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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 31, 1997
----------------
UOL PUBLISHING, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-21421 54-1290319
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(Commission file Number) (IRS Employer ID Number)
8251 Greensboro Drive, Suite 500, McLean, Virginia 22102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 893-7800
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NA
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
Pursuant to an Agreement and Plan of Merger dated as of October 31,
1997 (the "Agreement"), by and among UOL Publishing, Inc., a Delaware
corporation (the "Registrant"), HTR Acquisition, Inc., a Delaware corporation
and a wholly owned subsidiary of the Registrant ("Acquisition"), HTR, Inc., a
Delaware corporation ("HTR"), and the stockholders of HTR, the Registrant
acquired, by merger, all of the outstanding capital stock of HTR from the
stockholders of HTR. As a result, HTR became a wholly owned subsidiary of the
Registrant effective October 31, 1997 (the "Effective Date"). At the Effective
Date, the HTR stockholders became entitled to receive an aggregate of 585,960
shares of UOL Common Stock, options and warrants exercisable for an aggregate
of an additional 34,040 shares, and an aggregate of $600,000 in a combination
of cash and short-term notes. In addition, the Registrant will assume
approximately $3.5 million of HTR debt, including approximately $3.0 million
payable to Sirrom Capital Corporation. The executive officers of HTR will
receive bonuses granted in connection with the signing of three-year employment
agreements. In addition, the Registrant will create a stock option pool of
180,000 shares of its Common Stock and an incentive bonus pool with a potential
payout of up to approximately $3.3 million over three years, contingent upon
the achievement of agreed-upon revenue and profit objectives for HTR.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. At the time of the filing
of this Report, it is impracticable for the Registrant to provide any
of the financial statements for the acquired business required by Item
7 of Form 8-K promulgated by the Commission under the Securities
Exchange Act of 1934, as amended (the "Act"). Accordingly, the
Registrant will file the required financial statements as soon as
practicable, but not later than January 16, 1998, as required by such
Item 7.
(b) Pro Forma Financial Information. At the time of the filing of this
Report, it is impracticable for the Registrant to provide any of the
pro forma financial information required by Item 7 of Form 8-K
promulgated by the Commission under the Act. Accordingly, the
Registrant will file the required financial statements as soon as
practicable, but not later than January 16, 1998, as required by such
Item 7.
(c) Exhibits.
2.4 Agreement and Plan of Merger dated as of October 31,1997, by
and among the Registrant, Acquisition, HTR and the stockholders of
HTR.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UOL PUBLISHING, INC.
Date: November 12, 1997 /s/ NARASIMHAN P. KANNAN
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Narasimhan P. Kannan,
Chief Executive Officer
(Principal Executive Officer)
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EXHIBIT 2.4
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AGREEMENT AND PLAN OF MERGER
Among
UOL Publishing, Inc.
HTR Acquisition, Inc.
and
HTR, Inc.
Dated as of October 31, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS.....................................................................................2
1.1. Definitions.....................................................................................2
ARTICLE 2 BASIC TRANSACTION...............................................................................8
2.1 The Merger......................................................................................8
2.2 Effective Time..................................................................................8
2.3 UOL Common Stock Conversion Notes and Conversion Cash Payments..................................8
2.4 Conversion and Exchange of Shares...............................................................8
2.5 Fractional Shares..............................................................................10
2.6 Articles of Incorporation......................................................................10
2.7 Bylaws.........................................................................................10
2.8 Directors......................................................................................10
2.9 Officers.......................................................................................10
2.10 Subsequent Actions.............................................................................10
ARTICLE 3 CLOSING AND TERMINATION........................................................................11
3.1 Closing........................................................................................11
3.2 Transactions on the Closing Date...............................................................11
3.3 Termination....................................................................................11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF EXCHANGING STOCKHOLDERS......................................12
4.1 Organization of HTR; Authority.................................................................12
4.2 Ability to Carry Out the Agreement.............................................................13
4.3 Capitalization of HTR; Ownership; Investment...................................................13
4.4 Subsidiaries and Affiliates....................................................................14
4.5 Financial Statements; Liabilities..............................................................14
4.6 Conduct of Business Since Most Recent Fiscal Year End; Absence of Material
Adverse Change.................................................................................15
4.7 Title to Tangible Personal Properties; Absence of Liens........................................17
4.8 Litigation.....................................................................................17
4.9 Compliance with Law............................................................................18
4.10 Contracts......................................................................................18
4.11 Brokers and Intermediaries.....................................................................19
4.12 Tax Matters....................................................................................19
4.13 Employee Benefits..............................................................................21
4.14 Articles of Incorporation and Bylaws...........................................................23
4.15 Insurance......................................................................................23
4.16 Intellectual Property..........................................................................23
4.17 Bank Accounts..................................................................................26
4.18 Directors, Officers and Employees..............................................................26
4.19 Labor Relations; Employees.....................................................................26
4.20 Transactions with Related Parties..............................................................26
4.21 Real Property..................................................................................27
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4.22 Books and Records..............................................................................28
4.23 Environmental Matters..........................................................................28
4.24 Guaranties.....................................................................................29
4.25 Government Consents............................................................................29
4.26 Manufacturing Rights...........................................................................29
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF..............................................................29
5.1 Organization and Authority of the Acquirors....................................................29
5.2 Ability to Carry Out the Agreement.............................................................30
5.3 Brokers and Intermediaries.....................................................................30
5.4 Securities Law Filings.........................................................................30
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS...............................................................31
6.1 Full Access....................................................................................31
6.2 Regulatory Filings; Consents...................................................................31
6.3 Conduct of Business............................................................................31
6.4 Confidentiality................................................................................32
6.5 Books and Records..............................................................................32
6.6 Announcement...................................................................................32
6.7 Best Efforts...................................................................................33
6.8 Discussion With Others.........................................................................33
6.9 Cooperation in Litigation......................................................................33
6.10 Stock Transfer Restrictions....................................................................33
6.11 Certain Private Placement Representations and Warranties.......................................34
6.12 UOL SEC Documents..............................................................................35
6.13 Stockholder Action.............................................................................35
6.14 Power of Attorney..............................................................................35
6.15 Cooperation in Preparation of Registration Statement...........................................35
6.16 Board of Directors.............................................................................36
ARTICLE 7 CONDITIONS PRECEDENT OF TRANSFERORS............................................................36
7.1 Representations and Warranties.................................................................36
7.2 Agreements.....................................................................................36
7.3 Performance Certificates.......................................................................36
7.4 No Injunction..................................................................................37
7.5 No Violation...................................................................................37
7.6 Consents.......................................................................................37
7.7 Opinion of the Acquirors' Counsel..............................................................37
7.8 No Proceedings.................................................................................37
7.9 Tax-Free Reorganization........................................................................37
7.10 Employment Agreements..........................................................................37
7.11 Miscellaneous Closing Deliveries...............................................................37
ARTICLE 8 CONDITIONS PRECEDENT OF THE ACQUIRORS..........................................................38
8.1 Representations and Warranties.................................................................38
8.2 Agreements.....................................................................................38
8.3 Performance Certificates.......................................................................38
8.4 No Injunction..................................................................................38
8.5 No Violation...................................................................................39
8.6 Consents.......................................................................................39
8.7 Opinion of Transferors' Counsel................................................................39
8.8 Resignations...................................................................................39
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8.9 No Proceedings.................................................................................39
8.10 Employment Agreements and Lockup Agreements....................................................39
8.11 HTR Capital Stock..............................................................................39
8.12 Options, Rights, Warrants or Convertible Securities............................................40
8.13 Stockholder Approval...........................................................................40
8.14 Sirrom Capital Corporation Note and Other Indebtedness.........................................40
8.15 Investor Rights Agreement......................................................................40
8.16 Miscellaneous Closing Deliveries...............................................................40
ARTICLE 9 SURVIVAL OF REPRESENTATIONS,...................................................................41
9.1 Survival of Representations and Warranties.....................................................41
9.2 Survival of Covenants and Agreements...........................................................41
9.3 Underwriter's Benefit..........................................................................41
ARTICLE 10 INDEMNIFICATION................................................................................41
10.1 Indemnification of UOL.........................................................................41
10.2 Indemnification of Exchanging Stockholders.....................................................42
10.3 Remedies.......................................................................................43
10.4 Survival.......................................................................................44
10.5 Set-off........................................................................................44
10.6 Assertion of Claims............................................................................44
10.7 Resolution of Conflicts; Arbitration...........................................................44
10.8 Beneficial Interest............................................................................45
10.9 Limitation on Liability........................................................................45
ARTICLE 11 MISCELLANEOUS..................................................................................46
11.1 Further Assurances.............................................................................46
11.2 Expenses.......................................................................................46
11.3 Applicable Law.................................................................................46
11.4 Notices........................................................................................46
11.5 Entire Agreement...............................................................................47
11.6 Amendments.....................................................................................47
11.7 Headings; References...........................................................................48
11.8 Counterparts...................................................................................48
11.9 Parties in Interest; Assignment................................................................48
11.10 Severability; Enforcement......................................................................48
11.11 JURISDICTION...................................................................................48
11.12 Waiver.........................................................................................49
11.13 Incorporation of Exhibits......................................................................49
11.14 Construction...................................................................................49
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EXHIBITS
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EXHIBIT A Exchanging Stockholders.........................................................................1
EXHIBIT B Certificate of Merger...........................................................................8
EXHIBIT C Promissory Note.................................................................................9
EXHIBIT D Schedule of Exceptions.........................................................................12
EXHIBIT E Financial Statements:..........................................................................14
Annual Audited June 30, 1995
Annual Audited June 30, 1996
Annual Unaudited: June 20, 1997
Monthly Unaudited through September 30, 1997
EXHIBIT F Selling Stockholders...........................................................................34
EXHIBIT G Form of Lock-up Agreement......................................................................34
EXHIBIT H Consent of Stockholders To Action Without .....................................................35
Meeting (Approval of the Merger)
EXHIBIT I Power of Attorney..............................................................................35
EXHIBIT J Form of Opinion - UOL Counsel..................................................................37
EXHIBIT K Employees and Form of Employment Agreements....................................................37
EXHIBIT L Form of Opinion - HTR Counsel..................................................................39
EXHIBIT M Investor Rights Termination....................................................................40
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into as of October 31, 1997, by and among UOL Publishing, Inc., a
Delaware corporation ("UOL"); HTR Acquisition, Inc., a Delaware corporation and
a wholly owned subsidiary of UOL ("HTR Acquisition, Inc."); HTR, Inc., a
Delaware corporation ("HTR"); and the stockholders of HTR listed on Exhibit A
(collectively the "Exchanging Stockholders" and individually an "Exchanging
Stockholder"). UOL and HTR Acquisition shall sometimes collectively be referred
to as the "Acquirors" and individually as an "Acquiror"; HTR and the Exchanging
Stockholders shall sometimes collectively be referred to as the "Transferors"
and individually as a "Transferor"; and HTR Acquisition and HTR shall sometimes
collectively be referred to as the "Constituent Corporations" and individually
as a "Constituent Corporation".
W I T N E S S E T H:
WHEREAS, HTR is a Delaware corporation with authorized capital stock
of 20,000,000 shares of Common Stock, of which 11,763,301 shares are issued and
outstanding (the "HTR Shares") and 1,900,000 Shares of Series A Preferred Stock
of which 1,724,953 shares are issued and outstanding (the "HTR Preferred
Stock"); and
WHEREAS, HTR Acquisition is a Delaware corporation with authorized
capital stock of 1,000 shares of Common Stock, $0.01 par value per share, all
of which immediately prior to the Effective Time (as defined below) will be
issued and outstanding and held by UOL; and
WHEREAS, UOL is a Delaware corporation with authorized capital stock
of 36,000,000 shares of Common Stock, $.01 par value, and 10,000,000 shares of
Preferred Stock $.01 par value.
WHEREAS, the parties intend that the transactions contemplated hereby
will qualify as a tax-free reverse triangular merger of HTR Acquisition with
and into HTR in a reorganization pursuant to Code Sections 368(a)(1)(A) and
368(a)(2)(E); and
WHEREAS, pursuant to the Merger (as defined below), the Exchanging
Stockholders shall receive the consideration set forth below; and
WHEREAS, the parties expect that the Merger shall further certain of
their business objectives, including, without limitation, the expansion of the
combined companies' businesses and the utilization of the technologies of both
of UOL and HTR.
NOW, THEREFORE, in reliance upon the premises, representations,
warranties and covenants made herein and in consideration of the mutual
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
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ARTICLE 1
DEFINITIONS
1.1. Definitions. For purposes of this Agreement, the following
terms shall have the meaning set forth below:
"Acquiror" and "Acquirors" shall have the respective meanings set
forth in the first paragraph of this Agreement.
"Acquiror Indemnitee" and "Acquiror Indemnitees" shall have the
respective meanings set forth in Section 10.1.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by, or under common Control with
such other Person.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Ancillary Agreements" shall have the meaning set forth in Section
4.1.
"Basis" means any known (without investigation) past or present fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction that forms
or could reasonably be expected to form the basis for any specified
consequence.
"Basket Deductible" shall have the meaning set forth in Section 10.10.
"CERCLA" shall have the meaning set forth in subsection 4.24(a).
"Certificate of Merger" shall have the meaning set forth in Section
2.2.
"Claim Notice" shall have the meaning set forth in Section 10.7.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall have the meaning set forth in Section
6.4.
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"Constituent Corporation" and "Constituent Corporations" shall have
the respective meanings set forth in the first paragraph of this Agreement.
"Contracts" shall have the meaning set forth in subsection 4.10(a).
"Control" (including, with correlative meanings, the terms "Controlled
by", "Controlling" and "under common Control with"), as used with respect to
any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Conversion Cash" means the aggregate Conversion Cash Amount payable
under Section 2.4(b).
"Conversion Cash Amount: means the quotient of (i) $600,000 divided by
(ii) the total number of HTR Shares outstanding plus HTR shares issuable upon
exercise of any option, warrant, or right or conversion of any convertible
security all on a fully diluted basis but excluding options granted under the
HTR, Inc. 1994 Stock Option Plan.
"Conversion Note Amount" means the quotient of (i) $600,000 divided by
(ii) the total number of HTR Shares outstanding plus HTR shares issuable upon
exercise of any option, warrant, or right or conversion of any convertible
security all on a fully diluted basis but excluding options granted under the
HTR, Inc. 1994 Stock Option Plan..
