities for such
determination of stockholders.
(b) If the stock transfer records shall be closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such records shall be closed for at least 10 days immediately
preceding such meeting.
(c) In lieu of closing the stock transfer records, the Board of Directors may
fix in advance a date as the date for any such determination of
stockholders, such date in any case to be not more than 60 days prior to
the date on which the particular action, requiring such determination of
stockholders, is to be taken.
(d) If the stock transfer records are not closed and no record date is fixed
for the determination of stockholders entitled to notice or to vote at a
meeting of stockholders, or to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the resolution
of the Board of Directors declaring such dividend is adopted, as the case
may be, shall be the record date for such determination of stockholders.
(e) When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this Section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes
a new record date under this Section for the adjourned meeting.
(f)(1) The officer or agent having charge of the stock transfer records of
the Corporation shall make, as of a date at least 10 days before each
meeting of stockholders, a complete list of the stockholders entitled
to vote at such meeting or any adjournment thereof, with the address
of each stockholder and the number and class and series, if any, of
shares held by each stockholder.
(2) Such list shall be kept on file at the registered office of the
Corporation, at the principal place of business of the Corporation or
at the office of the transfer agent or registrar of the Corporation
for a period of 10 days prior to such meeting and shall be available
for inspection by any stockholder at any time during usual business
hours.
(3) Such list shall also be produced and kept open at the time and place
of any meeting of stockholders and shall be subject to inspection by
any stockholder at any time during the meeting.
(g) The original stock transfer records shall be prima facie evidence as to the
stockholders entitled to examine such list or stock transfer records or to
vote any meeting of stockholders.
(h) If the requirements of Section 5(f) of this Article I have not been
substantially complied with, then, on the demand of any stockholder in
person or by proxy, the meeting shall be adjourned until such requirements
are complied with.
(i) If no demand pursuant to Section 5(h) of this Article I is made, failure to
comply with the requirements of this Section shall not affect the validity
of any action taken at such meeting.
Page 105
(j) Section 5(g) of this Article I shall be operative only at such time(s) as
the Corporation shall have 6 or more stockholders.
SECTION 6. Quorum
(a) At any meeting of the stockholders of the Corporation, the presence, in
person or by proxy, of stockholders holding a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of
any business.
(b) If a quorum is present, the vote of a majority of the shares represented at
such meeting and entitled to vote on the subject matter shall be the act of
the stockholders.
(c) If there shall not be a quorum at any meeting of the stockholders of the
Corporation, then the Chairman of the meeting or the holders of a majority
of the shares of the capital stock of the Corporation who shall be present
at such meeting, in person or by proxy, may adjourn such meeting from time
to time until holders of all of the shares of the capital stock shall
attend.
(d) At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting
as originally scheduled.
SECTION 7. Presiding Officer; Order of Business
(a)(1) Meetings of the stockholders shall be presided over by the Chairman of
the Board, or, if he or she is not present or there is no Chairman of
the Board, by the President or, if he or she is not present, by the
senior Vice President present or, if neither the Chairman of the
Board, the President, nor a Vice President is present, the meeting
shall be presided over by a chairman to be chosen by a plurality of
the stockholders entitled to vote at the meeting who are present, in
person or by proxy.
(2) The presiding officer of any meeting of the stockholders may delegate
his or her duties and obligations as the presiding officer as he or
she sees fit.
(b) The Secretary of the Corporation, or, in his or her absence, an Assistant
Secretary shall act as Secretary of every meeting of stockholders, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as secretary
of the meeting.
(c) The order of business shall be as follows:
Call of meeting to order.
Proof of notice of meeting.
Reading minutes of last previous stockholders' meeting or a waiver thereof.
Reports of Officers.
Reports of committees.
Election of Directors.
Regular and miscellaneous business.
Special matters.
Adjournment.
Page 106
(d)(1) Notwithstanding the provisions of Section 7(c) of this Article I, the
order and topics of business to be transacted at any meeting shall be
determined by the presiding officer of the meeting in his or her sole
discretion.
(2) In no event shall any variation in the order of business or additions
and deletions from the order of business as specified in Section 7(c)
of this Article I invalidate any actions properly taken at any
meeting.
SECTION 8. Voting
(a) Unless otherwise provided for in the Articles of Incorporation, each
stockholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name
on the stock transfer records of the Corporation on the record date fixed
as provided for in Section 5 of this Article I.
(b)(1) The presiding officer at any meeting of the stockholders shall have
the power to determine the method and means of voting when any matter
is to be voted upon.
(2) The method and means of voting may include, but shall not be limited
to, vote by ballot, vote by hand, vote by voice or vote by written
consent in lieu of meeting.
(3) No method of voting may be adopted, however, which fails to take
account of any stockholder`s right to vote by proxy as provided for in
Section 10 of this Article I.
(4) In no event may any method of voting be adopted which would prejudice
the outcome of the vote.
SECTION 9. Action Without Meeting
(a)(1) Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at
any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed
by the holders of a majority of the Corporation's outstanding voting
stock.
2) Such instrument may be executed in counterparts or as a unitary
document.
(b) In the event that the action to which the stockholders consent is such as
wou ld have required the filing of a certificate under the Florida Business
Corporation Act General Corporation Act, the effect of such consent shall
be as if such action had been voted on by stockholders at a meeting
thereof, however, the certificate filed under such other section shall
state that written consent has been given in accordance with the provisions
of Section 9 of this Article I.
(c) If stockholder action is taken by written consent in lieu of meeting signed
by less than all of the Corporation's stockholders, then all non
participating stockholders shall be provided with written notice of the
action taken within 10 days after the effective date of the written
instrument taking such action.
Page 107
(d) No action by written consent in lieu of meeting shall be valid if it is in
contravention of applicable proxy or informational rules adopted pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including, without limitation, the requirements of Section 14 thereof.
SECTION 10. Proxies
(a) Every stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent without a meeting, or his or her duly authorized
attorney-in-fact, may authorize another person or persons to act for him or
her by proxy.
(b)(1) Every proxy must be signed by the stockholder or his or her
attorney-in-fact.
(2) No proxy shall be valid after the expiration of 11 months from the
date thereof unless otherwise provided in the proxy.
(3) Every proxy shall be revocable at the pleasure of the stockholder
executing it, except as otherwise provided in this Section 10.
(c) The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the stockholder who executed the proxy unless,
before the authority is exercised, written notice of any adjudication of
such incompetence or of such death is received by the corporate officer
responsible for maintaining the list of stockholders.
(d) Except when other provisions shall have been made by written agreement
between the parties, the record holder of shares held as pledges or
otherwise as security or which belong to another, shall issue to the
▇▇▇▇▇▇▇ or to such owner of such shares, upon demand therefor and payment
of necessary expenses thereof, a proxy to vote or take other action
thereon.
(e) A proxy which states that it is irrevocable is irrevocable when it is held
by any of the following or a nominee of any of the following: (i) a
pledgee; (ii) a person who has purchased or agreed to purchase the shares:
(iii) a creditor or creditors of the Corporation who extend or continue to
extend credit to the Corporation in consideration of the proxy, if the
proxy states that it was given in consideration of such extension or
continuation of credit, the amount thereof, and the name of the person
extending or continuing credit; (iv) a person who has contracted to perform
services as an officer of the Corporation, if a proxy is required by the
contract of employment, if the proxy states that it was given in
consideration of such contract of employment and states the name of the
employee and the period of employment contracted for; and (v) a person
designated by or under an agreement as provided in Article XI hereof.
(f)(1) Notwithstanding a provision in a proxy stating that it is irrevocable,
the proxy becomes revocable after the pledge is redeemed, the debt of
the Corporation is paid, the period of employment provided for in the
contract of employment has terminated, or the agreement under Article
XI hereof has terminated and, in a case provided for in Section 10(e)
(iii) or Section 10(e) (iv) of this Article I, becomes revocable three
years after the date of the proxy or at the end of the period, if any,
specified therein, whichever period is less, unless the period of
irrevocability of the proxy as provided in this Section 10.
(2) This Section 10(f) does not affect the duration of a proxy under
Section 10(b) of this Article I.
Page 108
(g) A proxy may be revoked, notwithstanding a provision making it irrevocable,
by a purchaser of shares without knowledge of the existence of the
provisions unless the existence of the proxy and its irrevocability is
noted conspicuously on the face or back of the certificate representing
such shares.
(h) If a proxy for the same shares confers authority upon two or more persons
and does not otherwise provide, a majority of such persons present at the
meeting, or if only one is present then that one, may exercise all the
powers conferred by the proxy. if the proxy holders present at the meeting
are equally divided as to the right and manner of voting in any particular
case, the voting of such shares shall be prorated.
(i) If a proxy expressly so provides, any proxy holder may appoint in writing a
substitute to act in his or her place.
(j) Notwithstanding anything in the Bylaws to the contrary, no proxy shall be
valid if it was obtained in violation of any applicable laws, including,
without limitation, the requirements of the Exchange Act or the Rules and
Regulations promulgated thereunder.
SECTION 11. Voting of Shares by Stockholders
(a)(1) Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by
the bylaws of the corporate stockholder; or, in the absence of any
applicable bylaw, by such person as the Board of Directors of the
corporate stockholder may designate.
(2) Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate stockholder.
(3) In the absence of any such designation, or in case of conflicting
designation by the corporate stockholder, the chairman of the board,
president, any vice president, secretary and treasurer of the
corporate stockholder, in that order, shall be presumed to possess
authority to vote such shares.
(b) Shares held by an administrator, executor, guardian or conservator may be
voted by him or her, either in person or by proxy, without a transfer of
such shares into his or her name. Shares standing in the name of a trustee
may be voted as shares held by him or her without a transfer of such shares
into his name.
(c)(1) Shares standing in the name of a receiver may be voted by such
receiver.
(2) Shares held by or under the control of a receiver but not standing in
the name of such receiver, may be voted by such receiver without the
transfer thereof into his name if authority to do so is contained in
an appropriate order of the court by which such receiver was
appointed.
(d) A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee.
(e) Shares of the capital stock of the Corporation belonging to the Corporation
or held by it in a fiduciary capacity shall not be voted, directly or
indirectly, at any meeting, and shall not be counted in determining the
total number of outstanding shares.
Page 109
ARTICLE II
DIRECTORS
SECTION 1. Board of Directors; Exercise of Corporate Powers
(a)(1) All corporate powers shall be exercised by or under the authority of,
and the business and affairs of the Corporation shall be managed under
the direction of, the Board of Directors except as may be otherwise
provided in the Articles of Incorporation or in a stockholders'
agreement.
(2) If any such provision is made in the Articles of Incorporation or in a
stockholders' agreement, the powers and duties conferred or imposed
upon the Board of Directors shall be exercised or performed to such
extent and by such person or persons as shall be provided in the
Articles of Incorporation or stockholders' agreement.
(3) In the event that the Corporation, pursuant to due and valid
authorization by the Board of Directors, enters into an agreement
relied on by a third party which requires specific actions by the
Board of Directors in the future (e.g., the granting of proxies to
vote shares in a subsidiary or the election of a person, or the
designee of a person to a corporate office), then the Corporation's
future Boards of Directors shall be bound to honor such agreement,
unless such agreement is inconsistent with applicable laws.
(b) Directors need not be residents of this state or stockholders of the
Corporation unless the Articles of Incorporation so require.
(c) The Board of Directors shall have authority to fix the compensation of
Directors based on recommendations of its compensation committee unless
otherwise provided in the Articles of Incorporation.
(d) A Director shall perform his or her duties as a Director, including his or
her duties as a member of any committee of the Board upon which he may
serve, in good faith, in a manner he or she reasonably believes to be in
the best interests of the Corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
(e) In performing his or her duties, a Director shall be entitled to rely on
information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by:
(i) one or more officers or employees of the Corporation whom the Director
reasonably believes to be reliable and competent in the matters presented;
(ii) legal counsel, public accountants or other persons as to matters which
the Director reasonably believes to be within such persons' professional or
expert competence; or (iii) a committee of the Board upon which he or she
does not serve, duly designated in accordance with a provision of the
Articles of Incorporation or these Bylaws, as to matters within its
designated authority, which committee the Director reasonably believes to
merit confidence.
(f) A Director shall not be considered to be acting in good faith if he or she
has knowledge concerning the matter in question that would cause such
reliance described in Section 1(e) of this Article II to be unwarranted.
(g) A person who performs his or her duties in compliance with Section 1 of
this Article II shall have no liability by reason of being or having been a
Director of the Corporation.
Page 110
(h) A Director of the Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless he or she votes
against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
SECTION 2. Number; Election; Classification of Directors; Vacancies
(a)(1) The Board of Directors of this Corporation shall consist of not less
than one Director.
(2) The Board shall have authority, from time to time, to increase the
number of Directors or to decrease it to not less than one member,
provided that no decrease in the number of Directors shall deprive a
serving Director of the right to serve throughout the term of his or
her election.
(3) Whenever the Board of Directors is comprised of three or more members,
at least on such member shall be a person other than a holder of ten
percent or more of any class of the Corporation's capital stock, an
officer or employee of the Corporation, or a person related to any
such person (such director or directors being hereinafter referred to
as "Independent Director(s)".
(b) Each person named in the Articles of Incorporation as a member of the
initial Board of Directors shall serve until his or her successor shall
have been elected and qualified or until his or her earlier resignation,
removal from office, or death.
(c)(1) At the first annual meeting of stockholders and at each annual meeting
thereafter, the stockholders shall elect Directors to hold office
until the next succeeding annual meeting, except in case of the
classification of Director as permitted by the Florida Business
Corporation Act.
(2) Each Director shall hold office for the term for which he or she is
elected and until his or her successor shall have been elected and
qualified or until his or her earlier resignation, removal from
office, or death.
(d)(1) The stockholders, by amendment to these Bylaws, may provide that the
Directors be divided into not more than four classes, as nearly equal
in number as possible, whose terms of office shall respectively expire
at different times, but no such term shall continue longer than four
years, and at least one fourth of the Directors shall be elected
annually.
(2) If Directors are classified and the number of Directors is thereafter
changed, any increase or decrease in Directorship shall be so
apportioned among the classes as to make all classes as nearly equal
in number as possible.
(e)(1) Any vacancy occurring in the Board of Directors, including any vacancy
created by reason of an increase in the number of Directors, may be
filled only by the Board of Directors.
(2) A Director elected to fill a vacancy shall hold office only until the
next election of Directors by the stockholders.
Page 111
SECTION 3. Removal of Directors
(a) At a meeting of stockholders called expressly for that purpose, any
Director or the entire Board of Directors may be removed, with or without
cause, by the vote of the holders of 50% plus one of the shares entitled to
attend and vote at the election of Directors; provided that at least one
Director remains in office or one Director is elected as a replacement
Director concurrently with such removal.
(b) In the event that the number of Directors is reduced below the number
mandated in the Articles of Incorporation as a result of the removal of one
or more Directors by the stockholders, then the remaining Directors or the
contemporaneously elected replacement Director will promptly elect
replacement Directors, to serve until the next meeting of the Corporation's
stockholders, and until their replacements have been elected, qualified and
assume their office.
SECTION 4. Director Quorum and Voting
(a) A majority of the Directors fixed in the manner provided in these Bylaws
shall constitute a quorum for the transaction of business.
(b) A majority of the members of an executive committee or other committee
shall constitute a quorum for the transaction of business at any meeting of
such executive committee or other committee.
(c) The act of a majority of the Directors present at a Board meeting at which
a quorum is present shall be the act of the Board of Directors.
(d) The act of a majority of the members of an executive committee present at
an executive committee meeting at which a quorum is present shall be the
act of the executive committee.
(e) The act of a majority of the members of any other committee present at a
committee meeting at which a quorum is present shall be the act of the
committee, unless the committee is required to maintain a membership
comprised of a majority of Independent Directors, in which case an act of
the committee will require the affirmative vote of a majority of all
Independent Directors who are eligible to attend and vote as well as a
majority of those present and voting.
(f) Directors may, if not contrary to applicable law, vote either in person or
by proxy, provided that the proxy holder must be either another Director,
an officer or a stockholder of the Corporation; however, any Director who
elects to vote by proxy more than three times during any single fiscal year
shall, unless otherwise determined by the Board of Directors, be
automatically removed as a Director.
SECTION 5. Director Conflicts of Interest
(a) No contract or other transaction between this Corporation and one or more
of its Directors or any other corporation, firm, association or entity in
which one or more of its Directors are Directors or officers or are
financially interested shall be either void or voidable because of such
relationship or interest or because such Director or Directors are present
at the meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction or because
their votes are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of such interested Directors; or
Page 112
(2) The fact of such relationship or interest is disclosed or known to the
stockholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the Corporation at
the time it is authorized by the Board, a committee, or the stockholders.
(b) Interested Directors, whether or not voting, may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction.
SECTION 6. Executive and Other Committees; Designation; Authority
(a) The Board of Directors, by resolution adopted by the full Board of
Directors, may designate from among its Directors an executive committee
and one or more other committees each of which, to the extent provided in
such resolution or in the Articles of Incorporation or these Bylaws, shall
have and may exercise all the authority of the Board of Directors, except
that no such committee shall have the authority to : (i) approve or
recommend to stockholders actions or proposals required by the Florida
Business Corporation Act to be approved by stockholders; (ii) designate
candidates for the office of Director for purposes of proxy solicitation or
otherwise; (iii) fill vacancies on the Board of Directors or any committee
thereof; (iv) amend these Bylaws; (v) authorize or approve the
re-acquisition of shares unless pursuant to a general formula or method
specified by the Board of Directors; or (vi) authorize or approve the
issuance or sale of, or any contract to issue or sell, shares or designate
the terms of a series of a class of shares, unless the Board of Directors,
having acted regarding general authorization for the issuance or sale of
shares, or any contract therefor, and, in the case of a series, the
designation thereof has specified a general formula or method by resolution
or by adoption of a stock option or other plan, authorized a committee to
fix the terms upon which such shares may be issued or sold, including,
without limitation, the price, the rate or manner of payment of dividends,
provisions for redemption, sinking fund, conversion, and voting or
preferential rights, and provisions for other features of a class of
shares, or a series of a class of shares, with full power in such committee
to adopt any final resolution setting forth all the terms of a series for
filing with the Department of State under the Florida Business Corporation
Act.
(b) The Board, by resolution adopted in accordance with Section 6(a) of this
Article II, may designate one or more Directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.
(c) Neither the designation of any such committee, the delegation thereto of
authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by a member of the Board of Directors, not a
member of the committee in question, with his responsibility to act in good
faith, in manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
Page 113
(d) The Board of Directors shall at every organizational meeting thereof
designate the following committees comprised in each case of a majority of
Independent Directors:
(1) An audit committee;
(2) A derivative litigation committee;
(3) A compensation committee;
(4) A regulatory compliance committee; and
(5) A nominating committee.
(e) The audit committee shall be responsible for selection of the auditor for
the Corporation's financial statements, which must be a certified public
accountant that is a member of the AICPA's Securities Practice Section and
already successfully subjected to peer review, for supervision of the
annual audit and for review of all financial data submitted by the
Corporation to the Commission.
(f)(1) No stockholder may assert a derivative cause of action on behalf of
the Corporation, rather, any claims that would give rise to derivative
causes of action shall be submitted in writing, specifying the nature
of the cause of action and providing all evidence associated with such
claim, to a the derivative litigation committee of the Board of
Directors.
(2) The derivative litigation committee shall be comprised of members who
do not also serve as officers of the Corporation and who are not
reasonably involved with the subject cause of action.
(3) In the event that, due to the nature of the litigation involved, no
such directors are serving, then its duties shall be delegated by the
Board of Directors to a specially selected legal counsel who is not
otherwise representing the Corporation, provided that no attorney so
designated or his or her partners hold shares of the Corporation's
securities, hold any office or position with the Corporation or be
related by marriage or through siblings, parents or children to any
officer or director of the Corporation.
(4) The decision to litigate, or not to litigate by such special committee
or special counsel shall be binding on the Corporation and the
submitting stockholder or stockholders unless the foregoing procedure
has not been initiated within 30 days after completion of the
submission by the subject litigant.
(g)(1) The compensation committee shall have exclusive jurisdiction to
develop compensation plans and alternatives for all executive officers
and directors of the Corporation, and shall be responsible for
development, implementation and awards under any benefit plans
covering the Corporation's directors, officers or employees which,
after proposal by the compensation committee, are adopted by the Board
of Directors or the stockholders of the Corporation.
(2) Plans or proposals developed by the compensation committee must be
submitted for ratification to the Board of Directors, and, if approved
thereby, shall, if required by applicable laws, be submitted for
ratification to the Corporation's stockholders.
Page 114
(3) The Corporation's chief financial officer, a designee of the
Corporation's auditors and a designee of the Corporation's general
counsel shall serve as ex officio, non-voting members of the
compensation committee.
(h) The regulatory compliance committee shall be responsible for review and
approval of all filings by the Corporation with the Commission and any
other federal regulatory body with which the Corporation is regularly
required to file information involving matters not under the jurisdiction
of the audit committee, and shall supervise the preparation by the
Corporation's general counsel of summary materials concerning all such
reports as may be required to permit all members of the Board of Directors
to make informed decisions concerning approval or ratification of any such
reports.
(i) The nominating committee shall conduct ongoing searches for candidates to
corporate offices, for candidates to the Corporation's board of directors
and for membership in committees of the Corporation's board of directors,
and, in each instance when it makes recommendations for any such position,
shall submit more qualified candidates, if reasonably possible, than there
are positions to fill so that the Board of Directors and stockholders will
be presented with more than one alternative.
(j) Any committee, may, if required for purposes of independence, be comprised
of a single voting member.
(k) Notwithstanding the foregoing, in the event that the Corporation is a
controlled subsidiary of another corporation and the parent corporation is
ultimately responsible for the matters delegated to the audit committee,
derivative litigation committee, compensation committee, regulatory
compliance committee, or nominating committee, then the requirements for
such committees as to this Corporation may be dispensed with.
SECTION 7. Place, Time, Notice and Call of Directors' Meeting.
(a) Meetings of the Board of Directors, regular or special, may be held either
within or without the State of Florida.
(b)(1) A regular meeting of the Board of Directors of the Corporation shall
be held for the election of officers of the Corporation and for the
transaction of such other business as may come before such meeting as
promptly as practicable after the annual meeting of the stockholders
of this Corporation without the necessity of notice other than this
Bylaw.
(2) Other regular meetings of the Board of Directors of the Corporation
may be held at such places as the Board of Directors of the
Corporation may from time to time resolve without notice other than
such resolution.
(3) Special meetings of the Board of Directors may be held at any time
upon call of the Chairman of the Board of Directors or a majority of
the Directors of the Corporation, at such time and at such place as
shall be specified in the call thereof.
(4)(A) Notice of any special meeting of the Board of Directors must be given
at least two days prior thereto if by written notice delivered
personally, by telegram, by telephone, by e-mail or by facsimile
transmission; or at least five days prior thereto if mailed.
Page 115
(B) If such notice is given by mail, such notice shall be deemed to have
been delivered when deposited with the United States Postal Service
addressed to the business address of such Director with postage
thereon prepaid.
(C) If notice be given by telegram, such notice shall be deemed delivered
when the telegram is delivered to the telegraph company.
(D) If notice is given by telephone (including facsimile transmission or
e-mail), such notice shall be deemed delivered when the call is
completed.
(E) Notwithstanding the foregoing: if an emergency meeting of the Board of
Directors or any committee thereof is required and notice as provided
above cannot be reasonably provided within the time periods required,
then:
1. Notice shall be provided by all of the foregoing means and to all
members, whether or not at the locations normally established for
receipt of notice, establishing that an emergency meeting will be
held at a specified time through teleconference in which each
member must be able to participate, if he or she so elect;
2. The time set for the emergency meeting must be the maximum amount
of time following the provision or attempted provision of notice
as is reasonable under the circumstances;
3. If a quorum is established, then temporary required actions may
be authorized, subject to ratification at a regularly called
special meeting to be held within two days after at the emergency
meeting, and if not so ratified, any such actions shall be
immediately discontinued, and to the extent reasonably possible,
undone.
(c)(1) Notice of a meeting of the Board of Directors need not be given to any
Director who signs a waiver of notice either before or after the
meeting.
(2) Attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting and waiver of any and all objections to the
place of the meeting, the time of the meeting, or the manner in which
it has been called or convened, except when a Director states, at the
beginning of the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened.
(d) Neither the business to be transacted at, nor the purpose of, any regular
of special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
(e) (1) A majority of the Directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and
place.
