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Exhibit 2
AGREEMENT AND PLAN OF MERGER
AMONG
VS&A COMMUNICATIONS PARTNERS III, L.P.,
VS&A-DTN, LLC
DATA TRANSMISSION NETWORK CORPORATION
AND
DTN ACQUISITION CORPORATION
MARCH 3, 2000
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into
this 3rd day of March, 2000 by and among VS&A Communications Partners III, L.P.,
a Delaware limited partnership ("VS&A"), VS&A-DTN, LLC, a Delaware limited
liability company, ("ACQUIROR"), DATA TRANSMISSION NETWORK CORPORATION, a
Delaware corporation ("DTN"), and DTN ACQUISITION CORPORATION, a Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Merger Sub").
RECITALS
A. The parties desire to provide for the acquisition of DTN by Acquiror
by means of a merger (the "Merger") of Merger Sub into DTN preceded by a tender
offer by Acquiror (the "Offer") to purchase all of the issued and outstanding
shares of common stock, par value $.001 per share, of DTN (the "DTN Common
Stock") at a price of $29.00 per share (the "Offer Price"). If the holders of at
least 90% of the outstanding shares of DTN Common Stock (the "Required Number")
accept the Offer and if the other conditions to the Offer set forth in Annex A
are satisfied, Merger Sub will consummate the Offer in accordance with its
terms, and immediately thereafter Merger Sub will be merged into DTN pursuant to
Section 253 of the Delaware General Corporation Law ("DGCL"). If the holders of
less than the Required Number of shares of DTN Common Stock accept the Offer,
DTN will call a meeting of stockholders of DTN to approve the Merger pursuant to
Section 251 of the DGCL.
B. Certain stockholders, who hold in the aggregate in excess of 50.1%
of the DTN Common Stock, have agreed, pursuant to agreements dated March 3, 2000
between VS&A and each of those stockholders (the "Stockholder Agreements"), to
tender their shares in the Offer and to vote in favor of the Merger.
C. The parties desire to make certain representations, warranties and
agreements in connection with the Offer and the Merger and also agree to certain
prescribed conditions to the Offer and the Merger.
AGREEMENTS
In consideration of the foregoing premises and the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
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ARTICLE 1.
THE OFFER
SECTION 1.1 TERMS OF THE OFFER.
(a) As promptly as practicable (but in no event later than 10
business days after the public announcement of the execution of this Agreement),
Acquiror shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934) the Offer for all of the outstanding shares of DTN Common
Stock at a price of $29.00 per share, net to the sellers in cash, subject to the
conditions referred to below, and shall consummate the Offer in accordance with
its terms. The Offer shall be made by means of an offer to purchase (the "Offer
to Purchase") containing the terms set forth in this Agreement, and Acquiror
shall, on the terms and subject to the prior satisfaction or waiver of the
conditions of the Offer, accept for payment and pay for shares tendered as soon
as practicable after the satisfaction or waiver of the conditions to the Offer,
and in any event, within the period required by law. The date on which Acquiror
consummates the purchase of the shares in the Offer is referred to in this
Agreement as the "Offer Closing Date".
(b) The obligations of Acquiror to accept for payment and to
pay for any shares tendered prior to the expiration of the Offer shall be
subject only to (i) the condition that there shall be validly tendered and not
withdrawn prior to the expiration of the Offer the Required Number of shares of
DTN Common Stock (the "Minimum Condition") and (ii) the other conditions set
forth in Annex A. Acquiror shall not, without the written consent of DTN (such
consent to be authorized by the Board of Directors of DTN or a duly authorized
committee of the Board), amend or waive the Minimum Condition, decrease the
Offer Price or the number of shares sought, or amend any other condition of the
Offer in any manner adverse to the holders of the shares of DTN Common Stock
(sometimes referred to as the "Shares"); provided, however, that if on the
initial scheduled expiration date of the Offer (which shall be 20 business days
after the date the Offer is commenced), all conditions to the Offer shall not
have been satisfied or waived, Acquiror may, from time to time, in its sole
discretion, extend the expiration date; provided, further, however, that any
extension beyond 10 business days shall require the approval of DTN.
(c) As soon as practicable on the date the Offer is commenced,
Acquiror and Merger Sub shall file with the SEC a Tender Offer Statement on
Schedule TO with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule TO"). The
Schedule TO1 shall include, as exhibits, the Offer to Purchase and a form of
letter of transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Offer Documents
shall comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to DTN's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the
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circumstances under which they were made, not misleading, except that neither
Acquiror nor Merger Sub shall have any responsibility to DTN with respect to
information furnished by DTN to Acquiror, in writing, expressly for inclusion in
the Offer Documents. The information supplied by DTN to Acquiror in writing
expressly for inclusion in the Offer Documents and by Acquiror to DTN in writing
expressly for inclusion in the Schedule 14D-9 (as hereinafter defined) shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Acquiror shall take all steps necessary to cause the Offer Documents
to be filed with the SEC and to be disseminated to holders of the issued and
outstanding shares of DTN Common Stock, in each case as and to the extent
required by applicable federal securities laws. Acquiror and DTN promptly shall
correct any information provided by it for use in the Offer Documents if and to
the extent that it shall have become false or misleading in any material respect
and Acquiror shall take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. DTN and its counsel shall be given the opportunity to review
the Schedule TO before it is filed with the SEC. In addition, Acquiror promptly
shall provide DTN and its counsel in writing with any comments, whether written
or oral, Acquiror or its counsel may receive from the SEC or its staff with
respect to the Offer Documents, and Acquiror also promptly shall provide DTN and
its counsel with copies of all responses to comments received from the SEC or
its staff.
SECTION 1.2 DTN ACTIONS.
(a) DTN hereby confirms that it approves of and consents to
the Offer and represents that the Board of Directors of DTN at a meeting duly
called and held has (i) unanimously determined that each of this Agreement, the
Offer and the Merger are fair to and in the best interests of the stockholders
of DTN, (ii) approved this Agreement and the Stockholder Agreements and the
transactions contemplated hereby and thereby, including the Offer and the Merger
(collectively, the "Transactions"), and such approval constitutes approval of
the Offer, this Agreement, the Stockholders Agreements and the transactions
contemplated hereby and thereby, including the Merger, for purposes of Section
203 of the DGCL, with the effect that Section 203 of the DGCL will not apply to
the transactions contemplated by this Agreement or the Stockholder Agreements,
and (iii) resolved to recommend that the stockholders of DTN accept the Offer,
tender their shares to Acquiror pursuant to the Offer, and approve and adopt
this Agreement and the Merger; provided, that such recommendation may be
withdrawn, modified or amended if, in the opinion of DTN's Board of Directors,
only after receipt of written advice from independent legal counsel, failure to
withdraw, modify or amend such recommendation would result in the Board of
Directors violating its fiduciary duties to DTN's stockholders under applicable
law. DTN represents that no further corporate action is required to be taken by
DTN (under its certificate of incorporation and bylaws or any agreement or other
obligation by which it is bound) to render the relevant provisions of Section
203 of the DGCL inapplicable to the Offer and the Merger.
(b) Concurrently with the commencement of the Offer, DTN shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule 14D-9")
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which shall contain the recommendation referred to in clause (iii) of Section
1.2(a) hereof. The Schedule 14D-9 shall comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to DTN's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that DTN shall not have any responsibility to Acquiror
with respect to information furnished by Acquiror for inclusion in the Schedule
14D-9. DTN shall take all steps necessary to cause the Schedule 14D-9 to be
filed with the SEC and to be disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws. DTN and
Acquiror promptly shall correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and DTN shall take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Acquiror and its counsel shall
be given the opportunity to review the Schedule 14D-9 before it is filed with
the SEC. DTN promptly shall provide Acquiror and its counsel in writing with any
comments, whether written or oral, DTN or its counsel may receive from the SEC
or its staff with respect to the Schedule 14D-9, and DTN also promptly shall
provide Acquiror and its counsel with copies of all responses to comments
received from the SEC or its staff. DTN shall include in the Schedule 14D-9 on
the date first published, sent or given to DTN's stockholders, such information
with respect to DTN and its officers and directors as is required under section
14(f) of the Exchange Act and Rule 14f-1 thereunder in order to fulfill its
obligations under Section 1.3. Acquiror and Merger Merger Sub shall supply DTN
with, and be solely responsible for, any information with respect to themselves
and their nominees, officers, directors and officers required by section 14(f)
and Rule 14f-1.
(c) In connection with the Offer, DTN shall promptly furnish
or cause to be furnished to Acquiror mailing labels, security position listings
and any available listing or computer file containing the names and addresses of
all record holders of the Shares as of a recent date, and shall furnish Acquiror
with such additional information (including, but not limited to, updated lists
of holders of the Shares and their addresses, mailing labels and lists of
security positions) and reasonable assistance as Acquiror or its agents may
reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Except for such steps as are necessary to disseminate the
Offer Documents, Acquiror shall hold in confidence the information contained in
any of such labels and lists and the additional information referred to in the
preceding sentence, shall use such information only in connection with the
Offer, and, if this Agreement is terminated, shall upon request of DTN deliver
or cause to be delivered to DTN all copies of such information then in its
possession or the possession of its agents or representatives.
ARTICLE 2.
THE MERGER
SECTION 2.1 THE MERGER. Provided that this Agreement shall not have
been
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terminated in accordance with Section 9.1, upon the terms and subject to the
conditions set forth in this Agreement, (a) if the Offer is consummated,
immediately thereafter the parties hereto shall, at the request of Acquiror,
take all necessary action to cause the Merger to become effective, without a
meeting of stockholders of DTN, in accordance with Section 253 of the DGCL or
(b) if the Offer is not consummated, DTN shall call a meeting of its
stockholders as provided in Section 7.1 to vote upon adoption of this Agreement
and approval of the Merger, and the parties shall take all such action as may be
necessary to effect the Merger at the earliest practicable date in accordance
with Section 251 of the DGCL and the terms of this Agreement. Upon the Merger,
the separate corporate existence of Merger Sub shall cease and DTN shall be the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 2.2 EFFECTIVE TIME; CLOSING. Provided that this Agreement shall
not have been terminated in accordance with Section 9.1, as promptly as
practicable after the satisfaction or, if permissible and effected as provided
in Section 9.4, waiver of the conditions set forth in Article 8 (or such other
date as may be agreed to in writing by Acquiror and DTN), the parties hereto
shall cause the Merger to be consummated by filing with the Secretary of State
of the State of Delaware a certificate of merger or a certificate of ownership
and merger (the "Certificate of Merger") in such form as required by, and
executed in accordance with, Section 251 or Section 253 of the DGCL (the date
and time of such filing, or such later date or time as set forth therein, being
the "Effective Time"). Immediately prior to the filing of the Certificate of
Merger, a closing (the "Closing") will be held at the offices of Xxxxxxxxx Xxxx
XXX, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (or such other place as the parties may
agree). The date on which the Closing occurs is referred to in this Agreement as
the "Closing Date."
SECTION 2.3 EFFECTS OF MERGER. At the Effective Time, the effect of the
Merger shall be as provided in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of DTN and Merger Sub shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of DTN and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.4 CERTIFICATE OF INCORPORATION. At the Effective Time, the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as the certificate of incorporation of Merger
Sub as in effect immediately prior to the Effective Time.
