ACQUSITION AND EXCHANGE AGREEMENT
Between
PAIVIS,
CORP.
AVENTRA
COMMUNICATIONS, LTD.
and
DETROIT
PHONE CARD, INC.
Dated:
October 4, 2007
TABLE
OF CONTENTS
ARTICLE
I REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF Detroit Phone Card, Inc.
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1.01
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Organization
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1
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1.02
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Capitalization
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1
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1.03
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Financial
Statements
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2
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1.04
|
Information
|
2
|
1.05
|
Options
and
Warrants
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2
|
1.06
|
Absence
of Certain Changes or
Events
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2
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1.07
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Litigation
and
Proceedings
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2
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1.08
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Contracts
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3
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1.09
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Material
Contract
Defaults
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3
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1.10
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No
Conflict With Other
Instruments
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3
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1.11
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Governmental
Authorizations
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3
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1.12
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Compliance
With Laws and
Regulations
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3
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1.13
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Approval
of
Agreement
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3
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1.14
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Material
Transactions or
Affiliations
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3
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1.15
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Detroit
Phone Card,
Inc. Schedules
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4
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1.16
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Payroll
Taxes and Corporate
Taxes
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4
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1.17
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Valid
Obligation
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4
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ARTICLE
II REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF PAIVIS CORP.
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2.01
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Organization
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4
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2.02
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Capitalization
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5
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2.03
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Subsidiaries
and Predecessor
Corporations
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5
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2.04
|
Securities
Filings; Financial
Statement
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5
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2.05
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Filing:
Books and
Records
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5
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2.06
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Information
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5
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2.07
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Options
and
Warrants
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5
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2.08
|
Absence
of Certain Changes or
Events
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6
|
2.09
|
Litigation
and
Proceedings
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6
|
2.10
|
Contracts
|
6
|
2.11
|
Material
Contract
Defaults
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7
|
2.12
|
No
Conflict With Other
Instruments
|
7
|
2.13
|
Governmental
Authorizations
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7
|
2.14
|
Compliance
With Laws and
Regulations
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7
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2.15
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Material
Transactions or
Affiliation
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7
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2.16
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Approval
of
Agreement
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7
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2.17
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Continuity
of Business
Enterprises
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8
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2.18
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PAIVIS
CORP.
Schedules
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8
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2.19
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Bank
Account;
Power of Attorney
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8
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2.20
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Valid
Obligation
|
9
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ARTICLE
III PLAN
OF EXCHANGE
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3.01
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The
Purchase and
Exchange
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9
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3.02
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Working
Capital
Commitment
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9
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3.03
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Employment
Agreement
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9
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3.04
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Closing
Date and
Place
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9
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3.05
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Changes
and Interim
Operations
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9
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3.06
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Closing
Events
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10
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3.07
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Termination
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10
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ARTICLE
IV SPECIAL
COVENANTS
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4.01
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Access
to Properties and
Records
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10
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4.02
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Delivery
of Books and
Records
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11
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4.03
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Third
Party Consents and
Certificates
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11
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4.04
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Consent
of Detroit Phone Card,
Inc. . Shareholders
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11
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4.05
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Name
Change
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11
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4.06
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PAIVIS
Corporation Shareholder
Meeting
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11
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4.07
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Actions
Prior to
Closing
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11
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4.08
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Sales
Under Rule 144 or 145, If
Applicable
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11
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4.09
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Indemnification
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11
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ARTICLE
V CONDITIONS
PRECEDENT TO OBLIGATIONS OF PAIVIS CORPORATION.
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5.01
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Accuracy
of Representations and
Performance of Covenants
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12
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5.02
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Officer's
Certificates
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12
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5.03
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No
Material Adverse
Change
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12
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5.04
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Approval
by
Shareholders
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12
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5.05
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No
Governmental
Prohibitions
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12
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5.06
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Consents
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13
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5.07
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Delivery
of Audited Financial
Statements
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13
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5.08
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Other
Items
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13
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ARTICLE
VI CONDITIONS
PRECEDENT TO OBLIGATIONS OF Detroit Phone Card, Inc.
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6.01
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Accuracy
of Representations and
Performance of Covenants
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13
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6.02
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Officer's
Certificate
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13
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6.03
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No
Governmental
Prohibition
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13
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6.04
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Consents
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13
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6.05
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Delivery
of Initial Shares and
Cash Payment
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13
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6.06
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Delivery
of Working Capital
Commitment
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13
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6.05
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Execution
of Employment
Agreement
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13
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6.08
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Other
Items
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13
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ARTICLE
VII MISCELLANEOUS
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7.01
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Brokers
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14
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7.02
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Governing
Law
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14
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7.03
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Notices
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14
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7.04
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Attorney's
Fees
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14
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7.05
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Confidentiality
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14
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7.06
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Public
Announcements and
Filings
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15
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7.07
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Schedules;
Knowledge
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15
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7.08
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Third
Party
Beneficiaries
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15
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7.09
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Expenses
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15
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7.10
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Entire
Agreement
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15
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7.11
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Survival;
Termination
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15
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7.12
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Counterparts
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15
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7.13
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Amendment
or
Waiver
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15
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7.14
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Best
Efforts
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15
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ACQUISITION
AND EXCHANGE AGREEMENT
THIS
ACQUSITION AND EXCHANGE AGREEMENT (hereinafter referred to as this
"AGREEMENT ") is entered into as of this 4th
day of October
2007, by and between PAIVIS, CORP., a Nevada corporation
(hereinafter referred to as “PAIVIS”), AVENTRA
COMMUNICATIONS, LTD. a Nevada corporation and wholly owned
subsidiary of Paivis (“Sub”) and DETROIT PHONE CARD,
INC., a Michigan corporation and its subsidiaries (hereinafter referred
to as "DPC”), (collectively the three companies are hereinafter
referred to as the “Parties”) upon the following
premises:
Premises
WHEREAS,
PAIVIS, is a publicly held corporation organized under the laws of the State
of
Nevada;
WHEREAS,
AVENTRA COMMUNICATIONS LTD, is a corporation organized under the laws of the
State of Nevada and a wholly owned subsidiary of
Paivis, formed for the purposed of acquiring the Assets referred to
herein;
WHEREAS,
DPC is a privately-held corporation organized under the laws of
Michigan;
WHEREAS,
DPC wish to sell to Sub and Sub wishes to purchase from DPC one hundred percent
(100%) of the Assets recorded on the Consolidated Balance Sheet of DPC as at
September 30,2007 (the “Assets”) upon the terms and conditions
hereinafter set forth;
WHEREAS,
the Boards of Directors of each of Paivis and Sub deems it advisable
and in the best interests of each corporation and its respective shareholders
to
engage in the transactions contemplated hereby pursuant to which Sub will
acquire all of the Assets the DPC (the "Acquisition"); and
WHEREAS,
the respective Parties desire to make certain representations, warranties and
agreements in connection with the Acquisition, and.
