STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (" Agreement") is made this 10th day of
May, 2002, by and among ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Nevada corporation
("Purchaser"), iNet Worldwide, Inc., a North Carolina corporation ("iNet").
RECITALS
A. iNet is engaged in the business of providing capital to fund the
startup operations of Purchaser and to assist DRM and its subsidiaries with
funding for product and operations;
B. Purchaser desires to acquire iNet's business in accordance with the
terms and conditions of this Agreement in a transaction designed and intended to
meet the requirements of Section ("'") 368(a)(l)(A) and '368(a)(2)(D) of the
Internal Revenue Code of 1986, as amended ("Code"), and as a result of such
transaction iNet shall be a wholly owned subsidiary of the Purchaser.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Certain Definitions The definitions set forth below shall apply to
the meaning of the terms as used throughout this Agreement. All other
capitalized terms shall have the meaning as defined in other sections of this
Agreement.
1.1 "Affiliate" shall mean with reference to a particular Person (i)
any Person, directly or indirectly, owning, controlling or holding with power to
vote 10% or more of the outstanding voting securities of such particular Person;
(ii) any Person 10% or more of whose outstanding voting securities are directly
or indirectly owned, controlled, or held with power to vote by such particular
Person; or (iii) any Person, directly or indirectly, controlled by, controlling
or under common control with such particular Person.
1.2 "Agreement" shall mean this Stock Exchange Agreement .
1.3 "Closing" shall mean the consummation of the transactions
contemplated by this Agreement.
1.4 "Closing Date" shall mean the date on which the Closing occurs
pursuant to Section 2.4 hereof.
1.5 "Commission" shall mean the United States Securities and Exchange
Commission.
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1.6 "Peoplesway Common Stock" shall mean the $.001 par value voting
common stock of Purchaser .
1.7 "iNet" shall mean iNet Worldwide, Inc., a North Carolina
corporation.
1.8 "iNet Stock" shall mean the voting common stock, with zero par
value, of iNet, which is the only authorized capital stock of iNet.
1.9 "Marketable Title" shall mean a title that is free of encumbrances
and any reasonable doubt as to its validity, and such that a reasonable and
prudent person engaged in the business of the ownership, development and
operation of any of the assets to which this term applies as provided in this
Agreement, with the knowledge of all the facts and their legal bearing, would be
willing to accept in the exercise of ordinary business prudence.
1.10 Permitted Encumbrances. The following liens, charges, and other
encumbrances of a similar nature are collectively referred to in this Agreement
as the "Permitted Encumbrances" with respect to the properties and assets of
iNet:
1.10.1 Tax Liens. Liens for current state or local property taxes not
yet due and payable or subject to penalties.
1.10.2 Immaterial Violations of Law. Zoning ordinances, building laws,
restrictions, regulations, and rules imposed by governmental authorities, if
any, none of which is materially violated by existing buildings and land uses by
iNet.
1.10.3 Governmental Assessments. Any assessment for local benefits
levied by any governmental authority and not now a lien upon all or any portion
of such real property; provided, however, iNet does not know or have reason to
know of any such assessment.
1.10.4 Liens Released Prior to Closing. Liens of carriers,
warehousemen, mechanics, laborers, materialmen and other like statutory liens in
existence less than 120 days from the date of creation thereof, all of which
shall be satisfied and released on or prior to the Closing Date.
1.10.5 Encumbrances of Leasehold Properties. Any mortgage, deeds of
trust or other encumbrances on leasehold properties which iNet is leasing from a
third party which is the owner of the property being leased by iNet subject to
any such encumbrance.
1.10.6 Property Restrictions Not Impairing Value. Liens, easements,
rights-of-way, restrictions, servitude, permits, conditions, covenants,
exceptions, reservations, and other similar encumbrances which are incurred in
the ordinary course of business or existing on property and which appear of
public record in the records maintained by the appropriate local or state
governmental authority and which do not materially impair the value of the
assets of iNet or interfere with the ordinary conduct of iNet's business or its
rights to its assets.
1.11 "Person" shall mean an individual, partnership, corporation,
trust, limited liability company, unincorporated organization, association or
joint venture or a government, agency, political subdivision or instrumentality
thereof.
1.12 "Purchaser" shall mean ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Nevada corporation.
1.13 "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
All other capitalized terms shall have the meanings as specified elsewhere
in this Agreement.
2. The Exchange and Consideration
2.1 Exchange Consideration. On the Closing Date, the shares of iNet
Stock owned by the iNet shareholders, consisting of a total of one million
(1,000,000) shares of iNet Stock, which constitutes one hundred percent (100%)
of the issued and outstanding shares of iNet's capital stock, subject to the
provisions of this Agreement, shall be delivered by all of the Shareholders of
iNet for surrender to the Purchaser and exchanged for the Consideration
("Exchange Consideration") as follows:
2.1.1 Peoplesway Stock. Subject to the provisions of Sections 2.1.3 and
6.4 of this Agreement, the shares of iNet Stock held by the shareholders of iNet
shall be exchanged for, converted into and become one million (1,000,000) shares
of Peoplesway Common Stock ("Stock Consideration") which shall be issued by
Purchaser to the Shareholders of iNet;
2.1.2 Peoplesway Warrants. In addition, the iNet shareholders shall
also receive a warrant to purchase the same number of shares of Peoplesway
Common Stock as received in exchange for iNet shares. The exercise price of
such warrants shall be $.50 for Peoplesway Common Stock. The warrant shall
terminate at the end of business on February 28, 2003.
2.1.3 Reduction in Stock Consideration. To the extent that any
shareholders of iNet Stock exercise their dissenter's rights as provided in
Section 6.4 of this Agreement and receive cash in lieu of the issuance of shares
of Peoplesway Common Stock in exchange for their iNet Stock, the number of
shares of Peoplesway Common Stock which it shall be required to exchange under
this Agreement shall be reduced by one share of Peoplesway Common Stock for each
share of iNet Stock for which dissenter's rights have been exercised;
2.1.4 Allocation of Peoplesway Stock. Such shares of Peoplesway Common Stock
shall be divided and issued to the shareholders of INet in proportion to their
respective ownership interests in the iNet Stock, as set forth in Exhibit A
attached to this Agreement.
2.2 Shareholder Approvals. Subsequent to the date of this Agreement and
prior to the Effective Time, the parties hereto shall use their best efforts to
obtain the requisite shareholder approval as required under their respective
Certificates or Articles of Incorporation and Bylaws and under Nevada and North
Carolina law as follows:
2.2.2 iNet Approval. iNet's board of directors at a special meeting,
duly called pursuant to notice, shall approve and shall duly call, give notice
of, convene and hold a special meeting of its shareholders (the "Special
Meeting") to consider and vote upon the approval and adoption of this Agreement
or shall seek the requisite written consent of its shareholders, all in
accordance with North Carolina law and its Certificate of Incorporation and
Bylaws. iNet shall hold the Special Meeting or obtain such written consent as
soon as practicable prior to or after the date of this Agreement.
2.3 Closing. The Closing Date shall occur on that date which is on or
before thirty (30) days after any and all required conditions and approvals,
including any required approval of the shareholders of Purchaser; but in no
event later than August 31, 2002. Purchaser and iNet will use their best efforts
to close as soon as possible following the execution of this Agreement. In the
event that the Closing Date falls on a Saturday, Sunday or federal holiday, then
the next succeeding date which is not a Saturday, Sunday or federal holiday
shall be the Closing Date. The Closing shall take place at the offices of
Peoplesway, at 11:00 a.m. Eastern Daylight Time on the Closing Date, or at such
other time or place as mutually agreed by the parties to this Agreement. Such
Closing may be accomplished by facsimile transmission of Closing Documents and
facsimile signatures, provided that the original of such signed documents are
transmitted to the party or parties entitled to receive such documents within
three (3) business days following the Closing Date. The Closing shall be
effective as of the close of business of the Closing Date. At the Closing, (a)
iNet will deliver to the Purchaser the various certificates and instruments and
documents referred to in Section 9.1 of this Agreement, (b) Purchaser will
deliver to iNet the various certificates, instruments and documents referred to
in Section 9.2 of this Agreement, and (c) Purchaser will deliver to the
shareholders of iNet in the manner provided below in Section 9.2.1 the Stock
Certificates evidencing the Stock Consideration, subject to the provisions of
Sections 2.1.3 and 6.4 of this Agreement.
2.4 Effect on Capital Stock.
2.4.1 Conversion of iNet Stock. At the Effective Time, iNet or the
holders of any of their securities, all of the issued and outstanding shares of
iNet Stock immediately prior to the Effective Time, held by the shareholders of
iNet shall be delivered for surrender to the Purchaser on the Closing Date and
at the Effective Time converted into the right to receive all of the shares of
Peoplesway Common Stock payable under this Agreement as provided in Section 2.1
of this Agreement.
2.4.2 Cancellation of iNet Stock Certificates. The certificate or
certificates representing iNet Stock shall, after the Effective Time, cease to
have any rights with respect to such shares of iNet Stock except the right to
the issuance of the number of shares of Peoplesway Common Stock as provided in
Exhibit A attached to this Agreement or the payment of cash, to the extent
provided in Section 2.1.3 of this Agreement, for such iNet Stock upon the
surrender of such certificate or certificates in accordance with this Section
2.4 of this Agreement.
2.4.3 Cash Payment for iNet Stock. Payment by the Purchaser shall
be made with respect to the iNet Stock in the manner and only to the extent
provided in Sections 2.1.3 and 6.4 of this Agreement and except as so provided
the Purchaser shall have no obligations to purchase any additional shares of the
iNet Stock in exchange for the payment of cash.