SECTION 2.5 BYLAWS. At the Effective Time, the bylaws of Merger Sub as
in effect immediately prior to the Effective Time shall become the bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
SECTION 2.6 BOARD OF DIRECTORS. From and after the Effective Time,
until duly changed in compliance with applicable law and the certificate of
incorporation and bylaws of the Surviving Corporation, the board of directors of
the Surviving Corporation shall consist of the directors of Merger Sub
immediately prior to the Effective Time.
SECTION 2.7 MANAGEMENT. At the Effective Time, the officers of Merger
Sub immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation
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and shall hold office until their respective successors are duly elected or
appointed and qualified in the manner provided in the certificate of
incorporation and bylaws of the Surviving Corporation, or as otherwise provided
by the DGCL.
SECTION 2.8 ACQUIROR'S DELIVERIES AT CLOSING. At the Closing, Acquiror
shall deliver the following items to DTN:
(a) evidence of the delivery by Acquiror or its agents to the
Paying Agent of an aggregate amount of cash equal to the total Merger
Consideration the holders of DTN Common Stock will be entitled to receive
pursuant to this Agreement;
(b) a good standing certificate for Acquiror issued by the
Secretary of State of the State of Delaware, and dated not more than ten (10)
business days prior to the Closing Date;
(c) a good standing certificate for Merger Sub issued by the
Secretary of State of the State of Delaware, and dated not more than ten (10)
business days prior to the Closing Date;
(d) a copy of the certificate of incorporation of Merger Sub
certified not more that ten (10) business days prior to the Closing Date by the
Secretary of State of the State of Delaware;
(e) a certificate of the Secretary or any Assistant Secretary
of Merger Sub dated the Closing Date certifying a copy of the bylaws of Merger
Sub;
(f) copies of resolutions of the Board of Directors and
stockholders of Merger Sub authorizing and approving this Agreement and the
consummation of the transactions contemplated by this Agreement, certified as of
the Closing Date by the Secretary or any Assistant Secretary of Merger Sub;
(g) the certificates referred to in Sections 8.2(a) and (b);
and
(h) a legal opinion of Acquiror's counsel dated the Closing
Date and to the effect set forth in Exhibit A; and
(i) such other documents as DTN may reasonably request.
All of such items shall be reasonably satisfactory in form and substance to DTN
and its counsel.
SECTION 2.9 DTN'S DELIVERIES AT CLOSING. At the Closing, DTN shall
deliver the following items to Acquiror:
(a) a good standing certificate for DTN issued by the
Secretary of State of the State of Delaware and dated not more than ten (10)
business days prior to the Closing Date;
(b) a copy of the certificate of incorporation of DTN
certified not more than ten (10) business days prior to the Closing Date by the
Secretary of State of the State of Delaware;
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(c) a certificate of the Secretary or any Assistant Secretary
of DTN dated the Closing Date certifying a copy of the bylaws of DTN;
(d) copies of resolutions of the board of directors and
stockholders of DTN authorizing and approving this Agreement and the
consummation of transactions contemplated by this Agreement, certified as of the
Closing Date by the Secretary or any Assistant Secretary of DTN;
(e) the certificates referred to in Sections 8.3(a) and (b);
(f) a legal opinion of DTN's counsel dated the Closing Date
and to the effect set forth in Exhibit B; and
(g) such other documents as Acquiror may reasonably request.
All of such items shall be reasonably satisfactory in form and substance to
Acquiror and its counsel.
ARTICLE 3.
CONVERSION OF SECURITIES IN THE MERGER
SECTION 3.1 CONVERSION OF CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of DTN or Acquiror or
the holder of any of the Shares:
(a) each share of DTN Common Stock issued and outstanding
immediately prior to the Effective Time, except for shares of DTN Common Stock
owned by DTN as treasury stock or owned, directly or indirectly, by Acquiror,
DTN or Merger Sub or any of their respective wholly-owned Subsidiaries (other
than shares of DTN Common Stock to be cancelled pursuant to this Section), shall
be converted into the right to receive $29.00 in cash (the "Merger
Consideration"), payable without interest to the holder of such share of DTN
Common Stock upon surrender of the stock certificate that formerly evidenced
such share of DTN Common Stock (the "DTN Certificate");
(b) each share of DTN Common Stock held in the treasury of DTN
and shares of DTN Common Stock owned by Acquiror, Merger Sub or any Subsidiary
of Acquiror or DTN shall be cancelled and extinguished without any conversion
thereof and no payment shall be made with respect thereto; and
(c) each share of common stock, $0.01 par value per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into one validly issued, fully paid and non-assessable share of
common stock of the Surviving Corporation.
SECTION 3.2 PAYMENT FOR SHARES.
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(a) From and after the Effective Time, a bank or trust company
designated by Acquiror and reasonably acceptable to DTN shall act as paying
agent (the "Paying Agent") in effecting the payment of the Merger Consideration
in respect of the DTN Certificates. At the Effective Time, Acquiror shall cause
to be provided to the Paying Agent cash in amounts necessary to pay the Merger
Consideration in exchange for the shares of DTN Common Stock. Such funds shall
be invested by the Paying Agent as directed by Acquiror.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of DTN Certificates a (i) letter of transmittal in
customary form (which shall specify that delivery shall be effected, and risk of
loss and title to the DTN Certificates shall pass, only upon delivery of the DTN
Certificates to the Paying Agent) (the "Letter of Transmittal") and (ii)
instructions for use in surrendering such DTN Certificates in exchange for
payment therefor. Upon the surrender of each such DTN Certificate, together with
the respective Letter of Transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other documents as may be
required pursuant to such instructions, the Paying Agent shall pay the holder of
such DTN Certificate the Merger Consideration multiplied by the number of shares
of DTN Common Stock formerly represented by such DTN Certificate, in
consideration therefor, and such DTN Certificate shall forthwith be cancelled.
Until so surrendered, each such DTN Certificate (other than the DTN Certificates
representing Dissenting Shares and the DTN Certificates representing shares of
DTN Common Stock owned by Acquiror or Merger Sub or any Subsidiary of Acquiror
or held in the treasury by DTN or by any wholly owned Subsidiary of DTN) shall
represent solely the right to receive the aggregate Merger Consideration
relating thereto. No interest or dividends shall be paid or accrued on the
Merger Consideration. If the Merger Consideration (or any portion thereof) is to
be paid to any person other than the person in whose name the DTN Certificate
formerly representing shares of DTN Common Stock surrendered is registered, it
shall be a condition to such right to receive such payment that the DTN
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person surrendering such DTN Certificate shall
pay to the Paying Agent any transfer or other similar taxes required by reason
of the payment of the Merger Consideration to a person other than the registered
holder of the DTN Certificate surrendered, or shall establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable.
(c) At any time following the six-month anniversary of the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to the Surviving Corporation any funds which had been
made available to the Paying Agent and not disbursed to holders of shares of DTN
Common Stock (including all interest and other income received by the Paying
Agent in respect of all funds made available to it), the DTN Certificates and
other documents in its possession relating to the Merger, and the Paying Agent's
duties shall terminate. Thereafter, each holder of a DTN Certificate formerly
representing shares of DTN Common Stock may surrender such DTN Certificate to
the Surviving Corporation and receive in consideration therefor the aggregate
Merger Consideration relating thereto, without any interest or dividends
thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a share of DTN Common Stock
for any Merger Consideration delivered in respect of such share to a public
official pursuant to any abandoned property, escheat or other similar law.
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(d) At the close of business on the day of the Effective Time,
the stock transfer books of DTN shall be closed and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of any shares of DTN Common Stock which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, DTN Certificates
formerly representing shares of DTN Common Stock are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and cancelled in
return for the payment of the aggregate Merger Consideration relating thereto,
subject to applicable law in the case of Dissenting Shares. From and after the
Effective Time, the holders of shares of DTN Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of DTN Common Stock, except as otherwise provided herein
or by applicable law.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of DTN Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Corporation, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
DTN Common Stock in respect of which such deduction and withholding was made by
the Surviving Corporation, except that such treatment shall not apply to any
withholding tax imposed by any foreign jurisdiction.
(f) If any DTN Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such DTN Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such DTN Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed DTN Certificate
the Merger Consideration to which the holders thereof are entitled pursuant to
this Agreement.
SECTION 3.3 STOCK OPTIONS AND WARRANTS.
(a) At the Effective Time, each option to purchase shares of
DTN Common Stock and each stock appreciation right with respect to DTN Common
Stock outstanding and unexercised as of the Effective Time (a "DTN Option"),
whether granted pursuant to DTN's 1999 Stock Incentive Plan, DTN's Stock Option
Plan of 1989, or DTN's Non-Employee Directors Stock Option Plan, as each of the
same may have been amended from time to time (collectively, the "DTN Stock
Plans"), or granted by DTN other than pursuant to the DTN Stock Plans, shall, at
the Effective Time, be cancelled and the former holder shall have the right to
receive from DTN in consideration of such cancellation, payable during the
ten-day period following the Closing Date, an amount of cash equal to (i) the
excess, if any, of the Merger Consideration applicable to the number of shares
of DTN Common Stock subject to such DTN Option, which for this purpose shall be
deemed to be fully vested as of the Effective Time, over (ii) the aggregate
exercise price of such DTN Option, less any income or employment tax withholding
required under the Code or any provision of state or local law.
(b) At the Effective Time, each of the DTN Warrants (as
defined in Section
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4.3) outstanding immediately prior to the Effective Time shall be converted into
the right to receive an amount of cash, payable in accordance with Section
3.2(b), equal to (i) the excess, if any, of the Merger Consideration applicable
to the number of shares of DTN Common Stock subject to such DTN Warrants over
(ii) the aggregate exercise price of such DTN Warrants.
SECTION 3.4 SHARES OF DISSENTING HOLDERS OF DTN COMMON STOCK.
(a) Notwithstanding any provision of this Agreement to the
contrary, shares of DTN Common Stock that are outstanding immediately prior to
the Effective Time and that are held by stockholders who shall not have voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing an appraisal for such shares of DTN Common Stock in
accordance with Section 262 of the DGCL (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration. Such stockholders shall be entitled to receive payment of the
appraised value of such shares of DTN Common Stock held by them in accordance
with the provisions of Section 262 of the DGCL ("Section 262"), except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Dissenting Shares under Section 262 shall thereupon be deemed to have been
converted into the right to receive, and to have become exchangeable for, as of
the Effective Time, the Merger Consideration, without any interest thereon, upon
surrender, in the manner provided in this Agreement, of the DTN Certificate or
DTN Certificates that formerly evidenced such shares of DTN Common Stock.
(b) DTN shall give Acquiror (i) prompt written notice of any
demands for appraisal received by DTN, withdrawals of such demands, and any
other instruments served pursuant to the DGCL and received by DTN and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. DTN shall not, except with the prior written
consent of Acquiror, make any payment with respect to any demands for appraisal
or offer to settle any such demands.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF DTN
Except as set forth in the DTN Disclosure Schedule, DTN hereby represents
and warrants to Acquiror as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of DTN
and each Subsidiary of DTN (a "DTN Subsidiary") has been duly organized, and is
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and has the requisite power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect. Each of DTN and the DTN Subsidiaries is duly qualified
or licensed to do business, and is in good standing, in each
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jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 4.2 CERTIFICATE OF INCORPORATION AND BYLAWS. The copies of
DTN's certificate of incorporation and bylaws that are set forth as exhibits to
DTN's Form 10-K for the year ended December 31, 1998 are complete and correct
copies thereof. Such certificate of incorporation and bylaws are in full force
and effect. DTN is not in violation of any of the provisions of its certificate
of incorporation or bylaws.
