AmeriNet Group.com, Inc.
CERTIFICATE OF DESIGNATION
PREFERENCES & RIGHTS OF CLASS A PREFERRED STOCK
AmeriNet Group.com, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), does
by its president and its secretary and under its corporate seal hereby certify
as follows:
FIRST: That by the certificate of incorporation duly filed in the
State of Delaware, as currently amended, the Corporation is
"authorized to issue 5,000,000 shares of preferred stock,
$0.01 par value, the attributes of which are to be determined
by resolution of the Corporation's Board of Directors from
time to time, prior to issuance, in conformity with the
requirements of Section 151 of the Delaware General
Corporation Law."
SECOND: That pursuant to the authority vested in the Board of
Directors by the certificate of incorporation, the board of
directors at a meeting duly convened an held on the 29th day
of June, 2000, adopted the following resolution:
RESOLVED, that the Board of Directors hereby creates and
designates the initial series of Preferred Stock, $0.01 par
value, of the Corporation, authorizes the issuance thereof,
and fixes the designation and amount thereof and the
preferences and relative, participating, optional and other
special rights of such shares, and the qualifications,
limitations or restrictions thereof as follows:
1.1 Designation and amount.
The shares of the initial class of Preferred Stock shall be designated
"Class A Preferred Stock, (hereinafter sometimes called "Preferred Stock"),
and the number of shares which may be issued shall be 500,000.
1.2 Dividends.
(A) The holders of shares of the Preferred Stock shall be entitled to
receive, out of the assets of the Corporation legally available
therefore, and as and when declared by the Board of Directors,
dividends of every kind declared and paid to holders of the
Corporation's Common Stock, at a rate per share twenty times that paid
per share of Common Stock.
(B) Each such dividend shall be paid to the holders of record of shares of
the Preferred Stock as they appear on the stock register of the
Corporation on the last day of the month next preceding the payment
date thereof.
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1.3 Conversion.
The holders of shares of the Preferred Stock shall have the right, at
their option, to convert all or any part of such shares into shares of
Common Stock of the Corporation at any time on and subject to the
following terms and conditions:
(A) The shares of Preferred Stock shall be convertible at the office
of transfer agent for the Preferred Stock (the "Transfer Agent"),
and at such other place or places, if any, as the Board of
Directors of the Corporation may designate, into fully paid and
non-assessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of Common Stock.
(B) The number of shares of Common Stock issuable upon conversion of
each share of the Preferred Stock shall be equal to the greater
of:
(1) Twenty shares of Common Stock (the "Set Conversion Rate");
or
(2) The number of shares of Common Stock obtained by dividing
the gross price at which the preferred shares were issued by
the Corporation (the "Issuance Price") by 80% of the closing
price for the Corporation's Common Stock, as reported on the
public stock market or securities exchange (in both cases,
registered as such by the United States Securities Exchange
Commission [the "Commission"]) having the highest average
trading volume in the Corporation's securities (for purposes
of illustration, the following, being acceptable: The New
York Stock Exchange the NASDAQ Stock Market, the American
Stock Exchange, the OTC Bulletin Board operated by the NASD,
the Electronic Pink Sheets operated by the National Daily
Quotation System, Inc.), on the day the notice of conversion
provided to the Corporation is executed and dated by the
holder with medallion signature guarantee (the "Market
Conversion Rate").
(C) The Set Conversion Rate shall be subject to adjustment from time
to time in certain instances as hereinafter provided.
(D) No payment or adjustment shall be made in respect of dividends on
the Common Stock or the Preferred Stock upon conversion of shares
of the Preferred Stock.
(E) No fractional shares of Common Stock will be issued, rather, one
fractional share per holder will be rounded up to a whole share.
(F) Before any holder of shares of the Preferred Stock shall be
entitled to convert the same into Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed
and dated to the Corporation with a medallion signature
guarantee, at the office of the Transfer Agent or at such other
place or places, if any, as the Board of Directors of the
Corporation has designated, and shall give written notice to the
Corporation at said office or place that he elects to convey the
same and shall state in writing therein the name or names (with
addresses) in which he wishes the certificate or certificates for
Common Stock to be issued.
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(G) The Corporation will, as soon as practicable thereafter, issue
and deliver at said office or place to such holder of shares of
the Preferred Stock, or to his nominee or nominees, certificates
for the number of full shares of Common Stock to which he shall
be entitled as aforesaid.
(H) Shares of the Preferred Stock shall be deemed to have been
converted as of the close of business on the date of the
medallion signature guarantee on the certificate surrendered for
conversion as provided above so long as it is received by the
Corporation or the Corporation's transfer agent no later than the
tenth business day thereafter, and the person or persons entitled
to receive the Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such
Common Stock as of the close of business on such date.
