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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 1, 1997
DAKOTA TELECOMMUNICATIONS GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 333-22025 91-1845100
(State or Other Jurisdic- (Commission (IRS Employer
tion of Incorporation) File Number) Identification No.)
29705 453RD AVENUE
IRENE, SOUTH DAKOTA 57037-0066
(Address of principal executive offices) (Zip Code)
(605) 263-3301
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
Effective December 1, 1997, Dakota Telecommunications Group, Inc.
acquired Futuristic, Inc., a South Dakota corporation doing business as
DataNet, Inc. ("DataNet") by merging its wholly owned subsidiary with and
into DataNet. In connection with the transaction, the former stockholders
of DataNet collectively received 160,000 shares of common stock of Dakota
Telecommunications Group, Inc.
DataNet is a regional telecommunications company specializing in
Local and Wide Area networks with emphasis on network design, installation
and technical support. DataNet will be operated as a wholly owned
subsidiary of Dakota Telecommunications Group, Inc. A copy of the Merger
Agreement and the related Articles of Merger are attached to this Form 8-K
as Exhibit 2, and are here incorporated by reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND
EXHIBITS.
(a) Financial Statements of Business Acquired.
The Financial Statements of Futuristic, Inc. (d/b/a DataNet,
Inc.) required to be filed as part of this Form 8-K Current Report will be
filed by amendment on or before February 13, 1998.
(c) Exhibits. The following documents are filed as exhibits to this
report on Form 8-K:
2 Merger Agreement dated as of October 10, 1997, including the
Articles of Merger and Plan of Merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: December 8, 1997 DAKOTA TELECOMMUNICATIONS
GROUP, INC.
By /s/Craig A. Anderson
Craig A. Anderson
Executive Vice President - Marketing
and Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NUMBER DOCUMENT
2 Merger Agreement dated as of October 10, 1997, including
Articles of Merger and Plan of Merger.
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EXHIBIT 2
_____________________________________________________________________________
MERGER AGREEMENT
by and among
FUTURISTIC, INC.
(d/b/a DataNet),
DAKOTA TELECOMMUNICATIONS GROUP, INC.
and
DTG DATANET, INC.
and joined in by
GERY BAAR and DOUGLAS ENGLISH
October 10, 1997
_____________________________________________________________________________
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MERGER AGREEMENT
THIS MERGER AGREEMENT (the "Agreement") is made as of
October 10, 1997, by and among Dakota Telecommunications Group,
Inc., a Delaware corporation ("DTG"), DTG DataNet, Inc., a South
Dakota corporation and wholly owned subsidiary of DTG ("Sub"),
and Futuristic, Inc. (d/b/a DataNet), a South Dakota corporation
(the "Company"). This Agreement is joined in by Gery Baar and
Douglas English, the sole shareholders of the Company (each a
"Seller" and collectively the "Sellers"). DTG, Sub, the Company
and each Seller are sometimes referred to individually in this
Agreement as a "Party" and collectively as the "Parties."
Capitalized terms used in this Agreement and not otherwise
defined are defined in Article 8 of this Agreement.
P R E A M B L E
The Parties each deem it desirable for the Company to
become affiliated with DTG through the merger of Sub with and
into the Company (the "Merger") in accordance with the provisions
of the South Dakota Business Corporation Act (the "Act") and the
terms and conditions of this Agreement. The board of directors
and shareholders of the Company have unanimously approved this
Agreement and the transactions contemplated hereby (including the
Merger).
Accordingly, the Parties Agree as Follows:
Article 1 - The Merger
Section 1.1. Merger of Sub with and into the Company.
Subject to the other conditions set forth in this Agreement, (i)
Sub and the Company will be, at the Effective Time, merged into a
single surviving corporation, which will be the Company. The
Company is sometimes referred to in this Agreement as the
"Surviving Corporation." The Surviving Corporation will continue
its corporate existence under the name "Futuristic, Inc." and
will remain a South Dakota corporation governed by and subject to
the laws of that state.
Section 1.2. Shareholder Approval. This Agreement and the
Merger have been approved by the shareholders of the Company and,
subject to the satisfaction of the conditions set forth in this
Agreement, will prior to the Effective Time be approved by the sole
shareholder of Sub in accordance with the applicable laws of the state
of South Dakota.
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Section 1.3. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") will take place at the
offices of Woods, Fuller, Schultz & Smith, P.C. at 10:00 a.m. local
time, on October 24, 1997, or at such other place or time as the
Parties may agree or as may be required to allow for the satisfaction
of the conditions set forth in Article 5 below. At the Closing, the
Parties will cause the Articles of Merger to be filed in accordance
with the Act and will take all other lawful actions and do all other
lawful things called for by this Agreement or necessary to cause the
Merger to become effective and to consummate the transactions
contemplated by this Agreement. In addition, at the Closing the
Parties will execute such additional agreements, instruments or
certificates as are contemplated by this Agreement or as any Party may
reasonably require to confirm and effectuate the transactions
contemplated by this Agreement.
Section 1.4. Effective Time. The Merger will become
effective at the date and time set forth in the Articles of Merger and
related Plan of Merger attached as Exhibit A to this Agreement
following the issuance of a Certificate of Merger by the Secretary of
the state of South Dakota. The time and date on which the Merger
shall becomes effective is referred to in this Agreement as the
"Effective Time."
Section 1.5. Effects of the Merger. The effect of the
Merger on Sub and the Company will be as provided in Sections 47-6-9
through 47-6-12, inclusive, of the Act with respect to the merger of
two domestic corporations where the surviving corporation will be
governed by the laws of the state of South Dakota.
Section 1.6. Surviving Corporation. Immediately after the
Effective Time, the Surviving Corporation will have the following
attributes until they are subsequently changed in the manner provided
by law: (i) the name of the Surviving Corporation will be
"Futuristic, Inc.;" (ii) the articles of incorporation of the Company
will be the articles of incorporation of the Surviving Corporation;
(iii) the bylaws of Sub will be the bylaws of the Surviving
Corporation; and (iv) the persons who, immediately before the
Effective Time, constitute the board of directors and officers of Sub
will be the directors and officers, respectively, of the Surviving
Corporation and will hold office until their respective successors are
duly elected and qualified.
Section 1.7. Conversion of Shares. As a result of the
Merger, at the Effective Time:
(a) Conversion of Shares. The Shares will be
converted into the right to receive an aggregate of 160,000
shares of DTG Common Stock, to be divided among Sellers pro
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rata based upon their proportionate ownership of the
outstanding Shares as of the Effective Time.
(b) Conversion of Sub Common Stock. Each share of
Subs' common stock, no par per share, outstanding
immediately before the Effective Time will continue to be
outstanding without change and will constitute all of the
outstanding capital stock of the Surviving Corporation as of
such date.
(c) Exchange of Share Certificates. Sellers will
surrender their outstanding certificates representing the
Shares to DTG and shall be entitled to receive in exchange
therefor certificates representing the number of shares of
DTG Common Stock into which the Shares represented by the
certificates so surrendered will have been converted as
described above. The holders of Shares outstanding
immediately before the Effective Time will have no rights as
shareholders of the Company as of the Effective Time and
each certificate representing the Shares will represent only
the right to receive shares of DTG Common Stock as provided
in this Agreement. On and after the Effective Time, there
will be no transfer of Shares on the stock books of the
Company and ownership of Shares may be transferred only on
the stock books of the Surviving Corporation with the
consent of DTG. The certificates of DTG Common Stock to be
received by Sellers under this Agreement will be issued by
DTG's transfer agent as soon as reasonably practicable, but
not before DTG Common Stock certificates are generally
distributed to DTG's existing stockholders.
Section 1.8. Conveyances to Surviving Corporation. Each
Party hereby agrees that from time to time after the Effective Time,
as and when requested by the Surviving Corporation, or by the
Surviving Corporation's successors and assigns, it or he will execute
and deliver, or cause to be executed and delivered, all such deeds,
conveyances, assignments, assurances and other instruments, and will
take or cause to be taken such further or other action as the
Surviving Corporation, or the Surviving Corporation's successors or
assigns, may deem necessary or desirable to vest or perfect in or
confirm to the Surviving Corporation, or the Surviving Corporation's
successors and assigns, title to and possession of all the property,
rights, privileges, powers, immunities, franchises, interests and
assets acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger and to otherwise carry
out the intent and purposes of this Agreement. The directors and
officers of the Surviving Corporation will be fully authorized in the
name of the Company to take any and all such action contemplated by
this Agreement.
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ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE
COMPANY
Sellers and the Company represent and warrant to DTG and Sub
as follows:
Section 2.1. Disclosure Schedule. Within seven days from the
date of this Agreement, Sellers will deliver to DTG the Disclosure
Schedule, which will include the numbered schedules specifically
referred to in this Article 2. The information contained in the
Disclosure Schedule will be complete and accurate in all respects, and
all documents that are attached to or form a part of the Disclosure
Schedule will be true and complete copies of the genuine original
documents they purport to represent.
Section 2.2. Organization and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the state of South Dakota, with full corporate power
and authority to conduct its business as it is now being conducted, to
own or use the properties and assets that it purports to own or use,
and to perform its obligations under Applicable Contracts. The
Company is duly qualified to do business as a foreign corporation and
is in good standing in each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it or
the nature of the activities conducted by it requires such
qualification. Copies of the Company's Organizational Documents are
attached to Schedule 1 of the Disclosure Schedule. The Company does
not have any subsidiaries and, except as disclosed on Schedule 1, does
not own or have any right to acquire any equity interest in any other
Person.
Section 2.3. Capitalization of the Company; Ownership. The
authorized capital stock of the Company consists of 10,000 shares of
common stock, $10.00 par value each, of which 4,000 shares (i.e., the
Shares) are issued and outstanding. There are no other authorized
classes or series of capital stock or other equity securities of the
Company. All of the Shares were validly issued, are fully paid and
nonassessable, and were not issued in violation of any preemptive or
similar rights of any shareholder. There are no outstanding Contracts
that require Sellers to sell any Shares or that require the Company to
issue or sell any shares of capital stock of the Company or securities
convertible into shares of capital stock of the Company. Sellers own,
beneficially and of record, all of the Shares free and clear of all
Encumbrances.