SECTION 4.3 CAPITALIZATION. The authorized capital stock of DTN
consists of (a) 20,000,000 shares of DTN Common Stock; and (b) 1,000,000 shares
of preferred stock, par value $0.50 per share, 11,693 shares of which are
designated as Series A Junior Participating Preferred Stock. As of March 1,
2000, (i) 12,019,986 shares of DTN Common Stock were issued and outstanding, all
of which were validly issued and fully paid and nonassessable (ii) no shares of
DTN Common Stock were held in the treasury of DTN; (iii) 3,010,000 shares of DTN
Common Stock were reserved for issuance in connection with the DTN Stock Plans;
(iv) no shares of Series A Junior Participating Preferred Stock were issued and
outstanding (v) 20,000 shares of DTN Common Stock were reserved for issuance in
connection with warrants to purchase shares of DTN Common Stock (the "DTN
Warrants"). From March 1, 2000, through the date hereof, DTN has not issued any
additional shares of capital stock except pursuant to the exercise of
outstanding DTN Options. There are no bonds, debentures, notes or other
indebtedness having general voting rights (or convertible into securities having
such rights) ("Voting Debt") of DTN or any DTN Subsidiary issued and
outstanding. Except as issued pursuant to any DTN Stock Plans (including options
for 35,500 shares issued under the Non-Employee Directors Stock Option Plan),
DTN Warrants or pursuant to agreements or arrangements described in Schedule 4.3
of the DTN Disclosure Schedule, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which DTN is a party
or by which DTN is bound relating to the issued or unissued capital stock of DTN
or any DTN Subsidiary or obligating DTN or any DTN Subsidiary to issue or sell
any shares of capital stock of, any other equity interests in, or any Voting
Debt of, DTN or any DTN Subsidiary. Schedule 4.3 of the DTN Disclosure Schedule
contains a true and complete list as of March 1, 2000 of all outstanding options
to purchase shares of DTN or any DTN Subsidiary, identifying the holder of each
option and the exercise price applicable to that holder's option. All shares of
DTN Common Stock subject to issuance as aforesaid, upon issuance prior to the
Effective Time on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. There are no outstanding contractual obligations of DTN or
any DTN Subsidiary to repurchase, redeem or otherwise acquire any shares of DTN
Common Stock or any capital stock of any DTN Subsidiary. Each outstanding share
of capital stock of each DTN Subsidiary is duly authorized, validly issued,
fully paid and nonassessable, and each such share owned by DTN or another DTN
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on DTN's or such other
DTN Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever, except as described in Schedule 4.3 of the DTN Disclosure Schedule.
Except as set forth in Schedule 4.3, there are no outstanding contractual
obligations of DTN or any DTN Subsidiary to make any investment (in the form of
a
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loan, capital contribution or otherwise) in, or guaranty any obligation of, any
DTN Subsidiary or any other person.
SECTION 4.4 AUTHORIZATION; ENFORCEABILITY. DTN has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder (including its obligations with respect to the Offer
and the Merger), and to consummate the transactions contemplated hereby to be
consummated by DTN. The execution and delivery of this Agreement by DTN and the
consummation by DTN of such transactions have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the part
of DTN are necessary to authorize this Agreement or to consummate such
transactions (other than the adoption of this Agreement by the requisite
affirmative vote of the stockholders of DTN as required by the DGCL). This
Agreement has been duly and validly executed and delivered by DTN and (assuming
due authorization, execution and delivery by Acquiror and Merger Sub)
constitutes a legal, valid and binding obligation of DTN, enforceable against
DTN in accordance with its terms, subject to bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
the availability of equitable remedies.
SECTION 4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by DTN does
not, and the performance of this Agreement by DTN will not: (i) conflict with or
violate any provision of the certificate of incorporation or bylaws of DTN or
any equivalent organizational documents of any DTN Subsidiary; (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 4.5(b) have been obtained and all filings and obligations described in
Section 4.5(b) have been made, conflict with or violate any foreign or domestic
law, statute, ordinance, rule, regulation, order, judgment or decree ("Law")
applicable to DTN or any DTN Subsidiary or by which any property or asset of DTN
or any DTN Subsidiary is bound or affected; or (iii) except as set forth in
Schedule 4.5(a) of the DTN Disclosure Schedule, result in any breach of any
provision of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of DTN or any
DTN Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
except, with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not,
individually or in the aggregate, (A) have a Material Adverse Effect or (B)
prevent or materially delay the performance of this Agreement by DTN.
(b) The execution and delivery of this Agreement by DTN does
not, and the performance of this Agreement by DTN will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
domestic or foreign governmental or regulatory authority ("Governmental Entity")
or any third party under any material Contract (defined in Section 4.10), except
for (i) applicable requirements of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act"), the Securities Act of 1933, as amended (together with the rules
and regulations promulgated thereunder, the "Securities Act"), state securities
or "blue sky" laws ("Blue Sky Laws"), the National Association of Securities
Dealers, state takeover laws, Section 251 of the DGCL, the
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pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act"), or similar antitrust filings or notifications in other
jurisdictions, filing and recordation of the Certificate of Merger as required
by the DGCL and set forth in Schedule 4.5(b) of the DTN Disclosure Schedule and
(ii) the other third party consents, approvals or notifications set forth in
Schedule 4.5(b) of the DTN Disclosure Schedule.
SECTION 4.6 PERMITS; COMPLIANCE.
(a) Each of DTN and the DTN Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Entity necessary for DTN or any DTN Subsidiary to own, lease and operate its
properties or to carry on its business as it is now being conducted (the "DTN
Permits"), except where the failure to have, or the suspension or cancellation
of, any of the DTN Permits would not, individually or in the aggregate, (i) have
a Material Adverse Effect or (ii) prevent or materially delay the performance of
this Agreement by DTN.
(b) As of the date of this Agreement, no suspension or
cancellation of any of the DTN Permits is pending or, to the Knowledge of the
executive officers of DTN, threatened, except where the failure to have, or the
suspension or cancellation of, any of the DTN Permits would not, individually or
in the aggregate, (A) have a Material Adverse Effect or (B) prevent or
materially delay the performance of this Agreement by DTN.
(c) Neither DTN nor any DTN Subsidiary is in conflict with, or
in default or violation of, (i) any Law applicable to DTN or any DTN Subsidiary
or by which any property or asset of DTN or any DTN Subsidiary is bound or
affected or (ii) any DTN Permits, except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, (A) have a Material
Adverse Effect or (B) prevent or materially delay the performance of this
Agreement by DTN.
SECTION 4.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) DTN has filed all forms, reports and documents required to
be filed by it under the Exchange Act since January 1, 1999 (collectively, the
"DTN SEC Reports"). The DTN SEC Reports (i) were prepared in all material
respects in accordance with the requirements of the Exchange Act and (ii) did
not, as of their respective dates, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(b) Schedule 4.7(a) of the DTN Disclosure Schedule contains a
draft of the audited consolidated financial statements of DTN and the DTN
Subsidiaries for the year ended December 31, 1999, which includes the
consolidated balance sheet as of December 31, 1999 and the consolidated results
of operations and cash flows of DTN and its Subsidiaries for the year ended
December 31, 1999. Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the DTN SEC Reports or included in
the draft of the audited consolidated financial statements of DTN and the DTN
Subsidiaries for the year ended
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December 31, 1999, was prepared in all material respects in accordance with GAAP
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each presented fairly, in all material
respects, the consolidated financial position of DTN and its Subsidiaries at the
respective dates thereof and the consolidated results of operations and cash
flows of DTN and its Subsidiaries for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal year-end audit adjustments that do not materially affect any of those
financial statements). The audited consolidated financial statements of DTN and
the DTN Subsidiaries for the year ended December 31, 1999 shall be delivered by
DTN to Acquiror promptly after received by DTN and none of those financial
statements shall differ in any material respect from the draft contained in
Schedule 4.7(a).
(c) Except as and to the extent set forth in the draft of the
audited consolidated balance sheet of DTN and its Subsidiaries as of December
31, 1999 contained in Schedule 4.7(a), including the notes thereto, or in any
balance sheet contained in any of the DTN SEC Reports, neither DTN nor any DTN
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in notes thereto prepared in accordance with United States
generally accepted accounting principles, except for liabilities or obligations
incurred in the ordinary course of business since the respective dates of those
balance sheets that would not, individually or in the aggregate, (i) have a
Material Adverse Effect or (ii) prevent or materially delay the performance of
this Agreement by DTN. Schedule 4.7 of the DTN Disclosure Schedules contains a
true and complete list of all off-balance sheet and contingent liabilities of
DTN and its Subsidiaries that individually or in the aggregate involve more than
$100,000.
SECTION 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since January 1,
1999, except as contemplated by or as disclosed in this Agreement, including
Schedule 4.8 of the DTN Disclosure Schedule, or as disclosed in any of the DTN
SEC Reports or the financial statements delivered to Acquiror, DTN and the DTN
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since such date, there has not been:
(a) any change, condition, event or development that has had a Material Adverse
Effect; (b) any event that could reasonably be expected to prevent or materially
delay the performance of this Agreement by DTN; (c) any material change by DTN
in its accounting methods, principles or practices (other than as required by
GAAP); (d) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of DTN Common Stock or any redemption,
purchase or other acquisition of any of DTN's securities; or (e) any increase in
the compensation or benefits or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any executive officers of DTN or any DTN Subsidiary except in the
ordinary course of business consistent with past practice or except as required
by applicable Law or contractual obligations existing as of the date hereof.
SECTION 4.9 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) With respect to each material employee benefit plan,
program,
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arrangement and contract (including any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), maintained or contributed to by DTN or any DTN Subsidiary, or with
respect to which DTN or any DTN Subsidiary could reasonably be expected to incur
material liability under Section 4069, 4212(c) or 4204 of ERISA (the "DTN
Benefit Plans"), DTN will make available to Acquiror, promptly after the date
hereof, a true and complete copy (other than with respect to any multi-employer
plan as defined in Section 3(37) of ERISA) of (i) the most recent annual report
thereof (Form 5500) filed with the Internal Revenue Service (the "IRS"), (ii)
such DTN Benefit Plan, (iii) each trust agreement relating to such DTN Benefit
Plan, (iv) the most recent summary plan description for each DTN Benefit Plan
for which a summary plan description is required, (v) the most recent actuarial
report or valuation relating to a DTN Benefit Plan subject to Title IV of ERISA
and (vi) the most recent determination letter, if any, issued by the IRS with
respect to any DTN Benefit Plan qualified under Section 401(a) of the Code.
Schedule 4.9 of the DTN Disclosure Schedules contains a true and complete list
of all Employee Benefit Plans.
(b) With respect to the DTN Benefit Plans, no event has
occurred and, to the Knowledge of DTN, there exists no condition or set of
circumstances in connection with which DTN or any DTN Subsidiary could
reasonably be expected to be subject to any liability under the terms of such
DTN Benefit Plans, ERISA, the Code or any other applicable Law which would have
a Material Adverse Effect.
(c) Neither DTN nor any DTN Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by DTN or any DTN Subsidiary and no collective bargaining agreement or
other labor union contract is being negotiated by DTN or any DTN Subsidiary,
except as disclosed in the DTN SEC Reports. As of the date of this Agreement,
there is no labor dispute, strike or work stoppage against DTN or any DTN
Subsidiary pending or threatened in writing which would reasonably be expected
to interfere with the respective business activities of DTN or any DTN
Subsidiary. As of the date of this Agreement, to the Knowledge of DTN, none of
DTN, any DTN Subsidiary, or their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of DTN or any DTN Subsidiary, and there is no charge or
complaint against DTN or any DTN Subsidiary by the National Labor Relations
Board or any comparable state or foreign agency pending or threatened in
writing, except where such unfair labor practice, charge or complaint would not
have a Material Adverse Effect.