1.4 Adjustments
(A) The Set Conversion Rate in effect at any time shall be subject to
adjustment as follows:
(1) The Set Conversion Rate in effect at the time of the record or
effective date for the following listed events shall be
proportionately adjusted so that the holder of any share of the
Preferred Stock surrendered for conversation after such time shall be
entitled to receive the kind and amount of shares which he would have
owned or have been entitled to receive had such share of the Preferred
Stock been converted immediately prior to such time:
(a) If the Corporation declares a dividend on its Common Stock in
shares of its capital stock;
(b) If the Corporation subdivides its outstanding shares of Common
Stock;
(c) If the Corporation combines its outstanding shares of Common
Stock into a smaller number of shares; or
(d) If the Corporation issues by reclassification of its Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Corporation is the
continuing corporation) any shares of its capital stock.
(2) Such adjustment shall be made successively whenever any event listed
above shall occur.
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(3) In case the Corporation shall issue rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the closing price for
the Corporation's Common Stock, as reported on the public stock market
or securities exchange [as described in Section 1.3(B)(2)], if the
underlying shares of Common Stock are to be pre- registered with the
Commission (the "Current Market Price"), or 50% of the Current Market
Price if the underlying shares of Common Stock are to be issued
without registration pursuant to exemptions from applicable securities
laws restricting their transferability as provided in Commission Rule
144 (the "Current Private Placement Price"), in each case on the date
fixed for the determination of stockholders entitled to receive such
rights or warrants, the Set Conversion Rate shall be reduced by
multiplying the Set Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus
the number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock so
offered for subscription or purchaser would purchase at such Current
Market Price or Current Private Placement Price (as the case may be)
and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the
date fixed for such determination.
(4) In case the Corporation shall distribute to all holders of its Common
Stock (including any such distribution made in connection with a
consolidation or merger in which the Corporation is the continuing
corporation) evidences of its indebtedness or assets (excluding
dividends or other distributions paid out of earned surplus) or
subscription rights or warrants (excluding those referred to in
Section 1.4(A)(3) above), the Set Conversion Rate shall be adjusted so
that the same shall equal the price determined by multiplying the Set
Conversion Rate in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date
fixed for such determination less the then fair market value (as
determined by the Board of Directors of the Corporation, whose
determination shall be conclusive and described in a Board Resolution
of the Corporation filed with the Transfer Agent) of the portion of
the assets or evidences of indebtedness so distributed applicable to
one share of Common Stock and the denominator shall be such Current
Market Price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business of the day
following the date fixed for the determination of stockholders
entitled to receive such distribution.
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(5) All calculations under this Section 1.4 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be.
(6) In case of any consolidation or merger of the Corporation with or into
any other corporation (other than a consolidation or merger in which
the Corporation is the continuing corporation), or in case of any sale
or transfer of all or substantially all of the assets of the
Corporation, the holder of each share of the Preferred Stock shall
after such consolidation, merger, sale or transfer have the right to
convert such share of the Preferred Stock into the kind and amount of
shares of stock and other securities and property which such holder
would have been entitled to receive upon such consolidation, merger,
sale or transfer if he had held the Common Stock issuable upon the
conversion of such share of the Preferred Stock immediately prior to
such consolidation, merger, sale or transfer.
(A) In the event that at any time, as a result of an adjustment made
pursuant to this Section 1.4, the holder of any share of the
Preferred Stock surrendered for conversation shall become
entitled to receive any securities other than shares of Common
Stock, thereafter the amount of such other securities so
receivable upon conversion of any share of the Preferred Stock
shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock set forth in the foregoing
subsections of this Sections 1.3 and the provisions of this
Section 1.3 with respect to the Common Stock shall apply on like
terms to any such other securities.
(B) No adjustment in the Set Conversion Rate shall be required unless
such adjustment would require a change of at least 1% in such
price; provided, however, that any adjustments which by reason of
this Section 1.4(C) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(C) Whenever the Set Conversion Rate is adjustable as herein
provided:
(1) The Corporation shall promptly file with the Transfer Agent
for the Preferred Stock a certificate of the treasurer of
the Corporation setting forth the adjusted Set Conversion
Rate and showing in reasonably detail the facts upon which
such adjustment is based, including a statement of the
consideration received or to be received by the Corporation
for any shares of Common Stock issued or deemed to have been
issued; and
(2) A notice stating that the Set Conversion Rate has been
adjusted and setting forth the adjusted Set Conversion Rate
shall forthwith be required, and as soon as practicable
after it is required, such additional notice shall be deemed
to be required pursuant to this Section 1.4(D)(2) as of the
opening of business on the tenth day after such mailing and
shall set forth the Set Conversion Rate as adjusted at such
opening of business, and upon the mailing of such additional
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notice no other notice need be given of any adjustment in
the Set Conversion Rate occurring at or prior to such
opening of business and after the time that the next
preceding notice given by mailing became required.
