EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
between
TRANSCOM COMMUNICATIONS, INC.
and
DTVN HOLDINGS, INC.
Dated as of July 17, 2002
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of July 17,
2002, between Transcom Communications, Inc., a Texas corporation ("Buyer"), DTVN
Holdings, Inc., a Delaware corporation ("Seller"), and DataVoN, Inc., a Texas
corporation ("DataVoN"), the primary operating subsidiary of Seller.
WHEREAS, Buyer is a leading telecommunications company, and Buyer
supplies networking services to DataVoN; and
WHEREAS, Buyer is a significant creditor of DataVoN, DataVoN does not
currently posses the means to pay its outstanding obligations to Buyer (which
are now overdue), and DataVoN cannot pay its other debts as they come due; and
WHEREAS, Seller desires to sell issue to Buyer shares of authorized but
unissued common stock of Seller, par value $.001 (the "Common Stock"), upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party hereto, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I
SALE AND ISSUANCE
OF COMMON STOCK; OTHER AGREEMENTS
1.1 Sale of the Shares. Subject to Section 1.10, at Closing (defined
below) Seller shall issue to Buyer, and Buyer shall purchase from Seller
76,500,000 shares of Common Stock (the "Shares"). Upon issuance, the Shares
will constitute 51% of the total authorized shares of Common Stock.
1.2 Consideration. In consideration of the issuance of the Shares, at
Closing Buyer shall forgive $100,000 of its secured debt to DataVoN. In
addition, Buyer shall provide DataVoN a 180-day grace period (measured from
the date of the Closing) during which (i) Buyer will continue to provide
networking services to DataVoN, (ii) Buyer will not make any demands on the
overdue secured debt owed by DataVoN, and (iii) Lee Barton will not exercise
any collection rights related to DataVoN's debt to Lee Barton. In addition,
during such 180-day period, Buyer shall use commercially reasonable efforts
to resolve all secured debt of Lee Barton, either (i) by the conversion of
such debt into equity, (ii) by refinancing such debt on commercially
reasonable terms, consistent with DataVoN's ability to pay, or (iii) by
other means in the best interests of Seller. In addition, Buyer understands
that DataVoN has approximately $1.1 million in payables that must be paid or
otherwise deferred in the month of July that exceed Seller's available cash
(the "July Cash Shortage").
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At Closing, Buyer will commit to resolving the July Cash Shortage through (i) a
cash infusion, (ii) negotiated vendor terms, (iii) certain operational changes
in DTVN and DataVoN that Buyer considers appropriate, or (iv) changes in
vendors, where appropriate, or any combination of the foregoing, or other
mechanisms that are in the best interests of Seller and DataVoN.
1.3 Board of Directors. At Closing, the size of Seller's Board of
Directors will consist of seven (7) members. Philip N. O'Reilly shall resign
as a director, and the three then-existing vacancies will be filled by the
remaining directors, such that effective as of Closing, Seller's Board of
Directors shall consist of the following persons: Scott Birdwell, Britt
Birdwell, Jeff Becker, Michael McInerney, Hugh D. Simpson, Jay Nickell, and
Steve Holden. At Closing, the Board of Directors of each of Seller's
subsidiaries (including DataVoN) shall be comprised solely of Scott
Birdwell. In addition, at Closing Scott Birdwell shall be elected Chairman
of the Board of Directors of Seller (replacing Hugh D. Simpson, who shall
have resigned as Chairman of the Board).
1.4 Closing. The purchase and sale of the Shares (the "Closing") shall
take place at the offices of Haynes and Boone, LLP, 2505 N. Plano Road,
Suite 4000, Richardson, Texas 75082, on the date of this Agreement.
1.5 Other Matters. After Closing, in order to address DataVoN's cash
needs in August 2002, Buyer shall use commercially reasonable efforts to
provide credit assistance with vendors, including, but not limited to,
conversion of weekly pay accounts to monthly pay where possible.
1.6 Line of Credit. After Closing, Buyer shall use commercially
reasonable efforts to provide assistance to Seller and/or DataVoN in its
efforts to obtain a line of credit for working capital.