(2) Notice of any such adjourned meeting shall be given to the Directors
who were not present at the time of the adjournment and, unless the
time and place of the adjourned meeting are announced at the time of
the adjournment, to the other Directors.
(f)(1) Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting
can hear each other at the same time.
Page 116
(2) Participation by such means shall constitute presence in person at a
meeting.
SECTION 8. Action by Directors Without a Meeting
(a)(1) Any action required by the Florida Business Corporation Act to be
taken at a meeting of the Directors of the Corporation, or any action
which may be taken at a meeting of the Directors or a committee
thereof, may be taken without a meeting if a consent in writing,
setting forth the action so to be taken, signed by all of the
Directors, or all of the members of the committee, as the case may be,
and is filed in the minutes of the proceedings of the Board or of the
committee.
(2) Such consent shall have the same effect as a unanimous vote.
(b) If not contrary to applicable law, Directors may take action as the Board
of Directors or committees thereof through a written consent to action
signed by a number of Directors sufficient to have carried a vote of the
Board of Directors or committee thereof with all members present and
voting; provided, that all Directors not joining in such written instrument
shall be deemed for all purposes to have cast dissenting votes, and that
all Directors not parties to such instrument shall receive written notice
of all action taken through such instrument within three days after such
instrument shall have been subscribed by the requisite number of Directors
required for such action.
SECTION 9. Compensation
(a) The Directors and members of the executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for
their services and on such basis as shall be fixed from time to time by
resolution of the Board of Directors, based on proposals submitted by the
compensation committee of the Board of Directors.
(b) The Board of Directors and members of any committee of that Board of
Directors shall be entitled to reimbursement for any reasonable expenses
incurred in attending any Board or committee meeting.
(c) Any Director receiving compensation under this Section shall not be
prevented from serving the Corporation in any other capacity and shall not
be prohibited from receiving reasonable compensation for such other
services.
SECTION 10. Resignation
(a) Unless he or she is the sole serving Director, any Director of the
Corporation may resign at any time by providing the Board of Directors with
written notice indicating the Director's intention to resign and the
effective date thereof.
(b) A sole serving Director of the Corporation must, at least concurrently with
his or her resignation, elect one or more successor Director(s) at least
one of whom must assume his or her office concurrently with the subject
resignation, and the resignation shall be effected by providing the
successor Director(s) with written notice indicating the Director's
intention to resign and the effective date thereof.
Page 117
ARTICLE III
OFFICERS
SECTION 1. Election; Number; Terms of Office
(a)(1) The officers of the Corporation shall consist of a Chairman of the
Board of Directors, provided that there are three or more directors
then serving, whose title may be designated as "Chairman," a Chief
Executive officer, a President, a Chief Operating Officer, a Chief
Financial Officer, one or more Vice-Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of Directors at
such time and in such manner as may be prescribed by these Bylaws.
(2) Such other officers and assistance officers and agents as may be
deemed necessary may be elected or appointed by the Board of
Directors.
(3) The officers of the Corporation shall be hereinafter collectively
referred to as the "Officers."
(b) All Officers and agents, as between themselves and the Corporation, shall
have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
(c) Any two or more offices may be held by the same person, except for the
offices of President and Secretary.
(d) A failure to elect a Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, a Vice
President, a Secretary or a Treasurer shall not affect the existence of the
Corporation.
SECTION 2. Removal
(a) An Officer of the Corporation shall hold office until the election and
qualification of his successor; however, any Officer of the Corporation may
be removed from office by the Board of Directors or, if appointed by
another Officer pursuant to authority delegated by the Board of Directors,
by such appointing Officer, whenever in its, his or her judgment the best
interests of the Corporation will be served thereby.
(b) Such removal shall be without prejudice to the contract rights, if any, of
the person so removed.
(c) Election or appointment of an officer shall not of itself create any
contract right to employment or compensation or create an employer-employee
relationship.
SECTION 3. Vacancies
Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.
Page 118
SECTION 4. Powers and duties
(a) Chairman:
The Chairman of the Board of Directors (hereinafter referred to as the
"Chairman"):
(1) Shall preside over meetings of the Board of Directors and the
stockholders.
(2) Unless a separate Chief Executive Officer is elected, shall exercise
the powers hereafter granted to that office.
(3) Unless a Chairman of the Board is specifically elected, shall be the
President.
(b) Chief Executive Officer:
(1) The Chief Executive Officer shall be the principal Officer of the
Corporation to whom all other Officers shall be subordinate.
(2) In the event no Chief Executive Officer is separately elected, such
office shall be assumed by the Chairman of the Board, and if no such
office has been filled, by the President.
(3) Except where by law the signature of the President is required or
unless the Board of Directors shall rule otherwise, the Chief
Executive Officer shall possess the same power as the President to
sign all certificates, contracts and other instruments of the
Corporation which may be authorized by the Board of Directors.
(c) Chief Operating Officer
(1) The Chief Operating Officer of the Corporation shall be responsible
for management of the day to day affairs of the Corporation, subject
to compliance with the directions of the Board of Directors and of the
Chief Executive Officer.
(2) The Chief Operating Officer shall be responsible for the general
day-to-day supervision of the business and affairs of the Corporation.
(3) The Chief Operating Officer shall sign or countersign all
certificates, contracts or other instruments of the Corporation, as
authorized by the Board of Directors or as assigned by the Chief
Executive Officer.
(4) Unless otherwise provided by specific resolution of the Board of
Directors, the President shall be the Chief Operating Officer of the
Corporation.
(d) President
(1) In the absence of a separately elected or available Chief Executive
Officer or Chairman of the Board, the President shall be the Chief
Executive Officer of the Corporation and shall preside at all meetings
of the stockholders and the Board of Directors.
(2) The Board of Directors will at all times retain the power to expressly
delegate the duties of the President to any other Officer of the
Corporation.
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(e) Chief Financial Officer
(1) The Chief Financial Officer shall be responsible for coordinating all
financial aspects of the Corporation's operations, including strategic
financial planning, supervision of the Corporation's Treasurer,
Comptroller and, subject to the supervision of the audit committee,
for coordination with the Corporation's outside auditors.
(2) The Chief Financial Officer shall be responsible for keeping the audit
committee fully and timely informed of all matters under its
jurisdiction.
(3) The Chief Financial Officer shall, unless otherwise specifically
provided by the Board of Directors, serve as the Corporation's
principal compliance officer and shall be responsible for overseeing
preparation and filing of all reports of the Corporation's activities
required to be filed, either periodically or on a special basis with
the United States Internal Revenue Service, the Commission and with
other federal, state or local governmental agencies.
(4) The Chief Financial Officer shall be responsible for keeping the
regulatory committee fully and timely informed of all matters under
its jurisdiction.
(f) Vice President(s)
(1) The Vice President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President in the event
of the absence, disability, death, or refusal to act of the President.
(2) During the time that any Vice President is properly exercising the
functions of the President, such Vice President shall have all the
powers of and be subject to all restrictions upon the President.
(3) Each Vice President shall have such other duties as are assigned to
him from time to time by the Board of Directors or by the President of
the Corporation and shall be subject to such specializing designations
(e.g., "senior," executive," etc.) as the Board of Directors may
select.
(g) Secretary
(1) The Secretary of the Corporation shall keep the minutes of the
meetings of the stockholders of the Corporation, and, unless provided
otherwise by the Chairman at any meeting of the Board of Directors,
the Secretary shall keep the minutes of the meetings of the Board of
Directors of the Corporation.
(2) The Secretary shall, unless a chief legal officer is elected, be the
custodian of the minute books of the Corporation and such other books
and records of the Corporation as the Board of Directors of the
Corporation may direct.
(3) The Secretary of the Corporation shall have the general responsibility
for maintaining the stock transfer records of the Corporation, or of
supervising the maintenance of the stock transfer records of the
Corporation by the transfer agent, if any, of the Corporation.
(4) The Secretary shall be the custodian of the corporate seal of the
Corporation and shall affix the corporate seal of the Corporation on
contracts and other instruments as the Board of Directors may direct.
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(5) The Secretary shall perform such other duties as are assigned from
time by the Board of Directors, the Chief Executive Officer, the
Chairman, the Chief Operating Officer or the President of the
Corporation.
(h) Treasurer
(1) The Treasurer of the Corporation shall be directly subordinate to the
Chief Financial Officer.
(2) In the absence of a Chief Financial Officer, such office shall be
filled by the Treasurer.
(3) Unless otherwise specified by the Board of Directors, the Treasurer
shall have custody of all funds and securities owned by the
Corporation.
(4) The Treasurer shall cause to be entered regularly in the proper books
of account of the Corporation full and accurate accounts of the
receipts and disbursements of the Corporation.
(5) The Treasurer of the Corporation shall render a statement of the cash,
financial and other accounts of the Corporation whenever he is
directed to render such a statement by the Board of Directors or by
the President of the Corporation.
(6) The Treasurer shall at all reasonable times make available the
Corporation's books and financial accounts to any Director of the
Corporation during normal business hours.
(7) The Treasurer shall perform all other acts incident to the Office of
Treasurer of the Corporation, and he shall have such other duties as
are assigned to him from time to time by the Board of Directors, the
Chief Executive Officer, the Chairman, the Chief Operating Officer or
the President of the Corporation.
(i)General Counsel & Chief Legal Officer:
(1) The Board of Directors shall designate a person licensed to practice
law in one of the states comprising the United States as the
Corporation's General Counsel and Chief Legal Officer;
(2) The Corporation's General Counsel and Chief Legal Officer shall
coordinate the Corporation's legal affairs under the directions of the
Board of Directors and in coordination with the Chief Executive
Officer, to whom he or she shall report;
(3) The Board of Directors may appoint such subordinate legal officers and
assign them such functions as it may deem appropriate.
(j) Other Subordinate or Assistant Officers.
(1) Other subordinate, deputy or assistant officers may be appointed by
the Board of Directors or by the Chief Executive Officer, the
Chairman, the Chief Operating Officer or the President, if such
authority is delegated to them by the Board of Directors.
(2) Persons so appointed shall exercise such powers and perform such
duties as may be delegated to them by the Board of Directors, the
Chief Executive Officer, the Chief Operating Officer or by the
President, that appointed them, as the case may be.
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(k) In case of the absence or disability of any Officer of the Corporation and
of any person authorized to act in his place during such period of absence
or disability, the Board of Directors may from time to time delegate the
powers and duties of such Officer or any Director or any other person whom
it may select.
SECTION 5. Salaries
(a) The salaries of all Officers of the Corporation shall be fixed by the Board
of Directors based on recommendations by the compensation committee of the
Board of Directors.
(b) No Officer shall be ineligible to receive such salary by reason of the fact
that he is also a Director of the Corporation and receiving compensation
therefor.
ARTICLE IV
LOANS TO EMPLOYEES AND OFFICERS;
GUARANTEE OF OBLIGATIONS OF EMPLOYEES AND OFFICERS
(a) This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any Officer or other employee of the Corporation or of a
subsidiary, including any Officer or employee who is a Director of the
Corporation or of a subsidiary, whenever, in the judgment of the Directors,
such loan, guarantee or assistance may reasonably be expected to benefit
the Corporation.
(b) The loan, guarantee or other assistance may be with or without interest,
and may be unsecured, or secured in such manner as the Board of Directors
shall approve including, without limitation, a pledge of shares of stock of
the Corporation.
(c) Nothing in this Article shall be deemed to deny, limit or restrict the
powers of guarantee or warranty of this Corporation at common law or under
any statute.
ARTICLE V
STOCK CERTIFICATES; VOTING TRUSTS; TRANSFERS
SECTION 1. Certificates Representing Shares
To the extent legally permitted by the laws of the United States and the
State of Florida, in the event that the Corporation has 100 or more
stockholders, records of the holders of the Corporation's capital stock shall be
maintained through stock transfer record entry with a transfer agent registered
and in good standing with the Commission and certificates evincing ownership of
capital stock shall not be issued, except at the request of a stockholder in
which case they shall be issued as provided below, at the stockholders' expense:
(a)(1) Subject to the foregoing, every holder of shares of this Corporation
shall be entitled to one or more certificates representing all shares
to which he, she or it is entitled and such certificates shall be
signed by the Chairman, Chief Executive Officer, Chief Operating
Officer, the President or a Vice President and the Secretary or an
Assistant Secretary of the Corporation and may be sealed with the seal
of the Corporation or a facsimile thereof.
(2) The signatures of the Chairman, the Chief Executive Officer, the Chief
Operating Officer, the President or Vice President and the Secretary
or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar other
than the Corporation itself or an employee of the Corporation.
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(3) In case any Officer who signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such Officer
before such certificate is issued, it may be issued by the Corporation
with the same effect as if it were executed by the appropriate Officer
at the date of its issuance.
(b) Every certificate representing shares issued by this Corporation shall, if
shares are divided into one or more classes or series with differing
rights, state that the Corporation will furnish to any stockholder upon
request and without charge a full statement of: (i) the designations,
preferences, limitations, and relative rights of the shares of each class
or series authorized to be issued, and (ii) the variations in the relative
rights and preferences between the shares of each such series, if the
Corporation is authorized to issue any preferred or special class in series
and so far as the same have been fixed and determined, and the authority of
the Board of Directors to fix and determine, the relative rights and
preferences of subsequent series.
(c) Every certificate representing shares which are restricted as to sale,
disposition or other transfer (including restrictions based on federal or
state securities and other laws) shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the Corporation will furnish to any
stockholder upon request and without charge a full statement of, such
restrictions.
(d) Each certificate representing shares shall state upon the face thereof:
(1) The name of the Corporation;
(2) That the Corporation is organized under the laws of the State of
Florida;
(3) The name of the person or persons to whom issued;
(4) The number and class of shares, and the designation of the series, if
any, which such certificate represents;
(5) The date of issuance; and
(6) The par value of each share represented by such certificate, or a
statement that the shares are without par value.
(e) No certificate shall be issued for any shares until they are fully paid for
and in the event that a certificate is erroneously issued or compensation
paid is subsequently discovered to be other than as represented (e.g.,
dishonored checks, securities of a corporation acquired in a reorganization
where the representations and warranties provided prove to be materially
false, services provided where other than as represented, etc.), then the
Board of Directors shall promulgate a certified resolution detailing the
nature of the misrepresented consideration, and shall submit such certified
resolution to the person responsible for recording and effecting
transactions in the Corporation's securities; whereupon such securities
will be restricted from transfer and treated as no longer outstanding for
all purposes unless the Corporation becomes subject to a judgment of a
court of competent jurisdiction providing otherwise.
(f) For purposes of Commission Rule 144, the holding period for the company's
securities shall be the initial date recorded in the Corporation's stock
transfer record entry system for the issuance or transfer thereto to the
subject holder, subject to the tacking provisions of such rule, unless a
failure of consideration is determined to exist pursuant to the preceding
paragraph, in which case the holding period will be deemed to have tolled
until a legally binding determination is obtained concerning when the
subject securities were, in fact, fully paid for.
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SECTION 2. Transfer records
(a) The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a stock
transfer record (or stock transfer records where more than one kind, class,
or series of stock is outstanding) to be known as the Official Stock
Transfer Registry, containing the names, alphabetically arranged, addresses
and Social Security numbers of every stockholder and the number of shares
each kind, class or series of stock held of record.
(b) Where the Stock Transfer Registry is kept in the office of the transfer
agent, the Corporation shall keep at its chief administrative offices
copies of the stock lists prepared from said Stock Transfer Registry and
sent to it from time to time (but not less frequently than every month) by
the transfer agent.
(c) The Stock Transfer Registry or stock lists shall show the current status of
the ownership of shares of the Corporation provided that, if the transfer
agent of the Corporation be located elsewhere, a reasonable time shall be
allowed for transit or mail, not to exceed three days.
SECTION 3. Transfer of Shares
(a) The name(s) and address(es) of the person(s) to whom shares of stock of
this Corporation are issued, shall be entered on the Stock Transfer records
of the Corporation, with the number of shares and date of issue.
(b)(1) Transfer of shares of the Corporation shall be made on the Stock
Transfer records of the Corporation by the Secretary or the transfer
agent, subject to compliance with any restrictions specified on such
certificate, only when the holder of record thereof or the legal
representative of such holder of record or the attorney-in-fact of
such holder of record, authorized by power of attorney duly executed
and filed with the Secretary or transfer agent of the Corporation,
shall direct that such transfer be effected in a written instrument
complying with the securities industry requirements for stock and bond
powers, bearing a medallion guarantee or such other requirements as
may from time to time be promulgated by the Commission, and, if a
certificate therefor has been issued, shall require surrender the
Certificate representing such shares for cancellation concurrently
with the request for transfer.
(2) Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article V.
(c) The person or persons in whose names shares stand on the stock transfer
records of the Corporation shall be deemed by the Corporation to be the
owner of such shares for all purposes, except as otherwise provided
pursuant to Sections 10 and 11 of Article I, or Section 4 of Article V.
(d) Shares of the Corporation's capital stock shall be freely transferable
without required Board of Directors' consent unless:
(1) Such shares are subject to transfer restrictions under applicable
Commission rules;
(2) Transfer of the shares has been restricted due to lack of
consideration, fraud in the inducement or other legally cognizable
reasons heretofore described; or
Page 124
(3) A consent requirement has been imposed pursuant to a binding written
contract subscribed to by the holder or his or her predecessor in
interest.
(e) (1) All transactions in securities subject to any restrictions imposed
under Commission Rule 144 ("restricted securities" and "Rule 144,"
respectively) shall, as a condition to transfer, require the following
documentation, to be reviewed and approved by legal counsel to the
Corporation:
(A) An affidavit from the holder (the "Holder") providing details
concerning acquisition of the subject shares; providing evidence
of the date when consideration for the shares was paid in full;
detailing all transactions in the Corporation's securities during
the immediately preceding 90 days; affirming a present intent to
dispose of the subject securities; affirming that a Form 144 has
been filed with the Commission covering the proposed transaction
(and providing a copy thereof); affirming compliance with any
reporting obligations under Sections 13(d), 13(g) or 16(b) of the
Exchange Act, and providing such other facts or representations
as legal counsel to the Corporation may reasonably require;
(B) A written confirmation by the Corporation's transfer agent based
on records available thereto of all transactions in the
Corporation's securities by the Holder and anyone with whom the
holder is required to aggregate sales or securities holdings for
purposes of Rule 144, as well as confirmation of the percentage
of outstanding securities of the Corporation held of record by
the Holder and anyone with whom the holder is required to
aggregate sales or securities holdings for purposes of Rule 144;
(C) Except as provided below, a written confirmation from the broker
through whom the Holder is effecting the proposed transaction
verifying that the transaction will be effected in full
compliance with Rule 144; and
(D) A legal opinion from counsel to the Holder (who may not also be
the counsel to the Corporation) specifically addressing all
aspects of Rule 144 and detailing the manner in which they are
being complied with or the reasons that they are not applicable.
(2) Transactions in restricted securities that are not being effected in
reliance on Rule 144 shall require, as a condition to transfer, the
following documentation, to be reviewed and approved by legal counsel
to the Corporation:
(A) An affidavit from the holder (the "Holder") providing details
concerning acquisition of the subject shares; providing evidence
of the date when consideration for the shares was paid in full;
the identity and qualifications of the person to whom the
securities are being transferred; the manner in which such person
has been provided with required information concerning the
Corporation; affirming compliance with any reporting obligations
under Sections 13(d), 13(g) or 16(b) of the Exchange Act and
providing such other facts or representations as legal counsel to
the Corporation may reasonably require;
(B) If the Corporation has a class of securities registered under
Section 12 of the Exchange Act, an affidavit from the Holder
affirming that all reports required to be filed by the Holder
with the Commission pursuant to Sections, 13, 14 and 16 of the
Exchange Act (e.g., Forms 3, 4 and 5, and Schedules 13D or 13G),
have been filed; and
Page 125
(C) A legal opinion from counsel to the Holder (who may not also be
the counsel to the Corporation) addressed to the Corporation in a
manner creating enforceable privity between such legal counsel
and the Corporation, specifically addressing all aspects of the
exemptions relied on to effect the proposed transaction without
registration under applicable federal and state securities laws
and regulations, detailing the manner in which they are being
complied with or the reasons that they are not applicable and, if
the Corporation has a class of securities registered under
Section 12 of the Exchange Act, asserting that after diligent
inquiry, such counsel confirms that all reports required to be
filed by the Holder with the Commission pursuant to Sections, 13,
14 and 16 of the Exchange Act (e.g., Forms 3, 4 and 5, and
Schedules 13D or 13G), have been filed.
(3) No transactions in the Corporation's restricted securities failing to
materially comply with the foregoing requirements will be honored, nor
will any holding period required under Rule 144 be deemed to commence
until all such requirements are materially complied with (material
compliance to be determined in the sole discretion of the Board of
Directors or a court of competent jurisdiction located in the county
where the Corporation's Chief Legal Officer maintains its principal
offices).
SECTION 4. Voting Trusts
(a)(1) Any number of stockholders of the Corporation may create a voting
trust for the purpose of conferring upon a trustee or trustees the
right to vote or otherwise represent their shares, for a period not to
exceed ten years, by: (i) entering into a written voting trust
agreement specifying the terms and conditions of the voting trust;
(ii) depositing a counterpart of the agreement with the Corporation at
its registered office; and (iii) transferring their shares to such
trustee or trustees for the purposes of this Agreement.
(2) Prior to the recording of the agreement, the stockholder concerned
shall, if certificates have been issued, tender the stock
certificate(s) described therein to the Corporate Secretary who shall
note on each certificate:
"This Certificate is subject to the provisions of a voting trust
agreement dated ..........., recorded in Minute Book ............, of
the Corporation."
(b) (1) Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the stockholders who transfer
their shares in trust.
(2) Such trustee or trustees shall keep a record of the holders of voting
trust certificates evidencing a beneficial interest in the voting
trust, giving the names and addresses of all such holders and the
number and class or the shares in respect of which the voting trust
certificates held by each are issued, and shall deposit a copy of such
record with the Corporation at its registered office.
(3) The Corporation shall have no liability to any stockholder
participating in a voting trust as a result of any actions or failures
to act by the trustee.
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(c) The counterpart of the voting trust agreement and the copy of such record
so deposited with the Corporation shall be subject to the same right of
examination by a stockholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such
counterpart and such copy of such record shall be subject to examination by
any holder of record of voting trust certificates either in person or by
agent or attorney, at any reasonable time for any proper purpose.
(d)(1) At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Section
4(d), one or more holders of voting trust certificates may, by
agreement in writing, extend the duration of such voting trust
agreement, nominating the same or substitute trustees, for an
additional period not exceeding 10 years.
(2) Such extension agreement shall not affect the rights or obligations or
persons not parties to the agreement, and such persons shall be
entitled to remove their shares from the trust and promptly to have
their stock certificates reissued upon the expiration of the original
term of the voting trust agreement.
(3) The extension agreement shall in every respect comply with and be
subject to all the provisions of this Section 4, applicable to the
original voting trust agreement except that the 10 year maximum period
of duration shall commence on the date of adoption of the extension
agreement.
(e) The trustees under the terms of the agreements entered into under the
provisions of this Section 4, shall not acquire the legal title to the
shares but shall be vested only with the legal right and title to the
voting power which is incident to the ownership of the shares.
(f) Notwithstanding generally applicable prohibitions against a corporation's
voting of treasury stock or any other provisions in these Bylaws, if the
Corporation is the trustee under a voting trust, it shall have full
authority to vote such shares in accordance with the terms of the voting
trust agreement, even if such agreement vests absolute and unfettered
voting discretion in the trustee and notwithstanding that the voting trust
was created at the prompting or direction of the Corporation, its Officers
or Directors.
SECTION 5. Lost, Destroyed, or Stolen Certificates
No Certificate representing shares of stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of Directors,
of such loss, destruction or theft, and, if the Board of Directors so requires,
upon the furnishing of an indemnity bond in such amount (but not to exceed twice
the fair market value of the shares represented by the Certificate) and with
such terms and with such surety as the Board of Directors may, in its
discretion, require.
ARTICLE VI
BOOKS AND RECORDS
(a) The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its stockholders,
Board of Directors and committees of Directors.
(b) Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Page 127
(c) Any person who shall have been a holder of record of shares, or the holder
of record of voting trust certificates for, at least five percent of the
outstanding shares of any class or series of the Corporation, upon at least
five business days prior written demand stating the purpose thereof, shall;
subject to the qualifications contained in subsection (d) hereof, have the
right to examine, in person or by agent or attorney, at any reasonable
business time or times, for any purpose, its relevant books and records of
account, minutes and records of stockholders and to make extracts
therefrom, provided that, to the extent legally permitted, such person
shall be required to reimburse the Corporation for the actual costs of any
reasonable expenses occasioned thereby.