Section 2.4. Financial Statements. Copies of the audited
financial statements for the Company at and for the fiscal year ended
August 31, 1996, and the reviewed financial statements for the Company
at and for the fiscal years ended August 31, 1995 and 1994 are
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attached to Schedule 2 of the Disclosure Schedule (the "Financial
Statements"). The Financial Statements shall include the audited
financial statements for the Company at and for the fiscal year ended
August 31, 1997, which will be delivered to DTG at least three (3)
business days prior to the Closing, which in turn shall include the
audited balance sheet of the Company at August 31, 1997 (the "Balance
Sheet"). Also attached to Schedule 2 are copies of the interim
balance sheets and interim statements of income of the Company at and
for each month-end during the current fiscal year, each prepared
internally by the Company (the "Interim Financial Statements"). The
Financial Statements and Interim Financial Statements present fairly
the financial condition of the Company at the dates indicated and its
results of operations for the periods then ended, all in accordance
with GAAP applied on a basis consistent throughout such periods and
consistent with prior periods (subject, in the case of the Interim
Financial Statement, to normal recurring year-end adjustments, the
effect of which will not individually or in the aggregate be
materially adverse, and the absence of notes which if presented would
not differ materially from those included in the Balance Sheet).
Section 2.5. Books and Records. The books of account, minute
books, stock record books and other records of the Company, all of
which have been made available to DTG, are complete and correct and
have been maintained in accordance with sound business practices. The
minute book of the Company contains accurate and complete records of
all meetings held, and all corporate action taken, by the shareholders
or board of directors of the Company (or any committee of the board of
directors). As of the Effective Time, all of these books and records
will be in the possession of the Company.
Section 2.6. No Undisclosed Liabilities. The Company has no
liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent or otherwise) except for
liabilities or obligations reflected or reserved against in the
Balance Sheet and current liabilities incurred in the Ordinary Course
of Business since August 31, 1997, which will not, individually or in
the aggregate, materially adversely affect the Company or its
business.
Section 2.7. Taxes. The Company has timely (a) filed all Tax
Returns pursuant to applicable Legal Requirements; (b) paid or made
proper provision for payment of all Taxes due and payable by it; and
(c) withheld or collected all Taxes required by applicable Legal
Requirements and, to the extent required, paid such Taxes to the
proper Governmental Body or other Person. The charges, accruals and
reserves with respect to the Taxes on the books of the Company are
adequate (determined in accordance with GAAP) and are at least equal
to the Company's liability for Taxes. The Company has not signed an
extension with any Governmental Body concerning any liability for
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Taxes and no open matters exist for any prior periods. There is no
proposed tax assessment against the Company and no deficiency has been
asserted against the Company as a result of any examination by the IRS
or other Governmental Body that has not been paid or finally settled,
and no grounds exist for the assertion of any deficiency for any
periods that have not been audited by the IRS or other applicable
Governmental Body. Copies of the Company's federal, state and local
income Tax Returns with supporting schedules filed for the fiscal
years ended August 31, 1996, 1995 and 1994 are attached to Schedule 3
of the Disclosure Schedule.
Section 2.8. No Material Adverse Change; Absence of Restricted
Events. Since August 31, 1996: the Company has conducted its
operations and affairs only in the Ordinary Course of Business; there
has not been any material adverse change in the business, operations,
properties, prospects, assets or condition of the Company; and no
event has occurred or circumstance exists that may result in such a
material adverse change. Except as disclosed on Schedule 4 of the
Disclosure Schedule, since August 31, 1996, no Restricted Event has
occurred with respect to the Company.
Section 2.9. Employees; Labor Relations.
(a) Schedule 5 of the Disclosure Schedule contains the
following information for each employee of the Company
(including each employee on leave of absence or layoff
status): name; job title; current compensation paid or
payable; vacation accrued; and service credited for purposes
of vesting and eligibility to participate under any of the
Company's Employee Benefit Plans. To Sellers' Knowledge, no
key employee of the Company intends to terminate his or her
employment with the Company. Each of the Company's
employees is employed on an "at will" basis.
(b) The Company is not now and has not ever been a
party to any collective bargaining or other labor Contract.
Since January 1, 1992, there has not been, there is not
presently pending or existing and to Sellers' Knowledge
there is not Threatened, any strike, slowdown, picketing,
work stoppage, labor arbitration or proceeding concerning
the grievance of any employee, application or complaint
filed by an employee or union with the National Labor
Relations Board or any comparable Governmental Body,
organizational activity or other labor dispute against or
affecting the Company or its premises, and no application
for certification of a collective bargaining agent is
pending or to Sellers' Knowledge Threatened. No event has
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occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute. There is no
lockout of any employees by the Company and no such action
is contemplated by the Company. The Company has complied
with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment
of social security and similar taxes, occupational safety
and health and plant closing. The Company is not liable for
the payment of any taxes, fines, penalties or other amounts,
however designated, for failure to comply with any of the
foregoing Legal Requirements.
Section 2.10. Employee Benefit Plans.
(a) Schedule 6 of the Disclosure Schedule sets forth
each Employee Benefit Plan maintained by the Company or
covering current or former (including retired) employees of
the Company. Copies of all written Employee Benefit Plans
and all agreements adopted or other material used in
connection with or relating to such Employee Benefit Plans
(including descriptions of vacation, separation and other
personnel policies) are also attached to Schedule 6.
(b) The Company has timely performed all of its
obligations (including, to the extent applicable, reporting,
disclosure, prohibited transaction, IRS qualification and
funding obligations) under its Employee Benefit Plans. Each
Employee Benefit Plan, and the administration of each
Employee Benefit Plan, complies and has complied with all
applicable Legal Requirements.
(c) Neither the Company nor any predecessor or
affiliate of the Company has ever established, maintained or
contributed to or otherwise participated in, or had an
obligation to establish, maintain, contribute to or
otherwise participate in, any Multi-Employer Retirement
Plan.
Section 2.11. Title to Properties; Encumbrances. Schedule 7 of
the Disclosure Schedule contains a list of all real property,
leaseholds or other real property interests of the Company. Except as
disclosed on Schedule 7, the Company owns all the properties and
assets (whether real, personal or mixed and whether tangible or
intangible) located in or at the facilities owned or operated by the
Company or reflected as owned in the books and records of the Company,
including all of the properties and assets reflected in the Balance
Sheet and the Interim Financial Statements (except for personal
property sold since the date of the Balance Sheet or the Interim
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Financial Statements, as the case may be, in the Ordinary Course of
Business). All properties and assets reflected in the Balance Sheet
and the Interim Financial Statements are free and clear of all
Encumbrances. All personal property owned by the Company will be in
the possession of the Company as of the Effective Time or at such
other location as is specified on Schedule 7. All buildings, plants
and structures owned or leased by the Company lie wholly within the
boundaries of the real property owned or leased by the Company and do
not encroach upon the property of, or otherwise conflict with the
property rights of, any other Person.
Section 2.12. Condition and Sufficiency of Assets. The
buildings, plants, structures and equipment owned or used by the
Company (a) are structurally sound, are in good operating condition
and repair and are adequate for the uses to which they are being put;
(b) do not need maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost; and
(c) are sufficient for the continued conduct of the Company's business
as presently conducted after the Effective Time in substantially the
same manner as conducted before the Effective Time.
Section 2.13. Accounts Receivable. All accounts receivable of the
Company that are reflected on the Balance Sheet or the Interim Financial
Statements or on the accounting records of the Company as of the Effective
Time (collectively, the "Accounts Receivable") represent or will represent
valid obligations arising from sales actually made or services actually
performed in the Ordinary Course of Business. Unless paid before the
Effective Time, the Accounts Receivable are, or will be as of the Effective
Time, current and collectible, and each of the Accounts Receivable either has
been or will be collected in full, without any set-off, within ninety days
after the day on which it first becomes due and payable.
Section 2.14. Inventory. All inventory of the Company, whether
or not reflected in the Balance Sheet or the Interim Financial
Statements, consists of a quality and quantity usable and salable in
the Ordinary Course of Business, except for obsolete items and items
below standard quality, all of which have been written off or written
down to net realizable value in the Balance Sheet or the Interim
Financial Statements. All inventories not written off have been
priced at the lower of cost or market on a first in, first out basis.
The quantities of each item of inventory (whether raw materials,
work-in-process or finished goods) are not excessive, but are reasonable in
the present circumstances of the Company.
Section 2.15. Litigation. Except as set forth on Schedule 8 of
the Disclosure Schedule, there is no Proceeding or Order pending
against the Company or that otherwise relates to or may affect the
business of, or any of the property or assets owned or used by, the
Company or that may interfere with the transactions contemplated by
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this Agreement. To Sellers' Knowledge, no such Proceeding or Order
has been Threatened and no event has occurred or circumstance exists
that may give rise to or serve as a basis for any such Proceeding or
Order.
Section 2.16. Authorization and Enforceability; No Conflict with
Other Instruments or Proceedings.
(a) Sellers and the Company each have full capacity,
power and authority to enter into and perform this Agreement
and to carry out the transactions contemplated by this
Agreement. This Agreement is binding upon Sellers and the
Company and is enforceable against Sellers and the Company
in accordance with its terms.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated by this Agreement will not (i) contravene the
Organizational Documents or result in a breach of any
provision of, or constitute a default under, any Applicable
Contract; (ii) violate any Legal Requirement or Order or
give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify any Governmental
Authorization applicable to the Company; (iii) result in the
imposition of any Tax on DTG, Sub or the Company or
accelerate any indebtedness of the Company or increase the
rate of interest payable by the Company with respect to any
indebtedness; or (iv) result in any Encumbrance being
created or imposed upon or with respect to any of the
property or assets owned or used by the Company. All
consents, approvals or authorizations of or declarations,
filings or registrations with any Person required in
connection with the execution, delivery or performance of
this Agreement or the consummation of the transactions
contemplated by this Agreement are set forth on Schedule 9
of the Disclosure Schedule and will be obtained or made, as
applicable, by Sellers before the Closing (except for the
Articles of Merger and related Plan of Merger, which will be
filed as provided in Article 1).
Section 2.17. Contracts. Schedule 10 of the Disclosure Schedule
sets forth (and includes a copy of) each Material Contract to which
the Company is a party or by which the Company is bound or affected.
