<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(d)(1) OR 13(e)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
DATA TRANSMISSION
NETWORK CORPORATION
(NAME OF SUBJECT COMPANY (ISSUER))
------------------------
VS&A COMMUNICATIONS PARTNERS III, L.P.
DTN ACQUISITION CORPORATION
VS&A-DTN, LLC
(NAMES OF FILING PERSONS (OFFERORS))
------------------------
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
238017017
(CUSIP NUMBER OF COMMON STOCK)
------------------------
JONATHAN D. DRUCKER
VS&A COMMUNICATIONS PARTNERS III, L.P.
350 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 935-4990
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS)
------------------------
COPY TO:
BERTRAM A. ABRAMS
PROSKAUER ROSE LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036
------------------------
CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$396,776,724 $79,355
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</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only. The
amount assumes the purchase of 13,681,956 shares of common stock, $0.001 par
value (the "Shares"), of Data Transmission Network Corporation, at a price
per Share of $29.00 in cash. Such aggregate number of Shares represents all
the Shares outstanding on a fully-diluted basis as of March 1, 2000. The
amount of the filing fee, calculated in accordance with Regulation 240.0-11
of the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the value of the transaction.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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<PAGE> 2
TENDER OFFER
This Tender Offer Statement on Schedule TO ("THIS STATEMENT") relates to a
third-party tender offer by DTN Acquisition Corporation, a Delaware corporation
(the "PURCHASER"), VS&A-DTN, LLC a Delaware Corporation ("VS&A-DTN") and VS&A
Communications Partners III, L.P. (the "PARENT"), to purchase all shares of
common stock, par value $0.001 per share (the "SHARES"), of Data Transmission
Network Corporation, a Delaware corporation (the "COMPANY"), at $29.00 per
Share, net to the Seller in cash, on the terms and subject to the conditions
contained in the Offer to Purchase, dated March 17, 2000 (the "OFFER TO
PURCHASE"), and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively (which collectively
constitute the "OFFER").
ITEM 1. SUMMARY TERM SHEET
The information set forth in the Summary Term Sheet in the Offer to
Purchase is incorporated herein by reference.
ITEM 2. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Data Transmission Network
Corporation, a Delaware corporation. The address of the Company's principal
executive offices is 9110 West Dodge Road, Suite 200, Omaha, Nebraska 68114
(b) The class of securities to which this statement relates is the common
stock, par value $.001 per share, of which 12,019,986 shares were issued and
outstanding as of March 1, 2000. The information set forth on the cover page
under "Introduction" in the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
(a) -- (b) This Statement is filed by the Purchaser, the Parent and
VS&A-DTN. The information set forth on the cover page, in "Introduction", in
Section 9 and in Schedule I of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 8 and Schedule I of the Offer to
Purchase is incorporated herein by reference. During the last five years, none
of the Purchaser, the Parent, VS&A-DTN, any person directly or indirectly
controlling the Parent, VS&A-DTN or the Purchaser and described in Section 8 of
the Offer to Purchase, nor, to the Purchaser's, the Parent's and VS&A-DTN's
knowledge, any of the persons listed in Schedule I to the Offer to Purchase (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) has been a party to a judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
ITEM 4. TERMS OF TRANSACTION.
The information set forth in the Offer to Purchase is incorporated herein
by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) None.
(b) The information set forth in "Introduction" and in Sections 9, 10 and
11 of the Offer to Purchase is incorporated herein by reference.
<PAGE> 3
ITEM 6. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS
(a), (c)(1), (4)-(7) The information set forth in "Introduction" and in
Sections 10, 11, 12, 13 and 14 of the Offer to Purchase is incorporated herein
by reference.
(c)(2)-(3) Not applicable.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) and (b) The information set forth in "Introduction" and in Section 8 of
the Offer to Purchase is incorporated herein by reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED
The information set forth in Section 17 of the Offer to Purchase is
incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS
The information set forth in Section 7 of the Offer to Purchase is
incorporated herein by reference.
ITEM 11. ADDITIONAL INFORMATION
(a) The information set forth in Sections 11, 13 and 16 of the Offer to
Purchase is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference.
2
<PAGE> 4
ITEM 12. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase, dated March 17, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated March 17, 2000.
(a)(8) Text of Press Release, dated March 3, 2000.
(b) None.
(d)(1) Agreement and Plan of Merger, dated as of March 3, 2000,
among VS&A-DTN, LLC, DTN Acquisition Corporation, VS&A
Communications Partners III, L.P. and Data Transmission
Network Corporation.
(d)(2) Voting Agreement, dated as of February 17, 2000, between
Peter H. Kamin (individually and on behalf of Peak
Management, Inc. and Peak Limited Partnership) and VS&A
Communications Partners III, L.P.
(d)(3) Voting Agreement, dated as of February 17, 2000, between
Anthony S. Jacobs and VS&A Communications Partners III, L.P.
(d)(4) Voting Agreement, dated as of February 17, 2000, between
Weitz Series Fund, Inc. -- Value Fund and VS&A
Communications Partners III, L.P.
(d)(5) Voting Agreement, dated as of February 17, 2000, between
Weitz Series Fund, Inc. -- Hickory Fund and VS&A
Communications Partners III, L.P.
(d)(6) Voting Agreement, dated as of February 17, 2000, between
Weitz Partners III Limited Partnership and VS&A
Communications Partners III, L.P.
(d)(7) Voting Agreement, dated as of February 17, 2000, between
Weitz Partners, Inc. -- Partners Value Fund and VS&A
Communications Partners III, L.P.
(d)(8) Voting Agreement, dated as of February 17, 2000, between
Roger Brodersen and VS&A Communications Partners III, L.P.
(d)(9) Voting Agreement, dated as of March 3, 2000, between Acorn
Investment Trust and VS&A Communications Partners III, L.P.
(d)(10) Voting Agreement, dated as of March 3, 2000, between Wanger
Advisors Trust and VS&A Communications Partners III, L.P.
(d)(11) Voting Agreement, dated as of March 3, 2000 between Wanger
Asset Management, L.P. and VS&A Communications Partners III,
L.P.
(d)(12) Voting Agreement, dated as of February 17, 2000, between DTN
401(k) Plan (First National Bank of Omaha) and VS&A
Communications Partners III, L.P.
(d)(13) Letter Agreement, dated as of March 15, 2000, between VS&A
Communications Partners III, L.P. and Data Transmission
Network Corporation
(g) None.
(h) None.
</TABLE>
3
<PAGE> 5
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
Dated: March 17, 2000
DTN ACQUISITION CORPORATION
By: /s/ S. GERARD BENFORD
---------------------------------------
Name: S. Gerard Benford
Title: Vice President and Treasurer
VS&A-DTN, LLC
By: VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, L.L.C.
By: /s/ S. GERARD BENFORD
-----------------------------------
Name: S. Gerard Benford
Title: Managing Member and Vice
President
VS&A COMMUNICTIONS PARTNERS III,
L.P.
By: VS&A EQUITIES III, L.L.C.
By: /s/ S. GERARD BENFORD
-----------------------------------
Name: S. Gerard Benford
Title: Managing Member and Vice
President
4
<PAGE> 6
EXHIBIT INDEX
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EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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(a)(1) Offer to Purchase, dated March 17, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated March 17, 2000.
(a)(8) Text of Press Release, dated March 3, 2000.
(b) None.
(d)(1) Agreement and Plan of Merger, dated as of March 3, 2000,
among VS&A-DTN, LLC, DTN Acquisition Corporation, VS&A
Communications Partners III, L.P. and Data Transmission
Network Corporation.
(d)(2) Voting Agreement, dated as of February 17, 2000, between
Peter H. Kamin (individually and on behalf of Peak
Management, Inc. and Peak Limited Partnership) and VS&A
Communications Partners III, L.P.
(d)(3) Voting Agreement, dated as of February 17, 2000, between
Anthony S. Jacobs and VS&A Communications Partners III, L.P.
(d)(4) Voting Agreement, dated as of February 17, 2000, between
Weitz Series Fund, Inc. -- Value Fund and VS&A
Communications Partners III, L.P.
(d)(5) Voting Agreement, dated as of February 17, 2000, between
Weitz Series Fund, Inc. -- Hickory Fund and VS&A
Communications Partners III, L.P.
(d)(6) Voting Agreement, dated as of February 17, 2000, between
Weitz Partners III Limited Partnership and VS&A
Communications Partners III, L.P.
(d)(7) Voting Agreement, dated as of February 17, 2000, between
Weitz Partners, Inc. -- Partners Value Fund and VS&A
Communications Partners III, L.P.
(d)(8) Voting Agreement, dated as of February 17, 2000, between
Roger Brodersen and VS&A Communications Partners III, L.P.
(d)(9) Voting Agreement, dated as of March 3, 2000, between Acorn
Investment Trust and VS&A Communications Partners III, L.P.
(d)(10) Voting Agreement, dated as of March 3, 2000, between Wanger
Advisors Trust and VS&A Communications Partners III, L.P.
(d)(11) Voting Agreement, dated as of March 3, 2000 between Wanger
Asset Management, L.P. and VS&A Communications Partners III,
L.P.
(d)(12) Voting Agreement, dated as of February 17, 2000, between DTN
401(k) Plan (First National Bank of Omaha) and VS&A
Communications Partners III, L.P.
(d)(13) Letter Agreement, dated as of March 15, 2000, between VS&A
Communications Partners III, L.P. and Data Transmission
Network Corporation
(g) None.
(h) None.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
AT
$29.00 NET PER SHARE
BY
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF
MARCH 3, 2000 (THE "MERGER AGREEMENT"), AMONG VS&A COMMUNICATIONS PARTNERS III,
L.P. (THE "PARENT"), VS&A -- DTN, LLC ("VS&A-DTN"), DTN ACQUISITION CORPORATION
(THE "PURCHASER") AND DATA TRANSMISSION NETWORK CORPORATION (THE "COMPANY"). THE
BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS,
HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL THEIR SHARES PURSUANT TO THE OFFER.
THE PURCHASE OF THE SHARES PURSUANT TO THE OFFER IS CONDITIONED UPON AT LEAST
90% OF THE COMPANY'S OUTSTANDING SHARES HAVING BEEN VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER. THE COMPANY HAS AGREED
THAT, IF THE PURCHASE PURSUANT TO THE OFFER IS CONSUMMATED, IT WILL TAKE ALL
NECESSARY ACTION TO CAUSE THE MERGER TO BECOME EFFECTIVE IMMEDIATELY WITHOUT A
MEETING OF STOCKHOLDERS AND THAT, IF THE PURCHASE PURSUANT TO THE OFFER IS NOT
CONSUMMATED, THE COMPANY WILL CALL A MEETING OF STOCKHOLDERS TO VOTE UPON
APPROVAL OF THE MERGER AND WILL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO
EFFECT THE MERGER AT THE EARLIEST PRACTICABLE DATE. STOCKHOLDERS WHO HOLD IN THE
AGGREGATE APPROXIMATELY 50.1% OF THE OUTSTANDING SHARES (APPROXIMATELY 44.1%,
AFTER THE EXERCISE OF ALL OUTSTANDING OPTIONS AND WARRANTS) HAVE AGREED TO
TENDER THEIR SHARES IN RESPONSE TO THE OFFER OR TO VOTE THEIR SHARES IN FAVOR OF
THE MERGER. UNDER DELAWARE LAW, THE VOTE OF A MAJORITY OF THE COMPANY'S
OUTSTANDING SHARES ENTITLED TO VOTE IS REQUIRED FOR APPROVAL OF THE MERGER. THE
PARENT, VS&A-DTN AND THE PURCHASER DO NOT CURRENTLY OWN ANY SHARES.
THE OFFER IS SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE "INTRODUCTION"
AND SECTIONS 1, 15 AND 16.
IMPORTANT
Any stockholder desiring to tender all or any portion of his shares should
either (a) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it, together with the certificate(s) representing tendered Shares and
any other required documents, to the Depositary at its address indicated on the
back cover of this Offer to Purchase or tender such Shares pursuant to the
procedures for book-entry transfer described in Section 3 or (b) request his
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for him. A stockholder whose shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if he
desires to tender such shares.
A stockholder who desires to tender his shares and whose certificates
representing such shares are not immediately available or who cannot comply with
the other procedures on a timely basis may tender such shares by following the
procedures for guaranteed delivery described in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone numbers indicated on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks and trust companies.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
March 17, 2000
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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<S> <C>
SUMMARY TERM SHEET.......................................... 1
INTRODUCTION................................................ 5
THE TENDER OFFER............................................ 6
1. Terms of the Offer; Expiration Date.................. 6
2. Acceptance for Payment and Payment................... 7
3. Procedures for Accepting the Offer and Tendering
Shares................................................. 8
4. Withdrawal Rights.................................... 10
5. Certain U.S. Federal Income Tax Consequences......... 11
6. Price Range of the Shares; Dividends................. 12
7. Certain Information Concerning the Company........... 12
8. Certain Information Concerning the Purchaser, the
Parent and VS&A-DTN.................................... 15
9. Source and Amount of Funds........................... 16
10. Background of the Offer; Contacts with the Company... 17
11. The Merger Agreement and Other Agreements; Other
Matters................................................ 18
12. Purpose of the Offer and the Merger; Plans for the
Company................................................ 26
13. Effect of the Offer on the Market for the Shares..... 27
14. Dividends and Distributions.......................... 27
15. Certain Conditions of the Offer...................... 28
16. Certain Legal Matters; Required Regulatory
Approvals.............................................. 29
17. Certain Fees and Expenses............................ 31
18. Miscellaneous........................................ 32
SCHEDULE I Directors and Executive Officers of the
Purchaser, the Parent, and Certain Entities
which Directly or Indirectly Control the Parent
</TABLE>
i
<PAGE> 3
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 4
SUMMARY TERM SHEET
DTN Acquisition Corporation is offering to purchase all the outstanding
shares of common stock of Data Transmission Network Corporation for $29.00 per
share in cash. The following are some of the questions that you, as a
stockholder of Data Transmission Network Corporation, may have, and the answers
to those questions. We urge you to read carefully the remainder of this offer to
purchase and the letter of transmittal because the information in this summary
term sheet is not complete. Additional important information is contained in the
remainder of this offer to purchase and the letter of transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is DTN Acquisition Corporation. We are a Delaware corporation and
have carried on no business other than in connection with the merger agreement.
We are a subsidiary of VS&A-DTN, LLC, a Delaware limited liability company,
which, in turn, is a subsidiary of VS&A Communications Partners III, L.P. See
"Introduction" and Section 8.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are offering to purchase all the outstanding common stock of Data
Transmission Network Corporation. See "Introduction" and Section 1.
HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $29.00 per share, net to you, in cash. If you are
the record owner of your shares and you tender your shares to us in the offer,
you will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares on
your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. See "Introduction."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
VS&A Communications Partners III, L.P. and the other equity investors in
VS&A-DTN will provide us with approximately $195.0 million to purchase all
shares validly tendered and not withdrawn in the offer and to provide funding
for the merger, which is expected to occur immediately after the successful
completion of the offer. The remainder of the funds necessary to consummate the
offer and merger and to pay all fees and expenses incurred in connection with
the offer and the merger (approximately $291.2 million) is expected to be from a
loan from a group of banks and other financial institutions. See Section 9.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because the form of payment consists solely of
cash and we have already arranged for all of our funding. The offer is not
subject to any financing condition. See Section 9.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Friday,
April 14, 2000 to tender your shares in the offer. Further, if you cannot
deliver everything that is required in order to make a valid tender by that
time, you may be able to use a guaranteed delivery procedure, which is described
later in this offer to purchase. See Section 1.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we may extend the offer if any of the
conditions to the offer have not been satisfied
1
<PAGE> 5
or waived; provided, however, that we can not extend the offer for more than 10
business days without the approval of Data Transmission Network Corporation.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform First National Bank of Omaha (which
is the depositary for the offer) of that fact and will make a public
announcement of the extension, not later than 9:00 a.m., New York City time, on
the next business day after the day on which the offer was scheduled to expire.
See Section 1.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares that are validly tendered,
unless the number of shares validly tendered and not properly withdrawn
before the expiration date of the offer represent at least 90% of the
outstanding shares of Data Transmission Network Corporation.
- We are not obligated to purchase shares that are validly tendered, if
there is a material adverse change in Data Transmission Network
Corporation or its business or if the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 has not expired or
been waived before we accept the shares that have been validly tendered.
The offer also is subject to a number of other conditions. We can waive any
of the conditions to the offer without Data Transmission Network Corporation's
consent. See Section 15.
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to First National Bank
of Omaha, the depositary for the offer, not later than the time the tender offer
expires. If your shares are held in street name, the shares can be tendered by
your nominee through The Depository Trust Company. If you cannot deliver to the
depositary any document or instrument that is required to be delivered by the
expiration of the tender offer, you may get additional time to do so by having a
broker, a bank or other fiduciary which is a member of the Securities Transfer
Agents Medallion Program or other eligible institution guarantee that the
missing items will be received by the depositary within three Nasdaq trading
days. For the tender to be valid, however, the depositary must receive the
missing items within that three trading day period. See Section 2.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired, and, if we
have not agreed by May 9, 2000 (or a later date as may apply, if the offer is
extended) to accept your shares for payment, you can withdraw them at any time
after that time, until we accept shares for payment. This right to withdraw will
not apply to any subsequent offering period discussed in Section 1. See Section
4.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4.
WHAT DOES DATA TRANSMISSION NETWORK CORPORATION'S BOARD OF DIRECTORS THINK OF
THE OFFER?
We are making the offer pursuant to the merger agreement, which has been
unanimously approved by the board of directors of Data Transmission Network
Corporation. The board of directors of Data Transmission Network Corporation
unanimously (1) determined that the offer, the merger and the merger agreement
are fair to, and in the best interests of, its stockholders, (2) approved the
merger, the offer, the merger agreement and the other transactions contemplated
by the merger agreement and (3) recommends that its stockholders accept the
offer and tender all their shares and approve and adopt the merger agreement.
See "Introduction."
2
<PAGE> 6
HAVE ANY STOCKHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Stockholders who own shares representing approximately 50.1% of the
outstanding common stock of Data Transmission Network Corporation (approximately
44.1%, after the exercise of all outstanding options and warrants) have agreed
to tender their shares in the offer.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE DATA TRANSMISSION
NETWORK CORPORATION SHARES ARE NOT TENDERED IN THE OFFER?
Yes. If DTN Acquisition Corporation accepts for payment and pays for at
least 90% of the outstanding shares of Data Transmission Network Corporation, we
will be merged with and into Data Transmission Network Corporation. If that
merger takes place, VS&A-DTN, LLC will own all the shares of Data Transmission
Network Corporation and all remaining stockholders of Data Transmission Network
Corporation (other than DTN Acquisition Corporation and stockholders properly
exercising dissenters' rights) will receive $29.00 per share in cash. See
"Introduction" and Section 11.
IF 90% OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL DATA
TRANSMISSION NETWORK CORPORATION CONTINUE AS A PUBLIC COMPANY?
No. Following the purchase of shares in the offer, we expect to consummate
the merger, and, following the merger, Data Transmission Network Corporation no
longer will be publicly owned. Even if for some reason the merger does not take
place, if we purchase all the tendered shares, there may be so few remaining
stockholders and publicly held shares that Data Transmission Network
Corporation's common stock will no longer be eligible to be traded on The Nasdaq
National Market or on any securities exchange, there may not be a public trading
market for Data Transmission Network Corporation stock and Data Transmission
Network Corporation may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with the SEC rules
relating to publicly held companies. See Section 13.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, stockholders not tendering in
the offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer, subject to any rights of
appraisal properly exercised under Delaware law. Therefore, if the merger takes
place, the only difference to you between tendering your shares and not
tendering your shares is that, if you tender your shares, you will be paid
earlier and will not have appraisal rights. However, if for some reason the
merger does not take place, the number of shares of Data Transmission Network
Corporation stock still in the hands of the public may be so small that there no
longer will be an active public trading market (or, possibly, there may not be
any public trading market) for Data Transmission Network Corporation common
stock. Also, as described above, Data Transmission Network Corporation may cease
making filings with the SEC or otherwise being required to comply with the SEC
rules relating to publicly held companies. See Section 13.
WHAT WILL HAPPEN IF FEWER THAN 90% OF THE OUTSTANDING SHARES ARE TENDERED IN THE
OFFER?
If fewer than 90% of the outstanding shares are tendered, the offer may not
be consummated and the Company will call a meeting of the stockholders to vote
upon the merger. If the merger is approved by a majority of the stockholders, we
will be merged with and into Data Transmission Network Corporation. If that
merger takes place, VS&A-DTN, LLC will own all the shares of Data Transmission
Network Corporation and all stockholders of Data Transmission Network
Corporation (other than DTN Acquisition Corporation and stockholders properly
exercising dissenters' rights) will receive $29.00 per share in cash. See
"Introduction" and Section 11.
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HAVE ANY STOCKHOLDERS AGREED TO VOTE THEIR SHARES IN FAVOR OF THE MERGER?
Yes. Stockholders who own shares representing approximately 50.1% of the
outstanding common stock of Data Transmission Network Corporation (approximately
44.1%, after the exercise of all outstanding options and warrants) have agreed
to vote their shares in favor of the merger.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On March 3, 2000, the last trading day before we announced the tender offer
and the possible subsequent merger, the last reported sale price of Data
Transmission Network Corporation common stock reported on The Nasdaq National
Market was $25.00 per share. On March 16, 2000, the last trading day before we
commenced the tender offer, the last reported sale price of Data Transmission
Network Corporation common stock reported on The Nasdaq National Market was
28.75 per share. We advise you to obtain a recent quotation for shares of Data
Transmission Network Corporation common stock in deciding whether to tender your
shares. See Section 6.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call D.F. King & Co., Inc. at 800-488-8075 (toll free). D.F. King &
Co., Inc. is acting as the information agent for our tender offer. See the back
cover of this offer to purchase.
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To: All Holders of Shares of Common Stock
of Data Transmission Network Corporation:
INTRODUCTION
DTN Acquisition Corporation, a Delaware corporation (the "PURCHASER") and
an indirect subsidiary of VS&A Communications Partners III, L.P., a Delaware
limited partnership (the "PARENT"), hereby offers to purchase all shares of
common stock, par value $0.001 per share (the "SHARES"), of Data Transmission
Network Corporation, a Delaware corporation (the "COMPANY"), at a price of
$29.00 per Share (the "SHARE PRICE"), net to the seller in cash and without
interest thereon, upon the terms and subject to the conditions contained in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "OFFER").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 3, 2000 (the "MERGER AGREEMENT"), among the Parent, VS&A-DTN, LLC, a
Delaware limited liability company that is a subsidiary of the Parent
("VS&A-DTN"), the Purchaser and the Company. The Merger Agreement provides,
among other things, for the commencement of the Offer by the Purchaser and
further provides that, subject to the satisfaction or waiver of certain
conditions, the Purchaser will be merged with the Company (the "MERGER"), with
the surviving corporation (the "SURVIVING CORPORATION") becoming a subsidiary of
VS&A-DTN. In the Merger, each outstanding Share (other than Shares held by the
Company as treasury stock and Shares owned by stockholders who have properly
exercised their appraisal rights under Delaware law) will be converted at the
effective time of the Merger (the "EFFECTIVE TIME") into the right to receive
the Share Price, in cash, without interest and less any required withholding
taxes (the "MERGER CONSIDERATION").
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE COMPANY'S STOCKHOLDERS (THE "STOCKHOLDERS"), HAS APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL
THEIR SHARES PURSUANT TO THE OFFER.
Greif & Co., the Company's financial advisor (the "COMPANY FINANCIAL
ADVISOR"), has delivered to the Company its written opinion, dated the date of
the Merger Agreement, that, as of the date thereof, the cash consideration to be
received by the Stockholders pursuant to the Offer and the Merger is fair from a
financial point of view to the Stockholders. A copy of the opinion of the
Company Financial Advisor is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "SCHEDULE 14D-9")
filed with the Securities and Exchange Commission (the "COMMISSION") in
connection with the Offer, a copy of which is being furnished to the
Stockholders concurrently with this Offer to Purchase.
The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn prior to the Expiration Date (as defined in
Section 1 below) that number of Shares (the "MINIMUM NUMBER OF SHARES") that
would represent at least 90% of the Shares outstanding (the "MINIMUM
CONDITION"). Stockholders who, in the aggregate, own approximately 50.1% of the
Shares (approximately 44.1%, after the exercise of all outstanding options and
warrants) have agreed to tender their shares in response to the Offer or vote
their Shares in favor of the Merger and the Merger Agreement. The Offer also is
subject to certain other conditions. See Sections 1, 15 and 16.
The Company has represented and warranted in the Merger Agreement that, as
of March 1, 2000, 12,019,986 Shares were issued and outstanding. In addition,
the Company has informed the Parent that, as of March 1, 2000, 1,641,970 Shares
were reserved for issuance pursuant to outstanding options under the Company's
1999 Stock Incentive Plan, Stock Option Plan of 1989 and Non-Employee Directors
Stock Option Plan (collectively, the "OPTION PLANS") having an exercise price
less than the Share Price, and 20,000 Shares were reserved for issuance pursuant
to outstanding warrants. Based on this information, the Purchaser believes that
the Minimum Condition will be satisfied, if Shares representing a minimum of
10,817,987 Shares (12,313,760 Shares, if all outstanding options and warrants
are exercised) are validly tendered and not properly withdrawn prior to the
Expiration Date. The Parent, VS&A-DTN and the Purchaser currently do not own any
Shares.
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The Schedule 14D-9 indicates that, to the best of the Company's knowledge,
all the Company's executive officers and directors who currently own Shares
intend to tender all their Shares pursuant to the Offer, other than Shares, if
any, held by persons whose shares, if tendered, could cause such persons to
incur liability under the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT").
The consummation of the Merger is subject to the satisfaction or waiver of
several conditions, including, if required, the approval of the Merger by the
requisite vote or consent of the holders of Shares. Under the Delaware General
Corporation Law (the "DGCL"), the stockholder vote necessary to approve the
Merger will be the affirmative vote of at least a majority of the outstanding
Shares. If, however, the Purchaser acquires at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, the Purchaser would be able to effect
the Merger pursuant to the "short-form" merger provisions of Section 253 of the
DGCL, without prior notice to, or any action by, any other Stockholder. In such
event, the Purchaser intends to effect the Merger immediately following the
purchase of Shares in the Offer. See Section 11.
The Company also has represented in the Merger Agreement that the approval
by the Company's Board of the Merger and the Merger Agreement is sufficient to
render inapplicable to the Merger, the Merger Agreement and the transactions
contemplated thereby the provisions of Section 203 of the DGCL and no further
corporate action is required to be taken by the Company under its certificate of
incorporation, bylaws or any agreement or other obligation by which it is bound
to render such provisions inapplicable to the Offer and the Merger. See Section
16.
The Merger Agreement is more fully described in Section 11. Certain U.S.
federal income tax consequences of the sale of Shares pursuant to the Offer and
the exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
Tendering Stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of First
National Bank of Omaha, as Depositary (the "DEPOSITARY") and D.F. King & Co.,
Inc., as Information Agent (the "INFORMATION AGENT"), incurred in connection
with the Offer. See Section 17.
This Offer to Purchase and the Letter of Transmittal contain important
information. You should read them in their entirety before making any decision
with respect to the Offer.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended as
required or permitted by the Merger Agreement, the terms and conditions of any
such extension or amendment), the Purchaser will accept for payment and thereby
purchase all Shares validly tendered and not withdrawn in accordance with the
procedures described in Section 4 on or prior to the Expiration Date (as
hereinafter defined). The term "Expiration Date" means 12:00 midnight, New York
City time, on April 14, 2000, unless and until the Purchaser, in accordance with
the Merger Agreement, shall have extended the period of time for which the Offer
is open, in which event the term "Expiration Date" shall mean the time and date
at which the Offer, as so extended by the Purchaser, shall expire. In the Merger
Agreement, VS&A-DTN and the Purchaser have agreed that, if the Minimum Condition
or any other condition to the Offer has not been satisfied or waived, VS&A-DTN
may, from time to time, in its sole discretion, extend the Expiration Date;
provided, however, any expiration beyond 10 business days requires the approval
of the Company.
Any such extension will be followed as promptly as practicable by public
announcement thereof, to be made no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Securities Exchange Act, which require that material changes be
promptly disseminated to holders of Shares), the Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
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<PAGE> 10
If, in accordance with the Merger Agreement, the Purchaser makes a material
change in the terms of the Offer or waives a material condition to the Offer,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer, other than a change in
price or a change in percentage of securities sought or a change in any dealer's
soliciting fee, will depend upon the facts and circumstances, including the
materiality, of the changes. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought or a change
in any dealer's soliciting fee, a minimum 10 business day period from the date
of such change is generally required to allow for adequate dissemination to
stockholders. Accordingly, if, prior to the Expiration Date, the Purchaser (with
the approval of the Company, as required by the Merger Agreement) decreases the
number of Shares being sought, or increases or decreases the consideration
offered pursuant to the Offer, and if the Offer is scheduled to expire at any
time earlier than the period ending on the 10th business day from the date that
notice of such increase or decrease is first published, sent or given to holders
of Shares, the Offer will be extended at least until the expiration of such 10
business day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
In the Merger Agreement, the Company has agreed to furnish the Purchaser
with the Company's stockholder list and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to Purchase
and the related Letter of Transmittal and, if required, other relevant materials
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the stockholder list or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended in
accordance with the Merger Agreement, the terms and conditions of the Offer as
so extended or amended) the Purchaser will purchase, by accepting for payment,
and, promptly after the Expiration Date, will pay for, all Shares validly
tendered and not withdrawn prior to the Expiration Date (as permitted by Section
4), if the conditions to the Offer described in Section 15 have each been
satisfied or waived, including, without limitation, the expiration or
termination of the waiting period applicable to the acquisition of Shares
pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR ACT"). In addition, subject to applicable rules of
the Commission, the Purchaser expressly reserves the right to delay acceptance
for payment of, or payment for, Shares, pending receipt of any regulatory or
governmental approvals specified in Section 16.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) share certificates for
such Shares ("SHARE CERTIFICATES") or confirmation (a "BOOK-ENTRY CONFIRMATION")
of the book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "BOOK-ENTRY TRANSFER FACILITY"), pursuant to the
procedures described in Section 3, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer, and (iii) any other documents required by the Letter
of Transmittal.
The term "AGENT'S MESSAGE" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares subject of the Book-Entry Confirmation
that such participant has received and agrees to be bound by the terms of the
Letter of Transmittal and that the Purchaser may enforce such agreement against
such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
its acceptance of such Shares for payment pursuant to the Offer. In all cases,
upon the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will
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<PAGE> 11
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering Stockholders for the purpose of receiving
payment from the Purchaser and transmitting payment to validly tendering
Stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID BY THE PURCHASER BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering Stockholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures described in Section 3,
such Shares will be credited to an account maintained within the Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
offered to holders of Shares pursuant to the Offer, such increased consideration
will be paid to all holders of Shares that are purchased pursuant to the Offer,
whether or not such Shares were tendered prior to such increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its subsidiaries or affiliates the right
to purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering Stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to
be validly tendered pursuant to the Offer, (i) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses specified
on the back cover of this Offer to Purchase on or prior to the Expiration Date
and either Share Certificates representing tendered Shares must be received by
the Depositary, or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case on or prior to the Expiration Date, or
(ii) the guaranteed delivery procedures described below must be complied with.