2.4.4 Subsequent Transfer: Lost. Stolen or Destroyed Certificates.
After the Effective Time, there shall be no transfer on the stock transfer books
of the Purchaser of shares of iNet Stock that were registered as outstanding
immediately prior to the Effective Time. If any registered certificate for iNet
shall have been lost, stolen or destroyed the Purchaser, upon making of an
affidavit signed by the Person claiming such certificate to have been lost,
stolen or destroyed and setting forth the facts and other information relating
to such loss or destruction shall, subject to the provisions of this Section
2.4.4, deliver a stock certificate for the appropriate number of shares of
Peoplesway Common Stock in exchange for and conversion of, the iNet Stock
represented by such certificate in accordance with Section 2.1 of this Agreement
to the Person(s) legally entitled thereto. The Purchaser, in the sole discretion
of its board of directors and as a condition precedent to the delivery of the
shares of Peoplesway Common Stock in exchange for, and conversion of, the shares
of iNet Stock represented by such certificate, may require the owner of such
lost, stolen or destroyed certificate to provide a bond or other security in
such sum as it reasonably may direct as indemnity against any claim that may be
made against the Purchaser with respect to the certificate alleged to have been
so lost, stolen or destroyed.
2.4.6 Dissenting Shares. As provided in Section 6.4 of this Agreement
and subject to the limitations as to the number of shares of iNet Stock
exercising such rights as provided in Section 6.4 of this Agreement, the
shareholders of iNet shall be entitled to exercise their dissenter's rights
under the applicable provisions of the North Carolina General Corporation Law
as amended relating to their rights to an appraisal of the shares of iNet Stock
held by each of them.
2.4.7 Tax Free Exchange. Notwithstanding anything to the contrary in
this Agreement, no actions shall be taken or payments made which would
disqualify this transaction from tax free treatment under Section 368(a)(1)(A)
and Section(a)(2)(D) of the Code.
3. Representations and Warranties of iNet. iNet represents and
warrants to the Purchaser, as of the date of this Agreement and as of the
Closing Date, as follows:
3.1 Incorporation and Corporate Status. iNet is a corporation duly
organized, validly existing and in good standing under the laws of the State of
North Carolina with full corporate power and authority to own, operate and lease
its properties and its interests in properties (including its interests in oil
and gas properties) and to carryon its business as now being conducted. iNet is
qualified to do business and is in good standing in all jurisdictions where its
properties, assets and/or activities and operations so require, which states are
listed in Schedule 3.1 attached to this Agreement, except where the failure to
qualify would not have a material adverse effect on iNet. Accurate, correct and
complete copies of iNet's Certificate of Incorporation and all amendments
thereto and restatements thereof, and INet's Bylaws and all amendments thereof
and restatements thereto, certified as accurate, correct and complete by the
Secretary of iNet, are set forth in Schedule 3.1(a) attached to this Agreement.
3.2 Binding Agreement. This Agreement, executed by iNet, constitutes
the valid and binding obligation of iNet enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium, general principles of equity or similar laws affecting
the rights of creditors generally, and will not conflict with, cause a breach,
violate or be in contravention of or result in a default under iNet's
Certificate of Incorporation or any other organizational or governing instrument
of iNet, or of any material Contract, Lease, indenture} promissory note}
agreement, mortgage or other instrument to which iNet is a party or by which any
of its assets or property is bound or affected or any law, rule, License,
Permit, regulation} judgment, decree or order of any court, agency or other
authority to which jurisdiction iNet is subject. No consent of any third party
is required for iNet to enter into this Agreement. All corporate action
necessary for the approval and/or ratification of this Agreement has been taken
or will have been taken on or before the Closing.
3.3 Authorized Stock. The only authorized capital stock of iNet is one
million (1,000,000) shares of its zero par value common stock, of which, as of
the date of this Agreement, one million (1,000,000) shares of iNet Stock are
issued and outstanding. The shareholders of iNet own such number of shares of
the issued and outstanding iNet Stock as set forth in Exhibit A attached to this
Agreement. The information relating to the names, addresses and social security
numbers of the shareholders of iNet as set forth in Exhibit A is accurate,
complete and correct according to iNet's records. To the best knowledge of iNet,
no other Person has any legal or beneficial ownership interest in and to any
shares of the iNet Stock, except as noted on Exhibit A.
3.4 Stock Fully Paid. All issued and outstanding shares of the iNet
Stock have been duly authorized and validly issued and are fully paid and
non-assessable. As of the date of this Agreement, there are not, and as of the
Closing Date there will not be, any (i) options, warrants, purchase rights,
subscription rights or other contract rights or commitments} stock appreciation
rights, phantom stock or other any rights to purchase any shares of the iNet
Stock or any debt or securities convertible into such shares or (ii) obligations
of iNet, contractual or contingent, to issue any such options} warrants, rights
or shares.
3.5 Ownership of Securities. As of the date hereof, record ownership of
the iNet Stock is held one hundred percent (100%) by the shareholders of iNet
and each such shareholder owns of record and beneficially the number of shares
set forth opposite such Shareholder's name in Exhibit A attached to this
Agreement} except as noted on Exhibit A.
3.6 Title. To the best knowledge of iNet, the other shareholders of
iNet have Marketable Title to the shares of the iNet Stock to be transferred
pursuant to the terms of this Agreement and such shares at the Closing will be
delivered to the Purchaser, free and clear of all pledges, liens, security
interests, encumbrances} equities, claims or other restrictions (other than
restrictions imposed under the Securities Act), and such shareholders have full
power and authority to consummate the transactions described in this Agreement.
3.7 No Other Agreements. iNet has not entered into any agreement (other
than this Agreement) with any Person providing for (i) the sale, lease, exchange
or other disposition of any of iNet's properties or assets, except in the
ordinary course of its business; or (ii) the sale, hypothecation, transfer,
assignment or other disposition of the ownership, direct or indirect, of any of
the shares of the iNet Stock.
3.8 Financial Representations. Attached hereto as Schedule 3.8 are a
Balance Sheet, Statement of Income (Loss and Deficit) and Statement of Changes
in Financial Position (including notes to such financial statements) as of
December 31, 2001, and for the seven (7) month period ended July 31, 2002
(collectively the "Financial Statements"). The Financial Statements have been
prepared in accordance with federal income tax basis principles applied on a
consistent basis, except as disclosed therein, and present the financial
position of iNet on an income tax basis as of December 31, 2000 and as of
December 31, 2001 ("Financial Statement Date") and the results of operations for
the seven (7) month period which ended on the Financial Statement Date and for
the twelve (12) month period ended December 31, 2001. The year-end statement
has been reviewed by independent public accountants, but the December 31, 2001
statement has not been reviewed. Purchaser may, at its expense, audit the
financial statements prior to Closing, and iNet shall offer reasonable
assistance and access to its financial records during the audit process.
3.9 No Liabilities. Except as disclosed or reflected in the Financial
Statements, or as set forth in Schedule 3.9 attached to this Agreement, iNet has
no, and as of the Closing Date, will not have any, material liabilities or
obligations of any nature (whether accrued, absolute, contingent, and due or to
become due) other than liabilities and obligations currently averaging with
respect to the domestic properties not in excess of $100 per month arising under
leases, operating agreements and other agreements to which iNet is a party, or
to which it or its assets are subject, which to the extent that the current
liabilities or obligations exceed individually or in the aggregate such dollar
amount are described in detail in Schedule 3.9 attached to this Agreement.
3.10 No Change In Financial Condition. Except as set forth in
Schedule 3.10 attached to this Agreement, since the Financial Statement Date,
there has not been, and iNet does not know of (i) any event, condition or state
of facts that has resulted or may reasonably be expected to result in any
material adverse change in the financial condition, business, sales, income,
properties, assets or liabilities of iNet from that shown on the Financial
Statements; or (ii) any material adverse change with respect to any contracts to
which iNet is a party or any event, circumstance, fact or other occurrence which
may result in any material adverse change to the financial condition, business,
sales, income, properties or assets of iNet; or (iii) any transfer, removal or
other disposition of the assets and properties of iNet not in the ordinary
course of business or any material damage, destruction or loss to its
properties, assets or business of iNet, whether or not covered by insurance, as
the result of any fire, explosion, accident, casualty, labor disturbance or
interruption, requisition or taking of property by any governmental body or
agency, flood, embargo, or act of God or the public enemy, or cessation,
interruption or diminution of operations, which has materially and adversely
affected or impaired or which may be reasonably expected to materially or
adversely affect or impair the conduct of iNet's operations or business; or (iv)
any labor trouble other than routine grievances (including, without limitation,
any negotiation, or request for negotiation, for any representation or any labor
contract) or to the knowledge of iNet any event or condition of any character
which has materially and adversely affected or which may be reasonably expected
to materially and adversely affect or impair the conduct of iNet's operations or
business; or (v) any declaration, setting aside or payment of any dividend, or
any distribution, in respect of the iNet Stock; or (vi) any redemption, purchase
or other acquisition by iNet of any shares of the iNet Stock; or (vii) any
significant loss of customers of iNet.