(d)(1) No stockholder who within two years has sold or offered for sale any
list of stockholders or of holders of voting trust certificates for
shares of this Corporation or any other corporation; has aided or
abetted any person in procuring any list of stockholders or of holders
of voting trust certificates for any such purpose; or has improperly
used any information secured through any prior examination of the
books and records of account, minutes, or record of stockholders or of
holders of voting trust certificates for shares of the Corporation of
any other corporation; shall be entitled to examine the documents and
records of the Corporation as provided in Section (c) of this Article
VI.
2) No stockholder who does not act in good faith or for a proper purpose
in making his demand shall be entitled to examine the documents and
records of the Corporation as provided in Section (c) of this Article
VI.
(e) Unless modified by resolution of the stockholders, this Corporation shall
prepare not later than 70 days after the close of each fiscal year, audited
financial statements, including all required schedules, prepared in
accordance with Generally Accepted Accounting Principals ("GAAP")
consistently applied; and shall prepare not later than 40 days after the
close of each fiscal quarter (other than the fourth quarter), quarterly
unaudited financial statements, including all required schedules, prepared
in accordance with Generally Accepted Accounting Principals ("GAAP").
(f) Upon the written request of any stockholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to
such stockholder or holder of voting trust certificates a copy of its most
recent balance sheet and profit and loss statement.
(g) Such financial statements shall be filed and kept for at least five years
in the chief administrative office of the Corporation and shall be subject
to inspection during business hours by any stockholder or holder of voting
trust certificates, in person or by agent, provided that, to the extent
legally permitted, such person shall be required to reimburse the
Corporation for the actual costs of any reasonable expenses occasioned
thereby.
(h) Notwithstanding the foregoing, in the event that this Corporation is part
of a group of corporation's which, pursuant to GAAP, is eligible to have
financial statements prepared on a consolidated basis, then the inclusion
of the Corporation's financial data, prepared in accordance with GAAP,
shall satisfy the requirements of this Article, unless otherwise required
under applicable provisions of federal securities laws.
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ARTICLE VII
DIVIDENDS & OTHER STOCKHOLDER BENEFITS
SECTION 1. Dividends
The Board of Directors of the Corporation may, from time to time, declare,
and the Corporation may pay dividends on its own shares, except when the
Corporation is insolvent or when the payment thereof would render the
Corporation insolvent, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as otherwise
provided in this Article VII, only out of the unreserved and unrestricted
earned surplus of the Corporation or out of capital surplus, however
arising, but each dividend paid out of capital surplus shall be identified
as a distribution of capital surplus, and the amount per share paid from
such capital surplus shall be disclosed to the stockholders receiving the
same concurrently with the distribution.
(b) If the Corporation shall engage in the business of exploiting natural
resources or other wasting assets and if the Articles of Incorporation so
provide, dividends may be declared and paid in cash out of depletion or
similar reserves, but each such dividend shall be identified as
distribution of such reserves and the amount per share paid from such
reserves shall be disclosed to the stockholders receiving the same
concurrently with the distribution thereof.
(c) Dividends may be declared and paid in the Corporation's treasury shares, in
shares of the capital stock or other securities of the Corporation's
subsidiaries, in the shares of capital stock or other securities of other
issuers held by the Corporation or in any other assets owned by the
Corporation which are capable of equitable distribution to the
Corporation's stockholders, in proportion to their ownership of equity
interests in the Corporation, or in classes or series thereof, inter se.
(d) Dividends may be declared and paid in the Corporation's authorized but
unissued shares, out of any unreserved and unrestricted surplus of the
Corporation, upon the following conditions:
(1) If a dividend is payable in the Corporations' own shares having a par
value, such shares shall be issued at not less than the par value
thereof and there shall be transferred to stated capital at the time
such dividend is paid an amount of surplus equal to the aggregate par
value of the shares to be issued as a dividend.
(2) If a dividend is payable in the Corporations' own shares without par
value, such shares shall be issued at a stated value fixed by the
Board of Directors by resolution adopted at the time such dividend is
declared, and there shall be transferred to stated capital at the time
such dividend is paid an amount of surplus equal to the aggregate
stated value so fixed and the amount per share so transferred to
stated capital shall be disclosed to the stockholders receiving such
dividend concurrently with the payment thereof.
(e) No dividend payable in shares of any class shall be paid to the holders of
shares of any other class unless the Articles of Incorporation so provide
or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of
the class in which the payment is to be made.
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(f) A split or division of the issued shares of any class into a greater number
of shares of the same class without increasing the stated capital of the
Corporation shall not be construed to be a stock dividend within the
meaning of this Article VII.
SECTION 2. Other Stockholder Benefits
The Board of Directors may, subject to the restrictions involving
impairment of the Corporation's capital applicable to declaration of dividends,
enter into arrangements with any other person or entity, including affiliates of
the Corporation or its officers, directors or stockholders, designed to provide
a benefit or benefits directly to the Corporation's stockholders, including,
without limitation, the payment for services provided by the Corporation by
making distributions of assets, rights or benefits directly to the Corporation's
stockholders.
ARTICLE VIII
SEAL
The Board of Directors shall adopt a Corporate Seal which shall be circular
in form and shall have inscribed thereon the name of the Corporation, the state
of incorporation and the year of incorporation.
ARTICLE IX
INDEMNIFICATION
(a) This Corporation shall indemnify its officers, Directors and authorized
agents for all liabilities incurred directly, indirectly or incidentally to
services performed for the Corporation, or for other entities at the
request of the Corporation, to the fullest extent permitted under Florida
law now existing or hereinafter enacted.
(b) Funds required to pay expenses reasonably necessary to defend allegations
that would raise the foregoing right of indemnifications shall be advanced
by this Corporation at any time that the person claiming such expenses
appears reasonably likely to become entitled to indemnification and enters
into a binding agreement with this Corporation to repay advances for such
expenditures in the event that he, she or it is eventually found not to be
entitled thereto.
(c) In the event that there are any questions raised concerning the legality of
indemnification, they will be referred by the Board of Directors to the
derivative litigation committee for resolution, or if such committee is
disqualified, to an independent legal counsel in the manner established in
these Bylaws for making decisions involving derivative litigation.
ARTICLE X
AMENDMENT OF BYLAWS
The Board of Directors shall have the power to amend, alter, or repeal
these Bylaws, and to adopt new bylaws unless the bylaw involved was passed by
the stockholders' in a resolution reserving the right to its amendment or repeal
to the stockholders.
ARTICLE XI
FISCAL YEAR
The fiscal year of this Corporation shall be determined by the Board of
Directors and, subject to compliance with applicable laws, may be modified from
time to time by the Board of Directors.
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ARTICLE XII
MEDICAL REIMBURSEMENT
SECTION 1. Benefits
(a) The Corporation may, subject to approval by the Board of Directors of a
plan proposed by its compensation committee, reimburse all employees for
expenses incurred by themselves and their dependents, as defined in Section
152 (or any successor provision thereto) of the Internal Revenue Code of
1986, as amended (the "IRC"), for medical care, as defined in IRC Section
213(e) or any successor section thereto, subject to the conditions and
limitations hereinafter set forth.
(b) It is the intention of the Corporation that the benefits payable to
employees hereunder will be excluded from their gross income pursuant IRC
Section 105 or any successor section thereto.
SECTION 2. Employees Defined
The term "employees" as used in this medical expense plan is hereby defined
to include all individuals employed by the corporation except the following:
(a) Employees who have not completed three months of service as is provided in
IRC Section 105(h)(3) (b)(i), or any successor section thereto;
(b) Employees who have not attained the age of 25 years;
(c) Employees who are part-time or seasonal as is defined in IRC Section
105(h)(3)(B)(iii) or any successor section thereto;
(d) Employees who are included in a unit of employees covered by an agreement
between employee representatives and one or more employers found to be a
collective bargaining agreement where accident and health benefits were the
subject of good faith bargaining between such employee representatives and
such employer(s) as is defined in IRC Section 105(h)(3)(B)(iv) or any
successor section thereto;
(e) Employees who are nonresident aliens and who receive no earned income from
the employer which constitutes income from sources within the United States
as is further defined in IRC Section 105(h)(5)(B)(v) or any successor
section thereto.
SECTION 3. Limitations
(a) The Corporation will reimburse any employee no more than $5,000.00 in any
fiscal year for medical care expenses;
(b) Reimbursement or payment provided under this plan will be made by the
Corporation only in the event and to the extent that such reimbursement or
payment is not provided under any insurance policy(ies), whether owned by
the Corporation or the employee, or under any other health and accident or
wage continuation plan;
(c) In the event that there is such an insurance policy or plan in effect
providing for reimbursement in whole or in part, then to the extent of the
coverage under such policy or plan, the Corporation will be relieved of any
and all liability hereunder.
Page 131
SECTION 4. Submission of Proof
(a) Any employee applying for reimbursement under this plan will submit to the
Corporation, at least quarterly, all bills for medical care, including
premium notices for accident or health insurance, for verification by the
Corporation prior to payment.
(b) Failure to comply herewith, may at the discretion of the Board of
Directors, terminate such employee's right to said reimbursement.
SECTION 5. Discontinuation
This plan will be subject to termination at any time by vote of the Board
of Directors; provided, however, that medical care expenses incurred prior to
such termination will be reimbursed or paid in accordance with the terms of this
plan.
SECTION 6. Determination
The Chief Executive Officer will determine all questions arising from the
administration and interpretation of the Plan except where reimbursement is
claimed by the Chief Executive Officer, in which such case determination will be
made by the compensation committee of the Board of Directors.
The Undersigned, being the duly elected and acting Secretary of the
Corporation, hereby certifies that the foregoing constitute the validly adopted
and true Bylaws of the Corporation, as of the date set forth below.
Dated: November 11th 1999
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary
(Corporate Seal)
Page 132
Schedule 1.5 Officers and Directors of Surviving Corporation
List of Officers
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Counsel and Secretary
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director of Production
▇▇▇▇▇ ▇. ▇▇▇▇, Art Director
▇▇▇▇▇ ▇▇▇▇▇, IT Director
Board of Directors
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Director
Exhibit 2.2(B) WRI Capital Structure
Assignment of Incorporator's Interest
I hereby assign to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
All my rights, title and interest as an incorporator of WEB Results,
Institute, Inc. a corporation organized under the laws of the state of Florida.
Executed this 5 August 1998
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Incorporator
Page 133
Schedule 2.5(A) Financials
Web Results Institute
Profit and Loss
July 1998 through June 1999
Ordinary Income/Expense
Income
Bank Atlantic Savings Interest 18.83
Hosting Service 43,671.20
Institute - Website Sales 1,382,364.46
Production Dept. Sales 51,750.56
Uncategorized Income 1,223.00
Website Sales 0.00
1,459,028.05
Total Income
Cost of Goods Sold
Web Site Development 1,200.00
Total COGS 1,200.00
Gross Profit1 457,828.05
Expense
Advertising 2,569.90
Bank Service Charges 899.25
Contributions 438.75
Credit Card Processing Fees
AMEX Processing Fees 9,033.64
Misc. Credit Card Processing 72.85
Visa/MC Processing Fee 12,001.87
Credit Card Processing Fees - Other 3,143.91
Total Credit Card Processing Fees 24,252.27
Dues and Subscriptions 2,159.73
Education 99.00
Equipment Rental 593.25
Hosting 20,575.00
Insurance 872.73
InterNIC Registration 870.00
Lead Generation 289,258.49
Leases
Computer Equipment Lease 3,871.34
Credit Card Processing Terminal 155.00
Postage Meter Lease 367.69
Telephone Equipment Lease 4,639.25
Page 134
Total Leases 9,033.28
Licenses and Permits 884.60
Miscellaneous 497.50
Office Expenses
Internet Cable 9,881.80
Office Supplies 7,330.70
Office Expense - Other 14,990.20
Total Office Expense 32,202.70
Payroll
1099 - Contractor Salary 194,907.90
Novacare Employees 566,793.84
Total Payroll 761,701.74
Postage and Delivery 3,024.54
Professional Development 260.00
Accounting1, 775.00
Legal Fees 19,946.00
Outside Consulting 33,960.37
Total Professional Fees 55,681.37
Reimbursed Expenses
Fuel/Parking Fees 313.89
Meals 3,480.77
Misc. Office Expense/Spiffs 2,106.14
Travel 6,593.47
Reimbursed Expenses - Other 4,657.20
Total Reimbursed Expenses 17,153.47
Rent 25,316.00
Repairs
Building Repairs 580.50
Computer Repairs 941.50
Office Equipment Repairs 2,557.65
Total Repairs 4,079.65
Research & Development 408.07
Return Deposit Items 0.00
Search Engine Registration 165.00
Page 135
Spiffs 7,329.41
Telephone
▇▇▇▇ South -626.10
Long Distance 28,168.41
Total -12,368.10
Telephone - Other 27,658.47
Total Telephone 57,568.88
Total Expenses 1,317,894.58
Net Ordinary Income 139,933.47
Other Income/Expense
Other Expense
Bad Debt/Write Offs 548.50
Other Expenses 7,662.50
Total Other Expenses -8,221.00
Net Income 131,722.47
Web Results Institute
Profit and Loss
July through September 1999
Ordinary Income/Expense
Income
Fees -90.00
Franchise Fees 10,000.00
Franchise Sales 1,892.93
Hosting - 12M 13,382.50
Hosting - 6M 4,591.50
Hosting Service 2,849.50
Institute - Website Sales 48,853.26
Production Dept. Sales 27,224.10
Shopping Cart Sales 1,703.50
Website Sales - 12M 91,468.00
Website Sales - 6M 49,705.00
Total Income 251,497.29
Gross Profit
Expense
Bank Service Charges 393.00
Contributions 20,222.00
Credit Card Processing Fees
Page 136
AMEX Processing Fee 1,570.87
Visa/MC Processing Fee 2,571.18
Credit Card Processing Fees - Other 1,123.95
Total Credit Card Processing Fees 5,266.00
Dues and Subscriptions 235.00
Education 445.00
Hosting 539.50
InterNIC Registration 210.00
Lead Generation 17,185.21
Leases
Computer Equipment Lease 734.21
Postage Meter Lease 41.88
Telephone Equipment Lease 1,271.77
Total Leases 2,047.86
Licenses and permits 157.00
Office Expense
Internet Cable 6,285.27
Office Supplies 879.18
Office Expense - Other 1,335.73
Total Office Expense 8,500.18
Payroll
1099 - Contractor Salary 47,724.81
Novacare Employees 150,112.66
Total Payroll 197,837.47
Postage and Delivery 475.76
Printing and Reproduction 691.86
Professional Fees
Accounting 1,600.00
Legal Fees 394.50
Outside Consulting 5,221.41
Total Professional Fees 7,215.91
Reimbursed Expenses
Fuel/Parking Fees 91.60
Meals 531.44
Travel 287.00
Reimbursed Expenses - Other 2,574.10
Total Reimbursed Expenses 3,484.14
Rent 9,444.92
Page 137
Repairs
Computer Repairs 0.00
Office Equipment Repairs 60.00
Total Repairs 60.00
Research and Development 231.65
Spiffs 400.00
Telephone
Long Distance 8,113.67
Telephone - Other 2,065.31
Total Telephone 10,178.98
Total Expense 284,999.44
Net Ordinary Income -33,502.15
Other Income/Expense
Other Income
Interest Income 8.45
Total Other Income 8.45
Other Expense
Other Expenses 1,000.00
1,000.00
Net Other Income -991.55
Net Income -34,493.70
Page 138
Web Results Institute
Balance Sheet
As of September 30, 1999
Assets
Current Assets
Checking/Savings
Checking - Bank Atlantic -1,364.77
Institute Inc. Checking 6,730.81
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 484.45
Total Checking Savings 5,850.49
Accounts Receivable 131,748.90
Accounts Receivable 131,748.90
Other Current Assets
Employee Advances 510.32
Total Other Current Assets 510.32
Total Current Assets 138,109.71
Fixed Assets
Computer Equipment 236,039.29
Computers 11,239.38
Office Equipment 3,199.25
Total Fixed Assets 250,477.92
Other Assets
Software/Comp. Accessories 3,507.23
Total Other Assets 3,507.23
Total Assets 392,094.86
Liabilities and Equity
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 43,498.11
Contribution 20,000.00
Total Accounts Payable 63,498.11
Other Current Liabilities
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 20,000.00
Total Other Current Liabilities 20,000.00
Page 139
Web Results Institute
Balance Sheet
As of September 30, 1999
Total Current Liabilities 83,498.11
Long Term Liabilities
Owner/Loan 6,165.94
Total Long Term Liabilties 6,165.94
Total Liabilities 89,664.05
Equity
Equipment 230,407.69
Opening Bal. Equity -2,355.34
Retained Earnings 20,168.65
Net Income 54.209.81
Total Equity 302,430.81
Total Liabilities and Equity 392,094.86
Schedule 2.8(A)Tax Disclosure Schedule
This exhibit is omitted but can be obtained through the office of the
General Counsel
Schedule 2.10(A)Real Property
At this time ▇▇▇▇▇▇▇.▇▇▇ has no ownership of real property.
Schedule 2.10(C)Equipment
Inventory
Quantity Description Per Unit Replacement Value
Chairs
3 Management chairs, 1 receptionist
task chair $350.00 $1,050.00
8 Executive Swivel chair $450.00 $3,600.00
1 Executive Swivel chair $900.00 $900.00
17 Rolling Swivel Chairs w/arms $250.00 $4,250.00
4 Black leather chairs $50.00 $200.00
4 Executive swivel chairs $175.00 $700.00
8 Rolling Swivel Chairs w/out arms $100.00 $800.00
Sum 45 Chairs Group Total: $11,500.00
Page 140
Computer Equipment
1 Seagate Barracuda 4.3gig SCSI drive $250.00 $250.00
8 Compaq 9.1 gig HD $525.00 $4,200.00
8 WD 4.3gig HD $121.25 $970.00
3 3com 3c905-TX $60.00 $180.00
21 Ensoniq Soundblaster $17.00 $357.00
5 Fujitsu 4.3gig HD $74.00 $370.00
22 Qauntum Bigfoot 6gig HD $130.00 $2,860.00
61 Quantum Bigfoot 4.3gig HD $95.00 $5,795.00
2 computer from Chiptech $625.00 $1,250.00
1 Creative DVD drive $250.00 $250.00
1 Compaq 4.3gig SCSI HD $250.00 $250.00
1 Dell 32mb kit $300.00 $300.00
5 WD 4.3gig HD $95.00 $475.00
1 Sony CD recorder $325.00 $325.00
1 3com adapter fast etherlink $425.00 $425.00
2 Courier v56 modem $285.00 $570.00
3 Compaq 2x32mb kit $2,400.00 $7,200.00
1 Adaptec AHA-294OUW kit PC $280.00 $280.00
1 Compaq 64meg kit $515.00 $515.00
1 Compaq 15/30 DLT $1,400.00 $1,400.00
1 Kingston 256mb Dimm $615.00 $615.00
80 6gig Quantum HD $85.00 $680.00
20 4.3gig Fujitsu HD $105.00 $2,100.00
1 Exabyte Tape Backup System upgrade $1,400.00 $1,400.00
Quantity Description Per Unit Replacement Value
1 Exabyte Tape Backup System EXB-218-R
6-152gig $5,250.00 $5,250.00
1 Pair Altec lansing Speakers $50.00 $50.00
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇.▇▇ $200.00
2 32mb EDO memory chips $105.00 $210.00
20 Mice $20.00 $400.00
20 Keyboards $30.00 $600.00
Sum 224 Computer Equipment Group Total: $39,727.00
Page 141
Computer Systems
1 Compaq Proliant Dual Pentium 256megs
RAM, (2) 9 gig SCSI HD $5,000.00 $5,000.00
1 Compaq Presario 233mhz, 64meg, 3gig
HD w/monitor, mouse, keyboard $500.00 $500.00
3 Soltron Built PC Clones consisting of Intel 233mhz cpu w/MMX, 4gig HD,
24x CD, Motherboard (w/built in audio, video, ps/2, usb, lpt, serial),
64meg SDRAM chip, 3 1/2" floppy, AT Mini-tower, 15" monitor (accounted
for on the monitors page), keyboard, mouse, speakers, Windows 95,
10/100 netcard $700.00 $2,100.00
10 Soltron Built PC Clones consisting of Intel 233mhz cpu w/MMX, 3gig HD,
24x CD, Motherboard (w/built in audio, video, ps/2, usb, lpt, serial),
32meg SDRAM chip, 3 1/2" floppy, AT Mini-tower, 15" monitor (accounted
for on the monitors page), keyboard, mouse, speakers, Windows 95,
10/100 netcard $700.00 $7,000.00
1 UMAX SuperMac Clone $200.00 $200.00
1 Macintosh Power Mac 7200/90 w/20"
Mac Monitor $400.00 $400.00
1 Compaq Deskpro 590 $100.00 $100.00
1 AMD 333, 128megs RAM, 6gig HD $1,000.00 $1,000.00
1 Cyrix 333mhz, 96megs SRAM, 8gig HD, ▇ ▇/▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇-▇▇
audio and video, 10/100 netcard speakers, Monitor (accounted for on
the monitor page) $900.00 $900.00
1 Compaq Proliant Dual Pentium 256megs
RAM, 9 gig SCSI $5,000.00 $5,000.00
1 Compaq Proliant Dual Pentium 256megs
RAM, (2) 9 gig SCSI $5,000.00 $5,000.00
HD, Tape Backup Drive
5 Pentium 166, 64megs, 4gig HD $350.00 $1,750.00
2 Dual Pentium II 300, 256megs RAM,
4gig SCSI HD $3,000.00 $6,000.00
Sum 29 Computer Systems Group Total: $34,950.00
Copiers
1 Minolta EP4233 $3,000.00 $3,000.00
1 Xerox 5028 Copier $3,000.00 $3,000.00
1 Lexmark 4039 $750.00 $750.00
Sum 3 Copiers Group Total: $6,750.00
Page 142
Quantity Description Per UnitReplacement Value
Desks
12 4 Drawer Computer Desks $200.00 $2,400.00
7 computer desks w/monitor ledge $200.00 $1,400.00
2 computer desks w/out monitor ledge $125.00 $250.00
1 L-Shaped 4 Drawer Computer Desk $300.00 $300.00
3 L-Shaped Computer Desks $125.00 $375.00
2 desk and full credenza $1,700.00 $3,400.00
Sum 27 Desks Group Total: $8,125.00
Fax Machines
1 Brother Intellifax 770 $200.00 $200.00
1 Canon Faxphone B640 $250.00 $250.00
4 Brother fax-190 $150.00 $600.00
1 Brother MFC4450 $700.00 $700.00
1 Brother4550 $600.00 $600.00
1 HP 700 Fax $385.00 $385.00
Sum 9 Fax Machines Group Total: $2,735.00
Miscellaneous
1 Credit Card Processing Machine $585.00 $585.00
1 Electric Pencil Sharpener $40.00 $40.00
1 Full Size Microwave $200.00 $200.00
1 Manual Punch Time Clock $80.00 $80.00
1 Mini Refrigerator $250.00 $250.00
1 Seagate Backup Exec Enterprise $290.00 $290.00
Sum 6 Miscellaneous Group Total: $1,445.00
Monitors
2 Cheer 15" $200.00 $400.00
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇" $200.00 $200.00
6 AOC 15" $200.00 $1,200.00
1 Sony Multiscan SF $1,400.00 $1,400.00
6 17" Monitors $300.00 $1,800.00
2 KDS 15" $100.00 $200.00
1 Gateway 2000 15" $200.00 $200.00
1 Sony Multiscan 200Sf Trinitron $1,400.00 $1,400.00
1 KDS 17" $300.00 $300.00
Quantity Description Per Unit Replacement Value
2 Princeton 16" $300.00 $600.00
1 Compaq V50 15" $200.00 $200.00
5 Komodo 15" $200.00 $1,000.00
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇" $1,000.00 $1,000.00
2 AOC Spectrum 5V 15" $200.00 $400.00
2 Sony Multiscan SEII $1,400.00 $2,800.00
Sum 34 Monitors Group Total: $13,100.00
Page 143
Network Components
4 Network Server Racks $1,200.00 $4,800.00
4 Chatsworth Rack w/shelves $1,200.00 $4,800.00
1 3Com Net Builder $1,800.00 $1,800.00
1 ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ $415.00 $415.00
1 3COom ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ $920.00 $920.00
1 3Com 8 port 8TPO $53.00 $53.00
1 D-Link DE-809TC $100.00 $100.00
1 Compaq 8 Port Switch Box $1,200.00 $1,200.00
1 3Com 24 Port Hub $375.00 $375.00
1 Cisco 25/24 Router $2,000.00 $2,000.00
1 3Com Switch 3000 $1,500.00 $1,500.00
2 3Com Superstack II / 24 dual Speed Hub $950.00 $1,900.00
2 3com office connect $480.00 $960.00
Sum 21 Network Components Group Total: $20,823.00
Other Furniture
2 bookcases $300.00 $600.00
2 office dividers $67.50 $135.00
2 storage cabinets $212.50 $425.00
1 fire safe file cabinet $339.00 $339.00
1 counter height cabinet $150.00 $150.00
4 Cubicle workstations $3,150.00 $12,600.00
3 Standard letter size 4 drawer
file cabinets $75.00 $225.00
1 endtable $200.00 $200.00
1 large dry erase bulletin board $30.00 $30.00
2 4' Wide Cubicle Walls w/out Plexiglass $150.00 $300.00
3 5' Wide Cubicle Walls w/out Plexiglass $150.00 $450.00
3 5' Wide Cubicle Walls w/Plexiglass $200.00 $600.00
1 small credenza $375.00 $375.00
Quantity Description Per Unit Replacement Value
1 6' Bookcase $100.00 $100.00
1 5'x4'x2' file cabinet $150.00 $150.00
1 conference table $1,300.00 $1,300.00
1 rolling printer cart $50.00 $50.00
2 small dry erase bulletin boards $20.00 $40.00
2 2-drawer letter-size file cabinets $50.00 $100.00
7 pushpin bulletin boards $20.00 $140.00
1 3' Wide Cubicle Walls w/out Plexiglass $150.00 $150.00
Sum 42 Other Furniture Group Total: $18,459.00
Phone Equipment
7 Headsets $180.00 $1,260.00
7 Samsung Digital Communication System
Phone w/handset port 12 button with
display $225.00 $1,575.00
1 Samsung Digital Communication System
operator $200.00 $200.00
9 Samsung Digital Communication System
Phone w/handset port 6 button basic $150.00 $1,350.00
8 Samsung Digital Communication System
Phone w/handset port 12 button basic $180.00 $1,440.00
1 Nextel i1000 Cellular Phone $315.00 $315.00
5 Nextel Cellular Radio Phones $140.00 $700.00
4 Samsung Digital Communication System
Phone w/handset port 24 button with
display $300.00 $1,200.00
1 ▇▇▇▇▇▇ ▇▇▇▇▇ Portable Phone $100.00 $100.00
Sum 43 Phone Equipment Group Total: $8,140.00
Page 144
Phone System
2 PSU-40 CARD $300.00 $600.00
1 ROM-1 CARD $350.00 $350.00
1 Phone System Cabinet, main $600.00 $600.00
2 8SLI CARD $450.00 $900.00
1 AA CARD $1,300.00 $1,300.00
1 EXPN-A CARD $350.00 $350.00
1 T1 CARD $1,200.00 $1,200.00
1 Artisoft Teleadvantage CT Phone System $3,800.00 $3,800.00
5 DLI CARD $300.00 $1,500.00
1 TRK-C1 CARD $450.00 $450.00
1 TRK-A1 CARD $300.00 $300.00
1 EXP-B CARD $250.00 $250.00
1 Phone System Software $300.00 $300.00
Quantity Description Per Unit Replacement Value
1 Phone System Cabinet, expansion cabinet $500.00 $500.00
1 Expert Comm - Voice mail system $2,100.00 $2,100.00
1 Telekol Integra - 4 port voice-mail
computer $12,000.00 $12,000.00
1 Comdial digital DXP Impact Phone
system 13 phone 32 $16,270.00 $16,270.00
1 SLI CARD $350.00 $350.00
Sum 24 Phone System Group Total: $43,120.00
Power Backup Systems & Surge Protection
1 APC Share UPS Interface expander $350.00 $350.00
8 APC 280 UPS $137.50 $1,100.00
1 APC 600 UPS $250.00 $250.00
2 APC 300 UPS $140.00 $280.00
1 APC UPS 300 w/battery pack $400.00 $400.00
1 APC UPS 1400 $600.00 $600.00
1 Adtran TSU 100 v.35 rs530 $1,150.00 $1,150.00
1 APC UPS 3000 $275.00 $275.00
1 APC Line-R 1250 Line Conditioner $185.0O $185.00
3 APC 650 UPS $250.00 $750.00
Sum 20 Power Backup Group Total: $5,340.00
Systems & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇▇ $8,400.00 $8,400.00
8 Lexmark Marknet Pro 10BT/10B2 $70.00 $560.00
1 HP 75sheet tray $240.00 $240.00
1 HP LaserJet 4 Plus $400.00 $400.00
3 HP Jetdirect 600N $175.00 $525.00
1 HP Deskjet 200CN Pro Series $385.00 $385.00
Sum 15 Printers Group Total: $10,510.00
Scanners
1 HP Scanjet 4C $300.00 $300.00
1 HP Scanjet 3C $300.00 $300.00
1 UMAX Astra 1220S $125.00 $125.00
2 UMAX Astra 1200S $175.00 $350.00
Sum 5 Scanners Group Total: $1,075.00
Page 145
Software
Quantity Description Per Unit Replacement Value
1 MS Back Office Server $760.00 $760.00
20 MS Client License Pack $16.40 $328.00
1 Microsoft Site Server Commerce v3.0 $4,250.00 $4,250.00
Sum 22 Software Group Total: $5,338.00
Grand Total: $231,137.00
Schedule 2.11 Intellectual Property
This schedule is not applicable.