The method of delivery of Share Certificates and the Letter of Transmittal
and all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the election and sole risk of the tendering
Stockholder. The Shares will be deemed delivered only when actually received by
the Depositary (including, in the case of a book-entry transfer, by Book-Entry
Confirmation). If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's account
at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents must, in any case, be transmitted to and received
by the Depositary at its address specified on the back cover of this Offer to
Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure described below must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
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Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"ELIGIBLE INSTITUTION"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the Share Certificates,
with the signatures on the Share Certificates or stock powers guaranteed by an
Eligible Institution as provided in the Letter of Transmittal. See Instructions
1 and 5 of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a Stockholder desires to tender Shares pursuant to
the Offer and such Stockholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares may nevertheless be tendered
if all the following guaranteed delivery procedures are duly complied with:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(c) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal, are received by the Depositary within three Nasdaq
National Market trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form contained in such Notice of Guaranteed
Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering Stockholders at the same
time, and will depend upon when Share Certificates or Book-Entry Confirmations
of such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Backup Federal Tax Withholding. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain Stockholders pursuant to the Offer. To prevent backup federal income
tax withholding on payments made to certain Stockholders with respect to the
purchase price of Shares purchased pursuant to the Offer, each such Stockholder
must provide the Depositary with his correct taxpayer identification number and
certify, under penalty of perjury, that he is not subject to
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backup federal income tax withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See Instruction 10 of the Letter of
Transmittal.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
Stockholder irrevocably appoints the Purchaser and any Purchaser designee, and
each of them, as such Stockholder's attorneys-in-fact and proxies, with full
power of substitution, in the manner set forth in the Letter of Transmittal, to
the full extent of such Stockholder's rights with respect to the Shares tendered
by such Stockholder and accepted for payment by the Purchaser and with respect
to any and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after the date of this Offer to Purchase. All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Shares for payment. Upon
payment by the Purchaser for the Shares, all powers of attorney and proxies
given by such Stockholder with respect to such Shares and such other securities
or rights prior to such payment will be revoked, without further action, and no
subsequent powers of attorney and proxies may be given by such Stockholder (and,
if given, will not be deemed effective). The designees of the Purchaser will,
with respect to the Shares for which such appointment is effective, be empowered
to exercise all voting and other rights of such Stockholder as they in their
sole discretion may deem proper at any annual or special meeting of the
Stockholders, or any adjournment or postponement of such meeting. The Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon the payment for such Shares, the Purchaser or its
designee must be able to exercise full voting, consent and other rights with
respect to such Shares and other securities, including voting at any meeting of
the Stockholders.
Determination of Validity. All questions as to the form of documents and
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding on all parties. The
Purchaser reserves the right to reject any or all tenders determined by it not
to be in proper form or the acceptance of or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
right (subject to the provisions of the Merger Agreement), in its sole
discretion, to waive any of the conditions of the Offer or any defect or
irregularity in any tender of Shares of any particular Stockholder, whether or
not similar defects or irregularities are waived in the case of other
Stockholders.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender of Shares will be deemed to have been validly made, until
all defects and irregularities with respect to such tender have been cured or
waived. None of the Purchaser, the Parent, VS&A-DTN or any of their affiliates
or assigns, if any, the Depositary, the Information Agent or any other person
will be under any duty to give any notification of any defects or irregularities
in tenders or incur any liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering Stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn at any time after May 9, 2000.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept
for payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares and such Shares
may not be withdrawn, except to the extent that the tendering Stockholder is
entitled to and duly exercises withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer, to the extent required by
law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address or facsimile number specified on the back cover of this Offer
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to Purchase. Any such notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and (if Share Certificates have been tendered) the name of the registered holder
of the Shares as set forth in the Share Certificate, if different from that of
the person who tendered such Shares. If Share Certificates have been delivered
or otherwise identified to the Depositary, then, prior to the physical release
of such certificates, the tendering Stockholder must submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of the
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer described in Section 3, the notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective, if delivered to the Depositary at its address or facsimile
number specified on the back cover of this Offer to Purchase. Withdrawals of
Shares may not be rescinded. Any Shares properly withdrawn will be deemed not
validly tendered for purposes of the Offer, but may be retendered at any
subsequent time prior to the Expiration Date by following any of the procedures
described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, the Parent, VS&A-DTN or any of their affiliates or assigns, if any,
the Depositary, the Information Agent or any other person will be under any duty
to give any notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. The following is a
general summary of certain U.S. federal income tax consequences of the Offer and
the Merger relevant to a beneficial holder of Shares whose Shares are tendered
and accepted for payment pursuant to the Offer or whose Shares are converted to
cash in the Merger (a "HOLDER"). The discussion is based on the Internal Revenue
Code of 1986, as amended (the "CODE"), regulations issued thereunder, judicial
decisions and administrative rulings, all of which are subject to change,
possibly with retroactive effect. The following does not address the U.S.
federal income tax consequences to all categories of Holders that may be subject
to special rules (e.g., holders who acquired their Shares pursuant to the
exercise of employee stock options or other compensation arrangements with the
Company, foreign holders, insurance companies, tax-exempt organizations, dealers
in securities and persons who have acquired the Shares as part of a straddle,
hedge, conversion transaction or other integrated investment), nor does it
address the federal income tax consequences to persons who do not hold the
Shares as "capital assets" within the meaning of Section 1221 of the Code
(generally, property held for investment). Holders should consult their own tax
advisors regarding the U.S. federal, state, local and foreign income and other
tax consequences of the Offer and the Merger.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under applicable state, local and foreign income and other
tax laws. In general, a Holder who sells Shares pursuant to the Offer or has
Shares converted into the right to receive cash pursuant to the Merger will
recognize gain or loss for U.S. federal income tax purposes equal to the
difference, if any, between the amount of cash received and the Holder's
adjusted tax basis in the Shares sold pursuant to the Offer or converted into
the right to receive cash pursuant to the Merger. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) tendered pursuant to the Offer or converted
into the right to receive cash pursuant to the Merger. Such gain or loss will be
long-term capital gain or loss, if the Holder has held the Shares for more than
one year at the time of the consummation of the Offer or the Merger. Capital
gains recognized by an individual investor (or an estate or certain trusts) upon
a disposition of a Share that has been held for more than one year generally
will be subject to a maximum U.S. federal income tax rate of 20% or, in the case
of a Share that has been held for one year or less, will be subject to tax at
ordinary income rates. Certain limitations apply to the use of capital losses.
Holders who receive cash pursuant to the exercise of appraisal rights with
respect to their Shares generally will be subject to the same treatment as that
described above for Holders who receive cash for Shares pursuant to the Offer
and Merger.
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<PAGE> 15
6. PRICE RANGE OF THE SHARES; DIVIDENDS. According to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 (the "COMPANY'S
1999 ANNUAL REPORT"), the Shares are traded on The Nasdaq National Market
("NASDAQ") under the symbol "DTLN." The following table presents, for (i) 1998
and 1999, the high and low sale prices for the Shares as reported in the
Company's 1999 Annual Report and (ii) 2000, the high and low sale prices for the
Shares as reported in published sources:
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
1998
First Quarter.......................................... $38.50 $ 26.25
Second Quarter......................................... 46.00 34.75
Third Quarter.......................................... 40.50 24.00
Fourth Quarter......................................... 35.00 22.25
1999
First Quarter.......................................... 33.25 16.125
Second Quarter......................................... 28.375 20.00
Third Quarter.......................................... 28.3125 23.5625
Fourth Quarter......................................... 26.75 16.50
2000
First Quarter (through March 16, 2000)................. 28.9375 16.625
</TABLE>
On March 3, 2000, the last full day of trading prior to the announcement of
the Offer, the last reported sale price on Nasdaq for the Shares was $25.00 per
Share. On March 16, 2000, the last full day of trading prior to the commencement
of the Offer, the last reported sale price on Nasdaq for the Shares was $28.75
per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
According to the Company's 1999 Annual Report, the Company has never paid
any cash dividends with respect to the Shares and has no present intention of so
doing. Under the terms of the Merger Agreement, the Company is not permitted to
declare or pay dividends with respect to the Shares without the prior written
consent of VS&A-DTN, which does not intend to consent to any such declaration or
payment.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise
specifically stated in this Offer to Purchase, the information concerning the
Company contained in this Offer to Purchase has been taken from or is based upon
reports and other documents on file with the Commission or otherwise publicly
available. Although neither the Purchaser nor the Parent has any knowledge that
would indicate that any statements contained in this Offer to Purchase are
untrue, neither the Purchaser nor the Parent takes any responsibility for the
accuracy or completeness of the information contained in such reports and other
documents or for the failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information but
that are unknown to the Purchaser or the Parent.
General. The Company is a Delaware corporation with its principal
executive offices located at 9110 West Dodge Road, Suite 200, Omaha, NE 68114,
and its telephone number is (402) 390-2328.
The Company is a leading electronic commerce and information services
company serving the agriculture, weather, energy and financial services
industries. The Company has built a leadership position in each of its
respective market segments by electronically delivering time-sensitive
information through a variety of distribution methods, including internet,
satellite, leased lines and other technologies. The Company's services reach
subscribers in the U.S. and Canada.
Selected Financial Information. Presented below is certain consolidated
financial information with respect to the Company, excerpted or derived from the
Company's 1999 Annual Report and the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 as filed with the Commission pursuant to
the Exchange Act.
More comprehensive financial information is included in reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports
12
<PAGE> 16
and other documents and all the financial information (including any related
notes) contained therein. Such reports, documents and financial information may
be inspected and copies may be obtained from the Commission in the manner
described below.
DATA TRANSMISSION NETWORK CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
1999 1998 1997 1996
-------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Operating Data:
Total revenues.................... $166,509 $148,986 $126,374 $ 98,384
Operating income.................. $ 4,156(1) $ 4,163(3) $ 12,383 $ 6,921
Net income (loss) per share....... $ (3,707)(2) $ (3,743)(4) $ 2,236 $ (958)
Basic income (loss) per share..... $ (0.32) $ (.33) $ .20 $ (.09)
Diluted income (loss) per share... $ (0.32) $ (.33) $ .19 $ (.09)
Basic shares outstanding.......... 11,734 11,359 11,101 10,658
Diluted shares outstanding........ 11,734 11,359 12,083 10,658
Balance Sheet Data:
Working capital (deficit)......... $(19,642) $(17,447) $(21,520) $(14,748)
Total assets...................... $184,003 $197,185 $162,431 $177,730
Long-term debt and subordinated
notes.......................... $ 79,038 $100,620 $ 72,891 $ 97,748
Shareholders' equity.............. $ 37,497 $ 32,150 $ 32,196 $ 28,290
</TABLE>
- ---------------
(1) Includes $0.7 million of non-recurring severance costs related primarily to
the resignation of the Company's Chairman and CEO and $4.1 million related
to the loss on sale of radar operations.
(2) Includes $0.7 million related to severance costs ($0.5 million net of tax),
$4.1 million related to the loss on sale of radar business ($2.6 million net
of tax) and $0.2 million related to equity in loss of affiliate ($0.1
million net of tax).
(3) Includes $5.8 million in non-recurring satellite costs related to the loss
of control of Galaxy IV satellite by PanAmSat, the Company's primary
satellite provider.
(4) Includes $5.8 million related to satellite costs ($3.7 million net of tax),
$1.7 million extraordinary item related to debt extinguishment charge for
the early retirement of the Company's $15,000,000 11.25% Senior Subordinated
Notes Due 2004 ($1.1 million net of tax).
Other Financial Information. In connection with the solicitation in
mid-1999 of preliminary indications of interest from potential purchasers of the
Company, the Company provided a confidential information memorandum to
interested parties, including the Parent, which contained certain non-public
estimates reflecting the possible future performance of the Company. The
estimates focused on the Company's four core operating divisions -- agriculture,
weather, energy and financial services -- and excluded losses associated with
certain development stage initiatives and the results of ancillary operations
with minimal revenues ("core" operations). The estimates, which are set forth
below, were not publicly available when the Company furnished them to the Parent
and other potential purchasers.
13
<PAGE> 17
DATA TRANSMISSION NETWORK CORPORATION
PRO FORMA PROJECTED FINANCIAL PERFORMANCE OF CORE OPERATIONS
FISCAL YEARS ENDING DECEMBER 31, 2000-2003
<TABLE>
<CAPTION>
2000 2001 2002 2003
------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Core Revenues(1)........................................ $196.3 $231.0 $257.6 $286.4
Core EBITDA(2) before Overhead(3)....................... $104.4 $132.9 $152.8 $174.8
Core EBITDA after Overhead.............................. $ 82.2 $109.2 $127.8 $148.5
Total Capital Expenditures.............................. $ 15.3 $ 15.3 $ 15.3 $ 15.3
</TABLE>
- ---------------
(1) Pro forma revenue from the Company's agriculture, weather, energy and
financial services divisions; excludes losses associated with certain
development stage initiatives and the results of ancillary operations with
minimal revenues ("core" operations).
(2) Pro forma earnings before interest, taxes, depreciation and amortization
expenses.
(3) Pro forma corporate overhead allocation.
In early-2000, management updated these estimates based on revised
assumptions and in light of subsequent developments and provided these revised
estimates to the Parent and other parties conducting due diligence
investigations of the Company. The revised estimates, which are set forth below,
were not publicly available when the Company furnished them to the Parent and
other potential purchasers.
DATA TRANSMISSION NETWORK CORPORATION
REVISED PRO FORMA PROJECTED FINANCIAL PERFORMANCE OF CORE OPERATIONS
FISCAL YEARS ENDING DECEMBER 31, 2000 -- 2003
<TABLE>
<CAPTION>
2000 2001 2002 2003
------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Core Revenues(1)........................................ $179.3 $199.0 $227.1 $255.7
Core EBITDA(2) before Overhead(3)....................... $ 91.3 $108.5 $130.0 $152.6
Core EBITDA after Overhead.............................. $ 70.2 $ 84.8 $105.0 $126.3
Total Capital Expenditures.............................. $ 15.3 $ 15.3 $ 15.3 $ 15.3
</TABLE>
- ---------------
(1) Pro forma revenue from the Company's agriculture, weather, energy and
financial services divisions; excludes losses associated with certain
development stage initiatives and the results of ancillary operations with
minimal revenues ("core" operations).
(2) Pro forma earnings before interest, taxes, depreciation and amortization
expenses.
(3) Pro forma corporate overhead allocation.
The Company does not as a matter of course make public forecasts as to its
future economic performance. The foregoing information was prepared by the
Company solely for internal use and not for publication or with a view to
complying with the published guidelines of the Commission regarding projections
or with the guidelines established by the American Institute of Certified Public
Accountants and is included in this Offer to Purchase only because it was
furnished to the Parent. The projections do not purport to present the
operations of the Company in accordance with generally accepted accounting
principles and have not been audited, compiled or otherwise examined by
independent accountants. The foregoing information is "forward-looking" and
inherently subject to significant uncertainties and contingencies, many of which
are beyond the control of the Company, including industry performance, general
business and economic conditions, changing competition, adverse changes in
applicable laws, regulations or rules governing environmental, tax or accounting
matters and other matters and should not be relied on by holders of Shares. The
Company has advised the Parent that, although the Company believes the
assumptions used in preparing this information were reasonable when made, such
assumptions are inherently subject to significant uncertainties and
14
<PAGE> 18
contingencies that are impossible to predict and beyond the Company's control.
Accordingly, there can be no assurance, and no representation or warranty is
made, that actual results will not vary materially from those reflected in the
projections. The inclusion of this information should not be regarded as an
indication that the Parent, VS&A-DTN, the Purchaser, the Company or anyone who
received this information considered it a reliable prediction of future events,
and this information should not be relied on as such. None of the Parent, the
Purchaser, VS&A-DTN, the Company or their respective financial advisors assumes
any responsibility for the validity, reasonableness, accuracy or completeness of
the projections, none of them intends to update or otherwise revise the
projections to reflect circumstances existing after the date when made or to
reflect the occurrence of future events and the Company has made no
representation to the Parent, VS&A-DTN or the Purchaser regarding the forecasts
described above. The projections have not been adjusted to reflect the effects
of the Offer and the Merger.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
7 World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such information also
should be obtainable by mail, upon payment of the Commission's customary
charges, by writing to the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a website on the
Internet at http://www.sec.gov that contains reports, proxy statements and other
information relating to the Company, which have been filed via the Commission's
EDGAR System.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER, THE PARENT AND
VS&A-DTN. The Purchaser was incorporated in 1999 under the law of the State of
Delaware for the purpose of acquiring the Company. The Purchaser is a
wholly-owned subsidiary of VS&A-DTN. The principal executive offices of the
Purchaser are located at 350 Park Avenue, New York, New York 10022. The
telephone number of the Purchaser is (212) 935-4990. The Purchaser has not, and
is not expected to, engage in any business other than in connection with its
organization, the Offer and the Merger.
VS&A-DTN was formed in 2000 under the law of the State of Delaware for the
purpose of holding the shares of the Purchaser. VS&A-DTN is a wholly-owned
subsidiary of the Parent. See "Purpose of the Offer and the Merger; Plans for
the Company." The principal executive offices of the Purchaser are located at
350 Park Avenue, New York, New York 10022. The telephone number of VS&A-DTN is
(212) 935-4990.
The Parent is a Delaware limited partnership with its principal executive
offices located at 350 Park Avenue, New York, New York 10022. The telephone
number of the Parent is (212) 935-4990. The Parent is an approximately $1.0
billion private equity fund affiliated with Veronis, Suhler & Associates Inc.
The Parent focuses exclusively on making equity investments in the information,
communications and media industries.
From time to time both during and after the Offer, the Parent intends to
sell interests in VS&A-DTN to certain of its investors and their affiliates, as
well as to certain affiliates of the Parent (collectively, the "CO-INVESTORS").
In addition, it is expected that, in consideration for the surrender by certain
executive officers of the Company of a portion of their options to purchase
Shares, the Parent would grant such executive officers interests in VS&A-DTN
equivalent to the interests the executive officers would have acquired if they
had made cash contributions to VS&A-DTN equal to the cash they otherwise would
have received in connection with the cancellation of such options pursuant to
the Merger Agreement.
The name, business address, principal occupation or employment, five-year
employment history and citizenship of each director and executive officer of the
Purchaser, the Parent and VS&A-DTN are listed in Schedule I hereto.
15
<PAGE> 19
Except as set forth elsewhere in this Offer to Purchase: (i) neither the
Purchaser nor the Parent nor VS&A-DTN, nor, to the best knowledge of the
Purchaser, the Parent, VS&A-DTN, any of the persons listed in Schedule I hereto,
or any majority-owned subsidiary of the Parent beneficially owns or has a right
to acquire any Shares or any other equity securities of the Company; (ii)
neither the Purchaser nor the Parent nor VS&A-DTN, nor, to the best knowledge,
of the Purchaser, the Parent, VS&A-DTN, any of the persons or entities referred
to in clause (i) above, has effected any transaction in the Shares or any other
equity securities of the Company during the past 60 days; (iii) neither the
Purchaser nor the Parent nor VS&A-DTN, nor, to the best knowledge of the
Purchaser, the Parent and VS&A-DTN, any of the persons listed in Schedule I
hereto has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, the transfer or voting thereof, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies, consents or authorizations; (iv) during the
three years preceding the date of this Offer to Purchase, there have been no
transactions which would require reporting under the rules and regulations of
the Commission between any of the Purchaser, the Parent, VS&A-DTN or, to the
best knowledge of the Purchaser, the Parent and VS&A-DTN, any of the persons
listed in Schedule I hereto, on the one hand, and the Company or any of its
executive officers, directors or affiliates, on the other hand; and (v) except
as disclosed in Section 10, during the three years preceding the date of this
Offer to Purchase, there have been no contracts, negotiations or transactions
between either of the Purchaser, the Parent or VS&A-DTN or, to the best
knowledge of the Purchaser, the Parent and VS&A-DTN, any of the persons listed
in Schedule I hereto, on the one hand, and the Company or its subsidiaries or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets of the
Company.
None of the persons listed in Schedule I hereto have, during the past five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors). None of the persons listed in Schedule I hereto has,
during the past five years, been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
9. SOURCE AND AMOUNT OF FUNDS. The Offer and the Merger are not subject to
any financing condition. The total amount of funds required by the Purchaser to
consummate the Offer and the Merger (including, refinancing the Company's
indebtedness) and to pay related fees and expenses is estimated to be
approximately $486.2 million. The total amount of funds required by the
Purchaser to purchase the Shares and pay for the cancellation of all outstanding
options and warrants is estimated to be approximately $367.3 million.
The Parent and the Co-Investors will provide approximately $195.0 million
to VS&A-DTN by way of a capital contribution. Thereafter, VS&A-DTN will make a
contribution in that amount to the Purchaser. Immediately following the
consummation of the Offer, the Parent expects to cause the Merger to occur and
to cause the Company to enter into a secured lending facility, which will
provide the remainder of the funds necessary to provide the funding for the
Offer and the Merger.
On February 29, 2000, the Parent entered into separate binding commitment
letters with First Union National Bank, Dresdner Bank AG, The Bank of New York
and The Industrial Bank of Japan, Limited. Pursuant to these commitment letters,
First Union National Bank, Dresdner Bank AG, The Bank of New York, and The
Industrial Bank of Japan, Limited agreed to provide the Company with senior
secured credit facilities in the aggregate amount of $350 million with proceeds
of $291.2 million available at the closing to finance the Offer and the Merger.
The secured credit facilities contemplate (i) a $75 million senior secured
revolving credit facility (the "REVOLVER"), (ii) a $125 million senior secured
term loan ("TERM LOAN A") and (iii) a $150 million senior secured term loan
("TERM LOAN B"). The Revolver and the Term Loan A are expected to mature on June
30, 2005 and the Term Loan B is expected to mature on December 31, 2006. Each of
the loans will bear interest at either (i) the alternate base rate plus an
applicable margin of between 50 and 350 basis points based upon the Company's
total debt to earnings before interest, taxes, depreciation and amortization
(the "APPLICABLE MARGIN") or (ii) Libor plus an Applicable Margin. The alternate
base rate will be the higher of the administrative agent's prime rate or the
overnight federal funds rate plus 0.50%. The
16
<PAGE> 20
loans will be secured by (i) a first priority pledge of 100% of the ownership
interests of the Company and its direct and indirect subsidiaries and (ii)
subject to certain permitted liens, a first priority lien on and security
interest in all personal property and real property assets of the Company
(excluding the warrants held by the Company in SmartServ Online, Inc.). The
loans will contain customary terms and conditions.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. On March 18, 1999,
the Company announced that its Board of Directors had, through a special
committee, been exploring various means by which the Company could produce
greater market value for its stockholders. In that connection, offers were
sought from potential buyers, although no offers were received during that
period that, in the Board of Director's view, adequately reflected the Company's
value.
On March 24, 1999, the Company announced, among other things, that its
Board of Directors had formed a new special committee (the "SPECIAL COMMITTEE")
to re-examine the Company's strategic alternatives and to engage an investment
banker for this purpose.
On May 5, 1999, the Company announced that it had engaged Greif & Co.
("GREIF") as its exclusive financial advisor to spearhead the development,
review and structuring of a range of strategic alternatives intended to enhance
stockholder value.
On June 24, 1999, Greif contacted, among others, the Parent to determine if
the Parent would have any interest in pursuing a strategic transaction with the
Company.
On July 8, 1999, the Parent and Greif (on behalf of the Company) executed a
confidentiality agreement. Subsequently, Greif delivered to the Parent and other
interested parties a confidential information memorandum.
On July 15, 1999, Greif notified all parties who had received a copy of the
confidential information memorandum, including the Parent, that preliminary
written indications of interest should be submitted to Greif by July 30, 1999.
The Parent declined to submit a written indication of interest at that time.
On December 8, 1999, the Parent contacted Greif requesting an opportunity
to commence a due diligence investigation of the Company with the objective of
presenting a proposal to acquire the Company.
On December 20, 1999, Greif provided the Parent with supplemental due
diligence information prepared by the Company.
On December 22, 1999, the Parent submitted to Greif an oral indication of
interest in the Company. The Special Committee directed Greif to reject the
Parent's indication of interest based on valuation and certain significant
contingencies, which included due diligence.
Subsequently, the Parent was advised that, on January 10, 2000, the Company
had entered into a letter of intent with a potential purchaser, which contained
a "no-shop" provision, and, in accordance with the letter of intent, Greif was
ending discussions with all other interested parties, including the Parent.
On January 20, 2000, Greif re-initiated discussions with the Parent and
others. Greif informed the Parent that discussions were in advanced stages and
that final proposals should be submitted during the following two-week period.
After negotiations with Greif, on January 21, 2000, the Parent delivered to
Greif a written indication of interest with an all-cash price range of $26.00 to
$29.00 per share. After further discussions with Greif, on January 24, 2000, the
Parent increased the price range of its offer to $27.00 to $29.00 per share.
From January 28, 2000 through February 2, 2000, the Parent conducted a
further due diligence review of the Company and engaged in discussions with the
Company's senior management.
On February 8, 2000, the Parent transmitted to Greif a letter of intent,
evidence of a bank financing commitment and comments to the draft merger
agreement. The letter of intent reflected a cash price of $28.00 per share.
17
<PAGE> 21
On February 15, 2000, based on ongoing negotiations with Greif, the Parent
revised and delivered to the Special Committee its final letter of intent,
reflecting a further increase in the cash price to $29.00 per share.
On February 16, 2000, the Board of Directors authorized the Special
Committee to consummate the transaction with the Parent, and Greif so informed
the Parent on February 17, 2000.
The Parent and the Special Committee continued to negotiate the
non-financial terms of the letter of intent, which was ultimately executed on
February 28, 2000. Thereafter, representatives of the Special Committee and the
Parent, together with their legal counsel, negotiated the terms of the
definitive Merger Agreement.
During late February and early March, certain stockholders entered into
voting agreements with the Parent, pursuant to which they agreed to tender their
shares in response to a tender offer by the Parent or to vote their shares in
favor of a merger with the Parent.
On March 3, 2000, the Board met to consider the proposed final form of the
definitive Merger Agreement and received an oral opinion of Greif, which was
subsequently confirmed in writing, that the consideration to be received by the
stockholders of the Company in the proposed Offer and the Merger was fair, from
a financial point of view, to such stockholders. At the meeting, the Board of
Directors unanimously approved the Merger and authorized the execution of the
Merger Agreement.
On March 6, 2000, prior to the opening of trading on Nasdaq, the Parent and
the Company publicly announced the Offer and the Merger.
On March 17, 2000, the Purchaser commenced the Offer.
11. THE MERGER AGREEMENT AND OTHER AGREEMENTS; OTHER MATTERS
The Merger Agreement
The following is a summary of the material terms of the Merger Agreement
and is qualified in its entirety by reference to the full text of the Merger
Agreement filed with the Commission as an exhibit to Schedule TO and
incorporated herein by reference. The Merger Agreement may be examined, and
copies obtained, as described in Section 7 above.
General. The Merger Agreement provides for the commencement of the Offer,
upon the terms and subject to the conditions contained therein, and further
provides for the consummation of the Merger following the satisfaction or
waiver, if permitted by applicable law, of the conditions contained in the
Merger Agreement.
In the Merger Agreement, the Company confirmed that it had approved of and
consented to the Offer and represented that its Board had (i) unanimously
determined that the Merger Agreement, the Offer and the Merger are fair to and
in the best interests of the Stockholders, (ii) approved the Merger Agreement
and the Voting Agreements and the transactions contemplated thereby, including
the Offer and the Merger, in accordance with the Section 203 of the DGCL and
(iii) resolved (subject to the provision described in "No Solicitation of
Transactions" below) to recommend that the Stockholders accept the Offer, tender
their shares to the Purchaser pursuant to the Offer and approve and adopt the
Merger Agreement and the Merger. The Company also represented that its Board had
received the written opinion of Greif, dated the date of the Merger Agreement,
that, as of the date thereof, the cash consideration to be received by the
Stockholders pursuant to the Offer and Merger is fair from a financial point of
view to the Stockholders.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, (i) if the Offer is consummated, the
Company will cause the Merger to become effective in accordance with the DGCL,
and the Purchaser will be merged with the Company at the Effective Time, or (ii)
if the Offer is not consummated, the Company has agreed to call a meeting of the
stockholders to vote upon the adoption of the Merger Agreement and approval of
the Merger, and, upon such adoption and approval, the Purchaser will be merged
with the Company at the Effective Time. Following the Merger, the separate
corporate existences of the Purchaser and the Company will cease and the
Surviving Corporation will
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succeed to and assume all the rights and obligations of the Purchaser and the
Company in accordance with the DGCL.
At the Effective Time, each Share outstanding immediately prior to the
Effective Time (other than those held by the Company as treasury stock or owned
by the Parent or any of its subsidiaries immediately prior to the Effective
Time, all of which will be cancelled, and dissenting Shares, if any) will, by
virtue of the Merger, be converted into the right to receive $29.00 in cash (the
"MERGER CONSIDERATION") payable without interest to the holder thereof upon
surrender of the certificates representing such Shares.
Subject to the terms and conditions in the Merger Agreement, (a) if
approval of the Stockholders is required under the DGCL, a Certificate of Merger
shall be duly filed with the Secretary of State of the State of Delaware as soon
as practicable after obtaining such Stockholder approval, or (b) if such
Stockholder approval is not required to be obtained in order to consummate the
Merger, a Certificate of Ownership and Merger shall be duly filed with the
Secretary of State of the State of Delaware as soon as practicable after the
satisfaction or, if permissible and effected as provided in the Merger
Agreement, waiver of the conditions to the Merger. If the Purchaser is the owner
of at least 90% of the outstanding shares of each class of stock following the
Offer or otherwise, the Merger will be consummated without a meeting or vote of
Stockholders in accordance with the "short-form" merger provisions of Section
253 of the DGCL.
Stock Options and Warrants. The Merger Agreement provides that, at the
Effective Time, each option to purchase Shares outstanding under the Company's
option plans, whether or not vested or exercisable, will be canceled, and the
former holder shall have the right to receive from the Company during the 10-day
period following the consummation of the Merger an amount in cash equal to (i)
the excess, if any, of the Merger Consideration applicable to the number of
Shares subject to such option over (ii) the aggregate exercise price of such
option, less any income or employment tax withholding required under the Code or
any provision of state or local law. The Merger Agreement also provides that, at
the Effective Time, each warrant outstanding immediately prior to the Effective
Time shall be converted into the right to receive an amount in cash equal to (i)
the excess, if any, of the Merger Consideration applicable to the number of
Shares subject to such warrant over (ii) the aggregate exercise price of such
warrant.