WHEREAS,
the Parties desire to set forth the terms of the Purchase and Exchange, which
is
intended to constitute a tax-free reorganization pursuant to the provisions
of
Section 368(a)(2) of the Internal Revenue Code of 1986, as amended.
NOW
THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits
to
the Parties to be derived here from, it is hereby agreed as
follows:
Agreement
ARTICLE
I
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF DPC
As
an
inducement to, and to obtain the reliance of PAIVIS except as set forth on
the
DPC Schedules (as hereinafter defined), DPC represents and warrants as
follows:
Section
1.01 Organization. DPC is
a corporation duly organized, validly existing, and in good standing under
the
laws of Michigan and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted,
including qualification to do business as a foreign corporation in the states
or
countries in which the character and location of the assets owned
by it or the nature of the business transacted by it requires
qualification, except where failure to be so qualified would not have a material
adverse effect on its business. Included in the DPC Schedules are
complete and correct copies of the articles of incorporation, and the bylaws
of
DPC as in effect on the date hereof. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not, violate any provision of DPC’s articles of incorporation or
bylaws. DPC has taken all actions required by law, its articles of
incorporation, or otherwise to authorize the execution and delivery of this
Agreement. DPC has full power, authority, and legal right and has
taken all action required by law, its articles of incorporation, and otherwise
to consummate the transactions herein contemplated.
Section
1.02 Capitalization. All
issued and outstanding shares of DPC are legally issued,
fully paid, and non-assessable and not issued in violation of the preemptive
or
other rights of any person.
-1-
Section
1.03 Financial
Statements.
(a) Included
in the DPC Schedules are the consolidated audited balance sheet and the related
statements of operations of DPC as of December 31, 2005, December 31, 2006
and
the consolidated unaudited financial statements as of September 30,
2007;
(b) All
such consolidated financial statements have been prepared in accordance with
generally accepted accounting principles. The DPC balance sheet
presents a true and fair view as of the date of such balance sheet of the
financial condition of DPC. DPC did not have, as of the dates of such
balance sheets, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which should
be
reflected in the balance sheets or the notes thereto, prepared in accordance
with generally accepted accounting principles, and all assets reflected therein
are properly reported and present fairly the value of the assets of DPC in
accordance with generally accepted accounting principles.
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(c)
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DPC
has no liabilities with respect to the payment of any federal, state,
county, local
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or
other
taxes (including any deficiencies, interest or penalties), except for taxes
accrued but not yet due and payable.
(d) DPC
has filed all state, federal or local income and/or franchise tax returns
required to be filed by it from inception to the date hereof. Each of
such income tax returns reflects the taxes due for the period covered thereby,
except for amounts which, in the aggregate, are immaterial.
(e) The
books and records, financial and otherwise, of DPC are in all material respects
complete and correct and have been maintained in accordance with good business
and accounting practices.
(f) All
of DPC’s assets are reflected on its consolidated financial statements, and,
except as set forth in the DPC Schedules or the financial statements of DPC
or
the notes thereto, DPC has no material liabilities, direct or indirect, matured
or unmatured, contingent or otherwise.
Section
1.04 Information. The
information concerning DPC set forth in this Agreement and in the
DPC Schedules which are to be incorporated herein as of the date of
above written or no later than Closing is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit
to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In
addition, DPC has fully disclosed in writing to PAIVIS (through this Agreement
or the DPC Schedules) all information relating to matters involving DPC or
its
assets or its present or past operations or activities which (i) indicated
or
may indicate, in the aggregate, the existence of a greater than $25,000
liability or diminution in value, (ii) have led or may lead to a competitive
disadvantage on the part of DPC or (iii) either alone or in aggregation with
other information covered by this Section, otherwise have led or may lead to
a
material adverse effect on the transactions contemplated herein or on DPC,
its
assets, or its operations or activities as presently conducted or as
contemplated to be conducted after the Closing , including, but not limited
to,
information relating to governmental, employee, environmental, litigation and
securities matters and transactions with affiliates.
Section
1.05 Options
or Warrants. There ere are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued DPC common
stock.
Section
1.06 Absence
of Certain Changes or Events. Except as set forth in this
Agreement or the DPC Schedules, since December 31, 2006 there has been no
material change in the business and assets of DPC and to the best knowledge
of
DPC, DPC has not become subject to any law or regulation which
materially and adversely affects, or in the future may adversely affect the
business, operations, properties, assets, or condition of DPC.
Section
1.07 Litigation
and Proceedings. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of DPC after reasonable
investigation, threatened by or against DPC or affecting DPC or its properties,
at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any
kind. DPC does not have any knowledge of any material default on its
part with respect to any judgment, order, injunction, decree, award, rule,
or
regulation of any court, arbitrator, or governmental agency or instrumentality
or of any circumstances that, after reasonable investigation, would result
in
the discovery of such a default.
-2-
Section
1.08 Contracts.
(a) Except
as included or described in the DPC Schedules, there are no "material"
contracts, agreements, franchises, license agreements, debt instruments or
other
commitments to which DPC is a party or by which it or any of its assets,
products, technology, or properties are bound other than those incurred in
the
ordinary course of business (as used in this Agreement, a "material" contract,
agreement, franchise, license agreement, debt instrument or commitment is one
which (i) will remain in effect for more than six (6) months after the date
of
this Agreement or (ii) involves aggregate obligations of at least twenty-five
thousand dollars ($25,000));
(b) All
contracts, agreements, franchises, license agreements, and other commitments
to
which DPC is a party or by which its properties are bound and which are material
to the operations of DPC taken as a whole are valid and enforceable by DPC
in
all respects, except as limited by bankruptcy and insolvency laws and by other
laws affecting the rights of creditors generally;
(c) Except
as set forth in the DPC Schedules, DPC is not a party to or bound by, and the
properties of DPC are not subject to any contract, agreement, other commitment
or instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of DPC;
and
(d) Except
as included or described in the DPC Schedules or reflected in the most recent
DPC balance sheet, DPC is not a party to any oral or written (i) contract for
the employment of any officer or employee which is not terminable on 30 days,
or
less notice; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, (iii) agreement, contract,
or
indenture relating to the borrowing of money, (iv) guaranty of any obligation,
other than one on which DPC is a primary obligor, for the borrowing of money
or
otherwise, excluding endorsements made for collection and other guaranties
of
obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of $25,000 in the aggregate; (vi) collective
bargaining agreement; or (vii) agreement with any present or former officer
or
director of DPC.