Each Material Contract is in full force and effect and is valid and
enforceable in accordance with its terms. The Company and each other
Person that is a party to a Material Contract has complied and is
fully complying with the terms of the applicable Material Contract,
and no event has occurred or circumstance exists that (with or without
notice or lapse of time) may contravene, conflict with or result in a
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violation or breach of, or give the Company or any other Person the
right to declare a default under, any Material Contract.
Section 2.18. Intellectual Property. Schedule 11 of the
Disclosure Schedule sets forth all Intellectual Property Assets
presently owned or used by the Company. Unless otherwise indicated on
Schedule 11, the Company will own the entire right, title and interest
in and to such Intellectual Property Assets as of the Effective Time
free and clear of all Encumbrances, and following the Effective Time
the Company will have the right to use each Intellectual Property
Asset without payment to any other Person. There is no infringement of
or unlawful use by any Person of any of the Company's Intellectual
Property Assets, and the Company has not infringed or unlawfully used
any Intellectual Property Assets of any other Person. Schedule 11
also sets forth a list of all Contracts relating to Intellectual
Property Assets to which the Company is a party or by which the
Company is bound or affected. None of the Company's Intellectual
Property Assets is subject to any pending or to Sellers' Knowledge
Threatened claim or challenge, and there is no valid basis for
asserting any claim or challenge. The Intellectual Property Assets
are all those necessary for the operation of the Company's business as
presently conducted and are sufficient in form and quality so that
following the Effective Time the Company can design, produce,
manufacture, assemble and sell the products and provide the services
presently sold or provided by the Company in a manner that meets
applicable specifications and conforms to commercially acceptable
quality standards.
Section 2.19. Insurance. Schedule 12 of the Disclosure Schedule
contains a list of all policies of liability, crime, fidelity, life,
fire, product liability, workers' compensation, health, director and
officer liability and other forms of insurance owned or maintained by
the Company, including for each policy: the name of the insurer; the
amount of coverage; the type of insurance; the policy number; the
renewal or expiration date; and all pending claims under the policy.
All of the insurance policies listed on Schedule 12 are outstanding
and in full force, all premiums with respect to the policies are
currently paid and all duties of the insureds under the policies have
been fully discharged.
Section 2.20. No Illegal Payments. Neither the Company nor any
other Person associated with or acting on behalf of the Company has
used any Company funds for unlawful contributions, gifts,
entertainment or other expenses or made any direct or indirect
unlawful payments from Company funds or established or maintained any
unlawful or unrecorded funds.
Section 2.21. Customers and Suppliers. Listed on Schedule 13 of
the Disclosure Schedule are the ten largest customers and suppliers of
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the Company (by dollar volume) in terms of sales or purchases for the
twelve months ended August 31, 1997 and 1996, showing for each period
the approximate total sales to each customer and purchasers from each
supplier. There has not been any adverse change in the business
relationship of the Company with any customer or supplier listed on
Schedule 13 nor, to Sellers' Knowledge, could an adverse change
reasonably be anticipated as a result of the consummation of the
transactions contemplated by this Agreement.
Section 2.22. Product Warranties and Liabilities. Set forth on
Schedule 14 of the Disclosure Schedule are all warranties applicable
to products sold or services provided by the Company. Except as
disclosed on Schedule 14, there are no claims against the Company to
return products in excess of an aggregate of $5,000 by any one
purchaser, or $10,000 for all purchasers considered collectively, by
reason of alleged overshipments, defective merchandise or otherwise,
and there is no Proceeding pending or to Sellers' Knowledge Threatened
against the Company under any warranty nor is there any basis upon
which any claim could validly be made. Schedule 14 also summarizes
all product liability claims that have been asserted against the
Company during the five years preceding the date of this Agreement.
Section 2.23. Certain Relationships. Except as disclosed on
Schedule 15 of the Disclosure Schedule, neither Sellers nor any
Related Person is an owner, shareholder, creditor, director, agent,
consultant or employee of, or lender to, any Person engaged in a
business that acts as a supplier of any goods or services to the
Company or any part of which is in actual or potential competition
with the Company. Without limiting the foregoing, Schedule 15 of the
Disclosure Schedule describes the Company's present business
relationships with Software Functions and Training Partners. The
Company does not have any outstanding indebtedness to Sellers or any
Related Person, and neither Sellers nor any Related Person has any
outstanding indebtedness to the Company.
Section 2.24. Permits and Licenses; Compliance with Legal
Requirements. All Governmental Authorizations necessary for the
Company to carry on its business as presently conducted are identified
on Schedule 16 of the Disclosure Schedule and have been timely
obtained, are in full force and effect and have been complied with.
All fees and charges incident to those Governmental Authorizations
have been fully paid and are current and no suspension or cancellation
of any Governmental Authorization has been Threatened or could result
by reason of the transactions contemplated by this Agreement. The
Company is not subject to, nor has it been Threatened with, any
Adverse Consequence as the result of a failure to comply with any
Legal Requirement applicable to it or the conduct or operation of its
business or the ownership or use of any of its properties or assets,
and no event has occurred or circumstance exists (with or without
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notice or lapse of time) that may give rise to any such Adverse
Consequence. The Company is presently, and during all applicable
limitations periods has been, in full compliance with all applicable
Legal Requirements.
Section 2.25. No Broker's Fees. Neither Sellers, the Company
nor anyone acting on Sellers' or the Company's behalf has incurred any
liability or obligation to pay fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this
Agreement for which DTG, Sub or the Surviving Corporation could be
liable.
Section 2.26. Investment Intent. Sellers are acquiring the
DTG Common Stock for their own accounts and not with a view to their
distribution within the meaning of the Securities Act of 1933.
Sellers have no plan or intention to sell or otherwise dispose of the
shares of DTG Common Stock to be received by them in the Merger.
Section 2.27. Accuracy of Statements. No representation or
warranty made by Sellers or the Company in this Agreement, the
Disclosure Schedule or any statement, certificate or schedule fur-
nished, or to be furnished, to DTG or Sub pursuant to this Agreement
or in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF DTG AND SUB
DTG and Sub represent and warrant to Sellers and the Company
as follows:
Section 3.1. Organization and Standing of DTG and Sub. DTG is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware. Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
state of South Dakota.
Section 3.2. Authorization and Enforceability. Each of DTG and
Sub has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated by this
Agreement. This Agreement is binding upon DTG and Sub and is enforceable
against DTG and Sub in accordance with its terms. Subject to the approval
of the Rural Telephone Finance Cooperative ("RTFC"), neither the execution
and delivery of this Agreement by DTG and Sub nor the consummation by DTG
and Sub of the transactions contemplated hereby violates or conflicts with
or constitutes a default under any term or provision of certificate or
articles incorporation or bylaws of DTG and Sub or any contract or indenture
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to which either is a party, or any other restriction of any kind or character
to which DTG and Sub is a party or by which either is bound.
Section 3.3. Investment Intent. DTG is acquiring the Shares for its
own account and not with a view to their distribution within the meaning of
the Securities Act of 1933.
Section 3.4. No Broker's Fees. Neither DTG, Sub nor anyone acting on
DTG or Sub's behalf has incurred any liability or obligation to pay fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Sellers or the Company could become
liable.
ARTICLE 4 - COVENANTS AND AGREEMENTS
The Parties (as applicable) covenant and agree as follows:
Section 4.1. Conduct Pending the Effective Time. From the date of
this Agreement to the Effective Time, Sellers will cause the Company to
conduct its operations and affairs only in the Ordinary Course of Business.
Sellers will exercise their reasonable best efforts to preserve intact
the present business organization and personnel of the Company and the
goodwill of the Company with all persons having business dealings with it,
and will cause the Company to comply with all Legal Requirements. From the
date of this Agreement to the Effective Time, neither Sellers nor the
Company will, without the prior written consent of DTG: (a) enter into any
negotiations, discussions or agreements contemplating or respecting the
acquisition of the Company by any Person other than DTG, whether through a
sale of stock, a merger or consolidation, the sale of all or substantially
all of the properties or assets of the Company, any type of recapitalization
or otherwise; (b) take any action that would interfere with or prevent the
timely consummation or performance of this Agreement; or (c) take any action
that would constitute a Restricted Event or which would be inconsistent
in any respect with any of the representations, warranties, covenants or
obligations set forth in this Agreement, as if such representations,
warranties, covenants or obligations were made at a time subsequent to such
action.
Section 4.2. Access and Investigation by DTG. From the date of this
Agreement to the Closing, Sellers will give DTG and its Representatives full
and free access to the Company's advisors, personnel, properties, contracts,
books and records, and other documents and data for the purpose of completing
DTG's investigation of the Company's business, properties and assets;
provided, however, that (a) DTG will conduct its investigation in a manner
that does not unreasonably interfere with the normal operations and employee
relationships of the Company and (b) DTG will hold any information obtained
from Sellers or the Company as part of its investigation in strict confidence
and will return all such written information upon request. Before the
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Closing, Sellers or an officer of the Company designated by Sellers will
introduce a Representative designated by DTG to those material customers or
suppliers of the Company as DTG may identify. During DTG's investigation, DTG
will have the right to make copies of such materials as it deems
appropriate.
Section 4.3. Reasonable Best Efforts; Notice of Breach or Failure of
Condition; Further Assurances. Each Party will use its or his reasonable
best efforts to fulfill the conditions required to be fulfilled by it or him
to bring about the timely consummation of the transactions contemplated by
this Agreement. Each Party will give prompt notice to the other of the
occurrence of any event or the failure of any event to occur that might
preclude or interfere with the satisfaction of any condition precedent to the
obligations of either Party under this Agreement or the timely consummation
of the transactions contemplated by this Agreement. After the Closing, each
Party will take all such further actions, execute and deliver all such
further documents and do all other acts and things as another Party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the other documents referred to in this Agreement.
Section 4.4. Non-Compete. In consideration of the consummation of the
transactions contemplated by this Agreement and no further consideration,
Sellers covenant and agree that they will not, for a period of three years
from the Effective Time, compete, directly or indirectly, or participate,
directly or indirectly, in the ownership, management, financing or control
of, or act as a consultant or agent for, any Person which competes or plans
to compete, directly or indirectly, with the business of the Company as
conducted on or prior to the Effective Time. The geographic scope of the
foregoing covenant is the state of South Dakota and each state contiguous
thereto. Sellers further covenant and agree that, for the period specified,
they will not induce any employee of the Company to leave the Company's
employment or directly or indirectly assist any other Person in requesting or
inducing any employee of the Company to leave the Company's employment.