Employee Benefits. Except as otherwise contemplated by the Merger
Agreement, for a period of 18 months following the Effective Time, the Surviving
Corporation will maintain employee benefit plans and arrangements that, in the
aggregate, will provide a similar level of benefits to active and retired
employees of the Company and its subsidiaries to those provided under the
Company's employee benefit plans and arrangements as in effect immediately prior
to the Effective Time; provided, however, that changes may be made to such
employee benefit plans and arrangements to the extent necessary to comply with
applicable law. From and after the Effective Time, the Surviving Corporation
will honor the Company's benefit plans and all existing employment and severance
agreements and severance plans that apply to current or former employees or
directors of the Company or its subsidiaries.
Amendments and Waivers. Any provision of the Merger Agreement may be
amended by mutual agreement of the parties prior to the Effective Time;
provided, however, that, after the approval of the Merger Agreement by the
Stockholders, no amendment may be made that would reduce the amount or change
the type of consideration into which each Share will be converted upon
consummation of the Merger. At any time prior to the Effective Time, any party
to the Merger Agreement may (i) extend the time for the performance of any
obligation or other act of any party, (ii) waive any inaccuracy in the
representations and warranties in the Merger Agreement or in any document
delivered pursuant to the Merger Agreement and (iii) waive compliance with any
agreement or condition contained in the Merger Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties to the Merger Agreement,
including (i) representations and warranties by the Company as to corporate
existence and power, authority relative to the Merger Agreement and the
transactions contemplated thereby, capitalization, required filings, financial
statements, absence of certain changes or events, employee benefit plans, labor
matters, material contracts, litigation, environmental matters, intellectual
property, taxes, insurance and brokers, and (ii) representations and warranties
by VS&A-DTN
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(with respect to itself and the Purchaser) as to corporate existence and power,
authority relative to the Merger Agreement and the transactions contemplated
thereby, consents, litigation, brokers and financing.
Conduct of Business Until the Merger. The Merger Agreement provides that
between the date of the Merger Agreement and the Effective Time, except as
otherwise contemplated in the Merger Agreement or the disclosure schedules
thereto, unless VS&A-DTN otherwise agrees in writing, which agreement will not
be unreasonably withheld or delayed: (1) the Company will conduct the businesses
of the Company and its subsidiaries only in, and the Company and its
subsidiaries will not take any action except in, the ordinary course of business
consistent with past practice; and (2) the Company will use its reasonable best
efforts to keep available the services of the current officers, significant
employees and consultants of the Company and its subsidiaries and to preserve
the current relationships of the Company and its subsidiaries with its
customers, suppliers and other persons with which the Company or any of its
subsidiaries has significant business relationships in order to preserve
substantially intact its business organization. The Merger Agreement also
provides that the Company will not, and will not cause or permit any of its
subsidiaries or affiliates (over which it exercises control), or any of its or
their officers, directors, employees and agents (in each case, in their
capacities as such) to, between the date of the Merger Agreement and the
Effective Time, directly or indirectly, do, or agree to do, any of the
following, without the prior written consent of VS&A-DTN, which consent will not
be unreasonably withheld or delayed (except that, with respect to the matters
referred to in clause (e)(i) below, VS&A-DTN will have the right to withhold its
consent in its sole discretion):
(a) amend or otherwise change its certificate of incorporation or
bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
guarantee, encumber, or authorize the issuance, sale, pledge, disposition,
grant, transfer, lease, license, guarantee or encumbrance of, (i) any
shares of capital stock of the Company or any of its subsidiaries, or
securities convertible or exchangeable or exercisable for any shares of
such capital stock, or any options, warrants or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
of the Company or any of its subsidiaries (except for the issuance of any
shares of capital stock issuable pursuant to the exercise of any options or
warrants outstanding on the date of the Merger Agreement); or (ii) any
property or assets of the Company or any of its subsidiaries, except in all
cases in the ordinary course of business and in a manner consistent with
past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, other than dividends paid by any of the
Company's wholly owned subsidiaries to the Company;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including by merger, consolidation or acquisition of
stock or assets) any interest in any corporation, partnership, other
business organization, person or any division thereof or any assets, other
than acquisitions of assets in the ordinary course of business consistent
with past practice and any other acquisitions for consideration that are
not, in the aggregate, in excess of $1 million; (ii) incur any indebtedness
for borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any person for borrowed money, except for indebtedness for
borrowed money incurred in the ordinary course of business and consistent
with past practice or incurred to refinance outstanding indebtedness for
borrowed money existing on the date of the Merger Agreement; (iii)
terminate, cancel or request any material change in, or agree to any
material change in any material contract of the Company or enter into any
contract or agreement material to the business, results of operations or
financial condition of the Company and its subsidiaries taken as a whole,
in either case other than in the ordinary course of business, consistent
with past practice; or (iv) make or authorize any capital expenditure, or
take any other related actions, that would be reasonably likely to cause
the Company to exceed its 2000 capital expenditures budget, in the
aggregate, by more than $50,000;
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(f) except as otherwise permitted by the Merger Agreement, increase
the compensation payable or to become payable to its officers or employees,
except for increases in accordance with past practices in salaries or wages
of employees of the Company or any of its subsidiaries who are not officers
of the Company, or grant any rights to severance or termination pay to, or
enter into any employment or severance agreement with, any director,
officer or other employee of the Company or any of its subsidiaries, or
establish, adopt, enter into or amend any collective bargaining or benefit
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except as contemplated by the Merger
Agreement or to the extent required by applicable law or the terms of a
collective bargaining agreement or a contractual obligation existing on the
date hereof; provided, however, that the Company may grant options,
restricted shares, performance units or other long-term incentive awards to
new hires in the ordinary course of business consistent with past practice;
(g) take any action with respect to modifying accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice and as advised by the Company's regular
independent accountants;
(h) waive, release, assign, settle or compromise any material claims
or litigation involving money damages in excess of $100,000, except for
claims asserted by the Company or any of its subsidiaries;
(i) make any material tax election or settle or compromise any
material federal, state, local or foreign income tax liability, other than
in the ordinary course of business and consistent with past practice;
(j) take any action that will likely result in the representations and
warranties of the Company set forth in the Merger Agreement becoming false
or inaccurate in any material respect;
(k) enter into or carry out any other transaction other than in the
ordinary course of business or other than as permitted by the Merger
Agreement; or
(l) permit or cause any Subsidiary to do any of the foregoing or agree
or commit to do any of the foregoing.
No Solicitation of Transactions. The Merger Agreement provides that, until
the earlier of the Effective Time or the termination of the Merger Agreement,
neither the Company nor any of its subsidiaries, nor any of their respective
representatives, will, except as contemplated by the Merger Agreement, directly
or indirectly, initiate, solicit or encourage any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its significant
subsidiaries, or any purchase or sale of all or any significant portion of the
assets of the Company or any of its significant subsidiaries, or 15% or more of
the equity securities of the Company (any such proposal or offer being
hereinafter referred to as a "COMPETING TRANSACTION").
The Merger Agreement also provides that neither the Company nor any of its
subsidiaries, nor any of their respective representatives, will, directly or
indirectly, have any discussion with or provide any confidential information or
data relating to Company or any of its subsidiaries to any person relating to a
Competing Transaction or engage in any negotiations concerning a Competing
Transaction, or otherwise facilitate any effort or attempt to make or implement
a Competing Transaction or accept or enter into any agreement in connection
with, a Competing Transaction; provided, however, that nothing will prevent the
Company or the Board from (i) engaging in any discussions or negotiations with,
or providing any information to, any person in response to an unsolicited
written Competing Transaction by any such person; or (ii) recommending such an
unsolicited written Competing Transaction to the Stockholders if, in any such
case as is referred to in clause (i) or (ii), (A) the Board concludes in good
faith (after consultation with independent financial advisors) that such
Competing Transaction is reasonably likely to be consummated, taking into
account all legal, financial and regulatory aspects of the proposal and the
person making the proposal (including the financial capability of that person
and any conditions contained in the proposal), and that such Competing
Transaction would, if consummated, result in a transaction more favorable to the
Stockholders than the Merger and the Offer (any such more favorable Competing
Transaction being referred to in the Merger
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<PAGE> 25
Agreement as a "SUPERIOR PROPOSAL"), (B) the Board determines in good faith
after consultation with independent legal counsel that the failure to take such
action would be reasonably likely to constitute a breach of its fiduciary duties
under applicable law, (C) prior to providing any information or data regarding
the Company to any person or any of such person's representatives in connection
with a Superior Proposal by such person, the Company receives from such person
an executed confidentiality agreement with terms substantially the same as those
contained in the Confidentiality Agreement dated July 8, 1999, between the
Parent and Greif & Co. (on behalf of the Company) (the "CONFIDENTIALITY
AGREEMENT") and (D) prior to providing any information or data to any person or
any of such person's representatives or entering into discussions or
negotiations with any person or any of such person's representatives in
connection with a Superior Proposal by such person, the Company notifies the
Parent promptly of the receipt of such Superior Proposal, indicating, in
connection with such notice, the name of such person and attaching a copy of the
proposal or offer or providing a complete written summary thereof. The Merger
Agreement provides that the Company will keep VS&A-DTN informed, on a current
basis, of the status and terms of any discussions or negotiations related to
each Superior Proposal.
Conditions of the Merger. The obligations of the Company, VS&A-DTN and the
Purchaser to consummate the Merger are subject to the satisfaction (or waiver by
the party for whose benefit the applicable condition exists) of the following
conditions: (a) if the Minimum Condition has not been satisfied, the Merger
Agreement and the transactions contemplated thereby shall have been approved and
adopted by the affirmative vote of the stockholders of the Company in accordance
with the DGCL; (b) no preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by the Merger
Agreement shall be in effect and no law shall have been enacted or adopted that
enjoins, prohibits or makes illegal consummation of the transactions
contemplated by the Merger Agreement; (c) any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated; and (d) all consents, approvals, waivers and
authorizations required to be obtained to effect the Merger shall have been
obtained, except where the failure to obtain such consents, approvals and
authorizations would not result in a material adverse effect.
Termination of the Merger Agreement. The Merger Agreement may be
terminated at any time prior to the Effective Time, notwithstanding any approval
and adoption of the Merger Agreement as follows:
(a) by mutual written consent of the Company and VS&A-DTN;
(b) by either VS&A-DTN or the Company:
(i) if any governmental entity shall have issued an order, decree
or ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use reasonable efforts to lift),
which permanently restrains, enjoins or otherwise prohibits the
acceptance for payment of, or payment for, Shares pursuant to the Offer
or the Merger and such order, decree, ruling or other action shall have
become final and non-appealable;
(ii) if the Minimum Condition shall not have been satisfied and
the Merger shall fail to receive the requisite vote for approval and
adoption by the Stockholders; or
(iii) if the Merger shall not have been consummated before August
31, 2000, unless the terminating party's failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted
in, the failure to consummate the Merger before that date;
(c) by the Company:
(i) in connection with entering into a definitive agreement with
respect to a Superior Proposal, provided it has complied with all
provisions of the Merger Agreement; or
(ii) if VS&A-DTN or the Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach cannot be or has not been cured within 30 days after the giving
of written notice by the Company to VS&A-DTN or the Purchaser, as
applicable;
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(d) by VS&A-DTN:
(i) if the Company shall have breached in any material respect any
of its representations, warranties, covenants or other agreements
contained in the Merger Agreement, which breach cannot be or has not
been cured within 30 days after the giving of written notice by VS&A-DTN
to the Company; or
(ii) if the number of dissenting Shares as of the date of notice
of termination shall exceed 7.5% of the outstanding Shares.
In the event the Merger Agreement is terminated by either the Company or
VS&A-DTN, the Merger Agreement will become void and have no effect, and there
will be no liability or obligation on the part of VS&A-DTN, the Purchaser or the
Company, except with respect to certain specified provisions (including the
provisions described below under "Fees and Expenses") and except to the extent
that such termination results from the breach by a party to the Merger
Agreement.
Fees and Expenses. The Company has agreed to pay VS&A-DTN a termination
fee equal to $10 million plus the amount of reasonable out-of-pocket legal,
accounting and other costs incurred by VS&A-DTN or the Parent (excluding any
investment banking fee paid to Veronis, Suhler & Associates, LLC), if at any
time prior to payment for the Shares tendered in response to the Offer or, if
the Minimum Condition is not satisfied, at any time prior to consummation of the
Merger, the Company receives a proposal with respect to a Competing Transaction
and terminates the Merger Agreement in connection with entering into a
definitive agreement with respect to a Superior Proposal in accordance with
terms of the Merger Agreement. Such payment will be made promptly upon demand,
but only if prior to or on the date of termination or within six months
thereafter the Company enters into an agreement (including, but not limited to,
a letter of intent or similar instrument) with a party other than the Parent or
any of its affiliates relating to a Competing Transaction or makes any public
announcement in support of any such transaction, and such transaction is
consummated within 12 months after the termination of the Merger Agreement.
Except as described above, the Merger Agreement generally provides that
each party will pay its own fees and expenses incurred in connection with the
Merger Agreement and the transactions contemplated thereby.
Indemnification and Insurance.
The Merger Agreement provides that the certificate of incorporation and
bylaws of the Surviving Corporation will contain the provisions regarding
liability of directors and indemnification of directors and officers that are
set forth, as of the date of the Merger Agreement, in the certificate of
incorporation and the bylaws, respectively, of the Company, which provisions
will not be amended, repealed or otherwise modified for a period of six years
from the Effective Time.
The Merger Agreement also provides that, for a period of six years after
the Effective Time, the Surviving Corporation shall use all reasonable efforts
to cause to be maintained in effect policies of directors' and officers'
liability insurance with coverage in amount and scope at least as favorable as
the Company's existing policies with respect to claims arising from facts or
events that occurred prior to the Effective Time; provided, however, that during
such period the Surviving Corporation will in no event be required to expend
more than an amount per year equal to 200% of current premiums paid by the
Company for such insurance.
In the Merger Agreement, VS&A-DTN has agreed to cause the Surviving
Corporation to indemnify and hold harmless from and after the Effective Time
each present and former director and officer of the Company and any of its
subsidiaries against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing on or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent that the Company or any its subsidiaries would have been permitted under
law and under its certificate of incorporation or bylaws.
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Voting Agreements
As an inducement to the Parent and the Purchaser to enter into the Merger
Agreement with the Company, each of Peter H. Kamin (individually and on behalf
of Peak Management, Inc. and Peak Investment Limited Partnership), Anthony S.
Jacobs, Weitz Series Fund, Inc. -- Value Fund, Weitz Series Fund,
Inc. -- Hickory Fund, Weitz Partners III Limited Partnership, Weitz Partners,
Inc. -- Partners Value Fund, Roger Brodersen, Acorn Investment Trust, Wanger
Asset Management, L.P., Wanger Advisors Trust, and DTN 401(k) Plan (First
National Bank of Omaha), who in the aggregate own approximately 50.1% of the
Shares (approximately 44.1%, after the exercise of all outstanding options and
warrants), has entered into voting agreements with the Parent (collectively, the
"VOTING AGREEMENTS").
Pursuant to the Voting Agreements, each of the stockholders party to the
Voting Agreements has agreed either to tender his or its shares in response to
the Offer, or to vote his or its shares in favor of the Merger and the Merger
Agreement (or, if not all of his or its Shares are purchased in the Offer, to
vote the remaining shares in favor of the Merger and the Merger Agreement). Each
stockholder also agreed not to tender any of his or its Shares in response to a
tender offer by any third party or to take any action that is inconsistent with
or that would limit or interfere with his or its obligations under the Voting
Agreements. The Voting Agreements terminate upon the termination of the Merger
Agreement.
The Voting Agreements are filed with the Commission as exhibits to Schedule
TO and incorporated herein by reference. The Voting Agreements may be examined
and copies obtained, as set forth in Section 7 of this Offer to Purchase.
Management Incentive Program
In the Merger Agreement, VS&A-DTN has agreed to provide an equity incentive
program that, subject to certain conditions, will provide the Company's senior
management team with up to 12.5% of the incremental equity profit earned on
VS&A-DTN's investment in the Company, after the return of capital to the
investors in VS&A-DTN. It is anticipated that this equity incentive will be
provided to the key members of senior management and allocated among them by
VS&A-DTN, after consultation with the Company's president. Under the
arrangement, 50% of the incentive interest will vest ratably over five years,
but will vest in full upon an earlier change in control; and the remaining 50%
will be payable upon a change of control, with management's entitlement based
upon a sliding scale based upon VS&A-DTN's realized internal rate of return
("IRR") after taking account of the payments under the program; the scale will
be a ratable sliding scale in which no incentive payment with respect to this
50% is made if the IRR is less than 20% and the full amount will be payable with
respect to this 50% if the IRR is 40% or higher.
In the Merger Agreement, VS&A-DTN also has agreed to an arrangement under
which certain key officers and employees of the Company (the "PARTICIPANTS")
will receive an aggregate of 15% of the excess of (i) the proceeds the Company
receives from the sale of the 303,000 shares of common stock of SmartServ
Online, Inc. (the "SMARTSERV STOCK") received upon exercise of warrants the
Company presently owns to purchase the SmartServ Stock over (ii) the aggregate
exercise price paid by the Company for the shares of SmartServ Stock (the "CASH
BONUSES"). The Cash Bonuses will be paid to the Participants from time to time
promptly after the proceeds of each sale of the SmartServ Stock is received by
the Company; provided, however, no Cash Bonuses will be paid until December 1,
2000. VS&A-DTN will, after consultation with the Company's president, determine
which officers and employees of the Company will be the Participants and the
percentage of the Cash Bonuses to which each Participant will be entitled. A
Participant will not be entitled to receive any Cash Bonuses after the voluntary
termination of employment of such Participant with the Company, other than as a
result of death or disability. In the event of a Participant's voluntary
termination of his or her employment with the Company, the remaining
Participants will receive proportionately the remaining Cash Bonuses the
Participant who voluntarily terminated employment would otherwise have received.
In the event the Company has not sold all the shares of SmartServ Stock by
February 16, 2002, after such date the Participants may elect to have the
Company distribute to each Participant that portion of the remaining shares of
SmartServ Stock then held by the Company that represents each Participant's
percentage
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of the Cash Bonuses multiplied by 15%, in lieu of such Participant's interest in
future Cash Bonuses based upon the remaining shares of SmartServ Stock.
Employment Agreements
At the Effective Time, it is expected that the Surviving Corporation would
enter into an employment agreement with Greg Sloma, under which Mr. Sloma would
serve as president and chief executive officer for a period of five years,
subject to earlier termination, with a salary of $225,000 per year and annual
bonuses.
In addition, Mr. Sloma and other members of management of the Surviving
Corporation would be granted membership interests in VS&A-DTN as "MANAGEMENT
MEMBERS" of VS&A-DTN. Mr. Sloma's interest as a Management Member would entitle
him, subject to certain conditions, to an amount equal to 2.25% (out of an
aggregate of up to 12.5% allocated to all Management Members) of all
distributions made by VS&A-DTN after VS&A-DTN's members who have provided
capital contributions to VS&A-DTN (the "INVESTOR MEMBERS") have received
distributions equal to their capital contributions to VS&A-DTN ("POST-RETURN
DISTRIBUTIONS"). Fifty percent of Mr. Sloma's interest as a Management Member
would vest ratably over five years, but would vest in full upon an earlier
change in control; and the remaining 50% would be payable upon a change of
control, with Mr. Sloma's entitlement based upon VS&A-DTN's realized IRR.
Mr. Sloma also would be entitled to receive an amount equal to 1.125% of
all Post-Return Distributions, regardless of VS&A-DTN's IRR. In addition, upon a
change in control, Mr. Sloma would be entitled to an additional 1.125% of all
Post Return Distributions, if the Investor Members realized an IRR of 40% or
more; if the Investor Members realized an IRR of less than 40% but more than
20%, Mr. Sloma would be entitled to an additional share of Post-Return
Distributions in an amount determined by multiplying 1.125% of all Post-Return
Distributions by a fraction, of which the numerator is the number of percentage
points by which the IRR exceeds 20% and the denominator of which is 20.
Mr. Sloma's entitlement as a Management Member to receive a portion of the
Post-Return Distributions would be subject to adjustment in certain
circumstances, including termination of employment.
At the Effective Time, it is expected that the Surviving Corporation also
would enter into employment agreements with certain other executive officers.
Rollover of Options
It is expected that, in consideration for the surrender by certain
executive officers of the Company of a portion of their options to purchase
Shares, the Parent would grant such executive officers interests in VS&A-DTN
equivalent to the interests the executive officers would have acquired if they
had made cash contributions to VS&A-DTN equal to the cash they otherwise would
have received in connection with the cancellation of such options pursuant to
the Merger Agreement. Mr. Sloma's interest is expected to be equivalent to a
cash contribution of $500,000. The amount of the interests of the other
executive officers has not yet been determined. However, the aggregate interests
to be granted to all the executive officers of the Company, including Mr. Sloma,
in connection with the surrender of options is not expected to exceed 1% of all
of the interests in VS&A-DTN.
OTHER MATTERS
Statutory Requirements. In general, under the DGCL, a merger of two
Delaware corporations requires the adoption of a resolution by the board of
directors of each of the corporations desiring to merge approving an agreement
of merger containing provisions with respect to certain statutorily specified
areas and the approval of such agreement of merger by the stockholders of each
corporation by the affirmative vote of the holders of a majority of all of the
outstanding shares of stock entitled to vote on such matter. Assuming that the
Minimum Condition is satisfied, upon consummation of the Offer, the Purchaser
would own sufficient Shares to enable it to satisfy the stockholder approval
requirement to approve the Merger, without the necessity of submitting it to the
other stockholders for their approval. The Purchaser intends to seek to
consummate the Merger with the Company as promptly as practicable after
consummation of the Offer.
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Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, the Stockholders would have
certain rights under Section 262 of the DGCL to dissent and demand appraisal of,
and payment in cash of the fair value of, their Shares. Such rights, if the
statutory procedures were complied with, could lead to a judicial determination
of the fair value (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial determination of the fair
value of Shares could be based upon considerations other than, or in addition
to, the price paid in the Offer and the market value of the Shares, including
asset values and the investment value of the Shares. The value so determined
could be more or less than the purchase price per Share pursuant to the Offer or
the consideration per Share to be paid in the Merger. The foregoing summary of
the rights of dissenting Stockholders under the DGCL does not purport to be a
complete statement of the procedures to be followed by Stockholders desiring to
exercise any available dissenters' rights. The preservation and exercise of
dissenters' rights require strict adherence to the applicable provisions of the
DGCL.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act, which is applicable to certain "going private" transactions,
and which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the proposed transaction and the
consideration offered to minority stockholders in such transaction be filed with
the Commission and disclosed to stockholders prior to the consummation of the
transaction. However, Rule 13e-3 should be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Merger or other business
combination or (ii) the Merger or other business combination is consummated
within one year after the purchase of the Shares pursuant to the Offer and the
amount paid per Share in the Merger or other business combination is at least
equal to the amount paid per Share in the Offer.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY. The
purpose of the Offer and the Merger is to enable VS&A-DTN to acquire control of,
and the entire equity interest in, the Company. The Offer is intended to
increase the likelihood that the Merger will be effected promptly. The purpose
of the Merger is to acquire all outstanding Shares not acquired pursuant to the
Offer or otherwise.
Upon completion of the Offer and the Merger, the Parent intends to conduct
a detailed review of the Company and its assets, corporate structure,
capitalization, operations, policies, management and personnel. After such
review, the Parent will determine what actions or changes, if any, would be
desirable in light of the circumstances that then exist.
From time to time, both during and after the Offer the Parent intends to
sell interests in VS&A-DTN to the Co-Investors. In addition, it is expected
that, in consideration for the surrender by certain executive officers of the
Company of a portion of their options to purchase Shares, the Parent would grant
such executive officers interests in VS&A-DTN equivalent to the interests the
executive officers would have acquired if they had made cash contributions to
VS&A-DTN equal to the cash they otherwise would have received in connection with
the cancellation of such options pursuant to the Merger Agreement.
Except as noted in this Offer to Purchase, the Parent, VS&A-DTN and the
Purchaser have no present plans or proposals that would result in (i) an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, or sale or transfer of assets, involving the Company or any of its
subsidiaries or any other material changes in the Company's capitalization,
dividend policy, corporate structure or business, (ii) a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries, (iii) any
change in the Board or management of the Company, (iv) any material change in
the Company's capitalization or dividend policy, (v) any other material change
in the Company's corporate structure or business, (vi) a class of securities of
the Company being delisted from a national securities exchange or ceasing to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, and or (vii) a class of equity securities of
the Company being eligible for termination of registration pursuant to Section
12(g) of the Exchange Act.
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<PAGE> 30
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares.
Nasdaq Quotation. The Shares are traded through Nasdaq. Depending upon the
number of Shares purchased pursuant to the Offer, the Shares may no longer meet
the requirements of Nasdaq for continued inclusion on Nasdaq. Nasdaq requires
that an issuer either (i) have at least 750,000 publicly held shares (exclusive
of holdings of officers, directors or any other person who is the beneficial
owner of more than 10% of the total Shares outstanding), held by at least 400
shareholders, with a market value of at least $5,000,000, net tangible assets
(total assets (excluding goodwill) minus total liabilities) of at least $4
million and have a minimum bid price of $1 per share or (ii) have at least
1,100,000 publicly held shares, held by at least 400 shareholders, with a market
value of at least $15,000,000, have a minimum bid price of $5 per share and have
either (A) a market capitalization of at least $50,000,000 or (B) total assets
and revenues each of at least $50,000,000. If Nasdaq were to cease to publish
quotations for the Shares, it is possible that the Shares would qualify for
listing on the Nasdaq SmallCap Market or that they would continue to trade in
the over-the-counter market and that price or other quotations would be reported
by other sources. The extent of the public market for such Shares and the
availability of such quotations would depend, however, upon such factors as the
number of Stockholders and/or the aggregate market value of the Shares remaining
at such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in the
Shares becoming eligible for deregistration under the Exchange Act. Registration
of the Shares may be terminated upon application by the Company to the
Commission if the Shares are not listed on a "national securities exchange" and
there are fewer than 300 record holders of Shares. Termination of registration
of the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its Stockholders and the Commission
and would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirements of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a), no longer applicable to the Company. If the Shares are no longer
registered under the Exchange Act, the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions would no longer be
applicable to the Company. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose of
such securities pursuant to Rule 144 promulgated under the Securities Act of
1933 may be impaired or eliminated. If, as a result of the purchase of Shares
pursuant to the Offer or the Merger, the Company is no longer required to
maintain registration of the Shares under the Exchange Act, the Purchaser
intends to cause the Company to apply for termination of such registration.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"FEDERAL RESERVE BOARD"), which have the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying or trading in securities ("PURPOSE LOANS"). Depending upon
factors such as the number of record holders of the Shares and the number and
market value of publicly held Shares, following the purchase of Shares pursuant
to the Offer, the Shares might no longer constitute "margin securities" for
purposes of the Federal Reserve Board's margin regulations and, therefore, could
no longer be used as collateral for Purpose Loans made by brokers. In addition,
if registration of the Shares under the Exchange Act is terminated, the Shares
will no longer constitute "margin securities."
14. DIVIDENDS AND DISTRIBUTIONS. In the Merger Agreement, the Company has
agreed not to declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property), outstanding
shares of its capital stock, except for dividends by a wholly owned subsidiary
of the Company to the Company; or, subject to certain exceptions, to redeem,
purchase or otherwise acquire or offer, sell, issue or grant, any additional
Shares (other than issuances of Shares pursuant to the exercise of options
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<PAGE> 31
under the Option Plans), or any shares of any other class of capital stock, or
any securities convertible into or exchangeable for, or rights, warrants or
options, of any kind, to acquire, any capital stock.
If, on or after the date of the Merger Agreement, the Company declares or
pays any dividend on the Shares or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the Shares that is payable or
distributable to Stockholders of record on a date prior to the transfer into the
name of the Purchaser or its nominees or transferees on the Company's stock
transfer records of the Shares purchased pursuant to the Offer, and if Shares
are purchased in the Offer, then, without prejudice to the Purchaser's rights
under Section 14, (i) the purchase price per Share payable by the Purchaser
pursuant to the Offer shall be reduced by the amount of any such cash dividend
or cash distribution and (ii) any such non-cash dividend, distribution,
issuance, proceeds or right to be received by the tendering Stockholders shall
(a) be received and held by the tendering Stockholders for the account of the
Purchaser and will be required to be promptly remitted and transferred by each
tendering Stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer or (b) at the direction of
the Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to applicable law, the Purchaser will be entitled to
all rights and privileges as owner of any such non-cash dividend, distribution,
issuance, proceeds or right and may withhold the entire purchase price or deduct
from the purchase price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer or the Merger Agreement, the Purchaser shall not be required to
accept for payment, or subject to the applicable rules and regulations of the
Commission, including Rule 14e-1(c) of the Exchange Act, pay for and may delay
the acceptance for payment of, or subject to the applicable rules and
regulations of the Commission, including Rule 14e-1(c) of the Exchange Act, the
payment for, any tendered Shares and the Purchaser may terminate or amend the
Offer as to any Shares not then paid for, if (i) any applicable waiting period
under the HSR Act has not expired or terminated, (ii) the Minimum Condition has
not been satisfied or (iii) at any time on or after the date of the Merger
Agreement and, prior to the acceptance for payment of Shares or the payment
therefor, any of the following conditions has occurred and continues to occur:
(a) there shall be threatened or pending any suit, action or
proceeding by any governmental entity against the Purchaser, VS&A-DTN, the
Company or any of the Company's subsidiaries (i) seeking to prohibit or
impose any material limitations on the Parent's or the Purchaser's
ownership or operation (or that of any of their respective subsidiaries or
affiliates) of all or a material portion of their or the Company's
businesses or assets, or to compel VS&A-DTN or the Purchaser or their
respective subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of the Company or the Parent and
their respective subsidiaries, (ii) challenging the acquisition by VS&A-
DTN or the Purchaser of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Merger
Agreement or the Stockholder Agreements (including the voting provisions
thereunder), or seeking to obtain from the Company, VS&A-DTN or the
Purchaser any damages that are material in relation to the Company and its
subsidiaries taken as a whole, (iii) seeking to impose material limitations
on the ability of the Purchaser, or render the Purchaser unable, to accept
for payment, pay for or purchase some or all of the Shares pursuant to the
Offer and the Merger or (iv) which otherwise would have or be reasonably
likely to have a Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a government
entity, to the Offer or the Merger, or any other action shall be taken by
any governmental entity, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
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<PAGE> 32
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange
or on NASDAQ, for a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference with such
exchanges not related to market conditions), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (iii) a commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions or (v) in the
case of any of the foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any changes (or any developments that,
insofar as reasonably can be foreseen, are reasonable likely to result in
any changes) in the financial condition, business, results of operations or
prospects of the Company and its subsidiaries that individually or in the
aggregate would have or be reasonably likely to have a Material Adverse
Effect;
(e) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to VS&A-DTN or the
Purchaser its approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any Superior Proposal or (ii)
the Company shall have entered into any agreement with respect to any
Superior Proposal;
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct without such qualification and any such representations
and warranties that are not so qualified shall not be true and correct in
any respect (in each case (i) as of the date referred to in any
representation or warranty which addresses matters as of a particular date,
or (ii) as to all other representations and warranties, as of the date of
the Merger Agreement and as of the scheduled expiration of the Offer),
except to the extent all failures to be true and correct in the aggregate
would not have or be reasonably likely to have a Material Adverse Effect;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under the Merger Agreement; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of VS&A-DTN and the
Purchaser and may be waived by VS&A-DTN or the Purchaser, in whole or in part,
at any time and from time to time in the sole discretion of the Parent or the
Purchaser. The failure by VS&A-DTN or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right, and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time up to consummation of the transactions contemplated by the
Merger Agreement.