Page 146
Schedule 2.12 Contracts and Agreements
OFFICER'S CERTIFICATION
for
▇▇▇▇▇▇▇.▇▇▇, Inc.,
a Florida corporation
EXECUTORY CONTRACTS
We, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President for operations, an elected and
currently serving officer OF ▇▇▇▇▇▇▇.▇▇▇, INC. a Florida corporation,
(hereinafter referred to as the "Corporation"), hereby certify, they reasonably
believe that the following is a true and correct listing of all executory
contracts, other than with AmeriNet ▇▇▇▇▇.▇▇▇, Inc., or with American Internet
Technical Center, Inc. or other than with each other, as of November 11, 1999
for the Corporation:
NOVA CARE EMPLOYEE SERVICES dated June 19, 1998 for the provision of
professional employment services.
GLOBAL SYSTEMS TELECOMMUNICATIONS SYSTEM, INC, ("GSTI") dated April 14,
1999. Agreement to appoint GSTI as a non-exclusive marketing agent to
obtain order for services.
TRADE WAY OF SOUTH FLORIDA, INC. Application & Agreement to provide
customers with trade credit.
CHARGE SOLUTIONS, dated May 12, 1999, Agreement to provide trade credit
to on line merchants
R.D.K. INVESTMENTS, INC., Office building lease dated March 29, 1999,
2 year lease, amended October 19, 1999.
INSIGHT 360, INC. Company reseller contract dated July 19, 1999.
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCIAL F/KA/ DIVISION OF TOKAI FINANCIAL SERVICES,
INC. A/k/a On PHONE INTERNATIONAL, Phone lease at $262.46 per month.
LIBERTY MUTUAL INSURANCE CO., ▇▇▇▇▇▇▇'▇ Compensation coverage, October
28, 1999.
▇▇▇▇ ▇▇▇▇▇▇ CO., Employee Health Benefit Plan.
▇▇▇▇ ▇▇▇▇▇, Independent Contractor's Agreement dated June 21, 1999.
▇▇▇▇ ▇▇▇▇▇, Confidentiality Agreement dated June 21, 1999.
▇▇▇▇ ▇▇▇▇▇▇▇▇, Independent Contractor's Agreement dated June 28, 1999.
▇▇▇▇ ▇▇▇▇▇▇▇▇, Confidentiality Agreement dated June 28, 1999.
ORIX F/K/A ROCKFORD INDUSTRIES, Computer Leasing
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Verbal Contract.
IN WITNESS WHEREOF, we have hereunto set our hand and seal, effective
as of the 12th day of November, 1999.
▇▇▇▇▇▇▇.▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice-President for Operations
BEFORE ME, the undersigned authority, on this date personally appeared,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and who first being duly sworn, deposes, and says: that he is an
elected officer of ▇▇▇▇▇▇▇.▇▇▇, INC., a Florida corporation, and that he has
read the same, know the contents thereof, and that the same is true and correct
to the best of his knowledge and belief. Sworn to and subscribed before me this
12TH day of November 1999.
My commission expires:
----------------------
Notary Public
Personally Known or produced I.D. Type of I.D. Produced:
Page 147
Schedule 2.12(A)(12)
Summary of Agreements between WRI and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has
throughout the course of business infused money in the amount of $63,517.69. The
infusions have come via credit cards, cash and a home equity loan. The payment
structure has been $1800.00 per month.
The agreement between WRI and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has infused
$40,000.00 from a home equity line of credit into WRI. WRI has agreed to pay
$1000.00 per month in repayment of the cash infusion.
Schedule 2.14 Governmental Authorization
WRI currently has an occupational license with City of Deerfield Beach from
October 1, 1999 to September 30, 2000.
Schedule 2.15 Litigation
SECRETARIAL CERTIFICATION
for ▇▇▇▇▇▇▇.▇▇▇, Inc.
a Florida corporation
Litigation and Potential Litigation
I ▇▇▇▇▇▇▇ ▇▇▇▇, duly elected and currently serving Secretary, of
▇▇▇▇▇▇▇.▇▇▇, Inc. a Florida corporation, (hereinafter referred to as the
"Corporation"), hereby certify, they reasonably believe that the following is a
true and correct listing of all Litigation and Potential Litigation as of
November 11, 1999 for the Corporation:
The following item of litigation is pending and outstanding:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, et. al. v. Web Results Institute a/k/a ▇▇▇▇▇▇▇.▇▇▇, Inc.,
et. al, Superior Court of California, Los Angeles County, Case No. BC199397. In
this matter WRI included as a member of a class of Defendants in a civil law
suit by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and others residing in the State of California (the
"Wood Case"). The Wood Case was filed on behalf of an unidentifiable class of
plaintiffs against an unidentifiable class of defendants. The Plaintiff is
seeking damages and Injunctive relief against WRI. Who filed defensive
pleadings, with numerous affirmative defenses. WRI is aggressively defending
itself in this matter. In this case, third parties sent faxes on behalf of WRI
and the forwarding of these faxes resulted in WRI being included as a named
defendant in the litigation. Parties are now negotiating a possible Settlement.
WRI has made an offer of settlement in this case that does not include the
entering of injunctive relief sought by the plaintiff. Such decision to se
settle is based on the nuisance value of the suit when compared to the potential
legal fees of a successful defense, and on the Registrant's desire that
▇▇▇▇▇▇▇.▇▇▇, Inc., be litigation free at the time of its acquisition.
The outcome of the foregoing matters cannot be predicted with absolute
certainty, however, should this matter be unsuccessfully settled, WRI's
management on advise of its general counsel, does not expect this matter to
materially adversely effect WRI's financial condition, liquidity or results of
operations.
Page 148
We are presently initiating procedures to discontinue all marketing
activities that gave rise to the ▇▇▇▇▇ Lawsuit and WRI has initiated procedures
to prevent its recurrence in the future.
Although none of the following lists WRI as a Defendant in any litigation,
the following have a potential for litigation:
Unsolicited Facimile Complaints: In addition to the issues addressed in the
▇▇▇▇▇ case, citizen complaints as to certain unsolicited facsimile advertising
have been filed in certain states. . Complaints have been filed in the following
states: A single complaint in the State of Washington by ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; a
single individual in the State of Connecticut by ▇▇. ▇▇▇ ▇▇▇▇▇▇; a single
individual in the State of Ohio by Mr. Kobiak; a single individual in the State
of New Mexico by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; a single individual in the State of
Florida by Mr. Bhlindan Keyport. While the outcome of the foregoing matters
cannot be predicted with absolute certainty, it appears that WRI has
appropriately communicated with each State, and no further action in any of
these matters is anticipated is anticipated. Over the past two years there have
been other complaints regarding unsolicited faxes; WRI's general counsel has
responded to these matters as they have appeared, however, there may be issues
regarding unsolicited faxing which may appear in the future. There exists a
potential liability for each complaint of $500.00 per complaint, however on
advise of WRI's General Counsel, these matters should not materially adversely
affect WRI's financial condition, liquidity or results of operations.
Telco Communications, Inc., ("Telco") November 11, 1999, Telco claims there
are unpaid certain telephone bills in the amount of $19,114.88. WRI disputes the
amount of the claim. As of November 11, 1999, Telco has offered to settle the
matter for $11,000.00. WRI has offered to settle the matter for $5,000.00.
Management represents that this matter should be settled without litigation, and
that this matter should not materially adversely affect WRI's financial
condition, liquidity or results of operations.
Insight 360, Inc., ("Insight") WRI and Insight have an agreement whereby
WRI produces websites for customers of Insight. WRI has been paid $10,000
pursuant to this Agreement. WRI, represents that as of November 11, 1999, he has
received several complaints from Insight concerning incomplete websites.
However, it is anticipated this matter should be settled without litigation, and
should not materially adversely affect WRI's financial condition, liquidity or
results of operations..
IN WITNESS WHEREOF, we have hereunto set our hand and seal, effective as of
the 11th day of November, 1999.
▇▇▇▇▇▇▇.▇▇▇, Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------
▇▇▇▇▇▇▇ ▇▇▇▇
Secretary
BEFORE ME, the undersigned authority, on this date personally appeared,
▇▇▇▇▇▇▇ ▇▇▇▇, who first being duly sworn, deposes, and says: that he is a duly
elected officer (Secretary) of ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation, and
that they have read the same, know the contents thereof, and that the same is
true and correct to the best of his knowledge and belief. Sworn to and
subscribed before me this day of November 1999.
My commission expires:
----------------------
Notary Public
Personally Known or produced I.D. Type of I.D. Produced:
Page 149
Schedule 2.19 Broker's and Finder's fees
Broker's and Finder's fees do not apply.
Schedule 2.20 List of Employees
List of Current WRI Employees:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ Shaman
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Orlando Colomatteo
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
List of Current AITC Employees to be added:
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Schedule 2.21 Insurance
WRI has ▇▇▇▇▇▇▇'▇ compensation insurance through Nova Care Employee
Services, Inc. and In regards to general liability insurance contracts are
currently being negotiated with various providers for quality insurance and
price.
Schedule 2.27 Employee Benefit Plans
Health benefits are provided with Nova Care Employee Services, Inc. A
savings incentive match plan for employees employer agreement is currently with
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
Schedule 2.28 Distribution Agreements
Distribution Agreements are not applicable.
Page 150
Schedule 3
OFFICER'S CERTIFICATION
for AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
a publicly held Delaware corporation
Schedule 3: Representation or Warranty Exceptions
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President, duly elected and currently serving officer
of AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a publicly held Delaware corporation, (hereinafter
referred to as the "Corporation"), hereby certify, they reasonably believe that
the following is a true and correct listing of all Representations and Warranty
Exceptions as of November 11, 1999 for the Corporation:
General: I call your attention to the fact that any information filed with
the Securities and Exchange Commission to the extent that it is contrary to the
information provided in this Agreement of Merger and Plan of Reorganization, the
Affiliate Agreement, or the Articles of Merger, is a warranty exception to the
Agreement of Merger and Plan of Reorganization, the Affiliate Agreement, or the
Articles of Merger signed and executed between the parties.
IN WITNESS WHEREOF, we have hereunto set our hand and seal, effective as of
the 11th day of November, 1999.
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
President
BEFORE ME, the undersigned authority, on this date personally appeared
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who first being duly sworn, deposes, and says: that he is
duly elected and currently serving officer of AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a
publicly held Delaware, corporation ; and that he has read the same, know the
contents thereof, and that the same is true and correct to the best of his
knowledge and belief. Sworn to and subscribed before me this 11th day of
November 1999.
My commission expires:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Notary Public
Personally Known or produced I.D. Type of I.D. Produced:
Page 151
Schedule 4.1 Disclosure Schedule re Conduct of Business
WRI currently uses Nova Care Employment Services handbook and the WRI'
Business Plan is listed below:
▇▇▇▇▇▇▇.▇▇▇
BUSINESS PLAN
TABLE OF CONTENTS
1.0 Executive Summary ..........................................2
1.1 Objectives ..............................................2
1.2 Keys To Success ....................................2
2.0 Company Summary ..........................................3
2.1 Company Ownership ............................3
2.2 Company History ..................................3
2.3 Company Locations and Facilities ........3
3.0 Products and Services .......................................3 - 5
3.1 Product and Service Description ..........3
3.2 Competitive Comparison ......................3 - 4
3.3 Labor Force .......................................4
3.4 Sales Literature ......................................4
3.5 Technology ................5
4.0 Market Analysis Summary ...............................5
4.1 Market Segmentation ............................5
4.2 Industry Analysis ..................................5
5.0 Strategy and Implementation Summary ...........6 - 7
5.1 Marketing Strategy ...............................6
5.2 Sales Strategy .......................................6
5.3 Milestones ............................................7
6.0 Management Summary ....................................7 - 8
6.1 Executive Officers .......................7
6.2 Personnel Plan .....................................7 - 8
7.0 Financial Plan ....................................................8 - 9
1. Use of Proceeds .........................8
2. Summary ....................... 9
▇▇▇▇▇▇▇.▇▇▇
EXECUTIVE SUMMARY
▇▇▇▇▇▇▇.▇▇▇ is poised to become a major player in the burgeoning Internet web
site design, production, and hosting industry. In just over a year, it has
designed, produced, and hosted over two thousand Internet web sites for
individuals, small businesses, and companies all over the United States. Its
sales division continues to sell an average 40 additional web sites per week,
providing the company continuous infusions of cash, as well as providing a
deepening pool of new hosting and maintenance customers.
Page 152
Objectives
The immediate objective of the company is to create a public presence by a new
marketing campaign aimed to increase the sales and hosting of web sites.
Although there are now hundreds of thousands of Internet web sites, there is
still a huge ocean of potential customers unaware of the low cost and high yield
nature of an Internet presence. A $650 web site is in the financial ballpark of
virtually every adult individual in the United States and the Western world; the
ability of a company like ▇▇▇▇▇▇▇.▇▇▇ to reach this customer base by a more
public marketing campaign is absolutely key. Up until now, the company has been
able to reach only a minute segment of this potential market through referrals
and direct business to business solicitations. The need to expand this campaign
is paramount, and could result in an explosion of sales and revenue
characteristic of new Internet companies like ▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇▇▇▇▇▇.▇▇▇.
Key To Success
Right now, the key to success is marketing: we need to reach businesses and
individuals who have not yet built web sites or who would like to upgrade their
already existing site. Furthermore, there are already potential customers out
there who are unsatisfied with the service of their existing host. The new
company that can reach these customers is going to explode in size and revenue.
▇▇▇▇▇▇▇.▇▇▇ has the capability to be this company, but it needs the investment
required to bring it to public view.
COMPANY SUMMARY
Company Ownership
▇▇▇▇▇▇▇.▇▇▇, inc. was incorporated in early 1998 in Florida as Web Results
Institute, Inc. The founder and 100% shareholder of the company is ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇. His strong business background, coupled with an unusual ability to
disseminate decision-making powers to his tech, operations, and legal
lieutenants, has created a management team capable of pushing the year-old
company to new heights.
Company History
Originally intended to be a producer of small business web sites for use on the
Internet, the company has grown substantially in a short time into an Internet
Presence Provider; meaning that it hosts and maintains the very web sites that
it produces. As of January, 1999, the company has sold over 2,000 web sites to
individuals and companies around the world, at the current rate of 40-50 per
week.
Company Locations and Facilities
The company currently leases space in an office building at ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇. The company recently signed a Letter Of
Intent to enter into a two year lease at $2650.00 per month, with an option to
renew for an additional two years at a 5% increase. The Letter Of Intent also
gives the company an escape clause with 60 days Notice, in the event the company
desires to move due to the need for additional space.
Page 153
PRODUCTS AND SERVICES
Product and Service Description
Although there are hundreds of small web site producers in the USA, few have
committed themselves to the development of the low-end-customer as has
▇▇▇▇▇▇▇.▇▇▇. As these individuals and small business customers gain experience
with the value of their web sites, they have turned to the company for various
upgrades and more detailed web sites, adding to the company's ongoing business
and growth.
The fact that the company sells to hundreds and soon thousands of customers
directly indicates that the company is not tied to one customer for its
viability.
The principal product of the Company is a 4-5-page web site, which is registered
as a unique domain name with the Government domain name registration office. The
customer to advertise and disseminate information about the customers business
utilizes the web site. The company also provides space for the customers web
site, otherwise known as hosting. This results in an ongoing monthly service fee
to the ▇▇▇▇▇▇▇.▇▇▇. Furthermore, the company makes changes and upgrades to the
web sites as they become necessary, providing the company with a further revenue
source. Competitive Comparison
▇▇▇▇▇▇▇.▇▇▇ has taken orders for over 3,000 web sites as of this writing. The
purchase price on the vast majority of the sites included six-free-months of
hosting the web sites at $79 per month. As these sites near the end of the
six-month free offering, the monthly renewal fees will provide a new infusion of
revenue to the company. ▇▇▇▇▇▇▇.▇▇▇ expects that by the time this Application is
submitted and approved, more than five hundred sites will be renewed for a
monthly billing cycle of approximately $39 a month each. Additionally, the
company plans to provide direct hosting for already existing web sites at the
rate of $15 to $450 per month. ▇▇▇▇▇▇▇.▇▇▇ is able to offer a web site valued at
$955 for an average price of $650, due to its labor pool of local college
students.
Labor Force
The most important raw material for production of web sites is the skilled labor
necessary to do the programming. For these reasons, the company has in place
computer interns supplied by the Art Institute of Fort Lauderdale, and Florida
Atlantic University. The company also employs highly skilled professional
programmers to oversee the work of these student programmers.
Sales Literature
The company is not dependent upon any material patents, patent rights,
trademarks, licenses, or franchises. Marketing materials can be found by
visiting the company's web site at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇. Additional information can
be mailed directly to the customer in the form of a computer disk. Technology
Research at ▇▇▇▇▇▇▇.▇▇▇ is ongoing, with programmers spending certain times of
their day utilizing new software to upgrade and create sophisticated graphics
and other web site related bells and whistles.
Page 154
MARKET ANALYSIS SUMMARY
As indicated, there continues to exist a huge ocean of potential web site
customers in the United States and throughout the world. Even though hundreds of
thousands of web sites have been established, the demand and uses of such sites
increases geometrically as the public discovers the power of the Internet.
Market Segmentation
The web site design, production, and hosting industry is presently segmented
into hundreds of small shops around the world. No individual company at this
time has the financial wherewithal to market its services to the general public
in a scope wide enough to capture a large market share. Almost unbelievably,
this new burgeoning industry has been left advertising-less, with small
businesses slowly building sales and maintenance customers through referrals and
local ads.
Industry Analysis
The average customer for a web site consists of a small business in need of a
4-5-page web site as a mostly identifying medium, similar in essence to a
brochure on the Internet. Through cybermarketing programs, more sophisticated
customers can use the site as an advertising medium, much like the yellow pages
on the Internet, or an inexpensive television advertisement. Still more
sophisticated customers can utilize the web site as an interactive order
catalogue, with direct custom designed data based order capabilities including
real-time-credit card purchasing, and inventory control.
STRATEGY AND IMPLEMENTATION SUMMARY
Marketing Strategy
The company now counts over three thousand web site owners as customers. The
company sold each web site as a package deal, providing six-months of prepaid
hosting with each web site purchase. Once each web site has been hosted for
six-months, the customer is expected to renew its hosting contract with the
company, for an on-going period. Therefore, within the next six-months, the
company is expected to reap additional revenues of at least one thousand times
$39 per month. This amount computes to an annual amount of $468,000.00.
Furthermore, the company has averaged weekly sales of 40 web sites, amounting to
gross revenues of an additional $75,000.00 per month. Together with the expected
hosting fees, the company expects gross revenues to exceed $1,368,000.00 in
1999. This figure excludes the addition of high-end web site design and
production, which if realized, could increase gross and net revenues.
If the company is successful in raising one million dollars worth capital, it
will utilize the funds to market its inexpensive web sites through newspaper and
radio advertising. It is projected that the addition of each $1000 per diem
worth of advertising could result in an additional sale of 10 sites per day,
resulting in an additional gross revenue increase of $6500.00 per day. If these
new sites renew at the close of the six-month hosting period, the resulting
income increases an additional $9322.00 per month, compounded. In other words,
the first month increase is $9322.00, the second month is $18,644.00, the third
month is $27,966.00, and so forth.