(d) Schedule 4.9(d) of the DTN Disclosure Schedule sets forth
a list of (i) all severance and material employment agreements with officers of
DTN and each DTN Subsidiary; (ii) all material severance programs and policies
of DTN and each DTN Subsidiary with or relating to its employees; and (iii) all
retention or stay agreements with employees of DTN or any of its subsidiaries
and all plans, programs, agreements and other arrangements of DTN and each DTN
Subsidiary with or relating to its employees which include obligations to make
payments to employees or contain change of control provisions.
(e) No DTN Benefit Plan provides retiree medical or retiree
life insurance benefits to any person except as disclosed in Schedule 4.9.
SECTION 4.10 CONTRACTS; DEBT INSTRUMENTS.
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(a) All contracts, agreements, guarantees, leases and
executory commitments other than the DTN Benefit Plans (each, a "Contract") to
which DTN is a party and which involve annual payments to or by DTN in excess of
$250,000, relate to DTN indebtedness for borrowed money or are otherwise
material to DTN or any of its Significant Subsidiaries (each, a "Material
Contract"), are valid and binding obligations of DTN and, to the Knowledge of
DTN, the valid and binding obligation of each other party thereto, except such
Material Contracts which if not so valid and binding would not, individually or
in the aggregate, have a Material Adverse Effect. Neither DTN nor, to the
Knowledge of DTN, any other party thereto is in violation of or in default in
respect of, nor has there occurred an event or condition which with the passage
of time or giving of notice (or both) would constitute a default under or permit
the termination of, any such Material Contract, except such violations or
defaults under or terminations which, would not, individually or in the
aggregate, have a Material Adverse Effect. All of the Material Contracts are
listed on Schedule 4.10 of the DTN Disclosure Schedule.
(b) Set forth in Schedule 4.10(b) of the DTN Disclosure
Schedule is a description of any material changes to the amount and material
terms of the indebtedness of DTN and its Subsidiaries as described in the notes
to the financial statements incorporated in DTN's audited financial statements
for the year ended December 31, 1999.
SECTION 4.11 LITIGATION. Except as disclosed on Schedule 4.11 of the
DTN Disclosure Schedule, there is no litigation, suit, claim, action, proceeding
or investigation pending or, to the Knowledge of DTN, threatened against DTN or
any of the DTN Subsidiaries or any of their properties or assets before any
court, arbitrator or administrator or Governmental Entity, other than any
litigation arising in the ordinary course of business that does not, or is not
likely to, involve more than $100,000. Except as disclosed in the DTN SEC
Reports, in the case of any suit, claim, action, proceeding or investigation
relating to any environmental matters relating to DTN or any DTN Subsidiary,
there has been no material change since January 1, 2000 in the status of any
such matters. Except as disclosed in the DTN SEC Reports, neither DTN nor any
DTN Subsidiary is subject to any continuing order of, consent decree, settlement
agreement or similar written agreement with, or, to the Knowledge of DTN,
continuing investigation by, any governmental or regulatory authority, domestic
or foreign, or any order, writ, judgment, injunction, decree, determination or
award of any governmental or regulatory authority or any arbitrator which,
individually or in the aggregate, would have a Material Adverse Effect.
SECTION 4.12 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
Schedule 4.12 of the DTN Disclosure Schedule, there are no actions, suits,
investigations, liabilities, inquiries or proceedings involving DTN or any of
its Subsidiaries or any of their respective assets that are pending or, to the
Knowledge of DTN, threatened, nor to the Knowledge of DTN is there any factual
basis for any of the foregoing, as a result of any asserted failure of DTN or
any of its Subsidiaries, or any predecessor thereof, to comply (or the assertion
of liability even if in compliance) with any Law designed to minimize, prevent,
punish or remedy the consequences of actions that damage or threaten the soil,
land surface or subsurface strata, surface waters (including navigable waters,
ocean waters, streams, ponds, drainage basins and wetlands), groundwaters,
drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life and any other environmental medium or natural resource,
any of which would have a Material Adverse Effect.
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SECTION 4.13 TRADEMARKS, PATENTS AND COPYRIGHTS. Except to the extent
the inaccuracy of any of the following (or the circumstances giving rise to any
inaccuracy) would not have a Material Adverse Effect, DTN and each of the DTN
Subsidiaries own or possess adequate licenses or other legal rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the business of DTN and the
DTN Subsidiaries as currently conducted or as contemplated to be conducted, and
DTN has no Knowledge of any assertion or claim challenging the validity of any
of the foregoing. Neither DTN nor any of the DTN Subsidiaries has infringed or
is infringing in any way any patent, patent right, license, trademark, trademark
right, trade dress, trade name, trade name right, service xxxx or copyright of
any third party that individually or in the aggregate, would have a Material
Adverse Effect. To DTN's Knowledge, there are no infringements of any
proprietary rights owned by or licensed by or to DTN or any DTN Subsidiary.
SECTION 4.14 TAXES. Except as set forth in Schedule 4.14 of the DTN
Disclosure Schedule, (a) DTN and the DTN Subsidiaries have timely filed or will
timely file all United States federal and state income Tax Returns and all other
material income Tax Returns and, to the Knowledge of DTN, all other material Tax
Returns required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the Effective Time, taking into account
any extension of time to file, granted to or obtained on behalf of DTN and the
DTN Subsidiaries, and all such Tax Returns are complete and correct in all
material respects; (b) all Taxes that are shown as due on such Tax Returns have
been or will be timely paid; (c) as of the date hereof, no deficiency for any
material amount of Tax has been asserted or assessed in writing by a taxing
authority against DTN or any of the DTN Subsidiaries for which there are not
adequate reserves; (d) DTN and the DTN Subsidiaries have provided adequate
reserves in accordance with GAAP in their financial statements for any Taxes
that have not been paid, whether or not shown as being due on any returns; (e)
as of the date hereof, DTN and the DTN Subsidiaries have neither extended nor
waived any applicable statute of limitations with respect to United States or
Canadian or, to the Knowledge of DTN, other income or franchise Taxes and have
not otherwise agreed to any extension of time with respect to a United States or
Canadian or, to the Knowledge of DTN, other income or franchise Tax assessment
or deficiency; (f) none of DTN and the DTN Subsidiaries is a party to any tax
sharing agreement or arrangement other than with each other; (g) as of the date
hereof, there are not pending or threatened in writing any material audits,
examinations, investigations, litigation, or other proceedings in respect of
Taxes of DTN or any DTN Subsidiary for which there are not adequate reserves;
and (h) to the Knowledge of DTN, no liens for Taxes exist with respect to any of
the assets or properties of DTN or the DTN Subsidiaries, except for statutory
liens for Taxes not yet due or payable or that are being contested in good
faith.
SECTION 4.15 INSURANCE. DTN and the DTN Subsidiaries have in effect
insurance coverage with reputable insurers or are self-insured, which in respect
of amounts, premiums, types and risks insured, constitutes reasonable coverage
for the risks customarily insured against by companies engaged in the industries
in which DTN and the DTN Subsidiaries are engaged and comparable in size and
operations to DTN and the DTN Subsidiaries.
SECTION 4.16 OPINION OF FINANCIAL ADVISOR. Xxxxx & Co. ("Greif") has
delivered to
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DTN its written opinion, dated the date hereof, accompanied by an authorization
to include such opinion in the Proxy Statement to the effect that, as of the
date of this Agreement, the consideration to be received in the Offer and the
Merger is fair, from a financial point of view, to DTN's stockholders. DTN has
delivered a signed copy of such written opinion to Acquiror.
SECTION 4.17 BROKERS. Except as set forth on Schedule 4.17 of the DTN
Disclosure Schedule, no broker, finder or investment banker (other than Greif)
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of DTN.
SECTION 4.18 APPROVAL DELAYS. To the Knowledge of DTN, there is no
reason why the granting of any of the consents, approvals, authorizations or
other actions described in Section 4.5(b) would be denied or unduly delayed.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to DTN as follows:
SECTION 5.1 ACQUIROR ORGANIZATION. Each of Acquiror and Merger Sub has
been duly organized and is validly existing and in good standing under the laws
of the jurisdiction of its formation. Each of Acquiror and Merger Sub has all
necessary limited liability company or corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions (including the Offer and the Merger) contemplated
hereby to be consummated by Acquiror and Merger Sub. The execution and delivery
of this Agreement by Acquiror and Merger Sub and the consummation by Acquiror
and Merger Sub of such transactions have been duly and validly authorized by all
necessary limited liability company or corporate action and no other limited
liability company or corporate proceedings on the part of Acquiror and Merger
Sub are necessary to authorize this Agreement or to consummate such
transactions. This Agreement has been duly authorized and validly executed and
delivered by each of Acquiror and Merger Sub and constitutes (assuming due
authorization, execution and delivery by DTN) a legal, valid and binding
obligation of each of Acquiror and Merger Sub, enforceable against each of
Acquiror and Merger Sub in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies.
SECTION 5.2 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Acquiror
and Merger Sub does not, and the performance of this Agreement by Acquiror and
Merger Sub will not: (i) conflict with or violate any provision of the limited
liability company agreement of Acquiror or the certificate of incorporation of
Merger Sub, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.2(b) have been obtained and all filings and
obligations described in Section 5.2(b) have been made, conflict with or violate
any Law applicable to Acquiror or Merger Sub or by which any property or asset
of Acquiror or Merger
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Sub is bound or affected; or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or in the case of Acquiror or Merger Sub, give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Acquiror
or Merger Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by each of
Acquiror and Merger Sub does not, and the performance of this Agreement by
Acquiror and Merger Sub will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Entity or any
other third party, except for: (i) applicable requirements of the Exchange Act,
the Securities Act, Blue Sky Laws, any exchange upon which securities of
Acquiror are traded and state takeover laws, the pre-merger notification
requirements of the HSR Act or similar anti-trust filings or notifications in
other jurisdictions; and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
reasonably be expected to prevent or materially delay consummation of the
Merger.
SECTION 5.3 ABSENCE OF LITIGATION. As of the date of this Agreement,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the Knowledge of Acquiror, threatened against Acquiror or Merger Sub or
any of their respective Subsidiaries, properties or assets before any court,
arbitrator or administrator, governmental or regulatory authority or body,
domestic or foreign, which seeks to delay or prevent or would result in the
material delay of or would prevent the consummation of any of the transactions
contemplated hereby. Neither Acquiror nor Merger Sub or any property or asset of
Acquiror or Merger Sub is subject to any continuing order of, consent decree,
settlement agreement or similar written agreement with, or, to the Knowledge of
Acquiror, continuing investigation by, any governmental or regulatory authority,
domestic or foreign, or any order, writ, judgment, injunction, decree,
determination or award of any governmental or regulatory authority or any
arbitrator which would prevent Acquiror or Merger Sub from performing its
respective material obligations under this Agreement or prevent or materially
delay the consummation of any of the transactions contemplated hereby.
SECTION 5.4 BROKERS. No broker, finder or investment banker, other than
Veronis, Suhler & Associates LLC (the fee to which shall be paid by Acquiror),
is entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Acquiror.