Section
1.09 Material
Contract Defaults. DPC is not in default in any material respect
under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets
or
condition of DPC and there is no event of default in any material respect under
any such contract, agreement, lease, or other commitment in respect of which
DPC
has not taken adequate steps to prevent such a default from
occurring.
Section
1.10 No
Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will
not
result in the breach of any term or provision of, constitute an event of default
under, or terminate, accelerate or modify the terms of any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument
to
which DPC is a party or to which any of its properties or operations are
subject.
Section
1.11 Governmental
Authorizations. Except as set forth in the DPC Schedules, DPC has
all licenses, franchises, permits, and other governmental authorizations that
are legally required to enable it to conduct its business in all material
respects as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided,
no
authorization, approval, consent, or order of, or registration, declaration,
or
filing with, any court or other governmental body is required in connection
with
the execution and delivery by DPC of this Agreement and the consummation by
DPC
of the transactions contemplated hereby.
Section
1.12 Compliance
With Laws and Regulations. Except as set forth in the DPC
Schedules, to the best of its knowledge DPC has complied with all applicable
statutes and regulations of any federal, state, or other governmental entity
or
agency thereof, except to the extent that noncompliance would not materially
and
adversely affect the business, operations, properties, assets, or condition
of
DPC, or except to the extent that noncompliance would not result in the
occurrence of any material liability for DPC.
Section
1.13 Approval
of Agreement. The board of directors of DPC has authorized the
execution and delivery of this Agreement by DPC and has approved this Agreement
and the transactions contemplated hereby, and will recommend to the DPC
Shareholders that the Exchange be accepted by them.
Section
1.14 Material
Transactions or Affiliations. Set forth in the DPC Schedules is a
description of every contract, agreement, or arrangement between DPC and any
predecessor and any person who was at the time of such contract, agreement,
or
arrangement an officer, director, or person owning of record, or known by DPC
to
own beneficially, 5% or more of the issued and outstanding common stock of
DPC
and which is to be performed in whole or in part after the date hereof or which
was entered into not more than three years prior to the date
hereof. Except as disclosed in the DPC Schedules or otherwise
disclosed herein, no officer, director, or 5% shareholder of DPC has, or has
had
since inception of DPC, any known interest, direct or indirect, in any
transaction with DPC which was material to the business of DPC. There
are no commitments by DPC, whether written or oral, to lend any funds, or to
borrow any money from, or enter into any other transaction with, any such
affiliated person.
-3-
Section
1.15 DPC
Schedules. DPC has delivered or agrees to deliver to PAIVIS the
following schedules as of the date of above written or no later than Closing,
which are collectively referred to as the "DPC Schedules" and which consist
of
separate schedules dated as of the date of execution of this Agreement or dated
as of the date of Closing, all certified by the chief executive officer of
DPC
as complete, true, and correct as of the date of this Agreement in all material
respects:
(a) a
schedule containing complete and correct copies of the articles of
incorporation, and bylaws of DPC in effect as of the date of this
Agreement;
(b) a
schedule containing complete and correct copies of the articles of
incorporation, and bylaws of GET MOBILE INC. a wholly owned subsidiary of
DPC;
(c) a
schedule containing the consolidated financial statements of DPC identified
in
paragraph 1.03(a);
(d) copies
of all licenses, permits, and other governmental authorizations (or requests
or
applications therefor) pursuant to which DPC carries on or proposes to carry
on
its business (except those which, in the aggregate, are immaterial to the
present or proposed business of DPC);
(e) a
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed in the DPC Schedules by Sections 1.01
through 1.14.
DPC
shall
cause the DPC Schedules and the instruments and data delivered to PAIVIS,
hereunder to be promptly updated after the date hereof up to and including
the
Closing .
Section
1.16 Payroll
Taxes and Corporate Taxes. All of the payroll taxes and corporate
taxes owed
by
DPC up
to the date of Closing shall remain the responsibility of DPC.
Section
1.17 Valid
Obligation. This Agreement and all agreements and other documents
executed by DPC in connection herewith constitute the valid and binding
obligation of DPC, enforceable in accordance with its or their terms, except
as
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefore may be
brought.
ARTICLE
II
REPRESENTATIONS,
COVENANTS, AND WARRANTIES OF PAIVIS AND SUB
As
an
inducement to, and to obtain the reliance of DPC and the DPC Shareholders,
except as set forth in the PAIVIS Schedules (as hereinafter defined), PAIVIS
AND
SUB represents and warrants as follows:
Section
2.01 Organization. PAIVIS
and Sub are corporations duly organized, validly existing, and in good standing
under the laws of Nevada and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets, to carry on its business in all material respects as
it
is now being conducted, and except where failure to be so qualified would not
have a material adverse effect on its business, there is no jurisdiction in
which it is not qualified in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. Included in the PAIVIS Schedules are complete and
correct copies of the articles of incorporation, and the bylaws as in effect
on
the date hereof. The execution and delivery of this Agreement does not, and
the
consummation of the transactions contemplated hereby will not, violate any
provision of PAIVIS and Subs’s articles of incorporation, and the
bylaws. PAIVIS and Sub has taken all action required by law,
its Articles of Incorporation, or otherwise to authorize the execution and
delivery of this Agreement, and PAIVIS and Sub has full power, authority, and
legal right and has taken all action required by law, its Articles of
Incorporation, or otherwise to consummate the transactions herein
contemplated.
-4-
Section
2.02 Capitalization. As
of June 30,2007 Paivis’s authorized capitalization consists of a) 125,000,000
shares of common stock, $0.0002 par value of which approximately 41,000,000
shares are issued and outstanding and: b) 15,000,000 shares of preferred stock
of $0.0002 par value of which 250,000 shares of Series A Preferred and 3,075,000
shares of Series B Preferred are issued and outstanding.. All issued
and outstanding shares are legally issued, fully paid, and non-assessable and
not issued in violation of the preemptive or other rights of any
person.
Section
2.03 Subsidiaries
and Predecessor Corporations. PAIVIS does not have any
predecessor corporation(s) or subsidiaries, and does not own, beneficially
or of
record, any shares of any other corporation, except as disclosed in Schedule
2.03. .
Section
2.04 Securities
Filings; Financial Statements.
|
(a)
|
Included
in the PAIVIS Schedules is (i) an unaudited consolidated balance
sheet of
PAIVIS as of June 30,
2007.
|
(b) PAIVIS
has no liabilities with respect to the payment of any federal, state, county,
local or other taxes (including any deficiencies, interest or penalties), except
for taxes accrued but not yet due and payable.