1.7 Service Agreement. In further consideration for the issuance of the
Shares, as soon as reasonably practicable after the Closing, Buyer shall
enter into a Service Agreement with Seller pursuant to which, for a period
of one year, Buyer shall grant Seller a right of first refusal to provide to
Buyer the use of Seller's network for domestic VOIP network termination
services for Seller's enterprise termination product. Such right of first
refusal may be exercised by Seller only if the pricing and quality of the
services offered by Seller are at least equal to the services otherwise
available to Buyer.
1.8 Share Certificates. At Closing, Seller shall provide Buyer with (i) a
written request of Seller to its stock transfer agent, requesting the
immediate issuance of a stock certificate for the Shares, and (ii) a written
document from the stock transfer agent certifying as to the number of
outstanding shares of Common Stock shown on the stock transfer agent's
records as of the date of Closing (or the most recent date available).
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1.9 Benefit to Seller. The parties acknowledge that the consideration
being received by DataVoN hereunder is also a significant benefit to Seller
(since DataVoN is Seller's primary operating subsidiary), and such benefit
to Seller is sufficient to support the valid issuance of the Shares to
Buyer.
1.10 Majority Ownership. It is the intent of the parties that, through
the issuance of the Shares, Buyer shall own 51% of all outstanding voting
power of Seller immediately after the Closing, after giving effect to the
full exercise or conversion of all outstanding options, warrants, rights to
purchase capital stock, or securities convertible into shares of capital
stock, regardless of whether such options, rights, warrants or convertible
securities are now exercisable or convertible (but excluding unissued stock
options under Seller's stock option plans). If for any reason (such as, for
example, identification of relinquished stock or identification of unissued
stock options) Buyer is issued shares of Common Stock that result in Buyer
having more than such 51% voting power, then not later than 20 days
hereafter, Buyer shall relinquish (without compensation) such number of the
Shares as is necessary to reduce Buyer's holdings to exactly 51% of such
voting power.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to Buyer as follows:
2.1 Organization and Standing. Seller is a corporation duly organized
and validly existing under, and by virtue of, the laws of the State of Delaware
and is in good standing under such laws. Seller has requisite corporate power
and authority to own and operate its properties and assets, and to carry on its
business as presently conducted. Seller is duly qualified to do business as a
foreign corporation in the State of Texas and in each jurisdiction in which the
failure to be so qualified would have a material adverse effect on Seller's
business.
2.2 Corporate Power. Seller has all requisite legal and corporate power
and authority (i) to execute and deliver this Agreement, (ii) to issue and sell
the Shares, (iii) and to carry out and perform its obligations under this
Agreement.
2.3 Capitalization. The authorized capital stock of Seller consists of
151,000,000 shares of stock, of which 150,000,000 are Common Stock, and
1,000,000 are preferred stock, par value $.001 per share. To Seller's knowledge,
the total number of shares of capital stock outstanding as of the date hereof
(on a fully diluted basis, including unissued stock options) is 67,107,132
shares, consisting of shares of Common Stock (or options, rights or warrants
therefor). These are no shares of preferred stock outstanding, and there are no
commitments to issue any preferred stock.
2.4 Authorization. All corporate action on the part of Seller, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement, and the issuance, sale and delivery
of the Shares has been taken. This Agreement constitutes the valid and binding
obligation of Seller, enforceable in accordance with its terms,
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except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
2.5 Valid Issuance of the Shares. The Shares, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under applicable state and federal securities laws.
2.6 Governmental Consents, etc. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
Seller is required in connection with the consummation of the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
3.1 Authorization. This Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable.
3.2 Purchase Entirely for Own Account. This Agreement is made with Buyer
in reliance upon Buyer's representation to Seller, which by Buyer's execution of
this Agreement Buyer hereby confirms, that the Shares will be acquired for
investment for Buyer's own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that Buyer has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, Buyer further represents
that Buyer does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person with respect to any of the Shares.
3.3 Disclosure of Information. Buyer believes it has received all the
public and nonpublic information it considers necessary or appropriate for
deciding whether to purchase the Shares. Buyer further represents that it has
had an opportunity to ask questions and receive answers from Seller regarding
the terms and conditions of the offering of the Shares and the business,
properties, prospects and financial condition of Seller. The foregoing, however,
does not limit or modify the representations and warranties of Seller in Article
II of this Agreement or the right of the Buyers to rely thereon.
3.4 Investment Experience. Buyer acknowledges that it is able to fend for
itself, can
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bear the economic risk of its investment, and has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares.