3.11 Certain Tax Matters. iNet has, or shall have, prepared and duly
filed all federal, state, county and local income, franchise, use, real property
and personal property tax returns and reports required to be filed as of the
date of this Agreement, and which shall be required to be filed on or before the
Closing Date, with respect to iNet and has, or shall have duly paid, withheld
(or reserved for) all taxes, penalties and other governmental charges required
to be paid, as of such dates, that have been assessed or levied against or upon
it or its properties, assets, income, franchises, licenses or sales, including,
without limitation, all income taxes, gross receipt taxes, ad valorem taxes,
property taxes, and production taxes or to the extent that they relate to
periods on or prior to the Financial Statement Date are reflected as a liability
on the Financial Statements, or if not paid, is contesting such amounts in good
faith by the appropriate proceedings. In the event iNet is contesting such
amounts in good faith, iNet has established a reserve sufficient to satisfy the
assessment or levy being contested and such reserve account shall be transferred
to Purchaser at Closing. In connection with the business currently conducted by
iNet, iNet does not know of any proposal by any taxing authority for additional
taxes or assessments against or upon iNet. All monies required to be withheld
by iNet from employees for income taxes, social security and unemployment
insurance taxes have, as of the date of this Agreement, been collected or
withheld, and as of the Closing Date shall have been collected and withheld, and
either paid to the appropriate governmental agencies or set aside in cash for
such purpose. iNet has not entered into any agreement or arrangement for the
extension of time or the assessment of any tax or tax delinquency, nor has iNet
received any outstanding or unresolved notices from the Internal Revenue Service
or any taxing body of any proposed examination or of any proposed deficiency or
assessment or of any tax returns or tax liabilities due and payable. iNet is not
a United States real property holding corporation within the meaning of
'897(c)(2) of the Code. iNet has or will within ten (10) days of the date of
this Agreement, deliver to Purchaser an accurate, correct and complete copy of
each return or statement, if any, filed by, on behalf of, or including, iNet
for federal income tax purposes or state and local income franchise tax
purposes for the last three (3) tax years of iNet or for such period as iNet has
been in existence. All material elections with respect to the taxes affecting
iNet as of the date of this Agreement are set forth in Schedule 3.11. After the
date hereof, no written election permitted under federal, state or local income,
property, franchise or other tax laws, ordinances, codes, rules or regulations
will be made by iNet without Purchaser's express written consent.
3.12 Financial Disclosure. iNet has made or will make available to
Purchaser all information known to iNet with respect to (i) accounts, borrowing
resolutions and deposit boxes maintained by iNet at any bank or other financial
institution and the account numbers and the names and addresses of all of the
Persons authorized to effect transactions in such accounts and pursuant to such
resolutions and with access to such boxes; and (ii) the names of all Persons
holding general or special powers of attorney from iNet and a summary of the
terms thereof.
3.13 Real Property. Schedule 3.13 attached to this Agreement lists and
describes all real property that iNet owns and the name of the owner of record
thereof. As to each parcel of real property and the improvements located thereon
except as described in Schedule 3.13 attached to this Agreement:
3.13.1 iNet has Marketable Title to such parcel, free and clear of any
deed of trust, mortgage, lien, easement, covenant, restriction or other
encumbrance other than Permitted Encumbrances;
3.13.2 No Proceedings. There are no pending, or to the best of the
knowledge of iNet, threatened, condemnation proceedings, lawsuits, or
administrative actions relating to the property nor other matters pending or
threatened which materially and adversely affect or will affect the current use,
occupancy, or value of such property;
3.13.3 No Leases. Except as described in Schedule 3.13.5 attached to
this Agreement, there are no leases, subleases, licenses, concessions, or other
agreements, whether written or oral, granting to any Person or Persons the right
to use or occupy any portion of such parcel of real property;
3.13.4 No Third Party Rights. There are no outstanding options or
rights of first refusal to purchase such parcel of real property, or any portion
thereof or any interest therein;
3.13.5 No Other Possessor Rights. Other than iNet and the Lessors
under the leases described in Schedule 3.13.5 attached to this Agreement, there
are no Persons in possession of such real property;
3.14 All Assets. The properties and assets of iNet as of the date of
this Agreement include, and as of the Closing Date shall include, (i) all
properties and assets, whether or not reflected on the balance sheet included in
the Financial Statements, including, without limitation, Licenses, Permits,
Leases, Contracts, customer lists, goodwill and any other tangible or intangible
assets disclosed in the Schedules attached to this Agreement, and (ii) assets
and properties acquired by iNet after the Financial Statement Date and on or
before the date of this Agreement and the Closing Date in the ordinary course of
business or as disclosed in the Schedules attached to this Agreement, other than
such properties and assets as shall have been transferred or otherwise disposed
of by iNet in the ordinary course of business.
3.15 Stock Transfer Records and Minute Books. The stock transfer
records and
corporate minute books of iNet will be furnished to the Purchaser at least ten
(10) days prior to the Closing Date and will be complete and correct in all
respects. The minute books will accurately reflect all meetings, consents and
other actions of the shareholders and Board of Directors of iNet since its
incorporation.
3.16 Indefeasible Title. Except for Permitted Encumbrances (as defined
in Section 1.9 of this Agreement), and as set forth in Schedule 3.16 attached to
this Agreement, iNet has Marketable Title to all of its assets and properties,
including fee interests in real property and title to all its other properties
and assets owned as of the date of this Agreement and as of the Closing Date,
free and clear of all mortgages, liens, pledges, charges, claims (real or
asserted) or encumbrances of any nature whatsoever, reorganization, readjustment
of debt, moratorium, general principles of equity or other laws of general
application related to or affecting the enforcement of creditor's rights
generally. iNet has not received notice or have any reason to know, of any claim
to material default under any such Leases. iNet has Marketable Title to the
mineral interests described on Schedule 3.16 free and clear of all security
interests, claims, liens and encumbrances of any nature, other than Permitted
Encumbrances.
3.17 Insurance. Schedule 3.17 attached to this Agreement sets forth,
as of the date hereof, an accurate and complete list and brief description of
the terms of all policies of insurance carried by iNet and designating iNet as
the insured thereunder. The description of each policy consists of a description
of the subject property, the insurance coverage, the deductibles and the
additional insureds. iNet will make available to Purchaser an accurate and
complete copy of all such insurance policies. Except as set forth in Schedule
3.17, to the best of the knowledge iNet, no insurance carrier has refused any
application for insurance by iNet or any other Person on behalf of iNet with
respect to any of its properties or assets.
3.18 Intellectual Property Rights. Schedule 3.18 attached to this
Agreement sets forth, as of the date of this Agreement and as of the Closing
Date, an accurate, correct and complete list of all letters patent, patent
applications, trademarks, service marks, trade names, brands, logos, copyrights
and license agreements or Licenses both domestic and foreign, and rights with
respect to the foregoing, whether or not registered or registrable with any
governmental authority, now owned or used by iNet. iNet has not received notice,
or otherwise have any reason to know, of any claimed or threatened infringement
of the rights of others with respect to any patents, trademarks, service marks,
trade names, brands, logos, copyrights and license agreements or Licenses used
or owned by iNet, the loss of which would have a material adverse effect upon
the business, operations, assets or financial condition of iNet.
3.19 No Litigation. Except as set forth in Schedule 3.19 attached to
this Agreement, there are no existing or pending, or to the best of the
knowledge of iNet, threatened, suits, actions, claims, or litigation,
administrative, arbitration or other proceedings or governmental investigations
or inquiries to which iNet is a party with respect to or arising in connection
with the properties, operations, affairs, transactions ,or agreements relating
to iNet or to which any of its properties or assets are subject.
3.20 No Violation of Laws or Regulations. Except as set forth in
Schedule 3.20 attached to this Agreement, to the best knowledge of iNet, iNet
has materially complied with, and is not in any material respect in default
under or in violation of or has failed to comply with any laws, ordinances,
requirements, regulations or orders applicable to its operations, businesses,
affairs and properties, nor is iNet in violation of or in default of any order,
writ, injunction, judgment or decree of any court, arbitrator, or federal, state
or local governmental department, office, commission, authority, board, bureau,
agency or other instrumentality issued or pending against iNet which might
adversely affect the ability of iNet or the shareholders of iNet to execute,
deliver and perform their obligations under this Agreement or to consummate the
transactions contemplated under this Agreement or which challenges or seeks to
prevent, enjoin, alter or materially delay any such transactions. iNet has not
received notice, or otherwise have any reason to know, of any claimed default or
violation with respect to any of the foregoing. There have been no illegal
payments, kickbacks, bribes or political contributions made by iNet to any
Person, entity or governmental or regulatory body in the United States or any
foreign country or political subdivision.
3.21 Approvals. There are no approvals, authorizations and consents
("Approvals") necessary or required to be obtained by iNet to enter into this
Agreement or for the consummation of the transactions contemplated hereby.
3.22 Labor Agreements. There are (i) no collective bargaining
agreements between iNet and any labor union or other representative of
employees, including arrangements, agreements, amendments, supplements, letters
and memoranda of understanding of all kinds and (ii) no employment or consulting
contracts which are not terminable at will, without penalty, to which iNet is a
party.
3.23 Contracts. Schedule 3.23 attached to this Agreement sets forth,
as of the date of this Agreement and as of the Closing Date, accurate, correct
and complete lists of the following:
3.23.1 Material Contracts. Except for the Leases and Licenses, all
agreements, contracts, arrangements, commitments, understandings or obligations,
oral or written, of iNet which are to be performed in whole or in part on or
after the date hereof and which require or may require, based upon payments made
in the past year, the payment by iNet in an amount, or under which iNet is
required or may be required to provide goods or services of a value greater than
one thousand dollars ($1,000) at any time within the twelve (12) month period
following the date of this Agreement;
3.23.2 Contracts Restricting Competition. Any agreement to which iNet
is a party or by which its properties or assets are bound that limits the
freedom of iNet to compete in any line of business or with any Person; and
3.23.3 Contracts with Affiliates. All other agreements, contracts,
arrangements, commitments, understandings or obligations, oral or written (other
than oral contracts of employment), between iNet, on the one part, and one or
more or all of the shareholders of iNet or any other officer or director of
iNet, on the other part, or in which any of such persons or entities has any
financial interest, direct or indirect (including, without limitation, any
agreements affecting iNet's properties or assets and agreements to make loans).
Prior to the Closing Date, iNet shall have furnished to, or shall have made
available for inspection by, Purchaser a copy of each agreement, contract,
arrangement, commitment or obligation set forth on Schedule 3.23, attached to
this Agreement, and, any other contracts to which iNet is subject, copies of
which are located in iNet's files and other records to which iNet is a party.