Finally, Sellers covenant and agree that they will not, from the date of this
Agreement and forever afterward, use or disclose to any Person any
proprietary, secret or confidential information of the Company, including
customer names, sales and manufacturing information and business and trade
secrets. If any court of competent jurisdiction finds that the time period
of the foregoing covenants is too lengthy or the scope of the covenants too
broad, the restrictive time period shall be deemed to be the longest period
permissible by law and the scope shall be deemed to comprise the largest
scope permissible by law under the circumstances. It is the Parties' intent
to protect and preserve the business and goodwill of the Company to be
acquired by DTG and thus the Parties agree and direct that the time period
and scope of the covenants set forth in this Section 4.4 be the maximum
permissible duration and size.
Section 4.5. Excluded Assets. Before the Closing, the Company shall
transfer title to the personal computer equipment and automobiles currently
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used by Sellers (as described in attached Exhibit B) to each individual
Seller, as applicable, for no consideration.
Section 4.6 Release of Sellers' Guaranties. Within 18 months after the
Effective Time, the Surviving Corporation shall take all actions necessary to
release each Seller from all personal guaranties given by the applicable Seller
for obligations of the Company.
Section 4.7 Affiliate Participation in 401(k) Plan. From and after
the Effective Time, employees of Software Functions and Training Partners
shall no longer participate in the Company's 401(k) plan and Sellers shall
take all required steps prior to the Effective Time to eliminate such
employees from participation. The Company shall not be responsible for any
contributions to the 401(k) plan with respect to such employees.
ARTICLE 5 - CONDITIONS TO OBLIGATION TO CLOSE
Section 5.1. Conditions to Obligation of DTG and Sub. DTG's and Sub's
obligation to consummate the Merger and to take the other actions required to
be taken by DTG or Sub at the Closing is subject to the satisfaction, at or
before the Closing, of each of the following conditions (any of which may be
waived by DTG, in whole or in part):
(a) The representations and warranties set forth in
Article 2 of this Agreement, individually and collectively,
must have been accurate as of the date of this Agreement and
must be accurate in all material respects as of the Closing
Date as if made on the Closing Date;
(b) Sellers and the Company must have performed and
complied with all of their covenants and obligations under
this Agreement in all material respects;
(c) Sellers must have delivered to DTG in form
reasonably acceptable: (i) a written opinion of Sellers' and
the Company's legal counsel; (ii) a certificate stating that
the conditions specified in Sections 5.1(a) and (B) have
been satisfied; (iii) a letter of resignation and release of
claims from each director and officer of the Company; and
(iv) such other certificates, instruments or documents as
DTG may reasonably request;
(d) There must not be any Proceeding or Order pending
or Threatened or any Legal Requirement in effect which would
prevent the consummation of any of the transactions contem-
plated by this Agreement or which could result in any
Adverse Consequence against DTG or the Company if the
transactions contemplated by this Agreement were
consummated;
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(e) Except as contemplated by this Agreement, there
shall have been no material adverse change in the Company's
condition, business, or operations, financial or otherwise,
from the date of this Agreement to the Closing Date.
(f) All authorizations, consents, and approvals by any
third parties, including any Governmental Authorization from
any Governmental Body and necessary consents from the RTFC,
that are necessary for the consummation of the transactions
contemplated by this Agreement shall have been received and
shall be in full force and effect. All necessary filings,
declarations, and notices of DTG, Sub, the Company and
Sellers with or to third parties shall also have been made
or given. In particular, Sellers shall have received a
written consent to the Merger from the Company's franchisor,
Synnex, Inc., and Sellers and the Company shall have
complied in all other respects with the terms of the
franchise agreement with respect to the Merger;
(g) The Company must have entered into the following
agreements on terms reasonably acceptable to DTG: (i) a new
lease for the premises currently occupied by the Company;
(ii) an employment agreement with each Seller (Gery Baar's
employment agreement will be with DTG); and (iii) an
agreement concerning the Company's business relationship
with Software Functions and Training Partners from and after
the Effective Time;
(h) DTG must have entered into a standstill agreement with
each Seller with respect to shares of DTG Common Stock to be
received in connection with the Merger on terms substantively
identical to the existing standstill agreements of Sellers
covering shares of DTG Common Stock currently held by Sellers;
and
(i) DTG must be satisfied with the results of its
investigation of the Company's business, properties and
assets, including its review of the Disclosure Schedule to
be delivered pursuant to Section 2.1, and this Agreement and
the transactions contemplated by this Agreement must have
been approved and authorized by DTG's board of directors.
Section 5.2. Conditions to Obligation of Sellers and the
Company. Sellers' and the Company's obligation to consummate the
Merger and to take the other actions required to be taken by Sellers
or the Company at the Closing is subject to the satisfaction, at or
before the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
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(a) The representations and warranties set forth in
Article 3 of this Agreement, individually and collectively,
must have been accurate in all material respects as of the
date of this Agreement and must be accurate in all material
respects as of the Closing Date as if made on the Closing
Date;
(b) DTG and Sub must have performed and complied with
all of its covenants and obligations under this Agreement in
all material respects;
(c) DTG must have delivered to Sellers in form
reasonably acceptable: (i) a written opinion of DTG's legal
counsel; (ii) a certificate stating that each of the
conditions specified in Sections 5.2(a) and (B) have been
satisfied; and (iii) such other certificates, instruments or
documents as Sellers may reasonably request;
(d) There must not be any Proceeding or Order pending
or Threatened or any Legal Requirement enacted since the
date of this Agreement which would prevent the consummation
of any of the transactions contemplated by this Agreement;
(e) All authorizations, consents, and approvals by any
third parties, including any Governmental Authorization from
any Governmental Body, that are necessary for the
consummation of the transactions contemplated by this
Agreement shall have been received and shall be in full
force and effect. All necessary filings, declarations, and
notices of DTG, Sub, the Company and Sellers with or to
third parties shall also have been made or given. In
particular, Sellers shall have received a written consent to
the Merger from the Company's franchisor, Synnex, Inc., and
Sellers and the Company shall have complied in all other
respects with the terms of the franchise agreement with
respect to the Merger;
(f) The Company must have entered into the following
agreements on terms reasonably acceptable to Sellers: (i) a
new lease for the premises currently occupied by the
Company; and (ii) an employment agreement with each Seller
(Gery Baar's employment agreement will be with DTG); and
(g) DTG must have entered into (i) a registration
rights agreement providing the applicable Seller with
piggyback registration rights for a period of 3 years after
the Effective Time for the purpose of registering shares of
DTG's Common Stock to be received by the Seller in
connection with the Merger; and (ii) an agreement concerning
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the Company's business relationship with Software Functions
and Training Partners from and after the Effective Time.
ARTICLE 6 - TERMINATION
Section 6.1. Termination Events. This Agreement may be
terminated by mutual consent of the Parties or by notice given before
or at the Closing:
(a) By DTG or Sellers if a material Breach of any
provision of this Agreement has been committed by the other
Party (DTG and Sub, on one hand, and Sellers and the
Company, on the other hand, being deemed a single Party for
purposes of this Section 6.1 (A)) and the Breach has not
been waived;
(b) By DTG if any of the conditions in Section 5.1
have not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible
(other than through the failure of DTG or Sub to comply with
their obligations under this Agreement) and DTG has not
waived the condition on or before the Closing Date;
(c) By Sellers if any of the conditions in Section 5.2
have not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible
(other than through the failure of Sellers or the Company to
comply with their or its obligations under this Agreement)
and Sellers have not waived the condition on or before the
Closing Date; or
(d) By either Party if the Closing has not occurred
(other than through the failure of the Party seeking to
terminate this Agreement to comply fully with its or his
obligations under this Agreement) on or before December 31,
1997, or such later date as the Parties may agree upon.
Section 6.2. Effect of Termination. Each Party's right of
termination under Section 6.1 is in addition to any other rights it or
he may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 6.1, all further
obligations of the Parties under this Agreement will terminate. If
this Agreement is terminated by a Party because of a Breach of the
Agreement by the other Party or because one or more of the conditions
to the terminating Party's obligations under this Agreement is not
satisfied as a result of the other Party's failure to comply with its
or his obligations under this Agreement, the terminating Party's right
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to pursue all legal remedies will survive such termination unimpaired.
DTG's confidentiality undertakings set forth in Section 4.2 will
survive any termination of this Agreement.
ARTICLE 7 - INDEMNIFICATION
Section 7.1. Indemnification and Reimbursement by Sellers. From
and after the Effective Time, Sellers, jointly and severally, will
indemnify and hold harmless DTG, the Surviving Corporation and their
respective Representatives and affiliates, and will reimburse DTG, the
Surviving Corporation and their respective Representatives and
affiliates, for all Adverse Consequences arising from or related to
(a) any Breach by Sellers or the Company of any representation,
warranty, covenant or obligation of Sellers or the Company in this
Agreement or any other certificate or instrument delivered by Sellers
or the Company to DTG or Sub pursuant to this Agreement; and (b) the
enforcement of indemnification rights under this Article 7.
Section 7.2. Indemnification and Reimbursement by the Surviving
Corporation. From and after the Effective Time, the Surviving
Corporation will indemnify and hold harmless Sellers, and will
reimburse Sellers, for all Adverse Consequences arising from or
related to (a) any Breach by DTG or Sub of any representation,
warranty, covenant or obligation of DTG or Sub in this Agreement or
any other certificate or instrument delivered by DTG and Sub to
Sellers pursuant to this Agreement, and (b) the enforcement of
indemnification rights under this Article 7.
Section 7.3. Indemnification Procedures.
(a) Third-Party Claims.
(i) Promptly after receipt by a Person entitled
to be indemnified under this Article 7 (an "Indemnified
Party") of notice of the commencement of any Proceeding
against it, such Indemnified Party will, if a claim for
indemnification is to be made against a Party (an
"Indemnifying Party") under this Article 7, give notice to
the Indemnifying Party of the commencement of such
Proceeding. The failure to promptly notify the Indemnifying
Party will not relieve the Indemnifying Party of any
liability that it may have to an Indemnified Party except to
the extent that the defense of such action was irreparably
and materially prejudiced by the Indemnifying Party's
failure to provide prompt notice.