3.5 Accredited Buyer. Buyer is an "accredited investor" within the
meaning of Rule 501 of Regulation D of the Securities Act.
3.6 Restricted Securities. Buyer understands that the Shares are
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from Seller in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act of 1933 only in certain limited
circumstances.
3.7 Legend. It is understood that the certificates evidencing the Shares
shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE
STATE SECURITIES LAWS, OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION
OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE CORPORATION
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
ARTICLE IV
MISCELLANEOUS
4.1 No Third Party Beneficiaries. Nothing in this Agreement shall confer
any rights upon any person or entity other than the parties hereto and their
respective heirs, successors and permitted assigns.
4.2 Entire Agreement. This Agreement constitutes the entire agreement and
understanding among Buyer and Seller and supersedes any prior agreement and
understanding relating to the subject matter of this Agreement (including, but
not limited to, the letter agreement between the parties, dated as of July 15,
2002). This Agreement may be modified or amended only by a written instrument
executed by Buyer and Seller.
4.3 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.4 Notices. All notices and communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with
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return receipt requested, or by delivering the same in person to an officer or
agent of such party, as follows:
(a) If to Seller, addressed to them at:
DTVN Holdings, Inc.
1081 Gateway Blvd., Suite 101
Richardson, Texas 75080
Attn: Hugh D. Simpson
With a copy (which shall not constitute notice) to:
Hugh D. Simpson
316 Ridgeview Drive
Richardson, Texas 75080
(b) If to Buyer, addressed as follows:
Transcom Communications Inc.
Brookhollow One
2301 East Lamar Blvd., Suite 350
Arlington, Texas 76006
Attn: Scott Birdwell, Chief Executive Officer
With a copy (which shall not constitute notice) to:
Haynes and Boone, LLP
2505 N. Plano Road
Suite 4000
Richardson, Texas 75082
Attn: David H. Oden, Esq.
or such other address as any party hereto shall specify pursuant to
this Section 4.4 from time to time.
4.5 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated hereby will be
issued, in such time and in such manner, as Seller and Buyer shall mutually
determine. However, Buyer acknowledges that Seller has certain disclosure
obligations under law, and Buyer shall not unreasonable withhold its agreement
to any disclosure made pursuant to such obligations, provided that Buyer is
first provided the opportunity to review and comment upon any such disclosures.
4.6 Waivers and Amendments. This Agreement or any provision hereof may be
amended, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the amendment, waiver, discharge or
termination is sought.
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4.7 Further Assurances. After Closing, Seller and Buyer shall promptly
execute and deliver those instruments, documents and certificates as Seller or
Buyer may reasonably request to more effectively consummate the transactions
contemplated hereby. Specifically, this Agreement contemplates that Buyer shall
have the voting power described in Section 1.10. If for any reason the Shares do
not constitute such voting power immediately after Closing, the Seller shall
immediately issue Buyer (without further consideration) such additional shares
of Common Stock as are necessary to provide Buyer with such voting power.
4.8 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Texas (without regard to its principles governing
conflicts of laws).
4.9 Survival of Representations and Warranties. The representations and
warranties set forth in Article 3 and Article 4 shall survive the Closing
indefinitely.
4.10 Exercise of Rights and Remedies. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party to this Agreement as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default occurring before or after that waiver.
4.11 Fiduciary Duties. Notwithstanding anything to the contrary elsewhere
in this Agreement, Seller, Buyer, and the officers and directors of each of
Seller and Buyer shall never be required to take any action, or omit from taking
any action, that would be in breach of, or inconsistent with, their fiduciary
duties.
4.12 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable, but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
4.13 Assignment. This Agreement shall not be assignable or otherwise
transferable by any party hereto without the prior written consent of the other
party hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
DTVN HOLDINGS, INC.
By: /s/ Hugh Simpson
---------------------------------------
Name: Hugh Simpson
---------------------------------
Title: CEO
---------------------------------
DATAVON:
DATAVON, INC.
By: /s/ Hugh D. Simpson
---------------------------------------
Name: Hugh D. Simpson
---------------------------------
Title: President
---------------------------------
BUYER:
TRANSCOM COMMUNICATIONS, INC.
By: /s/ Scott Birdwell
---------------------------------------
Scott Birdwell, Chief Executive Officer