January 26, 1999


Mr. Sebastian E. Casseta, Chief Executive Officer
SmartServ Online, Inc.
Metro Center, One Station Place
Stamford, CT 06902

         Re:  Possible Merger with Data Transmission Network Corporation ("DTN")

Dear Mr. Casseta:

         This  letter sets forth our  agreement  in  principle  whereby a wholly
owned subsidiary of DTN ("Merger Sub") would merge with SmartServ  Online,  Inc.
("SSOL") (the "Merger") upon the terms, and subject to the conditions, generally
described below.

                                 ECONOMIC TERMS

         1.  Merger.  The Merger would be  accomplished  in a manner which would
qualify  it as a  tax-free  reorganization  under  Section  368 of the  Internal
Revenue Code of 1986,  as amended,  and, if possible,  permit it to be accounted
for  as a  "pooling-of-interests".  Either  Merger  Sub  or  SSOL  would  be the
surviving  corporation  following the Merger, but the articles of incorporation,
bylaws,   directors  and  officers  of  the  surviving  corporation  immediately
following the Merger would be as specified by DTN.

         2. Merger Agreement. It is understood that SSOL and DTN will attempt in
good faith to negotiate and sign a definitive  merger agreement (the "Definitive
Agreement")  upon the  terms and  subject  to the  conditions  set forth in this
letter of intent.  The parties to this letter of intent  other than SSOL and DTN
(the  "Principal  Stockholders")  will be the holders of 46% or more of the SSOL
Common Stock on an as if converted  and fully  diluted  basis.  On or before the
execution of the Definitive Agreement,  the Principal Stockholders will agree to
exercise their  warrants,  options and other rights to acquire SSOL Common Stock
and vote their SSOL Common  Stock in favor of approval of the Merger;  provided,
however,  Sebastian Casseta and Mario Rossi will not be obligated to do so if it
would cause a  short-swing  profit  recapture  pursuant to Section  16(b) of the
Securities  Exchange  Act of 1934.  If such  recapture  would  result,  then the
parties  shall agree to  cooperate  in any  reasonable  arrangement  designed to
assure the vote of such SSOL Common Stock in favor of approval of the Merger and
yet avoid such recapture.  If no such reasonable  arrangement is available,  DTN
could elect to either  proceed  without the exercise of the options and warrants
of Messrs. Casseta and Rossi or terminate the Definitive Agreement.

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         3.  Merger  Consideration.  In the Merger,  the holders of  outstanding
stock  of  SSOL  on an as if  converted  and  fully  diluted  basis  (the  "SSOL
Stockholders")  would receive shares of Data  Transmission  Network  Corporation
Common Stock ("DTN Common Shares") having an aggregate market value equal to the
lesser of  $14,800,000  or the amount  determined  by  multiplying  $3.50 by the
number of shares of SSOL  Common  Stock  held by SSOL  Stockholders  on an as if
converted and fully diluted basis (the "Merger Consideration"). The market value
of a DTN Common Share for purposes of the Merger would be based upon the average
of its closing  prices on the Nasdaq Stock Market on each of the 10 trading days
ending on the third trading day prior to the date of the closing  ("Closing") of
the Merger, but would not be lower than $28.35 or higher than $34.65.



                                 RELATED MATTERS

         4.  Registration  of  Securities.  DTN  would  agree to file a  federal
registration  statement  prior to the  Closing  covering  all of the DTN  Common
Shares issued to the SSOL Stockholders in the Merger.  The registration would be
on Form S-4 or such other form as DTN elects.  The  registration,  if effective,
would permit the SSOL Stockholders to sell the DTN Common Shares into the public
market. DTN would pay the cost of such registration.  DTN would agree to use its
best  efforts  to  cause  the   registration   statement   (and  required  state
registrations,  if any) to become  effective upon the consummation of the Merger
and as soon as reasonably  practicable following the execution of the Definitive
Agreement.  DTN also would use its best efforts to list the DTN Common Shares to
be issued to the SSOL Stockholders on the Nasdaq Stock Market promptly after the
Closing.

         5.  Confidentiality and Non-Competition  Agreements.  Each of Sebastian
Casseta and Mario Rossi would enter into a Confidentiality  and  Non-Competition
Agreement (the  "Non-Competition  Agreements") in form mutually  satisfactory to
DTN and such employees.  The Non-Competition  Agreements would be for a duration
which is the longer of three years  following the Closing or two years following
the employee's termination of employment with the surviving  corporation,  would
be for the maximum geographic  territory  permitted by applicable law, and would
have the maximum scope of precluded conduct permitted by applicable law (or such
lesser period, territory and/or scope as DTN may elect).

         6.  Employment  Agreements.  Each of Sebastian  Casseta and Mario Rossi
would enter into an Employment  Agreement (the "Employment  Agreements") in form
mutually  satisfactory to DTN and such  employees,  which would be equivalent to
the compensatory  terms of their existing  employment  agreements with SSOL. The
Employment  Agreements  would be for a duration  of three  years  following  the
Closing,  would be subject to termination by the surviving  corporation  with or
without cause,  except upon termination by the surviving  corporation other than
for cause or death or disability of such  employee,  such employee shall receive
upon termination the present value of the compensation  such employee would have
received during the remaining term of the Employment Agreement.