Page 155
Sales Strategy
The Plan of Operation for the near future entails the ongoing sales of low cost
web sites to businesses and individuals in the Unites States. The average cost
of $650.00 per web site, which includes six-months of free web hosting, has
proven to be a customer darling. The company projects an average of 40 sales per
week at this rate, which has resulted in gross revenues of $26,000.00 per week,
and pre-tax net earnings of approximately $6,000.00 per week. In addition,
▇▇▇▇▇▇▇.▇▇▇ will continue to cultivate its customer base to sell enhancements
and upgrades. Twenty percent of the customers that sign up for a start-up-web
site, choose to upgrade their site to an advanced web site after their initial
contract. This trend will only increase as the Web becomes a mainstream
advertising market.
Milestones
On top of this, the company has begun to receive six-month and one-year renewals
of its hosting services at $39 per month. At the rate of 50 new rehosting sites
each month, this will add approximately $2,950.00 per month to company revenues,
and will aggregate monthly as more and more sold sites reach the six-month
rehosting period.
Management Summary
Executive Officers
The founder and incorporator of the company is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. He is expected
to retain the title of CEO and also to retain 60% of the outstanding stock. He
will become Chairman of the Board of the public company. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is
currently the Vice President of Operations. He will become Chief Operating
Officer of the Company, as well as a member of the Board of Directors. ▇▇▇▇▇▇▇
▇. ▇▇▇▇, Esquire is the company's corporation counsel. He will become a member
of the Board of Directors. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ is a Certified Public Accountant
who will also be named a member of the Board of Directors. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ is
an Employment Advisor at the Art Institute of Ft. Lauderdale. She will be named
a member of the Board of Directors. Personnel Plan To date, the company employs
18 individuals full-time, with a complement of 10-15 other individuals on a part
time basis. Furthermore, there are also 6 outside salespeople on a commission
only basis. The business is not in any way tied to seasonal fluctuations, unless
one considers winter as the primary time for Internet use in general. However,
no studies presently known have indicated seasonal fluctuations in Internet use
as yet. The production and hosting and upgrading of web sites is a highly
technological endeavor, with ▇▇▇▇▇▇▇.▇▇▇ dependent on the availability of
skilled computer-literate employees. Clearly, the demand for such employees is
great, and continues to increase. The company is preparing for this need by
cooperating with local schools to provide paid internships for students and
placement with the company as the need continues to rise. Financial Plan Use of
Proceeds(A)The company expects to use the proceeds from the sale of its
securities as follows:
1. Marketing: the company expects to expend approximately $250,000.00
dollars in advertising its products and services in the international
marketplace. This will include the use of newspaper ads, billboards,
radio, and television. An additional $250,000.00 will be used to hire
additional salespeople and software programmers to handle the expected
increase in sales and maintenance of web sites.
Page 156
2. Asset acquisition: the company expects to acquire an office building
suitable to house approximately fifty additional employees, who will
be needed to sustain the increase in web site orders expected from the
new marketing campaign. The deposit and closing costs are expected to
be approximately $250,000.00.
3. The expenses expected in the Offering include the costs of audited
financial statements ($5,000.00), registration fees both federally and
statewide ($30,000.00), and legal fees related to the preparation of
the registration forms and Private Placement Memorandum ($20,000.00).
4. Customer acquisition: the company will utilize $100,000 to purchase
customers from smaller Internet Product Providers. This will add an
additional 5000-hosting customers to ▇▇▇▇▇▇▇.▇▇▇'s customer base.
SUMMARY
With an offering of $1,000,000.00 ▇▇▇▇▇▇▇.▇▇▇ will position itself to be a
$50,000,000.00 public company within 36 months. The company will offer to
purchase a building at The Camino Corporate Center located at ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in Boca Raton, Florida. This will generate an immediate
additional positive cash flow to ▇▇▇▇▇▇▇.▇▇▇. The company will increase its
customer base significantly by utilizing the funds to implement a global
marketing campaign aimed at increasing its customer base to 20,000 customers
within 36 months. In addition to generating profits from web site design, these
customers will pay an average of $39.00 in residual hosting fees; this equates
to $780,000,000 in monthly income, and $9,360,000 in yearly income. ▇▇▇▇▇▇▇.▇▇▇
will place a public offering within 36 months, issuing 10 million shares of
stock.
Schedule 5.7 Third Party Consents
Third Party Consents are not applicable.
Schedule 5.8 Affiliates
WRI currently has three affiliates and the agreements are attached as
exhibit 5.8 to this agreement.
Schedule 5.12 List and Summary of Employment Agreements
▇▇▇▇▇▇▇.▇▇▇ currently utilizes Nova Care Employee Services for the leasing
of all employees. WRI currently has employment agreements with ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ which are attached as exhibits 5.12
to this agreement.
Page 157
Schedule 5.13 Use of Proceeds
Use of Proceeds
WRI plans to use the funds from AmeriNet in the following manner: All funds are
to be used for the expansion of WRI.
With the consumption of the AITC group, WRI has acquired 6 new employees. These
employees are at an expense of a minimal of $2380.00 per week. (The three sales
people account for a minimum of $600.00 per week plus over and above the base a
10% commission per sale.) WRI does not anticipate an increase in revenue for at
least an eight-week period from closing. That would be an expense of $19040.00
WRI also anticipates losing revenue for the delays in production and the
increased cost of Contract Designers. At this time to the best of our knowledge
there are 164 new sites to design for the AITC customer base. The cost to design
these sites will be $123000. This calculates toa formula of $75.00 per site to
create.
WRI has one outstanding ▇▇▇▇ with the Telecom Company for approximately
$11000.00. This would be paid out of the initial proceeds.
The company plans to invest $20000.00 in marketing and advertising to generate
more revenue and increase the bottom line over the period of the first 60 days,
which will show proceeds in 120 days.
The remaining 27660.00 will be kept in reserve as cash assets. The cash reserve
is to be kept in reserve unless the expense in saving the AITC customer exceeds
the above listed costs or the board decides to invest it into an interest
bearing account or mutual portfolio. The original $10000.00 was utilized to make
the merger and relocate the AITC office to the WRI location. As well as to
expand the WRI space by renting another office suite at $2580.00 and to pay the
moving crew, extend the phone system to accommodate the additional staff.
The $200,000.00 to be granted within 120 days after closing is at this time
slated to be used for the acquisition of a commercial building as outlined in
the ▇▇▇▇▇▇▇.▇▇▇ Business Plan. The property will be an income bearing property,
with available offices for leasing.
WRI currently has two investors, ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. These
investors are listed in scheduled 2.12(A) (12). Both investors are non
accredited investors.
Schedule 5.16 Projections
SUMMARY
With an offering of $1,000,000.00 ▇▇▇▇▇▇▇.▇▇▇ will position itself to be a
$50,000,000.00 public company within 36 months. The company will offer to
purchase a building at The Camino Corporate Center located at ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in Boca Raton, Florida. This will generate an immediate
additional positive cash flow to ▇▇▇▇▇▇▇.▇▇▇. The company will increase its
customer base significantly by utilizing the funds to implement a global
marketing campaign aimed at increasing its customer base to 20,000 customers
within 36 months. In addition to generating profits from web site design, these
customers will pay an average of $39.00 in residual hosting fees; this equates
to $780,000,000 in monthly income, and $9,360,000 in yearly income. ▇▇▇▇▇▇▇.▇▇▇
will place a public offering within 36 months, issuing 10 million shares of
stock.
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Schedule 6.3(L) Non-accredited Investors
WRI currently has two investors; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
Both investors are non-accredited investors.
Exhibit 2.11 Confidentiality Agreements
See Schedule 2.12 for list of confidentiality agreements
Exhibit 2.25 WRI Regulation S-B Disclosure Data
See the Business Plan in Schedule 4.1.
Exhibit 5.8 Affiliate Agreement
The following Agreement was signed by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇:
Affiliate Agreement
This Affiliate Agreement (this "Agreement") is made and entered into by and
between ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("WRI"), AmeriNet ▇▇▇▇▇.▇▇▇,
Inc., a publicly held Delaware corporation with a class of securities registered
under Section 12(g) of the Securities Act of 1934, as amended ("AmeriNet" and
the "Exchange Act," respectively), and person identified in the signature page
of this Agreement as the Affiliate (the "Affiliate").
Preamble:
WHEREAS, concurrently with the execution of this Agreement, WRI and
AmeriNet have entered into an Agreement & Plan of Merger (the "Reorganization
Agreement") which contemplates that WRI will be merged into American Internet
Technical Center, Inc., a Florida corporation and wholly owned subsidiary of
AmeriNet ("American Internet") and all outstanding capital stock of WRI will be
converted into AmeriNet common stock (the "Merger"); and
WHEREAS, the Affiliate is either an officer or director of WRI or is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of such
quantity of common stock in WRI as requires that the Affiliate to be deemed an
"affiliate" of WRI (within the meaning of Rule 405 promulgated by the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), as a result of which the Affiliate will be
subject to restrictions on disposition of the shares of AmeriNet's common stock
received as a result of the Merger; and
WHEREAS, the determination of the accounting and tax treatment of the
Merger will depend, in part, upon the accuracy of certain of the representations
and warranties made by the Affiliate in this Agreement, as well as upon the
Affiliate's compliance with certain of the agreements set forth herein; and
WHEREAS, Affiliate and AmeriNet further desire to provide for an
arrangement under which Affiliate will grant to AmeriNet an irrevocable proxy to
vote all of the Affiliate's shares of WRI's common stock in favor of the Merger
at a special meeting of the stockholders of WRI to be held for the purpose of
voting on the Merger.
Page 159
NOW, THEREFORE, the Parties agree as follows:
Article I
Agreement to Retain Shares.
1.1 Transfer and Encumbrance.
(A) As used herein, the term "Determination Date" shall mean the earlier of:
(1) The date AmeriNet shall have publicly released a report including the
combined financial results of AmeriNet and WRI for a period of at
least thirty (30) days of combined operations of AmeriNet and WRI; or
(2) The date the Reorganization Agreement shall be terminated pursuant to
Article VIII thereof.
(B) The Affiliate agrees not to transfer, sell, exchange, pledge or otherwise
dispose of or encumber the Affiliates WRI common stock or the shares of
AmeriNet common stock received in exchange therefor as a result of the
Merger (collectively or generically hereinafter referred to as the
"Shares") or any New Shares (as defined in Section 1.2) acquired or to make
any offer or agreement relating thereto:
(1) At any time prior to the Determination Date;
(2) Except in full compliance with the requirements of Rule 144
promulgated by the Commission under authority granted by the
Securities Act;
(3) Except in full compliance with the requirements of Sections 13 and 16
of the Exchange Act, including requirements pertaining to timely
filing of Commission Forms 3, 4 and 5 or Schedule 13-D; and
(4) In full compliance with the procedures established by AmeriNet
(including requirements imposed upon its transfer agent) to assure
compliance with the foregoing.
1.2 New Shares.
The Affiliate agrees that any shares of capital stock of WRI or AmeriNet
that Affiliate purchases or with respect to which Affiliate otherwise acquires
beneficial ownership after the date of this Agreement ("New Shares") shall be
subject to the terms and conditions of this Agreement to the same extent as if
they constituted Shares.
Article II
Agreement to Vote Shares.
2.1 Voting
At every meeting of the stockholders of WRI called with respect to any of
the following, and at every adjournment thereof, and on every action or approval
by written consent of the stockholders of WRI with respect to any of the
following, the Affiliate shall vote the Shares and any New Shares, including,
with respect to stock options held by Affiliate, only those stock options
immediately exercisable:
Page 160
(A) In favor of approval of the Reorganization Agreement and the Merger and any
matter that could reasonably be expected to facilitate the Merger; and
(B) Against approval of any proposal made in opposition to or competition with
consummation of the Merger and against any merger, consolidation, sale of
assets, reorganization or recapitalization, with any party other than
AmeriNet and its affiliates and against any liquidation or winding up of
WRI (each of the foregoing is hereinafter referred to as an "Opposing
Proposal").
2.2 Actions
In amplification of the obligations assumed by this Agreement, the
Affiliate agrees not to take any actions contrary to WRI's obligations under the
Reorganization Agreement or the Affiliate's obligations under this Agreement.
Article III
Irrevocable Proxy.
Concurrently with the execution of this Agreement, the Affiliate agrees to
deliver to AmeriNet a proxy in the form attached hereto as Exhibit A (the
"Proxy"), which shall be irrevocable to the extent permissible under Florida
law, with the total number of Shares beneficially owned (as such term is defined
in Rule 13d-3 under the Exchange Act) by the Affiliate set forth therein.
Article IV
Tax Treatment.
The Affiliate understands and agrees that it is intended that the Merger
will be treated as a "reorganization" within the meaning of Code Section 368(a)
for federal income tax purposes.
Article V
Reliance Upon Representations, Warranties and Covenants.
(A) The Affiliate has been informed that the treatment of the Merger as a
reorganization for federal income tax purposes requires that a sufficient
number of former stockholders of WRI maintain a meaningful continuing
equity ownership interest in AmeriNet after the Merger.
(B) The Affiliate understands that the representations, warranties and
covenants of the Affiliate set forth herein will be relied upon by
AmeriNet, WRI and their respective legal counsel and accounting firms.
Article VI
Representations, Warranties and Covenants of Affiliate.
The Affiliate represents, warrants and covenants to AmeriNet as follows:
6.1 Power and Authority.
The Affiliate has full power and authority to execute this Agreement, to
make the representations, warranties and covenants herein contained and to
perform Affiliate's obligations hereunder.
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6.2 Shares Owned.
Set forth following the Affiliate's signature below is the number of Shares
owned by the Affiliate, including all Shares as to which the Affiliate has sole
or shared voting or investment power and all rights, options and warrants to
acquire Shares owned or held by the Affiliate.
6.3 Restrictions on Transfer.
The Affiliate will not sell, transfer, exchange, pledge or otherwise
dispose of, or make any offer or agreement relating to any of the foregoing with
respect to, any shares of common stock of AmeriNet (the "AmeriNet Common Stock")
that the Affiliate may acquire in connection with the Merger, or any securities
that may be paid as a dividend or otherwise distributed thereon or with respect
thereto or issued or delivered in exchange or substitution therefor (all such
shares and other securities of AmeriNet are sometimes collectively referred to
as "Restricted Securities"), or any option, right or other interest with respect
to any Restricted Securities, unless:
(A) Such transaction is permitted pursuant to Rule 145(c) and 145(d) under the
Securities Act;
(B) (1) Legal counsel representing the Affiliate (which legal counsel is
reasonably satisfactory to AmeriNet), shall have advised AmeriNet in a
written opinion letter satisfactory to AmeriNet and AmeriNet's legal
counsel, and upon which AmeriNet and its legal counsel may rely, that
no registration under the Securities Act would be required in
connection with the proposed sale, transfer or other disposition and
that all requirements under the Exchange Act, including Sections 13
and 16 thereof have been complied with; or
(2) A registration statement under the Securities Act covering AmeriNet's
Stock proposed to be sold, transferred or otherwise disposed of,
describing the manner and terms of the proposed sale, transfer or
other disposition, and containing a current prospectus, shall have
been filed with the Securities and Exchange Commission (the
"Commission") and made effective under the Securities Act; or
(3) An authorized representative of the Commission shall have rendered
written advice to the Affiliate (sought by Affiliate or Affiliate's
legal counsel, with a copy thereof and all other related
communications delivered to AmeriNet) to the effect that the
Commission would take no action, or that the staff of the Commission
would not recommend that the Commission take any action, with respect
to the proposed disposition if consummated.
6.4 No Present Plan of Disposition.
(A) The Affiliate has, and as of the Effective Time (as defined in the
Reorganization Agreement) will have, no present plan or intention (a
"Plan") to sell, transfer, exchange, pledge or otherwise dispose of,
including by means of a distribution by a partnership to its partners, or a
corporation to its stockholders, or any other transaction which results in
a reduction in the risk of ownership (any of the foregoing being
hereinafter referred to generically as a "Sale") of any of the shares of
AmeriNet common stock that the Affiliate may acquire in connection with the
Merger, or any securities that may be paid as a dividend or otherwise
distributed thereon with respect thereto or issued or delivered in exchange
or substitution therefor, which, when taking into account those WRI
stockholders who dissent from the Merger, will reduce the WRI stockholders'
ownership of AmeriNet Stock, in the aggregate, to less than fifty (50%) of
the number of shares of AmeriNet Common Stock issued in the Merger.
Page 162
(B) (1) The Affiliate is not aware of, or participating in, any Plan on the
part of WRI stockholders to engage in Sales of the shares of AmeriNet
Stock to be issued in the Merger.
(2) For purposes Section 6.4(B)(1), Shares with respect to which a
pre-Merger Sale occurs in a Related Transaction (as defined below),
shall be considered to be Shares that are exchanged for AmeriNet Stock
in the Merger and then disposed of pursuant to a Plan.
(3) A Sale of AmeriNet Stock shall be considered to have occurred pursuant
to a Plan if, among other things, such Sale occurs in a Related
Transaction.
(4) For purposes of this Section 6.4, a "Related Transaction" shall mean a
transaction that is in contemplation of, or related or pursuant to,
the Merger or the Merger Agreements.
(C) If any of the Affiliate's representations in this Section 6.4 cease to be
true at any time prior to the Effective Time, the Affiliate will deliver to
each of WRI and AmeriNet, prior to the Effective Time, a written statement
to that effect, signed by the Affiliate.
6.5 Consultation with Counsel.
(A) The Affiliate has carefully read this Agreement and discussed its
requirements and other applicable limitations upon the sale, transfer or
other disposition of AmeriNet Shares to be acquired by Affiliate in the
Merger, to the extent the Affiliate felt necessary, with legal counsel for
the Affiliate.
(B) The Affiliate has carefully read the Reorganization Agreement and discussed
its requirements and its impacts upon Affiliate's ability to sell,
transfer, encumber, pledge or otherwise dispose of the AmeriNet Shares to
be acquired by Affiliate in the Merger, to the extent Affiliate felt
necessary, with legal counsel for Affiliate.
6.6 Ownership of Shares.
The Affiliate is the record owner of the Shares shown on the signature page
hereto, which at the date hereof and at all times up until the Determination
Date will be free and clear of any liens, claims, options, charges or other
encumbrances; does not beneficially own any shares of capital stock of WRI other
than such Shares; and, has full power and authority to make, enter into and
carry out the terms of this Agreement and the Proxy.
6.7 No Proxy Solicitations.
The Affiliate will not, and will not permit any entity under Affiliate's
control to:
(A) Solicit proxies or become a "participant" in a "solicitation" (as such
terms are defined in Regulation 14A under the Exchange Act) with respect to
an Opposing Proposal or otherwise encourage or assist any party in taking
or planning any action that would compete with, restrain or otherwise serve
to interfere with or inhibit the timely consummation of the Merger in
accordance with the terms of the Merger Agreement;
Page 163
(B) Initiate a stockholders' vote or action by consent of WRI stockholders with
respect to an Opposing Proposal; or
(C) Become a member of a "group" [as such term is used in Section 13(d) of the
Exchange Act] with respect to any voting securities of WRI with respect to
an Opposing Proposal.
Article VII
No Limitation on Discretion as Director.
This Agreement is intended solely to apply to the exercise by the Affiliate
in his individual capacity of rights attaching to ownership of the Shares, and
nothing herein shall be deemed to apply to, or to limit in any manner the
discretion of the Affiliate with respect to, any action which may be taken or
omitted by him acting in his fiduciary capacity as a director of WRI.
Article VIII
Rules 144 and 145.
From and after the Effective Time and for so long as is necessary in order
to permit the Affiliate to sell AmeriNet's Stock held by Affiliate pursuant to
Rule 145 and, to the extent applicable, Rule 144 under the Securities Act,
AmeriNet will use its reasonable efforts to file on a timely basis all reports
required to be filed by it pursuant to Sections 13 or 15(d) of the Exchange Act
referred to in paragraph (c)(1) of Rule 144 under the Securities Act, in order
to permit the Affiliate to sell AmeriNet's Stock held by it pursuant to the
terms and conditions of Rule 145 and the applicable provisions of Rule 144.
Article IX
Limited Resales.
The Affiliate understands that, in addition to the restrictions imposed
under Section 6 of this Agreement, the provisions of Rule 145 limit Affiliate's
public resales of Restricted Securities, in the manner set forth in subsections
(a), (b) and (c) below:
9.1 Rule 145(d)(1).
(A) Unless and until the restriction "Cut-off" provisions of Rule 145(d)(2) or
Rule 145(d)(3) set forth below become available, public resales of
Restricted Securities may only be made by the Affiliate in compliance with
the requirements of Rule 145(d)(1).
(B) Rule 145(d)(1) permits such resales only:
(1) While AmeriNet meets the public information requirements of Rule
144(c); (iii) in brokers' transactions or in transactions with a
market maker; and
(2) Where the aggregate number of Restricted Securities sold at any time
together with all sales of restricted AmeriNet Stock sold for
Affiliate's account during the preceding three-month period does not
exceed the greater of
(a) One percent (1%) of AmeriNet's Common Stock outstanding; or
Page 164
(b) The average weekly volume of trading in AmeriNet Common Stock on
all national securities exchanges, or reported through the
automated quotation system of a registered securities
association, during the four calendar weeks preceding the date of
receipt of the order to execute the sale.
9.2 Rule 145(d)(2).
The Affiliate may make unrestricted sales of Restricted Securities pursuant
to Rule 145(d)(2) if:
(A) The Affiliate has beneficially owned (within the meaning of Rule 144(d)
under the Securities Act) the Restricted Securities for at least one year
after the Effective Time of the Merger;
(B) The Affiliate is not an affiliate of AmeriNet; and
(C) AmeriNet meets the public information requirements of Rule 144(c).
9.3 Rule 145(d)(3).
The Affiliate may make unrestricted sales of Restricted Securities pursuant
to Rule 145(d)(3) if the Affiliate has beneficially owned (within the meaning of
Rule 144(d) under the Securities Act) the Restricted Securities for at least two
years and is not, and has not been for the three months preceding the date of
sale, an affiliate of AmeriNet.
9.4 Acknowledgment.
AmeriNet acknowledges that the provisions of Section 6.3 of this Agreement
will be satisfied as to any sale by the holder of the Restricted Securities
pursuant to Rule 145(d), by a broker's letter and a letter from the undersigned
with respect to that sale stating that each of the above-described requirements
of Rule 145(d)(1) has been met or is inapplicable by virtue of Rule 145(d)(2) or
Rule 145(d)(3); provided, however, that AmeriNet has no reasonable basis to
believe that such sales were not made in compliance with such provisions of Rule
145(d).
Article X
Legends.
(A) The Affiliate also understands and agrees that stop transfer instructions
will be given to AmeriNet's transfer agent with respect to certificates
evidencing the Restricted Securities and that there will be placed on the
certificates evidencing the Restricted Securities legends stating in
substance:
Page 165
"The shares represented by this certificate were issued pursuant to a business
combination which was structured to comply with the tax free reorganization
provisions of Section 368(a) of the Internal revenue Code of 1986, as amended
(the "Code") and was not registered under the Securities Act of 1933, as amended
(the "Securities Act") in reliance on applicable exemptions therefrom and from
comparable provisions of the securities laws of the recipients state of
domicile, and may not be sold, nor may the owner thereof reduce his or her risks
relative thereto in any way, until such time as AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
("AmeriNet"), has published the financial results covering at least thirty (30)
days of combined operations after the effective date of the merger through which
the business combination was effected. In addition, the shares represented by
this certificate may not be sold, transferred or otherwise disposed of except or
unless (1) covered by an effective registration statement under the Securities
Act, (2) in accordance with Commission Rule 145(d) (in the case of shares issued
to an individual who is not an affiliate of AmeriNet) or Commission Rule 144 (in
the case of shares issued to an individual who is an affiliate of AmeriNet) of
the rules and regulations of such act, or (3) in accordance with a legal opinion
satisfactory to counsel for AmeriNet that such sale or transfer is otherwise
exempt from the registration requirements of such act."
(B) (1) Upon the request of the Affiliate, AmeriNet shall cause the
certificates resenting the Restricted Securities to be reissued free
of any legend relating to restrictions on transfer by virtue of ASR
130 and 135 as soon as practicable after the requirements of ASR 130
and 135 have been met.
(2) In addition, if the provisions of Rules 144 and 145 are amended to
eliminate restrictions applicable to the Restricted Securities
received by Affiliate pursuant to the Merger, or at the expiration of
the restrictive period set forth in Rule 145(d), or upon registration
of my such shares, AmeriNet, upon the request of Affiliate, will cause
the certificates representing the Restricted Securities to be reissued
free of any legend relating to the restrictions set forth in Rules 144
and 145(d).