"Material Adverse Effect" is defined in the Merger Agreement as any change
in or effect on the business of the Company or any of its Significant
Subsidiaries that is, or insofar as can be reasonably foreseen would reasonably
be expected to be, materially adverse to the business, properties, prospects,
operations or condition (financial or otherwise) of the Company or any of its
Significant Subsidiaries, other than any change, effect, event or occurrence to
the extent arising from or relating to (i) the United States or the global
economy or securities markets in general, (ii) actions taken pursuant to the
obligations of the parties expressly set forth in the Merger Agreement or (iii)
changes in any laws.
"Significant Subsidiaries" is defined in the Merger Agreement as any
subsidiary of the Company that during the year ended December 31, 1999,
accounted for 3% or more of the consolidated revenue of the Company and its
subsidiaries.
16. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as
described in Section 15 or this Section 16, based on information provided by the
Company, none of the Company, the Parent, VS&A-DTN or the Purchaser is aware of
any license or regulatory permit that appears to be material to the business of
the
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<PAGE> 33
Company and its subsidiaries, taken as a whole, that might be adversely affected
by the acquisition of Shares by the Purchaser pursuant to the Offer, the Merger
or otherwise, or any approval or other action by any governmental,
administrative or regulatory agency or authority, domestic or foreign, that
would be required prior to the acquisition of Shares by the Purchaser pursuant
to the Offer, the Merger or otherwise. Should any such approval or other action
be required, the Purchaser and the Parent presently contemplate that such
approval or other action will be sought, except as described below under "State
Anti-takeover Statutes." While, except as otherwise described in this Offer to
Purchase, the Purchaser does not presently intend to delay the acceptance for
payment of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained without substantial conditions or
that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of, or other substantial
conditions complied with, in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could decline to accept for payment, or
pay for, any Shares tendered. See Section 14 for certain conditions to the
Offer, including conditions with respect to governmental actions.
Federal Reserve Board Regulations. Regulations G, U and X (the "MARGIN
REGULATIONS") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. Shares or other securities
that constitute margin stock will not directly or indirectly secure the
financing of the Offer. Accordingly, all financing of the Offer will be in full
compliance with the Margin Regulations.
State Anti-takeover Statutes. Section 203 of the DGCL, in general,
prohibits a Delaware corporation, such as the Company, from engaging in a
"Business Combination" (defined as a variety of transactions, including mergers)
with an "INTERESTED STOCKHOLDER" (defined generally as a person that is the
beneficial owner of 15% or more of the outstanding voting stock of the subject
corporation) for a period of three years following the date that such person
became an Interested Stockholder unless, prior to the date such person became an
Interested Stockholder, the board of directors of the corporation approved
either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder. In the Merger Agreement, the
Company has represented that, by virtue of the approval of the Company's Board,
the provisions of Section 203 of the DGCL are not applicable to the Merger, the
Merger Agreement or any of the transactions contemplated by the Merger
Agreement.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
officers or principal places of business in such states. In Edgar v. MITE Corp.,
the Supreme Court of the United States (the "SUPREME COURT") invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made certain corporate acquisitions more
difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana may, as a matter of corporate law
and, in particular, with respect to those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the State and were incorporated there.
The Parent and the Purchaser do not believe that the anti-takeover laws and
regulations of any state other than the State of Delaware will by their terms
apply to the Offer, and, except as described above with respect to Section 203
of the DGCL, neither the Parent nor the Purchaser has attempted to comply with
any state anti-takeover statute or regulations. The Purchaser reserves the right
to challenge the applicability or validity of any state law purportedly
applicable to the Offer and nothing in this Offer to Purchase or any action
taken in connection with the Offer is intended as a waiver of such right. If it
is asserted that any state anti-takeover
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statute is applicable to the Offer and an appropriate court does not determine
that it is inapplicable or invalid as applied to the Offer, the Purchaser might
be required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer or may be delayed in
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment, or pay for, any Shares tendered pursuant to the Offer. See
Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "ANTITRUST DIVISION") and the Federal Trade
Commission (the "FTC") and certain waiting period requirements have been
satisfied.
The Parent and the Company will file their Notification and Report Forms
with respect to the Offer under the HSR Act as soon as practicable after the
date of this Offer to Purchase. The waiting period under the HSR Act with
respect to the Offer will expire at 11:59 p.m., New York City time, on the
fifteenth day after filing, unless early termination of the waiting period is
granted. However, the Antitrust Division or the FTC may extend the waiting
period by requesting additional information or documentary material from the
Parent or the Company. If such a request is made, such waiting period will
expire at 11:59 p.m., New York City time, on the tenth day after substantial
compliance by the Parent with such request. The HSR Act authorizes only one
extension of the waiting period pursuant to a request for additional
information. Therefore, any waiting period may be further extended only with the
consent of the Parent. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. The relevant governmental agency may also seek to prevent
the consummation of the transaction as discussed below. The Purchaser will not
accept for payment Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 15.
The FTC and the Antitrust Division frequently scrutinize the legality under
the Antitrust Laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the Antitrust Laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of the Parent or its
subsidiaries. Private parties, as well as state governments, may also bring
legal action under the Antitrust Laws under certain circumstances. Based upon an
examination of information provided by the Company relating to the businesses in
which the Parent and the Company are engaged, the Parent and the Purchaser
believe that the acquisition of Shares by the Purchaser will not violate the
Antitrust Laws. Nevertheless, there can be no assurance that a challenge to the
Offer or other acquisition of Shares by the Purchaser on antitrust grounds will
not be made or, if such a challenge is made, of the result. See Section 15 for
certain conditions to the Offer, including conditions with respect to litigation
and certain governmental actions.
As used in this Offer to Purchase, "Antitrust Laws" mean and include the
Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal
Trade Commission Act, as amended, and all other federal and state statutes,
rules, regulations, orders, decrees, administrative and judicial doctrines, and
other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade.
17. CERTAIN FEES AND EXPENSES. D.F. King & Co., Inc. is acting as
Information Agent in connection with the Offer. D.F. King & Co., Inc. will
receive reasonable and customary compensation for its services relating to the
Offer and will be reimbursed for certain out-of-pocket expenses including
reasonable fees of attorneys and others.
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<PAGE> 35
First National Bank of Omaha has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in its
role as Depositary. The Depositary will receive customary compensation for its
services in connection with the Offer, will be reimbursed for its reasonable
out-of-pocket expenses and will be indemnified against certain liabilities and
expenses in connection therewith.
Except as described above, neither the Parent nor VS&A-DTN nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, upon
request, reimburse brokers, dealers, commercial banks and trust companies and
other nominees for customary clerical and mailing expenses incurred by them in
forwarding materials to their customers.
18. MISCELLANEOUS. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares residing in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
However, the Purchaser may, in its sole discretion, take such action as it may
deem necessary to make the Offer in any jurisdiction and extend the Offer to
holders of Shares in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
The Purchaser has filed with the Commission the Schedule TO, together with
exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, and may file amendments thereto. Such Schedule TO and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the office of the Commission in the same manner as described in
Section 7 with respect to information concerning the Company.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, any such
information or representation must not be relied upon as having been authorized.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to the
Offer shall, under any circumstances, create any implication that there has been
no change in the affairs of the Purchaser or the Company since the date as of
which information is furnished or the date of this Offer to Purchase.
DTN ACQUISITION CORPORATION
March 17, 2000
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER, THE PARENT, VS&A-DTN
AND CERTAIN ENTITIES WHICH DIRECTLY OR INDIRECTLY CONTROL THE PARENT
A. THE PURCHASER
Listed below are the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five years
of each director and executive officer of the Purchaser. The business address of
each such person is 350 Park Avenue, New York, New York 10022 and each such
person is a U.S. citizen.
<TABLE>
<S> <C>
Jeffrey T. Stevenson................. President and Director and President and Senior Managing
Member of VS&A Equities III, L.L.C. and President and Senior
Managing Member of VS&A Equities II, L.P.
S. Gerard Benford.................... Vice-President, Treasurer and Director and Managing Member
and Vice-President of VS&A Equities III, L.L.C. and Managing
Member and Vice President of VS&A Equities II, L.P.
Martin I. Visconti................... Vice President and Senior Vice President of Veronis, Suhler
& Associates Inc.
</TABLE>
B. THE PARENT AND VS&A-DTN
Currently, the sole member of VS&A-DTN is the Parent. VS&A-DTN does not
have any officers or directors.
The General Partner of the Parent is VS&A Equities III, L.L.C., a Delaware
limited liability company ("VS&A EQUITIES"). The Parent does not have any
officers or directors.
Set forth below are the name, present principal occupation or employment
and material occupations, positions, offices or employments for the past five
years of each managing member of VS&A Equities. The business address of each
such person is 350 Park Avenue, New York, New York 10022 and each such person is
a U.S. citizen.
<TABLE>
<S> <C>
John J. Veronis...................... Chairman and Co-Chief Executive Officer of Veronis, Suhler &
Associates Inc., an affiliate of VS&A Equities ("VS&A INC.")
John S. Suhler....................... President and Co-Chief Executive Officer of VS&A Inc.
Jeffrey T. Stevenson................. President and Senior Managing Member of VS&A Equities and
President and Senior Managing Member of VS&A Equities II,
L.P.
S. Gerard Benford.................... Managing Member and Vice-President of VS&A Equities and
Managing Member and Vice President of VS&A Equities II, L.P.
Martin I. Visconti................... Senior Vice President of VS&A Inc.
</TABLE>
<PAGE> 37
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses listed below:
The Depositary for the Offer is:
FIRST NATIONAL BANK OF OMAHA
By Mail, Overnight Delivery or
By Hand:
First National Bank of Omaha
Attn: Kellie Roanne
1620 Dodge Street
Omaha, NE 68102
By Facsimile Transmission:
(for Eligible Institutions Only)
(402) 341-6556
Confirm Facsimile By Telephone:
(402) 633-3465
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 WATER STREET, 20TH FLOOR
NEW YORK, NEW YORK 10005-4495
BANKS AND BROKERAGE FIRMS PLEASE CALL: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 488-8075
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 17, 2000
OF
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY
OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST NATIONAL BANK OF OMAHA
By Mail, Overnight Delivery or By Hand:
First National Bank of Omaha
Attn: Kellie Roane
1620 Dodge St.
Omaha, Nebraska 68102
By Facsimile Transmission:
(For Eligible Institutions Only)
(402) 341-6556
Confirm Facsimile By Telephone:
(402) 633-3465
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SPECIFIED ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS SPECIFIED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Data
Transmission Network Corporation, if certificates for Shares (as such term is
defined below) are to be forwarded herewith or, unless an Agent's Message (as
defined in Instruction 2 below) is utilized, if delivery of Shares is to be made
by book-entry transfer to an account maintained by the Depositary at the
Book-Entry Transfer Facility (as defined in and pursuant to the procedures
described in the Offer to Purchase). Stockholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders who deliver shares are referred to herein as "Certificate
Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures described in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
[ ] CHECK HERE, IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
Account Number:
Transaction Code Number:
[ ] CHECK HERE, IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Shareholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by Share certificates delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS CONTAINED
IN THIS LETTER OF TRANSMITTAL CAREFULLY.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to DTN Acquisition Corporation, a Delaware
corporation (the "PURCHASER") and a wholly-owned subsidiary of VS&A-DTN, LLC, a
Delaware limited liability company ("VS&A-DTN"), the above-described shares of
common stock, par value $0.001 per share (the "SHARES"), of Data Transmission
Network Corporation, a Delaware corporation (the "COMPANY"), pursuant to the
Purchaser's offer to purchase all Shares at a price of $29.00 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions contained in the Offer to Purchase, dated March 17, 2000, and in this
Letter of Transmittal (which, together with any amendments or supplements
thereto or hereto, collectively constitute the "OFFER"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole at any time, or in part from time to time, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer. Receipt of the Offer is hereby
acknowledged.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of March 3, 2000 (the "MERGER AGREEMENT"), among the Purchaser, VS&A-DTN,
VS&A Communications Partners III, L.P. and the Company.
Upon the terms and subject to the conditions of the Offer, subject to, and
effective upon, acceptance for payment of, and payment for, the Shares tendered
herewith in accordance with the terms of the Offer, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Purchaser all right,
title and interest in and to, and any and all claims in respect of or arising or
having arisen as a result of the undersigned's status as a holder of, all the
Shares that are being tendered hereby (and any and all non-cash dividends,
distributions, rights, other Shares or other securities issued or issuable in
respect thereof on or after March 17, 2000 (collectively, "DISTRIBUTIONS") and
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares (and all
Distributions), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
certificates for such Shares (and any and all Distributions), or transfer
ownership of such Shares (and any and all Distributions) on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
the Purchaser, (ii) present such Shares (and any and all Distributions) for
transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares (and any
and all Distributions), all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Jeffrey T. Stevenson and S. Gerard Benford in their respective
capacities as officers of the Purchaser, and any other designee of the
Purchaser, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote at any annual or
special meeting of the Company's stockholders or any adjournment or postponement
thereof or otherwise in such manner as each such attorney-in-fact and proxy or
his substitute shall in his sole discretion deem proper with respect to, to
execute any written consent concerning any matter as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, and otherwise to act as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, all of the
Shares (and any and all Distributions) tendered hereby and accepted for payment
by the Purchaser. This appointment will be effective if and when, and only to
the extent that, the Purchaser accepts such Shares for payment pursuant to the
Offer. This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer. Such acceptance for payment shall, without further
action, revoke any prior powers of attorney and proxies granted by the
undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if given,
will not be deemed effective). The Purchaser reserves the right to require that,
in order for Shares or other securities to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting, consent and other rights with
respect to such Shares (and any and all Distributions), including voting at any
meeting of the Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned owns the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the
3
<PAGE> 4
"EXCHANGE ACT"), that the tender of the tendered Shares complies with Rule 14e-4
under the Exchange Act, and that when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restrictions,
charges and encumbrances and the same will not be subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of the Purchaser all Distributions in respect of
the Shares tendered hereby, accompanied by appropriate documentation of
transfer, and, pending such remittance and transfer or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of each such Distribution and may withhold the entire purchase price of the
Shares tendered hereby or deduct from such purchase price the amount or value of
such Distribution as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer (and
if the Offer is extended or amended, the terms or conditions of any such
extension or amendment). Without limiting the foregoing, if the price to be paid
in the Offer is amended in accordance with the terms of the Merger Agreement,
the price to be paid to the undersigned will be the amended price,
notwithstanding the fact that a different price is stated in this Letter of
Transmittal. The undersigned recognizes that, under certain circumstances
described in the Offer to Purchase, the Purchaser may not be required to accept
for payment any of the Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased and/or return any certificates for Shares not tendered or accepted for
payment in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the purchase price of
all Shares purchased and/or return any certificates for Shares not tendered or
not accepted for payment (and any accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing above under "Description of
Shares Tendered." In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and/or return any
certificates evidencing Shares not tendered or not accepted for payment (and any
accompanying documents, as appropriate) in the name(s) of, and deliver such
check and/or return any such certificates (and any accompanying documents, as
appropriate) to, the person(s) so indicated. Unless otherwise indicated herein
in the box entitled "Special Payment Instructions," please credit any Shares
tendered herewith by book-entry transfer that are not accepted for payment by
crediting the account at the Book-Entry Transfer Facility designated above. The
undersigned recognizes that the Purchaser has no obligation, pursuant to the
"Special Payment Instructions," to transfer any Shares from the name of the
registered holder thereof, if the Purchaser does not accept for payment any of
the Shares so tendered.
4
<PAGE> 5
[ ] CHECK HERE, IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN
HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, DESTROYED OR STOLEN CERTIFICATES:
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in the name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned
or if Shares tendered hereby and delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.
Issue check and/or certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE W-9)
Credit Shares delivered by book-entry transfer and not purchased to the
Book-Entry Transfer Facility account.
------------------------------------------------------------
(ACCOUNT NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown under
"Description of Shares Tendered."
Mail check and/or certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE W-9)
------------------------------------------------------------
5
<PAGE> 6
IMPORTANT -- SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- -------------------------------------------------------------------------------,
2000
(Must be signed by registered holder(s) as name(s) appear(s) on the Share
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustee, executor, administrator, guardian, attorney-in-fact,
officer of corporation or other person acting in a fiduciary or representative
capacity, please provide the following information and see Instruction 5.)
Name(s):------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm:
---------------------------------------------------------------------
Capacity (Full Title):
----------------------------------------------------------------
(SEE INSTRUCTION 5)
Address:
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-----------------------------------------------------
Taxpayer Identification or
Social Security Number:
-------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
----------------------------------------------------------------
Name(s):------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Title:
---------------------------------------------------------------------------
Name of Firm:
---------------------------------------------------------------------
Address:
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-----------------------------------------------------
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facility's systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has (have) completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "ELIGIBLE INSTITUTION"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of
the Company either if Share certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if delivery of Shares is to be made by
book-entry transfer pursuant to the procedures described herein and in Section 3
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (in connection with book-entry transfer) and
any other required documents, must be received by the Depositary at its address
described herein prior to the Expiration Date and either (i) certificates
representing tendered Shares must be received by the Depositary at one of such
addresses prior to the Expiration Date or (ii) Shares must be delivered pursuant
to the procedures for book-entry transfer described herein and in Section 3 of
the Offer to Purchase and a Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Date or (b) the tendering stockholder must
comply with the guaranteed delivery procedures described herein and in Section 3
of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-entry
transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure described herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser, must be received by the Depositary, as provided below, on or
prior to the Expiration Date and (iii) the certificates for all tendered Shares,
in proper form for transfer (or a Book-Entry Confirmation with respect to all
tendered Shares), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
documents required by this Letter of Transmittal must be received by the
Depositary within three trading days after the date of execution of such Notice
of Guaranteed Delivery. A "TRADING DAY" is any day on which the Nasdaq National
Market is open for business.
The term "AGENT'S MESSAGE" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING THE SHARES, THIS LETTER
OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. THE SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
7
<PAGE> 8
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled "Number of
Shares Tendered." In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution as described in Instruction 1 hereto.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the transfer
and sale of any Shares purchased by it or to its order pursuant to the Offer.
If, however, payment of the purchase price of any Shares purchased is to be made
to, or if certificates for Shares not tendered or not accepted for payment are
to be registered in the name of, any person other than the registered holder(s),
or if tendered certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such other
person) payable on account of the transfer to such other person will be deducted
from the purchase price of such Shares purchased, unless evidence satisfactory
to the Purchaser of the payment of such taxes, or exemption therefrom is
submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares accepted for payment is to be issued in the name of, and/or
Share certificates for Shares not accepted for payment or not tendered are to be
issued in the name of and/or returned to, a person other than the signer of this
Letter of Transmittal or if a check is to be sent, and/or such certificates are
to be returned, to a person other than the signer of this Letter of Transmittal,
or to an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed. Any stockholder(s) delivering Shares
by book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder(s)
may designate in the box entitled "Special
8
<PAGE> 9
Payment Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above as the account from which such Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address and phone number specified at
the end of this Letter of Transmittal.
9. WAIVER OF CONDITIONS. Subject to the Merger Agreement, the Purchaser
reserves the absolute right in its sole discretion to waive, at any time or from
time to time, any of the specified conditions of the Offer, in whole or in part,
in the case of any Shares tendered.
10. SUBSTITUTE FORM W-9. The stockholder is required to give the
Depositary his taxpayer identification number ("TIN") (i.e., social security
number or employer identification number) of the record owner of the Shares. If
the Shares are held in more than one name or are not in the name of the actual
owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, most corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has (have) been lost, destroyed or stolen, the stockholder
should check the box immediately preceding the special payment/special delivery
instructions, indicating the number of Shares lost and promptly notify the
transfer agent for the Shares, First National Bank of Omaha, attention: Kellie
Roane at 1620 Dodge St., Omaha, Nebraska 68102. The stockholder will then be
instructed by Registrar and Transfer Company as to the steps that must be taken
in order to replace the Share certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under the United States federal income tax laws, a stockholder whose
tendered Shares are accepted for payment is required to provide the Depositary
(as payer) with such stockholder's correct TIN on Substitute Form W-9 below. If
such stockholder is an individual, the TIN is such person's social security
number. The TIN of a resident alien who does not have and is not eligible to
obtain a social security number is such person's IRS individual taxpayer number.
If a tendering stockholder is subject to backup withholding, such stockholder
must cross out item (2) of Part 2 (the Certification box) on the Substitute Form
W-9. If the Depositary is not provided with the correct TIN, the stockholder may
be subject to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
In addition, payments that are made to such stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding.
9
<PAGE> 10
Certain stockholders (including, among others, most corporations, and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that stockholder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. Exempt stockholders, other than
foreign individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
income tax. Rather, the amount of the backup withholding can be credited against
the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding of federal income tax on payments made to
certain stockholders with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form contained herein certifying that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and
that (i) such holder is exempt from federal backup withholding, (ii) such holder
has not been notified by the IRS that such holder is subject to federal backup
withholding as a result of a failure to report all interest or dividends, or
(iii) the IRS has notified such holder that such holder is no longer subject to
backup withholding (see Part 2 of Substitute Form W-9).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number to
report. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, such
stockholder should write "Applied For" in the space provided for in the TIN in
Part 1, and sign and date the Substitute Form W-9. If "Applied For" is written
in Part 1 and the Depositary is not provided with a TIN within sixty (60) days,
the Depositary will withhold 31% on all payments of the purchase price until a
TIN is provided to the Depositary.
10
<PAGE> 11
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: FIRST NATIONAL BANK OF OMAHA
- --------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORM W-9 THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. (If awaiting TIN
DEPARTMENT OF THE TREASURY write "Applied For")
INTERNAL REVENUE SERVICE OR
Employer Identification Number
--------------------------------
(If awaiting TIN
write "Applied For")
PAYOR'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER ("TIN")
- --------------------------------------------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued
to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are currently
subject to backup withholding because of under-reporting interest or dividends on your tax returns. However, if after
being notified by the IRS that you are subject to backup withholding, you receive another notification from the IRS that
you are no longer subject to backup withholding, do not cross out such item (2). (Also see instructions in the enclosed
Guidelines).
</TABLE>
- --------------------------------------------------------------------------------
SIGNATURE ____________________________ DATE ____________, 2000 PART
3 -- AWAITING TIN
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number to the Depositary by the time of
payment, 31% of all reportable payments made to me thereafter will be withheld,
but that such amounts will be refunded to me if I provide a certified Taxpayer
Identification Number to the Depositary within sixty (60) days.
SIGNATURE ___________________________________________ DATE __________________
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent at its address and telephone number specified
below:
<PAGE> 12
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET, 20TH FLOOR
NEW YORK, NEW YORK 10005-4495
BANKS AND BROKERAGE FIRMS PLEASE CALL: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 488-8075
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
TO
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY
OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or a form substantially equivalent to
it, must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, par value $0.001 per share (the "Shares"),
of Data Transmission Network Corporation, a Delaware corporation (the "Company")
are not immediately available, if the procedure for book-entry transfer cannot
be completed prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase), or if time will not permit all required documents to reach the
Depositary prior to the Expiration Date. This form may be delivered by hand,
transmitted by facsimile transmission or mailed to the Depositary. See Section 3
of the Offer to Purchase.
The Depositary for the Offer is:
FIRST NATIONAL BANK OF OMAHA
By Mail, Overnight Delivery or By Hand:
First National Bank of Omaha
Attn: Kellie Roane
1620 Dodge St.
Omaha, Nebraska 68102
By Facsimile Transmission:
(For Eligible Institutions Only)
(402) 341-6556
Confirm Facsimile By Telephone:
(402) 633-3465
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SPECIFIED ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS SPECIFIED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions to such Letter of Transmittal, such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to DTN Acquisition Corporation, a Delaware
corporation (the "Purchaser"), and a wholly-owned subsidiary of VS&A-DTN, LLC, a
Delaware limited liability corporation, upon the terms and subject to the
conditions contained in Purchaser's Offer to Purchase, dated March 17, 2000 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with any amendments and supplements thereto, constitute the "Offer"), receipt of
which is hereby acknowledged, the number of shares indicated below of common
stock, par value $0.001 per share (the "Shares"), of Data Transmission Network
Corporation, a Delaware corporation (the "Company"), pursuant to the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase.
-----------------------------------------------------------
Number of Shares:
--------------------------------------
Certificate Nos. (if available):
-----------------------------------------------------------
-----------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer:
Account Number:
---------------------------------------
Dated:
-------------------------------------------- , 2000
-----------------------------------------------------------
-----------------------------------------------------------
Name(s) of Record Holder(s):
-------------------------
-----------------------------------------------------------
-----------------------------------------------------------
PLEASE PRINT
Address(es):
--------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
-----------------------------------------------------------
-----------------------------------------------------------
Signature(s):
--------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, guarantees to deliver to the Depositary
either certificates representing the Shares tendered hereby, in proper form
for transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, in each case with
delivery of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message, and any other documents required by the Letter of Transmittal, within
three Nasdaq National Market trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the same time period stated
herein. Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm:
---------------------------------
Address:
----------------------------------------
--------------------------------------------------
ZIP CODE
Area Code & Tel. No.:
------------------------
--------------------------------------------------------
AUTHORIZED SIGNATURE
Name:
------------------------------------------------
PLEASE PRINT
Title:
-------------------------------------------------
Date:
------------------------------------------- , 2000
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
AT
$29.00 NET PER SHARE
BY
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY
OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
March 17, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by DTN Acquisition Corporation, a Delaware corporation
(the "PURCHASER"), and a wholly-owned subsidiary of VS&A-DTN, LLC, a Delaware
limited liability company, to act as Information Agent in connection with the
Purchaser's offer to purchase all shares of common stock, par value $0.001 per
share (the "SHARES"), of Data Transmission Network Corporation, a Delaware
corporation (the "COMPANY"), at a price of $29.00 per Share, net to the seller
in cash, without interest, upon the terms and subject to the conditions
contained in the Offer to Purchase, dated March 17, 2000 (the "OFFER TO
PURCHASE"), and in the related Letter of Transmittal (which, together with any
amendments and supplements thereto, constitute the "OFFER") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares that constitutes at least 90% of
the then outstanding Shares. The Offer is also subject to the other conditions
contained in the Offer to Purchase. See "Introduction" and Sections 1, 15 and 16
of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated March 17, 2000;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer, if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, by the Expiration Date;
4. A letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to First National Bank of Omaha (the
"DEPOSITARY").
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for Shares that are validly tendered prior to
the Expiration Date and not theretofore properly withdrawn when,
<PAGE> 2
as and if the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. Payment
for Shares purchased pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for such Shares, or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company, pursuant to the procedures described in
Section 2 of the Offer to Purchase, (ii) a properly completed and duly executed
Letter of Transmittal (or a properly completed and manually signed facsimile
thereof) or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer and (iii) all other documents required by
the Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Depositary and the Information Agent, as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for customary mailing and handling
costs incurred by them in forwarding the enclosed materials to their customers.
The Purchaser will pay or cause to be paid all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer of Shares, and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions contained in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
described in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, us at
our address and telephone number as indicated on the back cover of the Offer to
Purchase.
Very truly yours,
D.F. KING & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF THE PURCHASER, VS&A-DTN, LLC, VS&A COMMUNICATIONS PARTNERS III, L.P.,
THE COMPANY, THE INFORMATION AGENT, THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF
THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER, OTHER THAN
THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
AT
$29.00 NET PER SHARE
BY
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY
OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE OFFER IS EXTENDED.
March 17, 2000
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated March 17,
2000 (the "OFFER TO PURCHASE"), and the related Letter of Transmittal (which,
together with any amendments and supplements thereto, collectively constitute
the "OFFER") in connection with the offer by DTN Acquisition Corporation, a
Delaware corporation (the "PURCHASER") and a wholly-owned subsidiary of
VS&A-DTN, LLC, a Delaware limited liability company, to purchase for cash all
shares of common stock, par value $0.001 per share (the "SHARES"), of Data
Transmission Network Corporation, a Delaware corporation (the "COMPANY"), at a
purchase price of $29.00 per Share, net to you in cash (the "SHARE PRICE"). WE
ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. A TENDER OF SUCH
SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions contained in the Offer.
Your attention is invited to the following:
1. The offer price is $29.00 per Share, net to you in cash, without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously approved the
Merger Agreement (as defined in the Offer to Purchase) and the transactions
contemplated thereby, including the Offer and the Merger (each as defined
in the Offer to Purchase), and has unanimously determined that the Offer
and the Merger are fair to, and in the best interests of, the Company's
stockholders and unanimously recommends that the stockholders accept the
Offer and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on April 14, 2000, unless the Offer is extended.
<PAGE> 2
5. The Offer is conditioned upon, among other things, there being
validly tendered and not properly withdrawn prior to the Expiration Date
(as defined in the Offer to Purchase) that number of Shares that
constitutes at least 90% of the then outstanding Shares. The Offer also is
subject to the other conditions contained in the Offer to Purchase. See
"Introduction" and Sections 1, 15 and 16 of the Offer to Purchase.
6. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, the Purchaser is not aware of
any state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form attached to
this letter. An envelope to return your instructions to us is enclosed. If you
authorize the tender of your Shares, all such Shares will be tendered, unless
otherwise specified on the attachment to this letter. Your instructions should
be forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates for, or of Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to, such Shares,
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)),
and any other documents required by the Letter of Transmittal. Accordingly,
payment might not be made to all tendering stockholders at the same time, and
will depend upon when Share certificates or Book-Entry Confirmations of such
Shares are received into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase).
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE
ALL SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
AT
$29.00 NET PER SHARE IN CASH
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated March 17, 2000 and the related Letter of Transmittal in
connection with the Offer by DTN Acquisition Corporation, a Delaware corporation
and a wholly-owned subsidiary of VS&A-DTN, LLC, a Delaware limited liability
company, to purchase for cash all shares of common stock, par value $0.001 per
share (the "SHARES"), of Data Transmission Network Corporation, a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions contained in the
Offer.