(c) PAIVIS
has timely filed all state, federal or local income and/or franchise tax returns
required to be filed by it from inception to the date hereof except those
described in the PAIVIS Schedules. Each of such income tax returns
reflects the taxes due for the period covered thereby, except for amounts that,
in the aggregate, are immaterial.
(d) The
books and records, financial and otherwise, of PAIVIS are in all material
aspects complete and correct and have been maintained in accordance with good
business and accounting practices.
(e) All
of PAIVIS's assets are reflected on its financial statements, and, except as
set
forth in the PAIVIS Schedules or the financial statements of PAIVIS or the
notes
thereto, PAIVIS has no material liabilities, direct or indirect, matured or
unmatured, contingent or otherwise.
Section
2.05 Filings:
Books and Records. The books and records, financial and
otherwise, of PAIVIS are in all material aspects complete and correct and have
been maintained in accordance with good business and accounting
practices.
Section
2.06 Information. The
information concerning PAIVIS set forth in this Agreement and the PAIVIS
Schedules is complete and accurate in all material respects and does not contain
any untrue statements of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. In addition, PAIVIS has fully
disclosed in writing to DPC (through this Agreement or the PAIVIS Schedules)
all
information relating to matters involving PAIVIS or its assets or its present
or
past operations or activities which (i) indicated or may indicate, in the
aggregate, the existence of a greater than $25,000 liability or diminution
in
value, (ii) have led or may lead to a competitive disadvantage on the part
of
PAIVIS or (iii) either alone or in aggregation with other information covered
by
this Section, otherwise have led or may lead to a material adverse effect on
the
transactions contemplated herein or on PAIVIS, its assets, or its operations
or
activities as presently conducted or as contemplated to be conducted after
the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section
2.07 Options
or Warrants. There are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued stock
of
PAIVIS, except as described in Schedule 2.06 (the "Existing
Rights").
-5-
Section
2.08 Absence
of Certain Changes or Events. Except as disclosed in the PAIVIS
Schedules, or otherwise disclosed in writing to DPC, since
the date of the most recent PAIVIS balance sheet:;
(a) there
has not been (i) any material adverse change in the business, operations,
properties, assets or condition of PAIVIS or (ii) any damage, destruction or
loss to PAIVIS (whether or not covered by insurance) materially and adversely
affecting the business, operations, properties, assets or condition of
PAIVIS except
as disclosed in PAIVIS Schedules; and
(b) PAIVIS
has not (i) amended its certificate of incorporation or bylaws; (ii) declared
or
made, or agreed to declare or make any payment of dividends or distributions
of
any assets of any kind whatsoever to stockholders or purchased or redeemed,
or
agreed to purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of business
or material considering the business of PAIVIS; (iv) made any material change
in
its method of management, operation, or accounting; (v) entered into any
transactions or agreements other than in the ordinary course of business; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or any
of
its salaried employees whose monthly compensation exceed $1,000;
or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement, made to, for or with its officers, directors, or
employees; except as disclosed in PAIVIS Schedules; and
(c) PAIVIS
has not (i) granted or agreed to grant any options, warrants, or other rights
for its stock, bonds, or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or agreed
to
pay any material obligations or liabilities (absolute or contingent) other
than
current liabilities reflected in or shown on the most recent PAIVIS balance
sheet and current liabilities incurred since that date in the ordinary course
of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of
less
than $1000), or canceled, or agreed to cancel, any debts or claims (except
debts
or claims which in the aggregate are of a value less than $1000); (v) made
or
permitted any amendment or termination of any contract, agreement, or license
to
which it is a party if such amendment or termination is material, considering
the business of PAIVIS; or (vi) issued, delivered or agreed to issue or deliver,
any stock, bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock), except in connection with
this Agreement, except as disclosed in PAIVIS Schedules; and
(d) to
the best knowledge of PAIVIS, it has not become subject to any law or regulation
which materially and adversely affects, or in the future, may adversely affect,
the business, operations, properties, assets or condition of PAIVIS except
as
disclosed in PAIVIS Schedules.
Section
2.09 Litigation
and Proceedings. There are no actions, suits, proceedings or
investigations pending or, to the knowledge PAIVIS after reasonable
investigation, threatened by or against PAIVIS or
affecting PAIVIS or its properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic
or
foreign, or before any arbitrator of any kind except as disclosed in PAIVIS
Schedules. PAIVIS has no knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule
or
regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance that after reasonable investigation would result in the
discovery of such default.
Section
2.10 Contracts.
(a) PAIVIS
is not a party to, and its assets, are not bound by, any material contract,
franchise, license agreement, agreement, debt instrument or other commitments
whether such agreement is in writing or oral, except as disclosed in PAIVIS
Schedules.
(b) PAIVIS
is not a party to or bound by, and the properties of PAIVIS are not subject
to
any contract, agreement, other commitment or instrument; any charter or other
corporate restriction; or any judgment, order, writ, injunction, decree, or
award which materially and adversely affects, the business operations,
properties, assets, or condition of PAIVIS except as disclosed in PAIVIS
Schedules.
(c) All
contracts, agreements, franchises, license agreements, and other commitments
to
which PAIVIS is a party or by which its properties are bound and which are
material to the operations of PAIVIS taken as a whole are valid and enforceable
by PAIVIS in all respects, except as limited by bankruptcy and insolvency laws
and by other laws affecting the rights of creditors generally;
(d) Except
as included or described in the PAIVIS Schedules or reflected in the most recent
PAIVIS consolidated balance sheet, PAIVIS is not a party to any oral or written
(i) contract for the employment of any officer or employee which is not
terminable on 30 days, or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement plan,
(iii) agreement, contract, or indenture relating to the borrowing of money,
(iv)
guaranty of any obligation, other than one on which PAIVIS is a primary obligor,
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations which, in the aggregate do not
exceed more than one year or providing for payments in excess of $25,000 in
the
aggregate; (vi) collective bargaining agreement; or (vii) agreement with any
present or former officer or director of PAIVIS.
-6-
Section
2.11 Material
Contract Defaults. PAIVIS is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets
or
condition of PAIVIS and there is no event of default in any material respect
under any such contract, agreement, lease,
or other commitment in respect of which PAIVIS has not taken adequate steps
to
prevent such a default from occurring.
Section
2.12 No
Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will
not
result in the breach of any term or provision of, constitute a default under,
or
terminate, accelerate or modify the terms of, any indenture, mortgage, deed
of
trust, or other material agreement or instrument to which DPC is a party or
to
which any of its assets or operations are subject.
Section
2.13 Governmental
Authorizations. PAIVIS has all licenses, franchises, permits, and
other governmental authorizations, that are legally required to enable it to
conduct its business operations in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities
or corporation laws, as hereinafter provided, no authorization, approval,
consent or order of, of registration, declaration or filing with, any court
or
other governmental body is required in connection with the execution and
delivery by PAIVIS of this Agreement and the consummation by PAIVIS of the
transactions contemplated hereby.
