SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER
This Second Amendment to the Agreement and Plan of Merger (the
"Agreement"), dated as of June 28, 2000, is by and among XXXXXXXXXX.XXX, INC., a
Delaware corporation ("Tek"), TEKINSIGHT SERVICES INC., a Delaware corporation
("Services") and DATA SYSTEMS NETWORK CORPORATION, a Michigan corporation
("DSNC"). Following further discussions between the parties after execution of
the Agreement and Plan of Merger, dated February 18, 2000 (the "Merger
Agreement"), as previously amended by agreement dated April 4, 2000 (the "First
Amendment"), by and among certain of the parties hereto (which at that time
included Astratek, Inc., a New York Corporation, which was replaced as a party
by Services in connection with the First Amendment), the parties determined it
to be in the best interests of all such parties to make certain changes to the
Merger Agreement, as amended, which were agreed to by the parties, and the
parties hereby agree as follows:
Section 1 Section 7.1(b) of the Merger Agreement is hereby
replaced in its entirety with the following:
"(b) by either Tek or DSNC, if the Merger shall not have been
consummated by September 15, 2000 for any reason; provided, however,
that the right to terminate this Agreement under this Section 7.1(b)
shall not be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Merger to
occur on or before such date and such action or failure to act
constitutes a breach of this Agreement; provided, that in any event
this Agreement shall be automatically terminated on October 31, 2000 in
the event that the Merger shall not have been consummated by such
date."
Section 2 Section 1.1(o) to the Certificate of
Designations, Preferences and Relative, Participating, Optional or Other Special
Rights of Series A Convertible Preferred Stock and Qualifications, Limitations
and Restrictions Thereof of XxxXxxxxxx.xxx, Inc, which is Exhibit A to the
Merger Agreement (the "Certificate of Designations"), is hereby replaced in its
entirety with the following:
"(o) `Merger Agreement' means that certain Agreement and Plan of
Merger, dated February 18, 2000, between the Corporation, Astratek,
Inc. and Data Systems Network Corporation., as amended on April 4, 2000
and June 28,2000".
Section 3 Section 1.6(a) of the Merger Agreement is hereby
replaced in its entirety with the following:
"1.6 Effective Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of Merger Sub, DSNC or
the holders of any of the following securities:
(a) Subject to Sections 1.6(b), and 1.6(c), each
share of Common Stock, $.01 par value per share, of DSNC (the
"DSNC Common Stock") issued and outstanding three (3) days
prior to the Effective Time (the "Outstanding DSNC Common
Stock"), will be canceled and
extinguished and automatically converted (subject to Sections
1.6(c) and (d)) into the number of shares (the "Exchange
Ratio") of Series A Convertible Preferred Stock, $.0001 par
value, of Tek (the "Tek Preferred Stock") equal to the result
obtained by dividing the Common Converter (as hereinafter
defined) by the Divisor (as hereinafter defined). For purposes
of this calculation, the Common Converter is obtained by
dividing (i) the quotient found by dividing (A) $12,500,000
(the "Purchase Price") by (B) the number of shares of
Outstanding DSNC Common Stock, by (ii) the Market Value (as
defined in Section 1.6(c)) of each share of Tek Common Stock,
$0.0001 par value per share (the "Tek Common Stock) at the
Closing. The Divisor shall be determined as follows: (i) in
the event that the closing bid price per share of Common Stock
as reported on the Nasdaq SmallCap Market for the trading date
immediately preceding the Closing Date (the "Market Price") is
$3.50 or less, then the Divisor shall be equal to two and
one-half (2.5); (ii) in the event that the Market Price is
more than $3.50 but equal to or less than $4.50, then the
Divisor shall be equal to one and one-half (1.5); and (iii) in
the event that the Market Price is more than $4.50, then the
Divisor shall be equal to one. For example, if the number of
shares of DSNC Outstanding Common Stock were 5,000,000, and
the Market Value of each share of Tek Common Stock were $4.00,
then, subject to Sections 1.6(b) and (c), the Exchange Ratio
would be .4167 ($12,500,000 divided by 5,000,000 is $2.50;
$2.50 divided by $4.00 is .625; .625 divided by 1.5 is .4167).