<TABLE>
<S> <C>
Number of Shares to Be Tendered*
---------------------------------- Shares
Dated: ---------------------------, 2000 -----------------------------------------------------------------
------------------------------------------------------------
SIGNATURE(S)
-----------------------------------------------------------------
-----------------------------------------------------------------
PRINT NAME(S)
-----------------------------------------------------------------
-----------------------------------------------------------------
ADDRESS(ES)
-----------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
-----------------------------------------------------------------
TAX ID OR SOCIAL SECURITY NUMBER
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payor.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account (1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent
minor, or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), an individual
- retirement plan or a custodial account under Section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
PAYMENTS NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING
Payment of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payor's trade or business and you have not provided
your correct taxpayer identification number to the payor.
Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEE DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYOR. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payors
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payors must be given the numbers whether or not recipients are
required to file tax returns. Payors must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payor. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payor, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to
Purchase, dated March 17, 2000 (the "Offer to Purchase"), and the
related Letter of Transmittal, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not result in
compliance with the laws of such jurisdiction or any administrative or
judicial action pursuant thereto.
NOTICE OF OFFER TO PURCHASE
ALL SHARES OF COMMON STOCK
OF
DATA TRANSMISSION NETWORK CORPORATION
AT
$29.00 NET PER SHARE IN CASH
BY
DTN ACQUISITION CORPORATION
AN INDIRECT SUBSIDIARY
OF
VS&A COMMUNICATIONS PARTNERS III, L.P.
DTN Acquisition Corporation, a Delaware corporation (the "Purchaser")
and an indirect subsidiary of VS&A Communications Partners III, L.P., a Delaware
limited partnership (the "Parent"), hereby offers to purchase all shares of
common stock, par value $0.001 per share (the "Shares"), of Data Transmission
Network Corporation, a Delaware corporation (the "Company"), at a price of
$29.00 per Share (the "Share Price"), net to the seller in cash and without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase and the related Letter of Transmittal (which, together with
any amendments and supplements thereto, constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON APRIL 14, 2000, UNLESS THE
OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
BELOW) THAT NUMBER OF SHARES (COLLECTIVELY, THE "MINIMUM NUMBER OF SHARES") THAT
REPRESENTS 90% OF THE THEN OUTSTANDING SHARES.
The Offer is being made pursuant to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of March 3, 2000, among the Company, the
Parent, VS&A-DTN, LLC, a Delaware limited liability company and a subsidiary of
the Parent ("VS&A-DTN"), and the Purchaser. The Parent, VS&A-DTN and the
Purchaser do not own any Shares. Stockholders
<PAGE> 2
who hold in the aggregate approximately 50.1% of the outstanding Shares
(approximately 44.1%, after the exercise of all outstanding options and
warrants) have agreed to tender their shares in response to the Offer or to vote
their Shares in favor of the Merger and the adoption of the Merger Agreement.
The purpose of the Offer is to acquire control of the Company.
The Merger Agreement provides, among other things, that, following the
completion of the Offer, or, if the Offer is not completed, the approval of the
Merger by the Company's stockholders (the "Stockholders") and the satisfaction
or waiver, if permissible, of all conditions set forth in the Merger Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), the Purchaser will be merged with and into the Company (the "Merger"),
with the Company surviving the Merger as a wholly-owned subsidiary of VS&A-DTN.
At the effective time of the Merger (the "Effective Time"), each outstanding
Share (other than Shares held in the Company's treasury immediately before the
Effective Time, and each Share held by the Parent, the Purchaser, VS&A-DTN, any
other subsidiary of the Parent or any subsidiary of the Company immediately
before the Effective Time, all of which will be cancelled, and other than Shares
with respect to which appraisal rights are properly exercised under the DGCL)
will be converted into the right to receive $29.00 in cash, without interest
thereon.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT
THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL THEIR SHARES PURSUANT TO THE
OFFER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to First
National Bank of Omaha, as Depositary (the "Depositary"), of the Purchaser's
acceptance of such Shares for payment pursuant to the Offer. In all cases, upon
the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering Stockholders
for the purpose of receiving payment from the Purchaser and transmitting payment
to validly tendering Stockholders.
In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates
representing such Shares or timely confirmation of the book-entry transfer of
such Shares into the Depositary's account at The Depositary Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures described in the
Offer to Purchase, (ii) the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer and (iii) any other documents required by the Letter of
Transmittal.
If, prior to the Expiration Date, the Purchaser increases the
consideration offered to the Stockholders pursuant to the Offer, such increased
consideration will be paid to all holders of Shares that are purchased pursuant
to the Offer, whether or not such Shares were tendered prior to such increase in
consideration. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID BY THE PURCHASER BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.
The term "Expiration Date" means 12:00 midnight, New York City time, on
April 14, 2000, unless and until the Purchaser, in accordance with the Merger
Agreement, shall have exercised its right to extend the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the time
and date at which the Offer, as so extended by the Purchaser, shall expire. Any
such extension will be followed by a public announcement thereof by no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering Stockholder to withdraw such Shares. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, the Purchaser currently intends to make announcements by issuing
press releases to the Dow Jones News Service.
Except as otherwise provided below or as provided by applicable law,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be
<PAGE> 3
withdrawn at any time on or prior to the Expiration Date and, unless theretofore
accepted for payment as provided herein, may also be withdrawn at any time after
May 9, 2000.
To be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at its address or
facsimile number specified on the back cover of the Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown on
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution (as defined in the Offer to
Purchase), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer described in the Offer to Purchase, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with such Book-Entry Transfer Facility's procedures.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in the Offer to
Purchase.
All questions as to form and validity (including time of receipt) of
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding.
The information required to be disclosed by paragraph (d)(1) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has agreed to provide the Purchaser with the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer to the Stockholders. The Offer to Purchase, the related
Letter of Transmittal and other materials will be mailed to the Stockholders and
will be furnished to brokers, dealers, banks and similar persons whose names, or
the names of whose nominees, appear on the stockholder lists or, if applicable,
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information and should be read carefully before any decision is made
with respect to the Offer.
Questions and requests for assistance or additional copies of the Offer
to Purchase, Letter of Transmittal and other tender offer documents may be
directed to the Information Agent, at the address and telephone number specified
below, and copies will be furnished promptly at the Purchaser's expense. The
Purchaser will not pay any fees or commissions to any broker or dealer or other
person, other than the Depositary and the Information Agent, for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New 10005-4495
Banks and Brokerage Firms Please Call: (212)269-5550
ALL OTHERS CALL TOLL FREE: (800)488-8075
March 17, 2000
<PAGE> 1
News Release
OMAHA, Neb.--(BUSINESS WIRE)--March 6, 2000--Data Transmission Network
Corporation (DTN)(NASDAQ: DTLN - news), a leading business-to-business
e-commerce and information services company serving the agriculture, weather,
energy and financial services industries, today announced that it has signed a
definitive agreement to be acquired by VS&A Communications Partners III, L.P.,
the private equity affiliate of New York media merchant bank Veronis, Suhler &
Associates Inc. Total consideration for the transaction, inclusive of the
purchase of the equity and assumption of outstanding debt, is approximately $470
million.
DTN shareholders will receive $29.00 per share in an all-cash tender offer to be
commenced within 10 business days. The tender offer is made subject to the
tender of at least 90 percent of DTN's outstanding shares, the receipt of
certain government approvals and other customary conditions. If less than 90
percent of the outstanding shares of DTN are tendered, DTN has agreed to merge
with an affiliate of VS&A Communications Partners III. Under the terms of that
agreement, DTN's shareholders would receive $29.00 cash per share for their DTN
stock. The closing of the merger is also subject to government and shareholder
approvals and other customary conditions.
DTN has approximately 12.0 million shares outstanding, and has issued options to
purchase approximately 1.7 million additional shares. Holders of over 50.1
percent of the company's outstanding shares have agreed to accept the tender
offer and vote to approve the merger. DTN's Board of Directors has unanimously
recommended that DTN's shareholders accept the tender offer and also approved
the merger. Greif & Co. served as financial advisor to DTN and has rendered a
fairness opinion to DTN's board.
Greg Sloma, President and Chief Operating Officer of DTN, noted, "We are excited
about the prospect of teaming up with VS&A and capitalizing on their vast
experience in the media, communications and information industries. VS&A is an
ideal partner to enable us to achieve our goal of becoming the preeminent
electronic commerce and information source in our four core industry segments."
Jeffrey T. Stevenson, President of VS&A Communications Partners III, said, "We
have long admired DTN's strong market position, financial performance,
professionalism and reputation in the markets it serves. Its recent extensions
into Internet-based distribution and e-commerce served to further our respect
for DTN and its management team. We are pleased to have the opportunity to join
with DTN management to build upon the company's strengths in each of the
attractive information markets it serves. We expect to help DTN leverage its
proprietary digital content; its leading-edge distribution network; and its
large base of loyal customers to strengthen existing products, as well as to
introduce new products and services. We are particularly excited about the
potential that exists in the e-commerce arena."
Headquartered in Omaha, Nebraska, DTN is a leading business-to-business
electronic commerce and information services company with more than 1,000
employees in eight locations across the U.S., and approximately 167,000
subscribers throughout the U.S. and Canada.
DTN has served professional users in the agriculture, weather, energy and
financial services industries since it was founded in 1984. For each of these
sectors, DTN provides its customers with targeted (proprietary and third party)
time-sensitive information through a variety of distribution methods including
Internet, satellite, leased lines and other technologies. The Company announced
revenues of $167 million and operating cash flow (EBITDA) of $62 million for the
fiscal year ending December 31, 1999.
<PAGE> 2
Visit the DTN web site for company and investor information at www.dtn.com.
Since 1987, VS&A Communications Partners has managed three private equity funds,
which have acquired 20 portfolio companies in the media, communications and
information industries. Its third fund, VS&A Communications Partners III, L.P.,
capitalized at $1.0 billion, is the largest private equity fund dedicated
exclusively to investments in the media, communications and information
industries. Veronis, Suhler (www.veronissuhler.com) is a leading independent
merchant bank dedicated to the media, communications and information industries.
Since its formation in 1981, the firm has acted as a financial advisor across
the full spectrum of media industry segments including Broadcasting, Cable &
Entertainment; Newspaper Publishing; Consumer Magazines; Business Information
Services; Consumer, Professional & Educational Books; Business-to-Business
Communications; Specialty Media & Marketing Services; and the Internet.
Contact:
Data Transmission Network Corporation:
402-390-2328
Brian Larson, CFO
Greg Sloma, President & COO
Joe Urzendowski, Vice President/Operations
or
VS&A Communications Partners:
Allan Ripp, Ripp & Associates, 212-721-7468
Julie Farin, 212-935-4990
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES OF DATA TRANSMISSION NETWORK CORPORATION. AT THE TIME THE OFFER
IS COMMENCED, VS&A-DTN, LLC WILL FILE A TENDER OFFER STATEMENT WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION AND DATA TRANSMISSION NETWORK CORPORATION
WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER. THE
TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF
TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION
STATEMENT WILL CONTAIN IMPORTANT INFORMATION, WHICH SHOULD BE READ CAREFULLY
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE OFFER TO PURCHASE,
THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS, AS WELL AS
THE SOLICITATION/RECOMMENDATION STATEMENT, WILL BE MADE AVAILABLE TO ALL
STOCKHOLDERS OF DATA TRANSMISSION NETWORK CORPORATION AT NO EXPENSE TO THEM. THE
TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF
TRANSMITTAL AND ALL OTHER OFFER DOCUMENTS FILED WITH THE COMMISSION) AND THE
SOLICITATION/RECOMMENDATION STATEMENT WILL ALSO BE AVAILABLE AT THE COMMISSION'S
WEBSITE AT WWW.SEC.GOV.
<PAGE> 1
Exhibit 2
AGREEMENT AND PLAN OF MERGER
AMONG
VS&A COMMUNICATIONS PARTNERS III, L.P.,
VS&A-DTN, LLC
DATA TRANSMISSION NETWORK CORPORATION
AND
DTN ACQUISITION CORPORATION
MARCH 3, 2000
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into
this 3rd day of March, 2000 by and among VS&A Communications Partners III, L.P.,
a Delaware limited partnership ("VS&A"), VS&A-DTN, LLC, a Delaware limited
liability company, ("ACQUIROR"), DATA TRANSMISSION NETWORK CORPORATION, a
Delaware corporation ("DTN"), and DTN ACQUISITION CORPORATION, a Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Merger Sub").
RECITALS
A. The parties desire to provide for the acquisition of DTN by Acquiror
by means of a merger (the "Merger") of Merger Sub into DTN preceded by a tender
offer by Acquiror (the "Offer") to purchase all of the issued and outstanding
shares of common stock, par value $.001 per share, of DTN (the "DTN Common
Stock") at a price of $29.00 per share (the "Offer Price"). If the holders of at
least 90% of the outstanding shares of DTN Common Stock (the "Required Number")
accept the Offer and if the other conditions to the Offer set forth in Annex A
are satisfied, Merger Sub will consummate the Offer in accordance with its
terms, and immediately thereafter Merger Sub will be merged into DTN pursuant to
Section 253 of the Delaware General Corporation Law ("DGCL"). If the holders of
less than the Required Number of shares of DTN Common Stock accept the Offer,
DTN will call a meeting of stockholders of DTN to approve the Merger pursuant to
Section 251 of the DGCL.
B. Certain stockholders, who hold in the aggregate in excess of 50.1%
of the DTN Common Stock, have agreed, pursuant to agreements dated March 3, 2000
between VS&A and each of those stockholders (the "Stockholder Agreements"), to
tender their shares in the Offer and to vote in favor of the Merger.
C. The parties desire to make certain representations, warranties and
agreements in connection with the Offer and the Merger and also agree to certain
prescribed conditions to the Offer and the Merger.
AGREEMENTS
In consideration of the foregoing premises and the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
<PAGE> 3
ARTICLE 1.
THE OFFER
SECTION 1.1 TERMS OF THE OFFER.
(a) As promptly as practicable (but in no event later than 10
business days after the public announcement of the execution of this Agreement),
Acquiror shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934) the Offer for all of the outstanding shares of DTN Common
Stock at a price of $29.00 per share, net to the sellers in cash, subject to the
conditions referred to below, and shall consummate the Offer in accordance with
its terms. The Offer shall be made by means of an offer to purchase (the "Offer
to Purchase") containing the terms set forth in this Agreement, and Acquiror
shall, on the terms and subject to the prior satisfaction or waiver of the
conditions of the Offer, accept for payment and pay for shares tendered as soon
as practicable after the satisfaction or waiver of the conditions to the Offer,
and in any event, within the period required by law. The date on which Acquiror
consummates the purchase of the shares in the Offer is referred to in this
Agreement as the "Offer Closing Date".
(b) The obligations of Acquiror to accept for payment and to
pay for any shares tendered prior to the expiration of the Offer shall be
subject only to (i) the condition that there shall be validly tendered and not
withdrawn prior to the expiration of the Offer the Required Number of shares of
DTN Common Stock (the "Minimum Condition") and (ii) the other conditions set
forth in Annex A. Acquiror shall not, without the written consent of DTN (such
consent to be authorized by the Board of Directors of DTN or a duly authorized
committee of the Board), amend or waive the Minimum Condition, decrease the
Offer Price or the number of shares sought, or amend any other condition of the
Offer in any manner adverse to the holders of the shares of DTN Common Stock
(sometimes referred to as the "Shares"); provided, however, that if on the
initial scheduled expiration date of the Offer (which shall be 20 business days
after the date the Offer is commenced), all conditions to the Offer shall not
have been satisfied or waived, Acquiror may, from time to time, in its sole
discretion, extend the expiration date; provided, further, however, that any
extension beyond 10 business days shall require the approval of DTN.
(c) As soon as practicable on the date the Offer is commenced,
Acquiror and Merger Sub shall file with the SEC a Tender Offer Statement on
Schedule TO with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule TO"). The
Schedule TO1 shall include, as exhibits, the Offer to Purchase and a form of
letter of transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Offer Documents
shall comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to DTN's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the
4
<PAGE> 4
circumstances under which they were made, not misleading, except that neither
Acquiror nor Merger Sub shall have any responsibility to DTN with respect to
information furnished by DTN to Acquiror, in writing, expressly for inclusion in
the Offer Documents. The information supplied by DTN to Acquiror in writing
expressly for inclusion in the Offer Documents and by Acquiror to DTN in writing
expressly for inclusion in the Schedule 14D-9 (as hereinafter defined) shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Acquiror shall take all steps necessary to cause the Offer Documents
to be filed with the SEC and to be disseminated to holders of the issued and
outstanding shares of DTN Common Stock, in each case as and to the extent
required by applicable federal securities laws. Acquiror and DTN promptly shall
correct any information provided by it for use in the Offer Documents if and to
the extent that it shall have become false or misleading in any material respect
and Acquiror shall take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. DTN and its counsel shall be given the opportunity to review
the Schedule TO before it is filed with the SEC. In addition, Acquiror promptly
shall provide DTN and its counsel in writing with any comments, whether written
or oral, Acquiror or its counsel may receive from the SEC or its staff with
respect to the Offer Documents, and Acquiror also promptly shall provide DTN and
its counsel with copies of all responses to comments received from the SEC or
its staff.
SECTION 1.2 DTN ACTIONS.
(a) DTN hereby confirms that it approves of and consents to
the Offer and represents that the Board of Directors of DTN at a meeting duly
called and held has (i) unanimously determined that each of this Agreement, the
Offer and the Merger are fair to and in the best interests of the stockholders
of DTN, (ii) approved this Agreement and the Stockholder Agreements and the
transactions contemplated hereby and thereby, including the Offer and the Merger
(collectively, the "Transactions"), and such approval constitutes approval of
the Offer, this Agreement, the Stockholders Agreements and the transactions
contemplated hereby and thereby, including the Merger, for purposes of Section
203 of the DGCL, with the effect that Section 203 of the DGCL will not apply to
the transactions contemplated by this Agreement or the Stockholder Agreements,
and (iii) resolved to recommend that the stockholders of DTN accept the Offer,
tender their shares to Acquiror pursuant to the Offer, and approve and adopt
this Agreement and the Merger; provided, that such recommendation may be
withdrawn, modified or amended if, in the opinion of DTN's Board of Directors,
only after receipt of written advice from independent legal counsel, failure to
withdraw, modify or amend such recommendation would result in the Board of
Directors violating its fiduciary duties to DTN's stockholders under applicable
law. DTN represents that no further corporate action is required to be taken by
DTN (under its certificate of incorporation and bylaws or any agreement or other
obligation by which it is bound) to render the relevant provisions of Section
203 of the DGCL inapplicable to the Offer and the Merger.
(b) Concurrently with the commencement of the Offer, DTN shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule 14D-9")
5
<PAGE> 5
which shall contain the recommendation referred to in clause (iii) of Section
1.2(a) hereof. The Schedule 14D-9 shall comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to DTN's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that DTN shall not have any responsibility to Acquiror
with respect to information furnished by Acquiror for inclusion in the Schedule
14D-9. DTN shall take all steps necessary to cause the Schedule 14D-9 to be
filed with the SEC and to be disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws. DTN and
Acquiror promptly shall correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and DTN shall take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Acquiror and its counsel shall
be given the opportunity to review the Schedule 14D-9 before it is filed with
the SEC. DTN promptly shall provide Acquiror and its counsel in writing with any
comments, whether written or oral, DTN or its counsel may receive from the SEC
or its staff with respect to the Schedule 14D-9, and DTN also promptly shall
provide Acquiror and its counsel with copies of all responses to comments
received from the SEC or its staff. DTN shall include in the Schedule 14D-9 on
the date first published, sent or given to DTN's stockholders, such information
with respect to DTN and its officers and directors as is required under section
14(f) of the Exchange Act and Rule 14f-1 thereunder in order to fulfill its
obligations under Section 1.3. Acquiror and Merger Merger Sub shall supply DTN
with, and be solely responsible for, any information with respect to themselves
and their nominees, officers, directors and officers required by section 14(f)
and Rule 14f-1.
(c) In connection with the Offer, DTN shall promptly furnish
or cause to be furnished to Acquiror mailing labels, security position listings
and any available listing or computer file containing the names and addresses of
all record holders of the Shares as of a recent date, and shall furnish Acquiror
with such additional information (including, but not limited to, updated lists
of holders of the Shares and their addresses, mailing labels and lists of
security positions) and reasonable assistance as Acquiror or its agents may
reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Except for such steps as are necessary to disseminate the
Offer Documents, Acquiror shall hold in confidence the information contained in
any of such labels and lists and the additional information referred to in the
preceding sentence, shall use such information only in connection with the
Offer, and, if this Agreement is terminated, shall upon request of DTN deliver
or cause to be delivered to DTN all copies of such information then in its
possession or the possession of its agents or representatives.
ARTICLE 2.
THE MERGER
SECTION 2.1 THE MERGER. Provided that this Agreement shall not have
been
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terminated in accordance with Section 9.1, upon the terms and subject to the
conditions set forth in this Agreement, (a) if the Offer is consummated,
immediately thereafter the parties hereto shall, at the request of Acquiror,
take all necessary action to cause the Merger to become effective, without a
meeting of stockholders of DTN, in accordance with Section 253 of the DGCL or
(b) if the Offer is not consummated, DTN shall call a meeting of its
stockholders as provided in Section 7.1 to vote upon adoption of this Agreement
and approval of the Merger, and the parties shall take all such action as may be
necessary to effect the Merger at the earliest practicable date in accordance
with Section 251 of the DGCL and the terms of this Agreement. Upon the Merger,
the separate corporate existence of Merger Sub shall cease and DTN shall be the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 2.2 EFFECTIVE TIME; CLOSING. Provided that this Agreement shall
not have been terminated in accordance with Section 9.1, as promptly as
practicable after the satisfaction or, if permissible and effected as provided
in Section 9.4, waiver of the conditions set forth in Article 8 (or such other
date as may be agreed to in writing by Acquiror and DTN), the parties hereto
shall cause the Merger to be consummated by filing with the Secretary of State
of the State of Delaware a certificate of merger or a certificate of ownership
and merger (the "Certificate of Merger") in such form as required by, and
executed in accordance with, Section 251 or Section 253 of the DGCL (the date
and time of such filing, or such later date or time as set forth therein, being
the "Effective Time"). Immediately prior to the filing of the Certificate of
Merger, a closing (the "Closing") will be held at the offices of Proskauer Rose
LLP, 1585 Broadway, New York, New York (or such other place as the parties may
agree). The date on which the Closing occurs is referred to in this Agreement as
the "Closing Date."
SECTION 2.3 EFFECTS OF MERGER. At the Effective Time, the effect of the
Merger shall be as provided in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of DTN and Merger Sub shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of DTN and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.4 CERTIFICATE OF INCORPORATION. At the Effective Time, the
certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as the certificate of incorporation of Merger
Sub as in effect immediately prior to the Effective Time.
SECTION 2.5 BYLAWS. At the Effective Time, the bylaws of Merger Sub as
in effect immediately prior to the Effective Time shall become the bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
SECTION 2.6 BOARD OF DIRECTORS. From and after the Effective Time,
until duly changed in compliance with applicable law and the certificate of
incorporation and bylaws of the Surviving Corporation, the board of directors of
the Surviving Corporation shall consist of the directors of Merger Sub
immediately prior to the Effective Time.
SECTION 2.7 MANAGEMENT. At the Effective Time, the officers of Merger
Sub immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation
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and shall hold office until their respective successors are duly elected or
appointed and qualified in the manner provided in the certificate of
incorporation and bylaws of the Surviving Corporation, or as otherwise provided
by the DGCL.
SECTION 2.8 ACQUIROR'S DELIVERIES AT CLOSING. At the Closing, Acquiror
shall deliver the following items to DTN:
(a) evidence of the delivery by Acquiror or its agents to the
Paying Agent of an aggregate amount of cash equal to the total Merger
Consideration the holders of DTN Common Stock will be entitled to receive
pursuant to this Agreement;
(b) a good standing certificate for Acquiror issued by the
Secretary of State of the State of Delaware, and dated not more than ten (10)
business days prior to the Closing Date;
(c) a good standing certificate for Merger Sub issued by the
Secretary of State of the State of Delaware, and dated not more than ten (10)
business days prior to the Closing Date;
(d) a copy of the certificate of incorporation of Merger Sub
certified not more that ten (10) business days prior to the Closing Date by the
Secretary of State of the State of Delaware;
(e) a certificate of the Secretary or any Assistant Secretary
of Merger Sub dated the Closing Date certifying a copy of the bylaws of Merger
Sub;
(f) copies of resolutions of the Board of Directors and
stockholders of Merger Sub authorizing and approving this Agreement and the
consummation of the transactions contemplated by this Agreement, certified as of
the Closing Date by the Secretary or any Assistant Secretary of Merger Sub;
(g) the certificates referred to in Sections 8.2(a) and (b);
and
(h) a legal opinion of Acquiror's counsel dated the Closing
Date and to the effect set forth in Exhibit A; and
(i) such other documents as DTN may reasonably request.
All of such items shall be reasonably satisfactory in form and substance to DTN
and its counsel.
SECTION 2.9 DTN'S DELIVERIES AT CLOSING. At the Closing, DTN shall
deliver the following items to Acquiror:
(a) a good standing certificate for DTN issued by the
Secretary of State of the State of Delaware and dated not more than ten (10)
business days prior to the Closing Date;
(b) a copy of the certificate of incorporation of DTN
certified not more than ten (10) business days prior to the Closing Date by the
Secretary of State of the State of Delaware;
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(c) a certificate of the Secretary or any Assistant Secretary
of DTN dated the Closing Date certifying a copy of the bylaws of DTN;
(d) copies of resolutions of the board of directors and
stockholders of DTN authorizing and approving this Agreement and the
consummation of transactions contemplated by this Agreement, certified as of the
Closing Date by the Secretary or any Assistant Secretary of DTN;
(e) the certificates referred to in Sections 8.3(a) and (b);
(f) a legal opinion of DTN's counsel dated the Closing Date
and to the effect set forth in Exhibit B; and
(g) such other documents as Acquiror may reasonably request.
All of such items shall be reasonably satisfactory in form and substance to
Acquiror and its counsel.
ARTICLE 3.
CONVERSION OF SECURITIES IN THE MERGER
SECTION 3.1 CONVERSION OF CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of DTN or Acquiror or
the holder of any of the Shares:
(a) each share of DTN Common Stock issued and outstanding
immediately prior to the Effective Time, except for shares of DTN Common Stock
owned by DTN as treasury stock or owned, directly or indirectly, by Acquiror,
DTN or Merger Sub or any of their respective wholly-owned Subsidiaries (other
than shares of DTN Common Stock to be cancelled pursuant to this Section), shall
be converted into the right to receive $29.00 in cash (the "Merger
Consideration"), payable without interest to the holder of such share of DTN
Common Stock upon surrender of the stock certificate that formerly evidenced
such share of DTN Common Stock (the "DTN Certificate");
(b) each share of DTN Common Stock held in the treasury of DTN
and shares of DTN Common Stock owned by Acquiror, Merger Sub or any Subsidiary
of Acquiror or DTN shall be cancelled and extinguished without any conversion
thereof and no payment shall be made with respect thereto; and
(c) each share of common stock, $0.01 par value per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into one validly issued, fully paid and non-assessable share of
common stock of the Surviving Corporation.
SECTION 3.2 PAYMENT FOR SHARES.
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(a) From and after the Effective Time, a bank or trust company
designated by Acquiror and reasonably acceptable to DTN shall act as paying
agent (the "Paying Agent") in effecting the payment of the Merger Consideration
in respect of the DTN Certificates. At the Effective Time, Acquiror shall cause
to be provided to the Paying Agent cash in amounts necessary to pay the Merger
Consideration in exchange for the shares of DTN Common Stock. Such funds shall
be invested by the Paying Agent as directed by Acquiror.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder of DTN Certificates a (i) letter of transmittal in
customary form (which shall specify that delivery shall be effected, and risk of
loss and title to the DTN Certificates shall pass, only upon delivery of the DTN
Certificates to the Paying Agent) (the "Letter of Transmittal") and (ii)
instructions for use in surrendering such DTN Certificates in exchange for
payment therefor. Upon the surrender of each such DTN Certificate, together with
the respective Letter of Transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other documents as may be
required pursuant to such instructions, the Paying Agent shall pay the holder of
such DTN Certificate the Merger Consideration multiplied by the number of shares
of DTN Common Stock formerly represented by such DTN Certificate, in
consideration therefor, and such DTN Certificate shall forthwith be cancelled.
Until so surrendered, each such DTN Certificate (other than the DTN Certificates
representing Dissenting Shares and the DTN Certificates representing shares of
DTN Common Stock owned by Acquiror or Merger Sub or any Subsidiary of Acquiror
or held in the treasury by DTN or by any wholly owned Subsidiary of DTN) shall
represent solely the right to receive the aggregate Merger Consideration
relating thereto. No interest or dividends shall be paid or accrued on the
Merger Consideration. If the Merger Consideration (or any portion thereof) is to
be paid to any person other than the person in whose name the DTN Certificate
formerly representing shares of DTN Common Stock surrendered is registered, it
shall be a condition to such right to receive such payment that the DTN
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person surrendering such DTN Certificate shall
pay to the Paying Agent any transfer or other similar taxes required by reason
of the payment of the Merger Consideration to a person other than the registered
holder of the DTN Certificate surrendered, or shall establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable.
(c) At any time following the six-month anniversary of the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to the Surviving Corporation any funds which had been
made available to the Paying Agent and not disbursed to holders of shares of DTN
Common Stock (including all interest and other income received by the Paying
Agent in respect of all funds made available to it), the DTN Certificates and
other documents in its possession relating to the Merger, and the Paying Agent's
duties shall terminate. Thereafter, each holder of a DTN Certificate formerly
representing shares of DTN Common Stock may surrender such DTN Certificate to
the Surviving Corporation and receive in consideration therefor the aggregate
Merger Consideration relating thereto, without any interest or dividends
thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a share of DTN Common Stock
for any Merger Consideration delivered in respect of such share to a public
official pursuant to any abandoned property, escheat or other similar law.
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(d) At the close of business on the day of the Effective Time,
the stock transfer books of DTN shall be closed and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of any shares of DTN Common Stock which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, DTN Certificates
formerly representing shares of DTN Common Stock are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and cancelled in
return for the payment of the aggregate Merger Consideration relating thereto,
subject to applicable law in the case of Dissenting Shares. From and after the
Effective Time, the holders of shares of DTN Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of DTN Common Stock, except as otherwise provided herein
or by applicable law.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of DTN Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Corporation, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
DTN Common Stock in respect of which such deduction and withholding was made by
the Surviving Corporation, except that such treatment shall not apply to any
withholding tax imposed by any foreign jurisdiction.
(f) If any DTN Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such DTN Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such DTN Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed DTN Certificate
the Merger Consideration to which the holders thereof are entitled pursuant to
this Agreement.
SECTION 3.3 STOCK OPTIONS AND WARRANTS.