Collectively the contracts, agreements, arrangements, commitments or obligations
set forth in this Section 3.23 and listed in Schedule 3.23, attached to this
Agreement, are referred to throughout this Agreement as the "Contracts." Each
such Contract is in full force and effect as of the date of this Agreement and
as of the Closing Date, except as described in Schedule 3.23, iNet has performed
and shall have performed in all material respects all of the obligations under
each Contract required to be performed by it as of the date of this Agreement
and as of the Closing Date and no such Contract is in default, nor has any event
occurred, which with the passage of time or giving of notice or both, will
result in the occurrence of a default under any such Contract.
3.24 Employees. iNet is not a party to any agreement, Contract,
arrangement, plan, commitment or understanding which has resulted or would
result, upon the consummation of the transactions contemplated under this
Agreement or otherwise, separately or in the aggregate, in the payment of any
"excess parachute payment" within the meaning of Code '280G nor is iNet
obligated to pay any severance arrangements with any current or former employees
of iNet. There are no employees of iNet who have employment contracts or
employee benefit rights which cannot be terminated upon reasonable notice,
except to the extent employment benefit rights must be continued as required by
state and federal law.
3.25 Environmental Matters. Except as set forth in Schedule 3.25
attached to this Agreement, iNet, as to those properties and interests therein
operated, owned or controlled by iNet, has duly complied with, and as of the
Closing Date shall have complied with, and the operation of its business,
equipment and other assets in, under, on or in connection with the facilities
owned or leased by iNet are in compliance with and on the Closing Date shall be
in compliance with the provisions of all applicable federal, state and local
environmental, health and safety laws, statutes, ordinances, rules and
regulations of any governmental or quasi governmental authority relating to (i)
omissions or failure to comply with environmental, health and safety laws, rules
and regulations, (ii) discharges, release or seepage to surface water or ground
water, (iii) solid or liquid waste disposal, (iv) the use, storage, generation,
handling, transport, discharge, release or disposal of toxic or hazardous
substances or waste, or (vi) other environmental, health or safety matters,
including, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Authorization Act of 1986; the Occupational Safety and Health Act, as
amended; the Resource Conservation and Recovery Act of 1976; the Federal Water
Pollution Control Act of 1970, as amended: the Safe Drinking Water Act of 1974;
the Toxic Substances Control Act of 1976; the Emergency Planning and Community
Right to Know Act of 1986, as amended; and the Clean Air Act, as amended; the
Federal Water Pollution Control Act, as amended; the Oil Pollution Act of 1990,
as amended; the Rivers and Harbors Act of 1899; the Hazardous and Solid Waste
Amendments Act of 1984, as amended; and the Hazardous Materials Transportation
Act, as amended (collectively "Environmental and Health Laws"). To the best
knowledge of, there are no investigations, administrative proceedings, judicial
actions, orders, claims or notices which are pending, anticipated or threatened
against iNet, relating to violations of the Environmental and Health Laws.
Except as set forth in Schedule 3.25 attached to this Agreement, iNet has not
received a notice of, and does not know or have any reason to suspect, any facts
which might constitute a violation of any Environmental or Health Laws which
relate to the use, ownership or occupancy of any property or facilities used by
iNet in connection with the operation of its business or any activity of iNet's
business which would result in a violation or threatened violation of any
Environmental or Health Laws.
3.26 Stock Representations. Subject to the rights of the
shareholders of iNet under Section 2.4 of this Agreement and as provided in the
Shareholder Certificate attached to this Agreement as Exhibit xyz , the
shareholders of iNet shall represent as of the Closing Date whether they (i) are
not "underwriters" within the meaning of Section 2(11) of the Securities Act;
(ii) are either accredited investors within the meaning of Rule 501(a) of
Regulation D as promulgated under the Securities Act of 1933, as amended
("Securities Act") or sophisticated investors within the meaning of the judicial
and regulatory rulings and interpretations of Section 4(2) of the Securities Act
and Rule 506(b)(2)(ii) of Regulation D as promulgated under the Securities Act
(or if any such shareholder is not sophisticated he or she is represented by a
"purchaser representative" within the meaning set forth in Rule 501(h) of the
Securities Act); (iii) agree and acknowledge with regards to any offer or sale
of the Peoplesway Common Stock following the Closing Date to (a) comply with
Rule 144 and, with Rule 145(d), as shall be applicable, (b) comply with any
other exemption from registration under the Securities Act, or (c) offer and
sell their shares of Peoplesway Common Stock pursuant to an effective
registration statement under the Securities Act; (v) agree that they will not
offer, sell, pledge, hypothecate, transfer, assign or otherwise dispose of any
such shares of Peoplesway Common Stock unless such offer, pledge, hypothecation,
transfer, assignment or other disposition shall comply with either Rule 145 or
Rule 144, as the case may be, of the Securities Act or be registered or be
exempt from registration under the Securities Act and all applicable federal and
state securities laws; and (vi) agree and acknowledge that the stock
certificates representing the shares of Peoplesway Common Stock which will be
acquired by the shareholders of iNet under this Agreement will contain a legend
restricting the transferability of the shares Peoplesway Common Stock as
provided herein and that stop order instructions may be imposed by the
Purchaser's transfer agent restricting the transferability of such shares. Prior
to seeking the approval of its shareholders of this Agreement and the
transaction contemplated hereby, iNet shall prepare and deliver to its
shareholders a disclosure statement providing the information as required by
Section 6.16 of this Agreement. iNet represents that such information concerning
iNet shall be accurate, correct and complete in all material respect to enable
the shareholders of iNet to make an informed investment decision as to the
transactions contemplated under this Agreement.
3.27 Accounts Receivable. All of the accounts receivable of iNet as
disclosed in the Financial Statements constitute valid receivables deemed
collectible, have been incurred in the ordinary course of business consistent
with past practices and, to the knowledge of iNet are collectible in the
ordinary course of iNet's business. Except to the extent of the reserve for bad
debts or doubtful accounts as set forth in the Financial Statements attached to
the Agreement as Schedule 3.8, such accounts receivable are not subject to any
setoffs or counterclaims. No part of such accounts receivable is contingent
upon the performance by iNet of any obligation, and no agreements for deduction
or discounts have been made with respect to any part of such receivables.
3.28 Payables. The list of itemized accounts payable of iNet, as
shown on Schedule 3.28 as of July 31, 2002 attached to this Agreement, represent
a complete list of all of iNet's accounts payable to its creditors, are
accurate, correct and complete, and except as set forth in Schedule 3.27.2
attached to this Agreement are not currently in default, as of the date of this
Agreement and shall be accurate, correct and complete, and shall not be in
default, as of the Closing Date. iNet shall not incur any additional accounts
payable between the date of this Agreement and the Closing Date, other than in
the ordinary course of business, without Purchaser's express written consent,
except fees and expenses of professionals performing services in connection with
this Agreement and the transactions contemplated under this Agreement which
shall not exceed $100.
3.29 Employee Benefit Matters. iNet has no employee benefit plans,
agreements, arrangements or understandings of any kind, whether written or oral,
which would require iNet to fund, reserve or provide benefits or payments of any
kind or nature to any former employee or agents.
3.30 Directors and Officers. Attached to this Agreement is an
accurate, correct and complete list as of the date of this Agreement and as of
the Closing Date Showing the names of each of the Officers and Directors of
iNet, each of whom has been duly elected or appointed.
3.31 Subsidiaries. iNet does not have any subsidiaries and does not
own shares of common stock or capital stock in any other corporation or a
participating interest or other interest in any limited liability company,
partnership, joint venture, strategic alliance or any other entity, association
or business arrangement.
3.32 Full Disclosure. None of the written information provided by iNet
to Purchaser in connection with the negotiation of this Agreement contains any
intentionally misleading statement of a material fact.
4. Representations and Warranties of Purchaser. Purchaser represents to
iNet as follows:
4.1 Good Standing. Purchaser is duly organized, validly existing and in
good standing under the laws of Nevada with full corporate power and authority
to own, operate and lease its properties and to carryon its business as now
being conducted. Purchaser is qualified to do business and in good standing in
all jurisdictions where its properties, assets and operations so require.
Purchaser has all requisite power and authority to enter into this Agreement and
perform their obligations under this Agreement.
4.2 Binding Agreement. This Agreement, as executed and delivered by
Purchaser, constitute the valid and binding obligation of Purchaser enforceable
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, general principles of equity or
similar laws affecting the rights of creditors generally. This Agreement and the
performance of this Agreement by Purchaser will not conflict with, breach,
violate or be in contravention of or result in a default under Purchaser's
Articles of Incorporation, Bylaws or any other organizational or governing
instrument of Purchaser, or of any agreement, mortgage or other instrument to
which either Purchaser is a party or by which any of its assets or properties
are bound or affected or, to the best of Purchaser's knowledge, any law, rule,
License, Permit, regulation, judgment, decree or order of any court, agency or
other authority which has jurisdiction over the business, properties, assets
..and activities of Purchaser. All corporate action necessary for the approval
and/or ratification of this Agreement has been taken as of the date of this
Agreement.
4.3 Litigation; Compliance with Laws. Except as set forth in Schedule
4.3, attached to this Agreement, there are no existing or pending, or to the
best of Purchaser's knowledge, threatened, suits, actions, claims, arbitrations,
administrative or legal or other proceedings or governmental investigations or
inquires pending against either Purchaser, nor to the best of Purchaser's
knowledge in any failure to comply in any material respect with, nor any default
under, any law, ordinance, requirement, regulation or order applicable to
Purchaser and its business and properties nor to the best of Purchaser's
knowledge any violation of or default with respect to any law, ordinance,
requirement, regulation applicable to their respective operations and businesses
nor in violation of, or in default under, any order, writ, injunction, judgment
or decree of any court, arbitrator, or federal, state or local department,
official, commission, authority, board, bureau, agency or other instrumentality,
issued or pending against Purchaser which might adversely affect Purchaser's
ability to execute, deliver and perform its obligations under this Agreement or
to consummate the transactions contemplated hereby or which challenges or seeks
to prevent, enjoin, alter or materially delay any such transaction. The
Purchaser has not received any notice, or otherwise has any reason to know, of
any claimed default or violation with respect to any of the foregoing.