(ii) If any Proceeding is brought against an
Indemnified Party and it gives notice to the Indemnifying
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Party of the commencement of such Proceeding, the
Indemnifying Party will, unless the claim involves Taxes, be
entitled to participate in such Proceeding and, to the
extent that it wishes (unless (A) the Indemnifying Party is
also a party to such Proceeding and the Indemnified Party
determines in good faith that joint representation would be
inappropriate or (B) the Indemnifying Party fails to provide
reasonable assurances to the Indemnified Party of its
financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), to assume
the defense of such Proceeding with counsel satisfactory to
the Indemnified Party. Following a proper assumption of
defense by an Indemnifying Party, as long as the
Indemnifying Party diligently conducts such defense it will
not be liable for any subsequent fees of legal counsel or
other expenses incurred by the Indemnified Party in
connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the Indemnifying
Party assumes the defense of a Proceeding, (A) it will be
conclusively established for purposes of this Agreement that
the claims made in that Proceeding are within the scope of
and subject to indemnification; (B) no compromise or
settlement of such claims may be effected by the
Indemnifying Party without the Indemnified Party's consent
unless (x) there is no finding or admission of any violation
of Legal Requirements or any violation of the rights of any
Person and no effect on any other claims that may be made by
or against the Indemnified Party, and (y) the sole relief
provided is monetary damages that are paid in full by the
Indemnifying Party concurrently with the compromise or
settlement; and (C) the Indemnifying Party will have no
liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is
given to an Indemnifying Party of the commencement of any
Proceeding and the Indemnifying Party does not within ten
days give notice to the Indemnified Party of its election to
assume the defense of such Proceeding, the Indemnifying
Party will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the
Indemnified Party.
(iii) Notwithstanding the foregoing, if an
Indemnified Party determines in good faith that there is a
reasonable probability that a Proceeding may adversely
affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Party
may, by notice to the Indemnifying Party, assume the
exclusive right to defend, compromise or settle such
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Proceeding, but the Indemnifying Party will not be bound by
any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which
may not be unreasonably withheld).
(iv) The Parties will make available to each other
and each other's legal counsel and other professional
advisors all of its or his books and records relating to a
third-party claim and each Party will render to the other
assistance as may be reasonably required in order to insure
the proper and adequate defense of a third-party claim.
(v) Each Party hereby consents to the non-exclusive
jurisdiction of any court in which a Proceeding is
brought against any Indemnified Party for purposes of any
claim that an Indemnified Party may have under this
Agreement with respect to such Proceeding or the matters
alleged therein.
(b) Other Claims. A claim for indemnification for any
matter not involving a third-party claim may be asserted by
notice to the Party from whom indemnification is sought.
Section 7.4. Set-Off. Each Indemnified Party may, as one of its
remedies to effect indemnification under this Article 7, withhold or
cause to be withheld and set-off amounts payable following the Closing
to the Indemnifying Party. If there is a good faith dispute as to
whether indemnification is proper in any particular instance, offset
will not be effected until such dispute is resolved.
Section 7.5. Basket. Neither Sellers nor the Surviving
Corporation will have any liability under this Article 7 with respect
to claims of Breach of the representations and warranties set forth in
this Agreement until the aggregate amount of all Adverse Consequences
relating to Breaches of such representations and warranties exceeds
$64,000, and then only for the amount by which such Adverse
Consequences exceed $64,000 (the "Basket"); provided that no Basket
shall be applicable, and there shall be first dollar indemnity, for
claims under Sections 2.3, 2.25 or 3.4 of this Agreement or in the
event of fraud or an intentional Breach.
ARTICLE 8 - DEFINITIONS
For purposes of this Agreement, the following terms shall have
the meanings specified or referred to in this Article 8:
"Adverse Consequence" means any loss, cost, liability (including
any Environmental Liability), penalty, Tax, claim, damage, expense
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(including cost of investigation, defense, settlement and reasonable
attorneys' and other professional fees), responsibility, disability,
remedial action or diminution of value.
"Accounts Receivable" has the meaning set forth in Section 2.13
of this Agreement.
"Applicable Contract" means any Contract (a) under which the
Company has or may acquire any rights; (b) under which the Company is
or may become subject to any obligation or liability; or (c) by which
the Company or any of the property or assets owned or used by the
Company is or may become bound.
"Balance Sheet" has the meaning set forth in Section 2.4 of this
Agreement.
"Basket" has the meaning set forth in Section 7.5 of this
Agreement.
"Breach" means, as to any representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument or
document delivered pursuant to this Agreement, (a) any inaccuracy in,
or any failure to perform or comply with, such representation,
warranty, covenant, obligation or other provision or (b) any claim by
any Person or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation
or other provision, in either case regardless of whether deliberate,
reckless, negligent, innocent or unintentional.
"Closing" has the meaning set forth in Section 1.3 of this
Agreement.
"Closing Date" means the date and time as of which the Closing
actually takes place.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Contract" means any agreement, contract, obligation, promise or
undertaking (whether written or oral and whether express or implied)
that is legally binding.
"Disclosure Schedule" has the meaning set forth in Section 2.1 of
the Agreement.
"DTG" has the meaning set forth in the first paragraph of this
Agreement.
"DTG Common Stock" means the common stock, no par value, of DTG.
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"Effective Time" has the meaning set forth in Section 1.4 of this
Agreement.
"Employee Benefit Plan" means any "employee pension benefit plan"
or "employee welfare benefit plan" as defined under ERISA, any
incentive compensation plan, benefit plan for retired employees, plan
or Contract providing for bonuses, pensions, profit-sharing, stock
options, stock purchase rights, deferred compensation, insurance or
retirement benefits of any nature, in each case whether written or
oral.
"Encumbrance" means any charge, claim, community property
interest, condition, equitable interest, mortgage, lien, option,
pledge, security interest, right of first refusal or restriction of
any kind, including any restriction on use, voting (in the case of any
security), transfer, receipt of income or exercise of any other
attribute of ownership.
"Environment" means soil, land surface or subsurface strata,
surface waters (including navigable waters and ocean waters),
groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other
environmental medium or natural resource.
"Environmental Law" means any Legal Requirement designed: (a) to
advise appropriate authorities, employees and the public of intended,
threatened or actual releases of pollutants or hazardous substances or
materials, violations or discharge limits, or other prohibitions and
of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;
(b) to prevent or acceptably minimize the release or emission of
pollutants or hazardous substances or materials into the Environment;
(c) to reduce the quantities, prevent the release and minimize the
hazardous characteristics of wastes that are generated; (d) to
regulate the generation, treatment, storage, handling or disposal of
hazardous substances; (e) to assure that products are designed,
formulated, packaged or used so that they do not present unreasonable
risks to human health or the Environment when used or disposed of;
(f) to protect resources, species or ecological amenities; (g) to
acceptably minimize the risks inherent in transportation of hazardous
substances, pollutants, oil or other potentially harmful substances;
(h) to clean up pollutants that have been released, prevent the threat
of release or pay the costs of such clean up or prevention; (i) to
make responsible parties pay private parties, or groups of them, for
damages done to their health or Environment, or to permit self-appointed
representatives of the public interest to recover for
injuries done to public assets; or (j) to regulate in any manner the
potential impact of an activity on the Environment.
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"Environmental Liability" means any Adverse Consequence arising
from or relating to Environmental Law or Occupational Safety and
Health Law with respect to acts or omissions by the Company or any
predecessor or affiliate or conditions in existence or events or
circumstances having occurred, in each case on or before the Closing
Date, including (a) any environmental, health or safety matters or
conditions (including on-site or off-site contamination, occupational
safety and health and regulation of chemical substances or products);
and (b) any responsibility for response costs, corrective action or
actions to achieve compliance, including any cleanup, removal,
containment or other remediation or response action ("Cleanup")
required by applicable Environmental Law or Occupational Safety and
Health Law (whether or not such Cleanup has been required or requested
by any Governmental Body or any other Person) and for any natural
resource damages. The terms "removal," "remedial," and "response
action" include the types of activities covered by the United States
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. <Section> 9601 et seq., as amended, or any similar state
law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Financial Statements" has the meaning set forth in Section 2.4
of this Agreement.
"GAAP" means generally accepted United States accounting
principles.
"Governmental Authorization" means any approval, consent,
license, permit, waiver or other authorization issued, granted, given
or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental Body" means any: (a) nation, state, county, city,
town, village, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official or
entity and any court or other tribunal); (d) multi-national
organization or body; or (e) body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any
nature.
"Indemnified Party" has the meaning set forth in Section 7.3 of
this Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.3 of
this Agreement.
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"Intellectual Property Assets" include all (a) legal names of
Persons, fictional business names, trading names, registered and
unregistered trademarks, service marks and applications; (b) patents
and patent applications; (c) copyrights both in published works and
unpublished works; (d) rights in mask works; and (e) know-how, trade
secrets, confidential information, software, technical information,
process technology, plans, drawings, specifications, bills of
material, blue prints and other similar data.
"Interim Financial Statements" has the meaning set forth in
Section 2.4 of this Agreement.
"IRS" means the Internal Revenue Service.
"Knowledge" means actual awareness of a particular fact or other
matter or awareness that a prudent individual could be expected to
obtain in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
"Legal Requirement" means any federal, state, local, municipal,
foreign, international, multinational or other constitution, law
(including any Environmental Law or Occupational Safety and Health
Law), ordinance, principle of common law, statute, code, regulation,
rule or treaty.