"Conversion Notes" means an aggregate of Six Hundred Thousand
($600,000) Dollars in principal of two year six (6%) percent promissory notes
issued by UOL in connection with the Merger, less an amount equal to the
aggregate Conversion Cash Amount payable to certain Exchanging Stockholders
under the provisions of Section 2.4(b) and the amounts reserved for payment in
connection with the issuance of certain warrants described on Section 2.4(b) of
the Schedule of Exceptions.
"Conversion Number" means the quotient of (i) the Merger Share Number
divided by (ii) the total number of the HTR Shares outstanding plus HTR shares
issuable upon exercise of any option, warrant or right or upon conversion of
any convertible security, all on a fully diluted basis immediately prior to the
Effective Time.
"Converted HTR Stock" shall have the meaning set forth in subsection 2.4(b).
"Dissenting Share" means any share of HTR capital stock with respect
to which any HTR stockholder has validly exercised his dissenters' rights under
the Delaware General Corporation Law (or any equivalent thereof which would,
subsequent to the Closing, permit
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any HTR stockholder to tender his shares of HTR capital stock to UOL or HTR
Acquisition in exchange for cash).
"Effective Time" shall have the meaning set forth in Section 2.2.
"Employee Benefit Plan" means any: (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan; (ii) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan; (iii) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit
Plan (including any Multiemployer Plan); and (iv) Employee Welfare Benefit Plan
or fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Encumbrances" means any and all restrictions on transfer, liens,
encumbrances, charges, pledges, security interests, taxes, claims, options,
warrants, purchase rights, contracts, commitments, equities, claims and
demands.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchanging Stockholder" and "Exchanging Stockholders" shall have the
respective meanings set forth in the first paragraph of this Agreement.
"Exhibit" means any of the Exhibits to this Agreement, each of which
is incorporated by reference into this Agreement.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statements" shall have the meaning set forth in subsection 4.5(a).
"GAAP" shall have the meaning set forth in subsection 4.5(a).
"Holdback Shares" shall have the meaning set forth in Section 10.5.
"HTR" shall have the meaning set forth in the first paragraph of this
Agreement.
"HTR Acquisition" shall have the meaning set forth in the first
paragraph of this Agreement.
"HTR Common Stock" means the Common Stock, $.001 par value per share,
of HTR.
"HTR Preferred Stock" means the Series A Preferred Stock $.001 par
value per share of HTR.
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"HTR Shares" shall have the meaning set forth in the first paragraph
of the recitals.
"Intellectual Property" means: (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications and patent disclosures, together
with all reissuances, divisions, continuations, renewals,
continuations-in-part, revisions, extensions and reexaminations thereof; (ii)
all trademarks, service marks, certification marks, collective marks, trade
dress, trade styles, logos, trade names, company names and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, recordings and renewals in connection therewith; (iii) all
copyrightable works, all copyrights, rights and interests in copyrights and all
applications, registrations, recordings and renewals in connection therewith;
(iv) all mask works and all applications, registrations, recordings and
renewals in connection therewith; (v) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals);
(vi) all computer software (including data and related documentation); (vii)
all other proprietary rights; (viii) all copies and tangible embodiments
thereof (in whatever form or medium); (ix) all income, royalties, damages or
payments now and hereafter due and/or payable under any of the foregoing with
respect to any of the foregoing and the right to sue for past, present or
future infringements of any of the foregoing; (x) all licenses with respect to
any of the foregoing; and (xi) all rights corresponding to any of the foregoing
throughout the world.
"Knowledge" means actual knowledge after reasonable investigation. If
such term is not capitalized, it means actual knowledge without investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including liability for Taxes.
"Litigation" shall have the meaning set forth in subsection 4.8(a).
"Majority Exchanging Stockholders" means Kamyar Kaviani, Farzin
Arsanjani and Daniel Callahan.
"Material Adverse Effect" means a material adverse effect on the
business financial condition, results of operations, assets or properties, of a
party hereto.
"Merger" shall have the meaning set forth in Section 2.1.
"Merger Consideration" means the Merger Shares and either (i) the
Conversion Notes or the Conversion Cash.
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"Merger Shares" means collectively the shares of UOL Common Stock
issued or issuable to Exchanging Stockholders in connection with the Merger in
exchange for the HTR Shares.
"Merger Share Number" means Six Hundred Twenty Thousand (620,000)
Shares of UOL Common Stock, reduced by (i) the number of shares of UOL Common
Stock subject to options which are granted in connection with the assumption by
UOL of the HTR, Inc. 1994 Stock Plan and the number of shares of UOL Common
Stock subject to issuance under options, rights, warrants or any other security
convertible into HTR Shares which are outstanding as of the Effective Date
other than the Series A Preferred Stock.
"Most Recent Balance Sheet" shall have the meaning set forth in
subsection 4.7(a).
"Most Recent Financial Statements" shall have the meaning set forth in
subsection 4.5(a).
"Most Recent Fiscal Month End" shall have the meaning set forth in
subsection 4.5(a).
"Most Recent Fiscal Year End" shall have the meaning set forth in
subsection 4.5(a).
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, corporation, partnership, limited
partnership, trust, entity or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Prohibited Transaction" has the meaning set forth in ERISA Section
406 and Code Section 4975.
"Proprietary Information" shall have the meaning set forth in
subsection 4.16(e).
"RCARA" has the meaning set forth in subsection 4.23(a).
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Schedule" means any of the schedules to this Agreement, each of which
is incorporated by reference into this Agreement.
"SEC" means the United States Securities and Exchange Commission.
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"Securities" means the portion of the Merger Consideration paid to any
Exchanging Stockholder other than in cash.
"Subsidiary" means any corporation with respect to which a specified
Person (or Subsidiary thereof) owns a majority of the capital stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" shall have the meaning set forth in Section
2.1.
"Tax" or "Taxes" means any federal, state, local, foreign or other
income, gross receipts, profits, franchise, license, transfer, sales, use,
payroll, withholding, occupation, property (real or personal), excise or
similar taxes, fees, duties, assessments, withholdings or governmental charges
of any nature (including interest, penalties or additions to such Taxes).
"Tax Returns" means all returns, reports, estimates, information
returns and statements of any nature with respect to Taxes.
"Termination Date" shall have the meaning set forth in subsection
3.3(b).
"Transferor" and "Transferors" shall have the respective meanings set
forth in the first paragraph of this Agreement.
"UOL" shall have the meaning set forth in the first paragraph of this
Agreement.
"UOL Common Stock" means the Common Stock, $.01 par value per share, of
UOL.
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ARTICLE 2
BASIC TRANSACTION
2.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time HTR Acquisition shall be merged with and into
HTR (the "Merger"), the separate corporate existence of HTR Acquisition shall
thereupon cease, and HTR shall be the surviving corporation in the Merger (the
"Surviving Corporation"). The Surviving Corporation shall, from and after the
Effective Time, possess all the rights, privileges, powers and franchises of
whatsoever nature and description, as well as a public or private nature, and
be subject to all the restrictions, disabilities and duties of each of the
Constituent Corporations; and all rights, privileges, powers and franchises of
each of the Constituent Corporations, and all property, tangible and
intangible, real, personal and mixed, and debts due to either of the
Constituent Corporations on whatever account as well for stock subscriptions as
all other things in action or belonging to each of the Constituent Corporations
shall be vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation as they
were of the several and respective Constituent Corporations, and the title to
any real estate vested by deed or otherwise in any of the Constituent
Corporations shall not revert or be in any way impaired by reason of the
Merger. All rights of creditors and all liens upon the property of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts, liabilities and duties had been incurred or contracted by it.
Any claim existing or action or proceeding, whether civil, criminal or
administrative, pending by or against either Constituent Corporation may be
prosecuted to judgment or decree as if the Merger had not taken place, or the
Surviving Corporation may be substituted in such action or proceeding.
2.2 Effective Time. At the time of the Closing, the Constituent
Corporations shall cause a Certificate of Merger substantially in the form of
Exhibit B attached hereto (the "Certificate of Merger") to be duly executed and
filed with the Department of the Secretary of State of the State of Delaware as
provided under the Delaware General Corporation Law. The Merger shall become
effective on the time and date specified in the Certificate of Merger, and such
time is hereinafter referred to as the "Effective Time".
2.3 UOL Common Stock Conversion Notes and Conversion Cash
Payments. UOL shall make available to HTR Acquisition a sufficient number of
shares of UOL Common Stock, Conversion Notes and Conversion Cash to effect the
Merger.
2.4 Conversion and Exchange of Shares. The manner of converting
and exchanging shares of the corporations participating in the Merger shall be
as follows:
(a) Stock of HTR Acquisition. Each share of capital stock of HTR
Acquisition issued and outstanding immediately prior to the Effective Time
shall thereupon be converted
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into and become one (1) share of Common Stock of the Surviving Corporation.
Each share of such Common Stock issued pursuant to this subsection shall be
validly used, fully paid and nonassessable.
(b) Stock of HTR. At and as of the Effective Time each HTR Share
issued and outstanding immediately prior to the Effective Time (excluding
shares held by HTR as treasury stock, if any, which shares shall be cancelled
and extinguished at the Effective Time) shall by virtue of the Merger and
without any action on the part of the holder thereof, cease to be outstanding,
and shall be automatically cancelled and retired and shall cease to exist, and
shall be exchanged for and converted into the right to receive (as set forth on
Section 2.4(b) of the Schedule of Exceptions) upon surrender of a certificate
or certificates representing such shares, from UOL (i) the number of shares of
UOL Common Stock as is equal to the Conversion Number; (ii) either (A) a
Non-negotiable Promissory Note in the form of Exhibit C in an amount equal to
the Conversion Note Amount or (B) a Conversion Cash payment in an amount equal
to the Conversion Cash Amount for each Exchanging Stockholder whose aggregate
Conversion Note Amount is less than $10,000; or (iii) with respect to any
Dissenting Shares, payment of the appraised value of such Dissenting Shares.
The Promissory Note shall be payable in arrears in two annual equal
installments of principal plus interest accrued through the date of payment at
six (6%) percent per annum. HTR Shares exchanged and converted as provided in
this subsection 2.4(b) are herein sometimes referred to as "Converted HTR
Stock".
(c) Exchange of Stock Certificates. Immediately after the
Effective Time, each holder of an outstanding certificate or certificates
theretofore representing shares of Converted HTR Stock shall surrender the same
to an agent or agents designated by the Surviving Corporation, and shall
thereupon be entitled to receive in exchange therefor a certificate
representing the number of shares of UOL Common Stock and a Conversion Note
into which the shares of Converted HTR Stock represented by the certificate or
certificates so surrendered shall have been exchanged and converted pursuant to
subsection 2.4(b) above. Dividends payable after the Effective Time to holders
of record in respect of shares of UOL Common Stock into which certificates for
shares of Converted HTR Stock shall be exchangeable, shall not be paid to
holders of such certificates until their certificates are surrendered for
exchange as aforesaid.
(d) Options. Each option to purchase HTR Shares granted pursuant
to the HTR, Inc. 1994 Stock Plan shall be assumed by UOL and adjusted to
reflect the terms and conditions of this Agreement including but not limited to
the Conversion Number. The underlying option grant shall reflect vesting and
exercise prices and terms (including continuing as qualified options under the
Code) substantially similar to those of the HTR, Inc. 1994 Stock Plan as
adjusted by the Board of Directors of UOL to reflect the terms and conditions
of this Agreement. The HTR, Inc. 1994 Stock Plan shall be cancelled as of the
Effective Time.
(e) No Rights. At the Effective Time, the holders of HTR capital
stock immediately prior to the Effective Time shall cease to have any rights as
stockholders of HTR, except such rights as may be available pursuant to this
Agreement.
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(f) No Further Transfers. At and after the Effective Time, no
transfer of the HTR Shares outstanding prior to the Effective Time shall be
made on the stock transfer books of the Surviving Corporation or otherwise.
If, after the Effective Time, certificates for HTR Shares are presented to the
Surviving Corporation, they shall be cancelled and exchanged for the Merger
Consideration as provided above.
2.5 Fractional Shares. No fractional shares of UOL Common Stock
shall be issued to the Exchanging Stockholders in connection with the Merger.
Any Exchanging Stockholder who would otherwise be entitled to receive a
fractional share pursuant to the Merger shall receive cash for such fractional
share at a per share rate equal to the average closing bid price of UOL Common
Stock on the NASDAQ National Market System for the ten days ending two days
preceding the Closing Date.
2.6 Certificate of Incorporation. The Certificate of
Incorporation of HTR Acquisition, as amended by the Certificate of Merger, in
effect immediately prior to the Effective Time shall be and remain the
Certificate of Incorporation of the Surviving Corporation, until duly amended
in accordance with the terms thereof and applicable state corporation law.
2.7 Bylaws. The Bylaws of HTR Acquisition in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until duly amended in accordance with the terms thereof and applicable state
corporation law.
2.8 Directors. The directors of HTR Acquisition shall become the
directors of the Surviving Corporation at and as of the Effective Time until
their successors shall have been duly elected or appointed and qualified in
accordance with the Surviving Corporation's Articles of Incorporation and
Bylaws. The Directors of HTR shall cease to be directors of any Constituent
Corporation immediately prior to the Effective Time.
2.9 Officers. The officers of HTR Acquisition shall become the
officers of the Surviving Corporation at and as of the Effective Time
(retaining their respective positions and terms of office) until their
successors have been duly elected or appointed and qualified in accordance with
the Surviving Corporation's Bylaws. The officers of HTR shall cease to be
officers of any Constituent Corporation immediately prior to the Effective
Time.
2.10 Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things may be
necessary or desirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation or UOL shall be authorized
to execute and deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of the
Constituent
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Corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
ARTICLE 3
CLOSING AND TERMINATION
3.1 Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions provided for herein (the "Closing")
shall take place at 10:00 a.m. (local time) on the date hereof (the "Closing
Date") at the offices of UOL, 8251 Greensboro Drive, Suite 500, McLean,
Virginia 22102, unless another date or place is agreed to in writing by the
parties hereto.
3.2 Transactions on the Closing Date. (a) At the Closing the
Exchanging Stockholders and HTR, as the case may be, shall deliver to the
Acquirors the following:
(i) the Certificate of Merger executed by HTR;
(ii) stock certificates, evidencing all of the HTR
Shares, in each case endorsed in blank or with an executed blank stock
power attached, and with all necessary stock transfer tax stamps
attached thereto; and
(iii) each of the certificates, instruments and other
documents and agreements contemplated by Article 8 hereof.
(b) At the Closing the Acquirors shall deliver to the Exchanging
Stockholders and HTR, as the case may be, the following:
(i) the Certificate of Merger executed by HTR
Acquisition;
(ii) (A) an irrevocable instruction letter to UOL's
transfer agent, instructing it promptly to issue stock certificates
and (B) either (1) promissory notes or (2) cash payments evidencing
the Merger Consideration set forth in Section 2.4(b); and
(iii) each of the certificates, instruments and other
documents and agreements contemplated by Article 7 hereof.