(a) At the Effective Time, each option to purchase shares of
DTN Common Stock and each stock appreciation right with respect to DTN Common
Stock outstanding and unexercised as of the Effective Time (a "DTN Option"),
whether granted pursuant to DTN's 1999 Stock Incentive Plan, DTN's Stock Option
Plan of 1989, or DTN's Non-Employee Directors Stock Option Plan, as each of the
same may have been amended from time to time (collectively, the "DTN Stock
Plans"), or granted by DTN other than pursuant to the DTN Stock Plans, shall, at
the Effective Time, be cancelled and the former holder shall have the right to
receive from DTN in consideration of such cancellation, payable during the
ten-day period following the Closing Date, an amount of cash equal to (i) the
excess, if any, of the Merger Consideration applicable to the number of shares
of DTN Common Stock subject to such DTN Option, which for this purpose shall be
deemed to be fully vested as of the Effective Time, over (ii) the aggregate
exercise price of such DTN Option, less any income or employment tax withholding
required under the Code or any provision of state or local law.
(b) At the Effective Time, each of the DTN Warrants (as
defined in Section
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4.3) outstanding immediately prior to the Effective Time shall be converted into
the right to receive an amount of cash, payable in accordance with Section
3.2(b), equal to (i) the excess, if any, of the Merger Consideration applicable
to the number of shares of DTN Common Stock subject to such DTN Warrants over
(ii) the aggregate exercise price of such DTN Warrants.
SECTION 3.4 SHARES OF DISSENTING HOLDERS OF DTN COMMON STOCK.
(a) Notwithstanding any provision of this Agreement to the
contrary, shares of DTN Common Stock that are outstanding immediately prior to
the Effective Time and that are held by stockholders who shall not have voted in
favor of the Merger or consented thereto in writing and who shall have demanded
properly in writing an appraisal for such shares of DTN Common Stock in
accordance with Section 262 of the DGCL (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration. Such stockholders shall be entitled to receive payment of the
appraised value of such shares of DTN Common Stock held by them in accordance
with the provisions of Section 262 of the DGCL ("Section 262"), except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Dissenting Shares under Section 262 shall thereupon be deemed to have been
converted into the right to receive, and to have become exchangeable for, as of
the Effective Time, the Merger Consideration, without any interest thereon, upon
surrender, in the manner provided in this Agreement, of the DTN Certificate or
DTN Certificates that formerly evidenced such shares of DTN Common Stock.
(b) DTN shall give Acquiror (i) prompt written notice of any
demands for appraisal received by DTN, withdrawals of such demands, and any
other instruments served pursuant to the DGCL and received by DTN and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. DTN shall not, except with the prior written
consent of Acquiror, make any payment with respect to any demands for appraisal
or offer to settle any such demands.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF DTN
Except as set forth in the DTN Disclosure Schedule, DTN hereby represents
and warrants to Acquiror as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of DTN
and each Subsidiary of DTN (a "DTN Subsidiary") has been duly organized, and is
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and has the requisite power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect. Each of DTN and the DTN Subsidiaries is duly qualified
or licensed to do business, and is in good standing, in each
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jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 4.2 CERTIFICATE OF INCORPORATION AND BYLAWS. The copies of
DTN's certificate of incorporation and bylaws that are set forth as exhibits to
DTN's Form 10-K for the year ended December 31, 1998 are complete and correct
copies thereof. Such certificate of incorporation and bylaws are in full force
and effect. DTN is not in violation of any of the provisions of its certificate
of incorporation or bylaws.
SECTION 4.3 CAPITALIZATION. The authorized capital stock of DTN
consists of (a) 20,000,000 shares of DTN Common Stock; and (b) 1,000,000 shares
of preferred stock, par value $0.50 per share, 11,693 shares of which are
designated as Series A Junior Participating Preferred Stock. As of March 1,
2000, (i) 12,019,986 shares of DTN Common Stock were issued and outstanding, all
of which were validly issued and fully paid and nonassessable (ii) no shares of
DTN Common Stock were held in the treasury of DTN; (iii) 3,010,000 shares of DTN
Common Stock were reserved for issuance in connection with the DTN Stock Plans;
(iv) no shares of Series A Junior Participating Preferred Stock were issued and
outstanding (v) 20,000 shares of DTN Common Stock were reserved for issuance in
connection with warrants to purchase shares of DTN Common Stock (the "DTN
Warrants"). From March 1, 2000, through the date hereof, DTN has not issued any
additional shares of capital stock except pursuant to the exercise of
outstanding DTN Options. There are no bonds, debentures, notes or other
indebtedness having general voting rights (or convertible into securities having
such rights) ("Voting Debt") of DTN or any DTN Subsidiary issued and
outstanding. Except as issued pursuant to any DTN Stock Plans (including options
for 35,500 shares issued under the Non-Employee Directors Stock Option Plan),
DTN Warrants or pursuant to agreements or arrangements described in Schedule 4.3
of the DTN Disclosure Schedule, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which DTN is a party
or by which DTN is bound relating to the issued or unissued capital stock of DTN
or any DTN Subsidiary or obligating DTN or any DTN Subsidiary to issue or sell
any shares of capital stock of, any other equity interests in, or any Voting
Debt of, DTN or any DTN Subsidiary. Schedule 4.3 of the DTN Disclosure Schedule
contains a true and complete list as of March 1, 2000 of all outstanding options
to purchase shares of DTN or any DTN Subsidiary, identifying the holder of each
option and the exercise price applicable to that holder's option. All shares of
DTN Common Stock subject to issuance as aforesaid, upon issuance prior to the
Effective Time on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. There are no outstanding contractual obligations of DTN or
any DTN Subsidiary to repurchase, redeem or otherwise acquire any shares of DTN
Common Stock or any capital stock of any DTN Subsidiary. Each outstanding share
of capital stock of each DTN Subsidiary is duly authorized, validly issued,
fully paid and nonassessable, and each such share owned by DTN or another DTN
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on DTN's or such other
DTN Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever, except as described in Schedule 4.3 of the DTN Disclosure Schedule.
Except as set forth in Schedule 4.3, there are no outstanding contractual
obligations of DTN or any DTN Subsidiary to make any investment (in the form of
a
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loan, capital contribution or otherwise) in, or guaranty any obligation of, any
DTN Subsidiary or any other person.
SECTION 4.4 AUTHORIZATION; ENFORCEABILITY. DTN has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder (including its obligations with respect to the Offer
and the Merger), and to consummate the transactions contemplated hereby to be
consummated by DTN. The execution and delivery of this Agreement by DTN and the
consummation by DTN of such transactions have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the part
of DTN are necessary to authorize this Agreement or to consummate such
transactions (other than the adoption of this Agreement by the requisite
affirmative vote of the stockholders of DTN as required by the DGCL). This
Agreement has been duly and validly executed and delivered by DTN and (assuming
due authorization, execution and delivery by Acquiror and Merger Sub)
constitutes a legal, valid and binding obligation of DTN, enforceable against
DTN in accordance with its terms, subject to bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
the availability of equitable remedies.
SECTION 4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by DTN does
not, and the performance of this Agreement by DTN will not: (i) conflict with or
violate any provision of the certificate of incorporation or bylaws of DTN or
any equivalent organizational documents of any DTN Subsidiary; (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 4.5(b) have been obtained and all filings and obligations described in
Section 4.5(b) have been made, conflict with or violate any foreign or domestic
law, statute, ordinance, rule, regulation, order, judgment or decree ("Law")
applicable to DTN or any DTN Subsidiary or by which any property or asset of DTN
or any DTN Subsidiary is bound or affected; or (iii) except as set forth in
Schedule 4.5(a) of the DTN Disclosure Schedule, result in any breach of any
provision of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of DTN or any
DTN Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
except, with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences which would not,
individually or in the aggregate, (A) have a Material Adverse Effect or (B)
prevent or materially delay the performance of this Agreement by DTN.
(b) The execution and delivery of this Agreement by DTN does
not, and the performance of this Agreement by DTN will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
domestic or foreign governmental or regulatory authority ("Governmental Entity")
or any third party under any material Contract (defined in Section 4.10), except
for (i) applicable requirements of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act"), the Securities Act of 1933, as amended (together with the rules
and regulations promulgated thereunder, the "Securities Act"), state securities
or "blue sky" laws ("Blue Sky Laws"), the National Association of Securities
Dealers, state takeover laws, Section 251 of the DGCL, the
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pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act"), or similar antitrust filings or notifications in other
jurisdictions, filing and recordation of the Certificate of Merger as required
by the DGCL and set forth in Schedule 4.5(b) of the DTN Disclosure Schedule and
(ii) the other third party consents, approvals or notifications set forth in
Schedule 4.5(b) of the DTN Disclosure Schedule.
SECTION 4.6 PERMITS; COMPLIANCE.
(a) Each of DTN and the DTN Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Entity necessary for DTN or any DTN Subsidiary to own, lease and operate its
properties or to carry on its business as it is now being conducted (the "DTN
Permits"), except where the failure to have, or the suspension or cancellation
of, any of the DTN Permits would not, individually or in the aggregate, (i) have
a Material Adverse Effect or (ii) prevent or materially delay the performance of
this Agreement by DTN.
(b) As of the date of this Agreement, no suspension or
cancellation of any of the DTN Permits is pending or, to the Knowledge of the
executive officers of DTN, threatened, except where the failure to have, or the
suspension or cancellation of, any of the DTN Permits would not, individually or
in the aggregate, (A) have a Material Adverse Effect or (B) prevent or
materially delay the performance of this Agreement by DTN.
(c) Neither DTN nor any DTN Subsidiary is in conflict with, or
in default or violation of, (i) any Law applicable to DTN or any DTN Subsidiary
or by which any property or asset of DTN or any DTN Subsidiary is bound or
affected or (ii) any DTN Permits, except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, (A) have a Material
Adverse Effect or (B) prevent or materially delay the performance of this
Agreement by DTN.
SECTION 4.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) DTN has filed all forms, reports and documents required to
be filed by it under the Exchange Act since January 1, 1999 (collectively, the
"DTN SEC Reports"). The DTN SEC Reports (i) were prepared in all material
respects in accordance with the requirements of the Exchange Act and (ii) did
not, as of their respective dates, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(b) Schedule 4.7(a) of the DTN Disclosure Schedule contains a
draft of the audited consolidated financial statements of DTN and the DTN
Subsidiaries for the year ended December 31, 1999, which includes the
consolidated balance sheet as of December 31, 1999 and the consolidated results
of operations and cash flows of DTN and its Subsidiaries for the year ended
December 31, 1999. Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the DTN SEC Reports or included in
the draft of the audited consolidated financial statements of DTN and the DTN
Subsidiaries for the year ended
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December 31, 1999, was prepared in all material respects in accordance with GAAP
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each presented fairly, in all material
respects, the consolidated financial position of DTN and its Subsidiaries at the
respective dates thereof and the consolidated results of operations and cash
flows of DTN and its Subsidiaries for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal year-end audit adjustments that do not materially affect any of those
financial statements). The audited consolidated financial statements of DTN and
the DTN Subsidiaries for the year ended December 31, 1999 shall be delivered by
DTN to Acquiror promptly after received by DTN and none of those financial
statements shall differ in any material respect from the draft contained in
Schedule 4.7(a).
(c) Except as and to the extent set forth in the draft of the
audited consolidated balance sheet of DTN and its Subsidiaries as of December
31, 1999 contained in Schedule 4.7(a), including the notes thereto, or in any
balance sheet contained in any of the DTN SEC Reports, neither DTN nor any DTN
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in notes thereto prepared in accordance with United States
generally accepted accounting principles, except for liabilities or obligations
incurred in the ordinary course of business since the respective dates of those
balance sheets that would not, individually or in the aggregate, (i) have a
Material Adverse Effect or (ii) prevent or materially delay the performance of
this Agreement by DTN. Schedule 4.7 of the DTN Disclosure Schedules contains a
true and complete list of all off-balance sheet and contingent liabilities of
DTN and its Subsidiaries that individually or in the aggregate involve more than
$100,000.
SECTION 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since January 1,
1999, except as contemplated by or as disclosed in this Agreement, including
Schedule 4.8 of the DTN Disclosure Schedule, or as disclosed in any of the DTN
SEC Reports or the financial statements delivered to Acquiror, DTN and the DTN
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since such date, there has not been:
(a) any change, condition, event or development that has had a Material Adverse
Effect; (b) any event that could reasonably be expected to prevent or materially
delay the performance of this Agreement by DTN; (c) any material change by DTN
in its accounting methods, principles or practices (other than as required by
GAAP); (d) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of DTN Common Stock or any redemption,
purchase or other acquisition of any of DTN's securities; or (e) any increase in
the compensation or benefits or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any executive officers of DTN or any DTN Subsidiary except in the
ordinary course of business consistent with past practice or except as required
by applicable Law or contractual obligations existing as of the date hereof.
SECTION 4.9 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) With respect to each material employee benefit plan,
program,
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arrangement and contract (including any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), maintained or contributed to by DTN or any DTN Subsidiary, or with
respect to which DTN or any DTN Subsidiary could reasonably be expected to incur
material liability under Section 4069, 4212(c) or 4204 of ERISA (the "DTN
Benefit Plans"), DTN will make available to Acquiror, promptly after the date
hereof, a true and complete copy (other than with respect to any multi-employer
plan as defined in Section 3(37) of ERISA) of (i) the most recent annual report
thereof (Form 5500) filed with the Internal Revenue Service (the "IRS"), (ii)
such DTN Benefit Plan, (iii) each trust agreement relating to such DTN Benefit
Plan, (iv) the most recent summary plan description for each DTN Benefit Plan
for which a summary plan description is required, (v) the most recent actuarial
report or valuation relating to a DTN Benefit Plan subject to Title IV of ERISA
and (vi) the most recent determination letter, if any, issued by the IRS with
respect to any DTN Benefit Plan qualified under Section 401(a) of the Code.
Schedule 4.9 of the DTN Disclosure Schedules contains a true and complete list
of all Employee Benefit Plans.
(b) With respect to the DTN Benefit Plans, no event has
occurred and, to the Knowledge of DTN, there exists no condition or set of
circumstances in connection with which DTN or any DTN Subsidiary could
reasonably be expected to be subject to any liability under the terms of such
DTN Benefit Plans, ERISA, the Code or any other applicable Law which would have
a Material Adverse Effect.
(c) Neither DTN nor any DTN Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by DTN or any DTN Subsidiary and no collective bargaining agreement or
other labor union contract is being negotiated by DTN or any DTN Subsidiary,
except as disclosed in the DTN SEC Reports. As of the date of this Agreement,
there is no labor dispute, strike or work stoppage against DTN or any DTN
Subsidiary pending or threatened in writing which would reasonably be expected
to interfere with the respective business activities of DTN or any DTN
Subsidiary. As of the date of this Agreement, to the Knowledge of DTN, none of
DTN, any DTN Subsidiary, or their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of DTN or any DTN Subsidiary, and there is no charge or
complaint against DTN or any DTN Subsidiary by the National Labor Relations
Board or any comparable state or foreign agency pending or threatened in
writing, except where such unfair labor practice, charge or complaint would not
have a Material Adverse Effect.
(d) Schedule 4.9(d) of the DTN Disclosure Schedule sets forth
a list of (i) all severance and material employment agreements with officers of
DTN and each DTN Subsidiary; (ii) all material severance programs and policies
of DTN and each DTN Subsidiary with or relating to its employees; and (iii) all
retention or stay agreements with employees of DTN or any of its subsidiaries
and all plans, programs, agreements and other arrangements of DTN and each DTN
Subsidiary with or relating to its employees which include obligations to make
payments to employees or contain change of control provisions.
(e) No DTN Benefit Plan provides retiree medical or retiree
life insurance benefits to any person except as disclosed in Schedule 4.9.
SECTION 4.10 CONTRACTS; DEBT INSTRUMENTS.
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(a) All contracts, agreements, guarantees, leases and
executory commitments other than the DTN Benefit Plans (each, a "Contract") to
which DTN is a party and which involve annual payments to or by DTN in excess of
$250,000, relate to DTN indebtedness for borrowed money or are otherwise
material to DTN or any of its Significant Subsidiaries (each, a "Material
Contract"), are valid and binding obligations of DTN and, to the Knowledge of
DTN, the valid and binding obligation of each other party thereto, except such
Material Contracts which if not so valid and binding would not, individually or
in the aggregate, have a Material Adverse Effect. Neither DTN nor, to the
Knowledge of DTN, any other party thereto is in violation of or in default in
respect of, nor has there occurred an event or condition which with the passage
of time or giving of notice (or both) would constitute a default under or permit
the termination of, any such Material Contract, except such violations or
defaults under or terminations which, would not, individually or in the
aggregate, have a Material Adverse Effect. All of the Material Contracts are
listed on Schedule 4.10 of the DTN Disclosure Schedule.
(b) Set forth in Schedule 4.10(b) of the DTN Disclosure
Schedule is a description of any material changes to the amount and material
terms of the indebtedness of DTN and its Subsidiaries as described in the notes
to the financial statements incorporated in DTN's audited financial statements
for the year ended December 31, 1999.
SECTION 4.11 LITIGATION. Except as disclosed on Schedule 4.11 of the
DTN Disclosure Schedule, there is no litigation, suit, claim, action, proceeding
or investigation pending or, to the Knowledge of DTN, threatened against DTN or
any of the DTN Subsidiaries or any of their properties or assets before any
court, arbitrator or administrator or Governmental Entity, other than any
litigation arising in the ordinary course of business that does not, or is not
likely to, involve more than $100,000. Except as disclosed in the DTN SEC
Reports, in the case of any suit, claim, action, proceeding or investigation
relating to any environmental matters relating to DTN or any DTN Subsidiary,
there has been no material change since January 1, 2000 in the status of any
such matters. Except as disclosed in the DTN SEC Reports, neither DTN nor any
DTN Subsidiary is subject to any continuing order of, consent decree, settlement
agreement or similar written agreement with, or, to the Knowledge of DTN,
continuing investigation by, any governmental or regulatory authority, domestic
or foreign, or any order, writ, judgment, injunction, decree, determination or
award of any governmental or regulatory authority or any arbitrator which,
individually or in the aggregate, would have a Material Adverse Effect.
SECTION 4.12 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
Schedule 4.12 of the DTN Disclosure Schedule, there are no actions, suits,
investigations, liabilities, inquiries or proceedings involving DTN or any of
its Subsidiaries or any of their respective assets that are pending or, to the
Knowledge of DTN, threatened, nor to the Knowledge of DTN is there any factual
basis for any of the foregoing, as a result of any asserted failure of DTN or
any of its Subsidiaries, or any predecessor thereof, to comply (or the assertion
of liability even if in compliance) with any Law designed to minimize, prevent,
punish or remedy the consequences of actions that damage or threaten the soil,
land surface or subsurface strata, surface waters (including navigable waters,
ocean waters, streams, ponds, drainage basins and wetlands), groundwaters,
drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life and any other environmental medium or natural resource,
any of which would have a Material Adverse Effect.
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SECTION 4.13 TRADEMARKS, PATENTS AND COPYRIGHTS. Except to the extent
the inaccuracy of any of the following (or the circumstances giving rise to any
inaccuracy) would not have a Material Adverse Effect, DTN and each of the DTN
Subsidiaries own or possess adequate licenses or other legal rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the business of DTN and the
DTN Subsidiaries as currently conducted or as contemplated to be conducted, and
DTN has no Knowledge of any assertion or claim challenging the validity of any
of the foregoing. Neither DTN nor any of the DTN Subsidiaries has infringed or
is infringing in any way any patent, patent right, license, trademark, trademark
right, trade dress, trade name, trade name right, service mark or copyright of
any third party that individually or in the aggregate, would have a Material
Adverse Effect. To DTN's Knowledge, there are no infringements of any
proprietary rights owned by or licensed by or to DTN or any DTN Subsidiary.
SECTION 4.14 TAXES. Except as set forth in Schedule 4.14 of the DTN
Disclosure Schedule, (a) DTN and the DTN Subsidiaries have timely filed or will
timely file all United States federal and state income Tax Returns and all other
material income Tax Returns and, to the Knowledge of DTN, all other material Tax
Returns required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the Effective Time, taking into account
any extension of time to file, granted to or obtained on behalf of DTN and the
DTN Subsidiaries, and all such Tax Returns are complete and correct in all
material respects; (b) all Taxes that are shown as due on such Tax Returns have
been or will be timely paid; (c) as of the date hereof, no deficiency for any
material amount of Tax has been asserted or assessed in writing by a taxing
authority against DTN or any of the DTN Subsidiaries for which there are not
adequate reserves; (d) DTN and the DTN Subsidiaries have provided adequate
reserves in accordance with GAAP in their financial statements for any Taxes
that have not been paid, whether or not shown as being due on any returns; (e)
as of the date hereof, DTN and the DTN Subsidiaries have neither extended nor
waived any applicable statute of limitations with respect to United States or
Canadian or, to the Knowledge of DTN, other income or franchise Taxes and have
not otherwise agreed to any extension of time with respect to a United States or
Canadian or, to the Knowledge of DTN, other income or franchise Tax assessment
or deficiency; (f) none of DTN and the DTN Subsidiaries is a party to any tax
sharing agreement or arrangement other than with each other; (g) as of the date
hereof, there are not pending or threatened in writing any material audits,
examinations, investigations, litigation, or other proceedings in respect of
Taxes of DTN or any DTN Subsidiary for which there are not adequate reserves;
and (h) to the Knowledge of DTN, no liens for Taxes exist with respect to any of
the assets or properties of DTN or the DTN Subsidiaries, except for statutory
liens for Taxes not yet due or payable or that are being contested in good
faith.
SECTION 4.15 INSURANCE. DTN and the DTN Subsidiaries have in effect
insurance coverage with reputable insurers or are self-insured, which in respect
of amounts, premiums, types and risks insured, constitutes reasonable coverage
for the risks customarily insured against by companies engaged in the industries
in which DTN and the DTN Subsidiaries are engaged and comparable in size and
operations to DTN and the DTN Subsidiaries.
SECTION 4.16 OPINION OF FINANCIAL ADVISOR. Greif & Co. ("Greif") has
delivered to
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DTN its written opinion, dated the date hereof, accompanied by an authorization
to include such opinion in the Proxy Statement to the effect that, as of the
date of this Agreement, the consideration to be received in the Offer and the
Merger is fair, from a financial point of view, to DTN's stockholders. DTN has
delivered a signed copy of such written opinion to Acquiror.
SECTION 4.17 BROKERS. Except as set forth on Schedule 4.17 of the DTN
Disclosure Schedule, no broker, finder or investment banker (other than Greif)
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of DTN.
SECTION 4.18 APPROVAL DELAYS. To the Knowledge of DTN, there is no
reason why the granting of any of the consents, approvals, authorizations or
other actions described in Section 4.5(b) would be denied or unduly delayed.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to DTN as follows:
SECTION 5.1 ACQUIROR ORGANIZATION. Each of Acquiror and Merger Sub has
been duly organized and is validly existing and in good standing under the laws
of the jurisdiction of its formation. Each of Acquiror and Merger Sub has all
necessary limited liability company or corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions (including the Offer and the Merger) contemplated
hereby to be consummated by Acquiror and Merger Sub. The execution and delivery
of this Agreement by Acquiror and Merger Sub and the consummation by Acquiror
and Merger Sub of such transactions have been duly and validly authorized by all
necessary limited liability company or corporate action and no other limited
liability company or corporate proceedings on the part of Acquiror and Merger
Sub are necessary to authorize this Agreement or to consummate such
transactions. This Agreement has been duly authorized and validly executed and
delivered by each of Acquiror and Merger Sub and constitutes (assuming due
authorization, execution and delivery by DTN) a legal, valid and binding
obligation of each of Acquiror and Merger Sub, enforceable against each of
Acquiror and Merger Sub in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies.
SECTION 5.2 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Acquiror
and Merger Sub does not, and the performance of this Agreement by Acquiror and
Merger Sub will not: (i) conflict with or violate any provision of the limited
liability company agreement of Acquiror or the certificate of incorporation of
Merger Sub, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.2(b) have been obtained and all filings and
obligations described in Section 5.2(b) have been made, conflict with or violate
any Law applicable to Acquiror or Merger Sub or by which any property or asset
of Acquiror or Merger
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Sub is bound or affected; or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or in the case of Acquiror or Merger Sub, give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Acquiror
or Merger Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by each of
Acquiror and Merger Sub does not, and the performance of this Agreement by
Acquiror and Merger Sub will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Entity or any
other third party, except for: (i) applicable requirements of the Exchange Act,
the Securities Act, Blue Sky Laws, any exchange upon which securities of
Acquiror are traded and state takeover laws, the pre-merger notification
requirements of the HSR Act or similar anti-trust filings or notifications in
other jurisdictions; and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
reasonably be expected to prevent or materially delay consummation of the
Merger.
SECTION 5.3 ABSENCE OF LITIGATION. As of the date of this Agreement,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the Knowledge of Acquiror, threatened against Acquiror or Merger Sub or
any of their respective Subsidiaries, properties or assets before any court,
arbitrator or administrator, governmental or regulatory authority or body,
domestic or foreign, which seeks to delay or prevent or would result in the
material delay of or would prevent the consummation of any of the transactions
contemplated hereby. Neither Acquiror nor Merger Sub or any property or asset of
Acquiror or Merger Sub is subject to any continuing order of, consent decree,
settlement agreement or similar written agreement with, or, to the Knowledge of
Acquiror, continuing investigation by, any governmental or regulatory authority,
domestic or foreign, or any order, writ, judgment, injunction, decree,
determination or award of any governmental or regulatory authority or any
arbitrator which would prevent Acquiror or Merger Sub from performing its
respective material obligations under this Agreement or prevent or materially
delay the consummation of any of the transactions contemplated hereby.
SECTION 5.4 BROKERS. No broker, finder or investment banker, other than
Veronis, Suhler & Associates LLC (the fee to which shall be paid by Acquiror),
is entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Acquiror.
SECTION 5.5 NO ACTIVITIES. Merger Sub was formed solely for the purpose
of engaging in the Merger. Except for obligations or liabilities incurred in
connection with its incorporation or organization and the transactions
contemplated by this Agreement, Merger Sub does not have any obligations or
liabilities of any nature (whether accrued, absolute, contingent or otherwise)
and has not engaged in any business activities of any type or kind whatsoever or
entered into any agreements or arrangements with any person.
SECTION 5.6 FINANCING. As of the date of this Agreement, Acquiror has
the financial ability required to consummate the transactions contemplated by
this Agreement.
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SECTION 5.7 APPROVAL DELAYS. To the Knowledge of Acquiror, there is no
reason why the granting of any of the consents, approvals, authorizations and
other actions described in SECTION 5.2(B) would be denied or unduly delayed.
ARTICLE 6.
COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS BY DTN PENDING THE CLOSING. DTN agrees
that, between the date of this Agreement and the Effective Time, except as set
forth in Schedule 6.1 of the DTN Disclosure Schedule or as contemplated by any
other provision of this Agreement, unless Acquiror shall otherwise agree in
writing, which agreement shall not be unreasonably withheld or delayed: (1) the
businesses of DTN and the DTN Subsidiaries shall be conducted only in, and DTN
and the DTN Subsidiaries shall not take any action except in, the ordinary
course of business consistent with past practice; and (2) DTN shall use its
reasonable best efforts to keep available the services of such of the current
officers, significant employees and consultants of DTN and the DTN Subsidiaries
and to preserve the current relationships of DTN and the DTN Subsidiaries with
such of the customers, suppliers and other persons with which DTN or any DTN
Subsidiary has significant business relations in order to preserve substantially
intact its business organization. By way of amplification and not limitation,
except as set forth in Schedule 6.1 of the DTN Disclosure Schedule or as
contemplated by any other provision of this Agreement, DTN shall not, and shall
neither (unless required by applicable Laws or stock exchange regulations) cause
nor permit any DTN Subsidiaries or any of its Affiliates (over which it
exercises control), or any of its or their officers, directors, employees and
agents (in each case, in their capacities as such) to, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or agree to do,
any of the following, without the prior written consent of Acquiror, which
consent shall not be unreasonably withheld or delayed (except that, with respect
to the matters referred to in Section 6.1(e)(i), Acquiror shall have the right
to withhold its consent in its sole discretion):
(a) amend or otherwise change its certificate of incorporation
or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of DTN or any DTN Subsidiary of any class, or
securities convertible or exchangeable or exercisable for any shares of such
capital stock, or any options, warrants or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest (including any
phantom interest), or any Voting Debt, of DTN or any DTN Subsidiary (except for
the issuance of any shares of capital stock issuable pursuant to the exercise of
any DTN Options or DTN Warrants outstanding on the date of this Agreement); or
(ii) any property or assets of DTN or any DTN Subsidiary, except in all cases in
the ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock, other than dividends
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paid by any of the wholly owned DTN Subsidiaries to DTN;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including by merger, consolidation or
acquisition of stock or assets) any interest in any corporation, partnership,
other business organization, person or any division thereof or any assets, other
than acquisitions of assets in the ordinary course of business consistent with
past practice and any other acquisitions for consideration that are not, in the
aggregate, in excess of $1 million; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of any person for
borrowed money, except for indebtedness for borrowed money incurred in the
ordinary course of business and consistent with past practice or incurred to
refinance outstanding indebtedness for borrowed money existing on the date of
this Agreement (which refinancing shall not increase the aggregate amount of
indebtedness permitted to be outstanding thereunder and shall not include any
covenants that shall be materially more burdensome to DTN in any material
respect or increase costs to the Surviving Corporation after the Effective Time
in any material respect); or other indebtedness for borrowed money with a
maturity of not more than one year in a principal amount not, in the aggregate,
in excess of $1 million; (iii) terminate, cancel or request any material change
in, or agree to any material change in any Material Contract or enter into any
contract or agreement material to the business, results of operations or
financial condition of DTN and the DTN Subsidiaries taken as a whole, in either
case other than in the ordinary course of business, consistent with past
practice; (iv) make or authorize any capital expenditure, or take any other
related actions, that would be reasonably likely to cause DTN to exceed its 2000
capital expenditures budget, in the aggregate, by more than $50,000; or (v)
enter into or amend any contract, agreement, commitment or arrangement that, if
fully performed, would not be permitted under this Section;
(f) except as set forth in Schedule 6.1 to the DTN Disclosure
Schedule, increase the compensation payable or to become payable to its officers
or employees, except for increases in accordance with past practices in salaries
or wages of employees of DTN or any DTN Subsidiary who are not officers of DTN,
or grant any rights to severance or termination pay to, or enter into any
employment or severance agreement with, any director, officer or other employee
of DTN or any DTN Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee, except as
contemplated by this Agreement or to the extent required by applicable Law or
the terms of a collective bargaining agreement or a contractual obligation
existing on the date hereof; provided, however, that DTN may grant options,
restricted shares, performance units or other long-term incentive awards to new
hires in the ordinary course of business consistent with past practice;
(g) take any action with respect to modifying accounting
policies or procedures, other than actions in the ordinary course of business
and consistent with past practice and as advised by DTN's regular independent
accountants;
(h) waive, release, assign, settle or compromise any material
claims or
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litigation involving money damages in excess of $100,000, except for claims
asserted by DTN or the applicable DTN Subsidiary;
(i) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability, other than such
actions in the ordinary course of business and consistent with past practice,
provided however that DTN shall inform Acquiror in advance of such election or
settlement or compromise if such election or settlement or compromise could
reasonably be expected to have any ongoing material adverse tax consequence to
the Surviving Corporation;
(j) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing;
(k) except as contemplated by Section 7.3, enter into any
confidentiality agreements or arrangements other than in the ordinary course of
business consistent with past practice;
(l) take any action that will likely result in the
representations and warranties set forth in Article 4 becoming false or
inaccurate in any material respect;
(m) enter into or carry out any other transaction other than
in the ordinary and usual course of business or other than as permitted pursuant
to the other clauses in this Section; or
(n) permit or cause any Subsidiary to do any of the foregoing
or agree or commit to do any of the foregoing.