SECTION 5.5 NO ACTIVITIES. Merger Sub was formed solely for the purpose
of engaging in the Merger. Except for obligations or liabilities incurred in
connection with its incorporation or organization and the transactions
contemplated by this Agreement, Merger Sub does not have any obligations or
liabilities of any nature (whether accrued, absolute, contingent or otherwise)
and has not engaged in any business activities of any type or kind whatsoever or
entered into any agreements or arrangements with any person.
SECTION 5.6 FINANCING. As of the date of this Agreement, Acquiror has
the financial ability required to consummate the transactions contemplated by
this Agreement.
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SECTION 5.7 APPROVAL DELAYS. To the Knowledge of Acquiror, there is no
reason why the granting of any of the consents, approvals, authorizations and
other actions described in SECTION 5.2(B) would be denied or unduly delayed.
ARTICLE 6.
COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS BY DTN PENDING THE CLOSING. DTN agrees
that, between the date of this Agreement and the Effective Time, except as set
forth in Schedule 6.1 of the DTN Disclosure Schedule or as contemplated by any
other provision of this Agreement, unless Acquiror shall otherwise agree in
writing, which agreement shall not be unreasonably withheld or delayed: (1) the
businesses of DTN and the DTN Subsidiaries shall be conducted only in, and DTN
and the DTN Subsidiaries shall not take any action except in, the ordinary
course of business consistent with past practice; and (2) DTN shall use its
reasonable best efforts to keep available the services of such of the current
officers, significant employees and consultants of DTN and the DTN Subsidiaries
and to preserve the current relationships of DTN and the DTN Subsidiaries with
such of the customers, suppliers and other persons with which DTN or any DTN
Subsidiary has significant business relations in order to preserve substantially
intact its business organization. By way of amplification and not limitation,
except as set forth in Schedule 6.1 of the DTN Disclosure Schedule or as
contemplated by any other provision of this Agreement, DTN shall not, and shall
neither (unless required by applicable Laws or stock exchange regulations) cause
nor permit any DTN Subsidiaries or any of its Affiliates (over which it
exercises control), or any of its or their officers, directors, employees and
agents (in each case, in their capacities as such) to, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or agree to do,
any of the following, without the prior written consent of Acquiror, which
consent shall not be unreasonably withheld or delayed (except that, with respect
to the matters referred to in Section 6.1(e)(i), Acquiror shall have the right
to withhold its consent in its sole discretion):
(a) amend or otherwise change its certificate of incorporation
or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of DTN or any DTN Subsidiary of any class, or
securities convertible or exchangeable or exercisable for any shares of such
capital stock, or any options, warrants or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest (including any
phantom interest), or any Voting Debt, of DTN or any DTN Subsidiary (except for
the issuance of any shares of capital stock issuable pursuant to the exercise of
any DTN Options or DTN Warrants outstanding on the date of this Agreement); or
(ii) any property or assets of DTN or any DTN Subsidiary, except in all cases in
the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock, other than dividends
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paid by any of the wholly owned DTN Subsidiaries to DTN;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including by merger, consolidation or
acquisition of stock or assets) any interest in any corporation, partnership,
other business organization, person or any division thereof or any assets, other
than acquisitions of assets in the ordinary course of business consistent with
past practice and any other acquisitions for consideration that are not, in the
aggregate, in excess of $1 million; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of any person for
borrowed money, except for indebtedness for borrowed money incurred in the
ordinary course of business and consistent with past practice or incurred to
refinance outstanding indebtedness for borrowed money existing on the date of
this Agreement (which refinancing shall not increase the aggregate amount of
indebtedness permitted to be outstanding thereunder and shall not include any
covenants that shall be materially more burdensome to DTN in any material
respect or increase costs to the Surviving Corporation after the Effective Time
in any material respect); or other indebtedness for borrowed money with a
maturity of not more than one year in a principal amount not, in the aggregate,
in excess of $1 million; (iii) terminate, cancel or request any material change
in, or agree to any material change in any Material Contract or enter into any
contract or agreement material to the business, results of operations or
financial condition of DTN and the DTN Subsidiaries taken as a whole, in either
case other than in the ordinary course of business, consistent with past
practice; (iv) make or authorize any capital expenditure, or take any other
related actions, that would be reasonably likely to cause DTN to exceed its 2000
capital expenditures budget, in the aggregate, by more than $50,000; or (v)
enter into or amend any contract, agreement, commitment or arrangement that, if
fully performed, would not be permitted under this Section;
(f) except as set forth in Schedule 6.1 to the DTN Disclosure
Schedule, increase the compensation payable or to become payable to its officers
or employees, except for increases in accordance with past practices in salaries
or wages of employees of DTN or any DTN Subsidiary who are not officers of DTN,
or grant any rights to severance or termination pay to, or enter into any
employment or severance agreement with, any director, officer or other employee
of DTN or any DTN Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee, except as
contemplated by this Agreement or to the extent required by applicable Law or
the terms of a collective bargaining agreement or a contractual obligation
existing on the date hereof; provided, however, that DTN may grant options,
restricted shares, performance units or other long-term incentive awards to new
hires in the ordinary course of business consistent with past practice;
(g) take any action with respect to modifying accounting
policies or procedures, other than actions in the ordinary course of business
and consistent with past practice and as advised by DTN's regular independent
accountants;
(h) waive, release, assign, settle or compromise any material
claims or
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litigation involving money damages in excess of $100,000, except for claims
asserted by DTN or the applicable DTN Subsidiary;
(i) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability, other than such
actions in the ordinary course of business and consistent with past practice,
provided however that DTN shall inform Acquiror in advance of such election or
settlement or compromise if such election or settlement or compromise could
reasonably be expected to have any ongoing material adverse tax consequence to
the Surviving Corporation;
(j) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing;
(k) except as contemplated by Section 7.3, enter into any
confidentiality agreements or arrangements other than in the ordinary course of
business consistent with past practice;
(l) take any action that will likely result in the
representations and warranties set forth in Article 4 becoming false or
inaccurate in any material respect;
(m) enter into or carry out any other transaction other than
in the ordinary and usual course of business or other than as permitted pursuant
to the other clauses in this Section; or
(n) permit or cause any Subsidiary to do any of the foregoing
or agree or commit to do any of the foregoing.
SECTION 6.2 NOTICES OF CERTAIN EVENTS. Each of Acquiror, on the one
hand, and DTN, on the other hand, shall give prompt notice to the other of: (a)
any notice or other communication from any person alleging that the consent of
such person is or may be required in connection with the Merger; (b) any
material notice or other communication from any Governmental Entity in
connection with the Merger; (c) any actions, suits, claims, investigations or
proceedings commenced or, to its Knowledge threatened in writing against,
relating to or involving or otherwise affecting Acquiror, DTN or any of their
respective Subsidiaries that relate to the consummation of the Merger; (d) the
occurrence of a default or event that, with notice or lapse of time or both,
will become a default under any Material Contract; and (e) any change that would
result in a Material Adverse Effect or is reasonably likely to delay or impede
the ability of either Acquiror or DTN to consummate the transactions
contemplated by this Agreement or to fulfill its obligations set forth herein.
SECTION 6.3 MANAGEMENT INCENTIVE PROGRAM.
(a) Acquiror shall provide an equity incentive program that,
subject to certain conditions, will provide DTN's senior management team with
12.5% of the incremental equity profit after return of capital to the Acquiror.
It is anticipated that this equity incentive will be provided to the key members
of senior management and allocated by the Acquiror after consultation with DTN's
president. Under the arrangement, 50% of the incentive interest will vest
ratably over five years, but will vest in full upon an earlier change in
control; and the
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remaining 50% will be payable upon a change of control with management's
entitlement based upon a sliding scale that correlates to the Acquiror's
realized internal rate of return ("IRR") after taking account of the payments
under the program; the scale will be a ratable sliding scale in which no
incentive payment with respect to this 50% is made if the IRR is less than 20%
and the full amount will be payable with respect to this 50% if the IRR is 40%
or higher.
(b) In addition, Acquiror shall establish an arrangement under
which certain key officers and employees of DTN as of the Closing Date (the
"Participants") will receive an aggregate of 15% of the excess of (i) the
proceeds DTN receives from the sale of the 303,000 shares of common stock of
SmartServ Online, Inc (the "SmartServ Stock") received upon exercise of the
warrants presently held by DTN to purchase the SmartServ Stock over (ii) the
aggregate exercise price paid by DTN for the shares of SmartServ Stock (the
"Cash Bonuses"). The Cash Bonuses shall be paid to the Participants from time to
time promptly after the proceeds of each sale of the SmartServ Stock is received
by DTN; provided, however, no Cash Bonuses shall be paid until December 1, 2000.
Acquiror shall, after consultation with DTN's president, determine which
officers and employees of DTN will be the Participants and the percentage of the
Cash Bonuses to which each Participant will be entitled. A Participant will not
be entitled to receive any Cash Bonuses after the voluntary termination of
employment of such Participant with DTN, other than as a result of death or
disability. In the event of a Participant's voluntary termination of his or her
employment with DTN, the remaining Participants shall receive proportionately
the remaining Cash Bonuses the Participant who voluntarily terminated employment
would otherwise have received. In the event DTN has not sold all of the shares
of SmartServ Stock by February 16, 2002, then after such date the Participants
may elect to have DTN distribute to each Participant that portion of the
remaining shares of SmartServ Stock then held by DTN which represents such
Participant's percentage of the Cash Bonuses multiplied by 15%, in lieu of such
Participant's interest in future Cash Bonuses based upon the remaining shares of
SmartServ Stock.
ARTICLE 7.
ADDITIONAL AGREEMENTS
SECTION 7.1 STOCKHOLDERS MEETING.
(a) If the Minimum Condition or any other condition of the
Offer is not satisfied and the Offer is therefore terminated, DTN, acting
through its Board of Directors, shall, in accordance with applicable law and as
promptly as practicable following the termination of the Offer, (i) duly call,
give notice of, convene and hold a special meeting of its stockholders (the "DTN
Stockholders' Meeting") for the purpose of considering and adopting this
Agreement and approving the Merger, (ii) prepare and file with the SEC
preliminary proxy materials relating to the Merger and this Agreement and use
its reasonable efforts to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Acquiror, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy statement, and (iii) cause a definitive
proxy statement, including any amendment or supplement thereto (the "Proxy
Statement"), to be mailed to its stockholders, provided that no amendment or
supplement to the Proxy Statement shall be made
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by DTN without consultation with Acquiror and its counsel.
(b) Subject to the fiduciary duties of the Board of Directors
of DTN, as described in the following proviso, the Proxy Statement shall include
the recommendation of the Board of Directors of DTN to the stockholders of DTN
in favor of approval of the Merger and this Agreement; provided, however, that
the Board of Directors of DTN may, at any time prior to the date of the DTN
Stockholders' Meeting, withdraw, modify or change any such recommendation to the
extent that the Board of Directors of DTN determines in good faith after
consultation with independent legal counsel that the failure to so withdraw,
modify or change its recommendation could cause the Board of Directors of DTN to
breach its fiduciary duties to DTN's stockholders under applicable law.
(c) The information supplied by Acquiror for inclusion in the
Proxy Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto), is first mailed to the stockholders of DTN and
(ii) the time of the DTN Stockholders' Meeting contain any untrue statement of a
material fact or fail to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the date of the DTN Stockholders' Meeting, any event or circumstance relating
to Acquiror or its officers or directors is discovered by Acquiror that should
be set forth in an amendment or a supplement to the Proxy Statement, Acquiror
shall promptly inform DTN. All documents that Acquiror is responsible for filing
with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and the
Exchange Act.