3.3 Termination. Notwithstanding any other provision to the
contrary herein, this Agreement may be terminated at any time prior to the
Effective Time:
(a) without liability on the part of any party hereto, by mutual
consent of all parties to this Agreement;
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(b) without liability on the part of any party hereto (unless
occasioned by reason of failure of one of the parties hereto to perform its
obligations hereunder), by either UOL or HTR, if the transactions contemplated
hereby are not consummated on or before October 31, 1997, or such later date as
may be agreed upon in writing by the parties hereto (the "Termination Date");
(c) by UOL, if (i) HTR or the Exchanging Stockholders shall
breach in any material respect any of their respective representations,
warranties or obligations hereunder, (ii) UOL shall have notified HTR and the
Exchanging Stockholders in writing of such breach, (iii) such breach shall not
have been cured in all material respects or waived, and (iv) HTR or the
Exchanging Stockholders, as the case may be, shall not have provided reasonable
assurance that such breach shall be cured in all material respects on or before
the Closing Date, but only if such breach, singly or together with all other
such breaches, constitutes a failure of the conditions contained in Sections
8.1 or 8.2 hereof as of the date of such termination;
(d) by HTR, if (i) the Acquirors shall breach in any material
respect any of their respective representations, warranties or obligations
hereunder, (ii) HTR shall have notified the Acquirors in writing of such
breach, (iii) such breach shall not have been cured in all material respects or
waived, and (iv) the Acquirors shall not have provided reasonable assurance
that such breach shall be cured in all material respects on or before the
Closing Date, but only if such breach, singly or together with all other such
breaches, constitutes a failure of the conditions contained in Sections 7.1 or
7.2 hereof as of the date of such termination.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EXCHANGING STOCKHOLDERS
Except as otherwise set forth in the Schedule of Exceptions attached
hereto as Exhibit D (the "Schedule of Exceptions"), the Majority Exchanging
Stockholders, jointly and severally, represent and warrant to the Acquirors
that the representations and warranties contained in this Article 4 are true,
correct and complete as of the date of this Agreement and as of the Effective
Date.
4.1 Organization of HTR; Authority. HTR is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with the full power and authority, corporate and otherwise, to enter
into this Agreement and the other certificates and instruments required on or
prior to the Closing by this Agreement (collectively, the "Ancillary
Agreements") and to carry out and perform its obligations under the terms of
this Agreement and the Ancillary Agreements. HTR has the full corporate power
and authority, corporate and otherwise, to own, operate and lease its assets
and properties and to carry on its business as currently conducted and in which
it presently proposes to engage. HTR is qualified to do business and in good
standing in the states listed in Section 4.1 of the Schedule of Exceptions,
which jurisdictions constitute the only jurisdictions in which the nature of
HTR's business
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requires it to be so qualified other than where the failure to be so qualified
would not have a Material Adverse Effect. The execution and delivery of this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate or other action on the part of HTR and each of the Exchanging
Stockholders. This Agreement has been, and at the Closing the Ancillary
Documents will be, duly executed and delivered by HTR and each of the
Exchanging Stockholders and constitutes the valid, binding and enforceable
obligation of HTR and each of the Exchanging Stockholders, enforceable in
accordance with its terms and conditions.
4.2 Ability to Carry Out the Agreement. Neither HTR nor any of
the Exchanging Stockholders is subject to or bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or
judicial or administrative decision;
(ii) any articles or certificate of incorporation or
bylaws;
(iii) any mortgage, deed of trust, lease, note,
stockholders' agreement, bond, indenture, other instrument or
agreement, license, permit, trust, custodianship or other restriction
of any kind or character whatsoever; or
(iv) any judgment, order, writ, injunction or decree of
any court, governmental body, administrative agency or arbitrator;
that would prevent or be violated by, or would result in any penalty,
forfeiture or contract termination as a result of, or under which there would
be a default as a result of, nor is the consent of any Person under any
Contract required for, the execution, delivery and performance by HTR and each
of the Exchanging Stockholders of this Agreement and the transactions
contemplated hereby.
4.3 Capitalization of HTR; Ownership; Investment. (a) The
authorized capital stock of HTR consists of 20,000,000 shares of HTR Common
Stock and 1,900,000 shares of HTR Preferred Stock. The shares of capital stock
and other securities described in Section 4.3 hereto are the only shares of
capital stock and other securities of HTR which are issued and outstanding.
Except as set forth in Section 4.3 of the Schedule of Exceptions, immediately
prior to the Closing, any such securities and any and all dividends payable in
connection therewith (irrespective of whether dividends have accrued) shall,
without any liability on the part of HTR, be converted into shares of HTR
Common Stock. At the Closing except as set forth in Section 4.3 of the
Schedule of Exceptions, the only class, type or kind of capital stock or
security of HTR outstanding shall be HTR Common Stock. All shares of HTR
Common Stock are duly authorized, validly issued, fully paid and nonassessable,
were issued in compliance with all applicable federal and state securities
laws, and are held of record by the respective HTR stockholders as set forth in
Section 4.3 of the Schedule of Exceptions hereto. Except as set forth in
Section 4.3 of the Schedule of Exceptions, there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange
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rights, rights of first refusal, preemptive rights or other rights of any kind
to acquire, directly or indirectly, any shares of capital stock of HTR or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such shares or securities, nor is
HTR committed to issue any such option, warrant, right or security. Prior to
the Closing, except as set forth on Section 4.3 of the Schedule of Exceptions
all securities of HTR, any and all notes and debts of HTR to any of the
Exchanging Stockholders and their Affiliates, any advances made by the
Exchanging Stockholders to HTR, any similar or related rights or interests owed
to the Exchanging Stockholders, and any and all interest or dividends payable
with respect to any of the foregoing shall, without any liability on the part
of HTR, be converted into shares of HTR Common Stock. There are no outstanding
or authorized stock appreciation, phantom stock, profit participation or other
similar rights with respect to HTR. There are no voting trusts, proxies or
other agreements, commitments, obligations or understandings with respect to
the voting of the capital stock of HTR except as set forth in Section 4.3 of
the Schedule of Exceptions.
(b) Each Exchanging Stockholder has good and valid title to his
HTR Shares or other securities related to or convertible into HTR shares set
forth opposite his name in Exhibit A hereto, free and clear of any and all
Encumbrances, with full right and lawful authority to transfer, assign,
deliver, convert and exchange his HTR Shares pursuant to this Agreement.
Except as set forth in Section 4.3(b) of the Schedule of Exceptions, none of
the Exchanging Stockholders are parties to any option, warrant, purchase right
or other contract or commitment that could require any Exchanging Stockholder
to sell, transfer, or otherwise dispose of any capital stock of HTR. Section
4.3(b) of the Schedule of Exceptions sets forth a true, correct and complete
schedule of the Merger Consideration payable in connection with the Merger.
4.4 Subsidiaries and Affiliates. HTR has no Subsidiaries and
does not control, directly or indirectly, or have any direct or indirect equity
participation or any interest in any corporation, partnership, trust, venture,
business, enterprise, firm or other business association except as set forth on
Section 4.4 of the Schedule of Exceptions.
4.5 Financial Statements; Liabilities. Attached hereto as
Exhibit E are the following financial statements of HTR (collectively the
"Financial Statements"): (i) the audited balance sheets and statements of
income changes in shareholders' equity and cash flows as at June 30, 1995,and
1996, and unaudited as at June 30, 1997, (the "Most Recent Fiscal Year End");
and (ii) the unaudited balance sheet and statement of income ("Most Recent
Financial Statements") as of and for the month ended September 30, 1997 ("Most
Recent Fiscal Month End"). The Financial Statements (including the notes
thereto) have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods covered thereby, are true, correct and complete, fairly present the
financial position of HTR as of the dates thereof and the results of operations
of HTR for the periods covered thereby, and are consistent with the books and
records of HTR (which books and records are correct and complete in all
material respects), except that the Financial Statements for the Most Recent
Fiscal Month End are subject to normal year end audit adjustments which
adjustments are not material individually or in the aggregate.
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(b) There are no Liabilities of HTR (and there is no Basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claims or demand against HTR giving rise to any Liability), except
for those: (i) disclosed in the Schedule of Exceptions; (ii) accrued or
reflected on the face of the Most Recent Financial Statements; or (iii) arising
after the Most Recent Fiscal Month End in the ordinary course of business and
not material, singly or in the aggregate, to HTR (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort infringement violation of law nor which
would be prohibited by this Agreement) .
4.6 Conduct of Business Since Most Recent Fiscal Year End;
Absence of Material Adverse Change. Except as disclosed in Section 4.6 of the
Schedule of Exceptions, since the Most Recent Fiscal Year End, there has been
no material adverse change in the business, operations, results of operations,
assets, properties, financial condition or prospects of HTR. Except as
disclosed in Section 4.6 of the Schedule of Exceptions, since such date, except
as contemplated in this Agreement: (i) HTR has conducted its business in the
manner theretofore conducted and only in the ordinary course consistent with
past practices; and (ii) without limiting the generality of the foregoing, HTR
has not:
(a) incurred any material loss of, or material injury to, the
assets or properties of HTR as the result of any fire, explosion, flood,
windstorm, earthquake, labor trouble, riot, accident, act of God, public enemy
or armed forces, or other casualty (whether or not covered by insurance payable
to HTR);
(b) issued, sold or otherwise disposed of, or committed to issue,
sell or otherwise dispose of (other than as contemplated in this Agreement),
any capital stock, bonds or other securities of any kind or nature, or granted
any options, warrants or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock;
(c) incurred, or become subject to, any obligation or Liability
in excess of $25,000, either individually or in the aggregate, except (i)
Liabilities incurred in the ordinary course of business consistent with past
practices and (ii) obligations under the Contracts;
(d) discharged or satisfied any material Encumbrance or paid any
material obligation or material Liability other than (i) Liabilities reflected
in the Most Recent Fiscal Year End balance sheet and (ii) Liabilities paid or
incurred since the Most Recent Fiscal Year End in the ordinary course of
business consistent with past practices;
(e) for any reason, declared or made payment of, or set aside for
payment, any dividends or distributions of any assets of any kind whatsoever in
respect of any shares of the capital stock of HTR (whether in cash or in kind),
or purchased, redeemed or otherwise acquired any of its capital stock, any
securities convertible into capital stock, or any other securities;
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(f) mortgaged, pledged or subjected to any Encumbrance or
obligations any of its material assets or properties;
(g) sold, exchanged, transferred or otherwise disposed of any of
its assets or properties, tangible and intangible, or cancelled any debts or
claims, except in each case in (i) the ordinary course of business consistent
with past practices or (ii) immaterial amounts;
(h) revalued any of its assets or properties or written off as
uncollectible any notes or accounts receivable, except write-downs and
write-offs in (i) the ordinary course of business consistent with past
practices or (ii) immaterial amounts;
(i) except in the ordinary course of business consistent with
past practices entered into any employment agreement or collective bargaining
agreement, written or oral; modified the terms of any such existing agreement
or contract; increased the rate of compensation payable, or to become payable,
by it to any of its officers, directors, employees, consultants, agents or
independent contractors; adopted, amended, modified, terminated or made any
contributions to, or any commitments for any contributions to, any bonus,
profit sharing, incentive, severance, pension or other employee benefit plan,
payment or arrangement made to, for or with any of the foregoing; or made any
other change in employment terms for any of its officers, directors, employees,
consultants, agents or independent contractors;
(j) made or permitted any amendment or termination of any
material contract, agreement, lease or license to which it is a party or which
it owns otherwise than in the ordinary course of business consistent with past
practice;
(k) through negotiation or otherwise made any commitment or
incurred any Liability to any labor organization;
(l) paid any severance or termination pay to any officer or
employee in excess of two weeks' salary;
(m) made any change in any method of accounting or accounting
practice;
(n) made any charitable contributions or pledges outside of the
ordinary course of business consistent with past practices;
(o) waived or released any rights of material value other than in
the ordinary course of business consistent with past practices except where
such wavier or release would not have a Material Adverse Effect;
(p) effected any material reduction or increase of advertising,
administrative, or research and development expenses of HTR other than in the
ordinary course of business consistent with past practices;
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(q) made or committed to make capital expenditures (or series of
related capital expenditures) either in excess of $25,000 in the aggregate or
outside of the ordinary course of business consistent with past practices;
(r) made any investment in (capital or otherwise), any loan to,
or any acquisition of securities or assets of, any other Person;
(s) made or authorized any change in the charter or bylaws of
HTR;
(t) issued any note, bond, or other debt security, increased bank
debt, or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capital lease obligations together with Liabilities involving
more than $50,000 in the aggregate;
(u) made any loan to, or entered into any other transaction with,
any of its directors, officers or employees outside of the ordinary course of
business consistent with past practices; or
(v) agreed or committed, whether in writing or not, to do any of
the foregoing.
4.7 Title to Tangible Personal Properties; Absence of Liens. (a)
HTR has good, valid and marketable title to, or valid and subsisting leasehold
interests in, all buildings, machinery, equipment and other tangible personal
properties and assets used in the business of HTR, located on its premises, or
shown on the balance sheet of the Most Recent Financial Statements (the "Most
Recent Balance Sheet") or acquired after the date thereof, free and clear of
any and all Encumbrances, except for (i) Encumbrances reflected in the Most
Recent Balance Sheet or (ii) Encumbrances that do not impair the use of the
assets by HTR in its business as presently conducted.
(b) The assets and properties owned or leased by HTR constitute
all of the assets and properties necessary to conduct the business of HTR in
the manner in which it has previously been conducted. All such personal
property is free from material defects, has been maintained in accordance with
normal industry practice, is in good operating condition and repair, ordinary
wear and tear excepted, and is suitable for the purposes for which it presently
is used and proposed to be used.
4.8 Litigation. (a) There is no charge, complaint, action, suit,
arbitration, proceeding, hearing or investigation (collectively, "Litigation")
pending or, to the Knowledge of HTR, threatened against HTR at law or in equity
in, before or by any court or arbitrator or governmental agency or authority.
None of the Majority Exchanging Stockholders and the directors and officers of
HTR has any Basis to believe that any Litigation may be brought or threatened
against HTR. Except as set forth in Section 4.8(a) of the Schedule of
Exceptions, HTR is not subject to any outstanding injunction, judgment, order,
decree, ruling or charge.