SECTION 6.2 NOTICES OF CERTAIN EVENTS. Each of Acquiror, on the one
hand, and DTN, on the other hand, shall give prompt notice to the other of: (a)
any notice or other communication from any person alleging that the consent of
such person is or may be required in connection with the Merger; (b) any
material notice or other communication from any Governmental Entity in
connection with the Merger; (c) any actions, suits, claims, investigations or
proceedings commenced or, to its Knowledge threatened in writing against,
relating to or involving or otherwise affecting Acquiror, DTN or any of their
respective Subsidiaries that relate to the consummation of the Merger; (d) the
occurrence of a default or event that, with notice or lapse of time or both,
will become a default under any Material Contract; and (e) any change that would
result in a Material Adverse Effect or is reasonably likely to delay or impede
the ability of either Acquiror or DTN to consummate the transactions
contemplated by this Agreement or to fulfill its obligations set forth herein.
SECTION 6.3 MANAGEMENT INCENTIVE PROGRAM.
(a) Acquiror shall provide an equity incentive program that,
subject to certain conditions, will provide DTN's senior management team with
12.5% of the incremental equity profit after return of capital to the Acquiror.
It is anticipated that this equity incentive will be provided to the key members
of senior management and allocated by the Acquiror after consultation with DTN's
president. Under the arrangement, 50% of the incentive interest will vest
ratably over five years, but will vest in full upon an earlier change in
control; and the
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remaining 50% will be payable upon a change of control with management's
entitlement based upon a sliding scale that correlates to the Acquiror's
realized internal rate of return ("IRR") after taking account of the payments
under the program; the scale will be a ratable sliding scale in which no
incentive payment with respect to this 50% is made if the IRR is less than 20%
and the full amount will be payable with respect to this 50% if the IRR is 40%
or higher.
(b) In addition, Acquiror shall establish an arrangement under
which certain key officers and employees of DTN as of the Closing Date (the
"Participants") will receive an aggregate of 15% of the excess of (i) the
proceeds DTN receives from the sale of the 303,000 shares of common stock of
SmartServ Online, Inc (the "SmartServ Stock") received upon exercise of the
warrants presently held by DTN to purchase the SmartServ Stock over (ii) the
aggregate exercise price paid by DTN for the shares of SmartServ Stock (the
"Cash Bonuses"). The Cash Bonuses shall be paid to the Participants from time to
time promptly after the proceeds of each sale of the SmartServ Stock is received
by DTN; provided, however, no Cash Bonuses shall be paid until December 1, 2000.
Acquiror shall, after consultation with DTN's president, determine which
officers and employees of DTN will be the Participants and the percentage of the
Cash Bonuses to which each Participant will be entitled. A Participant will not
be entitled to receive any Cash Bonuses after the voluntary termination of
employment of such Participant with DTN, other than as a result of death or
disability. In the event of a Participant's voluntary termination of his or her
employment with DTN, the remaining Participants shall receive proportionately
the remaining Cash Bonuses the Participant who voluntarily terminated employment
would otherwise have received. In the event DTN has not sold all of the shares
of SmartServ Stock by February 16, 2002, then after such date the Participants
may elect to have DTN distribute to each Participant that portion of the
remaining shares of SmartServ Stock then held by DTN which represents such
Participant's percentage of the Cash Bonuses multiplied by 15%, in lieu of such
Participant's interest in future Cash Bonuses based upon the remaining shares of
SmartServ Stock.
ARTICLE 7.
ADDITIONAL AGREEMENTS
SECTION 7.1 STOCKHOLDERS MEETING.
(a) If the Minimum Condition or any other condition of the
Offer is not satisfied and the Offer is therefore terminated, DTN, acting
through its Board of Directors, shall, in accordance with applicable law and as
promptly as practicable following the termination of the Offer, (i) duly call,
give notice of, convene and hold a special meeting of its stockholders (the "DTN
Stockholders' Meeting") for the purpose of considering and adopting this
Agreement and approving the Merger, (ii) prepare and file with the SEC
preliminary proxy materials relating to the Merger and this Agreement and use
its reasonable efforts to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Acquiror, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy statement, and (iii) cause a definitive
proxy statement, including any amendment or supplement thereto (the "Proxy
Statement"), to be mailed to its stockholders, provided that no amendment or
supplement to the Proxy Statement shall be made
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by DTN without consultation with Acquiror and its counsel.
(b) Subject to the fiduciary duties of the Board of Directors
of DTN, as described in the following proviso, the Proxy Statement shall include
the recommendation of the Board of Directors of DTN to the stockholders of DTN
in favor of approval of the Merger and this Agreement; provided, however, that
the Board of Directors of DTN may, at any time prior to the date of the DTN
Stockholders' Meeting, withdraw, modify or change any such recommendation to the
extent that the Board of Directors of DTN determines in good faith after
consultation with independent legal counsel that the failure to so withdraw,
modify or change its recommendation could cause the Board of Directors of DTN to
breach its fiduciary duties to DTN's stockholders under applicable law.
(c) The information supplied by Acquiror for inclusion in the
Proxy Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto), is first mailed to the stockholders of DTN and
(ii) the time of the DTN Stockholders' Meeting contain any untrue statement of a
material fact or fail to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the date of the DTN Stockholders' Meeting, any event or circumstance relating
to Acquiror or its officers or directors is discovered by Acquiror that should
be set forth in an amendment or a supplement to the Proxy Statement, Acquiror
shall promptly inform DTN. All documents that Acquiror is responsible for filing
with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and the
Exchange Act.
(d) The information supplied by DTN for inclusion in the Proxy
Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto), is first mailed to the stockholders of DTN and
(ii) the time of the DTN Stockholders' Meeting, contain any untrue statement of
a material fact or fail to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the date of the DTN Stockholders' Meeting, any event or circumstance relating
to DTN or any Subsidiary of DTN, or their respective officers or directors, is
discovered by DTN that should be set forth in an amendment or a supplement to
the Proxy Statement, DTN shall promptly inform Acquiror. All documents that DTN
is responsible for filing with the SEC in connection with the Merger or the
other transactions contemplated by this Agreement will comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act.
SECTION 7.2 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which DTN or any of its
Subsidiaries is a party or pursuant to applicable Law or the regulations or
requirements of any regulatory organization with whose rules the parties are
required to comply, from the date of this Agreement to the Effective Time, DTN
shall (and shall cause its Subsidiaries to): (i) provide to Acquiror and its
Affiliates and their respective officers, directors, employees, accountants,
consultants, legal counsel, agents, lenders and other representatives
(collectively with respect to any party hereunder, "Representatives")
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reasonable access at reasonable times, upon prior notice to DTN, to the
officers, employees, agents, properties, offices and other facilities of DTN and
its Subsidiaries and to the books and records thereof (ii) furnish promptly such
information concerning the business, properties, contracts, assets, liabilities,
personnel and other aspects of DTN and its Subsidiaries as Acquiror or its
Representatives may reasonably request and (iii) promptly deliver to Acquiror
the monthly financial statements of DTN and the DTN Subsidiaries and copies of
all other material relating to the business and operations of DTN and its
Subsidiaries (excluding material relating to this Agreement, the Offer, the
Merger, or any Competing Transaction) that is delivered from time to time to the
members of DTN's Board of Directors. No investigation conducted pursuant to this
Section shall affect or be deemed to modify any representation or warranty made
in this Agreement.
(b) The parties shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations
under the Confidentiality Agreement dated July 8, 1999 (the "Confidentiality
Agreement"), between Acquiror and Greif (on behalf of DTN) with respect to the
information disclosed pursuant to this Section.
SECTION 7.3 NO SOLICITATION OF TRANSACTIONS.
(a) DTN agrees that, from and after the date hereof until the
earlier of the Effective Time or the termination of this Agreement in accordance
with its terms, neither it nor any DTN Subsidiary, nor any of their respective
Representatives, shall, except as contemplated by this Agreement, directly or
indirectly, initiate, solicit or encourage any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving DTN or any of its Significant Subsidiaries, or
any purchase or sale of all or any significant portion of the assets of DTN or
any of its Significant Subsidiaries, or fifteen percent (15%) or more of the
equity securities of DTN (any such proposal or offer being hereinafter referred
to as a "Competing Transaction").
(b) DTN further agrees that neither it nor any DTN
Subsidiaries, nor any of their respective Representatives, shall, directly or
indirectly, have any discussion with or provide any confidential information or
data relating to DTN or any DTN Subsidiary to any Person relating to a Competing
Transaction or engage in any negotiations concerning a Competing Transaction, or
otherwise facilitate any effort or attempt to make or implement a Competing
Transaction or accept or enter into any agreement in connection with, a
Competing Transaction; provided, however, that nothing contained in this Section
shall prevent DTN or the Board of Directors of DTN from (i) engaging in any
discussions or negotiations with, or providing any information to, any Person in
response to an unsolicited written Competing Transaction by any such Person; or
(ii) recommending such an unsolicited written Competing Transaction to the
holders of DTN Common Stock if, in any such case as is referred to in clause (i)
or (ii), (A) the Board of Directors of DTN concludes in good faith (after
consultation with independent financial advisors) that such Competing
Transaction is reasonably likely to be consummated, taking into account all
legal, financial and regulatory aspects of the proposal and the Person making
the proposal (including the financial capability of that Person and any
conditions contained in the proposal), and that such Competing Transaction
would, if consummated, result in a transaction more favorable to holders of DTN
Common Stock than the Merger and the Offer (any such more
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favorable Competing Transaction being referred to in this Agreement as a
"Superior Proposal"), (B) the Board of Directors of DTN determines in good faith
after consultation with independent legal counsel that the failure to take such
action would be reasonably likely to constitute a breach of its fiduciary duties
under applicable Law, (C) prior to providing any information or data regarding
DTN to any Person or any of such Person's Representatives in connection with a
Superior Proposal by such Person, DTN receives from such Person an executed
confidentiality agreement with terms substantially the same as those contained
in the Confidentiality Agreement and (D) prior to providing any information or
data to any Person or any of such Person's Representatives or entering into
discussions or negotiations with any Person or any of such Person's
Representatives in connection with a Superior Proposal by such Person, DTN
notifies Acquiror promptly of the receipt of such Superior Proposal indicating,
in connection with such notice, the name of such Person and attaching a copy of
the proposal or offer or providing a complete written summary thereof. DTN
agrees that it shall keep Acquiror informed, on a current basis, of the status
and terms of any discussions or negotiations related to such Superior Proposal.
(c) DTN agrees that it will take the necessary steps to
promptly inform each DTN Subsidiary and each Representative of DTN or any DTN
Subsidiary of the obligations undertaken in this Section. Effective as of the
date hereof, DTN shall terminate and cause its Subsidiaries to terminate any
existing activities, discussions or negotiations with any third parties that may
be ongoing with respect to any Competing Transaction and shall request that all
confidential information previously furnished to any such third parties be
returned promptly.
SECTION 7.4 EMPLOYEE BENEFITS MATTERS.
(a) Except as contemplated by this Agreement, for a period of
eighteen (18) months following the Effective Time, the Surviving Corporation
shall maintain employee benefit plans and arrangements which in the aggregate
will provide a similar level of benefits to active and retired employees of DTN
and the DTN Subsidiaries to those provided under DTN's employee benefit plans
and arrangements as in effect immediately prior to the Effective Time; provided,
however, that changes may be made to such employee benefit plans and
arrangements to the extent necessary to comply with applicable Law. From and
after the Effective Time, the Surviving Corporation shall honor in accordance
with their terms, the DTN Benefit Plans and all existing employment and
severance agreements and severance plans which apply to current or former
employees or directors of DTN or the DTN Subsidiaries.
(b) To the extent that service is relevant for purposes of
eligibility, participation, vesting or benefit accrual under any employee
benefit plan, program or arrangement established, maintained or contributed to
by the Surviving Corporation, employees of DTN and the DTN Subsidiaries shall be
credited for service accrued or deemed accrued prior to the Effective Time with
DTN or a DTN Subsidiary; provided, however, that such crediting of service does
not result in the duplication of benefits or an unintended windfall with respect
to the accrual of benefits. The Surviving Corporation shall provide each
employee of DTN and the DTN Subsidiaries with credit for any co-payments and
deductibles paid prior to the Effective Time for the calendar year in which the
Effective Time occurs, in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time.
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SECTION 7.5 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The certificate of incorporation and bylaws of the
Surviving Corporation shall contain the provisions regarding liability of
directors and indemnification of directors and officers that are set forth, as
of the date of this Agreement, in the Certificate of Incorporation and the
bylaws, respectively, of DTN, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who at
or at any time prior to the Effective Time were directors, officers, employees,
fiduciaries or agents of DTN.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use all reasonable efforts to cause to be maintained
in effect policies of directors' and officers' liability insurance with coverage
in amount and scope at least as favorable as DTN's existing policies with
respect to claims arising from facts or events that occurred prior to the
Effective Time; provided, however, that during such period the Surviving
Corporation shall in no event be required to expend pursuant to this Section
more than an amount per year equal to 200 percent of current premiums paid by
DTN for such insurance, which current premium amount is set forth in Schedule
7.5(b) of the DTN Disclosure Schedule.
(c) This Section is intended to be for the benefit of, and
shall be enforceable by, the indemnified parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns.
(d) From and after the Effective Time, the Surviving
Corporation agrees that it shall, and Acquiror shall cause the Surviving
Corporation to, indemnify and hold harmless each present and former director and
officer of DTN and any DTN Subsidiary, determined as of the Effective Time (the
"Indemnified Parties"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that DTN or any DTN Subsidiary
would have been permitted under the law of the state or jurisdiction of its
formation and under the certificate of incorporation, charter, bylaws or other
organizational documents of DTN or any DTN Subsidiary (as in effect on the date
hereof) to indemnify such Indemnified Parties (and the Surviving Corporation
shall, and Acquiror shall cause the Surviving Corporation to, advance expenses
as incurred to the fullest extent permitted under applicable Law; provided that
the Indemnified Party to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such Indemnified Party
is not entitled to indemnification); and provided, further, that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under applicable Law
and the certificate of incorporation, charter, bylaws or other organizational
documents of DTN or any DTN Subsidiary shall be made by independent counsel
selected by the Surviving Corporation.
(e) To the extent paragraph (d) shall not serve to indemnify
and hold harmless an Indemnified Party, for a period of six years after the date
hereof, the Surviving Corporation shall, and Acquiror shall cause the Surviving
Corporation to, subject to the terms set forth herein,
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indemnify and hold harmless, to the fullest extent permitted under applicable
Law (and the Surviving Corporation shall, and Acquiror shall cause the Surviving
Corporation to advance expenses as incurred to the fullest extent permitted
under applicable Law; provided that the Indemnified Party to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification), each
Indemnified Party against any Costs incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to the
transactions contemplated by this Agreement; provided, however, that the
Surviving Corporation shall not be required to indemnify any Indemnified Party
pursuant hereto if it shall reasonably determine that the Indemnified Party
acted in bad faith and not in a manner such Indemnified Party believed to be in
or not opposed to the best interests of DTN and any DTN Subsidiary.
(f) Any Indemnified Party wishing to claim indemnification
under paragraphs (d) or (e) of this Section, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Acquiror
thereof, but the failure to so notify shall not relieve Acquiror or Surviving
Corporation of any liability it may have to such Indemnified Party, except to
the extent that such failure materially prejudices the Surviving Corporation. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) the Surviving Corporation shall
have the right to assume the defense thereof and the Surviving Corporation shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Parties advises
that there are issues which raise conflicts of interest between Acquiror or the
Surviving Corporation and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and the Surviving Corporation shall, and
Acquiror shall cause the Surviving Corporation to, pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; provided, however, that Acquiror and the Surviving
Corporation shall be obligated pursuant to this paragraph to pay for only one
firm of counsel for all Indemnified Parties in any jurisdiction unless the use
of one counsel for such Indemnified Parties would present such counsel with a
conflict of interest, (ii) the Indemnified Parties will cooperate in the defense
of any such matter and (iii) neither Acquiror nor the Surviving Corporation
shall be liable for any settlement effected without the prior written consent of
Acquiror (which consent shall not be unreasonably withheld); and provided,
further, that neither Acquiror nor the Surviving Corporation shall have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law. If such indemnity is not
available with respect to any Indemnified Party, then the Surviving Corporation
shall, and Acquiror shall cause the Surviving Corporation to, and the
Indemnified Party shall, each contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and benefits.
(g) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity or such
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets or outstanding voting securities to any individual,
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corporation or other entity, then and in each such case, proper provisions shall
be made so that the successors and assigns of the Surviving Corporation shall
assume all of the obligations set forth in this Section.
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SECTION 7.6 FURTHER ACTION; CONSENTS; FILINGS.
(a) Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use its reasonable best efforts to promptly after
the execution of this Agreement (i) take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the Merger,
(ii) obtain from Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by Acquiror
or DTN or any of their Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Merger, and
(iii) make all necessary filings, and thereafter make any other submissions
either required or deemed appropriate by each of the parties, with respect to
this Agreement and the Merger required under (A) the Securities Act, the
Exchange Act and any other applicable federal or Blue Sky Laws, (B) the HSR Act
and (C) any other applicable Law, and, in any event, the necessary filing under
the HSR Act shall be made by the parties no later than 15 days from the date of
this Agreement. The parties hereto shall cooperate and consult with each other
in connection with the making of all such filings, including by providing copies
of all such documents to the nonfiling party and its advisors prior to filing,
and none of the parties will file any such document if any of the other parties
shall have reasonably objected to the filing of such document. No party to this
Agreement shall consent to any voluntary extension of any statutory deadline or
waiting period or to any voluntary delay of the consummation of the Merger at
the behest of any Governmental Entity without the consent and agreement of the
other parties to this Agreement, which consent shall not be unreasonably
withheld or delayed. Without limiting the foregoing, each of the parties hereto
shall, and shall cause their Subsidiaries to, use their reasonable best efforts
to obtain (and to cooperate and coordinate with the other parties to obtain) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity that is required to be obtained in connection with the
Merger and to take all actions reasonably necessary to satisfy any applicable
regulatory requirements relating thereto. Each of the parties shall take
promptly, in the event that any permanent or preliminary injunction or other
order is entered or becomes reasonably foreseeable to be entered in any
proceeding that would make consummation of the transaction contemplated hereby
in accordance with the terms of this Agreement unlawful or that would prevent or
delay consummation of the transaction contemplated hereby, any and all steps
necessary to vacate, modify or suspend such injunction or order so as to permit
such consummation prior to the deadline specified in Section 9.1(b).
(b) Neither DTN nor any of the DTN Subsidiaries shall take, or
agree to commit to take, any action that would or is reasonably likely to result
in any of the conditions to the Offer set forth in Annex A or any of the
conditions to the Merger set forth in Article 8 not being satisfied, or that
would make any representation or warranty of DTN contained herein inaccurate in
any respect at, or as of any time prior to, the Effective Time, or that would
materially impair the ability of DTN to consummate the Offer or the Merger in
accordance with the terms hereof or materially delay such consummation.
(c) Neither Acquiror, Merger Sub nor any of their Subsidiaries
shall take, or agree to commit to take, any action that would or is reasonably
likely to result in any of the conditions to the Offer set forth in Annex A or
any of the conditions to the Merger set forth in Article 8 not being satisfied,
or that would make any representation or warranty of Acquiror
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contained herein inaccurate in any respect at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of Acquiror or
Merger Sub to consummate the Offer or the Merger in accordance with the terms
hereof or materially delay such consummation.
SECTION 7.7 PUBLIC ANNOUNCEMENTS. The initial press release concerning
the Merger shall be a joint press release and, thereafter, Acquiror and DTN
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or any transaction
contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except to the extent required by
applicable Law or the requirements of the National Association of Securities
Dealers or any exchange upon which the securities of Acquiror trade, in which
case the issuing party shall use its reasonable best efforts to consult with the
other party before issuing any such release or making any such public statement.
ARTICLE 8.
CONDITIONS TO THE MERGER
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of Acquiror, DTN and Merger Sub to effect the Merger shall be
subject to the satisfaction or, if permitted by applicable Law, waiver prior to
the Closing Date of the following conditions:
(a) if the Minimum Condition has not been satisfied, this
Agreement and the transactions contemplated hereby shall have been approved and
adopted by the stockholders of DTN in accordance with the DGCL;
(b) no preliminary or permanent injunction, decree or other
order (an "Order") issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect, and no Law shall have been enacted or adopted that
enjoins, prohibits or makes illegal consummation of any of the transactions
contemplated hereby;
(c) any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(d) all consents, approvals, waivers and authorizations
required to be obtained to effect the Merger shall have been obtained from all
Governmental Entities, except where the failure to obtain any such consents,
approvals and authorizations would not result in a Material Adverse Effect; and
(e) all consents, approvals, waivers and authorizations
(including waivers of termination rights) of third parties (other than
Governmental Entities), the failure of which to obtain would result in a
Material Adverse Effect, shall have been obtained.
SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF DTN. The obligation of DTN
to effect the Merger is subject to the satisfaction or, if permitted by
applicable Law, waiver prior to the
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Closing Date of the following further conditions:
(a) each of the representations and warranties of Acquiror and
Merger Sub contained in this Agreement shall be true and correct as of the
Effective Time as though made on and as of the Effective Time, except where any
such failure or failures to be so true and correct, in the aggregate, would not
materially and adversely affect the ability of Acquiror or Merger Sub to perform
its obligations hereunder, and except that those representations and warranties
that address matters only as of a particular date shall remain true and correct
as of such date except where any such failure or failures to be so true and
correct, in the aggregate, would not materially and adversely affect the ability
of Acquiror or Merger Sub to perform its obligations hereunder, and DTN shall
have received a certificate of the Chairman, President or Chief Financial
Officer of Acquiror to such effect; and
(b) Acquiror and Merger Sub shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the Effective
Time, and DTN shall have received a certificate of the Chairman, President or
Chief Financial Officer of Acquiror to that effect.
SECTION 8.3 CONDITIONS TO THE OBLIGATIONS OF ACQUIROR AND MERGER SUB.
The obligation of Acquiror and Merger Sub to effect the Merger is subject to the
satisfaction or, if permitted by applicable Law, waiver prior to the Closing
Date of the following further conditions:
(a) each of the representations and warranties of DTN
contained in this Agreement shall be true and correct as of the Effective Time
(without giving effect to the materiality or Material Adverse Effect qualifiers
set forth therein) as though made on and as of the Effective Time, except where
any such failure or failures to be so true and correct, individually or in the
aggregate, would not have a Material Adverse Effect, and except that those
representations and warranties that address matters only as of a particular date
shall remain true and correct as of such date except where any such failure or
failures to be so true and correct, individually or in the aggregate, would not
have a Material Adverse Effect, and Acquiror shall have received a certificate
of the Chairman, President or Chief Financial Officer of DTN to such effect;
(b) DTN shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time, and Acquiror
shall have received a certificate of the Chairman, President or Chief Financial
Officer of DTN to such effect;
(c) There shall not have occurred any material adverse change
(or any developments that, insofar as reasonably can be foreseen, would
reasonably be expected to result in a material adverse change) in the business,
properties, prospects, operations or condition (financial or otherwise) of DTN
or any Significant Subsidiary of DTN, other than any change, effect, event or
occurrence to the extent arising from or relating to (i) the United States or
the global economy or securities markets in general, (ii) actions taken pursuant
to the obligations of the parties expressly set forth in this Agreement, or
(iii) changes in any Laws;
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(d) The consents under any Material Contracts set forth on
Schedule 4.5(b) of the DTN Disclosure Schedule shall have been obtained, without
any terms or conditions that Acquiror determines in good faith to be materially
burdensome to Acquiror or the operations of DTN on a going forward basis, and
shall be in effect at the Effective Time; and
(e) DTN shall have delivered to Acquiror the audited
consolidated financial statements of DTN and the DTN Subsidiaries for the year
ended December 31, 1999 and none of those financial statements shall differ in
any material respect from the draft contained in Schedule 4.7(a).
ARTICLE 9.
TERMINATION
SECTION 9.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of the Agreement, as follows:
(a) by mutual written consent duly authorized by the Board of
Directors of DTN and the Board of Directors of Acquiror;
(b) by either Acquiror or DTN:
(i) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling or other
action the parties hereto shall use reasonable efforts to lift), which
permanently restrains, enjoins or otherwise prohibits the acceptance for payment
of, or payment for, Shares pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final and non-appealable;
(ii) if the Minimum Condition shall not have been
satisfied and the Merger shall fail to receive the requisite vote for approval
and adoption by the stockholders of DTN; or
(iii) if the Merger shall not have been consummated before
August 31, 2000; provided, however, this Section 9.1(b)(iii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure to consummate the
Merger before that date.
(c) By DTN:
(i) in connection with entering into a definitive
agreement with respect to a Superior Proposal in accordance with Sections 7.3,
provided it has complied with all provisions of Section 7.3, including the
notice provisions therein; or
(ii) if Acquiror or the Merger Sub shall have breached in
any material respect any of their respective representations, warranties,
covenants or other agreements
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contained in this agreement, which breach cannot be or has not been cured within
30 days after the giving of written notice by DTN to Acquiror or the Merger Sub,
as applicable.
By Acquiror:
(i) if DTN shall have breached in any material respect any
of its representations, warranties, covenants or other agreements contained in
this agreement, which breach cannot be or has not been cured within 30 days
after the giving of written notice by Acquiror to DTN; or
(ii) if the number of Dissenting Shares as of the date of
notice of termination shall exceed 7.5% of the outstanding DTN Common Stock.
SECTION 9.2 EFFECT OF TERMINATION. Except as provided in Section 11.1,
in the event of termination of this Agreement pursuant to Section 9.1, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Acquiror, DTN or Merger Sub or any of their respective
officers or directors, and all rights and obligations of each party hereto shall
cease; provided, however, that nothing herein shall relieve any party from
liability for the breach of any of its representations and warranties or the
breach of any of its covenants or agreements set forth in this Agreement. In the
event of termination of this Agreement by either Acquiror or DTN pursuant to
Section 9.1, the terminating party shall give prompt written notice thereof to
the non-terminating party.
SECTION 9.3 AMENDMENT. This Agreement may be amended by mutual
agreement of the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval of this Agreement by the
stockholders of DTN, no amendment may be made that would reduce the amount or
change the type of consideration into which each share of DTN Common Stock shall
be converted upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto. Subject to the
foregoing, in the event that the implementation of the transactions contemplated
by this Agreement prove for any reason to be impracticable, the parties shall
use their reasonable best efforts to amend the method of effecting the business
combination between Acquiror and DTN contemplated by this Agreement, including
providing for a mutually agreeable alternative form of transaction structure to
effect such business combination; provided that no such amendment shall alter
the amount or kind of consideration to be issued to the stockholders of DTN or
be reasonably likely to materially impede or delay consummation of the
transactions contemplated by this Agreement.
SECTION 9.4 WAIVER. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any agreement or condition contained herein. Any
waiver of a condition set forth in Section 8.1, or any determination that such a
condition has been satisfied, will be effective only if made in writing by each
of DTN, Acquiror and Merger Sub, and, unless otherwise specified in such
writing, shall thereafter operate as a waiver (or satisfaction) of such
condition for any and all purposes of this Agreement. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
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party or parties to be bound thereby.
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SECTION 9.5 EXPENSES; TERMINATION FEE.
(a) Subject to paragraph (b) below, all Expenses (as defined
below) incurred in connection with this Agreement and the Merger shall be paid
by the party incurring such expenses, whether or not the Merger is consummated,
except that Acquiror and DTN each shall pay one-half of all Expenses relating to
printing, filing and mailing the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Proxy Statement.
"Expenses" as used in this Agreement shall consist of all out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Proxy Statement, the
solicitation of stockholder approvals and all other matters related to the
consummation of the Merger.
(b) If at any time prior to payment for shares of DTN Common
Stock tendered in response to the Offer or, if the Minimum Condition is not
satisfied, at any time prior to consummation of the Merger, DTN shall receive a
proposal with respect to a Competing Transaction and shall terminate this
Agreement under Section 9.1(c)(i), DTN shall pay to Acquiror in accordance with
this section a cash fee in the amount of $10 million plus the amount of
reasonable out-of-pocket legal, accounting and other costs, fees and expenses
incurred by VS&A or Acquiror in connection with the Transactions contemplated by
this Agreement (excluding any investment banking fee paid to Veronis, Suhler &
Associates LLC). Such payment shall be made promptly upon demand, but only if
prior to or on the date of termination or within six months thereafter DTN
enters into an agreement (including, but not limited to, a letter of intent or
similar instrument) with a party other than VS&A or any of its Affiliates
relating to a Competing Transaction or makes any public announcement in support
of any such transaction, and such transaction is consummated within twelve
months after termination of this Agreement.
ARTICLE 10.
DEFINITIONS
SECTION 10.1 DEFINITIONS. In addition to those terms defined throughout
this Agreement, the following terms, when used herein, shall have the following
meanings.
(a) "Affiliate" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person.
(b) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which banks are
not required or authorized to close in the city of New York, New York.
(c) "control" (including the terms "controlled by" and "under
common control
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with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or otherwise.
(d) "Knowledge" with respect to:
(i) an individual means that such person will be deemed to
have "Knowledge" of a particular fact or other matter if such individual is
actually aware of such fact or other matter; and
(ii) a Person (other than an individual) means that such
Person will be deemed to have "Knowledge" of a particular fact or other matter
if any individual who is serving as a director, officer, partner, executor or
trustee of such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or other matter.
(e) "Material Adverse Effect" means any change in or effect on
the business of DTN or any Significant Subsidiary of DTN which is, or insofar as
can be reasonably foreseen would reasonably be expected to be, materially
adverse to the business, properties, prospects, operations or condition
(financial or otherwise) of DTN or any Significant Subsidiary of DTN, other than
any change, effect, event or occurrence to the extent arising from or relating
to (i) the United States or the global economy or securities markets in general,
(ii) actions taken pursuant to the obligations of the parties expressly set
forth in this Agreement, or (iii) changes in any Laws.
(f) "Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union or
other entity or Regulatory Authority.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Significant Subsidiary" means any Subsidiary of DTN that
during the year ended December 31, 1999 accounted for 3% or more of the
consolidated revenue of DTN and its Subsidiaries.
(i) "Subsidiary" means with respect to any Person (the
"Owner"), any corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation's or other Person's
board of directors or similar governing body, or otherwise having the power to
direct the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or more of its
Subsidiaries.