Section
2.14 Compliance
With Laws and Regulations. To the best of its knowledge, PAIVIS
has complied with all applicable statutes and regulations of any federal, state,
or other applicable governmental entity or agency thereof, except to the extent
that noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of DPC or except to the extent
that
noncompliance would not result in the occurrence of any material
liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities
authorities.
Section
2.15 Material
Transactions or Affiliations. Except as disclosed herein and in
the PAIVIS Schedules, there exists no contract, agreement or arrangement between
PAIVIS and any predecessor and any person who was at the time of such contract,
agreement or arrangement an officer, director, or person owning of record or
known by PAIVIS to own beneficially, 5% or more of the issued and outstanding
common stock of PAIVIS and which is to be performed in whole or in part after
the date hereof or was entered into not more than three years prior to the
date
hereof. Neither any officer, director, nor 5% shareholder of PAIVIS
has, or has had since inception of PAIVIS, any known interest, direct or
indirect, in any such transaction with PAIVIS which was material to the business
of PAIVIS. PAIVIS has no commitment, whether written or oral, to lend
any funds to, borrow any money from, or enter into any other transaction with,
any such affiliated person.
Section
2.16 Approval
of Agreement. The board of directors PAIVIS have authorized the
execution and delivery of this Agreement and has approved this Agreement and
the
transactions contemplated hereby.
-7-
Section
2.17 Continuity
of Business Enterprises. PAIVIS has no commitment or present
intention to liquidate PAIVIS or sell or otherwise dispose of a material portion
of PAIVIS’S business or assets following the consummation of the transactions
contemplated hereby except as disclosed in PAIVIS Schedules.
Section
2.18 PAIVIS
Schedules. PAIVIS has delivered or agrees to deliver to DPC the
following schedules as of the date above written or no later than fourteen
calendar days following the date above and subject to extension by mutual
agreement of the Parties., which are collectively referred to as the "PAIVIS
Schedules" and which consist of separate schedules, which are dated the date
of
this Agreement or dated as of the date of Closing, all certified by the chief
executive officer of PAIVIS to be complete, true, and accurate in all material
respects as of the date of this Agreement:
(a) a
schedule containing complete and accurate copies of the certificate of
incorporation and bylaws of PAIVIS as in effect as of the date of this
Agreement;
(b) a
schedule containing complete and correct copies of the articles of
incorporation, and bylaws of Aventra Communications Inc. a wholly owned
subsidiary of DPC, as in effect as of the date of this Agreement.
(c) a
schedule containing the consolidated financial statements of PAIVIS identified
in paragraph 2.04(a);
(d) a
Schedule 2.20(c) containing a list indicating the name and address of each
shareholder of PAIVIS together with the number of shares owned by him, her
or
it;
(e) a
schedule containing a description of all real property owned by PAIVIS, together
with a description of every mortgage, deed of trust, pledge, lien, agreement,
encumbrance, claim, or equity interest of any nature whatsoever in such real
property;
(f) copies
of all licenses, permits, and other governmental authorizations (or requests
or
applications therefor) pursuant to which PAIVIS carries on or proposes to carry
on its business (except those which, in the aggregate, are immaterial to the
present or proposed business of PAIVIS);
(g) a
schedule listing the accounts receivable and notes and other obligations of
PAIVIS as of June 30, 2007, or thereafter other than in the ordinary
course of business of PAIVIS, indicating the debtor and amount, and classifying
the accounts to show in reasonable detail the length of time, if any, overdue,
and stating the nature and amount of any refunds, set offs, reimbursements,
discounts, or other adjustments which are in the aggregate material and due
to
or claimed by such debtor;
(h) a
schedule listing the accounts payable and notes and other obligations payable
of
PAIVIS as of June 30, 2007, or that arose thereafter other than in the ordinary
course of the business of PAIVIS, indicating the creditor and amount,
classifying the accounts to show in reasonable detail the length of time, if
any, overdue, and stating the nature and amount of any refunds, set offs,
reimbursements, discounts, or other adjustments, which in the aggregate are
material and due to or claimed by PAIVIS respecting such
obligations;
(i) a
schedule setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of PAIVIS since
June 30, 2007 required to be provided pursuant to section 2.07 hereof;
and
(j) a
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed in the PAIVIS Schedules by Sections
2.01
through 2.19.
PAIVIS
shall cause the PAIVIS Schedules and the instruments and data delivered to
DPC
hereunder to be promptly updated after the date hereof up to and including
the
Closing Date.
Section
2.19 Bank
Accounts; Power of Attorney. Set forth in Schedule 2.19 is a true
and complete list of (a) all accounts with banks, money market mutual funds
or
securities or other financial institutions maintained by PAIVIS within the
past
twelve (12) months, the account numbers thereof, and all persons authorized
to
sign or act on behalf of PAIVIS, (b) all safe deposit boxes and other similar
custodial arrangements maintained by PAIVIS within the past twelve (12) months,
and (c) the names of all persons holding powers of attorney from PAIVIS or
who
are otherwise authorized to act on behalf of PAIVIS with respect to any matter,
other than its officers and directors, and a summary of the terms of such powers
or authorizations.
-8-
Section
2.20 Valid
Obligation. This Agreement and all agreements and other documents
executed by PAIVIS in connection herewith constitute the valid and
binding obligation of PAIVIS, enforceable in accordance with its or their terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to
the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefor may be
brought..
ARTICLE
III
PLAN
OF PURCHASE AND EXCHANGE
Section
3.01 The
Purchase and Exchange. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
each DPC Shareholder who shall elect to accept the purchase and exchange offer
described herein (the "Accepting Shareholders"), shall assign, transfer and
deliver, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, the Assets
of
DPC set forth on Schedule 1.19(c) attached hereto, in the aggregate
constituting 100% of the Assets; the objective of such Exchange being the
acquisition by Sub of 100% of the Assets of DPC. In exchange for the
transfer of such Assets by the DPC Shareholders, PAIVIS shall:
|
a)
|
issue
to the DPC Shareholders, Preferred Series D shares (the “Preferred Shares”
or “the Initial Shares”) equal to $3,750,000.The preferential provisions
(the “Provisions”) of the Preferred Shares will be defined at or before
Closing and;
|
|
b)
|
pay
to the DPC Shareholders an aggregate of $2,250,000 in cash,
and;
|
|
c)
|
pay
to the DPC Shareholders $500,000 upon reaching
operational milestones (the “Milestones”) related to Get Mobile
Inc. a subsidiary of DPC , to be defined at or before Closing,
and
|
|
d)
|
the
Preferred Shares will have piggy back registration rights. The Piggy
Back
Registration Rights Agreement shall be delivered and executed at
or before
Closing; and
|
|
e)
|
payment
of the Federal Excise Tax Refund as described in Section 3.02 herein
to
the shareholders of DPC (the
“Refund”),
|
At
the
Closing, one hundred percent (100%) of the Assets recorded on the
Consolidated Balance Sheet of DPC as at September 30, 2007 will be
transferred to SUB. Upon consummation of the transaction contemplated herein,
assuming participation by all of the DPC Shareholders, all of the Assets of
DPC
shall be held by Sub.