(b) Except as set forth in Section 4.8(b) of the Schedule of
Exceptions, HTR has not breached, and is not in default of, any of its legal
obligations with respect to any of its
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licensors, licensees, collaborative and other partners, joint venturers,
brokers, distributors, business consultants, franchisees, franchisors,
representatives or other independent contractors.
4.9 Compliance with Law. Each of the Exchanging Stockholders and
HTR and its predecessors and Affiliates have as they relate to HTR, complied in
all material respects with all applicable statutes, laws, ordinances,
regulations, rules, orders, determinations, writs, injunctions, awards,
judgments and decrees of every kind whatsoever of any and all governmental
authorities applicable to HTR (including all agencies thereof) or to the
assets, properties and business of HTR, and no suit, action, proceeding,
hearing, investigation, charge, complaint, claim, demand or notice is filed,
commenced or threatened against HTR alleging any failure to so comply. All
governmental approvals, permits and licenses required by HTR in connection with
the conduct of its business have been obtained, are in full force and effect,
and are being complied with in all material respects, except where the failure
to obtain, maintain or comply with any such approvals, permits or licenses
would not have a Material Adverse Effect. To the knowledge of the Majority
Exchanging Stockholders, neither HTR nor any of its employees, agents,
distributors or representatives have paid or received any bribe or other
unlawful payment of money or other thing of more than nominal value, granted or
accepted any extraordinary discount, or furnished or been given any other
unlawful or unusual inducement to or from any Person in connection with or in
furtherance of the business of HTR, and such business is not in any manner
dependent upon the making or receipt of such payment, discounts or other
inducements.
4.10 Contracts. (a) Section 4.10(a) of the Schedule of
Exceptions sets forth a list of all material written and oral contracts or
agreements existing as of the date hereof to which HTR is a party (collectively
the "Contracts" or individually a "Contract"):
(i) which involves the lease of personal property from
or to third parties providing for lease payments in excess of $25,000
per annum;
(ii) under which it has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) indebtedness
for borrowed money (including capitalized lease obligations) involving
more than $25,000;
(iii) which is in the nature of an employment, consulting
or severance agreement or collective bargaining agreement (x)
involving the annual payment of more than $5,000 or (y) not entered
into in the ordinary course of business;
(iv) which is with any of the Exchanging Stockholders or
their Affiliates;
(v) which concerns confidentiality, nondisclosure or
noncompetition;
(vi) which is a profit sharing, stock option, stock
appreciation, deferred compensation, severance or other plan or
arrangement for the benefit of its current or former directors,
officers and employees;
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(vii) which by its terms is not terminable without
liability and involves the annual payment or receipt of $5,000 or
more;
(viii) which the consequences of a default or termination
of such Contract could have a Material Adverse Effect;
(ix) which is in the nature of a partnership, joint
venture strategic alliance, preferred vendor, collaborative
arrangement or relationship or distribution agreement;
(x) which involves the purchase or sale of raw
materials, commodities, supplies, products or other personal property,
or for the furnishing or receipt of services, the performance of which
shall extend over a period of more than one (1) year, result in
financial loss to HTR, or involves consideration in excess of $5,000;
or
(xi) which is outside of the ordinary course of business
or contains any provision requiring HTR to indemnify any other party
thereto.
(b) HTR has made available to UOL a correct and complete copy of
each written Contract and a written summary setting forth the terms and
conditions of each oral Contract except for oral Contracts relating to
obligations of $5,000 or less annually or employment contracts entered into the
ordinary course of business. All of the Contracts are legal, valid, binding
and enforceable in accordance with their respective terms against HTR and any
other parties thereto, and will be in full force and effect on substantially
similar terms following the consummation of the transactions contemplated in
this Agreement. There is not under any Contract: (i) any existing default,
breach or violation by HTR or, to the knowledge of HTR, by any other party
thereto; (ii) an event which, after notice or lapse of time or both, would
constitute a default or breach by HTR or, to the knowledge of HTR, by any other
party, or permit termination, modification or acceleration, under the Contract;
or (iii) to the knowledge of HTR, any repudiation of any provision of any
Contract which would have a Material Adverse Effect on the business of HTR when
taken as a whole.
4.11 Brokers and Intermediaries. Except as disclosed in Section
4.11 of the Schedule of Exceptions, none of the Transferors has employed any
broker, finder, advisor or intermediary (not including counsel) in connection
with the transactions contemplated by this Agreement which would be entitled to
a broker's, finder's or similar fee or commission in connection therewith or
upon the consummation thereof.
4.12 Tax Matters.
(a) HTR is taxed under the provisions of Subchapter C of the
Code. HTR currently utilizes the accrual method of accounting for income tax
purposes, and such method of accounting has not changed since the date of its
incorporation.
(b) HTR has filed all Tax Returns that it has been required to
file. All such Tax Returns were correct and complete in all material respects.
All Taxes owed by HTR (whether
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or not shown on any Tax Return) have been paid or are properly reserved for or
being contested in good faith. HTR currently is not the beneficiary of any
extension of time within which to file any Tax Return. There are no claims by
any authority in a jurisdiction where HTR does not file Tax Returns that it is
or may be subject to taxation by that jurisdiction. There are no Encumbrances
on any of the assets of HTR that arose in connection with any failure (or
alleged failure) to pay any Tax.
(c) HTR has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
consultant, independent contractor, creditor, stockholder or other third
Person.
(d) No Transferor or director or officer (or employee responsible
for Tax matters) of HTR expects any authority to assess any additional Taxes
for any period for which Tax Returns have been filed. There is no dispute or
claim concerning any Tax Liability of HTR either: (i) claimed or raised by any
authority in writing; or (ii) as to which any of the Transferors or the
directors and officers (and employees responsible for Tax matters) of HTR has
knowledge based upon personal contact with any agent of such authority.
Section 4.12(d) of the Schedule of Exceptions lists all federal, state, local
and foreign income Tax Returns filed with respect to HTR for taxable periods
beginning June 30, 1995, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of audit. HTR
will make available to UOL correct and complete copies of all federal, state
and local income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by HTR.
(e) HTR has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(f) HTR has not filed a consent under Code Section 341(f)
concerning collapsible corporations. HTR has not made any payments, is not
obligated to make any payments, and is not a party to any agreement that could
obligate it to make any payments that shall not be deductible under Code
Section 280G. HTR has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii). HTR has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to
a substantial understatement of federal income Tax within the meaning of Code
Section 6662. HTR is not a party to any Tax allocation or sharing agreement.
HTR is not a member of an Affiliated Group filing a consolidated federal income
Tax Return and has no Liability for the Taxes of any Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or foreign law), as
a transferee or successor, by contract or otherwise.
(g) Except as set forth in Section 4.12(g) of the Schedule of
Exceptions, the unpaid Taxes of HTR, other than such Taxes which are being
contested in good faith: (i) did not, as of the Most Recent Fiscal Month End,
exceed the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
set forth on the face of the Most Recent Balance Sheet (rather than in any
notes
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thereto); and (ii) do not exceed that reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice
of HTR in filing its Tax Returns.
(h) Each of the Exchanging Stockholders has no present plan,
intention or arrangement to dispose of any of the Merger Shares in a manner
that would cause the Merger to violate the continuity of shareholder interest
requirement set forth in Treas. Reg. Section 1.368-1.
(i) As of the Effective Time, HTR shall not have outstanding any
warrants, options, convertible securities or any other type of right pursuant
to which any Person could acquire stock in HTR that, if exercised or converted,
would affect UOL's acquisition or retention of control of HTR as defined in
Code Section 368(c)(1).
(j) HTR operates at least one significant historic business line
or owns at least a significant portion of its historic business assets, in each
case within the meaning of Treas. Reg. Section 1.368-1(d).
4.13 Employee Benefits. (a) Section 4.13 of the Schedule of
Exceptions lists each Employee Benefit Plan that HTR maintains or to which HTR
contributes. Each such Employee Benefit Plan (and each related trust,
insurance contract or fund) complies in form and in operation in all material
respects with the applicable requirements of ERISA, the Code, and other
applicable laws.
(b) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's and Summary Plan Descriptions)
have been filed or distributed appropriately with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle B of Title I of ERISA and
of Code Section 4980B have been met with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan in all material respects.
(c) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Employee Benefit Plan which is an Employee Pension Benefit Plan, and all
contributions for any period ending on or before the Closing Date which are not
yet due, have been paid to each such Employee Pension Benefit Plan or accrued
in accordance with the past custom and practice of HTR. All premiums or other
payments for all periods ending on or before the Closing Date are current and
have been paid with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan.
(d) Each such Employee Benefit Plan which is an Employee Pension
Benefit Plan has been adopted as a standard IRS form prototype plan by the
Company.
(e) The market value of assets under each such Employee Benefit
Plan which is an Employee Pension Benefit Plan (other than any Multiemployer
Plan) equals or exceeds the present value of all vested and nonvested
Liabilities thereunder determined in accordance with
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PBGC methods, factors and assumptions applicable to an Employee Pension Benefit
Plan terminating on the date for determination.
(f) HTR has delivered to UOL correct and complete copies of the
plan documents and summary plan descriptions, the most recent determination
letter received from the Internal Revenue Service, the most recent Form 5500
Annual Report and all related trust agreements, insurance contracts and other
funding agreements which implement each such Employee Benefit Plan.
(g) With respect to each Employee Benefit Plan that HTR and the
Controlled Group of Corporations, if any, that includes HTR maintains or ever
has maintained or to which any of them contributes, ever has contributed, or
ever has been required to contribute:
(i) No such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable
Event as to which notices would be required to be filed with the PBGC.
No proceeding by the PBGC to terminate any such Employee Pension
Benefit Plan (other than any Multiemployer Plan) has been instituted
or, to the knowledge of HTR, threatened.
(ii) To the knowledge of HTR, there have been no
Prohibited Transactions with respect to any such Employee Benefit Plan
and no Fiduciary has any Liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration
or investment of the assets of any such Employee Benefit Plan. No
action, suit, proceeding, hearing or investigation with respect to the
administration or the investment of the assets of any such Employee
Benefit Plan (other than routine claims for benefits) is pending or,
to the knowledge of HTR, threatened. None of the Exchanging
Stockholders or the directors or officers (or employees with
responsibility for employee benefits matters) of HTR has any knowledge
of any Basis for any such action, suit, proceeding, hearing or
investigation.
(iii) HTR has not incurred, and none of the Exchanging
Stockholders or the directors or officers (or employees with
responsibility for employee benefits matters) of HTR has any reason to
expect that HTR shall incur, any Liability to the PBGC (other than
PBGC premium payments) or otherwise under Title IV of ERISA (including
any withdrawal Liability) or under the Code with respect to any such
Employee Benefit Plan which is an Employee Pension Benefit Plan.
(h) None of HTR and the other members of the Controlled Group of
Corporations, if any, that includes HTR contributes to ever has contributed to,
or ever has been required to contribute to any Multiemployer Plan or has any
Liability (including withdrawal Liability) under any Multiemployer Plan.
(i) HTR does not maintain or contribute, never has maintained or
contributed and never has been required to contribute to any Employee Welfare
Benefit Plan providing
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medical, health or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses or their dependents
(other than in accordance with Code Section 4980B).
4.14 Articles of Incorporation and Bylaws. HTR has delivered to
the Acquirors complete and correct copies of the Articles of Incorporation and
Bylaws of HTR, as currently in effect. The Transferors have not defaulted
under or violated any provision of the Articles of Incorporation or Bylaws of
HTR.
4.15 Insurance. (a) Section 4.15 of the Schedule of Exceptions
sets forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability or workers'
compensation coverage or bond or surety arrangements) or self-insurance
arrangement to which HTR is a party, a named insured, or otherwise the
beneficiary of coverage.
(i) the name, address and telephone number of the agent;
(ii) the name of the insurer, the name of the
policyholder and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) a general description of the scope (including an
indication of whether the coverage was on a claims made, occurrence or
other basis) and amount (including a description of how deductibles
and ceilings are calculated and operate) of coverage; and
(v) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
(b) With respect to each such insurance policy, to the knowledge
of the Majority Exchanging Stockholders: (i) the policy is legal, valid,
binding, enforceable and in full force and effect; (ii) the policy shall
continue to be legal, valid, binding, enforceable and in full force and effect
on identical terms following the consummation of the transactions contemplated
by this Agreement; (iii) HTR is not nor is any other party to the policy in
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse
of time, would constitute such a breach or default, or permit termination,
modification or acceleration, under the policy; (iv) no party to the policy has
repudiated any provision thereof; and (v) no claims have been made during the
past five years. HTR has, to the knowledge of the Majority Exchanging
Stockholders, been covered since the date of its formation by insurance in
scope and amount customary and reasonable for the businesses in which it has
engaged during the aforementioned period.
4.16 Intellectual Property. (a) Schedule 4.16(a) of the Schedule
of Exceptions sets forth a complete and correct list of all Intellectual
Property owned by or used in the business of HTR. HTR owns or has the legal
right to use pursuant to license, sublicense, agreement or
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permission all Intellectual Property necessary for the operation of the
businesses of HTR as currently conducted. Each item of Intellectual Property
owned or used by HTR immediately prior to the Effective Time shall be owned or
used by HTR on identical terms and conditions subsequent to the Effective Time.
HTR has taken all actions reasonably deemed necessary by it to maintain and
protect each item of Intellectual Property that it owns or uses.
(b) None of HTR, the Transferors or the directors or officers of
HTR has received any charge, complaint, claim, demand or notice alleging that
it has interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property rights of third Persons. To the
knowledge of any of HTR or the directors or officers of HTR, no third Person
has interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property rights of HTR.
(c) To its knowledge, HTR has not utilized any inventions of any
of its employees (or people it currently intends to hire, if any) made prior to
their employment by HTR. Section 4.16(c) of the Schedule of Exceptions
identifies each patent or registration which has been issued to HTR with
respect to any of its Intellectual Property, identifies each pending patent
application or application for registration which HTR has made with respect to
any of its Intellectual Property and identifies each license, agreement or
other permission which HTR has granted to any third Person with respect to any
of its Intellectual Property (together with any exceptions). HTR has made
available to UOL correct and complete copies of all such patents,
registrations, applications, licenses, agreements, permissions (as amended to
date) and all other written documentation evidencing ownership and prosecution
(if applicable) of each such item. Section 4.16(c) of the Schedule of
Exceptions also identifies each trade name or unregistered trademark used by
HTR in connection with its business. With respect to each item of Intellectual
Property required to be identified in Section 4.16(c) of the Schedule of
Exceptions except as set forth in Section 4.16(c) of the Schedule of
Exceptions:
(i) HTR possesses all right, title and interest in and
to the item, free and clear of any Encumbrance, license or other
restriction;
(ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge;
(iii) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the knowledge of
HTR, is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(iv) HTR has never agreed to indemnify any Person for or
against any interference, infringement, misappropriation or other
conflict with respect to the item other than through standard
indemnification contained in each of HTR's agreements with its
customers.