(d) The information supplied by DTN for inclusion in the Proxy
Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto), is first mailed to the stockholders of DTN and
(ii) the time of the DTN Stockholders' Meeting, contain any untrue statement of
a material fact or fail to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the date of the DTN Stockholders' Meeting, any event or circumstance relating
to DTN or any Subsidiary of DTN, or their respective officers or directors, is
discovered by DTN that should be set forth in an amendment or a supplement to
the Proxy Statement, DTN shall promptly inform Acquiror. All documents that DTN
is responsible for filing with the SEC in connection with the Merger or the
other transactions contemplated by this Agreement will comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act.
SECTION 7.2 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which DTN or any of its
Subsidiaries is a party or pursuant to applicable Law or the regulations or
requirements of any regulatory organization with whose rules the parties are
required to comply, from the date of this Agreement to the Effective Time, DTN
shall (and shall cause its Subsidiaries to): (i) provide to Acquiror and its
Affiliates and their respective officers, directors, employees, accountants,
consultants, legal counsel, agents, lenders and other representatives
(collectively with respect to any party hereunder, "Representatives")
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reasonable access at reasonable times, upon prior notice to DTN, to the
officers, employees, agents, properties, offices and other facilities of DTN and
its Subsidiaries and to the books and records thereof (ii) furnish promptly such
information concerning the business, properties, contracts, assets, liabilities,
personnel and other aspects of DTN and its Subsidiaries as Acquiror or its
Representatives may reasonably request and (iii) promptly deliver to Acquiror
the monthly financial statements of DTN and the DTN Subsidiaries and copies of
all other material relating to the business and operations of DTN and its
Subsidiaries (excluding material relating to this Agreement, the Offer, the
Merger, or any Competing Transaction) that is delivered from time to time to the
members of DTN's Board of Directors. No investigation conducted pursuant to this
Section shall affect or be deemed to modify any representation or warranty made
in this Agreement.
(b) The parties shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations
under the Confidentiality Agreement dated July 8, 1999 (the "Confidentiality
Agreement"), between Acquiror and Greif (on behalf of DTN) with respect to the
information disclosed pursuant to this Section.
SECTION 7.3 NO SOLICITATION OF TRANSACTIONS.
(a) DTN agrees that, from and after the date hereof until the
earlier of the Effective Time or the termination of this Agreement in accordance
with its terms, neither it nor any DTN Subsidiary, nor any of their respective
Representatives, shall, except as contemplated by this Agreement, directly or
indirectly, initiate, solicit or encourage any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving DTN or any of its Significant Subsidiaries, or
any purchase or sale of all or any significant portion of the assets of DTN or
any of its Significant Subsidiaries, or fifteen percent (15%) or more of the
equity securities of DTN (any such proposal or offer being hereinafter referred
to as a "Competing Transaction").
(b) DTN further agrees that neither it nor any DTN
Subsidiaries, nor any of their respective Representatives, shall, directly or
indirectly, have any discussion with or provide any confidential information or
data relating to DTN or any DTN Subsidiary to any Person relating to a Competing
Transaction or engage in any negotiations concerning a Competing Transaction, or
otherwise facilitate any effort or attempt to make or implement a Competing
Transaction or accept or enter into any agreement in connection with, a
Competing Transaction; provided, however, that nothing contained in this Section
shall prevent DTN or the Board of Directors of DTN from (i) engaging in any
discussions or negotiations with, or providing any information to, any Person in
response to an unsolicited written Competing Transaction by any such Person; or
(ii) recommending such an unsolicited written Competing Transaction to the
holders of DTN Common Stock if, in any such case as is referred to in clause (i)
or (ii), (A) the Board of Directors of DTN concludes in good faith (after
consultation with independent financial advisors) that such Competing
Transaction is reasonably likely to be consummated, taking into account all
legal, financial and regulatory aspects of the proposal and the Person making
the proposal (including the financial capability of that Person and any
conditions contained in the proposal), and that such Competing Transaction
would, if consummated, result in a transaction more favorable to holders of DTN
Common Stock than the Merger and the Offer (any such more
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favorable Competing Transaction being referred to in this Agreement as a
"Superior Proposal"), (B) the Board of Directors of DTN determines in good faith
after consultation with independent legal counsel that the failure to take such
action would be reasonably likely to constitute a breach of its fiduciary duties
under applicable Law, (C) prior to providing any information or data regarding
DTN to any Person or any of such Person's Representatives in connection with a
Superior Proposal by such Person, DTN receives from such Person an executed
confidentiality agreement with terms substantially the same as those contained
in the Confidentiality Agreement and (D) prior to providing any information or
data to any Person or any of such Person's Representatives or entering into
discussions or negotiations with any Person or any of such Person's
Representatives in connection with a Superior Proposal by such Person, DTN
notifies Acquiror promptly of the receipt of such Superior Proposal indicating,
in connection with such notice, the name of such Person and attaching a copy of
the proposal or offer or providing a complete written summary thereof. DTN
agrees that it shall keep Acquiror informed, on a current basis, of the status
and terms of any discussions or negotiations related to such Superior Proposal.
(c) DTN agrees that it will take the necessary steps to
promptly inform each DTN Subsidiary and each Representative of DTN or any DTN
Subsidiary of the obligations undertaken in this Section. Effective as of the
date hereof, DTN shall terminate and cause its Subsidiaries to terminate any
existing activities, discussions or negotiations with any third parties that may
be ongoing with respect to any Competing Transaction and shall request that all
confidential information previously furnished to any such third parties be
returned promptly.
SECTION 7.4 EMPLOYEE BENEFITS MATTERS.
(a) Except as contemplated by this Agreement, for a period of
eighteen (18) months following the Effective Time, the Surviving Corporation
shall maintain employee benefit plans and arrangements which in the aggregate
will provide a similar level of benefits to active and retired employees of DTN
and the DTN Subsidiaries to those provided under DTN's employee benefit plans
and arrangements as in effect immediately prior to the Effective Time; provided,
however, that changes may be made to such employee benefit plans and
arrangements to the extent necessary to comply with applicable Law. From and
after the Effective Time, the Surviving Corporation shall honor in accordance
with their terms, the DTN Benefit Plans and all existing employment and
severance agreements and severance plans which apply to current or former
employees or directors of DTN or the DTN Subsidiaries.
(b) To the extent that service is relevant for purposes of
eligibility, participation, vesting or benefit accrual under any employee
benefit plan, program or arrangement established, maintained or contributed to
by the Surviving Corporation, employees of DTN and the DTN Subsidiaries shall be
credited for service accrued or deemed accrued prior to the Effective Time with
DTN or a DTN Subsidiary; provided, however, that such crediting of service does
not result in the duplication of benefits or an unintended windfall with respect
to the accrual of benefits. The Surviving Corporation shall provide each
employee of DTN and the DTN Subsidiaries with credit for any co-payments and
deductibles paid prior to the Effective Time for the calendar year in which the
Effective Time occurs, in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time.
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SECTION 7.5 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The certificate of incorporation and bylaws of the
Surviving Corporation shall contain the provisions regarding liability of
directors and indemnification of directors and officers that are set forth, as
of the date of this Agreement, in the Certificate of Incorporation and the
bylaws, respectively, of DTN, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who at
or at any time prior to the Effective Time were directors, officers, employees,
fiduciaries or agents of DTN.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use all reasonable efforts to cause to be maintained
in effect policies of directors' and officers' liability insurance with coverage
in amount and scope at least as favorable as DTN's existing policies with
respect to claims arising from facts or events that occurred prior to the
Effective Time; provided, however, that during such period the Surviving
Corporation shall in no event be required to expend pursuant to this Section
more than an amount per year equal to 200 percent of current premiums paid by
DTN for such insurance, which current premium amount is set forth in Schedule
7.5(b) of the DTN Disclosure Schedule.
(c) This Section is intended to be for the benefit of, and
shall be enforceable by, the indemnified parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns.
(d) From and after the Effective Time, the Surviving
Corporation agrees that it shall, and Acquiror shall cause the Surviving
Corporation to, indemnify and hold harmless each present and former director and
officer of DTN and any DTN Subsidiary, determined as of the Effective Time (the
"Indemnified Parties"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that DTN or any DTN Subsidiary
would have been permitted under the law of the state or jurisdiction of its
formation and under the certificate of incorporation, charter, bylaws or other
organizational documents of DTN or any DTN Subsidiary (as in effect on the date
hereof) to indemnify such Indemnified Parties (and the Surviving Corporation
shall, and Acquiror shall cause the Surviving Corporation to, advance expenses
as incurred to the fullest extent permitted under applicable Law; provided that
the Indemnified Party to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such Indemnified Party
is not entitled to indemnification); and provided, further, that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under applicable Law
and the certificate of incorporation, charter, bylaws or other organizational
documents of DTN or any DTN Subsidiary shall be made by independent counsel
selected by the Surviving Corporation.
(e) To the extent paragraph (d) shall not serve to indemnify
and hold harmless an Indemnified Party, for a period of six years after the date
hereof, the Surviving Corporation shall, and Acquiror shall cause the Surviving
Corporation to, subject to the terms set forth herein,
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indemnify and hold harmless, to the fullest extent permitted under applicable
Law (and the Surviving Corporation shall, and Acquiror shall cause the Surviving
Corporation to advance expenses as incurred to the fullest extent permitted
under applicable Law; provided that the Indemnified Party to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification), each
Indemnified Party against any Costs incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to the
transactions contemplated by this Agreement; provided, however, that the
Surviving Corporation shall not be required to indemnify any Indemnified Party
pursuant hereto if it shall reasonably determine that the Indemnified Party
acted in bad faith and not in a manner such Indemnified Party believed to be in
or not opposed to the best interests of DTN and any DTN Subsidiary.
(f) Any Indemnified Party wishing to claim indemnification
under paragraphs (d) or (e) of this Section, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Acquiror
thereof, but the failure to so notify shall not relieve Acquiror or Surviving
Corporation of any liability it may have to such Indemnified Party, except to
the extent that such failure materially prejudices the Surviving Corporation. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) the Surviving Corporation shall
have the right to assume the defense thereof and the Surviving Corporation shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Parties advises
that there are issues which raise conflicts of interest between Acquiror or the
Surviving Corporation and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and the Surviving Corporation shall, and
Acquiror shall cause the Surviving Corporation to, pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; provided, however, that Acquiror and the Surviving
Corporation shall be obligated pursuant to this paragraph to pay for only one
firm of counsel for all Indemnified Parties in any jurisdiction unless the use
of one counsel for such Indemnified Parties would present such counsel with a
conflict of interest, (ii) the Indemnified Parties will cooperate in the defense
of any such matter and (iii) neither Acquiror nor the Surviving Corporation
shall be liable for any settlement effected without the prior written consent of
Acquiror (which consent shall not be unreasonably withheld); and provided,
further, that neither Acquiror nor the Surviving Corporation shall have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law. If such indemnity is not
available with respect to any Indemnified Party, then the Surviving Corporation
shall, and Acquiror shall cause the Surviving Corporation to, and the
Indemnified Party shall, each contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and benefits.
(g) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity or such
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets or outstanding voting securities to any individual,
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corporation or other entity, then and in each such case, proper provisions shall
be made so that the successors and assigns of the Surviving Corporation shall
assume all of the obligations set forth in this Section.