Section
3.02 Federal
Excise Tax Refund . PAIVIS
and Sub agrees that in the event a Federal Excise Tax refund is
issued to DPC for the period ending December 31, 2006 for which DPC has
submitted its application to the Internal Revenue Service, the proceeds from
the
refund, net of any costs incurred by DPC to receive the refund, the refund
will
be paid to the Shareholders of DPC .
Section
3.03 Line
of Credit. PAIVIS agrees to provide to DPC $700,000 (“Debt
Repayment Capital”) in financing for the purposes of reducing the Line of Credit
at the Huntington National Bank required to be paid due to a change of control
of DPC.
Section
3.04 Employment
and Stock Compensation Agreement for Xxxx Xxxxxxx. PAIVIS and DPC
President & CEO Xxxx Xxxxxxx shall at or before Closing
negotiate and execute and an Employment and Stock Compensation Agreement for
and
with Xxxx Xxxxxxx. The Employment and Stock Compensation Agreement with Xxxx
Xxxxxxx will
be
negotiated with mutually accepted terms including responsibilities and
compensation comparable to those currently in effect for Xxxx
Xxxxxxx and
employment period of a minimum of five years and provision providing for any
non
compete provisions to be terminated if employment agreement with Xxxx
Xxxxxxx is
terminated by PAIVIS without cause.
Section
3.05 Closing. The
closing ("Closing") of the transactions contemplated by this Agreement shall
take place on October 31 2007 at 3:00 p.m., Eastern Standard Time or at a time
and place agreeable by both Parties.
Subject to extension by mutual agreement of the Parties.
-9-
Section
3.06 Changes
to Interim Operations. The financial statements (unaudited) of DPC shall
reflect all current and total liabilities, including all trade payables and
all
DPC assets at Closing; except that immediately before Closing all cash and
receivables of DPC may be used , under the sole discretion of DPC by
DPC to reduce DPC’s credit balance for inventory/COGS. Therefore no cash assets
may be transferred with DPC.
Section
3.07 Closing
Events. At the Closing, DPC and each of the Accepting
Shareholders shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. This Agreement shall
become effective as of Closing on October 31, 2007. Subject to extension by
mutual agreement of the Parties
Section
3.08 Termination.
(a) This
Agreement may be terminated by the board of directors of either PAIVIS or DPC
at
any time prior to the Closing if:
(i) there
shall be any actual or threatened action or proceeding before any court or
any
governmental body which shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in the judgment of such
board of directors, made in good faith and based upon the advice of its legal
counsel, makes it inadvisable to proceed with the Exchange; or
(ii) any
of the transactions contemplated hereby are disapproved by any regulatory
authority whose approval is required to consummate such transactions (which
does
not include the Securities and Exchange Commission) or in the judgment of such
board of directors, made in good faith and based on the advice of counsel,
there
is substantial likelihood that any such approval will not be obtained or will
be
obtained only on a condition or conditions which would be unduly burdensome,
making it inadvisable to proceed with the Exchange.
In
the
event of termination pursuant to this paragraph (a) of Section 3.04, no
obligation, right or liability shall arise hereunder, and each party shall
bear
its own costs and expenses incurred by it in connection with the negotiation,
drafting, and execution of this Agreement and the transactions herein
contemplated.
ARTICLE
IV
SPECIAL
COVENANTS
Section
4.01 Access
to Properties and Records. Each of the Parties will each afford
to the officers and authorized representatives of the other Parties full access
to their properties, books and records, in order that each may have a full
opportunity to make such reasonable investigation as they shall desire to make
of the affairs of the other, and each will furnish the other with such
additional financial and operating data and other information reasonably
requested.
-10-
Section
4.02 Delivery
of Books and Records. At the Closing, DPC shall deliver to PAIVIS
the copies of the corporate minute books, books of account, contracts, records,
and all other books or documents of DPC now in the possession of DPC or its
officer and director.
Section
4.03 Third
Party Consents and Certificates. All Parties agree to cooperate
with each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section
4.04 Consent
of DPC Shareholders. DPC shall use its best efforts to obtain the
consent of all DPC shareholders to participate in the Exchange.
Section
4.05 PAIVIS
Shareholder Meeting. If required PAIVIS shall seek a consent of
the majority voting shareholders or call a special shareholders meeting to
be
held on or prior to the Closing Date for the purposes of requesting to approve,
and PAIVIS's board of directors shall recommend approval of, the terms of this
Agreement and such other matters as shall require shareholder approval
hereunder
Section
4.06 Post-ExchangeSales
Under Rule 144 or 145, If Applicable.
(a) PAIVIS
will use its best efforts to at all times comply with the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including timely filing of all periodic reports required under the provisions
of
the Exchange Act and the rules and regulations promulgated
thereunder.
(b) Upon
being informed in writing by any such person holding restricted stock of PAIVIS
subsequent to the Exchange that such person intends to sell any shares under
Rule 144, Rule 145 or Regulation S promulgated under the Securities Act
(including any rule adopted in substitution or replacement thereof), PAIVIS
will
certify in writing to such person that it has filed all of the reports required
to be filed by it under the Exchange Act to enable such person to sell such
person's restricted stock under Rule 144, 145 or Regulation S, as may be
applicable in the circumstances, or will inform such person in writing that
it
has not filed any such report or reports.
(c) If
any certificate representing any such restricted stock is presented to PAIVIS’S
transfer agent for registration of transfer in connection with any sale
theretofore made under Rule 144, 145 or Regulation S, provided such certificate
is duly endorsed for transfer by the appropriate person(s) or accompanied by
a
separate stock power duly executed by the appropriate person(s) in each case
with reasonable assurances that such endorsements are genuine and effective,
and
is accompanied by an opinion of counsel satisfactory to PAIVIS and
its counsel that the stock transfer has complied with the requirements of Rule
144, 145 or Regulation S, as the case may be, PAIVIS will promptly instruct
its
transfer agent to register transfer such shares and to issue one or more new
certificates representing such shares to the transferee and, if appropriate
under the provisions of Rule 144, 145 or Regulation S, as the case may be,
free
of any stop transfer order or restrictive legend. The provisions of
this Section 4.08 shall survive the Closing and the consummation of the
transactions contemplated by this Agreement.