(d) Section 4.16(d) of the Schedule of Exceptions identifies each
item of Intellectual Property that any third Person owns and that HTR uses
pursuant to license, sublicense,
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agreement or permission. HTR has delivered to UOL correct and complete copies
of all such licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each item of Intellectual Property required to be
identified in Section 4.16(d) of the Schedule of Exceptions except as set forth
in Section 4.16(c) of the Schedule of Exceptions:
(i) the license, sublicense, agreement or permission
covering the item is legal, valid, binding, enforceable and in full
force and effect;
(ii) the license, sublicense, agreement or permission
shall continue to be legal, valid, binding, enforceable and in full
force and effect on identical terms following the Effective Time;
(iii) no party to the license, sublicense, agreement or
permission is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default or
permit termination, modification or acceleration, thereunder;
(iv) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(v) with respect to each sublicense, the representations
and warranties set forth in clauses (i) through (iv) above are true
and correct with respect to the underlying license;
(vi) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment, order, decree, ruling
or charge;
(vii) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the knowledge of
HTR, is threatened which challenges the legality, validity or
enforceability of the underlying item of Intellectual Property; and
(viii) HTR has not granted any sublicense or similar right
with respect to the license, sublicense, agreement or permission.
(e) Neither HTR nor any of the directors or officers (or
employees with responsibility for Intellectual Property matters) of HTR has
done anything to compromise the secrecy, confidentiality or value of any of its
trade secrets, know-how, inventions, prototypes, designs, processes or
technical data (collectively "Proprietary Information") required to conduct its
business as now conducted and proposed to be conducted. HTR has taken all
reasonable security measures to protect the secrecy, confidentiality and value
of its Proprietary Information important to the conduct of its business,
including requiring each employee to execute an agreement in the form attached
to the Schedule of exceptions as Appendix 4.16(e).
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(f) Neither HTR nor any of the directors or officers (or
employees with responsibility for Intellectual Property matters) of HTR has any
Knowledge that any of HTR's employees, officers or consultants is in violation
of his or her respective noncompetition, confidentiality or non-disclosure
agreement.
(g) Subject to Section 4.16(a) to the HTR Schedule of Exceptions,
HTR has the valid right and power to convert to a web-based format all of its
current and proposed Knowledge Works suite of products and services including
HTR Developed Products (as defined in the Schedule of Exceptions) which
includes all seminars, all tutorials, all product support materials and all
student guides developed by HTR and to distribute and publish such products and
services in any manner including but not limited to electronically over the
worldwide web, intranets, extranets or otherwise without contractual limitation
or restriction. To the knowledge of the Majority Exchanging Stockholders, no
independent software vendor has provided to HTR any indication that HTR's
traditional HTR Developed classroom training materials will not be certified
for delivery electronically over the world wide web, internets, extranets or
otherwise.
4.17 Bank Accounts. Section 4.17 of the Schedule of Exceptions
sets forth a true and complete list of all bank accounts of HTR and all
authorized signatories to each such account.
4.18 Directors, Officers and Employees. Section 4.18 of the
Schedule of Exceptions contains a correct and complete listing as of the date
hereof of all of the directors, officers and employees of HTR, showing their
names, positions and current wage or salary and rights to bonuses.
4.19 Labor Relations; Employees. (a) HTR has no collective
bargaining agreements with any of its employees; there is no labor union
organizing activity pending or, to the knowledge of HTR, threatened with
respect to HTR; and HTR has not experienced any strikes, grievances, claims of
unfair labor practices or other collective bargaining disputes. HTR has not
committed any unfair labor practices. To the knowledge of the Transferors, no
executive, key employee or group of employees has any plans to terminate
employment with HTR. A copy of the current personnel handbook delivered to
employees has been delivered to HTR.
(b) There is no pending claim nor, to the knowledge of HTR, any
Basis for any claim by any Person or party (including, but not limited to,
governmental agencies of any kind) against HTR arising out of any federal,
state, county, local or foreign statute, ordinance or regulation relating to
discrimination against employees or any other employee practices, including
without limitation retirement or labor relations, or occupational, safety
and/or health standards, sexual harassment or intentional infliction of
emotional distress.
4.20 Transactions with Related Parties. Except as disclosed in
Section 4.20 of the Schedule of Exceptions, none of the Exchanging Stockholders
or any present or former officer, director or stockholder of HTR, and no
Affiliate of the Exchanging stockholders or of such officer, director or
stockholder: (i) has been involved in any business (excluding relationships
and payments arising from the employment or retention by HTR of any such
persons in the
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ordinary course of business) arrangement or relationship with HTR, including,
without limitation, any contract, agreement or other arrangement providing for
the employment of, furnishing of services, by, rental of real or personal
property from or otherwise requiring payment to any such officer, director,
stockholder or Affiliate involving payments or obligations in excess of $10,000
per annum; or (ii) owns any asset, tangible or intangible, which is used in the
business of HTR.
4.21 Real Property.
(a) HTR owns no real property.
(b) Section 4.21(b) of the Schedule of Exceptions lists all real
property leased or subleased to or by HTR. HTR has delivered to UOL correct
and complete copies of the leases and subleases (as amended to date) listed in
Section 4.21(b) of the Schedule of Exceptions. Except as disclosed in Section
4.21(b) of the Schedule of Exceptions, with respect to each such lease and
sublease:
(i) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect;
(ii) the lease or sublease shall continue to be legal,
valid, binding, enforceable and in full force and effect on identical
terms following the consummation of the transactions contemplated
hereby;
(iii) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit termination,
modification or acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral agreements or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease to HTR's knowledge,
the representations and warranties set forth in clauses (i) through
(v) above are true and correct with respect to the underlying lease;
(vii) HTR has not assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold
or subleasehold;
(viii) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including licenses
and permits) required in connection with the operation thereof and
have been operated and maintained in accordance with applicable laws,
rules and regulations except where the failure to obtain such
approvals or to be so operated or maintained would not have a Material
Adverse Effect; and
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(ix) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation
of said facilities.
4.22 Books and Records. The stock records of HTR are in all
respects complete and accurate, and the minute books of HTR accurately reflect
the actions taken at stockholder and director meetings or by unanimous written
consent and are in all respects correct, complete and accurate.
4.23 Environmental Matters. (a) HTR has complied and is in
compliance with all local, state and federal statutes, ordinances, and
regulations dealing with the protection of the environment or public health and
safety, including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act (codified as amended, 42 U.S.C.
Sections 9601 et seq.) ("CERCLA") and the Resource Conservation and Recovery
Act (codified as amended, 42 U.S.C. Sections 6901 et seq.) ("RCARA") except
where the failure to so comply would not have a Material Adverse Effect.
(b) Except where failure to do so would not have a Material
Adverse Effect, HTR has obtained all required local, state and federal permits,
licenses, certificates and approvals, if any, relating to: (i) air emissions;
(ii) discharges to surface water or groundwater; (iii) noise emissions; (iv)
solid or liquid waste disposal; (v) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or wastes (intended
hereby and hereafter to include any and all such materials listed in any local,
state or federal statute, ordinance or regulation); (vi) the use, storage,
transportation or disposal of petroleum or petroleum products; or (vii) other
environmental, health and safety matters.
(c) HTR has not caused, suffered, permitted or sustained any
emission, spill, release or discharge of any toxic or hazardous substances or
wastes, or any petroleum products, into or upon: (i) the air; (ii) soils or any
improvements located thereon, whether on HTR's property or elsewhere; (iii)
surface water or groundwater; or (iv) a sewer, septic system or waste
treatment, storage or disposal system except in accordance with applicable law
or a valid government permit, license, certificate or approval.
(d) Neither HTR nor any of its officers or directors (including
employees responsible for environmental matters) of HTR has received written or
oral notice of any actual or potential claims, orders, directives, citations or
causes of action based on actual or alleged violations of any local, state, or
federal statutes, ordinances or regulations dealing with the protection of the
environment or public health and safety, including, but not limited to, CERCLA
or RCARA, or oral or written notice of any actual or potential common law
claims or causes of action based upon HTR's actual or alleged involvement with
or use of any substance regulated by local, state or federal statutes,
ordinances or regulations dealing with the protection of the environment or
public health and safety.
(e) Neither HTR nor any of its officers or directors (including
employees responsible for environmental matters) of HTR has received oral or
written notice of any actual
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or potential claims, orders, directives, citations or causes of action under
any local, state or federal statutes, ordinances or regulations dealing with
the protection of the environment or public health and safety, including, but
not limited to, CERCLA and RCARA, based upon or arising out of its actual or
alleged disposal of hazardous wastes or substances, whether on or off real
property being operated by HTR.
(f) Neither HTR nor any of its officers or directors (including
employees responsible for environmental matters) of HTR has any knowledge of
any condition on any of the real property owned or leased by HTR which may give
rise to any claim, order, directive, citation or cause of action based on any
local, state or federal statute, ordinance or regulation dealing with
protection of the environment or public health and safety, including, but not
limited to, CERCLA or RCARA.
4.24 Guaranties. HTR is not a guarantor or otherwise liable for
any Liability or obligation of any Person other than itself (including
indebtedness of any other Person).
4.25 Government Consents. Except as may be required by Federal or
State securities laws, no consent, approval or authorization of or designation,
declaration or filing with any state, federal or foreign governmental authority
on the part of any of the Exchanging Stockholders because of any special
characteristic of such Exchanging Stockholder is required in connection with
the valid execution and delivery of this Agreement and the consummation by the
Exchanging Stockholders of the transactions contemplated hereby.
4.26 Manufacturing Rights. HTR has not granted rights to
manufacture its products to any other Person.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
THE ACQUIRORS
The Acquirors jointly and severally represent and warrant to HTR and
the Exchanging Stockholders that:
5.1 Organization and Authority of the Acquirors. UOL and UOL
Acquisition are corporations duly incorporated, validly existing and in good
standing under the laws of the State of Delaware with the corporate power and
authority to enter into this Agreement and the Ancillary Agreements and to
perform their respective obligations hereunder and thereunder. The execution
and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of each of the
Acquirors. This Agreement has been, and at the Closing the Ancillary
Agreements shall be, duly executed and delivered by each of the Acquirors and
constitutes the valid, binding and enforceable obligation of each of the
Acquirors, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and
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other laws affecting creditors' rights generally from time to time in effect
and to general equitable principles.
5.2 Ability to Carry Out the Agreement. Neither of the Acquirors
is subject to or bound by any provision of:
(i) any law, statute, rule, regulation, ordinance or
judicial or administrative decision;
(ii) any articles or certificate of incorporation or
bylaws;
(iii) any mortgage, deed of trust, lease, note,
shareholders' agreement, bond, indenture, other instrument or
agreement, license, permit, trust, custodianship other restriction of
any kind or character whatsoever; or
(iv) any judgment, order, writ, injunction or decree of
any court, governmental body, administrative agency or arbitrator;
that would prevent or be violated by or would result in any penalty, forfeiture
or contract termination as a result of, or under which there would be a default
as a result of, nor is the consent of any Person under any material agreement
which has not been obtained required for, the execution, delivery and
performance by each of the Acquirors of this Agreement and the transactions
contemplated hereby, other than violations, penalties, forfeitures, contract
terminations, defaults or failure to obtain consents which, singly or in the
aggregate, shall not have a material adverse effect on the enforceability or
validity of this Agreement or the ability of the Acquirors to perform their
obligations hereunder.
5.3 Brokers and Intermediaries. None of the Acquirors has
employed any broker, finder, advisor or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to a
broker's, finder's or similar fee or commission in connection therewith or upon
the consummation thereof.
5.4 Securities Law Filings. UOL has previously furnished to HTR
and the Exchanging Stockholders copies of: (i) its Annual Report on Form 10-K
for the year ended December 31, 1996; (ii) its Quarterly Reports on Form 10-Q
for the quarters ended March 31, and June 30, 1996; (iii) its proxy
solicitation materials, dated April 8, 1996, for its Annual Meeting of
Shareholders held on May 28, 1997; (iv) its Annual Report to Shareholders for
the year ended December 31, 1996; and (v) its Current Reports on Form 8-K, as
amended (collectively the "Reports"). Such Reports, as of the date of the
filing thereof with the SEC, complied as to form and substance in all material
respects with the provisions of the 1934 Act, the rules and regulations
promulgated thereunder, and all court cases and regulatory interpretations
relating thereto. Since date of the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, there has been no material adverse change in the
business, operations, results of operations, assets, properties, financial
condition or prospects of UOL.
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None of the Reports contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein not
misleading.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
6.1 Full Access. From the date hereof until the earlier of the
Closing or the termination of this Agreement pursuant to Section 3.3 above,
each party hereto shall permit representatives of the other party hereto to
have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of such party, to all premises,
customers, employees, properties, books, records contracts, tax records, and
documents of or pertaining to the other party.
6.2 Regulatory Filings; Consents. From the date hereof until the
earlier of the Closing or the termination of this Agreement pursuant to Section
3.3 above, each of the parties hereto shall: (i) take any additional action
that is necessary, proper or advisable in connection with any notices to,
filings with, and authorizations, consents and approvals of governments and
governmental agencies that it is required to give, make or obtain in order to
effect the transactions contemplated hereunder; and (ii) furnish to the other
party or parties hereto, as the case may be, such necessary information and
reasonable assistance as such other party or parties may reasonably request in
connection with its or their preparation of necessary filings or submissions to
any governmental agency. Each party shall give any notices to third Persons,
and shall use its best efforts to obtain any third Person consents, that the
other party may reasonably request in connection with the matters referred to
in Sections 4.2 and 5.2 above.
6.3 Conduct of Business. From the date hereof until the earlier
of the Closing or the termination of this Agreement pursuant to Section 3.3
above, and except as otherwise contemplated by this Agreement or consented to
or approved by the other party in writing, neither party shall engage in any
practice, take an action, embark on any course of action, or enter into any
transaction outside the ordinary course of business consistent with past
practices. Without limiting the generality of the foregoing, neither party, as
the case may be, shall, during the period specified in the first sentence of
this Section 6.3:
(a) take any action, engage in any practice or enter into any
transaction of the nature or sort referred to in subsections (a) through (v) of
Section 4.6, except as permitted therein;
(b) cause the business conducted by either party to be operated
in all respects in the ordinary and usual course and keep and preserve its
business and properties intact, including its present operations, physical
facilities, working conditions and relationships with employees, clients,
suppliers, customers, lessors and licensors of such business;
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(c) not effect or authorize any change or amendment to its
Articles of Incorporation or Bylaws;
(d) maintain in full force and effect all of its existing
casualty, liability and other insurance until the Closing Date in amounts not
less than those in effect on the date hereof;
(e) except as set forth on Schedule 6.3(e), not declare, set
aside or pay any dividend or make any distribution with respect to its capital
stock or redeem, purchase or otherwise acquire any of its capital stock; and
(f) promptly notify the other party in writing of: (i) any
actions, suits or proceedings instituted or threatened against it at law or in
equity or admiralty, before or by any court or governmental authority; (ii) any
changes in its personnel; and (iii) any adverse development causing a breach of
any of the representations and warranties contained in Articles 4 or 5 above.