(j) "Tax" means any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including: taxes or other
charges on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of
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excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes
and customs duties, tariffs, and similar charges
(k) "Tax Return" means any return, declaration, report, claim
for refund or information return or statement relating to Taxes filed with a
taxing authority, including any schedule or attachment thereto, and including
any amendment thereof.
SECTION 10.2 PRINCIPLES OF CONSTRUCTION.
(a) In this Agreement, unless otherwise stated or the context
otherwise requires, the following uses apply: (i) actions permitted under this
Agreement may be taken at any time and from time to time in the actor's sole
discretion; (ii) references to a statute shall refer to the statute and any
successor statute, and to all regulations promulgated under or implementing the
statute or successor, as in effect at the relevant time; (iii) in computing
periods from a specified date to a later specified date, the words "from" and
"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to, but excluding"; (iv) references
to a governmental or quasi-governmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of the
agency, authority or instrumentality; (v) indications of time of day mean
Eastern Standard Time; (vi) "including" means "including, but not limited to";
(vii) all references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified;
(viii) all words used in this Agreement will be construed to be of such gender
or number as the circumstances require; (ix) the captions and headings of
articles, sections, schedules and exhibits appearing in or attached to this
Agreement have been inserted solely for convenience of reference and shall not
be considered a part of this Agreement nor shall any of them affect the meaning
or interpretation of this Agreement or any of its provisions; and (x) the
language used in this Agreement shall be deemed to be the language jointly
chosen by the parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against either party.
(b) The disclosure schedule of DTN (the "DTN Disclosure
Schedule") shall consist of the information, agreements and other documentation
described and referred to in this Agreement as being included in the DTN
Disclosure Schedule. The parties acknowledge and agree that the mere inclusion
of an item in the DTN Disclosure Schedule shall not be deemed an admission by
DTN that such item represents a material exception or fact, event or
circumstance or that such item would have a Material Adverse Effect on DTN.
Disclosure of any fact or item in any Schedule or Exhibit hereto referenced by a
particular paragraph or section in this Agreement shall, should the existence of
the fact or item or its contents be relevant to any other paragraph or section,
be deemed to be disclosed with respect to that other paragraph or section
whether or not an explicit cross-reference appears.
(c) All accounting terms not specifically defined herein shall
be construed in accordance with United States generally accepted accounting
principles ("GAAP").
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ARTICLE 11.
MISCELLANEOUS
SECTION 11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 9.1, as the
case may be, except that the agreements set forth in Articles 2 and 3 and
Sections 7.4 and 7.5 and this Article shall survive the Effective Time, and
those set forth in Section 7.2(b) and Section 9.5(b) and this Article shall
survive termination. Each party agrees that, except for the representations and
warranties contained in this Agreement and the DTN Disclosure Schedule, no party
hereto has made any other representations and warranties, and each party hereby
disclaims any other representations and warranties made by itself or any of its
officers, directors, employees, agents, financial and legal advisors or other
representatives with respect to the execution and delivery of this Agreement or
the transactions contemplated herein, notwithstanding the delivery or disclosure
to any other party or any party's representatives of any documentation or other
information with respect to any one or more of the foregoing.
SECTION 11.2 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
and facsimile or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section):
(a) If to Acquiror or Merger Sub, to:
VS&A Communications Partners III, L.P.
350 Park Avenue
New York, New York 10022
Telephone: (212) 935-4990
Telecopier: (212) 935-0877
Attention: Jeffrey T. Stevenson
with copies to:
Proskauer Rose, LLP
1585 Broadway
New York, New York 10036
Telephone: (212) 969-3000
Telecopier: (212) 969-2900
Attention: Bertram A. Abrams, Esq.
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(b) if to DTN, to:
Data Transmission Network Corporation
9110 West Dodge Road, Suite 200
Omaha, Nebraska 68114
Telephone: (402) 390-2328
Telecopier: 402-255-8227
Attention: Greg Sloma
with copies to:
Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 West Wacker
Suite 2700
Chicago, Illinois 60606
Attention: Peter J. Barack, Esq.
Telephone: (312) 984-3100
Telecopier: (312) 984-3150
SECTION 11.3 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 11.4 ASSIGNMENT; MERGER SUB; BINDING EFFECT; BENEFIT. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties.
Notwithstanding anything to the contrary contained in this Agreement, Acquiror
may transfer the shares of Merger Sub to one of its Subsidiaries prior to the
consummation of the Merger. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, except for the provisions of Section 7.5 (the
"Third Party Provision"), nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. The Third Party Provision may
be enforced by the beneficiaries thereof.
SECTION 11.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State without regard to any
conflicts of laws principles otherwise applicable. No provision of this
Agreement shall be construed to require any of the parties hereto or any of
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their respective Subsidiaries, Affiliates, directors, officers, employees or
agents to take any action that would violate any applicable Law.
SECTION 11.6 COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 11.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits
and DTN Disclosure Schedule) and the Confidentiality Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed
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by their respective officers on the day and year first written above.
ATTEST DATA TRANSMISSION NETWORK CORPORATION
/s/ Scott Fleck /s/ Greg T. Sloma
By: ____________________________ By: _________________________________
Scott Fleck Greg T. Sloma
Name: __________________________ Name: _______________________________
VP President -- CEO
Title: _________________________ Title: ______________________________
ATTEST VS&A-DTN, LLC
/s/ Jonathan Drucker /s/ Jeffrey T. Stevenson
By: ____________________________ By: _________________________________
Jonathan Drucker Jeffrey T. Stevenson
Name: __________________________ Name: _______________________________
General Counsel President
Title: _________________________ Title: ______________________________
ATTEST VS&A COMMUNICATIONS
PARTNERS III, L.P.
By: VS&A Equities III, L.L.C.
/s/ Jonathan Drucker /s/ Jeffrey T. Stevenson
By: ____________________________ By: _________________________________
Jonathan Drucker Jeffrey T. Stevenson
Name: __________________________ Name: _______________________________
General Counsel President
Title: _________________________ Title: ______________________________
ATTEST DTN ACQUISITION CORPORATION
/s/ Jonathan Drucker /s/ Jeffrey T. Stevenson
By: ___________________________ By: ________________________________
Jonathan Drucker Jeffrey T. Stevenson
Name: __________________________ Name: ______________________________
General Counsel President
Title: _________________________ Title: _____________________________
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ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provisions of
the Offer, and in addition to (and not in limitation of) Merger Sub's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of this Agreement), Merger Sub shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to Merger Sub's
obligation to pay for or return tendered shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
shares, and may terminate or amend the Offer as to any shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of this Agreement and before the time of acceptance
for payment for any such shares, any of the following events shall occur or
shall be determined by Merger Sub to have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against Merger Sub, Acquiror, DTN or any
DTN Subsidiary (i) seeking to prohibit or impose any material limitations on
Acquiror's or Merger Sub's ownership or operation (or that of any of their
respective subsidiaries or affiliates) of all or a material portion of their or
DTN's businesses or assets, or to compel Acquiror or Merger Sub or their
respective Subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of DTN or Acquiror and their
respective subsidiaries, (ii) challenging the acquisition by Acquiror or Merger
Sub of any shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the other
transactions contemplated by this Agreement or the Stockholder Agreements
(including the voting provisions thereunder), or seeking to obtain from DTN,
Acquiror or Merger Sub any damages that are material in relation to DTN and its
Subsidiaries taken as a whole, (iii) seeking to impose material limitations on
the ability of Merger Sub, or render Merger Sub unable, to accept for payment,
pay for or purchase some or all of the shares pursuant to the Offer and the
Merger, or (iv) which otherwise would have or be reasonably likely to have a
Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated, or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of a
Government Entity, to the Offer or the Merger, or any other action shall be
taken by any Governmental Entity, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange or in the NASDAQ National Market System, for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market conditions),
(ii) a declaration of a banking moratorium or any suspension of payments in
respect
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of banks in the United States (whether or not mandatory), (iii) a commencement
of a war, armed hostilities or other international or national calamity directly
or indirectly involving the United States, (iv) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions, or (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(d) there shall have occurred any changes (or any developments
that, insofar as reasonably can be foreseen, are reasonable likely to result in
any changes) in the financial condition, business, results of operations or
prospects of DTN and the DTN Subsidiaries that individually or in the aggregate
would have or be reasonably likely to have a Material Adverse Effect;
(e) the Board of Directors of DTN or any committee thereof
shall have withdrawn or modified in a manner adverse to Acquiror or Merger Sub
its approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any Superior Proposal or (ii) DTN shall have entered
into any agreement with respect to any Superior Proposal in accordance with
Section 7.3 of this Agreement;
(f) any of the representations and warranties of DTN set forth
in this Agreement that are qualified as to materiality shall not be true and
correct without such qualification and any such representations and warranties
that are not so qualified shall not be true and correct in any respect (in each
case (i) as of the date referred to in any representation or warranty which
addresses matters as of a particular date, or (ii) as to all other
representations and warranties, as of the date of this Agreement and as of the
scheduled expiration of the Offer), except to the extent all failures to be true
and correct in the aggregate would not have or be reasonably likely to have a
Material Adverse Effect;
(g) DTN shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of DTN to be performed or complied with by it under this
Agreement; or
(h) this Agreement shall have been terminated in accordance
with its terms;
The foregoing conditions are for the sole benefit of Acquiror and
Merger Sub and may be waived by Acquiror or Merger Sub, in whole or in part, at
any time and from time to time in the sole discretion of Acquiror or Merger Sub.
The failure by Acquiror or Merger Sub at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time up to consummation of the transactions contemplated by this
Agreement.
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Exhibit 8
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that he has
the sole voting power with respect to the Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization with respect to any of the Subject Shares or take any
other action that is inconsistent with or that would limit or interfere with his
obligations under this Agreement.
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(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
2
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P. Peter H. Kamin
By: VS&A EQUITIES III, LLC. its G.P. Peak Management, Inc.
Peak Investment Limited
Partnership
/s/ Peter H. Kamin
------------------------
Signature
By: /s/ S. Gerard Benford
- -------------------------- Peter H. Kamin,
Name: S. Gerard Benford individually and on
Title Managing Member behalf of Peak Man-
agement, Inc. and Peak
3 Investment Limited
Partnership
------------------------
Printed Name
349,900
------------------------
Number of Subject Shares
</TABLE>
<PAGE> 1
Exhibit 7
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that he has
the sole voting power with respect to the Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization with respect to any of the Subject Shares or take any
other action that is inconsistent with or that would limit or interfere with his
obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror
1
<PAGE> 2
shall have no authority: (a) to
manage, direct, superintend, restrict, regulate, govern or administer any of the
policies or operations of DTN or of any of its subsidiaries; or (b) except as
otherwise expressly provided herein, to exercise any power or authority to
direct Stockholder in the voting of any of the Subject Shares or the performance
of his duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. AMENDMENT AND MODIFICATION. This Agreement may only be amended,
modified or supplemented by a written instrument signed by Stockholder and
Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Anthony S. Jacobs
--------------------
Signature
Anthony S. Jacobs
--------------------
By:/s/ S. Gerard Benford Printed Name
- -------------------------
Name: S. Gerard Benford
Title: Managing Member 145,500
--------------------
Number of Subject Shares
</TABLE>
2
<PAGE> 1
Exhibit 6
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that Wallace
R. Weitz & Company, investment adviser to the Stockholder, has the sole voting
power with respect to the Subject Shares and the sole power to dispose of the
Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization with respect to any of the Subject Shares or take any
other action that is inconsistent with or that would limit or interfere with his
obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. NO OWNERSHIP INTEREST. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall
1
<PAGE> 2
remain in and belong to
Stockholder, and except as may be provided in the Merger Agreement, Acquiror
shall have no authority: (a) to manage, direct, superintend, restrict, regulate,
govern or administer any of the policies or operations of DTN or of any of its
subsidiaries; or (b) except as otherwise expressly provided herein, to exercise
any power or authority to direct Stockholder in the voting of any of the Subject
Shares or the performance of his duties or responsibilities as a director,
officer or stockholder of DTN. Section 4. Amendment and Modification. This
Agreement may only be amended, modified or supplemented by a written instrument
signed by Stockholder and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Wallace R. Weitz, President
- --- -------------------------------- --------------------------------
Signature
Weitz Series Fund, Inc. - Value Fund
------------------------------------------
By: /s/ S. Gerard Benford Printed Name
-------------------------
Name: S. Gerard Benford
Title: Managing Member 1,195,600
------------------------
Number of Subject Shares
</TABLE>
2
<PAGE> 1
Exhibit 5
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that Wallace
R. Weitz & Company, investment adviser to the Stockholder, has the sole voting
power with respect to the Subject Shares and the sole power to dispose of the
Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of
are purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of
1
<PAGE> 2
the Merger and the Merger Agreement). In addition, Stockholder shall not tender
any of the Subject Shares in response to a tender offer by any third party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization with respect to any of the Subject Shares or take any
other action that is inconsistent with or that would limit or interfere with his
obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of
2
<PAGE> 3
the Merger Agreement; or (b) March 3, 2000, but only if by such date either the
Merger Agreement has not been executed by Acquiror and DTN or holders of greater
than 50.1% of the outstanding DTN Common Stock have not entered into agreements
substantially in the form of this Agreement with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Wallace R. Weitz, President
--------------------------------
Signature
Weitz Series Fund, Inc. - Hickory Fund
--------------------------------------
By:/s/ S. Gerard Benford Printed Name
- ---------------------------
Name: S. Gerard Benford
Title: Managing Member 1,515,200
---------------------------
Number of Subject Shares
</TABLE>
3
<PAGE> 1
Exhibit 4
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that Wallace
R. Weitz & Company, investment adviser to the Stockholder, has the sole voting
power with respect to the Subject Shares and the sole power to dispose of the
Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization
1
<PAGE> 2
with respect to any of the Subject Shares or take any other action that is
inconsistent with or that would limit or interfere with his obligations under
this Agreement.
(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Wallace R. Weitz, General Partner
--------------------------------------
Signature
Weitz Partners III Limited Partnership
--------------------------------------
By: /s/ S. Gerard Benford Printed Name
-----------------------
Name: S. Gerard Benford
Title: Managing Member 56,200
-----------------------
Number of Subject Shares
</TABLE>
2
<PAGE> 1
Exhibit 3
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that Wallace
R. Weitz & Company, investment adviser to the Stockholder, has the sole voting
power with respect to the Subject Shares and the sole power to dispose of the
Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror
1
<PAGE> 2
and DTN enter into the Merger Agreement and holders of greater than 50.1% of the
outstanding shares of DTN Common Stock enter into agreements substantially in
the form of this Agreement with Acquiror, then Stockholder agrees that he will
either (i) tender the Subject Shares to Acquiror in response to the Tender Offer
or (ii) vote the Subject Shares in favor of the Merger and the Merger Agreement
(or, if not all of the Subject Shares are purchased in the Tender Offer, he
shall vote the remaining Subject Shares in favor of the Merger and the Merger
Agreement). In addition, Stockholder shall not tender any of the Subject Shares
in response to a tender offer by any third party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of attorney
or similar authorization with respect to any of the Subject Shares or take any
other action that is inconsistent with or that would limit or interfere with his
obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to publish
and disclose in the documents relating to the Tender Offer and the Merger
(including all documents filed with the Securities and Exchange Commission) his
identity and the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the
2
<PAGE> 3
other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Wallace R. Weitz, President
----------------------------------
Signature
Weitz Series Fund, Inc. - Partners Value Fund
----------------------------------------------
By:/s/ S. Gerard Benford Printed Name
---------------------
Name: S. Gerard Benford
Title: Managing Member 382,400
---------------------
Number of Subject Shares
</TABLE>
3
<PAGE> 1
Exhibit 9
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that he has
the sole voting power with respect to the Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
1
<PAGE> 2
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
a)
Stockholder shall not grant any proxy or power of attorney or similar
authorization with respect to any of the Subject Shares or take any other action
that is inconsistent with or that would limit or interfere with his obligations
under this Agreement.
(b) Stockholder authorizes the Company and Acquiror to publish and disclose in
the documents relating to the Tender Offer and the Merger (including all
documents filed with the Securities and Exchange Commission) his identity and
the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
section 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
section 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not
2
<PAGE> 3
been executed by Acquiror and DTN or holders of greater than 50.1% of the
outstanding DTN Common Stock have not entered into agreements substantially in
the form of this Agreement with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P.
By: VS&A EQUITIES III, LLC. its G.P. /s/ Roger Brodersen
- --- -------------------------------- -------------------
Signature
Roger Brodersen
By: /s/ S. Gerard Benford -------------------
------------------- Printed Name
Name: S. Gerard Benford
Title Managing Member 703,738
------------------------
Number of Subject Shares
</TABLE>
3
<PAGE> 1
Exhibit 10
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of March 3, 2000 (this "AGREEMENT"), is
entered into by the undersigned stockholder ("Stockholder") of Data Transmission
Network Corporation, a Delaware corporation ("DTN"), and VS&A Communications
Partners III, L.P., a Delaware limited partnership ("ACQUIROR").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN COMMON
STOCK") as is set forth below Stockholder's name on the signature page of this
Agreement (the "SUBJECT SHARES").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "TENDER OFFER"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "MERGER"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "MERGER AGREEMENT").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares. Stockholder
represents that he has delegated to Wanger Asset Management, L.P., Stockholder's
investment adviser, the power to vote the Subject Shares, subject to
Stockholder's retained power to direct Wanger Asset Management, L.P. as to the
voting of the Subject Shares. Stockholder shall cause Wanger Asset Management,
L.P. to take such action (including, if applicable, voting in the manner
provided in this Agreement) as may be necessary to carry out Stockholder's
obligations under this Agreement.
SECTION 2. TENDER OR VOTING OF SUBJECT SHARES. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer
of any of the Subject Shares to a third party transferee unless as a condition
of such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of
attorney or similar authorization with respect to any of the Subject Shares or
take any other action that is inconsistent with or that would limit or interfere
with his obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to
publish and disclose in the documents relating to the Tender Offer and the
Merger (including all documents filed with the Securities and Exchange
Commission) his identity and the commitments and arrangements under this
Agreement.
SECTION 3. NO OWNERSHIP INTEREST. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. AMENDMENT AND MODIFICATION. This Agreement may only be
amended, modified or supplemented by
<PAGE> 2
a written instrument signed by Stockholder and Acquiror.
SECTION 5. ENTIRE AGREEMENT. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreement between DTN
and Stockholder concerning the acquisition, disposition or control of the stock
of DTN.
SECTION 6. SEVERABILITY. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. CAPTIONS, COUNTERPARTS AND CONSTRUCTION. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. ASSIGNMENT; PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. TERMINATION. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
SECTION 11. LIMITATION OF PERSONAL LIABILITY. A copy of the Declaration
of Trust of Stockholder is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of Stockholder as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of Stockholder individually but are binding only upon
the assets and property of the series of Stockholder which is the owner of the
Subject Shares.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS III, L.P. ACORN INVESTMENT TRUST
By: VS&A EQUITIES III, LLC. its G.P. By: /s/ Kenneth A. Kalina
-----------------------------------
Signature
By: /s/ S. Gerard Benford Kenneth A. Kalina, Assistant Treasurer
-------------------------------- --------------------------------------
Name: S. Gerard Benford Printed Name
Title: Managing Member
819,000 - Acorn Fund series
--------------------------------------
209,100 - Acorn USA series
--------------------------------------
Number of Subject Shares
2
<PAGE> 1
Exhibit 12
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of March 3, 2000 (this "AGREEMENT"), is
entered into by the undersigned stockholder ("Stockholder") of Data Transmission
Network Corporation, a Delaware corporation ("DTN"), and VS&A Communications
Partners III, L.P., a Delaware limited partnership ("ACQUIROR").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN COMMON
STOCK") as is set forth below Stockholder's name on the signature page of this
Agreement (the "SUBJECT SHARES").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "TENDER OFFER"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "MERGER"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "MERGER AGREEMENT").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares. Stockholder
represents that he has delegated to Wanger Asset Management, L.P., Stockholder's
investment adviser, the power to vote the Subject Shares, subject to
Stockholder's retained power to direct Wanger Asset Management, L.P. as to the
voting of the Subject Shares. Stockholder shall cause Wanger Asset Management,
L.P. to take such action (including, if applicable, voting in the manner
provided in this Agreement) as may be necessary to carry out Stockholder's
obligations under this Agreement).
SECTION 2. TENDER OR VOTING OF SUBJECT SHARES. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer
of any of the Subject Shares to a third party transferee unless as a condition
of such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of
attorney or similar authorization with respect to any of the Subject Shares or
take any other action that is inconsistent with or that would limit or interfere
with his obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to
publish and disclose in the documents relating to the Tender Offer and the
Merger (including all documents filed with the Securities and Exchange
Commission) his identity and the commitments and arrangements under this
Agreement.
SECTION 3. NO OWNERSHIP INTEREST. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. AMENDMENT AND MODIFICATION. This Agreement may only be
amended, modified or supplemented by
<PAGE> 2
a written instrument signed by Stockholder and Acquiror.
SECTION 5. ENTIRE AGREEMENT. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreement between DTN
and Stockholder concerning the acquisition, disposition or control of the stock
of DTN.
SECTION 6. SEVERABILITY. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. CAPTIONS, COUNTERPARTS AND CONSTRUCTION. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
SECTION 9. ASSIGNMENT; PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. TERMINATION. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
SECTION 11. LIMITATION OF PERSONAL LIABILITY. A copy of the Declaration
of Trust of Stockholder is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of Stockholder as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of Stockholder individually but are binding only upon
the assets and property of the series of Stockholder which is the owner of the
Subject Shares.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS WANGER ADVISORS TRUST
PARTNERS III, L.P.
By: VS&A EQUITIES III, its G.P. By: /s/ Kenneth A. Kalina
-------------------------------------------
Signature
By: /s/ S. Gerard Benford Kenneth A. Kalina, Assistant Treasurer
-------------------------- -----------------------------------------------
Name: S. Gerard Benford Printed Name
Title: Managing Member
250,600 - Wanger U.S. Small Cap Advisor series
-----------------------------------------------
Number of Subject Shares
2
<PAGE> 1
Exhibit 11
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of March 3, 2000 (this "Agreement"), is
entered into by the undersigned stockholder ("Stockholder") of Data Transmission
Network Corporation, a Delaware corporation ("DTN"), and VS&A Communications
Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the investment
adviser to accounts for the benefit of the owners of the number of shares of the
common stock, par value $0.001, of DTN ("DTN Common Stock") as are set forth
below Stockholder's name on the signature page of this Agreement (the "Subject
Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he has the sole power to vote and dispose of
the Subject Shares on behalf of the owner thereof and has the authority to enter
into this Agreement.
Section 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror and DTN enter into the Merger Agreement and holders of
greater than 50.1% of the outstanding shares of DTN Common Stock enter into
agreements substantially in the form of this Agreement with Acquiror, then
Stockholder agrees that he will either (i) tender the Subject Shares to Acquiror
in response to the Tender Offer or (ii) vote the Subject Shares in favor of the
Merger and the Merger Agreement (or, if not all of the Subject Shares are
purchased in the Tender Offer, he shall vote the remaining Subject Shares in
favor of the Merger and the Merger Agreement). In addition, Stockholder shall
not tender any of the Subject Shares in response to a tender offer by any third
party.
(b) Stockholder shall not transfer or permit the transfer
of any of the Subject Shares to a third party transferee unless as a condition
of such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(c) Stockholder shall not grant any proxy or power of
attorney or similar authorization with respect to any of the Subject Shares or
take any other action that is inconsistent with or that would limit or interfere
with his obligations under this Agreement.
(d) Stockholder authorizes the Company and Acquiror to
publish and disclose in the documents relating to the Tender Offer and the
Merger (including all documents filed with the Securities and Exchange
Commission) his identity and the commitments and arrangements under this
Agreement.
Section 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
Section 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
Section 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement
<PAGE> 2
between the parties hereto with respect to the matters provided for herein and
there are no agreements, representations or warranties with respect to the
matters provided for herein other than those set forth in this Agreement. This
Agreement supersedes any agreement between DTN and Stockholder concerning the
acquisition, disposition or control of the stock of DTN.
Section 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
Section 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
Section 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
Section 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
ACQUIROR: STOCKHOLDER:
VS&A COMMUNICATIONS PARTNERS WANGER ASSET MANAGEMENT, L.P.
III, L.P.
By: VS&A EQUITIES III, LLC By: /s/ Kenneth A. Kalina
its G.P. -----------------------------------------------
- ------------------------------ Signature
By: /s/ S. Gerard Benford Kenneth A. Kalina, Fund Controller
-------------------------- -----------------------------------------------
Name: S. Gerard Benford Printed Name
Title Managing Member
186,100 - Oregon State Treasury
-----------------------------------------------
33,000 - Wanger U.S. Smaller Companies Fund
-----------------------------------------------
20,000 - New America Small Caps
-----------------------------------------------
Number of Subject Shares
2
<PAGE> 1
Exhibit 13
VOTING AGREEMENT
THIS VOTING AGREEMENT dated as of February 17, 2000 (this "Agreement"),
is entered into by the undersigned stockholder ("Stockholder") of Data
Transmission Network Corporation, a Delaware corporation ("DTN"), and VS&A
Communications Partners III, L.P., a Delaware limited partnership ("Acquiror").
RECITALS
A. As of the date of this Agreement, Stockholder is the owner of the
number of shares of the common stock, par value $0.001, of DTN ("DTN Common
Stock") as is set forth below Stockholder's name on the signature page of this
Agreement (the "Subject Shares").
B. Acquiror is contemplating the acquisition of DTN by means of a cash
tender offer for up to 100% of the outstanding shares of DTN Common Stock at a
price of $29.00 per share (the "Tender Offer"), followed by a cash merger, if
necessary, to acquire all of the remaining shares of outstanding DTN Common
Stock (the "Merger"), all pursuant to the terms of an Agreement and Plan of
Merger between Acquiror and DTN (the "Merger Agreement").
C. Acquiror is unwilling to initiate the Tender Offer unless holders of
greater than 50.1% of the outstanding DTN Common Stock enter into an agreement
substantially in the form of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the sufficiency of which is hereby acknowledged, and
as an inducement to Acquiror to initiate the Tender Offer, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Representations and Warranties. Stockholder represents and
warrants that as of the date hereof he owns the Subject Shares and that he has
the sole voting power with respect to the Subject Shares.
SECTION 2. Tender or Voting of Subject Shares. (a) If on or prior to
March 3, 2000, Acquiror
1
<PAGE> 2
and DTN enter into the Merger Agreement and holders of greater than 50.1% of the
outstanding shares of DTN Common Stock enter into agreements substantially in
the form of this Agreement with Acquiror, then Stockholder agrees that he will
either (i) tender the Subject Shares to Acquiror in response to the Tender Offer
or (ii) vote the Subject Shares in favor of the Merger and the Merger Agreement
(or, if not all of the Subject Shares are purchased in the Tender Offer, he
shall vote the remaining Subject Shares in favor of the Merger and the Merger
Agreement). In addition, Stockholder shall not tender any of the Subject Shares
in response to a tender offer by any third party.
(b) Stockholder shall not transfer or permit the transfer of
any of the Subject Shares to a third party transferee unless as a condition of
such transfer the third party transferee executes a voting agreement
substantially in the form of this Agreement, and any such voting agreement shall
be deemed a supplement to this Agreement to which all Subject Shares then or
thereafter acquired by the third party transferee shall be subject.
(a)
Stockholder shall not grant any proxy or power of attorney or similar
authorization with respect to any of the Subject Shares or take any other action
that is inconsistent with or that would limit or interfere with his obligations
under this Agreement.
(b) Stockholder authorizes the Company and Acquiror to publish and disclose in
the documents relating to the Tender Offer and the Merger (including all
documents filed with the Securities and Exchange Commission) his identity and
the commitments and arrangements under this Agreement.
SECTION 3. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Acquiror any direct or indirect ownership or
incidence of ownership of or with respect to any of the Subject Shares. All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain in and belong to Stockholder, and except as may be provided in the
Merger Agreement, Acquiror shall have no authority: (a) to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of DTN or of any of its subsidiaries; or (b) except as otherwise
expressly provided herein, to exercise any power or authority to direct
Stockholder in the voting of any of the Subject Shares or the performance of his
duties or responsibilities as a director, officer or stockholder of DTN.
SECTION 4. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by a written instrument signed by Stockholder
and Acquiror.
SECTION 5. Entire Agreement. Except for the Merger Agreement, this
Agreement evidences the entire agreement between the parties hereto with respect
to the matters provided for herein and there are no agreements, representations
or warranties with respect to the matters provided for herein other than those
set forth in this Agreement. This Agreement supersedes any agreements among DTN
and its stockholders concerning the acquisition, disposition or control of the
stock of DTN.
SECTION 6. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or inoperative,
this Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
SECTION 7. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflicts of laws rules.
SECTION 8. Captions, Counterparts and Construction. The captions in
this Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in counterparts, each of which shall constitute
one and the same instrument. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
2
<PAGE> 3
SECTION 9. Assignment; Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Except as otherwise expressly provided herein, nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10. Termination. This Agreement shall terminate at the earlier
of: (a) the termination of the Merger Agreement; or (b) March 3, 2000, but only
if by such date either the Merger Agreement has not been executed by Acquiror
and DTN or holders of greater than 50.1% of the outstanding DTN Common Stock
have not entered into agreements substantially in the form of this Agreement
with Acquiror.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
ACQUIROR: STOCKHOLDER:
First National Bank of Omaha
VS&A COMMUNICATIONS PARTNERS III, L.P. Directed Trustee
By: VS&A EQUITIES III, LLC. its G.P. /s/ Stacy Van Blair
-------------------
Signature
Stacy Van Blair
By:/s/ S. Gerard Benford -------------------
---------------------- Printed Name
Name: S. Gerard Benford
Title Managing Member 160,000
-------------------
Number of Subject Shares
</TABLE>
3
<PAGE> 1
[VS&A COMMUNICATIONS PARTNERS III, L.P. LETTERHEAD]
March 15, 2000
Data Transmission Network Corporation
9110 West Dodge Road, Suite 200
Omaha, Nebraska 68114
Ladies and Gentlemen:
Reference is hereby made to the Agreement and Plan of Merger dated as of
March 3, 2000, among VS&A Communications Partners III, L.P., VS&A-DTN, LLC, DTN
Acquisition Corporation and Data Transmission Network Corporation. VS&A
Communications Partners III, L.P. intends to cause DTN Acquisition Corporation
to commence the tender offer contemplated by the Agreement and Plan of Merger.
DTN Acquisition Corporation has the financial ability required to consummate the
transactions contemplated by the Agreement and Plan of Merger.
VS&A COMMUNICATIONS
PARTNERS III, L.P.
By: VS&A EQUITIES III, L.L.C., its general partner
By: /s/ S. Gerard Benford
---------------------------------
S. Gerard Benford
Vice President
Acknowledged and agreed this 15th day of March, 2000
DATA TRANSMISSION NETWORK
CORPORATION
By: /s/ Greg Sloma
---------------------------------
Name: Greg Sloma
Title: President and COO