Section
4.07 Indemnification.
(a) DPC
hereby agrees to indemnify PAIVIS and each of the officers, agents and directors
of PAIVIS as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and
all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever),
to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentations made under Article I of this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby
and
termination of this Agreement.
(b) PAIVIS
hereby agrees to indemnify DPC and each of the officers, agents, and directors
of DPC as of the date of execution of this Agreement against any loss,
liability, claim, damage, or expense (including, but not limited to, any and
all
expense whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever),
to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Article II of this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby
and
termination of this Agreement.
-11-
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF PAIVIS
The
obligations of PAIVIS AND SUB under this Agreement are subject to the
satisfaction, at or before the Closing, of the following
conditions:
Section
5.01 Accuracy
of Representations and Performance of Covenants. The
representations and warranties made by DPC in this Agreement were true when
made
and shall be true at the Closing with the same force and effect as if such
representations and warranties were made at and as of the Closing (except for
changes therein permitted by this Agreement). DPC shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by DPC prior to or at the
Closing.
Section
5.02 Officer's
Certificate. PAIVIS AND SUB has been furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of DPC to the
effect that no litigation, proceeding, investigation, or inquiry is pending,
or
to the best knowledge of DPC threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this
Agreement, or, to the extent not disclosed in the DPC Schedules, by or against
DPC, which might result in any material adverse change in any of the assets,
properties, business, or operations of DPC.
Section
5.03 No
Material Adverse Change. Prior to the Closing , there shall not
have occurred any change in the financial condition, business, or operations
of
DPC nor shall any event have occurred which, with the lapse of time or the
giving of notice, is determined to be unacceptable using the criteria set forth
in Section 1.06.
Section
5.04 Approval
by Shareholders. The Purchase and Exchange shall have been
approved, and shares delivered in accordance with Section 3.01, by the holders
of not less than one hundred percent (100%) of the outstanding common stock
of
DPC.
Section
5.05 No
Governmental Prohibition. No order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or governmental
or regulatory authority or instrumentality which prohibits the consummation
of
the transactions contemplated hereby.
-12-
Section
5.06 Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of DPC after the Closing
on
the basis as presently operated shall have been obtained.
Section
5.07 Delivery
of Financial Statements. PAIVIS AND SUB shall have received from
DPC Consolidated Audited financial Statements of DPC for the previous
two DPC fiscal periods ended December 31, 2006 and December 31, 2005
and the unaudited financial statements for the period ending September
30,2007.
Section
5.08 Satisfaction
of Due Diligence Mutual completion of legal and financial
due diligence to the satisfaction of both DPC and Paivis in writing to the
other
party before or at Closing, including disclosure of all pending material
agreements contracts and liabilities
Section
5.09 Other
Items.
(a) PAIVIS
AND SUB shall have received a list of DPC’s Assets and shareholders as of
September 30, 2007 and as of the date of Closing, certified by an executive
officer of DPC as being true, complete and accurate; and
(b) PAIVIS
AND SUB shall have received such further opinions, documents, certificates
or
instruments relating to the transactions contemplated hereby as PAIVIS AND
SUB
may reasonably request.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF DPC
The
obligations of DPC and the DPC Shareholders under this Agreement are subject
to
the satisfaction, at or before the Closing, of the following
conditions:
Section
6.01 Accuracy
of Representations and Performance of
Covenants. The representations and warranties made by PAIVIS and
Sub in this Agreement were true when made and shall be true as of the Closing
(except for changes therein permitted by this Agreement) with the same force
and
effect as if such representations and warranties were made at and as of the
Closing. Additionally, PAIVIS and Sub shall have performed and
complied with all covenants and conditions required by this Agreement to be
performed or complied shall have approved the Exchange and the related
transactions described herein. DPC shall have been furnished with
certificates, signed by duly authorized executive officers of PAIVIS and Sub
and
dated the Closing, to the foregoing effect.
Section
6.02 Officer's
Certificate. DPC shall have been furnished with certificates
dated the Closing Date and signed by duly authorized executive officers of
PAIVIS and Sub to the effect that no litigation, proceeding, investigation
or
inquiry is pending, or to the best knowledge of PAIVIS and Sub threatened,
which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or, to the extent not disclosed
in
the PAIVIS Schedules, by or against PAIVIS and Sub, which might result in any
material adverse change in any of the assets, properties or operations of PAIVIS
and Sub
Section
6.03 No
Governmental Prohibition. No order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or governmental
or regulatory authority or instrumentality which prohibits the consummation
of
the transactions contemplated hereby.
Section
6.04 Consents. All
consents, approvals, waivers or amendments pursuant to all contracts, licenses,
permits, trademarks and other intangibles in connection with the transactions
contemplated herein, or for the continued operation of each party after the
Closing on the basis as presently operated shall have been
obtained.
|
Section
6.05
|
Delivery
of the Preferred Shares and Cash Payment. PAIVIS
shall have at Closing delivered to the DPC Shareholders the Preferred
Shares and the portion of the cash payment due on Closing as per
Section
3.01.
|
|
Section
6.06
|
Provisions
of the Preferred Shares. Paivis shall have at or before Closing define
the Provisions of the Preferred Shares per Section
3.01.
|
|
Section
6.07
|
The
Milestones. The Milestones shall have been defined by the Parties at
Closing per Section 3.01.
|
|
Section
6.08
|
Delivery
of Debt Repayment Capital . PAIVIS shall have at Closing
delivered to DPC the Debt Repayment Capital as per Section
3.03.
|
|
Section
6.09
|
Execution
of Employment and Stock Compensation Agreement for Xxxx Xxxxxxx.
PAIVIS shall at or before Closing have
executed an Employment Agreement for and with Xxxx Xxxxxxx as per
Section
3.04.
|
Section
6.10 Other
Items DPC shall have received further opinions, documents,
certificates, or instruments r elating to the transactions contemplated
hereby as PAIVIS may reasonably request.
|
Section
6.11
|
Satisfaction
of Due Diligence Mutual completion of legal and financial
due diligence to the satisfaction of the Parties in writing to the
other
party before or at Closing, including disclosure of all pending material
agreements contracts and
liabilities.
|
-13-
ARTICLE
VII
MISCELLANEOUS
Section
7.01 Brokers. The
Parties agree that there were no finders or brokers involved in bringing the
parties together or who were instrumental in the negotiation, execution or
consummation of this Agreement. The Parties each agree to indemnify
the other against any claim by any third person other than those described
above
for any commission, brokerage, or finder's fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between
the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
Section
7.02 Governing
Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the United States of America and,
with
respect to the matters of state law, with the laws of the State of Nevada
without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees
that any legal or equitable action or proceedings arising under or in connection
with this Agreement shall be brought exclusively in the federal courts of the
United States,.