No disclosure by either party pursuant to this subsection 6.3(f) shall be
deemed to amend or supplement the disclosures contained in any Schedule or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
6.4 Confidentiality. Each party to this Agreement agrees that
all information concerning the business and offices of the other parties to the
Agreement that is not generally available to the public ("Confidential
Information") and obtained from such other party shall be deemed confidential
and shall not be disclosed to any Person for any reason or purpose whatsoever,
except in connection with this Agreement, to the parties and their
representatives involved in this transaction, or as may by required by law or
stock exchange or market regulation. In the event this Agreement is
terminated, all such Confidential Information which is in tangible Form shall,
upon request, be returned to the appropriate parties, together with any and all
copies made thereof.
6.5 Books and Records. UOL shall retain all books, records and
other documents pertaining to the business of HTR in existence on the Closing
Date for a period of at least three (3) years from the Closing Date (or such
longer period as provided in Section 9.1) and shall make the same reasonably
available after the Closing Date for such three (3) year period for inspection
and copying by the Exchanging Stockholders at the Exchanging Stockholders'
expense during the normal business hours of UOL, upon reasonable request and
upon reasonable notice.
6.6 Announcement. Promptly after the execution of this
Agreement, UOL shall make a public statement approved by HTR and UOL with
respect to this Agreement and the transactions contemplated hereby.
Thereafter, prior to the Closing, no party to this Agreement shall issue any
press release or otherwise make any public statement with respect to this
Agreement and the transactions contemplated hereby without the prior consent of
the other parties to this Agreement (which consent shall not be unreasonably
withheld), except as may be required by applicable law or stock exchange or
market regulation.
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6.7 Best Efforts. Without limiting the specific obligations of
any party hereto under any agreement or covenant hereunder, each of the parties
hereto shall use its respective best efforts to take all action and do such
acts and things necessary in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the conditions to Closing set forth in Articles 7 and 8 below).
6.8 Discussion With Others. From the date hereof until the
earlier of the Closing or the termination of this Agreement pursuant to Section
3.3 above, none of the Transferors shall: (i) discuss, solicit, initiate or
encourage the submission of any proposal or offer from any third Person
concerning the sale or acquisition of any capital stock or other voting
securities, or any significant assets of, HTR (including any acquisition
structured as a merger, consolidation or share exchange); or (ii) engage or
participate in any discussions or negotiations regarding, enter into any
agreement with respect to, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
third Person to do or seek any of the foregoing. The Transferors shall
immediately notify UOL if any third Person makes any proposal, offer, inquiry
or contact with respect to any of the foregoing.
6.9 Cooperation in Litigation. Each party hereto shall fully
cooperate with the other in the defense or prosecution of any litigation or
proceeding already instituted or which may be instituted hereafter against or
by such party relating to or arising out of the conduct of the business of HTR
prior to or after the Closing Date (other than litigation arising out of the
transactions contemplated by this Agreement). The party requesting such
cooperation shall pay the out-of-pocket expenses (including legal fees and
disbursements) of the party providing such cooperation and of its officers,
directors, employees and agents reasonably incurred in connection with
providing such cooperation, but shall not be responsible to reimburse the party
providing such cooperation for such party's time spent in such cooperation or
the salaries or costs of fringe benefits or similar expenses paid by the party
providing such cooperation to its officers, directors, employees and agents
while assisting in the defense or prosecution of any such litigation or
proceeding.
6.10 Stock Transfer Restrictions. (a) each of the Exchanging
Stockholders acknowledges, represents, warrants and covenants as follows:
(i) A restrictive legend acknowledging the restrictions
on resale of the Merger Shares and Conversion Notes under the 1933 Act
will be placed on the certificates representing the Merger Shares and
the Conversion Notes;
(ii) UOL may put "stop transfer" orders in place with its
transfer agent to ensure compliance with the provisions of Sections
6.11.
(b) UOL agrees that prior to the date which is the later of (i)
forty-five (45) days after the Effective Time, or (ii) January 31, 1998 it will
use its best efforts to promptly cause a registration statement on Form S-3 for
the resale of the Merger Shares to be declared effective by the SEC (but in any
event, not later than April 31, 1998), subject to provisions of law and
regulations affecting UOL and the reasonable cooperation by the Exchanging
Stockholders.
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(c) UOL agrees to grant to the persons listed on Exhibit F,
incidental registration rights to have such persons included in the public
offering contemplated by UOL, on terms and conditions the same as those
generally applicable to UOL's Stockholders. The balance of the Exchanging
Stockholders agree to execute one hundred and eighty day lock-up agreement in
the form attached hereto as Exhibit G.
6.11 Certain Private Placement Representations and Warranties.
Each Exchanging Stockholder hereby represents and warrants that:
(a) Such Exchanging Stockholder is experienced in evaluating
companies such as UOL, is able to fend for itself in transactions such as the
one contemplated by this Agreement, has such knowledge and experience in
financial and business matters that each such Exchanging Stockholder is capable
of evaluating the merits and risks of acquiring the Securities as a prospective
investment in the Company, and has the ability to bear the economic risks of
the investment.
(b) Such Exchanging Stockholder is acquiring the Securities for
investment for such Exchanging Stockholder's own account and not with the view
to, or for resale in connection with, any distribution thereof. Such
Exchanging Stockholder understands that the Securities have not been registered
under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.
Such Exchanging Stockholder further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to any third person with respect to any of the
Securities. Such Exchanging Stockholder understands and acknowledges that the
offering of the Securities pursuant to this Agreement will not be registered
under the Securities Act on the ground that the sale provided for in this
Agreement and the issuance of Securities hereunder is exempt from the
registration requirements of the Securities Act.
(c) Such Exchanging Stockholder acknowledges that the Securities
must be held indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. Such Exchanging
Stockholder is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions. Such Exchanging Stockholder covenants that, in the absence of an
effective registration statement covering the stock in question, such
Exchanging Stockholder will sell, transfer, or otherwise dispose of the
Securities only in a manner consistent with such Exchanging Stockholder's
representations and covenants set forth in this Section 6.11.
(d) Such Exchanging Stockholder has received and reviewed
information about UOL and has had an opportunity to discuss UOL's business,
management and financial affairs with its management. Such Exchanging
Stockholder understands that such discussions, as
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well as any written information issued by UOL, were intended to describe the
aspects of UOL's business and prospects which UOL believes to be material.
6.12 UOL SEC Documents. Prior to the Closing, UOL shall furnish
to HTR true and complete copies of any filings made by UOL with the SEC under
the 1933 Act or the 1934 Act after the date of this Agreement.
6.13 Stockholder Action. Each of the Exchanging Stockholders
shall simultaneously herewith execute the stockholder consent in the form of
Exhibit H attached hereto, reflecting each such Exchanging Stockholder's vote
to approve the merger contemplated by this Agreement and to waive any
stockholder notice otherwise required by the Delaware General Corporation Law.
6.14 Power of Attorney. Each Exchanging Stockholder shall
simultaneously herewith execute a power of attorney in the form of Exhibit I
granting to Daniel Callahan the authority and power to execute any document or
agreement contemplated by this Agreement or any waiver in connection with this
Agreement on behalf of each such Exchanging Stockholder.
6.15 Cooperation in Preparation of Registration Statement.
(a) HTR and each Exchanging Stockholder shall furnish or cause to
be furnished to UOL, HTR Acquisition and the underwriters of the proposed
public offering (the "Proposed Offering") being contemplated by UOL (the
"Underwriters") all of the information concerning HTR and the Exchanging
Stockholders reasonably requested by the UOL, HTR Acquisition and the
Underwriters, and will cooperate with UOL, HTR Acquisition and the Underwriters
in the preparation of, any registration statement (or similar document)
relating to the Proposed Offering and the prospectus included therein,
including audited financial statements, prepared in accordance with generally
accepted accounting principles (collectively, the "Registration Statement").
HTR and the Exchanging Stockholders agree promptly to advise UOL if at any time
during the period in which a prospectus relating to the Proposed Offering is
required to be delivered under the 1933 Act, any information contained in the
prospectus concerning the HTR or the Exchanging Stockholders becomes incorrect
or incomplete in any material respect, and to provide the information needed to
correct such inaccuracy. UOL agrees to use its commercially reasonable best
efforts to prepare and file the Registration Statement as promptly as
practicable, to furnish HTR and each Exchanging Stockholder with a copy thereof
and each amendment thereto in substantially the form in which it is to be filed
as promptly as reasonably practicable prior to such filing (it being understood
that neither the Company nor the Sellers has any obligation to review the same
other than with respect to information regarding the Company or the Seller).
(b) HTR and the Exchanging Stockholders acknowledge and agree (i)
that, prior to the execution and delivery of a definitive underwriting
agreement, the Underwriters have made no firm commitment, binding agreement, or
promise or other assurance of any kind, whether express or implied, oral or
written that the Registration Statement will become effective or that the
Proposed Offering pursuant thereto will occur at a particular price or within a
particular range of prices or occur at all, (ii) that none of the prospective
Underwriters of UOL's Common Stock in the Proposed Offering, nor any officers,
directors, agents or representatives of such Underwriters, shall have any
liability to HTR or any Exchanging Stockholder or any other person affiliated
or associated with HTR or any Exchanging Stockholder for any failure of the
Registration Statement to become effective, the Proposed Offering to occur at a
particular price or within a particular
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range of prices or occur at all, and (iii) the decision of HTR and each
Exchanging Stockholder to enter into this Agreement and, if applicable, to vote
in favor of or consent to the transactions contemplated hereby, has been or
will be made independent of, and without reliance upon, any statements,
opinions or other communications of, or due diligence investigation which have
been or will be made or performed by any prospective Underwriter, relative to
UOL or the Proposed Offering. Each Exchanging Stockholder acknowledges that
shares of UOL Common Stock received as a part of the Purchase Price, if any,
will not be issued pursuant to the Registration Statement, and, therefore, the
Underwriters shall have no obligation to the Exchanging Stockholders with
respect to any disclosure contained in the Registration Statement and
Exchanging Stockholders may not assert any claim against the Underwriters
relating to the Registration Statement on account thereof.
6.16 Board of Directors.Kamyar Kaviani or his designee, which
designee shall be reasonably acceptable to UOL, shall be recommended by the
management of UOL for election to the Board of Directors at the next annual
meeting of Stockholders. The Exchanging Stockholders agree to vote in favor of
Mr. Kaviani or his designee for such position.
ARTICLE 7
CONDITIONS PRECEDENT OF TRANSFERORS
The obligation of the Transferors to consummate the transactions to be
performed by them in connection with the Closing is subject to the satisfaction
of each of the following conditions prior to or at the Closing:
7.1 Representations and Warranties. The representations and
warranties of the Acquirors made hereunder shall be true in all material
respects at and as of the Closing Date, with the same force and effect as
though made at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any representation
or warranty is made as of a specified date, in which case such representation
or warranty shall be true in all material respects as of such date.
7.2 Agreements. The Acquirors shall have performed and complied
in all material respects with all their respective undertakings, covenants and
agreements required by this Agreement to be performed or complied with by the
Acquirors prior to or at the Closing.
7.3 Performance Certificates. HTR shall have been furnished with
a certificate of a proper officer of UOL and a certificate of a proper officer
of HTR Acquisition, both dated as
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of the Closing Date, each certifying to the effect that each of the conditions
contained in Sections 7.1 and 7.2 above has been satisfied in all respects.
7.4 No Injunction. No injunction, restraining order or decree of
any nature of any court or governmental or regulatory authority shall exist
against the Acquirors, the Transferors or any of their respective Affiliates,
or any of the principals, officers or directors of any of them, that restrains,
prevents or materially changes the transactions contemplated hereby.
7.5 No Violation. The consummation of the transactions
contemplated hereunder shall not be in violation of any material applicable
law, statute, rule or regulation for which a waiver has not been obtained and
where such violation would make illegal or otherwise prevent the consummation
of the Merger.
7.6 Consents. All material consents, approvals and
authorizations of governmental and regulatory authorities, and all material
filings with and notifications of governmental authorities and regulatory
agencies or other entities which regulate the business of HTR or the Acquirors,
necessary on the part of HTR or Acquirors, or their respective Affiliates, to
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, shall have been obtained or effected (and all
applicable waiting periods, if any, including any extensions thereof, under any
applicable law, statute, regulation or rule shall have expired or terminated,
as applicable). HTR shall have received the written consents or approvals of
any and all third Persons required under the terms of the Contracts to the
consummation of the transactions contemplated hereunder except where the
failure to obtain such consents or approvals would not have a Material Adverse
Effect.
7.7 Opinion of the Acquirors' Counsel. The Exchanging
Stockholders shall have received an opinion of Wyrick Robbins Yates & Ponton
LLP, counsel for the Acquirors, dated as of the Closing Date, addressed to the
Exchanging Stockholders, to the effect and substantially in the form of Exhibit
J.
7.8 No Proceedings. No claim, suit, action or other proceeding
shall be pending or threatened in writing before or by any court, governmental
agency or other entity against any of the parties to this Agreement with
respect to the transactions contemplated by this Agreement or which adversely
affect the assets, property, operations, results of operations, financial
condition or prospects of UOL.
7.9 Tax-Free Reorganization. The Merger shall constitute a
tax-free reorganization under the provisions of Code Section 368.
7.10 Employment Agreements. The Exchanging Stockholders listed on
Exhibit K shall have entered into an employment agreement in form and substance
as set forth in Exhibit K, and the same shall be in full force and effect.
7.11 Miscellaneous Closing Deliveries. HTR shall have received
each of the following:
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(a) all documents, instruments and other closing deliveries
specified in subsection 3.2(b) above; and
(b) such evidence as HTR may reasonably request in order to
establish: (i) the power and authority of each of the Acquirors to consummate
the transactions contemplated by this Agreement; (ii) compliance with the
conditions of Closing set forth herein; and (iii) satisfactory completion of
all corporate proceedings to be taken in connection with the transactions
contemplated by this Agreement together with certified copies of necessary
resolutions duly adopted by the stockholders and directors of the Acquirors (to
the extent required by law) approving the Merger and the execution and delivery
of this Agreement and all other corporate action necessary to enable the
Acquirors to comply with the terms of this Agreement.