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SECTION 7.6 FURTHER ACTION; CONSENTS; FILINGS.
(a) Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use its reasonable best efforts to promptly after
the execution of this Agreement (i) take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the Merger,
(ii) obtain from Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by Acquiror
or DTN or any of their Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Merger, and
(iii) make all necessary filings, and thereafter make any other submissions
either required or deemed appropriate by each of the parties, with respect to
this Agreement and the Merger required under (A) the Securities Act, the
Exchange Act and any other applicable federal or Blue Sky Laws, (B) the HSR Act
and (C) any other applicable Law, and, in any event, the necessary filing under
the HSR Act shall be made by the parties no later than 15 days from the date of
this Agreement. The parties hereto shall cooperate and consult with each other
in connection with the making of all such filings, including by providing copies
of all such documents to the nonfiling party and its advisors prior to filing,
and none of the parties will file any such document if any of the other parties
shall have reasonably objected to the filing of such document. No party to this
Agreement shall consent to any voluntary extension of any statutory deadline or
waiting period or to any voluntary delay of the consummation of the Merger at
the behest of any Governmental Entity without the consent and agreement of the
other parties to this Agreement, which consent shall not be unreasonably
withheld or delayed. Without limiting the foregoing, each of the parties hereto
shall, and shall cause their Subsidiaries to, use their reasonable best efforts
to obtain (and to cooperate and coordinate with the other parties to obtain) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity that is required to be obtained in connection with the
Merger and to take all actions reasonably necessary to satisfy any applicable
regulatory requirements relating thereto. Each of the parties shall take
promptly, in the event that any permanent or preliminary injunction or other
order is entered or becomes reasonably foreseeable to be entered in any
proceeding that would make consummation of the transaction contemplated hereby
in accordance with the terms of this Agreement unlawful or that would prevent or
delay consummation of the transaction contemplated hereby, any and all steps
necessary to vacate, modify or suspend such injunction or order so as to permit
such consummation prior to the deadline specified in Section 9.1(b).
(b) Neither DTN nor any of the DTN Subsidiaries shall take, or
agree to commit to take, any action that would or is reasonably likely to result
in any of the conditions to the Offer set forth in Annex A or any of the
conditions to the Merger set forth in Article 8 not being satisfied, or that
would make any representation or warranty of DTN contained herein inaccurate in
any respect at, or as of any time prior to, the Effective Time, or that would
materially impair the ability of DTN to consummate the Offer or the Merger in
accordance with the terms hereof or materially delay such consummation.
(c) Neither Acquiror, Merger Sub nor any of their Subsidiaries
shall take, or agree to commit to take, any action that would or is reasonably
likely to result in any of the conditions to the Offer set forth in Annex A or
any of the conditions to the Merger set forth in Article 8 not being satisfied,
or that would make any representation or warranty of Acquiror
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contained herein inaccurate in any respect at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of Acquiror or
Merger Sub to consummate the Offer or the Merger in accordance with the terms
hereof or materially delay such consummation.
SECTION 7.7 PUBLIC ANNOUNCEMENTS. The initial press release concerning
the Merger shall be a joint press release and, thereafter, Acquiror and DTN
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or any transaction
contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except to the extent required by
applicable Law or the requirements of the National Association of Securities
Dealers or any exchange upon which the securities of Acquiror trade, in which
case the issuing party shall use its reasonable best efforts to consult with the
other party before issuing any such release or making any such public statement.
ARTICLE 8.
CONDITIONS TO THE MERGER
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of Acquiror, DTN and Merger Sub to effect the Merger shall be
subject to the satisfaction or, if permitted by applicable Law, waiver prior to
the Closing Date of the following conditions:
(a) if the Minimum Condition has not been satisfied, this
Agreement and the transactions contemplated hereby shall have been approved and
adopted by the stockholders of DTN in accordance with the DGCL;
(b) no preliminary or permanent injunction, decree or other
order (an "Order") issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect, and no Law shall have been enacted or adopted that
enjoins, prohibits or makes illegal consummation of any of the transactions
contemplated hereby;
(c) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(d) all consents, approvals, waivers and authorizations
required to be obtained to effect the Merger shall have been obtained from all
Governmental Entities, except where the failure to obtain any such consents,
approvals and authorizations would not result in a Material Adverse Effect; and
(e) all consents, approvals, waivers and authorizations
(including waivers of termination rights) of third parties (other than
Governmental Entities), the failure of which to obtain would result in a
Material Adverse Effect, shall have been obtained.
SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF DTN. The obligation of DTN
to effect the Merger is subject to the satisfaction or, if permitted by
applicable Law, waiver prior to the
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Closing Date of the following further conditions:
(a) each of the representations and warranties of Acquiror and
Merger Sub contained in this Agreement shall be true and correct as of the
Effective Time as though made on and as of the Effective Time, except where any
such failure or failures to be so true and correct, in the aggregate, would not
materially and adversely affect the ability of Acquiror or Merger Sub to perform
its obligations hereunder, and except that those representations and warranties
that address matters only as of a particular date shall remain true and correct
as of such date except where any such failure or failures to be so true and
correct, in the aggregate, would not materially and adversely affect the ability
of Acquiror or Merger Sub to perform its obligations hereunder, and DTN shall
have received a certificate of the Chairman, President or Chief Financial
Officer of Acquiror to such effect; and
(b) Acquiror and Merger Sub shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the Effective
Time, and DTN shall have received a certificate of the Chairman, President or
Chief Financial Officer of Acquiror to that effect.
SECTION 8.3 CONDITIONS TO THE OBLIGATIONS OF ACQUIROR AND MERGER SUB.
The obligation of Acquiror and Merger Sub to effect the Merger is subject to the
satisfaction or, if permitted by applicable Law, waiver prior to the Closing
Date of the following further conditions:
(a) each of the representations and warranties of DTN
contained in this Agreement shall be true and correct as of the Effective Time
(without giving effect to the materiality or Material Adverse Effect qualifiers
set forth therein) as though made on and as of the Effective Time, except where
any such failure or failures to be so true and correct, individually or in the
aggregate, would not have a Material Adverse Effect, and except that those
representations and warranties that address matters only as of a particular date
shall remain true and correct as of such date except where any such failure or
failures to be so true and correct, individually or in the aggregate, would not
have a Material Adverse Effect, and Acquiror shall have received a certificate
of the Chairman, President or Chief Financial Officer of DTN to such effect;
(b) DTN shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time, and Acquiror
shall have received a certificate of the Chairman, President or Chief Financial
Officer of DTN to such effect;
(c) There shall not have occurred any material adverse change
(or any developments that, insofar as reasonably can be foreseen, would
reasonably be expected to result in a material adverse change) in the business,
properties, prospects, operations or condition (financial or otherwise) of DTN
or any Significant Subsidiary of DTN, other than any change, effect, event or
occurrence to the extent arising from or relating to (i) the United States or
the global economy or securities markets in general, (ii) actions taken pursuant
to the obligations of the parties expressly set forth in this Agreement, or
(iii) changes in any Laws;
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(d) The consents under any Material Contracts set forth on
Schedule 4.5(b) of the DTN Disclosure Schedule shall have been obtained, without
any terms or conditions that Acquiror determines in good faith to be materially
burdensome to Acquiror or the operations of DTN on a going forward basis, and
shall be in effect at the Effective Time; and
(e) DTN shall have delivered to Acquiror the audited
consolidated financial statements of DTN and the DTN Subsidiaries for the year
ended December 31, 1999 and none of those financial statements shall differ in
any material respect from the draft contained in Schedule 4.7(a).
ARTICLE 9.
TERMINATION
SECTION 9.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of the Agreement, as follows:
(a) by mutual written consent duly authorized by the Board of
Directors of DTN and the Board of Directors of Acquiror;
(b) by either Acquiror or DTN:
(i) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling or other
action the parties hereto shall use reasonable efforts to lift), which
permanently restrains, enjoins or otherwise prohibits the acceptance for payment
of, or payment for, Shares pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final and non-appealable;
(ii) if the Minimum Condition shall not have been
satisfied and the Merger shall fail to receive the requisite vote for approval
and adoption by the stockholders of DTN; or
(iii) if the Merger shall not have been consummated before
August 31, 2000; provided, however, this Section 9.1(b)(iii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure to consummate the
Merger before that date.
(c) By DTN:
(i) in connection with entering into a definitive
agreement with respect to a Superior Proposal in accordance with Sections 7.3,
provided it has complied with all provisions of Section 7.3, including the
notice provisions therein; or
(ii) if Acquiror or the Merger Sub shall have breached in
any material respect any of their respective representations, warranties,
covenants or other agreements
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contained in this agreement, which breach cannot be or has not been cured within
30 days after the giving of written notice by DTN to Acquiror or the Merger Sub,
as applicable.
By Acquiror:
(i) if DTN shall have breached in any material respect any
of its representations, warranties, covenants or other agreements contained in
this agreement, which breach cannot be or has not been cured within 30 days
after the giving of written notice by Acquiror to DTN; or
(ii) if the number of Dissenting Shares as of the date of
notice of termination shall exceed 7.5% of the outstanding DTN Common Stock.
SECTION 9.2 EFFECT OF TERMINATION. Except as provided in Section 11.1,
in the event of termination of this Agreement pursuant to Section 9.1, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Acquiror, DTN or Merger Sub or any of their respective
officers or directors, and all rights and obligations of each party hereto shall
cease; provided, however, that nothing herein shall relieve any party from
liability for the breach of any of its representations and warranties or the
breach of any of its covenants or agreements set forth in this Agreement. In the
event of termination of this Agreement by either Acquiror or DTN pursuant to
Section 9.1, the terminating party shall give prompt written notice thereof to
the non-terminating party.
SECTION 9.3 AMENDMENT. This Agreement may be amended by mutual
agreement of the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval of this Agreement by the
stockholders of DTN, no amendment may be made that would reduce the amount or
change the type of consideration into which each share of DTN Common Stock shall
be converted upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto. Subject to the
foregoing, in the event that the implementation of the transactions contemplated
by this Agreement prove for any reason to be impracticable, the parties shall
use their reasonable best efforts to amend the method of effecting the business
combination between Acquiror and DTN contemplated by this Agreement, including
providing for a mutually agreeable alternative form of transaction structure to
effect such business combination; provided that no such amendment shall alter
the amount or kind of consideration to be issued to the stockholders of DTN or
be reasonably likely to materially impede or delay consummation of the
transactions contemplated by this Agreement.
SECTION 9.4 WAIVER. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any agreement or condition contained herein. Any
waiver of a condition set forth in Section 8.1, or any determination that such a
condition has been satisfied, will be effective only if made in writing by each
of DTN, Acquiror and Merger Sub, and, unless otherwise specified in such
writing, shall thereafter operate as a waiver (or satisfaction) of such
condition for any and all purposes of this Agreement. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
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party or parties to be bound thereby.
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SECTION 9.5 EXPENSES; TERMINATION FEE.
(a) Subject to paragraph (b) below, all Expenses (as defined
below) incurred in connection with this Agreement and the Merger shall be paid
by the party incurring such expenses, whether or not the Merger is consummated,
except that Acquiror and DTN each shall pay one-half of all Expenses relating to
printing, filing and mailing the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Proxy Statement.
"Expenses" as used in this Agreement shall consist of all out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Proxy Statement, the
solicitation of stockholder approvals and all other matters related to the
consummation of the Merger.