Article XI
Miscellaneous Provisions.
11.1 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.
11.2 Consent and Waiver.
The Affiliate hereby gives any consents or waivers that are reasonably
required for the consummation of the Merger under the terms of any agreements to
which Affiliate is a party or pursuant to any rights Affiliate may have.
11.3 Binding Agreement.
This Agreement will inure to the benefit of and be binding upon and
enforceable against the Parties and their successors and assigns, including
administrators, executors, representatives, heirs, legatees and devisees of the
Affiliate and any pledgee holding Restricted Securities as collateral.
Page 166
11.4 Waiver.
No waiver by any party hereto of any condition or of any breach of any
provision of this Agreement shall be effective unless in writing and signed by
each party hereto.
11.5 Governing Law.
This Agreement shall be governed by and construed, interpreted and enforced
in accordance with the laws of the State of Delaware, except for any choice of
law provisions that would result in the application of the law of another
jurisdiction, and except for laws involving the fiduciary obligations of WRI's
officers and directors, which shall be governed under Florida law.
11.6 Third Party Reliance.
Legal counsel to and accountants for the Parties shall be entitled to rely
upon this Agreement.
11.7 Amendments and Modification.
This Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by the Parties.
11.8 Specific Performance: Injunctive Relief.
The Parties acknowledge that AmeriNet will be irreparably harmed and that
there will be no adequate remedy at law for a violation of any of the covenants
or agreement of Affiliate set forth herein; therefore, it is agreed that, in
addition to any other remedies that may be available to AmeriNet upon any such
violation, AmeriNet shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to AmeriNet at law or in equity.
11.9 Notices.
All notices, requests, claims, demands and other communications hereunder
shall be in writing and sufficient if delivered in person, by cable, telegram or
telex, or sent by mail (registered or certified mail, postage prepaid, return
receipt requested) or overnight courier (prepaid) to the respective Parties as
follows:
(1) To the Affiliate:
At the contact information provided to the registrar of WRI's shares
of common stock and, after the Merger, at the contact information
provided to and maintained by AmeriNet's transfer agent.
Page 167
(2) To AmeriNet:
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Jordan, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; with a copy to
General Counsel
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail, ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇.
(3) To WRI:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
web site ▇▇▇.▇▇▇▇▇▇▇.▇▇▇;
(4) To Yankees:
The Yankee Companies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇;
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, except that
notices of change of address shall only be effective upon receipt.
11.10 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.
Page 168
(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.
11.11 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.
11.12 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and the Closing hereon and
shall be effective regardless of any investigation that may have been made or
may be made by or on behalf of any Party.
11.13 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.
11.14 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.
Page 169
11.15 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) Except for the arbitration procedures outlined in paragraphs 7.2(G)(2) and
7.2(G)(3) which shall govern any arbitration proceeding described therein,
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 six alternatives to be provided, two by the Affiliate,
two by AmeriNet and two by WRI.
(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 six
alternatives to be provided, two by the Affiliate, two by AmeriNet and
two by WRI.
(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.
11.16 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.
Page 170
11.17 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.
11.18 License.
(A) This form of agreement is the property of Yankees and has been customized
for this transaction with the consent of Yankees by G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esquire.
(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.
11.19 Information Concerning the Affiliate's Share Ownership.
(A) Shares beneficially owned:
(1) ___________ shares of WRI Common Stock; and
(2) ___________ shares of WRI Common Stock subject to options, warrants or
other rights.
Execution Pages
IN WITNESS WHEREOF, the Affiliate, AmeriNet, American Internet and WRI 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:
The Affiliate
----------------------------
---------------------------- ------------------------
Signature
Dated: November 11 1999
------------------------
Print name
Page 171
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
----------------------------
____________________________ By:________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
Attest: ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
Dated: November 11 1999
American Internet Technical Centers, Inc.
----------------------------
____________________________ By: _________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
Attest: ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
Secretary & General Counsel
Dated: November 11, 1999
▇▇▇▇▇▇▇.▇▇▇, Inc.
----------------------------
____________________________ By:______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
Attest: _________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary & General Counsel
Dated: November 11, 1999
Page 172
Exhibit "A"
Irrevocable Proxy
The undersigned stockholder of ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation
("WRI"), hereby irrevocably to the extent provided by Florida law) appoints the
directors on the Board of Directors of AmeriNet, Inc., a Delaware corporation
("AmeriNet"), and each of them, as the sole and exclusive attorneys and proxies
of the undersigned, with full power of substitution and resubstitution, to the
full extent of the undersigned's rights with respect to the shares of capital
stock of WRI beneficially owned by the undersigned, which shares are listed on
the final page of this Proxy (the "Shares"), and any and all other shares or
securities issued or issuable in respect thereof on or after the date hereof,
until such time as that certain Agreement & Plan of Merger dated as of November
11, 1999 (the "Reorganization Agreement"), among AmeriNet, American Internet
Technical Center, Inc., a Florida corporation and a wholly owned subsidiary of
AmeriNet ("American Internet"), and WRI, shall be terminated in accordance with
its terms or the Merger (as defined in the Reorganization Agreement) is
effective.
Terms:
1. Upon the execution hereof, all prior proxies given by the undersigned with
respect to the Shares and any and all other shares or securities issued or
issuable in respect thereof on or after the date hereof are hereby revoked
and no subsequent proxies will be given.
2. This proxy is irrevocable (to the extent provided by Florida law), is
granted pursuant to the Affiliate Agreement dated as of November 11, 1999,
between AmeriNet, WRI, and the undersigned stockholder (the "Affiliate
Agreement"), and is granted in consideration of AmeriNet entering into the
Reorganization Agreement.
3. The attorneys and proxies named above will be empowered at any time prior
to termination of the Reorganization Agreement in accordance with Article
VIII thereof to exercise all voting and other rights (including, without
limitation, the power to execute and deliver written consents with respect
to the Shares) of the undersigned at every annual, special or adjourned
meeting of WRI's stockholders, and in every written consent in lieu of such
a meeting, or otherwise, in favor of approval of the Merger and the
Reorganization Agreement and any matter that could reasonably be expected
to facilitate the Merger, and against any proposal made in opposition to or
competition with the consummation of the Merger and against any merger,
consolidation, sale of assets, reorganization or recapitalization of WRI
with any party other than AmeriNet and its affiliates and against any
liquidation or winding up of WRI.
4. The attorneys and proxies named above may only exercise this proxy to vote
the Shares subject hereto at any time prior to termination of the
Reorganization Agreement in accordance with Article VIII thereof at every
annual, special or adjourned meeting of the stockholders of WRI and in
every written consent in lieu of such meeting, in favor of approval of the
Merger and the Reorganization Agreement and any matter that could
reasonably be expected to facilitate the Merger, and against any merger,
consolidation, sale of assets, reorganization or recapitalization of WRI
with any party other than AmeriNet and its affiliates, and against any
liquidation or winding up of WRI, and may not exercise this proxy on any
other matter.
Page 173
5. The undersigned stockholder may vote the Shares on all other matters.
6. Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
7. This proxy is irrevocable and coupled with an interest.
8. Stockholder Data:
A. Full name:_____________________________________________
First Middle Last
B. Tax identification number:_____________________________________
C. Domicile Address:_____________________________________
D. Telephone, fax and e-mail:___________ _______________________
E. Shares Information:
(1) Number of WRI Shares owned or controlled as to voting matters:
-----------------
Signed, sealed and delivered
In Our Presence:
Stockholder:
----------------------------
____________________________ By:___________________________
Dated:________________
Page 174
Exhibit 5.12 Copies of employment agreements
Executive's Employment Agreement
This Executive's Employment Agreement (the "Agreement") is entered into by
and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing in the State of Florida (
"▇▇. ▇▇▇▇▇▇"); ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("WRI"; WRI and ▇▇.
▇▇▇▇▇▇ being sometimes hereinafter collectively referred to as the "Parties" or
generically as a "Party".
Preamble:
WHEREAS, WRI's board of directors is of the opinion that in conjunction
with effectuation of WRI's future plans it must memorialize, confirm and assure
itself of the continuing services of WRI's founder, who currently serves as its
president, director and chief executive officer, on a long term basis; and
WHEREAS, ▇▇. ▇▇▇▇▇▇ is thoroughly knowledgeable with all aspects of WRI's
operations and plans; and
WHEREAS, ▇▇. ▇▇▇▇▇▇ is agreeable to serving as WRI's president and chief
executive officer, on the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
Witnesseth:
Article One
Term, Renewals, Earlier Termination
1.1 Term.
Subject to the provisions set forth herein, the term of ▇▇. ▇▇▇▇▇▇'▇
employment hereunder shall be deemed to commence on the date of this Agreement's
execution by all of the Parties and shall continue until December 31, 2004.
1.2 Renewals.
This Agreement shall be renewed automatically, after expiration of the
original term, on a continuing annual basis, unless the Party wishing not to
renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
1.3 Earlier Termination.
WRI shall each have the right to terminate this Agreement prior to the
expiration of its Term, as it applies to them (without affecting the Agreement
as it applies to the other, except in conjunction with the compensation aspects
thereof), or of any renewals thereof, subject to the provisions of Section 1.4,
for the following reasons:
Page 175
(a) For Cause:
(1) WRI may terminate ▇▇. ▇▇▇▇▇▇'▇ employment under this Agreement at any
time for cause.
(2) Such termination shall be evidenced by written notice thereof to ▇▇.
▇▇▇▇▇▇, which notice shall specify the cause for termination.
(3) For purposes hereof, the term "cause" shall mean:
(a) The inability of ▇▇. ▇▇▇▇▇▇, through sickness or other
incapacity, to discharge his duties under this Agreement for
ninety or more consecutive days or for a total of 120 or more
days in a period of twelve consecutive months;
(b) The refusal of ▇▇. ▇▇▇▇▇▇ to follow the directions of WRI's board
of directors;
(c) Dishonesty; theft; or conviction of a crime involving moral
turpitude;
(d) Material default in the performance by ▇▇. ▇▇▇▇▇▇ of his
obligations, services or duties required under this Agreement
(other than for illness or incapacity) or materially breach of
any provision of this Agreement, which default or breach has
continued for twenty days after written notice of such default or
breach and such material default or breach has resulted in
material damage to WRI.
(4) In the event of a dispute concerning termination due to breach or
default, ▇▇. ▇▇▇▇▇▇'▇ compensation shall be continued until resolution
of such dispute by a tribunal of competent jurisdiction, it being
understood that ▇▇. ▇▇▇▇▇▇ must repay any amounts so paid upon final
determination that he was not entitled to such compensation.
(b) Discontinuance of Business:
In the event that WRI discontinues operating its business, this Agreement
shall terminate as of the last day of the month on which it ceases
operation with the same force and effect as if such last day of the month
were originally set as the termination date hereof; provided, however, that
a reorganization of WRI shall not be deemed a termination of its business.
(c) Death:
This Agreement shall terminate immediately on the death of ▇▇. ▇▇▇▇▇▇;
however, all accrued compensation at such time shall be promptly paid to
▇▇. ▇▇▇▇▇▇'▇ estate.
1.4 Final Settlement.
Upon termination of this Agreement and payment to ▇▇. ▇▇▇▇▇▇ of all amounts
due him hereunder, ▇▇. ▇▇▇▇▇▇ or his representative shall execute and deliver to
the terminating entity on a form prepared by WRI, a receipt for such sums and a
release of all claims, except such claims as may have been submitted pursuant to
the terms of this Agreement and which remain unpaid, and, shall forthwith tender
to WRI all records, manuals and written procedures, as may be desired by it for
the continued conduct of its business.
Page 176
Article Two
Scope of Employment
2.1 Retention.
WRI hereby hires ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ hereby accepts such
employment, in accordance with the terms, provisions and conditions of this
Agreement.
2.2 General Description of Duties.
(a) ▇▇. ▇▇▇▇▇▇ shall be employed as the president of WRI and perform the
duties generally associated with the position of president and chief
executive officer thereof.
(b) Without limiting the generality of the foregoing, ▇▇. ▇▇▇▇▇▇ shall
have exclusive control of all aspects of WRI's day to day operations,
subject only to compliance with the directions of WRI's board of
directors, applicable laws and fiduciary obligations.
(c) ▇▇. ▇▇▇▇▇▇ covenants to perform in good faith his employment duties,
devoting substantially all of his business time, energies and
abilities to the proper and efficient management of the business of
WRI, and for its benefit.
2.3 Status.
(a) Throughout the term of this Agreement, ▇▇. ▇▇▇▇▇▇ shall serve as a
member of the board of directors of WRI and as its president and chief
executive officer.
(b) In the event that he is not elected to such positions, then, at the
option of ▇▇. ▇▇▇▇▇▇, this Agreement may be deemed terminated
effective as of the earliest time that it can be reasonably determined
that such election will not take place, provided that written notice
of such election is provided to WRI within 30 days after it failed to
elect ▇▇. ▇▇▇▇▇▇ to the required office.
2.4 Exclusivity.
▇▇. ▇▇▇▇▇▇ shall, unless specifically otherwise authorized by WRI's board
of directors, on a case by case basis, devote his business time exclusively to
the affairs of WRI.
Article Three
Compensation
3.1 Compensation.
As consideration for ▇▇. ▇▇▇▇▇▇'▇ services to WRI ▇▇. ▇▇▇▇▇▇ shall be
entitled to a salary in an aggregate gross sum equal to $1,250 per week (the
"Base Salary").
Page 177
3.2 Benefits.
During the term of this Agreement, ▇▇. ▇▇▇▇▇▇ shall also be entitled to the
following benefits:
(1) Two weeks paid vacation per year during the first three years of this
Agreement and three weeks per year thereafter.
(2) During the period of his employment, ▇▇. ▇▇▇▇▇▇ shall be reimbursed
for reasonable traveling, telephone and other direct business expenses
required in connection with the performance of his duties hereunder,
subject to verification required by WRI for audit purposes, for tax
deduction purposes and in order to assure compliance with applicable
laws and regulations.
(3) ▇▇. ▇▇▇▇▇▇ shall be entitled to receive all benefits of employment
generally available to all of WRI's employees.
3.3 Indemnification.
WRI will defend, indemnify and hold ▇▇. ▇▇▇▇▇▇ harmless from all
liabilities, suits, judgments, fines, penalties or disabilities, including
expenses associated directly, therewith (e.g. legal fees, court costs,
investigative costs, witness fees, etc.) resulting from any reasonable actions
taken by him in good faith on behalf of WRI, its affiliates or for other persons
or entities at the request of the board of directors of WRI, to the fullest
extent legally permitted, and in conjunction therewith, shall assure that all
required expenditures are made in a manner making it unnecessary for ▇▇. ▇▇▇▇▇▇
to incur any out of pocket expenses; provided, however, that ▇▇. ▇▇▇▇▇▇ permits
the majority stockholders of WRI to select and supervise all personnel involved
in such defense and that ▇▇. ▇▇▇▇▇▇ waive any conflicts of interest that such
personnel may have as a result of also representing WRI, its stockholders or
other personnel and agrees to hold them harmless from any matters involving such
representation, except such as involve fraud or bad faith.
Article Four
Special Covenants
4.1 Confidentiality.
(a) ▇▇. ▇▇▇▇▇▇ acknowledges that, in and as a result of his employment
hereunder, he will be developing for WRI, making use of, acquiring
and/or adding to, confidential information of special and unique
nature and value relating to such matters as WRI's trade secrets,
systems, procedures, manuals, confidential reports, personnel
resources, strategic and tactical plans, advisors, clients, investors
and funders; consequently, as material inducement to the entry into
this Agreement by WRI, ▇▇. ▇▇▇▇▇▇ hereby covenants and agrees that he
shall not, at anytime during or following the terms of his employment
hereunder, directly or indirectly, personally use, divulge or
disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to him as a result
of his employment by WRI, or WRI's affiliates.
(b) In the event of a breach or threatened breach by ▇▇. ▇▇▇▇▇▇ of any of
the provisions of this Section 4.1, WRI, in addition to and not in
limitation of any other rights, remedies or damages available to WRI,
whether at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach by ▇▇.
▇▇▇▇▇▇, or by ▇▇. ▇▇▇▇▇▇'▇ partners, agents, representatives,
servants, employers, employees, affiliates and/or any and all persons
directly or indirectly acting for or with him.
Page 178
4.2 Special Remedies.
In view of the irreparable harm and damage which would undoubtedly occur to
WRI as a result of a breach by ▇▇. ▇▇▇▇▇▇ of the covenants or agreements
contained in this Article Four, and in view of the lack of an adequate remedy at
law to protect WRI's interests, ▇▇. ▇▇▇▇▇▇ hereby covenants and agrees that WRI
shall have the following additional rights and remedies in the event of a breach
hereof:
(a) ▇▇. ▇▇▇▇▇▇ hereby consents to the issuance of a permanent injunction
enjoining him from any violations of the covenants set forth in
Section 4.1 hereof; and
(b) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which WRI may sustain prior to the effective
enforcement of such injunction, ▇▇. ▇▇▇▇▇▇ hereby covenants and agrees
to pay over to WRI, in the event he violates the covenants and
agreements contained in Section 4.2 hereof, the greater of:
(i) Any payment or compensation of any kind received by him because
of such violation before the issuance of such injunction, or
(ii) The sum of One Thousand ($1,000.00) Dollars per violation, which
sum shall be liquidated damages, and not a penalty, for the
injuries suffered by WRI as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to WRI for any breach
of the covenants and agreements contained in this Article Four,
prior to the issuance of such injunction, the Parties recognizing
that the only adequate remedy to protect WRI from the injury
caused by such breaches would be injunctive relief.
4.3 Cumulative Remedies.
▇▇. ▇▇▇▇▇▇ hereby irrevocably agrees that the remedies described in Section
4.3 hereof shall be in addition to, and not in limitation of, any of the rights
or remedies to which WRI is or may be entitled to, whether at law or in equity,
under or pursuant to this Agreement.
4.4 Acknowledgment of Reasonableness.
▇▇. ▇▇▇▇▇▇ hereby represents, warrants and acknowledges that he has
carefully read and considered the provisions of this Article Four and, having
done so, agrees that the restrictions set forth herein are fair and reasonable
and are reasonably required for the protection of the interests of WRI, its
officers, directors and other employees; consequently, in the event that any of
the above-described restrictions shall be held unenforceable by any court of
competent jurisdiction, ▇▇. ▇▇▇▇▇▇ hereby covenants, agrees and directs such
court to substitute a reasonable judicially enforceable limitation in place of
any limitation deemed unenforceable and, ▇▇. ▇▇▇▇▇▇ hereby covenants and agrees
that if so modified, the covenants contained in this Article Four shall be as
fully enforceable as if they had been set forth herein directly by the Parties.
In determining the nature of this limitation, ▇▇. ▇▇▇▇▇▇ hereby acknowledges,
covenants and agrees that it is the intent of the Parties that a court
adjudicating a dispute arising hereunder recognize that the Parties desire that
this covenant not to compete be imposed and maintained to the greatest extent
possible.
Page 179
4.5 Unauthorized Acts.
▇▇. ▇▇▇▇▇▇ hereby covenants and agrees that he will not do any act or incur
any obligation on behalf of WRI of any kind whatsoever, except as authorized by
its board of directors or by its stockholders pursuant to duly adopted
stockholder action.
Article Five
Miscellaneous
5.1 Notices.
(a)(1) All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been
duly given on the first business day after mailing by registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
To ▇▇. ▇▇▇▇▇▇:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇;
e-mail ▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ To WRI:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; e-mail ▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Attention: General Counsel
(2) In each case, copies of notices will also be provided to:
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Jordan, President; and
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and
e-mail ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary;
(3) Copies of notices will also be provided to 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)(1) The Parties acknowledge that The Yankee Companies, Inc., a Florida
corporation ("Yankees") has acted as scrivener for the Parties in this
transaction and 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 on their behalf.
Page 180
5.2 Amendment.
(1) No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by
the Party against which the enforcement of said modification, waiver,
amendment, discharge or change is sought.
(2) This Agreement may not be modified without the consent of a majority
in interest of AmeriNet's stockholders.
5.3 Merger.
(a) This instrument 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.
5.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
5.5 Severability.
If any provision or any portion of any provision of this Agreement, 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 effected thereby.
5.6 Governing Law and Venue.
This Agreement shall be construed in accordance with the laws of the State
of Florida but any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in Broward County, Florida.
5.7 Litigation.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, 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 litigation is 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:
Page 181
(1)(A) First, the issue shall be submitted to mediation before a
mediation service in Broward County, Florida, to be selected by
lot from six alternatives to be provided, two by WRI's majority
stockholder, two by WRI and two by ▇▇. ▇▇▇▇▇▇.
(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 six
alternatives to be provided,, two by WRI's majority stockholder, two
by WRI and two by ▇▇. ▇▇▇▇▇▇.
(3)(A) Expenses of mediation shall be borne by WRI, 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.
5.8 Benefit of Agreement.
(1) This Agreement may not be assigned by ▇▇. ▇▇▇▇▇▇ without the prior
written consent of WRI.
(2) Subject to the restrictions on transferability and assignment
contained herein, the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, their
successors, assigns, personal representative, estate, heirs and
legatees.
5.9 Captions.
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.
5.10 Number and Gender.
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.
5.11 Further Assurances.
The Parties hereby agree to do, execute, acknowledge and deliver or cause
to be done, executed or acknowledged or delivered and to perform all such acts
and deliver all such deeds, assignments, transfers, conveyances, powers of
attorney, assurances, recipes, records and other documents, as may, from time to
time, be required herein to effect the intent and purposes of this Agreement.
Page 182
5.12 Status.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, agency, or lessor-lessee relationship; but, rather,
the relationship established hereby is that of employer-employee in WRI.
5.13 Counterparts.
(a) This Agreement may be executed in any number of counterparts.
(b) 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 Securities
and Exchange Commission.
5.14 License.
(a) This Agreement is the property of Yankees and the use hereof by the
Parties is authorized hereby solely for purposes of this transaction.
(b) The use of this form of agreement or of any derivation thereof without
Yankees' prior written permission is prohibited.
(c) The interpretation of this Agreement shall not be directly or
indirectly affected in any manner as a result of its authorship.
In Witness Whereof, the Parties have executed this Agreement, effective as
of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
President
--------------------------
-------------------------- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated: November ___, 1999
Wriwebs.coms, Inc.
a Florida corporation.
--------------------------
__________________________ By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(CORPORATE SEAL)
Attest:__________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary & General Counsel
Dated: November ___, 1999
Page 183
Executive's Employment Agreement
This Executive's Employment Agreement (the "Agreement") is entered into by
and among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual residing in the State of Florida ("▇▇.
▇▇▇▇▇"); ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("WRI"; WRI and ▇▇. ▇▇▇▇▇
being sometimes hereinafter collectively referred to as the "Parties" or
generically as a "Party".
Preamble:
WHEREAS, WRI's board of directors is of the opinion that in conjunction
with effectuation of WRI's future plans it must memorialize, confirm and assure
itself of the continuing services of WRI's founder, who currently serves as its
vice president of operations and director, on a long term basis; and
WHEREAS, ▇▇. ▇▇▇▇▇ is thoroughly knowledgeable with all aspects of WRI's
operations and plans; and
WHEREAS, ▇▇. ▇▇▇▇▇ is agreeable to serving as WRI's Vice President of
Operations on the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
Witnesseth:
Article One
Term, Renewals, Earlier Termination
1.1 Term.
Subject to the provisions set forth herein, the term of ▇▇. ▇▇▇▇▇'▇
employment hereunder shall be deemed to commence on the date of this Agreement's
execution by all of the Parties and shall continue until December 31, 2004.
1.2 Renewals.
This Agreement shall be renewed automatically, after expiration of the
original term, on a continuing annual basis, unless the Party wishing not to
renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
1.3 Earlier Termination.
WRI shall each have the right to terminate this Agreement prior to the
expiration of its Term, as it applies to them (without affecting the Agreement
as it applies to the other, except in conjunction with the compensation aspects
thereof), or of any renewals thereof, subject to the provisions of Section 1.4,
for the following reasons:
Page 184
(a) For Cause:
(1) WRI may terminate the ▇▇. ▇▇▇▇▇'▇ employment under this Agreement at
any time for cause.
(2) Such termination shall be evidenced by written notice thereof to ▇▇.
▇▇▇▇▇, which notice shall specify the cause for termination.
