I think he means Corey:
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ____________________________________ X
MADISON STOCK TRANSFER, INC.
Plaintiff,
-against – NETCO INVESTMENTS, INC., MARCO CHAVARRIA CV06-3926 (Wexler, J.)
Defendants.
____________________________________ X
DECLARATION OF JONATHAN L. SCHECHTER IN SUPPORT OF MOTION TO INTERVENE AS PARTY DEFENDANTS
JONATHAN L. SCHECHTER declares as follows:
1.
I am General Counsel of The N.I.R. Group, LLC (“NIR”). NIR provides and has provided since in or about 1999 management services to the entities which seek to intervene in the above-entitled action as party defendants, i.e., AJW Partners, LLC, New Millennium Capital Partners II, LLC, AJW Offshore, Ltd. (formerly know as AJW/New Millennium Offshore, Ltd.), and AJW Qualified Partners, LLC (formerly known as Pegasus Capital Partners, LLC) (collectively, “Intervenors”). I am fully familiar with the facts set forth herein based on personal knowledge or corporate records and make this declaration in support of Intervenors’ motion for an order (a) permitting their intervention as party defendants in this action and (b) for permission to file their answer, and cross-claim and counterclaim in the action, which, I understand, accompanies this motion.
2.
Each of AJW Partners, LLC, New Millennium Capital Partners II, LLC, and AJW Qualified Partners, LLC is a limited liability company maintaining its principal office in Roslyn,
New York. AJW Offshore, Ltd is a corporation organized under the laws of the Cayman Islands
with its principal office located in Roslyn, New York. The Intervenors’ members or shareholders
have contributed funds to the Intervenors for investment by the Intervenors. On or about the
following dates, the following Intervenors loaned the following amounts and received secured
convertible debentures as Holders thereof in return in the same principal amounts from a
predecessor of defendant NetCo Investments, Inc. (“NetCo”):
January 31, 2002: $70,000 (AJW Partners, LLC), $35,000 (AJW Qualified Partners, LLC), $75,000 (AJW Offshore, Ltd.), $70,000 (New Millennium Capital Partners II, LLC)
May 31, 2002: $7000 (AJW Qualified Partners, LLC), $14,000 (AJW Partners, LLC), $15,000 (AJW Offshore, Ltd.), $14,000 (New Millennium Capital Partners II, LLC)
July 17, 2002: $56,000 (AJW Partners, LLC), $56,000 (New Millenium Capital Partners II, LLC), $60,000 (AJW Offshore, Ltd.), $28,000 (AJW Qualified Partners, LLC)
September 30, 2002:: $50,000 (AJW Partners, LLC), $50,000 (AJW Offshore, Ltd.), $20,000 (New Millennium Capital Partners II, LLC), and $30,000 (AJW Qualified Partners, LLC)
All of the above debentures were made and given to Intervenors by MarketCentral.Net Corp., a
Texas corporation and predecessor of NetCo, except for the debenture in the principal amount of
$50,000, dated September 30, 2002, which was made and given to AJW Partners, LLC by Trezac
Corp., another Texas corporation and predecessor of NetCo. Each of these notes provides that:
1.1 Conversion Right. The Holder shall have the right from time to time, and at any time on or prior to the earlier of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, the Optional Prepayment Amount (as defined in Section 5.1) or any payments pursuant to Section 1.7, each in respect of the remaining outstanding principal amount of this Debenture to convert all or any part of the outstanding and unpaid principal amount of this Debenture into fully paid and non-assessable shares of Common Stock [of the issuer/borrower], as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion prices (the “Conversion Price”) determined as provided herein (a “Conversion”) ….
3.
Annexed hereto as Exhibit A is a copy of the secured convertible debenture given by MarketCentral.Net Corp. to AJW Partners, LLC, dated January 31, 2002, in the principal amount of $70,000. The text of this debenture is representative of the text in all of the convertible debentures identified above.
4.
Pursuant to the right granted to each of the Intervenors/Holders unilaterally to elect to convert some or all of debt owed to the Holder under the debenture into equity, the Intervenors/Holders converted some of the debt under the convertible debentures into shares of common stock in NetCo on or about and prior to July 11, 2006.
5.
On or about July 13, 2006, the Intervenors/Holders of the convertible debentures identified above elected to convert additional amounts of debt owed to them under the debentures into common stock of NetCo but have not received share certificates representing the shares of common stock of NetCo to which they are entitled. Under such elections, the Intervenors are entitled to the following amounts of shares of common stock of NetCo, the certificates for which have not been issued to Intervenors: 322 shares (AJW Partners, LLC), 322 shares (New Millennium Capital Partners II, LLC), 345 shares (AJW Offshore, Ltd.), and 161 (AJW Qualified Partners, LLC).
6.
The reasons why NetCo’s transfer agent, plaintiff Madison Stock Transfer, Inc., did not issue share certificates for this stock to the Intervenors, despite demand on behalf of Intervenors on the transfer agent, were (a) because of what the transfer agent viewed as a claim to common stock of NetCo by defendant Chavarria and (b) subsequently because the order dated August 15, 2006 in this action “impose[d] a stay on any new issuances of stock of Defendant NetCo Investments, Inc. ….” A copy of the order is annexed hereto as Exhibit B. I further understand that the plaintiff, Madison Stock Transfer. Inc., in its complaint in this interpleader proceeding,
seeks an order “enjoining both Defendants [i.e, both NetCo and Chavarria] from new issuances until the instant litigation is adjudicated.” (Complaint at ¶ 33). I further understand that the plaintiff’s complaint also seeks to adjudicate the validity of a purported “cognovit note” and judgment by confession by which defendant Chavarria apparently claims entitlement to common stock of NetCo, and that the complaint requests, at paragraph 46, that the note “be fully adjudicated in all respects, inclusive of transfers, new issuances, respective restrictions on shares, operational control, and legitimate authority.” It appears from this request, specifically the references to “transfers [and] new issuances,” that the final relief sought by plaintiff, if granted and depending on its wording, may interfere with the exercise of Intervenors’ rights to convert debt for NetCo stock under the convertible debentures. Accordingly, without the intervention requested by this motion, at least until conclusion of this action and perhaps beyond, NetCo is, and may be after conclusion of this action, barred from converting debt owed to the Intervenors into NetCo stock to which they are entitled under their convertible debentures.
7.
Thus, the Intervenors have a direct interest in this action as their right to immediate possession of stock certificates for their conversion of debt into equity has been denied them by reason of the preliminary injunction in this action. Furthermore, as set forth above, the outcome of this action could very well impair or impede Intervenor’s ability to protect their interests depending on the final disposition of the action.
8.
It is respectfully submitted that, in order to protect their entitlement to their conversion rights, Intervenors should be permitted to intervene in this action and file their answer, counterclaim and cross-claim. No existing party will adequately represent the interests of the Intervenors as all have agreed to conversion of what was in effect a temporary restraining order into a preliminary injunction.
I hereby declare under penalty of perjury that the foregoing is true and correct. Executed on September 15, 2006. /s/ Jonathan Schechter________ JONATHAN L. SCHECHTER
News 
Market Data 
Discover 