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                            CONDITIONS TO OBLIGATIONS

         7.  Subject  to  Definitive  Merger  Agreement.  This  letter of intent
expresses the parties' intent to move forward with the Merger and the terms upon
which they  would  move  forward.  This  letter of intent is based upon  certain
assumptions  which need to be verified through a due diligence review process by
DTN.  Except for the  provisions of Sections 9 through 13 which shall be binding
upon the parties in  accordance  with their terms  through  June 30,  1999,  the
provisions of this letter of intent shall not obligate the parties to consummate
the Merger or provide  the basis for  liability  of one party to another if such
Merger is not  consummated for any reason.  A party's  obligations to consummate
the Merger  shall  arise only if and when a  Definitive  Agreement,  if any,  is
entered into by the parties. The parties agree to negotiate in good faith to try
to reach a  Definitive  Agreement by March 31, 1999.  The  Definitive  Agreement
would contain representations,  warranties,  indemnities, covenants, conditions,
provisions for opinions, etc. as are customary in transactions of this nature.

         8. Special  Conditions.  In addition to the conditions to Closing which
customarily  would  be  contained  in the  Definitive  Agreement,  the  parties'
obligations  to  consummate  the  Merger  would  be  subject  to  the  following
conditions being satisfied as of Closing:

               a. Final Due Diligence. DTN shall be satisfied in good faith with
the results of its  continued  due  diligence  with respect to matters  arising,
matters  changing,  or matters coming to its attention during the period between
the date of the Definitive Agreement and the Closing.

               b. Entering into Other  Agreements.  The parties,  as applicable,
shall have negotiated and entered into the  Confidentiality  and Non-Competition
Agreements and Employment Agreements. In addition, DTN shall have negotiated and
entered into an agreement  with Spencer  Trask  Securities,  Inc.  regarding the
payment of expenses and fees by SSOL  pursuant to that certain  Letter of Intent
dated August 11, 1998 concerning a proposed  private  placement of securities of
SSOL,  which  agreement  shall be  satisfactory  to DTN in its sole and absolute
discretion.

               c. Board and Stockholder Approval. The parties' respective Boards
of Directors, the SSOL Stockholders and the sole stockholder of Merger Sub shall
have  approved  the Merger and  authorized  the  execution  and  delivery of the
Definitive Agreement and other closing documents.  Principal  Stockholders would
agree to vote their SSOL Common Stock in favor of approval of the Merger.

               d. Options,  Warrants,  and Conversion  Rights.  All  outstanding
options, warrants and conversion rights with respect to SSOL capital stock shall
have been exercised or the rights  thereunder  shall have been  relinquished  by
such  holders  prior to Closing or shall have been  replaced at Closing with DTN
Common Shares or options and warrants for DTN Common Shares.

               e. No Material Change.  DTN's and Merger Sub's  obligations shall
be  subject  to there  not  having  been a  material  adverse  change  in SSOL's
business,  operations,  prospects,  assets,  liabilities,  financial position or
results of operations,  as determined by DTN in its reasonable judgment.  SSOL's
and the SSOL Stockholders' obligations shall be subject to there not having been
a material  adverse change in DTN's  business,  operations,  prospects,  assets,
liabilities,  financial position or results of operations, as determined by SSOL
in its reasonable judgment.



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<PAGE>

               f.  Litigation.  DTN's  and  Merger  Sub's  obligations  shall be
subject to SSOL not having any claims,  litigation,  proceedings  or  regulatory
changes pending which, in DTN's reasonable judgment, materially adversely affect
the Merger.  SSOL's and the SSOL  Stockholders'  obligations shall be subject to
DTN not having any claims, litigation, proceedings or regulatory changes pending
which, in SSOL's reasonable judgment, materially adversely affect the Merger.

               g. Dissenting  Stockholders.  DTN's and Merger Sub's  obligations
shall be  subject  to the  condition  that no SSOL  Stockholders  holding in the
aggregate  more  than five  percent  (5%) of the SSOL  Common  Stock on an as if
converted and fully diluted basis shall have perfected their dissenters'  rights
or demanded  payment  for their SSOL  Common  Shares  under  Delaware  statutory
dissenters' rights provisions.

               h. Effective Registration Statement.  The federal registration of
the DTN Common  Shares as  contemplated  in Section 4 shall be  effective at the
Closing.

               i.  Pooling-of-Interests  and Tax-Free Reorganization  Treatment.
Nothing  shall  have   occurred   which  would   disqualify   the  Merger  as  a
"reorganization"  within the meaning of Section 368 of the Code. In addition, if
the Merger can be accounted for as a "pooling-of-interests",  nothing shall have
occurred after the execution of this letter of intent which would disqualify the
Merger as a "pooling-on-interests" for accounting purposes.

               j.  Pooling  Letters.  If the  Merger can be  accounted  for as a
"pooling-of-interests",  each of DTN and SSOL shall have received from their own
independent  accountants a letter,  dated the date of the Closing, to the effect
that,   for   financial   reporting   purposes,   the   Merger   qualifies   for
"pooling-of-interests"  accounting treatment under generally accepted accounting
principles if consummated in accordance with the Definitive Agreement.

               k.  Fairness  Opinion.  The Board of Directors of SSOL shall have
received  an  opinion  of  its   financial   advisor  to  the  effect  that  the
consideration  to be received by the SSOL  Stockholders in the Merger is fair to
the SSOL Stockholders from a financial point of view.