The Transferors may waive any condition specified in this Article 7 if each of
them executes a writing so stating at or prior to the Closing.
ARTICLE 8
CONDITIONS PRECEDENT OF THE ACQUIRORS
The obligation of the Acquirors to consummate the transactions to be
performed by them in connection with the Closing is subject to the satisfaction
of each of the following conditions prior to or at the Closing:
8.1 Representations and Warranties. The representations and
warranties of the Exchanging Stockholders made hereunder shall be true in all
material respects at and as of the Closing Date, with the same force and effect
as though made at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any representation
or warranty is made as of a specified date, in which case such representation
or warranty shall be true in all respects as of such date.
8.2 Agreements. The Transferors shall have performed and
complied in all material respects with all of their respective undertakings and
agreements required by this Agreement to be performed or complied with by them
prior to or at the Closing.
8.3 Performance Certificates. The Acquirors shall have been
furnished with a certificate of HTR and each of the Exchanging Stockholders,
dated as of the Closing Date, certifying that the conditions contained in
Sections 8.1, 8.2, 8.9 and 8.13 hereof have been satisfied in all respects.
8.4 No Injunction. No injunction, restraining order or decree of
any nature of any court or governmental or regulatory authority shall exist
against the Acquirors, the Transferors
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or any of their respective Affiliates, or any of the principals, officers or
directors of any of them, that restrains, prevents or materially changes the
transactions contemplated hereby.
8.5 No Violation. The consummation of the transactions
contemplated hereunder shall not be in violation of any material applicable
law, statute, rule or regulation for which a waiver has not been obtained and
where such violation would make illegal or otherwise prevent the consummation
of the Merger.
8.6 Consents. All material consents, approvals and
authorizations of governmental and regulatory authorities, and all material
filings with and notifications of governmental authorities and regulatory
agencies or other entities which regulate the business of HTR or Acquirors,
necessary on the part of HTR or Acquirors, or their respective Affiliates, to
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, shall have been obtained or effected (and all
applicable waiting periods, if any, including any extensions thereof, under any
applicable law, statute, regulation or rule, including but not limited to the
HSR Act, if applicable, shall have expired or terminated, as applicable). UOL
shall have received the written consents or approvals of any and all third
Persons required under the terms of the Contracts to the consummation of the
transactions contemplated hereunder except where the failure to obtain such
consents or approvals would not have a Material Adverse Effect.
8.7 Opinion of Transferors' Counsel. UOL shall have received an
opinion of Epstein, Becker & Green, P.C., counsel of HTR, dated as of the
Closing Date, addressed to UOL to the effect and substantially in the form of
Exhibit L.
8.8 Resignations. The Acquirors shall have received
resignations, effective as of the Closing, of each officer and director of HTR
other than those whom UOL shall have specified in writing prior to the Closing.
8.9 No Proceedings. No claim, suit, action or other proceeding
shall be pending or threatened in writing before or by any court, governmental
agency or other entity against any of the parties to this Agreement with
respect to the transactions contemplated by this Agreement or which adversely
affect the assets, property, operations, results of operations, financial
condition or prospects of HTR.
8.10 Employment Agreements and Lockup Agreements. The Exchanging
Stockholders listed on Exhibit K shall have entered into an employment
agreement in form and substance as set forth in Exhibit K and the Exchanging
Stockholders, other than those listed on Exhibit K shall have entered into a
lock-up agreement in form and substance as set forth in Exhibit G, and the same
shall be in full force and effect.
8.11 HTR Capital Stock. All shares of the capital stock of HTR
owned by the Exchanging Stockholders shall be free and clear of any and all
Encumbrances (other than transfer restrictions under applicable securities
laws).
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8.12 Options, Rights, Warrants or Convertible Securities .Any
option warrant, right or other convertible security of HTR shall be exercised
or converted into HTR Common Stock immediately prior to the Closing, except for
the securities set forth in Section 4(b) of the Schedule of Exceptions.
8.13 Stockholder Approval. This Agreement and the Merger shall
have been approved by the affirmative vote of holders of not less than one
hundred percent (100%) of the HTR Common Stock on a fully-diluted and
as-converted basis (including the holders of any convertible security of HTR)
in favor of this Agreement and the Merger. In connection with such approval,
there shall exist no Dissenting Shares.
8.14 Sirrom Capital Corporation Note and Other Indebtedness. UOL
shall have negotiated terms and conditions satisfactory to UOL with respect to
the assumption of subordinated debt due to Sirrom Capital Corporation in the
approximate principal amount of Three Million ($3,000,000) Dollars. HTR's
outstanding indebtedness for borrowed money shall not exceed the amount due to
Sirrom Capital Corporation plus One Million ($1,000,000) Dollars which
additional amount is supported in full by valid collectible receivables.
8.15 Investor Rights Agreement. HTR's Investor Rights Agreement
dated July 28, 1994 shall be terminated pursuant to the provisions of Exhibit
M, executed by each Exchanging Stockholder having registration rights
thereunder or by reference thereto.
8.16 Miscellaneous Closing Deliveries. The Acquirors shall have
received each of the following:
(a) all documents, instruments and other closing deliveries
specified in Section 3.2(a) above; and
(b) such evidence as the Acquirors may reasonably request in
order to establish: (i) the power and authority of the Transferors to
consummate the transactions contemplated by this Agreement; (ii) compliance
with the conditions of Closing set forth herein; and (iii) satisfactory
completion of all corporate and stockholder proceedings to be taken in
connection with the transactions contemplated by this Agreement, together with
certified copies of resolutions duly adopted by the stockholders and directors
of HTR approving the Merger and the execution and delivery of this Agreement
and all other corporate action necessary to enable the Transferors to comply
with the terms of this Agreement.
UOL may waive any condition specified in this Article 8 if it executes a
writing so stating at or prior to the Closing.
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ARTICLE 9
SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
9.1 Survival of Representations and Warranties. All of the
representations and warranties of the parties hereto contained in the Agreement
shall survive the Closing and continue in full force and effect for thirty six
(36) months following the Closing Date; provided, however the warranties and
representations contained in Sections 4.3 and 4.7 shall survive without
limitation and the warranties and representations contained in Sections 4.8,
4.12 and 4.23 shall survive for the applicable statute of limitations period
for each such section. Any claims with respect to the foregoing sentence under
Article 10 below must be asserted in writing with reasonable particularity by
the party making such claim prior to the end of the 36-month period referenced
above, and the obligations of the indemnifying party under Sections 10.1 and
10.2 below with respect to such claims shall continue until such claims have
been resolved.
9.2 Survival of Covenants and Agreements. The respective
covenants and agreements of the parties contained in this Agreement shall
survive the Closing without limitation as to time. Any claims under Article 10
as to a breach of a covenant or agreement must be asserted in writing with
reasonable particularity by the party making such claims.
9.3 Underwriter's Benefit. HTR's Merger Agreement
representations and warranties and covenants contained in this Agreement or any
document, instrument, certificate or other item furnished or to be furnished to
UOL and HTR Acquisition by HTR pursuant hereto or thereto or in connection with
the transactions contemplated by this Agreement shall run to the benefit of any
Underwriter of the UOL's Common Stock subject to the completion of the Proposed
Offering in addition to the benefit of UOL and HTR Acquisition.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification of UOL. Subject to, and as expressly limited
by, Sections 10.3, 10.4 and 10.9 of this Agreement, the Exchanging
Stockholders, jointly and severally, agree to defend, indemnify and hold
harmless UOL and its successors and assigns (individually an "Acquiror
Indemnitee", and collectively the "Acquiror Indemnitees") from, against, and in
respect of the following:
(a) any and all direct, and not consequential, punitive or other
similar, losses, damages, deficiencies or liabilities directly caused by or
directly resulting or arising from: (i) any breach of the representations and
warranties of the Exchanging Stockholders contained in this Agreement; or (ii)
any failure by any of the Transferors to perform or otherwise fulfill or comply
with (X) if this Agreement shall have been terminated, Sections 6.4, 6.7 and
6.8 or any
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other covenant, undertaking, agreement or obligation to be performed, fulfilled
or complied with by the Exchanging Stockholders or HTR prior to the Closing; or
(Y) if the Closing shall occur, any undertaking or other agreement or obligation
hereunder to be performed, fulfilled or otherwise complied with by the
Exchanging Stockholders after the Closing; and
(b) any and all actions, suits, proceedings, claims, liabilities,
demands, assessments, judgments, interest, penalties, costs and expenses,
including reasonable attorneys' fees incurred by the Acquiror Indemnitees in
connection with investigating, defending, settling (with the consent of the
Majority Exchanging Stockholders, which shall not be unreasonably withheld) or
prosecuting any action, suit, proceeding or claim against any of the Acquiror
Indemnitors hereunder, directly incident to such indemnification; provided,
however, that if any action, suit, proceeding, claim, liability, demand or
assessment shall be asserted against any Acquiror Indemnitee in respect of
which such Acquiror Indemnitee proposes to demand indemnification, such
Acquiror Indemnitee shall notify the Majority Exchanging Stockholders thereof
within twenty (20) days after assertion thereof, and such notice shall include
copies of all suit, service and claim documents, all other relevant documents
in the possession of the Acquiror Indemnitee, and an explanation of the
Acquiror Indemnitee's contentions and defenses with as much specificity and
particularity as the circumstances permit. Subject to rights of or duties to
any insurer or other third Person having liability therefor, the Majority
Exchanging Stockholders shall have the right within 10 days after receipt of
such notice to assume the control of the defense, compromise or settlement of
any such action, suit, proceeding, claim, liability, demand or assessment,
including, at its own expense, employment of counsel; provided further,
however, that if the Exchanging Stockholders shall have exercised their right
to assume such control, the Acquiror Indemnitee: (X) may, in its sole
discretion and expense, employ counsel to represent it (in addition to counsel
employed by the Majority Exchanging Stockholders) in any such matter, and in
such event counsel selected by the Majority Exchanging Stockholders shall be
required to reasonably cooperate with such counsel of the Acquiror Indemnitee
in such defense, compromise or settlement for the purpose of informing and
sharing information with such Acquiror Indemnitee; and (Y) shall, at its own
expense, make available to the Exchanging Stockholders those employees of the
Acquiror Indemnitees whose assistance, testimony or presence is reasonably
deemed by the Majority Exchanging Stockholders necessary or beneficial to
assist the Exchanging Stockholders in evaluating and in defending any such
action, suit, proceeding, claim, liability, demand or assessment; provided
further, however, that any such access shall be conducted in such a manner as
not to interfere unreasonably with the operations of the businesses of the
Acquiror Indemnitees.
10.2 Indemnification of Exchanging Stockholders. Subject to and
expressly limited by Sections 10.3, 10.4 and 10.9 UOL agrees to defend,
indemnify and hold harmless the Exchanging Stockholders and their respective
successors and assigns (individually a "Transferor Indemnitee", and
collectively the "Transferor Indemnitees") from, against and in respect of:
(a) any and all losses, damages, deficiencies or liabilities
caused by, resulting or arising from or otherwise relating to: (i) any breach
of the representations and warranties of
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the Acquirors contained in this Agreement; and (ii) any failure by the Acquirors
to perform or otherwise fulfill or comply with (X) if this Agreement shall have
been terminated, Sections 6.4 or 6.7 or any other covenant, undertaking,
agreement or obligation to be performed, fulfilled or complied with by the
Acquirors prior to or in connection with the Closing; or (Y) if the Closing
shall occur, any undertaking or other agreement or obligation hereunder to be
performed, fulfilled or otherwise complied with by UOL after the Closing; and
(b) any and all actions, suits, proceedings, claims, liabilities,
demands, assessments, judgments, interest, penalties, costs and expenses,
including reasonable attorneys' fees incurred by the Transferor Indemnitees in
connection with investigating, defending, settling or prosecuting any action,
suit, proceeding or claim against any of the Transferor Indemnitees hereunder,
incident to any of the items referred to herein or such indemnification;
provided, however, that if any action, suit, proceeding, claim, liability,
demand or assessment shall be asserted against any Transferor Indemnitee in
respect of which such Transferor Indemnitee proposes to demand indemnification,
such Transferor Indemnitee shall notify UOL thereof within twenty (20) days
after assertion thereof, and such notice shall include copies of all suit,
service and claim documents, all other relevant documents in the possession of
the Transferor Indemnitees and an explanation of the Transferor Indemnitees'
contentions and defenses with as much specificity and particularity as the
circumstances permit, provided that the failure of the Transferor Indemnitee to
give such notice shall not relieve UOL of its obligations under this Section
10.2 if the Transferor Indemnitee shall have demonstrated that: (i) it acted
in good faith and without unreasonable delay; and (ii) UOL shall not have been
prejudiced thereby. Subject to rights of or duties to any insurer or other
third Person having liability therefor, UOL shall have the right within 10 days
after receipt of such notice to assume the control of the defense, compromise
or settlement of any such action, suit, proceeding, claim, liability, demand or
assessment, including, at its own expense, employment of counsel; provided
further, however, that if UOL shall have exercised its right to assume such
control, the Transferor Indemnitees: (X) may, in their sole discretion and
expense, employ one counsel to represent them (in addition to counsel employed
by UOL) in any such matter, and in such event counsel selected by UOL shall be
required to cooperate with such counsel of the Transferor Indemnitees in such
defense, compromise or settlement for the purpose of informing and sharing
information with such Transferor Indemnitees; and (Y) shall, at their own
expense, make themselves available to Transferor Indemnitees.
10.3 Remedies. Notwithstanding any provision to the contrary in
this Agreement, the indemnification rights set forth in this Article 10, all of
which are subject to the terms, limitations and restrictions of this Article
10, and the enforcement thereof and collection thereunder, shall be the
exclusive remedy after Closing for monetary damages sustained as a result of a
breach of a representation, warranty, covenant or agreement under this
Agreement or certificates to be delivered at Closing hereunder. Such
limitations set forth in this Section 10.3 shall not impair the rights of any
of the parties to seek non-monetary equitable relief, including (without
limitation) specific performance or injunctive relief to redress any default or
breach of this Agreement. In connection with the seeking of any non-monetary
equitable relief, each of the parties acknowledges and agrees that the other
parties hereto would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in
43
<PAGE> 49
accordance with their specific terms or otherwise are breached. Accordingly,
each of the parties hereto agrees the other parties hereto shall be entitled to
an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any competent court having jurisdiction over the parties
(subject to the provisions of Section 11.11 below), in addition to any other
remedy to which they may be entitled, at law or in equity.