In this example, subject to Sections 1.6(b) and (c), each
share of DSNC Common Stock would be converted into .4167
shares of Tek Preferred Stock."
Section 4 Section 6.1, "Conversion", to the Certificate of
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights of Series A Convertible Preferred Stock and Qualifications,
Limitations and Restrictions Thereof of XxxXxxxxxx.xxx, Inc, which is
Exhibit B to the Merger Agreement, is hereby replaced in its entirety with
the following:
"Section 6.1 Conversion. A Holder of any share or shares of Series A
Preferred Stock shall be entitled, at any time and from time to time
after the Current Conversion Date (unless a Liquidation Event has
occurred prior to that date) to cause any or all of such shares to be
converted into shares of Common Stock. The initial Conversion Rate for
each share of Series A Preferred Stock shall be equal to one of the
following ratios: (i) in the event that the closing bid price per share
of Common Stock as reported on the Nasdaq SmallCap Market for the
trading date immediately preceding the Closing Date (the "Market Price")
is $3.50 or less , then the initial Conversion Rate for each share of
Series A Preferred Stock shall be equal to one share of Series A
Preferred Stock for-two and one-half (2.5) shares of Common Stock; (ii)
in the event that the Market Price is more than $3.50 but equal to or
less than $4.50, then the initial Conversion Rate for each share of
Series A Preferred Stock shall be equal to one share of Series A
Preferred Stock for-one and one-half (1.5) shares of Common Stock; and
(iii) in the event that the Market Price is more than $4.50, then the
initial Conversion Rate for each share of Series A Preferred Stock shall
be equal to one share of Series A Preferred Stock for-one share of 2
Common Stock. Such initial Conversion Rate shall be adjusted as
hereinafter provided. If a Holder elects to convert Series A Preferred
Stock at a time when there are any declared and unpaid dividends or
other amounts due on such shares, to the extent permitted by applicable
law (which the Corporation shall use its best efforts to comply with in
order to permit such payment of declared and unpaid dividends or other
amounts), such dividends and other amounts shall be paid in full by the
Corporation in connection with such conversion."
Section 5 Section 6.2(f) of the Merger Agreement is hereby replaced
in its entirety with the following:
"(f) Election of Officers and Directors. On the Closing Date, Xxxxxx
Xxxx will be the Chief Executive Officer of Tek. Three (3) persons
designated by DSNC, who shall be reasonably acceptable to Tek, shall be
appointed to the Tek Board of Directors, to take office following the
Closing (the "DSNC Designees"). The DSNC Designees are Xxxxxxx Xxxxxxx,
Xxxxxx Xxxx (who was appointed to the Tek Board of Directors at a
meeting of the Tek Board of Directors held on June 28, 2000) and Xxxxxx
X. Xxxxxxxx."
Section 6
6.1 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all
parties need not sign the same counterparts.
6.2 Entire Agreement. This Agreement and the documents and
instruments and other agreements among the parties hereto as
contemplated by or referred to herein, (a) constitute the
entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that
except as specifically modified by this Agreement, the terms
and conditions of the Merger Agreement remain in full force
and effect in accordance with their terms.
6.3 Severability. In the event that any provision of this
Agreement or the application thereof, becomes or is declared
by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Agreement will continue
in full force and effect and the application of such provision
to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The
parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or
unenforceable provision.
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6.4 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or
equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The
parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law
or in equity.
6.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, without giving effect to principles of conflicts of
laws.
6.6 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and
execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or
other document will be construed against the party drafting
such agreement or document.
6.7 Assignment. No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the
prior written approval of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
6.8 Definitions. All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such
terms in the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
XXXXXXXXXX.XXX, INC.
By:/s/Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxxx, Chairman and
Chief Technology Officer
DATA SYSTEMS NETWORK CORPORATION
By:/s/Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, President
TEKINSIGHT SERVICES, INC.
By:/s/Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxxx, Executive Vice
President
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