4.4 Current Filings With SEC. Purchaser has filed all Annual Reports on
Form 10-KSB, Quarterly Reports on Form 10-QSB and other applications and reports
(including all amendments and supplemental information) required to be filed by
Purchaser with the Commission under the Securities Exchange Act of 1934, as
amended ("Exchange Act"). iNet and the shareholders of iNet have access to all
documents electronically filed with the Commission on the Commission's ▇▇▇▇▇
(Electronic Data Gathering, Analysis and Retrieval) system and, to the extent
requested by the shareholders of iNet, Purchaser shall furnish, at its expense,
copies to them of any documents filed with the Commission, including (a) each
registration statement, report on Form 8- K, proxy statement or information
statement prepared by it since June 30,2001, and (b) Purchaser's Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 2001, each in
the form (including exhibits), filed with the Commission on or before February
15, 2002 (collectively, the "Purchaser's SEC Reports"). As of the respective
dates of such filed documents, to the best of Purchaser's knowledge, the
Purchaser's SEC Reports did 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. Each of the consolidated balance sheets included in
the Purchaser's SEC Reports (including the related notes and schedules) fairly
presents the financial position of Purchaser as of its date and each of the
statements of income, of stockholders' equity and of cash flows included in or
incorporated by reference into the Purchaser's SEC Reports (including any
related notes and schedules) fairly presents the results of operations,
stockholders' equity and cash flows, of Purchaser or the periods set forth
therein (subject, in the case of unaudited statements, to normal year-end audit
adjustments which will not be material to Purchaser taken as a whole in amount
or effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Purchaser has provided, and to the extent requested will provide
to any shareholders of iNet making such request, a copy of Purchaser's
registration statement on Form SB-2 previously been electronically filed with
the Commission on its ▇▇▇▇▇ system and which has not been declared effective by
the Commission. Other than the Purchaser's SEC Reports and its registration
statement on Form SB-2, Purchaser has not filed any other definitive reports or
statements with the Commission since December 31, 2001. However, nothing
contained in this Section 4.4 will preclude Purchaser or its officers (directors
or affiliates from filing such SEC Reports and other filings as shall be
required under the securities laws or as Purchaser shall determine, in its sole
discretion, is necessary or appropriate. Purchaser is eligible to register the
shares of Peoplesway Common Stock, which will be acquired by the shareholders of
iNet as contemplated under this Agreement, for a secondary offering for the
account of such shareholders for their reoffer or resale of such shares by use
and the filing of a registration statement on Form SB-2 and otherwise has met
all conditions required of an issuer under Rule 144( c) of the Securities Act.
4.5 Purchaser's Stock. The only authorized capital stock of Purchaser
are 100,000,000 shares of its $.001 par value voting common stock, which is the
Peoplesway Common Stock . All outstanding shares of capital stock of the
Purchaser have been duly authorized and validly issued and are fully paid and
nonassessable. Except as specifically stated above in this Section 4.5 or
disclosed in the Purchaser's SEC Reports or other filings by Purchaser or
Purchaser's officers, directors and affiliates with the Commission, there are
outstanding (i) no shares of capital stock or other voting securities of
Purchaser, (ii) no securities of Purchaser convertible into or exchangeable for
shares of capital stock or voting securities of Purchaser, and (iii) no options,
warrants or other rights to acquire from Purchaser, and no preemptive or similar
rights, subscription or other rights, convertible securities, agreements,
arrangements or commitments of any character, relating to the capital stock of
Purchaser, obligating Purchaser to issue, transfer or sell, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Purchaser or obligating Purchaser to grant, extend
or enter into any such option, warrant, subscription or other right, convertible
security, agreement, arrangement or commitment (the items in clauses 4.5(i),
4.5(ii) and 4.5(iii) being referred to collectively as the "Purchaser
Securities"). Except as provided in the employment agreements between Purchaser
and its executive officers, there are no outstanding obligations of Purchaser to
repurchase, redeem or otherwise acquire any Purchaser Securities. Upon issuance
of (a) up to one million (1,000,000) shares of Peoplesway Common Stock to the
Shareholders of iNet as contemplated under Section 2.1 of this Agreement and (b)
one million (1,000,000) shares of Peoplesway Common Stock issuable pursuant to
the warrants contemplated under Sections 2.1.2 of this Agreement, such shares of
Peoplesway Common Stock will be validly issued, fully paid and nonassessable.
The Peoplesway Common Stock is currently traded on the Bulletin Board under the
symbol "PLWY." As of February 14, 2002, there were 13,419,469 shares of
Peoplesways Common Stock which are issued and outstanding.
5. Activities Prior to the Closing Date.
5.1 Operation of iNet's Business. iNet agrees that from and after the
date of this Agreement until the Closing Date, except as otherwise contemplated
by this Agreement, iNet shall cause iNet to, conduct its business solely in the
ordinary course consistent with past practices, and shall cause iNet to:
5.1.1 Organizational Documents. Not amend its Certificate of
Incorporation or Charter or Bylaws, except as may be necessary to carry out this
Agreement or as required by law;
5.1.2 Corporate Name. Not change its corporate name or permit the use
thereof by any other corporation or Person;
5.1.3 Compensation. Not pay or agree to pay any employee, officer, or
director, without the consent of Purchaser, compensation which is in excess of
the current compensation level of each employee, officer or director of iNet,
except for standard periodic increases to non-management employees consistent
with past practices in terms of timing and amount;
5.1.4 Management. Not make any changes in management without the prior
written consent of Purchaser;
5.1.5 Reorganizations or Other Related Transactions Not merge or
consolidate with any other corporation, or acquire, agree to acquire or be
acquired by any corporation, association, partnership, joint venture or other
Person, without the prior written consent of Purchaser;
5.1.6 Indebtedness, Not create, incur, assume or guarantee any
indebtedness for money borrowed except for trade and other indebtedness incurred
in the ordinary course of business, unless iNet first advises Purchaser and
receives Purchaser's written consent thereto; provided, however, that nothing
contained in the foregoing to the contrary shall prohibit iNet from borrowing
funds to pay obligations under existing agreements so long as iNet informs
Purchaser of such payments;
5.1.7 Encumbrances. Not create or suffer to exist any Encumbrance on
any of its properties or assets, including without limitation its interests in
oil and gas properties or other mineral properties, Equipment or other
facilities, except for Permitted Encumbrances;
5.1.8 Increase of lndebtedness. Not increase the amount of any
indebtedness outstanding under any loan agreement, mortgage or borrowing
arrangement in existence on the date of this Agreement, unless iNet first
advises Purchaser and receives Purchaser's written consent to any such increase
except for additional borrowings required to fund the working capital needs of
iNet in the ordinary course of business under any line of credit loan identified
in iNet's Financial Statements to the extent permitted by the documentation
relating to such loan in effect as of the date of this Agreement and then only
to the extent that iNet has first notified Purchaser of any such borrowings
under the line of credit subsequent to the date of this Agreement and Purchaser
gives its prior written approval to such borrowings;
5.1.9 Payables. Pay when due, in accordance with past practices
consistent with good management practices, all of its accounts payables and
trade obligations;
5.1.10 Maintenance of Assets. Maintain its facilities, assets and
properties, including without limitation the Equipment in good operating repair,
order and condition, reasonable wear and tear excepted} and notify Purchaser
promptly upon any loss of, damage to or destruction of any of its facilities,
properties or assets;
5.1.11 Insurance. Not allow to lapse and maintain in full force and
effect all insurance coverage of the types and in the amounts set forth in
Schedule 3.17, attached to this Agreement, and apply the proceeds received under
any insurance policy or as a result of any loss of, damage to, or destruction of
any of its facilities, properties or assets, including the Equipment, to the
repair or replacement of such facilities, properties or assets, including the
Equipment;
5.1.12 Contracts and Permits. Maintain in full force and effect all
Licenses, Permits, Leases and Contracts for which iNet is responsible which are
related to the operation of its business in all respects and in all places as
its business is now conducted;
5.1.13 Goodwill. Use its best efforts to preserve its business
organization in tact, to keep available the services of its present employees
and to preserve the goodwill of its customers, suppliers and others having
business relations with it;
5.1.14 Issuance of Securities. Not issue any additional capital stock,
options, warrants, or other rights to purchase capital stock or securities
convertible into or exchangeable for capital stock of iNet;
5.1.15 Dividends and Distributions. Except as provided in Schedule
5.1.15 attached to this Agreement, declare, set aside or pay any dividend or
make any other distributions in respect of any of iNet's shares of capital
stock;
5.1.16 Repurchase of Securities and Repayment of Indebtedness. Except as
approved in writing by Purchaser after first being notified of any such event,
not make any direct or indirect redemption, purchase or other acquisition of
shares of iNet's capital stock or make any direct or indirect repurchase,
repayment or retirement of any principal of, or interest on, any indebtedness
other than regularly scheduled payments of principal and interest as provided in
the promissory note evidencing any of iNet's indebtedness;
5.1.17 Litigation. Promptly advise Purchaser in writing of the
commencement of, and of any known threat to commence, any suit, claim, action,
arbitration, legal or administrative proceedings, governmental investigation or
tax audit against iNet;
5.1.18 Monthly Financial Statements. Deliver to Purchaser as soon as
available monthly financial statements ("Monthly Financial Statements") of iNet
commencing with the month of January, 2002, and for each calendar month
thereafter prior to the Closing Date; and
5.1.19 Miscellaneous. Not enter into any agreement or otherwise agree to
take any action in violation of the negative covenants set forth in this Section
5 or take, agree to take or omit to take any action that would make any
representation or warranty inaccurate.