(3) For purposes hereof, the term "cause" shall mean:
(a) The inability of ▇▇. ▇▇▇▇▇, through sickness or other incapacity,
to discharge his duties under this Agreement for ninety or more
consecutive days or for a total of 120 or more days in a period
of twelve consecutive months;
(b) The refusal of ▇▇. ▇▇▇▇▇ to follow the directions of WRI's board
of directors;
(c) Dishonesty; theft; or conviction of a crime involving moral
turpitude;
(d) Material default in the performance by ▇▇. ▇▇▇▇▇ of his
obligations, services or duties required under this Agreement
(other than for illness or incapacity) or materially breach of
any provision of this Agreement, which default or breach has
continued for twenty days after written notice of such default or
breach and such material default or breach has resulted in
material damage to WRI.
(4) In the event of a dispute concerning termination due to breach or
default, ▇▇. ▇▇▇▇▇'▇ compensation shall be continued until resolution
of such dispute by a tribunal of competent jurisdiction, it being
understood that ▇▇. ▇▇▇▇▇ must repay any amounts so paid upon final
determination that he was not entitled to such compensation.
(b) Discontinuance of Business:
In the event that WRI discontinues operating its business, this Agreement
shall terminate as of the last day of the month on which it ceases operation
with the same force and effect as if such last day of the month were originally
set as the termination date hereof; provided, however, that a reorganization of
WRI shall not be deemed a termination of its business.
(c) Death:
This Agreement shall terminate immediately on the death of ▇▇. ▇▇▇▇▇;
however, all accrued compensation at such time shall be promptly paid to ▇▇.
▇▇▇▇▇'▇ estate.
1.4 Final Settlement.
Upon termination of this Agreement and payment to ▇▇. ▇▇▇▇▇ of all amounts
due him hereunder, ▇▇. ▇▇▇▇▇ or his representative shall execute and deliver to
the terminating entity on a form prepared by WRI, a receipt for such sums and a
release of all claims, except such claims as may have been submitted pursuant to
the terms of this Agreement and which remain unpaid, and, shall forthwith tender
to WRI all records, manuals and written procedures, as may be desired by it for
the continued conduct of its business.
Page 185
Article Two
Scope of Employment
2.1 Retention.
WRI hereby hires ▇▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ hereby accepts such employment, in
accordance with the terms, provisions and conditions of this Agreement.
2.2 General Description of Duties.
(a) ▇▇. ▇▇▇▇▇ shall be employed as the Vice President of Operations of WRI
and perform the duties generally associated with the position of Vice
President of Operations thereof.
(b) Without limiting the generality of the foregoing, ▇▇. ▇▇▇▇▇ shall
manage WRI's day to day operations under the directions of WRI's
president, subject to compliance with the directions of WRI's board of
directors, applicable laws and fiduciary obligations.
(c) ▇▇. ▇▇▇▇▇ covenants to perform in good faith his employment duties,
devoting substantially all of his business time, energies and
abilities to the proper and efficient management of the business of
WRI, and for its benefit.
2.3 Status.
(a) Throughout the term of this Agreement, ▇▇. ▇▇▇▇▇ shall serve as a
member of the board of directors of WRI and as its Vice President of
Operations.
(b) In the event that he is not elected to such positions, then, at the
option of ▇▇. ▇▇▇▇▇, this Agreement may be deemed terminated effective
as of the earliest time that it can be reasonably determined that such
election will not take place, provided that written notice of such
election is provided to WRI within 30 days after it failed to elect
▇▇. ▇▇▇▇▇ to the required office.
2.4 Exclusivity.
▇▇. ▇▇▇▇▇ shall, unless specifically otherwise authorized by WRI's board of
directors, on a case by case basis, devote his business time exclusively to the
affairs of WRI.
Article Three
Compensation
3.1 Compensation.
As consideration for ▇▇. ▇▇▇▇▇'▇ services to WRI ▇▇. ▇▇▇▇▇ shall be
entitled to a salary in an aggregate gross sum equal to $1,250 per week (the
"Base Salary").
Page 186
3.2 Benefits.
During the term of this Agreement, ▇▇. ▇▇▇▇▇ shall also be entitled to the
following benefits:
(1) Two weeks paid vacation per year during the first three years of this
Agreement and three weeks per year thereafter.
(2) During the period of his employment, ▇▇. ▇▇▇▇▇ shall be reimbursed for
reasonable traveling, telephone and other direct business expenses
required in connection with the performance of his duties hereunder,
subject to verification required by WRI for audit purposes, for tax
deduction purposes and in order to assure compliance with applicable
laws and regulations.
(3) ▇▇. ▇▇▇▇▇ shall be entitled to receive all benefits of employment
generally available to all of WRI's employees.
3.3 Indemnification.
WRI will defend, indemnify and hold ▇▇. ▇▇▇▇▇ harmless from all
liabilities, suits, judgments, fines, penalties or disabilities, including
expenses associated directly, therewith (e.g. legal fees, court costs,
investigative costs, witness fees, etc.) resulting from any reasonable actions
taken by him in good faith on behalf of WRI, its affiliates or for other persons
or entities at the request of the board of directors of WRI, to the fullest
extent legally permitted, and in conjunction therewith, shall assure that all
required expenditures are made in a manner making it unnecessary for ▇▇. ▇▇▇▇▇
to incur any out of pocket expenses; provided, however, that ▇▇. ▇▇▇▇▇ permits
the majority stockholders of WRI to select and supervise all personnel involved
in such defense and that ▇▇. ▇▇▇▇▇ waive any conflicts of interest that such
personnel may have as a result of also representing WRI, its stockholders or
other personnel and agrees to hold them harmless from any matters involving such
representation, except such as involve fraud or bad faith.
Article Four
Special Covenants
4.1 Confidentiality.
(a) ▇▇. ▇▇▇▇▇ acknowledges that, in and as a result of his employment
hereunder, he will be developing for WRI, making use of, acquiring
and/or adding to, confidential information of special and unique
nature and value relating to such matters as WRI's trade secrets,
systems, procedures, manuals, confidential reports, personnel
resources, strategic and tactical plans, advisors, clients, investors
and funders; consequently, as material inducement to the entry into
this Agreement by WRI, ▇▇. ▇▇▇▇▇ hereby covenants and agrees that he
shall not, at anytime during or following the terms of his employment
hereunder, directly or indirectly, personally use, divulge or
disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to him as a result
of his employment by WRI, or WRI's affiliates.
Page 187
(b) In the event of a breach or threatened breach by ▇▇. ▇▇▇▇▇ of any of
the provisions of this Section 4.1, WRI, in addition to and not in
limitation of any other rights, remedies or damages available to WRI,
whether at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach by ▇▇.
▇▇▇▇▇, or by ▇▇. ▇▇▇▇▇'▇ partners, agents, representatives, servants,
employers, employees, affiliates and/or any and all persons directly
or indirectly acting for or with him.
4.2 Special Remedies.
In view of the irreparable harm and damage which would undoubtedly occur to
WRI as a result of a breach by ▇▇. ▇▇▇▇▇ of the covenants or agreements
contained in this Article Four, and in view of the lack of an adequate remedy at
law to protect WRI's interests, ▇▇. ▇▇▇▇▇ hereby covenants and agrees that WRI
shall have the following additional rights and remedies in the event of a breach
hereof:
(a) ▇▇. ▇▇▇▇▇ hereby consents to the issuance of a permanent injunction
enjoining him from any violations of the covenants set forth in
Section 4.1 hereof; and
(b) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which WRI may sustain prior to the effective
enforcement of such injunction, ▇▇. ▇▇▇▇▇ hereby covenants and agrees
to pay over to WRI, in the event he violates the covenants and
agreements contained in Section 4.2 hereof, the greater of:
(i) Any payment or compensation of any kind received by him because
of such violation before the issuance of such injunction, or
(ii) The sum of One Thousand ($1,000.00) Dollars per violation, which
sum shall be liquidated damages, and not a penalty, for the
injuries suffered by WRI as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to WRI for any breach
of the covenants and agreements contained in this Article Four,
prior to the issuance of such injunction, the Parties recognizing
that the only adequate remedy to protect WRI from the injury
caused by such breaches would be injunctive relief.
4.3 Cumulative Remedies.
▇▇. ▇▇▇▇▇ hereby irrevocably agrees that the remedies described in Section
4.3 hereof shall be in addition to, and not in limitation of, any of the rights
or remedies to which WRI is or may be entitled to, whether at law or in equity,
under or pursuant to this Agreement.
Page 188
4.4 Acknowledgment of Reasonableness.
▇▇. ▇▇▇▇▇ hereby represents, warrants and acknowledges that he has
carefully read and considered the provisions of this Article Four and, having
done so, agrees that the restrictions set forth herein are fair and reasonable
and are reasonably required for the protection of the interests of WRI, its
officers, directors and other employees; consequently, in the event that any of
the above-described restrictions shall be held unenforceable by any court of
competent jurisdiction, ▇▇. ▇▇▇▇▇ hereby covenants, agrees and directs such
court to substitute a reasonable judicially enforceable limitation in place of
any limitation deemed unenforceable and, ▇▇. ▇▇▇▇▇ hereby covenants and agrees
that if so modified, the covenants contained in this Article Four shall be as
fully enforceable as if they had been set forth herein directly by the Parties.
In determining the nature of this limitation, ▇▇. ▇▇▇▇▇ hereby acknowledges,
covenants and agrees that it is the intent of the Parties that a court
adjudicating a dispute arising hereunder recognize that the Parties desire that
this covenant not to compete be imposed and maintained to the greatest extent
possible.
4.5 Unauthorized Acts.
▇▇. ▇▇▇▇▇ hereby covenants and agrees that he will not do any act or incur
any obligation on behalf of WRI of any kind whatsoever, except as authorized by
its board of directors or by its stockholders pursuant to duly adopted
stockholder action.
Article Five
Miscellaneous
5.1 Notices.
(a)(1) All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been
duly given on the first business day after mailing by registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
To ▇▇. ▇▇▇▇▇:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ #▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇)▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇;
e-mail ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
To WRI:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇;
e-mail ▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Attention: General Counsel
Page 189
(2) In each case, copies of notices will also be provided to:
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and,
e-mail ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, President; and
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and
e-mail ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary;
(3) Copies of notices will also be provided to 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)(1) The Parties acknowledge that The Yankee Companies, Inc., a Florida
corporation ("Yankees") has acted as scrivener for the Parties in this
transaction and 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 on their behalf.
5.2 Amendment.
(1) No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by
the Party against which the enforcement of said modification, waiver,
amendment, discharge or change is sought.
(2) This Agreement may not be modified without the consent of a majority
in interest of AmeriNet's stockholders.
5.3 Merger.
(a) This instrument 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.
5.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
Page 190
5.5 Severability.
If any provision or any portion of any provision of this Agreement, 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 effected thereby.
5.6 Governing Law and Venue.
This Agreement shall be construed in accordance with the laws of the State
of Florida but any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in Broward County, Florida.
5.7 Litigation.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, 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 litigation is 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 six alternatives to be provided, two by WRI's majority
stockholder, two by WRI and two by ▇▇. ▇▇▇▇▇.
(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 six
alternatives to be provided,, two by WRI's majority stockholder, two
by WRI and two by ▇▇. ▇▇▇▇▇.
(3)(A) Expenses of mediation shall be borne by WRI, 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.
Page 191
5.8 Benefit of Agreement.
(1) This Agreement may not be assigned by ▇▇. ▇▇▇▇▇ without the prior
written consent of WRI.
(2) Subject to the restrictions on transferability and assignment
contained herein, the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, their
successors, assigns, personal representative, estate, heirs and
legatees.
5.9 Captions.
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.
5.10 Number and Gender.
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.
5.11 Further Assurances.
The Parties hereby agree to do, execute, acknowledge and deliver or cause
to be done, executed or acknowledged or delivered and to perform all such acts
and deliver all such deeds, assignments, transfers, conveyances, powers of
attorney, assurances, recipes, records and other documents, as may, from time to
time, be required herein to effect the intent and purposes of this Agreement.
5.12 Status.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, agency, or lessor-lessee relationship; but, rather,
the relationship established hereby is that of employer-employee in WRI.
5.13 Counterparts.
(a) This Agreement may be executed in any number of counterparts.
(b) 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 Securities and Exchange
Commission.
5.14 License.
(a) This Agreement is the property of Yankees and the use hereof by the Parties
is authorized hereby solely for purposes of this transaction.
(b) The use of this form of agreement or of any derivation thereof without
Yankees' prior written permission is prohibited.
Page 192
(c) The interpretation of this Agreement shall not be directly or indirectly
affected in any manner as a result of its authorship.
In Witness Whereof, the Parties have executed this Agreement, effective as
of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
Vice President of Operations
--------------------------
-------------------------- -------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated: November ___, 1999
Wriwebs.coms, Inc.
a Florida corporation.
--------------------------
__________________________ By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(CORPORATE SEAL)
Attest: _________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary & General Counsel
Dated: November ___, 1999
Page 193
Executive's Employment Agreement
This Executive's Employment Agreement (the "Agreement") is entered into by
and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual residing in the State of Florida ("▇▇.
▇▇▇▇"); ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("WRI"; WRI and ▇▇. ▇▇▇▇ being
sometimes hereinafter collectively referred to as the "Parties" or generically
as a "Party".
Preamble:
WHEREAS, WRI's board of directors is of the opinion that in conjunction
with effectuation of WRI's future plans it must memorialize, confirm and assure
itself of the continuing services of WRI's founder, who currently serves as its
secretary, general counsel and director, on a long term basis; and
WHEREAS, ▇▇. ▇▇▇▇ is thoroughly knowledgeable with all aspects of WRI's
operations and plans; and
WHEREAS, ▇▇. ▇▇▇▇ is agreeable to serving as WRI's Secretary and General
Counsel on the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
Witnesseth:
Article One
Term, Renewals, Earlier Termination
1.1 Term.
Subject to the provisions set forth herein, the term of ▇▇. ▇▇▇▇'▇
employment hereunder shall be deemed to commence on the date of this Agreement's
execution by all of the Parties and shall continue until December 31, 2004.
1.2 Renewals.
This Agreement shall be renewed automatically, after expiration of the
original term, on a continuing annual basis, unless the Party wishing not to
renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
1.3 Earlier Termination.
WRI shall each have the right to terminate this Agreement prior to the
expiration of its Term, as it applies to them (without affecting the Agreement
as it applies to the other, except in conjunction with the compensation aspects
thereof), or of any renewals thereof, subject to the provisions of Section 1.4,
for the following reasons:
Page 194
(a) For Cause:
(1) WRI may terminate the ▇▇. ▇▇▇▇'▇ employment under this Agreement at
any time for cause.
(2) Such termination shall be evidenced by written notice thereof to ▇▇.
▇▇▇▇, which notice shall specify the cause for termination.
(3) For purposes hereof, the term "cause" shall mean:
(a) The inability of ▇▇. ▇▇▇▇, through sickness or other incapacity,
to discharge his duties under this Agreement for ninety or more
consecutive days or for a total of 120 or more days in a period
of twelve consecutive months;
(b) The refusal of ▇▇. ▇▇▇▇ to follow the directions of WRI's board
of directors;
(c) Dishonesty; theft; or conviction of a crime involving moral
turpitude;
(d) Material default in the performance by ▇▇. ▇▇▇▇ of his
obligations, services or duties required under this Agreement
(other than for illness or incapacity) or materially breach of
any provision of this Agreement, which default or breach has
continued for twenty days after written notice of such default or
breach and such material default or breach has resulted in
material damage to WRI.
(4) In the event of a dispute concerning termination due to breach or
default, ▇▇. ▇▇▇▇'▇ compensation shall be continued until resolution
of such dispute by a tribunal of competent jurisdiction, it being
understood that ▇▇. ▇▇▇▇ must repay any amounts so paid upon final
determination that he was not entitled to such compensation.
(b) Discontinuance of Business:
In the event that WRI discontinues operating its business, this Agreement
shall terminate as of the last day of the month on which it ceases operation
with the same force and effect as if such last day of the month were originally
set as the termination date hereof; provided, however, that a reorganization of
WRI shall not be deemed a termination of its business.
(c) Death:
This Agreement shall terminate immediately on the death of ▇▇. ▇▇▇▇;
however, all accrued compensation at such time shall be promptly paid to ▇▇.
▇▇▇▇'▇ estate.
1.4 Final Settlement.
Upon termination of this Agreement and payment to ▇▇. ▇▇▇▇ of all amounts
due him hereunder, ▇▇. ▇▇▇▇ or his representative shall execute and deliver to
the terminating entity on a form prepared by WRI, a receipt for such sums and a
release of all claims, except such claims as may have been submitted pursuant to
the terms of this Agreement and which remain unpaid, and, shall forthwith tender
to WRI all records, manuals and written procedures, as may be desired by it for
the continued conduct of its business.
Page 195
Article Two
Scope of Employment
2.1 Retention.
WRI hereby hires ▇▇. ▇▇▇▇ and ▇▇. ▇▇▇▇ hereby accepts such employment, in
accordance with the terms, provisions and conditions of this Agreement.
2.2 General Description of Duties.
(a) ▇▇. ▇▇▇▇ shall be employed as the Secretary and General Counsel of WRI
and perform the duties generally associated with the position of
Secretary and General Counsel thereof.
(b) Without limiting the generality of the foregoing, ▇▇. ▇▇▇▇ shall
maintain all of WRI's corporate records and shall be the Chief Legal
Officer and handle all court and regulatory actions, cases,
appearances and all other legal matters; and, ▇▇. ▇▇▇▇ shall
coordinate all such functions with WRI's stockholder as required for
preparation of reports to regulatory authorities including without
limitation the United States Securities and Exchange Commission.
(c) ▇▇. ▇▇▇▇ covenants to perform in good faith his employment duties,
devoting substantially all of his business time, energies and
abilities to the proper and efficient management of the business of
WRI, and for its benefit.
2.3 Status.
(a) Throughout the term of this Agreement, ▇▇. ▇▇▇▇ shall serve as a
member of the board of directors of WRI and as its Secretary and
General Counsel.
(b) In the event that he is not elected to such positions, then, at the
option of ▇▇. ▇▇▇▇, this Agreement may be deemed terminated effective
as of the earliest time that it can be reasonably determined that such
election will not take place, provided that written notice of such
election is provided to WRI within 30 days after it failed to elect
▇▇. ▇▇▇▇ to the required office.
2.4 Exclusivity.
▇▇. ▇▇▇▇ shall, unless specifically otherwise authorized by WRI's board of
directors, on a case by case basis, devote his business time exclusively to the
affairs of WRI.
Article Three
Compensation
3.1 Compensation.
As consideration for ▇▇. ▇▇▇▇'▇ services to WRI ▇▇. ▇▇▇▇ shall be entitled
to a salary in an aggregate gross sum equal to $800 per week (the "Base
Salary").
Page 196
3.2 Benefits.
During the term of this Agreement, ▇▇. ▇▇▇▇ shall also be entitled to the
following benefits:
(1) Two weeks paid vacation per year during the first three years of this
Agreement and three weeks per year thereafter.
(2) During the period of his employment, ▇▇. ▇▇▇▇ shall be reimbursed for
reasonable traveling, telephone and other direct business expenses
required in connection with the performance of his duties hereunder,
subject to verification required by WRI for audit purposes, for tax
deduction purposes and in order to assure compliance with applicable
laws and regulations.
(3) ▇▇. ▇▇▇▇ shall be entitled to receive all benefits of employment
generally available to all of WRI's employees.
3.3 Indemnification.
WRI will defend, indemnify and hold ▇▇. ▇▇▇▇ harmless from all liabilities,
suits, judgments, fines, penalties or disabilities, including expenses
associated directly, therewith (e.g. legal fees, court costs, investigative
costs, witness fees, etc.) resulting from any reasonable actions taken by him in
good faith on behalf of WRI, its affiliates or for other persons or entities at
the request of the board of directors of WRI, to the fullest extent legally
permitted, and in conjunction therewith, shall assure that all required
expenditures are made in a manner making it unnecessary for ▇▇. ▇▇▇▇ to incur
any out of pocket expenses; provided, however, that ▇▇. ▇▇▇▇ permits the
majority stockholders of WRI to select and supervise all personnel involved in
such defense and that ▇▇. ▇▇▇▇ waive any conflicts of interest that such
personnel may have as a result of also representing WRI, its stockholders or
other personnel and agrees to hold them harmless from any matters involving such
representation, except such as involve fraud or bad faith.
Article Four
Special Covenants
4.1 Confidentiality.
(a) ▇▇. ▇▇▇▇ acknowledges that, in and as a result of his employment
hereunder, he will be developing for WRI, making use of, acquiring
and/or adding to, confidential information of special and unique
nature and value relating to such matters as WRI's trade secrets,
systems, procedures, manuals, confidential reports, personnel
resources, strategic and tactical plans, advisors, clients, investors
and funders; consequently, as material inducement to the entry into
this Agreement by WRI, ▇▇. ▇▇▇▇ hereby covenants and agrees that he
shall not, at anytime during or following the terms of his employment
hereunder, directly or indirectly, personally use, divulge or
disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to him as a result
of his employment by WRI, or WRI's affiliates.
Page 197
(b) In the event of a breach or threatened breach by ▇▇. ▇▇▇▇ of any of
the provisions of this Section 4.1, WRI, in addition to and not in
limitation of any other rights, remedies or damages available to WRI,
whether at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach by ▇▇.
▇▇▇▇, or by ▇▇. ▇▇▇▇'▇ partners, agents, representatives, servants,
employers, employees, affiliates and/or any and all persons directly
or indirectly acting for or with him.
4.2 Special Remedies.
In view of the irreparable harm and damage which would undoubtedly occur to
WRI as a result of a breach by ▇▇. ▇▇▇▇ of the covenants or agreements contained
in this Article Four, and in view of the lack of an adequate remedy at law to
protect WRI's interests, ▇▇. ▇▇▇▇ hereby covenants and agrees that WRI shall
have the following additional rights and remedies in the event of a breach
hereof:
(a) ▇▇. ▇▇▇▇ hereby consents to the issuance of a permanent injunction
enjoining him from any violations of the covenants set forth in
Section 4.1 hereof; and
(b) Because it is impossible to ascertain or estimate the entire or exact
cost, damage or injury which WRI may sustain prior to the effective
enforcement of such injunction, ▇▇. ▇▇▇▇ hereby covenants and agrees
to pay over to WRI, in the event he violates the covenants and
agreements contained in Section 4.2 hereof, the greater of:
(i) Any payment or compensation of any kind received by him because
of such violation before the issuance of such injunction, or
(ii) The sum of One Thousand ($1,000.00) Dollars per violation, which
sum shall be liquidated damages, and not a penalty, for the
injuries suffered by WRI as a result of such violation, the
Parties hereto agreeing that such liquidated damages are not
intended as the exclusive remedy available to WRI for any breach
of the covenants and agreements contained in this Article Four,
prior to the issuance of such injunction, the Parties recognizing
that the only adequate remedy to protect WRI from the injury
caused by such breaches would be injunctive relief.
4.3 Cumulative Remedies.
▇▇. ▇▇▇▇ hereby irrevocably agrees that the remedies described in Section
4.3 hereof shall be in addition to, and not in limitation of, any of the rights
or remedies to which WRI is or may be entitled to, whether at law or in equity,
under or pursuant to this Agreement.
Page 198
4.4 Acknowledgment of Reasonableness.
▇▇. ▇▇▇▇ hereby represents, warrants and acknowledges that he has carefully
read and considered the provisions of this Article Four and, having done so,
agrees that the restrictions set forth herein are fair and reasonable and are
reasonably required for the protection of the interests of WRI, its officers,
directors and other employees; consequently, in the event that any of the
above-described restrictions shall be held unenforceable by any court of
competent jurisdiction, ▇▇. ▇▇▇▇ hereby covenants, agrees and directs such court
to substitute a reasonable judicially enforceable limitation in place of any
limitation deemed unenforceable and, ▇▇. ▇▇▇▇ hereby covenants and agrees that
if so modified, the covenants contained in this Article Four shall be as fully
enforceable as if they had been set forth herein directly by the Parties. In
determining the nature of this limitation, ▇▇. ▇▇▇▇ hereby acknowledges,
covenants and agrees that it is the intent of the Parties that a court
adjudicating a dispute arising hereunder recognize that the Parties desire that
this covenant not to compete be imposed and maintained to the greatest extent
possible.
4.5 Unauthorized Acts.
▇▇. ▇▇▇▇ hereby covenants and agrees that he will not do any act or incur
any obligation on behalf of WRI of any kind whatsoever, except as authorized by
its board of directors or by its stockholders pursuant to duly adopted
stockholder action.