"Material Contract" means any Applicable Contract: (a) that
involves performance of services or delivery of goods or materials by
or to the Company of an amount in excess of $64,000; (b) that involves
expenditures or receipts by or of the Company in excess of $20,000;
(c) that relates to the ownership, sale or use of real or personal
property, except those relating to personal property having a value
per item or aggregate payments of less than $20,000 and with a term of
less than one year; (d) that relates to Intellectual Property Assets;
(e) that involves the sharing of profits, losses, costs or liabilities
by the Company with any other Person or by any other Person with the
Company; (f) that provides for payments to or by any Persons based on
sales, purchases or profits, other than direct payments for goods;
(g) that grants a power of attorney; (h) that was entered into other
than in the Ordinary Course of Business and contains or provides for
an undertaking by the Company to be responsible for consequential
damages; (i) that relates to capital expenditures in excess of
$64,000; (j) that limits the freedom of the Company to compete in any
line of business or geographic area; (k) that contains a guaranty by
the Company of performance or payment by another Person; (l) that
relates to indebtedness for borrowed money or that creates an
Encumbrance in any of the Company's properties or assets; (m) that
relates to the length, duration or condition of employment or the
termination thereof and which cannot be terminated by the Company on
notice without liability; and any non-compete or similar agreement of
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<PAGE>
which the Company is a beneficiary; and (n) that amends, supplements
or modifies any of the foregoing.
"Merger" has the meaning set forth in the preamble of this
Agreement.
"Multi-Employer Retirement Plan" has the meaning set forth in
Section 3(37)(A) of ERISA.
"Occupational Safety and Health Law" means any Legal Requirement
designed to provide safe and healthful working conditions and to
reduce occupational safety and health hazards, and any program,
whether governmental or private, designed to provide safe and
healthful working conditions.
"Order" means any award, decision, injunction, judgment, order,
ruling, subpoena or verdict entered, issued, made or rendered by any
court, administrative agency or other Governmental Body or by any
arbitrator.
"Ordinary Course of Business" means in accordance with the usages
of trade prevailing in the industry in which the Company operates and
in accordance with the Company's historical and customary day-to-day
practices with respect to the activity in question.
"Organizational Documents" means the complete charter and the
bylaws of the Company, including all amendments.
"Party" or "Parties" has the meaning set forth in the first
paragraph of this Agreement.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization or
other entity or Governmental Body.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"Related Person" means with respect to a particular individual:
(a) each other member of such individual's Family; (b) any Person that
is directly or indirectly controlled by any one or more members of
such individual's Family; (c) any Person in which members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and (d) any Person with respect to which one or more members
of such individual's Family serves as a director, officer, partner,
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<PAGE>
executor or trustee (or in a similar capacity). For purposes of this
definition, (a) the "Family" of an individual includes (i) the
individual; (ii) the individual's spouse; (iii) any other natural
person who is related to the individual or the individual's spouse
within the second degree; and (iv) any other natural person who
resides with such individual; and (b) "Material Interest" means direct
or indirect beneficial ownership (as defined in Rule 13D-3 under the
Securities Exchange Act of 1934) of voting securities or other voting
interests representing at least 20% of the outstanding voting power of
a Person or equity securities or other equity interests representing
at least 20% of the outstanding equity securities or equity interests
in a Person.
"Representative" means with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor or other
representative of such Person, including legal counsel, accountants
and financial advisors.
"Restricted Event" means (a) any declaration or payment of any
dividend or other distribution or payment in respect of shares of
capital stock; (b) any amendment of the Organizational Documents;
(c) any payment or increase of any bonuses, salaries or other
compensation to any shareholder, director, officer or (except in the
Ordinary Course of Business) employee or entry into any employment,
severance or similar Contract with any director, officer or employee;
(d) the adoption of, or increase in the payments to or benefits under,
any Employee Benefit Plan for or with any employees of the Company;
(e) any damage to or destruction or loss of any property or assets of
the Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial
condition or prospects of the Company; (f) the entry into, termination
of or receipt of notice of termination of any license,
distributorship, dealer, sales representative, joint venture, credit
or similar Contract or transaction involving a total remaining
commitment by the Company of more than $10,000; (g) any sale (other
than sales of inventory in the Ordinary Course of Business), lease or
other disposition of any property or asset of the Company or the
imposition of any Encumbrance on any material property or asset of the
Company, including the sale, lease or disposition of any Intellectual
Property Asset; (h) the cancellation or waiver of any claims or rights
with a value to the Company in the aggregate in excess of $10,000;
(i) any material change in the accounting methods used by the Company;
or (j) any agreement or commitment, whether written or oral, to do any
of the foregoing.
"Sellers" has the meaning set forth in the first paragraph of
this Agreement.
"Shares" means the issued and outstanding shares of the Company's
common stock, $10.00 par value each.
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<PAGE>
"Sub" has the meaning set forth in the first paragraph of this
Agreement.
"Surviving Corporation" has the meaning as set forth in Section
1.1 of the Agreement.
"Tax" means any tax (including, without limitation, any income
tax, capital gains tax, value-added tax, sales tax, property tax, gift
tax or estate tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or other fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or
collected by or under the authority of any Governmental Body or
payable pursuant to any tax-sharing agreement or any other Contract
relating to the sharing of payment of any such tax, levy, assessment,
tariff, duty, deficiency or fee.
"Tax Return" means any return (including, without limitation, any
information return), report, statement, schedule, notice, form or
other document or information filed with or submitted to, or reported
to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or
enforcement of or compliance with any Legal Requirement relating to
any Tax.
"Threatened" means, as to any claim, Proceeding, dispute, action
or other matter, that a demand or statement has been made (orally or
in writing), a notice has been given (orally or in writing) or an
event has occurred or some other circumstance exists that would lead a
prudent Person to conclude that such a claim, Proceeding, dispute,
action or other matter is reasonably likely to be asserted, commenced,
taken or otherwise pursued in the future.
ARTICLE 9 - GENERAL
Section 9.1. Survival of Representations, Warranties, Covenants
and Agreements. All representations, warranties, covenants and
agreements made by any Party to this Agreement will survive the
Closing and any investigation at any time made by or on behalf of the
other Party before or after the Closing. No investigation by or
Knowledge of DTG, Sub or their Representatives will affect in any
manner the representations, warranties, covenants or agreements of
Sellers set forth in this Agreement (or in any document to be
delivered in connection with the consummation of the transactions
contemplated by this Agreement) or DTG's or Sub's right to rely
thereon, and such representations, warranties, covenants and
agreements will survive any such investigation. The representations
and warranties of the Parties set forth in this Agreement shall expire
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<PAGE>
on the third anniversary of the Effective Time except for the
representations and warranties set forth in Sections 2.7 and 2.24,
which shall survive for the applicable statute of limitations periods,
and the representations and warranties set forth in Sections 2.3 and
2.16, which shall survive forever.
Section 9.2. Binding Effect; Benefits; Assignment. All of the
terms of this Agreement will be binding upon, inure to the benefit of
and be enforceable by and against the heirs and legal representatives
of Sellers and the successors and authorized assigns of DTG, Sub and
the Company. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement, express or implied, is intended
to confer upon any other Person any rights or remedies under or by
reason of this Agreement, this Agreement being for the exclusive
benefit of the Parties and their respective heirs, legal
representatives, successors and assigns. Neither Party will assign
any of its or his respective rights or obligations under this
Agreement to any other Person without the prior written consent of the
other Party, except that DTG or Sub may assign their rights to a
direct or indirect subsidiary of DTG or Sub.
Section 9.3. Entire Agreement. This Agreement, and the exhibits
and schedules to this Agreement (including the Disclosure Schedule),
and the agreements referred to in this Agreement set forth the entire
agreement and understanding of the Parties in respect of the
transactions contemplated by this Agreement and supersede all prior
agreements, arrangements and understandings relating to the subject
matter hereof. No representation, promise, inducement or statement of
intention has been made by either Party that is not embodied in this
Agreement or in the documents referred to in this Agreement, and
neither Party will be bound by or liable for any alleged
representation, promise, inducement or statement of intention not so
set forth.
Section 9.4. Amendment and Waiver. This Agreement may be
amended, modified, superseded or canceled and any of the terms,
covenants, representations, warranties or conditions hereof may be
waived only by a written instrument executed by the Parties or, in the
case of a waiver, by or on behalf of the Party waiving compliance.
The failure of any Party at any time to require performance of any
provision of this Agreement will in no manner affect the right of that
Party at a later time to enforce such provision. No waiver by any
Party of any condition or of any Breach of any term, covenant,
representation or warranty contained in this Agreement, in any one or
more instances, will be deemed to be or construed as a further or
continuing waiver of any such condition or of any Breach of the term,
covenant, representation or warranty or any other term, covenant,
representation or warranty set forth in this Agreement.
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<PAGE>
Section 9.5. Governing Law. This Agreement will be governed by
and construed in accordance with the laws of the state of South Dakota
as applicable to contracts made and to be performed in the state of
South Dakota without regard to conflicts of laws principles.
Section 9.6. Public Disclosure. Except as may be required by
applicable law or the rules of any national securities exchange,
neither Party will make any public disclosure of the existence or
terms of this Agreement or the transactions contemplated by this
Agreement without the prior written consent of the other Party, which
consent will not be unreasonably withheld.
Section 9.7. Notices. All notices, requests, demands and other
communications to be given pursuant to the terms of this Agreement
will be in writing and will be deemed to have been duly given if
delivered by hand, sent by facsimile with confirmation, sent by a
nationally recognized overnight mail service, or mailed first class,
postage prepaid:
(a) If to DTG or Sub (or after the with a copy to:
Effective Time the Surviving
Corporation):
DTG DataNet, Inc. Warner Norcross & Judd LLP
c/o Dakota Telecommunications 900 Old Kent Building
Group, Inc. 111 Lyon St. N.W.
P.O. Box 66 Grand Rapids, Michigan 49503-2487
Highway 46
Irene, South Dakota 57037
Telephone: 605/263-3301 Telephone: 616/752-2000
Facsimile: 605/263-3844 Facsimile: 616/752-2510
Attention: Craig A. Anderson Attention: Tracy T. Larsen
(b) If to Sellers (or prior to the with a copy to:
Effective Time the Company):
Mr. Gery Baar Woods, Fuller, Schultz & Smith
4401 E. Tomar Road 300 S. Phillips Avenue, Suite 300
Sioux Falls, South Dakota 57105-7030 Sioux Falls, South Dakota 57104
Telephone: 605/331-4820 Telephone: 605/336-3890
Facsimile: 605/338-7130 Facsimile: 605/339-3357
Attention: Bradley C. Grossenburg
and
Mr. Doug English
909 E. Plum Creek Road
Sioux Falls, South Dakota 57105-7048
Telephone: 605/332-3451
Facsimile: 605/338-7130
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<PAGE>
Either Party may change its address, telephone number of facsimile
number by prior written notice to the other Party.