5.2 Access to Information. iNet will cooperate fully with Purchaser,
and iNet shall provide, to Purchaser and its accountants, counsel and other
representatives (collectively "Advisors"), and Purchaser will provide to iNet
and iNet's Advisors during normal business hours, (i) full access to the books,
records, equipment, and other information concerning real estate owned or leased
by the other party to this Agreement and all work papers relating to iNet of
iNet's independent accountants and (ii) full opportunity to discuss such other
party's business affairs and assets with its officers, employees, agents and
independent accounts ("Representatives") and furnish to such other party and
their Advisors copies of such documents, records and information with respect to
the affairs of such other party as Purchaser, or its Advisors or iNet, or iNet's
Advisors may reasonably request of such other party.
5.3 Confidentiality. Except to the extent that disclosure is required
by law and this Agreement, Purchaser, its officers, directors and employees and
iNet and the officers, directors and employees of iNet shall retain in
confidence and shall cause their Advisors to retain in confidence, all
information obtained by them pursuant to the investigations made by Purchaser or
its Advisors pursuant to Section 5.2 that is deemed by iNet to be confidential
in nature as so indicated by iNet to Purchaser (the "Confidential Information").
iNet, its officers, directors and employees and iNet's Advisors shall retain in
confidence, all information obtained by them in connection with any
investigation undertaken by such Persons as a result of Purchaser providing such
Persons such access to information of the Purchaser that is deemed by Purchaser
to be confidential (the "Confidential Information") pursuant to Section 5.2 of
this Agreement. The parties agree that Confidential Information of either iNet,
Purchaser not include information which (a) was or becomes generally available
to the public other than as a result of a disclosure by a party to another party
to this Agreement or any officers, directors or employees or any representatives
or Advisors of any such party, of their Advisors, (b) was or becomes available
to any party to this Agreement or the officers, directors or employees or the
Advisors of such party on a non-confidential basis from a source other than a
party to this Agreement or such party's Advisors, provided that such source is
not bound by a confidential agreement or (c) was, or in the future is, developed
independently by a party to this Agreement or an Advisor to such party without
reference to the information furnished by the other party to this Agreement or
an Advisor to such party. The parties understand and agree that all of the
Confidential Information supplied to a party to this Agreement by the other
party is provided on the understanding that such Confidential Information shall
remain the property of the party disclosing or furnishing such Confidential
Information, and that all copies and originals of any Confidential Information
furnished pursuant to this Agreement from one party to the other party will be
returned to the party furnishing such Confidential Information promptly upon its
request after termination of this Agreement as provided under Section 10 hereof.
Pending the Closing of the transactions contemplated under this Agreement or if
this Agreement is terminated as provided in Section 10 of this Agreement, a
party receiving the Confidential Information of another party shall not use such
information to its economic or financial advantage or benefit.
5.4 Benefit Plans. Between the date of this Agreement and the Closing
Date, iNet will not establish or implement a new Benefit Plan of any kind
whatsoever.
5.5 Best Efforts and Standstill. Subject to the other provisions of
this Agreement, iNet will use its best efforts to cause the conditions listed in
Section 6 of this Agreement to be satisfied on or before the Closing Date.
Subject to the other provisions of this Agreement, Purchaser will use its best
efforts to cause the conditions listed in Section 7 of this Agreement to be
satisfied on or before the Closing Date. iNet further agrees that they will not
enter into, request, solicit or engage in any discussions, negotiations,
understandings or agreements with any Person other than Purchaser relating to
the Exchange, consolidation or sale of iNet or the sale or disposition of their
shares of iNet Stock or the properties and assets of iNet (other than in the
ordinary course of business) unless this Agreement is terminated pursuant to
Section 10 hereof.
5.6 Meeting of iNet's Shareholders. iNet shall cause a special meeting
of iNet's shareholders (the "Company's Shareholder Meeting") to be duly called
and held as soon as reasonably practicable, for the purpose of voting on the
approval and adoption of this Stock Exchange Agreement (the "Company's
Shareholder Approval"). The board of directors of iNet shall recommend approval
and adoption of this Agreement by the shareholders of iNet. In connection with
iNet's Shareholder Meeting, iNet will use their best efforts, subject to the
immediately preceding sentence, to obtain iNet's Shareholder Approval and will
otherwise comply with all legal requirements applicable to iNet's Shareholder
Meeting.
5.7 Compliance with Laws. Purchaser shall timely file all applications
and reports, including all amendments and supplemental information, required to
be filed by Purchaser with the Commission under the Act and the Exchange Act,
and take no action that would cause Purchaser not to meet its obligations under
the Registration Rights Agreement attached to this Agreement as Exhibit F, or
fail to meet the conditions of Rule 144(c).
5.8 Contact with Third Parties. After the execution of this Agreement
and prior to the release of a public announcement of the execution of this
Agreement by the parties hereto Purchaser shall not contact any party to an
agreement with iNet without iNet's prior consent. Immediately following such
announcement, Purchaser may contact any such third party without restriction.
6. Conditions Precedent to the Purchaser's Obligations. The
obligations of Purchaser to be performed under this Agreement on or before the
Closing Date are subject to each and all of the following conditions, anyone or
more of which may, however, be waived in whole or in part by Purchaser.
6.1 Representations and Warranties. The representations and warranties
of iNet herein contained shall be accurate, correct and complete on and as of
the date of this Agreement and as of the Closing Date in all material respects
with the same force and effect as though made on and as of each such date.
6.2 Performance of Obligations. iNet shall have performed in all of
iNet's covenants, undertakings, obligations, conditions and agreements required
to be performed by it under this Agreement.
6.3 Performance at Closing. iNet shall have performed each of the acts
it is required to perform under this Agreement and shall have delivered or
tendered delivery of each of the certificates and other documents it is required
to deliver.
6.4 Dissenter's Rights. iNet shall provide a list of those
shareholders of iNet who have elected to exercise their dissenters' rights under
North Carolina law; provided that the total number of shares of iNet Stock held
by such shareholders shall not exceed one hundred thousand shares (100,000) of
the total issued and outstanding shares of iNet Stock.
6.5 Absence of Litigation or Restraining Action. No suit, action or
other proceeding shall be pending, or threatened, before any court or
governmental agency in which it will be, or it is, sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated under this Agreement or
which, if adversely determined, would have a material adverse effect on the
value of the business, assets or properties of iNet or the value of the iNet
Stock.
6.6 No Attachment. None of iNet's assets or properties shall have been
attached or levied upon or passed into the hands of a receiver or assignee for
the benefit of creditors. No petition or similar instrument shall have been
filed with respect to iNet under any bankruptcy or insolvency law, and no
injunction or restraining order shall have been instituted against iNet.
6.7 No Liens, Indebtedness. Except as set forth in Schedule 3.9
attached to this Agreement, iNet shall not be subject to any indebtedness nor
its properties or assets subject to liens or encumbrances of any kind, other
than (a) indebtedness and liens for current taxes, wages and operating expenses
in the normal course of business, payment of which at the time of Closing shall
not yet be due; or (b) indebtedness identified in iNet's Financial Statements as
set forth in Schedule II attached to this Agreement; (c) any accounts payable
incurred by iNet subsequent to the Financial Statement Date in the ordinary
course of its business as disclosed to iNet on or before the Closing Date; (d)
any other indebtedness approved in writing by Purchaser; or (e) Permitted
Encumbrances or indebtedness as disclosed in Schedule 3.17 attached to this
Agreement which Purchaser agrees to assume or acquire iNet's properties subject
to such indebtedness.
6.8 Resignations and Employee Terminations. Purchaser shall have
received the resignation dated as of the Closing Date of each director of iNet
and the officers of iNet in the form as set forth in Exhibit C attached to this
Agreement. iNet shall have terminated the employment of all employees effective
as of midnight on the day immediately preceding the Closing Date and at the time
of such termination shall have paid all amounts due to its employees, including,
without limitation, all salaries, bonuses, sick leave, accrued vacations and any
other employment benefits to which such employees are entitled at the time of
their terminations. Notwithstanding such termination may, in its sole discretion
without any Commitment to do so, hire such terminated employees or any of them
at any time after the Closing Date.
6.9 Corporate Records. Purchaser shall have received the stock record
books, minute books, files, documents, papers, Leases, Contracts, Licenses,
Permits and other agreements or authorizations, books of account and other
records pertaining to iNet's business operations and affairs and the corporate
seal (if any) of iNet.
6.10 Consents and Waivers. All consents and Approvals from third
parties, including without limitation the Notification and Report Form only to
the extent required to be filed under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder ("HSR
Act"), as well as any other Approval, consent or waiver required under any other
Leases, Contracts, Permits, Licenses, as listed in Schedules 3.18, and,
attached to this Agreement and any other Person or governmental bodies,
necessary for the consummation of the transactions contemplated hereby shall
have been obtained.
6.11 Legal Compliance. All statutory and other legal requirements for
the valid consummation of the transactions contemplated under this Agreement
shall have been satisfied.
6.12 Absence of Adverse Changes. iNet shall not have suffered any
material adverse change in its financial condition, business, property or assets
since the Financial Statement Date.
6.13 Opinion of Counsel. Purchaser shall have received an opinion of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as counsel for iNet dated as of the Closing Date in the
form of the opinion as set forth in Exhibit E attached to this Agreement.
6.14 Certificates. Purchaser shall have received the certificates and
other closing documents required to be received under Section 9.1 of this
Agreement on or prior to the Closing Date.
6.15 Shareholder Approval. The board of directors of iNet shall have
approved this Agreement and the transactions contemplated under this Agreement
and the shareholders of iNet holding two-thirds (2/3rds) of the issued and
outstanding iNet Stock shall have approved the transactions contemplated by this
Agreement in accordance with the North Carolina General Corporation Law.