Section
7.03 Notices. Any
notice or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if personally
delivered to it or sent by telecopy, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:
If
to PAIVIS:
|
PAIVIS
Corp.
|
400
– 0000 Xxxxx Xxxx
|
|
Xxxxxxx,
XX 00000
|
|
Attn:
the Board of Directors
|
|
If
to AVENTRA
|
|
COMMUNICATIONS
INC.:
|
X/X
XXXXXX Xxxx.
|
000
– 0000 Xxxxx Xxxx
|
|
Xxxxxxx,
XX 00000
|
|
Attn:
the Board of Directors
|
|
With
copies to:
|
Xxxxxxx
Xxxxxx, Esq.
|
Law
Office of Xxxxxxx Xxxxxx, P.C 400 – 0000 Xxxxx Xxxx
|
|
Xxxxxxx,
XX 00000
|
|
If
to DPC:
|
Detroit
Phone Card, Inc.
|
0000
Xxxxxxxx Xxxx
|
|
Xxxxxxxx,
XX 00000
|
|
Attn:
the Board of Directors
|
or
such
other addresses as shall be furnished in writing by any party in the manner
for
giving notices hereunder, and any such notice or communication shall be deemed
to have been given (i) upon receipt, if personally delivered, (ii) upon receipt
, if sent by overnight courier, (iii) upon receipt, if transmitted by telecopy
and receipt is confirmed by telephone and (iv) upon receipt , if sent by
registered or certified mail.
Section
7.04 Attorney's
Fees. In the event that either party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder
or
breach hereof, the prevailing party shall be reimbursed by the losing party
for
all costs, including reasonable attorney's fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered
therein.
Section
7.05 Confidentiality. Each
party hereto agrees with the other that, unless and until the transactions
contemplated by this Agreement have been consummated, it and its representatives
will hold in strict confidence all data and information obtained with respect
to
another party or any subsidiary thereof from any representative, officer,
director or employee, or from any books or records or from personal inspection,
of such other party, and shall not use such data or information or disclose
the
same to others, except (i) to the extent such data or information is published,
is a matter of public knowledge, or is required by law to be published; or
(ii)
to the extent that such data or information must be used or disclosed in order
to consummate the transactions contemplated by this Agreement. In the
event of the termination of this Agreement, each party shall return to the
other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, work papers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
-14-
Section
7.06 Public
Announcements and Filings. Unless required by applicable law or
regulatory authority, none of the parties will issue any report, statement
or
press release to the general public, to the trade, to the general trade or
trade
press, or to any third party (other than its advisors and representatives in
connection with the transactions contemplated hereby) or file any document,
relating to this Agreement and the transactions contemplated hereby, except
as
may be mutually agreed by the parties. Copies of any such filings,
public announcements or disclosures, including any announcements or disclosures
mandated by law or regulatory authorities, shall be delivered to each party
at
least one (1) business day prior to the release thereof.
Section
7.07 Schedules;
Knowledge. Each party is presumed to have full knowledge of all
information set forth in the other party's schedules delivered pursuant to
this
Agreement.
Section
7.08 Third
Party Beneficiaries. This contract is strictly between PAIVIS
and DPC, and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
Section
7.09 Expenses. Whether
or not the Exchange is consummated, PAIVIS will bear the expenses, including
legal, auditing, accounting and professional fees, incurred in connection with
the Exchange or any of the other transactions contemplated hereby accept as
agreed upon herein or in separate agreement or understanding reached by the
Parties.
Section
7.10 Entire
Agreement. This Agreement represents the entire agreement between
the parties relating to the subject matter thereof and supersedes all prior
agreements, understandings and negotiations, written or oral, with respect
to
such subject matter.
Section
7.11 Survival;
Termination. The representations, warranties, and covenants of
the respective parties shall survive the Closing and the consummation
of the transactions herein contemplated for a period of two years.
Section
7.12 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument.
Section
7.13 Amendment
or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at
law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed
as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the
Closing, this Agreement may by amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Agreement may be waived or the time for
performance may be extended by a writing signed by the party or parties for
whose benefit the provision is intended.
Section
7.14 Best
Efforts. Subject to the terms and conditions herein provided,
each party shall use its best efforts to perform or fulfill all conditions
and
obligations to be performed or fulfilled by it under this Agreement so that
the
transactions contemplated hereby shall be consummated as soon as
practicable. Each party also agrees that it shall use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions
contemplated herein.
IN
WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first-above written.
ATTEST:
|
DETROIT
PHONE CARD, INC..
|
BY:
_______________________________
__________________________,
President
ATTEST:
|
PAIVIS,
CORP.
|
BY:
_______________________________
_________________________,
President
ATTEST:
|
AVENTRA
COMMUNICATIONS, INC.
|
BY:
_______________________________
_________________________,
President
-15-
ADDENDUM
This
Addendum dated this 4th day of
October,
2007, entered into by and between PAIVIS CORP., a Nevada
corporation (“Paivis”), AVENTRA COMMUNICATIONS, LTD., a Nevada
corporation (“Aventra”) and wholly-owned subsidiary of Paivis (“Sub”), and
DETROIT PHONE CARD, INC., a Michigan corporation and its
subsidiaries (“DPC”).
Introductory
Statements
1.
Paivis, Aventra and DPC have executed an Acquisition and Exchange Agreement
(“Agreement”) on the same date this Addendum is being executed.
2.
The
parties wish to clarify some of the terms of the Agreement.
3.
The
Agreement provides that certain information will be attached as schedules to
be
provided by Paivis and DPC.
Agreement
NOW,
THEREFORE, for good and valuable consideration, receipt whereof is hereby
acknowledged, the following is added to the Agreement as an
addendum:
1.
All of
the information reflected in the Agreement as Schedules to be attached to the
Agreement will in actuality be gathered and prepared by the respective parties
required to do so subsequent to the execution of the Agreement but prior to
closing. At closing, the Schedules reflected in the Agreement will be
incorporated into the final documents to be executed with certifications by
the
respective officers of the corporations involved as to the validity and accuracy
of the various schedules.
2.
Except
as herein modified, the terms of the Agreement remain in full force and
effect.
WITNESS:
PAIVIS CORPORATION
__________________________
By::_______________________
Its
President
AVENTRA
COMMUNICATIONS, LTD.
__________________________
By::_______________________
Its
President
DETROIT
PHONE CARD, INC.
__________________________
By::_______________________
Its
President