10.4 Survival. Notwithstanding anything herein to the contrary,
this Article 10 shall survive termination of this Agreement without limitation;
provided however, that this survival shall not extend a liability otherwise
limited by Article 9, and no indemnifying party shall be liable for any claim
for indemnification asserted by an indemnified party pursuant to any provision
of this Agreement after the date which is twelve months after the Effective
Time.
10.5 Set-off. The liability of the Exchanging Stockholders under
the indemnification provisions of this Article 10 may be recovered by set-off
against the Conversion Notes or directly from any Exchanging Stockholder.
10.6 Assertion of Claims . Subject to the minimum claims
requirements set forth below, if any Acquiror Indemnitee shall be entitled to
be indemnified for monetary damages in accordance with Section 10.1 hereof, it
shall promptly give written notice thereof to the Exchanging Stockholders,
including in such notice a brief description of the facts upon which such claim
or adjustment is based and the amount thereof (the "Claim Notice"). Unless the
Exchanging Stockholders shall give written notice, within twenty (20) days
after receipt of the Claim Notice, to UOL objecting to the forfeiture of any
set-off amount, UOL shall be entitled to proceed directly against the
Exchanging Stockholders or to set-off against the Promissory Notes.
10.7 Resolution of Conflicts; Arbitration.
(a) If the Exchanging Stockholders give such written objection to
UOL, UOL shall be entitled to refrain from making any payment under the
Promissory Notes until the rights of the Exchanging Stockholders and UOL with
respect thereto have been agreed upon between the Exchanging Stockholders and
UOL or until such rights are settled by arbitration.
(b) In case the Exchanging Stockholders shall give such written
objection to UOL, the Exchanging Stockholders and UOL shall attempt promptly
and in good faith to agree upon the rights of the parties with respect to each
of such claims. If the Exchanging Stockholders and UOL should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both
parties.
(c) If no such agreement can be reached after good faith
negotiation, either UOL or the Exchanging Stockholders may demand arbitration
of the matter unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be
commenced until such amount is ascertained or both parties agree to
arbitration; and in any such event the matter shall be settled by arbitration
conducted by three arbitrators.
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<PAGE> 50
UOL and the Exchanging Stockholders shall each select one arbitrator, and the
two arbitrators so selected shall select a third arbitrator. The decision of
the arbitrators so selected as to the validity and amount of any claim in such
Claim Notice shall be binding and conclusive upon the parties to this
Agreement, and UOL shall be entitled to act in accordance with such decision.
Judgment upon any award rendered by the arbitrators may be entered in any court
having jurisdiction. Any such arbitration shall be held in McLean, Virginia.
Any such arbitration shall be conducted under the rules then in effect of the
American Arbitration Association, and shall be based on the provisions and
limitations of this Article 10.
10.8 Beneficial Interest. Subject to the rights of UOL hereunder,
all beneficial interest in the Promissory Notes shall be the property of the
Exchanging Stockholders from and after the Effective Time and UOL shall have no
interest therein.
10.9 Limitation on Liability. (a) Notwithstanding any provision
to the contrary in this Article 10, no claim, either individually or in the
aggregate, for indemnification hereunder, shall be valid and assertable unless
such claims in the aggregate are equal to or greater than $25,000 (the "Basket
Deductible"), in which case, subject to the limitations set forth in Section
10.9(b), the indemnifying party shall be liable for amounts relating back to
the first dollar.
(b) The parties agree that, prior to submitting any claim for
indemnification under this Article 10, they shall use reasonable efforts to
determine the amount, if any, by which their losses would be offset by recovery
of insurance proceeds and to provide the indemnitor notice of and a description
of such determination.
(c) In no event shall the aggregate liability of any Exchanging
Stockholder exceed (i) in the case of each Majority Exchanging Stockholder,
twenty percent of each such stockholder's Merger Consideration; and (ii) in the
case of the balance of the Exchanging Stockholders, ten (10%) percent of each
such Stockholders' Merger Consideration provided, however, no limit shall be
applicable with respect to a breach of Section 4.3. In no event shall the
aggregate liability of UOL exceed $2,500,000. The Exchanging Stockholders
shall be entitled to satisfy any claim for indemnification under this Article
10 first by reduction of the Promissory Notes by way of set off and thereafter
by return of Merger Shares based on the value of the original Merger
Consideration. By way of example, if an Exchanging Stockholder is obligated to
indemnify for his entire indemnity exposure (i.e. 10% of the Merger
Consideration received for Exchanging Stockholders and 20% of the Merger
Consideration received if a Majority Exchanging Stockholder) and he received
970 shares of UOL and $30 as his Merger Consideration, he may deliver 97 shares
and $3 dollars in full settlement of his obligation, but only after such
obligation has been first offset against Promissory Notes received as Merger
Consideration.
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<PAGE> 51
ARTICLE 11
MISCELLANEOUS
11.1 Further Assurances. From time to time at or after the
Closing, each of the parties agrees to take, or cause to be taken, such further
actions, to execute, deliver and file, or cause to be executed, delivered and
filed, such further documents and instruments, and to obtain consents, as may
be necessary or reasonably requested in order to fully effectuate the purposes,
terms and conditions of this Agreement.
11.2 Expenses. Each of the parties hereto shall bear its
respective legal, investment banking, accounting, audit, and other costs and
expenses associated with this Agreement and the consummation of the
transactions contemplated hereby; provided, however, that such costs and
expenses of HTR shall not exceed $25,000.00 if the Closing shall occur, and the
Exchanging Stockholders shall indemnify the Acquiror Indemnitees for any such
costs and expenses of UOL in excess of $25,000.00.
11.3 Applicable Law. Except as otherwise expressly provided
herein, this Agreement shall be governed by, and construed in accordance with,
the law of the State of Delaware without reference to any choice or conflict of
law principle, provision or rule, including all matters of construction,
validity and performance.
11.4 Notices. All notices, requests, permissions, waivers, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given (i) upon personal delivery or receipt of a telecopy
transmission, (ii) three (3) days after being sent by registered or certified
United States mail, return receipt requested, properly addressed to the
intended recipient or (iii) one (1) day after being transmitted by a nationally
recognized overnight courier service, properly addressed and postage prepaid to
the intended recipient as follows:
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<PAGE> 52
If to the Exchanging Stockholders to them at the addresses set forth
on Exhibit A:
with a copy to:
David Fleming, Esq.
Epstein, Becker & Green
250 Park Avenue
New York, NY
Telephone No. 212-351-4928
Telecopy No.: 212-351-4925
If to the Acquirors, to:
Nat Kannan, Chairman
UOL Publishing, Inc.
8251 Greensboro Drive
Suite 500
McLean, VA 22102
Telephone No.: 703-893-7800
Telecopy No.: 703-893-1905
with a copy to:
Larry E. Robbins, Esq.
Wyrick Robbins Yates & Ponton LLP
Suite 300
4101 Lake Boone Trail
Raleigh, NC 27607
Telephone No.: 919-781-4000
Telecopy No.: 919-781-4865
Notice of any change of address shall be effective if given in the manner
provided above.
11.5 Entire Agreement. This Agreement (including the Exhibits
attached hereto and the documents referred to herein, all of which are a part
hereof) constitutes the entire agreement and understanding of the parties
hereto with respect to the subject matter contained herein, supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter
(including, without limitation, the letter of intent dated October 1, 1997,
which is hereby terminated). There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto
with respect to the transactions under this Agreement other than those set
forth herein or made hereunder.
11.6 Amendments. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or assigns.
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<PAGE> 53
11.7 Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles", "Sections" or "Exhibits" shall be deemed to
be references to Articles or Sections hereof or Exhibits hereto unless
otherwise indicated.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
11.9 Parties in Interest; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors. Nothing in this Agreement, express or implied, is intended to
confer upon any Person not a party to this Agreement any rights or remedies
under or by reason of this Agreement. No party to this Agreement may assign or
delegate all or any portion of its rights, obligations or liabilities under
this Agreement without the prior written consent of the other parties to this
Agreement.
11.10 Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to
permit enforcement of such restriction to its fullest extent, each party agrees
that a court of competent jurisdiction may enforce such restriction to the
maximum extent permitted by law, and each party hereby consents and agrees that
such scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
11.11 JURISDICTION. EXCEPT AS PROVIDED IN ARTICLE 10, EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE CITY OF MCLEAN,
VIRGINIA FOR ANY ACTIONS, SUITS, OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, EACH PARTY HERETO
AGREES NOT TO COMMENCE ANY ACTION, SUIT OR PROCEEDING RELATING THERETO EXCEPT
IN SUCH COURTS, AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE
OR DOCUMENT BY U.S. REGISTERED MAIL TO THE RESPECTIVE PARTY'S ADDRESS SET FORTH
ABOVE SHALL BE EFFECTIVE SERVICE OF PROCESS OF ANY ACTION, SUIT OR PROCEEDING
BROUGHT AGAINST ANY OF ACQUIRORS IN ANY SUCH COURT. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF
VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN SUCH STATE OR FEDERAL COURTS AS AFORESAID
AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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<PAGE> 54
11.12 Waiver. Any of the conditions to Closing set forth in this
Agreement may be waived at any time prior to or at the Closing hereunder by the
party entitled to the benefit thereof. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach
of or non-compliance with this Agreement shall be held to be a waiver of any
other or subsequent breach or non-compliance.
11.13 Incorporation of Exhibits. All of the Exhibits identified in
this Agreement are incorporated by reference into this Agreement and made a
part hereof.
11.14 Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event of any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any of the provisions of this Agreement.
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<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date first above written.
HTR, INC.
By: /s/ KAMYAR KAVIANI
--------------------------------
Kamyar Kaviani, President
UOL PUBLISHING, INC.
By: /s/ NARASIMHAN P. KANNAN
--------------------------------
Narasimhan P. Kannan,
Chief Executive Officer
HTR ACQUISITION, INC.
By: /s/ NARASIMHAN P. KANNAN
--------------------------------
Narasimhan P. Kannan,
Chief Executive Officer
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EXCHANGING STOCKHOLDERS:
/s/ KAMYAR KAVIANI (SEAL)
------------------------------
Kamyar Kaviani
/s/ FARSIN ARSANJANI (SEAL)
------------------------------
Farsin Arsanjani
/s/ BABAK YAZDANI (SEAL)
------------------------------
Babak Yazdani
/s/ DANIEL CALLAHAN (SEAL)
------------------------------
Daniel Callahan
/s/ TED BAGLIERI (SEAL)
------------------------------
Ted Baglieri
/s/ VAL E. VADEN (SEAL)
------------------------------
Val E. Vaden
/s/ GAYANE S. GELEMAIN (SEAL)
------------------------------
/s/ RICHARD CAMPBELL (SEAL)
------------------------------
Richard Campbell
David W. Hanna Trust d/t/d 10/30/89
By: /s/ ROBERT D. KELLY
------------------------
Attorney-in-Fact for
David W. Hanna, Trustee
Brooks Hobbs Trust
By: /s/ WOODSON M. HOBBS
------------------------
Woodson M. Hobbs, Trustee
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<PAGE> 57
Hanna Living Trust U/A 7/7/83
By: /s/ ROBERT D. KELLY
-------------------------
Attorney-in-Fact for
William D. Hanna, Trustee
By: /s/ ROBERT D. KELLY
-------------------------
Attorney-in-Fact for
Violet B. Hanna, Trustee
/s/ MARTIN CULVER (SEAL)
--------------------------------
Martin Culver
/s/ BRAD WELLS (SEAL)
--------------------------------
Brad Wells
/s/ JAMES H. CLEMENT, Jr. (SEAL)
--------------------------------
James H. Clement, Jr.
/s/ IDA L. CLEMENT (SEAL)
--------------------------------
Ida L. Clement
/s/ GEORGE BEGGS, III (SEAL)
--------------------------------
George Beggs, III
/s/ LUCY H. WASHBURNE (SEAL)
--------------------------------
Lucy H. Washburne
/s/ CLAUDIA HUNTINGTON (SEAL)
--------------------------------
Claudia Huntington
/s/ SCOTT DODDS (SEAL)
--------------------------------
Scott Dodds
/s/ LESLIE CLEMENT (SEAL)
--------------------------------
Leslie Clement
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<PAGE> 58
/s/ MARTIN W. CLEMENT, II (SEAL)
--------------------------------
Martin W. Clement, II
Henrietta P. C. Hildebrand Marital Trust
By: /s/ HENRIETTA P. C. HILDEBRAND (SEAL)
--------------------------------
Henrietta P. C. Hildebrand, Trustee
/s/ WOODSON M. HOBBS, IV (SEAL)
--------------------------------
Woodson M. Hobbs, IV
/s/ MOHAMMAD JAFAR KAVIANI (SEAL)
--------------------------------
Mohammad Jafar Kaviani
/s/ FOROUD ARSANJANI (SEAL)
--------------------------------
Foroud Arsanjani
/s/ RIAZ HUSSAIN RANA (SEAL)
--------------------------------
Riaz Hussain Rana
Robert D. Kelly Living Trust, d/t/d 12/7/89
By: /s/ ROBERT D. KELLY
-----------------------------
Robert D. Kelly, Trustee
Alexander McNeilly Trust
By: /s/ WOODSON M. HOBBS
-----------------------------
Woodson M. Hobbs, Trustee
Natasha A. Hobbs 1993 Trust
By: /s/ WOODSON M. HOBBS
-----------------------------
Woodson M. Hobbs, Trustee
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<PAGE> 59
Hanna Grandchildren's Trust F/B/O,
John D. Hanna, d/t/d 12/31/81
By: /s/ DAVID W. HANNA
----------------------------
David W. Hanna, Trustee
Hanna Grandchildren's Trust F/B/O,
Laurie J. Hanna, d/t/d 12/31/81
By: /s/ DAVID W. HANNA
----------------------------
David W. Hanna, Trustee
Hanna Grandchildren's Trust F/B/O,
Molly K. Hanna, d/t/d 12/31/81
By: /s/ DAVID W. HANNA
----------------------------
David W. Hanna, Trustee
Hanna Grandchildren's Trust F/B/O,
William J. Hanna, d/t/d 12/31/81
By: /s/ DAVID W. HANNA
----------------------------
David W. Hanna, Trustee
Hanna Grandchildren's Trust F/B/O,
Phillip A. Williams, d/t/d 12/31/81
By: /s/ DAVID W. HANNA
----------------------------
David W. Hanna, Trustee
54