6.16 iNet's Disclosure Statement. iNet shall have prepared and
delivered a disclosure statement to all of the shareholders of iNet which shall
contain sufficient information with respect to iNet, its business operations,
assets and properties, financial condition, prospects and such other information
relating to iNet and this Agreement to enable each such shareholder to make an
informed investment decision with respect to the terms and provisions of this
Agreement and the information provided in such disclosure statement provided to
the shareholders of iNet shall be accurate, correct and complete in all material
respects, shall not contain a misstatement of a material fact or omit to state a
material fact necessary to make the statements made in such disclosure statement
not misleading. Purchaser represents that all information contained or
incorporated in the disclosure statement concerning Purchaser and its business
operations, assets and properties, financial condition, prospects and other
information supplied to iNet by Purchaser, shall be accurate, correct and
complete in all material respects.
6.17 Audit of iNet's Financial Statements. If Purchaser is required to
or elects to audit the Financial Statements provided to Purchaser, the
statements shall have been audited by a reputable, independent accounting firm,
at Purchaser's expense, and the results of such Financial Statements shall be
acceptable to Purchaser, in its sole and exclusive judgment, by so indicating
its acceptance in writing furnished to iNet on or prior to the Closing Date.
6.18 General Due Diligence Review. Purchaser shall have completed its
due diligence review of iNet and based on such review shall be satisfied, in its
sole discretion, as to the nature, condition and profitability of the Leases,
Contracts and all other assets and properties of iNet and the liabilities and
potential liabilities of iNet and shall have indicated such satisfaction and
approval in a writing delivered to iNet four (4) days prior to the Closing
Date.
7 .Conditions Precedent to iNet's and iNet Shareholders' Obligations. The
obligations of iNet and the shareholders of iNet, to be performed under this
Agreement at Closing are subject to each and all of the following conditions,
anyone or more of which may, however, be waived in whole or in part by iNet.
7.1 Representations and Warranties. The representations and warranties
of Purchaser set forth in this Agreement shall be true, correct and complete in
all material respects on and as of the date of this Agreement and as of the
Closing Date with the same effect as if made on and as of the said date.
7.2 Performance of Obligations. Purchaser shall have performed or
complied with all of Purchaser's covenants, undertakings, obligations,
conditions and agreements herein to be performed on or before Closing as
contained in this Agreement.
7.3 Performance at Closing. Purchaser shall have performed each of the
acts each such corporation is required to perform under this Agreement and shall
have delivered or tendered delivery of each of the certificates and other
documents each such corporation is required to deliver.
7.4 Absence of Restraining Action. No suit, action or other
proceeding shall be pending, or threatened, before any court or governmental
agency in which it will be, or it is, sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated under this Agreement or would have
a material adverse effect on the value of the business, assets, or properties of
Purchaser or the value of the Peoplesway Common Stock.
7.5 Market Price of Peoplesway Stock. The average daily closing price of
the shares of Peoplesway Common Stock as quoted on the OTC Bulletin Board for
the four (4) week period preceding the Closing Date, determined without retail
▇▇▇▇-up, ▇▇▇▇-down or commission, shall not have been less than $.10; provided,
however, that if the average daily closing price of Peoplesway Common Stock as
quoted on the Bulletin Board for the four (4) week period preceding the Closing
Date, determined without retail ▇▇▇▇-up, ▇▇▇▇-down or commission, is more than
$.10 per share, Purchaser shall have the right to terminate this Agreement as
provided in Section 10.1.5 of this Agreement in which event it shall not be
obligated to close or deliver the documents as required under Section 9.2 of
this Agreement, unless it elects in a writing delivered to iNet to perform its
obligation to close under this Agreement within two (2) days prior to the
scheduled Closing Date.
7.6 Due Diligence Review. iNet shall have completed its due diligence
review of Purchaser and based on such review shall be satisfied, in its sole
discretion, as to the nature, condition and profitability of the business,
assets, and properties of Peoplesway and the liabilities and potential
liabilities of Peoplesway and shall have indicated such satisfaction and
approval in a writing delivered to Purchaser four (4) days prior to the Closing
Date.
8. Post-Closing Covenants. iNet and Purchaser agree as follows with
respect to the period following the Closing:
8.1 Cooperation of the Former Officers of iNet. The current officers
and directors of iNet, will reasonably cooperate upon and after the Closing Date
in effecting the orderly transfer of the assets and properties as well as the
transfer of control of iNet to Purchaser by using their best efforts to cause
any federal, state or local governmental body, and any agency, department and
instrumentality thereof, to have Contracts between such government, agency,
department and instrumentality and iNet, to the extent required under any
existing Contracts between iNet and such governmental body, as a result of the
change of control of iNet, to be approved and transferred into the name of
Purchaser as such name may be changed following the Closing.
8.2 Litigation Support. If and to the extent that iNet is actively
contesting or defending against any charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand (collectively "Proceedings") in
connection with:
(a) any transaction contemplated under this Agreement, or
(b) any fact, situation, circumstance, status, condition, activity,
practice, planning, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving iNet, and the current
officers and directors of iNet will reasonably cooperate with Purchaser and its
counsel in contesting or defending any such Proceedings, making available any
personnel of iNet, and providing such testimony and access to their books and
records as shall be reasonably necessary in connection with contesting or
defending against such Proceedings. iNet shall indemnify Purchaser in
contesting, or defending against, any such Proceedings to the extent of the
obligation to indemnify Purchaser under the terms of this Agreement. Otherwise,
Purchaser shall bear the cost and expense of contesting or defending against any
such Proceedings.
8.3 Other Transitional Matters. The current officers and directors of
iNet will not take any action which primarily is designed or intended to have
the effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of, or Person having a business relationship with, iNet from
maintaining the same business relationships with iNet after the Closing as it
maintained with iNet prior to the Closing, or in any manner prior to or after
the Closing interfering with or disrupting such relationships to Purchaser's
detriment. iNet and the current officers and directors of iNet will refer all
inquiries by lessors, licensors, customers suppliers, business associates or
other Persons having a relationship with iNet relating to the business as
conducted by iNet prior to this transaction from and after the Closing Date.
8.4 Cooperation After Closing. ln case at any time after the Closing
Date any further action is necessary or desirable to carry out and accomplish
the purposes of this Agreement and the transactions contemplated hereunder, the
current officers and directors of iNet, in the case of the performance by iNet
as contemplated under this Agreement, and Purchaser, in the case of the
performance of Purchaser as contemplated under this Agreement, will take such
further action as the party seeking or requesting such performance ("Requesting
Party") may reasonably request, including executing and delivering such further
instruments and documents as shall be necessary or appropriate to accomplish and
effectuate the transactions contemplated under this Agreement. Except as to
costs and damages associated with the indemnification of Purchaser, as provided
in this Agreement, all costs and expenses relating to any such matters after the
Closing Date will be borne by Purchaser.
8.5 Confidential Information. The current officers and directors of
iNet will treat and hold as such all of the Confidential Information relating to
iNet, Purchaser which was acquired or obtained by them in connection with or
during their involvement with iNet in any capacity, whether as a shareholder,
officer, director, employee or agent. For purposes of this Section 8.5, the term
"Confidential Information" means any and all documents or information, either
oral or in writing, including without limiting the generality thereof any and
all reports, charts, graphs, photographs, diagrams, drawings, technical
specifications, financial statements, customer and supplier information, pricing
information, financial projections, business plans and strategies and trade
secrets of every kind, known to or in the possession or which came to the
attention of such Person in the course of his involvement with or employment by
iNet or as a result of the negotiations, investigation and due diligence review
of Purchaser's records, documents, instruments, data and any and all other
information of a confidential nature, which has not been previously made public
by iNet, Purchaser. The current officers and directors of iNet will refrain from
using any of the Confidential Information except as contemplated under this
Agreement and shall deliver promptly to Purchaser, or destroy at the request and
option of Purchaser, all tangible correspondence, documents, instruments,
memoranda and all other writings (and all copies thereof) which embody the
Confidential Information which are in such Person's possession.
8.6 Disclosure Required in Legal Proceedings. If the current officers
and directors of iNet are requested or required (by oral question or request for
information or document in any legal proceeding, interrogatory, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, the current officers and directors of iNet will notify Purchaser,
promptly of any such request or requirement to enable Purchaser to seek an
appropriate remedy to enjoin the disclosure of the Confidential Information or
in their sole discretion waive compliance with the provisions of Section 8.6 of
this Agreement.
8.7 Registration of Peoplesway Stock Issued to iNet Shareholders. Within
thirty (30) days following the filing of the final amendment to Purchaser's
current report of Form 8-K relating to the exchange of stock between iNet and
Purchaser as contemplated under this Agreement or within the time period as
otherwise provided in the Registration Rights Agreement (which Form 8-K Report
will be initially filed not later than 15 days following the Closing Date),
Purchaser shall file with the United States Securities and Exchange Commission a
registration statement on Form SB-2 or any other appropriate form of
registration statement providing for the registration of all shares of
Peoplesway Common Stock issued to the shareholders of iNet to the extent they
have received such shares ("Registered Peoplesway Shares") for a secondary
offering by such shareholders for the reoffer and resale thereof. The obligation
of Purchaser to register such shares of Peoplesway Common Stock for reoffer and
resale as Registered Peoplesway Shares shall be subject to the terms and
provisions of the Registration Rights Agreement attached to this Agreement as
Exhibit F and made a part of this Agreement by reference.
8.8 Cooperation on Filing of Amendment to Form 8-K (if necessary). iNet
shall cooperate fully with preparing any audited financial statements of iNet to
the full extent requested by Purchaser to enable Purchaser to file an amendment
to such Form 8-K (if necessary) report (include such audited financial
statements of iNet if such financial statements are required to be filed under
Rule 310(c) of Regulation S-K or S-B as adopted under the Securities Act (within
60 days following the filing of the Form 8-K Report).