(D) In each of the following instances the Corporation shall cause to
be filed with the Transfer Agent and shall cause to be mailed,
first class postage prepaid, to the holders of record of the
outstanding shares of Preferred Stock, at least 10 days prior to
the applicable record date hereinafter specified, a notice
stating the date on which a record is to be taken for the purpose
of such distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
to be entitled to such distribution or rights are to be
determined, or the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall
be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up:
(1) If the Corporation shall authorize the distribution to all
holders of its Common Stock of evidences of its indebtedness
or assets (other than dividends or other distributions paid
out of earned surplus); or
(2) If the Corporation shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or
purchase any shares of capital stock of any class or of any
other rights; or
(3) In the event of any reclassification of the Common Stock
(other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation or merger
to which the Corporation is a party and for which approval
of any stockholders of the Corporation is required, or of
the sale or transfer of all or substantially all of the
assets of the Corporation; or
(4) In the event of any reclassification of the voluntary or
involuntary dissolution, liquidation or winding up of the
Corporation.
1.5 Required Corporate Actions
(A) (1) The Corporation will at all times reserve, keep available and be
prepared to issue, free from any preemptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of
effecting conversion of the Preferred Stock, the full number of shares
of Common Stock then issuable upon the conversion of all outstanding
Preferred Stock.
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(2) The Corporation shall from time to time, in accordance with the laws
of the State of Delaware, endeavor to amend its Certificate of
Incorporation to increase the authorized amount of its Common Stock if
at any time the Authorized amount of its Common Stock remaining
unissued shall be not sufficient to permit the conversion of all
Preferred Stock.
(3) The Corporation shall, if any shares of Common Stock required to be
reserved for issuance upon conversion of Preferred Stock pursuant to
this section 1.3(F) required registration with or approval of any
governmental authority under any Federal or state law before such
shares may be issued upon such conversion, endeavor to cause such
shares to be so registered or approved as expeditiously as possib
(B) (1) The Corporation will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on
conversion of shares of the Preferred Stock pursuant hereto.
(2) The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue or
transfer and delivery of shares of Common Stock in a name other than
that in which the shares of the Preferred Stock so converted were
registered, and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the
Corporation that such tax has been paid.
(C) Whenever reference is made in Sections 1.3. 1.4 or 1.5 to the issuance or
sale of shares of Common Stock, the term "Common Stock" shall include any
stock of any class of the Corporation other than preferred stock of any
class with a fixed (absolutely or by reference to an adjustment formula)
limit on dividends and a fixed amount payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation.
1.6 Liquidation rights.
In the event of any liquidation or dissolution or winding up of the
Corporation, voluntary or involuntary, the holders of the Preferred Stock
shall be entitled to receive, subject to the rights of any other class of
stock which ranks senior to the Preferred Stock as to distribution of
assets on liquidation, but before any distribution is made on any class of
stock ranking junior to the Preferred Stock as to the payment of dividends
or the distribution of assets (including, without limitation, the
Corporation's Common Stock, a sum per share of Preferred Stock equal to the
Issuance Price per share.
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1.7 Voting Rights.
The Preferred Stock shall entitle its holders to twenty votes for every
share held on terms identical to those of holders of twenty shares of
Common Stock, or if there is more than one class or series of Common Stock
outstanding, equal to twenty votes by those of shares of Common Stock
having the greatest voting rights per share.
THIRD: That said resolution of the Corporation's board of directors,
and the creation and authorization of issuance thereby of said
series of 500,000 shares of convertible preferred stock and
determination thereby of the dividend rate, liquidation
preferences, voting rights and provisions in respect to
conversion or exchange of said stock, were duly made by the
Board of Directors pursuant to authority as aforesaid and in
accordance with Sections 103, 151 and 102(4) of the Delaware
General Corporation Law.
In Witness Whereof, the Corporation has made under its corporate seal and
the hands of its president and secretary, respectively, of said corporation, the
foregoing certificate, and the president and secretary have hereunto set their
hands and caused the corporate seal of the said corporation to be hereunto
affixed this 29th day of June, 2000.
AMERINET GROUP.COM, INC.
By: /s/ Lawrence R. Van Etten
Lawrence R. Van Etten
President
[Corporate Seal]
Attest: /s/ Vanessa H. Lindsey
Vanessa H. Lindsey
Secretary
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