Section 9.8. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed will be deemed to be an
original and such counterparts will together constitute one and the
same agreement.
Section 9.9. Expenses. Each Party will pay its or his own
respective expenses, costs and fees (including attorneys' and
accountants' fees) incurred in connection with the negotiation, prepa-
ration, execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement, and none of such
expenses, costs or fees will be paid by the Company.
Section 9.10. Severability. Any provision, or clause of any
provisions, of this Agreement that may be found to be contrary to
South Dakota law or otherwise unenforceable will not affect the
remaining terms of this Agreement, which will be construed as if the
unenforceable provision or clause were absent from this Agreement.
Section 9.11. Headings; Construction; Time of Essence. The
headings of the sections and paragraphs in this Agreement have been
inserted for convenience of reference only and will not restrict or
otherwise modify any of the terms or provisions of this Agreement.
Unless otherwise expressly provided, the word "including" whenever
used in this Agreement does not limit the preceding words or terms.
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
The Parties have executed this Agreement as of the date
stated in the first paragraph of this Agreement.
DAKOTA TELECOMMUNICATION
GROUP, INC.
By /s/Craig A. Anderson
Its Executive Vice President
"DTG"
DTG DATANET, INC.
By /s/Craig A. Anderson
Its Executive Vice President
"Sub"
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<PAGE>
FUTURISTIC, INC.
By /s/Gery Baar
Its President
"Company"
/s/Gery Baar
Gery Baar
/s/Douglas English
Doug English
"Sellers"
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<PAGE>
EXHIIBIT A
ARTICLES OF MERGER
OF
DTG DATANET, INC.,
a South Dakota Corporation
WITH AND INTO
FUTURISTIC, INC.
a South Dakota Corporation
Pursuant to the provisions of Section 47-6-6 of the South Dakota
Business Corporation Act, the undersigned corporations adopt the following
Articles of Merger:
ARTICLE I
The Plan of Merger is attached hereto as Exhibit A and is
incorporated herein by reference.
ARTICLE II
(a) DTG DataNet, Inc. has 1,000 outstanding shares of Common
Stock, no par value per share, and no outstanding shares of
any other class.
(b) Futuristic, Inc. has 4,000 outstanding shares of Common
Stock, $10.00 par value per share, and no outstanding
shares of any other class.
ARTICLE III
(a) The Plan of Merger was duly approved by the sole shareholder
of DTG DataNet, Inc. and by its Board of Directors on
November 25, 1997. All outstanding shares of DTG DataNet,
Inc. Common Stock were voted in favor of the Plan of Merger.
(b) The Plan of Merger was duly approved by the shareholders of
Futuristic, Inc. and by its Board of Directors on November
26, 1997. All outstanding shares of Futuristic, Inc. were
voted in favor of the Plan of Merger.
ARTICLE IV
The Plan of Merger is effective as of the date and time that the
South Dakota Secretary of State issues a Certificate of Merger concerning
the transactions described in the Plan of Merger.
<PAGE>
ARTICLE V
The surviving corporation is Futuristic, Inc., a South Dakota
corporation, which, after the merger, will continue its corporate existence
under the name "Futuristic, Inc."
ARTICLE VI
The executed Plan of Merger is on file at the principal place of
business of DTG DataNet, Inc., located at East Highway 46, Irene, South
Dakota 57037.
ARTICLE VII
A copy of the Plan of Merger will be furnished by DTG DataNet,
Inc. on request and without cost to any shareholder of DTG DataNet, Inc. or
Futuristic, Inc. or whose shares are involved in the merger.
[The remainder of this page is intentionally left blank.]
Exhibit A-2
<PAGE>
Dated: November 26, 1997 DTG DATANET, INC.
/s/Craig. A. Anderson
By: Craig A. Anderson
Its Executive Vice President
STATE OF SOUTH DAKOTA )
) : ss
COUNTY OF MINNEHAHA )
On this, the 26th day of November, 1997, before me, the undersigned
officer, personally appeared Craig Anderson, who acknowledged himself
to be the Executive Vice President of DTG DataNet, Inc., a corporation, and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as Executive Vice President.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
/s/Elizabeth A. Lewis
Notary Public, State of South Dakota,
County of Minnehaha
My Commission expires: August 24, 2002
Exhibit A-3
<PAGE>
Dated: November 26, 1997 FUTURISTIC, INC.
/s/Gery Baar
By: Gery Baar
Its President
STATE OF SOUTH DAKOTA )
) :ss
COUNTY OF MINNEHAHA )
On this, the 26th day of November, 1997, before me, the undersigned
officer, personally appeared Gery Baar, who acknowledged himself
to be the President of Futuristic, Inc., a corporation, and that he, as
such officer, being authorized so to do, executed the foregoing instrument
for the purposes therein contained by signing the name of the corporation by
himself as President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/Elizabeth A. Lewis
Notary Public, State of South Dakota,
County of Minnehaha
My Commission expires: August 24, 2002
Exhibit A-4
<PAGE>
EXHIBIT A
PLAN OF MERGER
DTG DATANET, INC.
AND FUTURISTIC, INC.
THIS PLAN OF MERGER has been entered into as of November 26,
1997, by and between DTG DATANET, INC., a South Dakota corporation, and
FUTURISTIC, INC., a South Dakota corporation.
The Boards of Directors of DTG DataNet, Inc. and Futuristic,
Inc., deem it to be in the best interests of their respective corporations
and shareholders to merge DTG DataNet, Inc. with and into Futuristic, Inc.
pursuant to the provisions of the laws of the State of South Dakota.
Accordingly, DTG DataNet, Inc., shall be merged with and into
Futuristic, Inc. upon the following terms and conditions:
ARTICLE I
DTG DataNet, Inc. and Futuristic, Inc. ("Constituent
Corporations") shall be merged into a single corporation in accordance with
the provisions of the laws of the State of South Dakota by merging DTG
DataNet, Inc. into Futuristic, Inc., which shall survive the merger.
ARTICLE II
When the merger shall become effective in accordance with and as
provided in the provisions of this Plan and the applicable provisions of
the laws of the State of South Dakota (such time being referred to as the
"Effective Time of the Merger"):
1. The Constituent Corporations shall be a single corporation which
shall be Futuristic, Inc. (the "Surviving Corporation"), and the separate
existence of DTG DataNet, Inc. shall cease.
2. At and after the Effective Time of the Merger, the Surviving
Corporation shall have all the rights, privileges, immunities and powers
and be subject to all the duties and liabilities of a business corporation
under South Dakota law and shall have and possess all the rights,
privileges, immunities and franchises, public or private, of each of the
Constituent Corporations.
3. All property, real, personal and mixed; all debts due on whatever
account, including subscriptions to shares; all rights of action; and all
other assets or interests of any description of or belonging to or due to
each of the Constituent Corporations shall be considered to be transferred
<PAGE>
to and vested in the Surviving Corporation without further act or deed; and
the title to any real estate, or any interest therein, vested in either of
the Constituent Corporations shall not revert or be in any way impaired
because of such merger.
4. At and after the Effective Time of the Merger, the Surviving
Corporation shall be responsible and liable for all the liabilities and
obligations of each of the Constituent Corporations and all debts,
liabilities and duties of the Constituent Corporations shall attach to the
Surviving Corporation and may be enforced against it to the same extent as
if such debts, liabilities and duties had been incurred and/or contracted
by it; a claim existing or action or proceeding pending by or against
either of the Constituent Corporations may be prosecuted as if such merger
had not taken place or the Surviving Corporation may be substituted in the
place of such Constituent Corporation; and the rights of creditors and any
lien upon the property of either of the Constituent Corporations shall not
be impaired by such merger.
5. All agreements of DTG DataNet, Inc., which were valid and
effective immediately prior to the Effective Time of the Merger shall be
taken as the agreements of the Surviving Corporation and shall be as
effective and binding on the Surviving Corporation as the same were with
respect to DTG DataNet, Inc.
6. The Bylaws of DTG DataNet, Inc. as existing and constituted at
the Effective Time of the Merger shall be and constitute the Bylaws of the
Surviving Corporation until they are altered, amended or repealed.
7. The directors of DTG DataNet, Inc. at the Effective Time of the
Merger shall be and constitute the directors of the Surviving Corporation
until their successors are elected in accordance with law and the
provisions of the Bylaws of the Surviving Corporation.
8. The officers of DTG DataNet, Inc. in office at the Effective Time
of the Merger shall be and constitute the officers of the Surviving
Corporation until their successors are elected or they are removed from
office by the Board of Directors of the Surviving Corporation in accordance
with law and the provisions of the Bylaws of the Surviving Corporation.
ARTICLE III
At and after the Effective Time of the Merger, and until further
amended as provided by law, the Articles of Incorporation of Futuristic,
Inc. shall constitute the corporate charter of the Surviving Corporation
until they are amended.
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<PAGE>
ARTICLE IV
The manner and basis of converting the shares of each of the
Constituent Corporations into shares of the Surviving Corporation are as
follows:
(a) CONVERSION OF FUTURISTIC SHARES. At the Effective Time
of the Merger each of the shares of Futuristic, Inc. ("Futuristic
Shares") outstanding immediately before the Effective Time of the
Merger will automatically become and be converted into the right
to receive forty (40) validly issued, fully paid and
nonassessable shares of Common Stock, no par value of Dakota
Telecommunications Group, Inc., a Delaware corporation ("DTG" and
such shares being the "DTG Common Stock") subject to additional
terms as may be agreed to by DTG and the holders of the
Futuristic Shares.
(b) CONVERSION OF DTG DATANET COMMON STOCK. At the
Effective Time of the Merger, each share of DTG DataNet, Inc.'s
common stock, no par value per share ("DataNet Shares"),
outstanding immediately before the Effective Time of the Merger
shall be converted into and become one fully paid and non-assessable
share of Common Stock, $10.00 par value of the Surviving Corporation,
and such shares shall constitute all of the outstanding capital stock
of the Surviving Corporation as of such date.