9. Delivery of Closing Documents.
9.1 Delivery of Closing Documents to Purchaser. Subject to the
fulfillment of all of the conditions set forth in Section 6 of this Agreement,
at the Closing, the following documents (agreements, and instruments shall be
duly delivered by iNet and the shareholders of iNet:
9.1.1 iNet Stock Certificates. Certificates representing 100% the
shares of iNet Stock (less the shares of iNet Stock owned by those exercising
their dissenter's rights) which shall be duly executed in blank or with a duly
executed stock power attached thereto, endorsed in blank, in order to effect the
transfer of the shares of iNet Stock from the shareholders of iNet to Purchaser,
with all stock transfer, tax stamps, if any, affixed and cancelled;
9.1.2 Shareholder Certificates. The Shareholder Certificates in the
form of Exhibit D attached to this Agreement signed by each shareholder, who in
the aggregate shall constitute all of the shareholders of iNet, who are not
exercising their dissenter's rights under Section 6.4 of this Agreement or
electing to receive cash in lieu of shares of Peoplesway Common Stock under
Section 2.1 of this Agreement subject to the limitations thereunder;
9.1.3 Resignations. The Resignations of the Officers and Directors
of iNet as agreed upon in Exhibit C;
9.1.4 iNet Records. The books, records and other documents referred
to in Section 6.9 of this Agreement;
9.1.5 Counsel's Opinion. The opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
counsel for iNet in the form of Exhibit E attached to this Agreement, such
opinion letter to be in the form and substance satisfactory to Purchaser;
9.1.6 Approvals. All consents and Approvals referred to in Section
3.23 of this Agreement;
9.1.7 Closing Certificate. iNet's closing certificate in the form
of Exhibit G attached to this Agreement;
9.1.8 Releases. To the extent appropriate and only if any secured loan, for
which iNet is currently obligated is paid in whole or in part on or prior to the
Closing Date (which is not contemplated as of the date hereof), documentation
(including without limitation, duly executed releases and UCC-3 termination
statements) satisfactory in form and substance to Purchaser as requested by
Purchaser to release all or a portion of such encumbrances to the extent of such
loan repayment, if any, or satisfaction of such loan in favor of any of the
holders of any such indebtedness which encumbers the property and assets of
iNet;
9.1.9 Additional Documents. Such other documents or instruments of further
assurance or conveyance as shall be deemed necessary and appropriate by the
Purchaser.
9.2 Delivery of Documents to iNet and the iNet Shareholders.
Subject to the fulfillment of all conditions set forth in Section 7 of this
Agreement, at the Closing, the following documents, agreements and instruments
shall be duly delivered by the Purchaser to iNet and the shareholders of iNet:
9.2.1 Peoplesway Common Stock. Stock Certificates representing
shares of Peoplesway Common Stock to be issued to each of the shareholders of
iNet in the amounts set forth in Exhibit A attached hereto;
9.2.2 Good Standing Certificate. A Certificate of good standing from
the Nevada Secretary of State, dated not more than five (5) business days prior
to the Closing Date evidencing that Purchaser is duly qualified and in good
standing under the laws of such state and in effect indicating that Purchaser
has filed all franchise taxes on the date of such certificate, that all taxes
shown on such returns to be due have been paid in full, and that there are no
outstanding franchise tax claims or assessments against Purchaser as of the date
of such certificate;
9.2.3 Closing Certificate. Purchaser's closing certificate in the form
of Exhibit H attached to this Agreement;
9.2.4 Registration Rights Agreement. The Registration Rights Agreement
in the form of Exhibit F attached to this Agreement; and
9.2.5 Additional Documents. Such other documents and instruments of
further assurance and conveyance as shall be deemed necessary and appropriate to
the Closing of the transactions contemplated hereby.
10. Termination
10.1 Events of Termination This Agreement and the transactions
contemplated hereby may be terminated and abandoned upon the occurrence of any
of the following:
10.1.1 Mutual Consent At any time prior to the Closing Date by
mutual written consent of the Purchaser and iNet;
10.1.2 Delay By the Buyer or the Seller at any time after 18 months
after the date of this Agreement if Closing has not occurred;
10.1.3 Prior to Closing Date. By iNet or Purchaser if the other party
shall have (i) misstated any representation or been in breach of any warranty
contained herein, or (ii) breached any covenant, undertaking or restriction
contained herein, and such misstatement or breach has not been cured by the
earlier of (a) ten (10) days after the giving of notice of such party of such
misstatement or breach or (b) the Closing Date;
10.1.4 Failure to Satisfy Condition of Closing. By Purchaser if
Purchaser does not approve of the contracts as specified in Section 6.16 of this
Agreement or Purchaser's not satisfied with the results of its due diligence
review of the documents as provided in Section 6.18 of this Agreement. By iNet
if it is not satisfied with the results of its due diligence review of the
documents as provided in Section 7.6 of this Agreement.
10.1.5 Amendments of Exhibits. By the party ("Receiving Party")
receiving Exhibits and Schedules or amendments thereto from the other party to
this Agreement which disclose information which such Receiving Party determines
to materially, adversely affect the economic, financial or business
considerations previously determined by the Receiving Party in entering into
this Agreement and to which such Receiving Party gives written notice to the
other party within ten (10) days after such amendment setting forth its
objections.
10.1.6 Peoplesway Stock Price. By iNet if the closing price of
Peoplesway Common Stock is below the average price level as provided in Section
7.5 of this Agreement and by Purchaser if the closing price of Peoplesway Common
Stock is above the average price level as provided in Section 7.5 of this
Agreement.
10.1.7 Consequences of Termination. In the event of a termination and
abandonment of this Agreement pursuant to the provisions of this Section 10,
this Agreement shall become void and have no effect, without any liability on
any of the parties or their directors, or officers or shareholders in respect of
this Agreement. Notwithstanding anything contained in the foregoing to the
contrary, if this Agreement is terminated as provided in Section 10.1.2 or due
to a delay caused by the failure of a party to perform its obligations under of
this Agreement, the defaulting party whose misstatement or breach or failure to
perform caused the termination of this Agreement shall be obligated to pay the
other party's costs and expenses incurred in connection with this Agreement,
including actual attorney's fees; provided, however, that no such termination
shall relieve the defaulting or nonperforming party from any liabilities or
damages resulting from a breach by that party of its representations,
warranties, covenants, agreements or other obligations under this Agreement
prior to such termination. Otherwise, if the transactions contemplated hereunder
cannot be consummated for reasons beyond the control of the parties hereto,
provided they have used their best efforts to acquire the approvals and consents
hereunder, or this Agreement is terminated under the provisions of Sections
10.1.1, 10.1.3, 10.1.4, 10.1.5 or 10.1.6 (which delay is not caused by any
party's failure to perform), then each party to this Agreement will pay its own
expenses, including without limitation its attorneys' fees and costs.
11. Miscellaneous
11.01 Modification; Waiver This Agreement may be modified, amended or
supplemented only by a written instrument executed by the Purchasers and iNet.
The failure of either Party to enforce or insist upon compliance with any of
the terms or conditions of this Agreement shall not constitute a general
waiver or relinquishment of any such terms or conditions, but the same shall be
and remain at all times in full force and effect.
11.02 Entire Agreement This Agreement, including the Schedules and
Exhibits hereto and thereto, constitute the entire agreement of the Parties
hereto with respect to the subject matter hereof and supersedes any and
all other prior understandings, contracts or agreements, representations or
warranties, oral or written, among the Parties hereto in respect of the subject
matter of this Agreement.
11.03 Expenses Whether or not the transactions contemplated herein
shall be consummated, each Party shall (except as otherwise specifically
provided herein) pay its own expenses incident to the preparation and
performance of this Agreement, including broker's fees and commissions.
11.04 Rights and Remedies The rights and remedies granted under this
Agreement shall not be exclusive rights and remedies, but shall be in addition
to all other rights and remedies available at law or in equity.
11.05 Further Actions Each Party shall execute and deliver such other
certificates, agreements, conveyances, certificates of title and other documents
and take such other actions as may reasonably be requested by the other Party
in order to consummate or implement the transactions contemplated by this
Agreement.
11.06 No Benefit To Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto, the shareholders of iNet and their respective heirs, Successors,
assigns, and such representations, warranties, covenants and agreements shall
not be construed as conferring, and are not intended to confer, any rights on
any other persons.
11.07 Notices All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, registered mail, first-class postage paid,
If to the Purchaser:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇▇▇.▇▇▇., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copies to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to iNet:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
iNet Worldwide, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11.11 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, by operation of law or
otherwise, by any Party hereto without the prior written consent of the other
Party. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the Parties hereto and their respective successors
and permitted assigns. Except as aforesaid, nothing in this Agreement, express
or implied, is intended to confer upon any person other than the Parties hereto
and their said successors and assigns, any rights, remedies or obligations
under or by reason of this Agreement.
11.12 Severability If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any adverse manner to either Party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
11.13 Counterparts This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.
11.14 Headings The article and section headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
11.15 Governing Law; Submission to Jurisdiction; Selection of Forum.
This Agreement shall be construed, performed and enforced in accordance with the
laws of the State of North Carolina, without reference to the conflict of laws
principles thereof. Each party hereto agrees that it shall bring any action or
proceeding in respect of any claim arising out of or related to this agreement
or the transactions contained in or contemplated by this Agreement, whether in
tort or contract or at law or in equity, exclusively in the United States
District Court for the Fifth District of North Carolina (the "Chosen
Court") and (i) irrevocably submits to the exclusive jurisdiction of the
Chosen Court, (ii) waives any objection to laying venue in any such action or
proceeding in the Chosen Court, (iii) waives any objection that the Chosen Court
is an inconvenient forum or does not have jurisdiction over any party hereto and
(iv) agrees that service of process upon such party in any such action or
proceeding shall be effective if notice is given in accordance with Section
12.06 of this Agreement.
11.16 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
INET WORLDWIDE, INC.
____________________________
By:__________________________
Its:__________________________
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
________________________
By: _____________________
Its:______________________