                                    COVENANTS

         9.  Covenants.  In  addition to the  covenants  pending  Closing  which
customarily would be contained in a Definitive Agreement,  SSOL and, solely with
respect to paragraph g below, the Principal Stockholders agree to:

               a.  Conduct of  Business.  Conduct  SSOL's  business  only in the
ordinary course, and not engage in any extraordinary  transactions without DTN's
prior consent.

               b.  Disposition  of  Assets.  Not  dispose of any assets of SSOL,
except in the ordinary course of business.

               c.  Employee  Matters.  Except  with  the  approval  of DTN,  not
materially increase the annual level of compensation or benefits of any employee
or grant any unusual or extraordinary bonuses, benefits or other forms of direct
or indirect compensation to any employee, officer, director or consultant.

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<PAGE>

               d.  Issuance of  Securities.  Not issue any equity  securities or
rights to acquire equity securities except with the prior approval of DTN.

               e. Dividends or Distributions.  Not pay any dividends, redeem any
securities,  or  otherwise  cause assets of SSOL to be  distributed  to any SSOL
Stockholder or affiliate.

               f.  Borrowings.  Not borrow any funds,  under  existing  lines of
credit or otherwise,  except as reasonably  necessary for the ordinary operation
of SSOL's  business in a manner,  and in  amounts,  in keeping  with  historical
practices.

               g. No Other  Negotiations.  Between  the date  hereof and May 31,
1999, not initiate,  solicit, encourage, or participate in any discussions with,
or provide any information to, any corporation,  partnership,  person, entity or
group,  other than DTN and its  employees  and  agents,  concerning  any merger,
consolidation, sale of assets or similar transaction involving SSOL, or any sale
of capital stock of SSOL, including securities  convertible into or exchangeable
for such securities.  If a Definitive  Agreement is entered into by the parties,
this  standstill  shall extend until Closing or  termination  of the  Definitive
Agreement in  accordance  with its terms.  SSOL and the  Principal  Stockholders
acknowledge  that  DTN is  relying  upon the  provisions  of this  paragraph  in
incurring the time and expense of due diligence and preparation of documents.


                                  MISCELLANEOUS

         10. Access and Due Diligence Updates.  SSOL shall make available to DTN
and its representatives full access to SSOL's books, records,  files, contracts,
documents,  facilities,  attorneys,  accountants  and  employees for purposes of
DTN's due diligence review.

         11.  Confidential  Information.  The parties by signing  this letter of
intent agree that DTN, Merger Sub, SSOL and the Principal Stockholders will each
keep  confidential  and will not disclose,  except as required by law (including
SEC and Nasdaq  requirements),  to anyone except employees and agents on a "need
to know" basis for purposes of evaluating,  negotiating, preparing documents for
and consummating the anticipated  Merger, all information  provided by the other
parties about its business which could  reasonably be expected to be proprietary
or confidential  information.  Prior to any disclosure of this letter of intent,
or the proposed Merger or other  confidential  information which may be required
by law, the party seeking to make such disclosure shall advise the other parties
so that appropriate  protective action may be taken as needed. The parties shall
consult with each other  regarding  the content of the press release to announce
this letter of intent.  If  negotiations  between the parties  terminate for any
reason,  each  party  will  promptly  return all  proprietary  and  confidential
information  received  from  the  other  parties  and  shall  not use  any  such
information, directly or indirectly, for their personal benefit. The obligations
of this paragraph shall survive the termination of negotiations.


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<PAGE>

         12.  Expenses.  Each party to this letter of intent  shall bear its own
expenses  associated  with the due  diligence  process and the  negotiation  and
preparation of a Definitive Agreement and related documents and the consummation
of the Merger; provided,  however, all of SSOL's investment banking,  appraisal,
brokerage,  legal,  accounting  and other  related fees in  connection  with the
Merger must be approved by DTN in advance.

         13.  Broker.  Except for the Letter of Intent  between SSOL and Spencer
Trask  Securities,  Inc. referred to in Section 8(b), each party represents that
it has not retained a broker in connection with this transaction.

         If you agree that this reflects our agreement in principle, please sign
the enclosed copy of this letter and return it to us.


                                   Very truly yours,

                                   Data Transmission Network Corporation


                                   /s/ Charles R. Wood
                                   ----------------------
                                   Charles R. Wood, Sr. Vice President


AGREED:

SmartServ Online, Inc.


/s/ Sebastian E. Cassetta
--------------------------
Sebastian E. Cassetta, Chairman and CEO


Principal Stockholders:


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