(c) EXCHANGE OF FUTURISTIC CERTIFICATES. At the Effective
Time of the Merger, holders of Futuristic Shares will surrender
their outstanding certificate or certificates representing the
Futuristic Shares to DTG and receive in exchange therefor
certificates representing the number of whole shares of DTG
Common Stock into which the Futuristic Shares represented by the
certificate or certificates so surrendered will have been
converted as described above. The holders of Futuristic Shares
outstanding immediately before the Effective Time of the Merger
will have no rights as shareholders of Futuristic, Inc. as of the
Effective Time of Merger and each certificate representing the
Futuristic Shares will represent only the right to receive shares
of DTG Common Stock. On and after the Effective Time of the
Merger, there will be no transfer of DataNet Shares on the stock
books of DTG DataNet, Inc. and ownership of DataNet Shares may be
transferred only on the stock books of Futuristic, Inc.
ARTICLE V
At the Effective Time of the Merger: (a) the respective assets
of DTG DataNet, Inc. and Futuristic, Inc. shall be taken up or continued on
the books of the Surviving Corporation in the amounts at which such assets
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<PAGE>
shall have been carried on their respective books immediately prior to the
Effective Time of the Merger; and (b) the respective liabilities and
reserves of DTG DataNet, Inc. and Futuristic, Inc. shall be taken up or
continued on the books of the Surviving Corporation in the amounts at which
such liabilities and reserves shall have been carried on their respective
books immediately prior to the Effective Time of the Merger.
ARTICLE VI
DTG DataNet, Inc. shall, from time to time, as and when requested
by the Surviving Corporation or its successors or assigns, execute and
deliver or cause to be executed and delivered such deeds, instruments,
assignments or assurances as the Surviving Corporation may deem necessary
or desirable to vest in and confirm to the Surviving Corporation title to
and possession of any property or rights of DTG DataNet, Inc. acquired or
to be acquired by reason of or as a result of this merger or otherwise to
carry out the purposes of the Merger. The directors and officers of the
Surviving Corporation are hereby fully authorized in the name of DTG
DataNet, Inc. to execute any and all such deeds, instruments, assignments
or assurances, or to take any and all such action.
ARTICLE VII
This Plan of Merger shall be deemed and be taken to be the Plan
of Merger of the Constituent Corporations upon the (a) approval thereof by
the Boards of Directors and shareholders of DTG DataNet, Inc. and
Futuristic, Inc. in accordance with the requirements of the laws of the
State of South Dakota; and (b) the filing and recording of such documents
and the doing of such acts and things as shall be required to accomplish
the merger under the provisions of the applicable laws of the State of
South Dakota.
ARTICLE VIII
Notwithstanding any other provision of this Plan of Merger, this
Plan of Merger may, subject to the laws of the State of South Dakota, be
amended, abandoned or postponed by the Board of Directors of DTG DataNet,
Inc. and Futuristic, Inc. at any time prior to the Effective Time of the
Merger for any reason deemed appropriate by such Boards of Directors.
ARTICLE IX
The Effective Time of the Merger shall be as of such date and
time that the South Dakota Secretary of State issues a certificate of
merger concerning the transactions described in this Plan of Merger.
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<PAGE>
EXHIIBIT B
EXCLUDED ASSETS
Gery Baar
1991 Audi
Deskjet 560C
US Robotics Modem
HP Vectra 515MCX w/33mb
HP 15" Monitor
HP Omnibook 4000
Epson
HP Vectra 5/90
Epson digital camera
Doug English
1993 Cadillac DeVille
Vectra 515MCX w/16mb
HP 15" monitor
Scanjet 4P Color
Deskjet 820CXI
Edutainment CD16
Vectra VL2 4/66 w/16mb
28.8 modem
HPO Omnibook 5500 CT
Exhibit B-1
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 - THE MERGER . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Merger of Sub with and into the Company. . . . . 1
Section 1.2. Shareholder Approval . . . . . . . . . . . . . . 1
Section 1.3. Closing. . . . . . . . . . . . . . . . . . . . . 1
Section 1.4. Effective Time . . . . . . . . . . . . . . . . . 2
Section 1.5. Effects of the Merger. . . . . . . . . . . . . . 2
Section 1.6. Surviving Corporation. . . . . . . . . . . . . . 2
Section 1.7. Conversion of Shares . . . . . . . . . . . . . . 2
Section 1.8. Conveyances to Surviving Corporation . . . . . . 2
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE
COMPANY
Section 2.1. Disclosure Schedule. . . . . . . . . . . . . . . 3
Section 2.2. Organization and Good Standing. . . . . . . . . 3
Section 2.3. Capitalization of the Company; Ownership . . . . 3
Section 2.4. Financial Statements . . . . . . . . . . . . . . 3
Section 2.5. Books and Records. . . . . . . . . . . . . . . . 4
Section 2.6. No Undisclosed Liabilities . . . . . . . . . . . 4
Section 2.7. Taxes. . . . . . . . . . . . . . . . . . . . . . 4
Section 2.8. No Material Adverse Change; Absence of Restricted
Events . . . . . . . . . . . . . . . . . . . . . 4
Section 2.9. Employees; Labor Relations . . . . . . . . . . . 5
Section 2.10. Employee Benefit Plans . . . . . . . . . . . . . 5
Section 2.11. Title to Properties; Encumbrances. . . . . . . . 6
Section 2.12. Condition and Sufficiency of Assets. . . . . . . 6
Section 2.13. Accounts Receivable. . . . . . . . . . . . . . . 6
Section 2.14. Inventory. . . . . . . . . . . . . . . . . . . . 6
Section 2.15. Litigation . . . . . . . . . . . . . . . . . . . 6
Section 2.16. Authorization and Enforceability; No Conflict
with Other Instruments or Proceedings. . . . . . 7
Section 2.17. Contracts. . . . . . . . . . . . . . . . . . . . 7
Section 2.18. Intellectual Property. . . . . . . . . . . . . . 7
Section 2.19. Insurance. . . . . . . . . . . . . . . . . . . . 8
Section 2.20. No Illegal Payments. . . . . . . . . . . . . . . 8
Section 2.21. Customers and Suppliers. . . . . . . . . . . . . 8
Section 2.22. Product Warranties and Liabilities . . . . . . . 8
Section 2.23. Certain Relationships. . . . . . . . . . . . . . 8
Section 2.24. Permits and Licenses; Compliance with Legal
Requirements . . . . . . . . . . . . . . . . . . 8
Section 2.25. No Broker's Fees . . . . . . . . . . . . . . . . 9
Section 2.27. Accuracy of Statements . . . . . . . . . . . . . 9
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF DTG AND SUB. . . . . . 9
Section 3.1. Organization and Standing of DTG and Sub . . . . 9
Section 3.2. Authorization and Enforceability . . . . . . . . 9
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Section 3.3. Investment Intent. . . . . . . . . . . . . . . . 9
Section 3.4. No Broker's Fees . . . . . . . . . . . . . . . . 9
ARTICLE 4 - COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . .10
Section 4.1. Conduct Pending the Effective Time . . . . . . .10
Section 4.2. Access and Investigation by DTG. . . . . . . . .10
Section 4.3. Reasonable Best Efforts; Notice of Breach or
Failure of Condition; Further Assurances . . . .10
Section 4.4. Non-Compete. . . . . . . . . . . . . . . . . . .10
Section 4.5. Excluded Assets. . . . . . . . . . . . . . . . .11
Section 4.6. Release of Sellers' Guaranties . . . . . . . . .11
Section 4.7. Affiliate Participation in 401(k) Plan. . . . .11
ARTICLE 5 - CONDITIONS TO OBLIGATION TO CLOSE. . . . . . . . . . . .11
Section 5.1. Conditions to Obligation of DTG and Sub. . . . .11
Section 5.2. Conditions to Obligation of Sellers and the
Company. . . . . . . . . . . . . . . . . . . . .12
ARTICLE 6 - TERMINATION. . . . . . . . . . . . . . . . . . . . . . .13
Section 6.1. Termination Events . . . . . . . . . . . . . . .13
Section 6.2. Effect of Termination. . . . . . . . . . . . . .14
ARTICLE 7 - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . .14
Section 7.1. Indemnification and Reimbursement by Sellers . .14
Section 7.2. Indemnification and Reimbursement by the
Surviving Corporation . . . . . . . . . . . . .14
Section 7.3. Indemnification Procedures . . . . . . . . . . .14
Section 7.4. Set-Off. . . . . . . . . . . . . . . . . . . . .16
Section 7.5. Basket . . . . . . . . . . . . . . . . . . . . .16
ARTICLE 8 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE 9 - GENERAL. . . . . . . . . . . . . . . . . . . . . . . . .21
Section 9.1. Survival of Representations, Warranties,
Covenants and Agreements . . . . . . . . . . . .21
Section 9.2. Binding Effect; Benefits; Assignment . . . . . .21
Section 9.3. Entire Agreement . . . . . . . . . . . . . . . .22
Section 9.4. Amendment and Waiver . . . . . . . . . . . . . .22
Section 9.5. Governing Law. . . . . . . . . . . . . . . . . .22
Section 9.6. Public Disclosure. . . . . . . . . . . . . . . .22
Section 9.7. Notices. . . . . . . . . . . . . . . . . . . . .22
Section 9.8. Counterparts . . . . . . . . . . . . . . . . . .23
Section 9.9. Expenses . . . . . . . . . . . . . . . . . . . .23
Section 9.10. Severability . . . . . . . . . . . . . . . . . .23
Section 9.11. Headings; Construction; Time of Essence. . . . .23
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EXHIBITS
Exhibit A--Articles of Merger and Related Plan of Merger
Exhibit B--Excluded Assets
DISCLOSURE SCHEDULE
Schedule 1--Organization and Standing of the Company
Schedule 2--Financial Statements
Schedule 3--Taxes
Schedule 4--Certain Changes or Events
Schedule 5--Employee Relations
Schedule 6--Employee Benefit Plans
Schedule 7--Real Property, Leaseholds or other interests
Schedule 8--Litigation
Schedule 9--Authorization and Enforceability; No Conflict
Schedule 10--Contracts
Schedule 11--Intellectual Property
Schedule 12--Insurance
Schedule 13--Customers and Suppliers
Schedule 14--Product Warranties and Liabilities
Schedule 15--Certain Relationships
Schedule 16--Permits and Licenses; Compliance with Law
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