(b) If at any time prior to payment for shares of DTN Common
Stock tendered in response to the Offer or, if the Minimum Condition is not
satisfied, at any time prior to consummation of the Merger, DTN shall receive a
proposal with respect to a Competing Transaction and shall terminate this
Agreement under Section 9.1(c)(i), DTN shall pay to Acquiror in accordance with
this section a cash fee in the amount of $10 million plus the amount of
reasonable out-of-pocket legal, accounting and other costs, fees and expenses
incurred by VS&A or Acquiror in connection with the Transactions contemplated by
this Agreement (excluding any investment banking fee paid to Veronis, Suhler &
Associates LLC). Such payment shall be made promptly upon demand, but only if
prior to or on the date of termination or within six months thereafter DTN
enters into an agreement (including, but not limited to, a letter of intent or
similar instrument) with a party other than VS&A or any of its Affiliates
relating to a Competing Transaction or makes any public announcement in support
of any such transaction, and such transaction is consummated within twelve
months after termination of this Agreement.
ARTICLE 10.
DEFINITIONS
SECTION 10.1 DEFINITIONS. In addition to those terms defined throughout
this Agreement, the following terms, when used herein, shall have the following
meanings.
(a) "Affiliate" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person.
(b) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which banks are
not required or authorized to close in the city of New York, New York.
(c) "control" (including the terms "controlled by" and "under
common control
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with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or otherwise.
(d) "Knowledge" with respect to:
(i) an individual means that such person will be deemed to
have "Knowledge" of a particular fact or other matter if such individual is
actually aware of such fact or other matter; and
(ii) a Person (other than an individual) means that such
Person will be deemed to have "Knowledge" of a particular fact or other matter
if any individual who is serving as a director, officer, partner, executor or
trustee of such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or other matter.
(e) "Material Adverse Effect" means any change in or effect on
the business of DTN or any Significant Subsidiary of DTN which is, or insofar as
can be reasonably foreseen would reasonably be expected to be, materially
adverse to the business, properties, prospects, operations or condition
(financial or otherwise) of DTN or any Significant Subsidiary of DTN, other than
any change, effect, event or occurrence to the extent arising from or relating
to (i) the United States or the global economy or securities markets in general,
(ii) actions taken pursuant to the obligations of the parties expressly set
forth in this Agreement, or (iii) changes in any Laws.
(f) "Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union or
other entity or Regulatory Authority.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Significant Subsidiary" means any Subsidiary of DTN that
during the year ended December 31, 1999 accounted for 3% or more of the
consolidated revenue of DTN and its Subsidiaries.
(i) "Subsidiary" means with respect to any Person (the
"Owner"), any corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation's or other Person's
board of directors or similar governing body, or otherwise having the power to
direct the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or more of its
Subsidiaries.
(j) "Tax" means any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including: taxes or other
charges on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of
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excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes
and customs duties, tariffs, and similar charges
(k) "Tax Return" means any return, declaration, report, claim
for refund or information return or statement relating to Taxes filed with a
taxing authority, including any schedule or attachment thereto, and including
any amendment thereof.
SECTION 10.2 PRINCIPLES OF CONSTRUCTION.
(a) In this Agreement, unless otherwise stated or the context
otherwise requires, the following uses apply: (i) actions permitted under this
Agreement may be taken at any time and from time to time in the actor's sole
discretion; (ii) references to a statute shall refer to the statute and any
successor statute, and to all regulations promulgated under or implementing the
statute or successor, as in effect at the relevant time; (iii) in computing
periods from a specified date to a later specified date, the words "from" and
"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to, but excluding"; (iv) references
to a governmental or quasi-governmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of the
agency, authority or instrumentality; (v) indications of time of day mean
Eastern Standard Time; (vi) "including" means "including, but not limited to";
(vii) all references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified;
(viii) all words used in this Agreement will be construed to be of such gender
or number as the circumstances require; (ix) the captions and headings of
articles, sections, schedules and exhibits appearing in or attached to this
Agreement have been inserted solely for convenience of reference and shall not
be considered a part of this Agreement nor shall any of them affect the meaning
or interpretation of this Agreement or any of its provisions; and (x) the
language used in this Agreement shall be deemed to be the language jointly
chosen by the parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against either party.
(b) The disclosure schedule of DTN (the "DTN Disclosure
Schedule") shall consist of the information, agreements and other documentation
described and referred to in this Agreement as being included in the DTN
Disclosure Schedule. The parties acknowledge and agree that the mere inclusion
of an item in the DTN Disclosure Schedule shall not be deemed an admission by
DTN that such item represents a material exception or fact, event or
circumstance or that such item would have a Material Adverse Effect on DTN.
Disclosure of any fact or item in any Schedule or Exhibit hereto referenced by a
particular paragraph or section in this Agreement shall, should the existence of
the fact or item or its contents be relevant to any other paragraph or section,
be deemed to be disclosed with respect to that other paragraph or section
whether or not an explicit cross-reference appears.
(c) All accounting terms not specifically defined herein shall
be construed in accordance with United States generally accepted accounting
principles ("GAAP").
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ARTICLE 11.
MISCELLANEOUS
SECTION 11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 9.1, as the
case may be, except that the agreements set forth in Articles 2 and 3 and
Sections 7.4 and 7.5 and this Article shall survive the Effective Time, and
those set forth in Section 7.2(b) and Section 9.5(b) and this Article shall
survive termination. Each party agrees that, except for the representations and
warranties contained in this Agreement and the DTN Disclosure Schedule, no party
hereto has made any other representations and warranties, and each party hereby
disclaims any other representations and warranties made by itself or any of its
officers, directors, employees, agents, financial and legal advisors or other
representatives with respect to the execution and delivery of this Agreement or
the transactions contemplated herein, notwithstanding the delivery or disclosure
to any other party or any party's representatives of any documentation or other
information with respect to any one or more of the foregoing.
SECTION 11.2 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
and facsimile or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section):
(a) If to Acquiror or Merger Sub, to:
VS&A Communications Partners III, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
with copies to:
Proskauer Rose, LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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(b) if to DTN, to:
Data Transmission Network Corporation
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: 000-000-0000
Attention: Xxxx Xxxxx
with copies to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Barack, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
SECTION 11.3 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 11.4 ASSIGNMENT; MERGER SUB; BINDING EFFECT; BENEFIT. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties.
Notwithstanding anything to the contrary contained in this Agreement, Acquiror
may transfer the shares of Merger Sub to one of its Subsidiaries prior to the
consummation of the Merger. 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 assigns. Notwithstanding anything contained in
this Agreement to the contrary, except for the provisions of Section 7.5 (the
"Third Party Provision"), nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. The Third Party Provision may
be enforced by the beneficiaries thereof.
SECTION 11.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State without regard to any
conflicts of laws principles otherwise applicable. No provision of this
Agreement shall be construed to require any of the parties hereto or any of
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their respective Subsidiaries, Affiliates, directors, officers, employees or
agents to take any action that would violate any applicable Law.
SECTION 11.6 COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 11.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits
and DTN Disclosure Schedule) and the Confidentiality Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed
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by their respective officers on the day and year first written above.
ATTEST DATA TRANSMISSION NETWORK CORPORATION
/s/ Xxxxx Xxxxx /s/ Xxxx X. Xxxxx
By: ____________________________ By: _________________________________
Xxxxx Xxxxx Xxxx X. Xxxxx
Name: __________________________ Name: _______________________________
VP President -- CEO
Title: _________________________ Title: ______________________________
ATTEST VS&A-DTN, LLC
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
By: ____________________________ By: _________________________________
Xxxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxxxxx
Name: __________________________ Name: _______________________________
General Counsel President
Title: _________________________ Title: ______________________________
ATTEST VS&A COMMUNICATIONS
PARTNERS III, L.P.
By: VS&A Equities III, L.L.C.
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
By: ____________________________ By: _________________________________
Xxxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxxxxx
Name: __________________________ Name: _______________________________
General Counsel President
Title: _________________________ Title: ______________________________
ATTEST DTN ACQUISITION CORPORATION
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
By: ___________________________ By: ________________________________
Xxxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxxxxx
Name: __________________________ Name: ______________________________
General Counsel President
Title: _________________________ Title: _____________________________
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ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, and in addition to (and not in limitation of) Merger Sub's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of this Agreement), Merger Sub shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to Merger Sub's
obligation to pay for or return tendered shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
shares, and may terminate or amend the Offer as to any shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of this Agreement and before the time of acceptance
for payment for any such shares, any of the following events shall occur or
shall be determined by Merger Sub to have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against Merger Sub, Acquiror, DTN or any
DTN Subsidiary (i) seeking to prohibit or impose any material limitations on
Acquiror's or Merger Sub's ownership or operation (or that of any of their
respective subsidiaries or affiliates) of all or a material portion of their or
DTN's businesses or assets, or to compel Acquiror or Merger Sub or their
respective Subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of DTN or Acquiror and their
respective subsidiaries, (ii) challenging the acquisition by Acquiror or Merger
Sub of any shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the other
transactions contemplated by this Agreement or the Stockholder Agreements
(including the voting provisions thereunder), or seeking to obtain from DTN,
Acquiror or Merger Sub any damages that are material in relation to DTN and its
Subsidiaries taken as a whole, (iii) seeking to impose material limitations on
the ability of Merger Sub, or render Merger Sub unable, to accept for payment,
pay for or purchase some or all of the shares pursuant to the Offer and the
Merger, or (iv) which otherwise would have or be reasonably likely to have a
Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated, or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of a
Government Entity, to the Offer or the Merger, or any other action shall be
taken by any Governmental Entity, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange or in the NASDAQ National Market System, for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market conditions),
(ii) a declaration of a banking moratorium or any suspension of payments in
respect
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of banks in the United States (whether or not mandatory), (iii) a commencement
of a war, armed hostilities or other international or national calamity directly
or indirectly involving the United States, (iv) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions, or (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(d) there shall have occurred any changes (or any developments
that, insofar as reasonably can be foreseen, are reasonable likely to result in
any changes) in the financial condition, business, results of operations or
prospects of DTN and the DTN Subsidiaries that individually or in the aggregate
would have or be reasonably likely to have a Material Adverse Effect;
(e) the Board of Directors of DTN or any committee thereof
shall have withdrawn or modified in a manner adverse to Acquiror or Merger Sub
its approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any Superior Proposal or (ii) DTN shall have entered
into any agreement with respect to any Superior Proposal in accordance with
Section 7.3 of this Agreement;
(f) any of the representations and warranties of DTN set forth
in this Agreement that are qualified as to materiality shall not be true and
correct without such qualification and any such representations and warranties
that are not so qualified shall not be true and correct in any respect (in each
case (i) as of the date referred to in any representation or warranty which
addresses matters as of a particular date, or (ii) as to all other
representations and warranties, as of the date of this Agreement and as of the
scheduled expiration of the Offer), except to the extent all failures to be true
and correct in the aggregate would not have or be reasonably likely to have a
Material Adverse Effect;
(g) DTN shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of DTN to be performed or complied with by it under this
Agreement; or
(h) this Agreement shall have been terminated in accordance
with its terms;
The foregoing conditions are for the sole benefit of Acquiror and
Merger Sub and may be waived by Acquiror or Merger Sub, in whole or in part, at
any time and from time to time in the sole discretion of Acquiror or Merger Sub.
The failure by Acquiror or Merger Sub at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time up to consummation of the transactions contemplated by this
Agreement.
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