Article Five
Miscellaneous
5.1 Notices.
(a)(1) All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been
duly given on the first business day after mailing by registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
To ▇▇. ▇▇▇▇:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ #▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇;
e-mail ▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
To WRI:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇;
e-mail ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Page 199
(2) In each case, copies of notices will also be provided to:
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; and, e-mail
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Jordan, President; and
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; and
e-mail ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary;
(3) Copies of notices will also be provided to 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)(1) The Parties acknowledge that The Yankee Companies, Inc., a Florida
corporation ("Yankees") has acted as scrivener for the Parties in this
transaction and 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 on their behalf.
5.2 Amendment.
(1) No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by
the Party against which the enforcement of said modification, waiver,
amendment, discharge or change is sought.
(2) This Agreement may not be modified without the consent of a majority
in interest of AmeriNet's stockholders.
5.3 Merger.
(a) This instrument 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.
5.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
Page 200
5.5 Severability.
If any provision or any portion of any provision of this Agreement, 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 effected thereby.
5.6 Governing Law and Venue.
This Agreement shall be construed in accordance with the laws of the State
of Florida but any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in Broward County, Florida.
5.7 Litigation.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, 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 litigation is 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 six alternatives to be provided, two by WRI's majority
stockholder, two by WRI and two by ▇▇. ▇▇▇▇.
(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 six
alternatives to be provided,, two by WRI's majority stockholder, two
by WRI and two by ▇▇. ▇▇▇▇.
(3)(A) Expenses of mediation shall be borne by WRI, 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.
Page 201
5.8 Benefit of Agreement.
(1) This Agreement may not be assigned by ▇▇. ▇▇▇▇ without the prior
written consent of WRI.
(2) Subject to the restrictions on transferability and assignment
contained herein, the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, their
successors, assigns, personal representative, estate, heirs and
legatees.
5.9 Captions.
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.
5.10 Number and Gender.
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.
5.11 Further Assurances.
The Parties hereby agree to do, execute, acknowledge and deliver or cause
to be done, executed or acknowledged or delivered and to perform all such acts
and deliver all such deeds, assignments, transfers, conveyances, powers of
attorney, assurances, recipes, records and other documents, as may, from time to
time, be required herein to effect the intent and purposes of this Agreement.
5.12 Status.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, agency, or lessor-lessee relationship; but, rather,
the relationship established hereby is that of employer-employee in WRI.
5.13 Counterparts.
(a) This Agreement may be executed in any number of counterparts.
(b) 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 Securities
and Exchange Commission.
5.14 License.
(a) This Agreement is the property of Yankees and the use hereof by the
Parties is authorized hereby solely for purposes of this transaction.
(b) The use of this form of agreement or of any derivation thereof without
Yankees' prior written permission is prohibited.
Page 202
(c) The interpretation of this Agreement shall not be directly or
indirectly affected in any manner as a result of its authorship.
In Witness Whereof, the Parties have executed this Agreement, effective as
of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
Secretary and General Counsel
--------------------------
-------------------------- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Dated: November ___, 1999
Wriwebs.coms, Inc.
a Florida corporation.
--------------------------
__________________________ By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(CORPORATE SEAL)
Attest: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary & General Counsel
Dated: November ___, 1999
Page 203
Exhibit 6.2(D) American Internet & AmeriNet Legal Opinion
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
A publicly held Delaware corporation
November 11, 1999
To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇.▇▇▇, Inc. American Internet Technical Center, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re:▇▇▇▇▇▇▇.▇▇▇, Inc./American Internet Technical Center, Inc.
Merger Closing
Ladies and Gentlemen:
We have acted as counsel to AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a Florida corporation
("AmeriNet") ") in connection with the Agreement of Merger & Plan of
Reorganization ( the "Merger Agreement"), between AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a
publicly held Delaware corporation with a class of securities registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended ("AmeriNet" and
the "Exchange Act," respectively), American Internet Technical Center, Inc., a
Florida corporation and wholly-owned subsidiary of AmeriNet ("American
Internet") and ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation ("WRI;" AmeriNet,
American Internet and WRI being sometimes hereinafter collectively referred to
as the "Parties" or generically as a "Party"). We are providing this opinion to
you pursuant to Section 6.2(D) of the Merger Agreement. Capitalized terms used
but not otherwise defined herein shall have the meanings given them in the
Merger Agreement.
A. Basis of Opinion
In rendering the following options, we have reviewed copies of each of the
following documents:
1. The Merger Agreement, including the disclosure schedules and exhibits
thereto;
2. The Certificate of Incorporation, as amended, and the Bylaws of
American Internet;
3. Certificates of Good Standing for American Internet issued by the
Secretary of State of the State of Florida;
Page 204
4. Minutes of proceedings of the Boards of Directors of the Company with
respect to the Merger Agreement duly adopted at a meeting of the Board
of Directors of American Internet held on November 11, 1999;
5. Certificate to Counsel dated as the date hereof;
6. Officers' Certificate delivered to American Internet dated as of the
date hereof;
7. Minutes of proceedings of the stockholders of American Internet
regarding approval of the Merger Agreement at the Special Meeting of
the Stockholders of the Company held on November 11, 1999;
8. The Certificate of Merger dated November 12, 1999, between American
Internet and WRI.
9. The Articles of Merger dated November 12, 1999 between American
Internet and WRI;
10. The Affiliate Agreement dated November 11, 1999 between AmeriNet,
American Internet, and WRI.
11. The Minutes of the Proceedings of the Board of Directors of WRI dated
November 11, 1999, adopting and ratifying the Affiliate Agreement
12. Such other agreements and documents and such matters of law as we have
considered necessary or appropriate for the expression of the opinions
contained herein.
The Merger Agreement and the other documents and information referred to in
this Section A are collectively referred to as the "Transaction Documents."
B. Assumptions
This opinion has been prepared and is to be construed in accordance with
the Report on Standards for Florida Opinions dated April 8, 1991, as amended and
supplemented, issued by the Business Law Section of the Florida Bar, 46 The
Business Lawyer, No. 4 (the "Report"). The Report is incorporated by reference
into this opinion letter.
In rendering the following opinions, we have made no assumptions other than
those set forth in the Report, the assumption that American Internet complies
with all laws and regulations relating to multi-level marketing, or those in the
opinions below.
C. Opinions
Based solely upon our examination and consideration of the foregoing
Transaction Documents, and in reliance thereon, and subject to the comments,
assumptions, exceptions, qualifications and limitations set forth in the Report,
we are of the opinion that:
Page 205
1. American Internet is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Florida. The Company is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where
such qualification is required, and where, to our knowledge, the
lack of such qualification would not have a material adverse
effect on the financial condition of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). We
do not pass upon qualification in any other state where the
Agreement is void or voidable due to lack of qualification.
2. American Internet has the corporate power and authority to carry
on the business in which it is engaged and to own and use the
properties owned and used by it.
3. As of the date hereof, American Internet has no subsidiaries.
4. The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock of which there are outstanding
8,354,126 shares of Common Stock and which are Reserved
4,368,980. There are in addition authorized 5,000,000 shares of
preferred stock, none of which has been issued.
5. All of the issued and outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid, and
nonassessable. Except as set forth in the Merger Agreement, to
our knowledge there are no outstanding Options, Warrants, or
other outstanding or authorized purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or
commitments that could require the American Internet to issue,
sell, or otherwise cause to become outstanding any shares of its
capital stock. To our knowledge, there are no outstanding or
authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the American
Internet.
6. The Merger Agreement and the transactions contemplated thereby
have been duly authorized by all necessary corporate action on
the part of the American Internet. The American Internet has the
full power and authority, corporate and otherwise, to execute and
deliver the Merger Agreement and to assume and perform all of its
obligations thereunder. The Merger Agreement has been duly
executed and delivered by the American Internet and constitutes a
legal, valid, and binding obligation of the American Internet,
enforceable against the American Internet in accordance with its
terms. The Merger Agreement and the transactions contemplated
thereby were approved by the American Internet's stockholders at
a duly called and held meeting of the American Internet's
stockholders. Assuming that the necessary filings have been made
under the Florida Business Corporation Act, the Merger referred
to in the Merger Agreement will be consummated and become
effective.
Page 206
7. Neither the execution and the delivery of the Merger Agreement,
nor the consummation of the transactions contemplated thereby,
will (i) to our knowledge, violate any material statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which the AmeriNet is subject (ii) violate
any provision of the Certificate of Incorporation or Bylaws of
the AmeriNet or (iii) to our knowledge, conflict with, result in
a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other
arrangement to which the AmeriNet is a party or by which it is
bound or to which any of its assets is subject (or result in the
imposition of any security interest upon any of the assets),
except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, or failure
to give notice would not have a Material Adverse Effect. Other
than in connection with the provisions of the Florida Business
Corporation Act, or as otherwise contemplated by the Merger
Agreement, AmeriNet is not required to give any notice to, make
any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for
the AmeriNet to consummate the transactions contemplated by the
Merger Agreement.
8. To the best of our knowledge, no judgment is presently filed of
record against the AmeriNet and there is no litigation,
arbitration, investigation, inquiry or other proceedings by or
before any federal, state, county or other local governmental
agency or authority, or by any other person or entity pending, or
that would materially adversely affect AmeriNet's ability to
perform its obligations as set forth in the Transaction Documents
and we have no knowledge of any material basis for any such
litigation, proceeding, arbitration, claim, investigation,
inquiry or proceeding that would materially adversely affect the
AmeriNet not referred to in the Litigation Section for the Form
10-KSB for calender year 1999.
9. To the best of our knowledge after due inquiry, no
representation, warranty or statement by the American Internet in
the Transaction Documents contains any untrue statement of a
material fact, or omits or will omit to state a fact necessary in
order to make such representations, warranties or statements not
materially misleading.
Without our prior written consent, this opinion letter may not be quoted in
whole or in part or otherwise referred to in any document or report and may not
be furnished to any person or entity including any governmental agency.
Very truly yours
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire
Secretary & General Counsel
Encl:
Copies: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Miles ▇▇▇▇▇▇
Page 207
American Internet Technical Center, Inc
------
a Florida corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Web site and e-mail ▇▇▇.▇▇▇▇.▇▇▇
To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇.▇▇▇, Inc. American Internet Technical Center, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re:▇▇▇▇▇▇▇.▇▇▇, Inc./American Internet Technical Center, Inc.
Merger Closing
Ladies and Gentlemen:
We have acted as counsel to American Internet Technical Center, Inc., a
Florida corporation ("American Internet") in connection with the Agreement of
Merger & Plan of Reorganization ( the "Merger Agreement"), between AmeriNet
▇▇▇▇▇.▇▇▇, Inc., a publicly held Delaware corporation with a class of securities
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended ("AmeriNet" and the "Exchange Act," respectively), American Internet
Technical Center, Inc., a Florida corporation and wholly-owned subsidiary of
AmeriNet ("American Internet") and ▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation
("WRI;" AmeriNet, American Internet and WRI being sometimes hereinafter
collectively referred to as the "Parties" or generically as a "Party"). We are
providing this opinion to you pursuant to Section 6.2(D) of the Merger
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings given them in the Merger Agreement.
A. Basis of Opinion
In rendering the following options, we have reviewed copies of each of the
following documents:
1. The Merger Agreement, including the disclosure schedules and exhibits
thereto;
2. The Certificate of Incorporation, as amended, and the Bylaws of
American Internet;
Page 208
3. Certificates of Good Standing for American Internet issued by the
Secretary of State of the State of Florida;
4. Minutes of proceedings of the Boards of Directors of the Company with
respect to the Merger Agreement duly adopted at a meeting of the Board
of Directors of American Internet held on November 11, 1999;
5. Certificate to Counsel dated as the date hereof;
6. Officers' Certificate delivered to American Internet dated as of the
date hereof;
7. Minutes of proceedings of the stockholders of American Internet
regarding approval of the Merger Agreement at the Special Meeting of
the Stockholders of the Company held on November 11, 1999;
8. The Certificate of Merger dated November 12, 1999, between American
Internet and WRI.
9. The Articles of Merger dated November 12, 1999 between American
Internet and WRI;
10. The Affiliate Agreement dated November 11, 1999 between Amerinet,
American Internet, and WRI.
11. The Minutes of the Proceedings of the Board of Directors of WRI dated
November 11, 1999, adopting and ratifying the Affiliate Agreement
12. Such other agreements and documents and such matters of law as we have
considered necessary or appropriate for the expression of the opinions
contained herein.
The Merger Agreement and the other documents and information referred to in
this Section A are collectively referred to as the "Transaction Documents."
B. Assumptions
This opinion has been prepared and is to be construed in accordance with
the Report on Standards for Florida Opinions dated April 8, 1991, as amended and
supplemented, issued by the Business Law Section of the Florida Bar, 46 The
Business Lawyer, No. 4 (the "Report"). The Report is incorporated by reference
into this opinion letter.
In rendering the following opinions, we have made no assumptions other than
those set forth in the Report, the assumption that American Internet complies
with all laws and regulations relating to multi-level marketing, or those in the
opinions below.
C. Opinions
Based solely upon our examination and consideration of the foregoing
Transaction Documents, and in reliance thereon, and subject to the comments,
assumptions, exceptions, qualifications and limitations set forth in the Report,
we are of the opinion that:
Page 209
1. American Internet is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Florida. The Company is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where
such qualification is required, and where, to our knowledge, the
lack of such qualification would not have a material adverse
effect on the financial condition of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). We
do not pass upon qualification in any other state where the
Agreement is void or voidable due to lack of qualification.
2. American Internet has the corporate power and authority to carry
on the business in which it is engaged and to own and use the
properties owned and used by it.
3. As of the date hereof, American Internet has no subsidiaries.
4. The authorized capital stock of the Company consists of 7,500
shares of Common Stock of which there are outstanding 7,500
shares of Common Stock
5. All of the issued and outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid, and
nonassessable. Except as set forth in the Merger Agreement, to
our knowledge there are no outstanding Options, Warrants, or
other outstanding or authorized purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or
commitments that could require the American Internet to issue,
sell, or otherwise cause to become outstanding any shares of its
capital stock. To our knowledge, there are no outstanding or
authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the American
Internet.
6. The Merger Agreement and the transactions contemplated thereby
have been duly authorized by all necessary corporate action on
the part of the American Internet. The American Internet has the
full power and authority, corporate and otherwise, to execute and
deliver the Merger Agreement and to assume and perform all of its
obligations thereunder. The Merger Agreement has been duly
executed and delivered by the American Internet and constitutes a
legal, valid, and binding obligation of the American Internet,
enforceable against the American Internet in accordance with its
terms. The Merger Agreement and the transactions contemplated
thereby were approved by the American Internet's stockholders at
a duly called and held meeting of the American Internet's
stockholders. Assuming that the necessary filings have been made
under the Florida Business Corporation Act, the Merger referred
to in the Merger Agreement will be consummated and become
effective.
Page 210
7. Neither the execution and the delivery of the Merger Agreement,
nor the consummation of the transactions contemplated thereby,
will (i) to our knowledge, violate any material statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which the American Internet is subject (ii)
violate any provision of the Certificate of Incorporation or
Bylaws of the American Internet or (iii) to our knowledge,
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument or
other arrangement to which the American Internet is a party or by
which it is bound or to which any of its assets is subject (or
result in the imposition of any security interest upon any of the
assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, or failure
to give notice would not have a Material Adverse Effect. Other
than in connection with the provisions of the Florida Business
Corporation Act, or as otherwise contemplated by the Merger
Agreement, the American Internet is not required to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the American Internet to consummate the transactions
contemplated by the Merger Agreement.
8. To the best of our knowledge, no judgment is presently filed of
record against the American Internet and there is no litigation,
arbitration, investigation, inquiry or other proceedings by or
before any federal, state, county or other local governmental
agency or authority, or by any other person or entity pending, or
that would materially adversely affect American Internet's
ability to perform its obligations as set forth in the
Transaction Documents and we have no knowledge of any material
basis for any such litigation, proceeding, arbitration, claim,
investigation, inquiry or proceeding that would materially
adversely affect the American Internet; The following item of
litigation is pending and outstanding but is not deemed to
materially adversely affect American Internet's ability to
perform its obligations as set forth in the Transaction
Documents. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ v. American Internet Technical Center,
Inc., Case No. 99-17293-RD, in the County Court of Palm Beach
County Florida is a suit seeking the return of $942. A Complaint
was served on or about October 20, 1999, and the parties have
agreed to settle the matter before trial in the amount of $555.
The matter is expected to be dismissed with prejudice upon
American Internet's tendering the settlement amount.
9. To the best of our knowledge after due inquiry, no
representation, warranty or statement by the American Internet in
the Transaction Documents contains any untrue statement of a
material fact, or omits or will omit to state a fact necessary in
order to make such representations, warranties or statements not
materially misleading.
Without our prior written consent, this opinion letter may not be quoted in
whole or in part or otherwise referred to in any document or report and may not
be furnished to any person or entity including any governmental agency.
Very truly yours
American Internet Technical Center, Inc.
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire
General Counsel
Page 211
Exhibit 6.3(E) WRI Legal Opinion
LEVY & SHAMAN, P.A.
Attorneys At Law
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(954) 522-1060
November 11, 1999
To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇.▇▇▇, Inc. American Internet Technical Center, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re:▇▇▇▇▇▇▇.▇▇▇, INC./American Internet Technical Center, Inc.
Merger Closing
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇▇.▇▇▇, INC, a Florida corporation ("WRI")
in connection with the Agreement of Merger & Plan of Reorganization ( the
"Merger Agreement"), between AmeriNet ▇▇▇▇▇.▇▇▇, Inc., a publicly held Delaware
corporation with a class of securities registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended ("AmeriNet" and the "Exchange Act,"
respectively), American Internet Technical Center, Inc., a Florida corporation
and wholly-owned subsidiary of AmeriNet ("American Internet") and ▇▇▇▇▇▇▇.▇▇▇,
INC., a Florida corporation ("WRI;" AmeriNet, American Internet and WRI being
sometimes hereinafter collectively referred to as the "Parties" or generically
as a "Party"). We are providing this opinion to you pursuant to Section 6.2(D)
of the Merger Agreement. Capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Merger Agreement.
A. Basis of Opinion
In rendering the following options, we have reviewed copies of each of the
following documents:
1. The Merger Agreement, including the disclosure schedules and exhibits
thereto;
2. The Certificate of Incorporation, as amended, and the Bylaws of WRI;
Page 212
3. Certificates of Good Standing for WRI issued by the Secretary of State
of the State of Florida;
4. Minutes of proceedings of the Boards of Directors of the Company with
respect to the Merger Agreement duly adopted and ratified at a meeting
of the Board of Directors of WRI held on November 11, 1999;
5. Certificate to Counsel dated as the date hereof;
6. Officers' Certificate delivered to WRI dated as of the date hereof;
7. Minutes of proceedings of the stockholders of WRI regarding approval
of the Merger Agreement at the Special Meeting of the Stockholders of
the Company held on November 11, 1999;
8. The Certificate of Merger dated November 11, 1999, between American
Internet and WRI.
9. The Articles of Merger dated November 11, 1999 between American
Internet and WRI;
10. The Affiliate Agreement dated November 11, 1999 between Amerinet,
American Internet, and WRI.
11. The Minutes of the Proceedings of the Board of Directors of WRI dated
November 11, 1999, adopting and ratifying the Affiliate Agreement.
12. Such other agreements and documents and such matters of law as we have
considered necessary or appropriate for the expression of the opinions
contained herein.
The Merger Agreement and the other documents and information referred to in
this Section A are collectively referred to as the "Transaction Documents."
B. Assumptions
This opinion has been prepared and is to be construed in accordance with
the Report on Standards for Florida Opinions dated April 8, 1991, as amended and
supplemented, issued by the Business Law Section of the Florida Bar, 46 The
Business Lawyer, No. 4 (the "Report"). The Report is incorporated by reference
into this opinion letter.
In rendering the following opinions, we have made no assumptions other than
those set forth in the Report, the assumption that American Internet complies
with all laws and regulations relating to multi-level marketing, or those in the
opinions below.
C. Opinions
Based solely upon our examination and consideration of the foregoing
Transaction Documents, and in reliance thereon, and subject to the comments,
assumptions, exceptions, qualifications and limitations set forth in the Report,
we are of the opinion that:
Page 213
1. WRI is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Florida. The Company
is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is
required, and where, to our knowledge, the lack of such
qualification would not have a material adverse effect on the
financial condition of the Company and its subsidiaries taken as
a whole (a "Material Adverse Effect"). We do not pass upon
qualification in any other state where the Agreement is void or
voidable due to lack of qualification.
2. WRI has the corporate power and authority to carry on the
business in which it is engaged and to own and use the properties
owned and used by it.
3. As of the date hereof, WRI has no subsidiaries.
4. The authorized capital stock of the Company consists of 7,500
shares of Common Stock of which there are outstanding 7,500
shares of Common Stock
5. All of the issued and outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid, and
nonassessable. Except as set forth in the Merger Agreement, to
our knowledge there are no outstanding Options, Warrants, or
other outstanding or authorized purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or
commitments that could require WRI to issue, sell, or otherwise
cause to become outstanding any shares of its capital stock. To
our knowledge, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar
rights with respect to the WRI.
6. The Merger Agreement and the transactions contemplated thereby
have been duly authorized by all necessary corporate action on
the part of WRI. WRI has the full power and authority, corporate
and otherwise, to execute and deliver the Merger Agreement and to
assume and perform all of its obligations thereunder. The Merger
Agreement has been duly executed and delivered by WRI and
constitutes a legal, valid, and binding obligation of WRI,
enforceable against WRI in accordance with its terms. The Merger
Agreement and the transactions contemplated thereby were approved
by WRI's stockholders at a duly called and held meeting of WRI's
stockholders. Assuming that the necessary filings have been made
under the Florida Business Corporation Act, the Merger referred
to in the Merger Agreement will be consummated and become
effective.
Page 214
7. Neither the execution and the delivery of the Merger Agreement,
nor the consummation of the transactions contemplated thereby,
will (i) to our knowledge, violate any material statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which WRI is subject (ii) violate any
provision of the Certificate of Incorporation or Bylaws of WRI or
(iii) to our knowledge, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract,
lease, license, instrument or other arrangement to which WRI is a
party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any security interest
upon any of the assets), except where the violation, conflict,
breach, default, acceleration, termination, modification,
cancellation, or failure to give notice would not have a Material
Adverse Effect. Other than in connection with the provisions of
the Florida Business Corporation Act, or as otherwise
contemplated by the Merger Agreement, WRI is not required to give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the American Internet to consummate the transactions
contemplated by the Merger Agreement.
8. To the best of our knowledge, no judgment is presently filed of
record against WRI and there is no litigation, arbitration,
investigation, inquiry or other proceedings by or before any
federal, state, county or other local governmental agency or
authority, or by any other person or entity pending, or that
would materially adversely affect WRI's ability to perform its
obligations as set forth in the Transaction Documents and we have
no knowledge of any material basis for any such litigation,
proceeding, arbitration, claim, investigation, inquiry or
proceeding that would materially adversely affect WRI, other than
that which has been set forth in the Corporate questionaire; The
following item of litigation is pending and outstanding but is
not deemed to materially adversely affect American Internet's
ability to perform its obligations as set forth in the
Transaction Documents. ▇▇▇▇▇ v. Minolta, et al, Case No. 99- in
the is a suit seeking an injunction against the unsolicited
faxing of business advertising materials, and damages. A
Complaint was served on or about June 1, 1999, and the parties
have agreed to settle the matter before trial in the amount of
$15,000.00. The matter is expected to be dismissed with prejudice
upon WRI's tendering the settlement amount.
9. To the best of our knowledge after due inquiry, no
representation, warranty or statement by WRI in the Transaction
Documents contains any untrue statement of a material fact, or
omits or will omit to state a fact necessary in order to make
such representations, warranties or statements not materially
misleading.
Without our prior written consent, this opinion letter may not be quoted in
whole or in part or otherwise referred to in any document or report and may not
be furnished to any person or entity including any governmental agency.
Very truly yours
▇▇▇▇▇▇▇.▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
Secretary & General Counsel
Encl.:
Copies: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Miles ▇▇▇▇▇▇
Page 215
Exhibit 7.2 (A)Escrow Data
Name WRI Stock AmeriNet
Surrendered Stock to be Issued
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,003.80 500,380
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 100 10,000
▇▇▇▇▇▇▇ ▇▇▇▇ 100 10,000
Source Marketing, Inc. 106.20 10,620
Total 5,303.80 531,000
Page 216
