EXHIBIT 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION
BY AND AMONG
SMARTFORCE PLC,
ATLANTIC ACQUISITION CORP.
AND
CENTRA SOFTWARE, INC.
Dated as of January 16, 2002
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I THE MERGER ........................................................ 2
1.1 The Merger ...................................................... 2
1.2 Effective Time; Closing ......................................... 2
1.3 Effect of the Merger ............................................ 2
1.4 Certificate of Incorporation; Bylaws ............................ 2
1.5 Directors and Officers .......................................... 3
1.6 Effect on Capital Stock ......................................... 3
1.7 Surrender of Certificates ....................................... 4
1.8 No Further Ownership Rights in Company Common Stock ............. 6
1.9 Lost, Stolen or Destroyed Certificates .......................... 6
1.10 Tax Consequences ................................................ 6
1.11 Taking of Necessary Action; Further Action ...................... 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY ........................ 6
2.1 Organization and Qualification; Subsidiaries .................... 7
2.2 Certificate of Incorporation and Bylaws ......................... 7
2.3 Capitalization .................................................. 7
2.4 Authority Relative to this Agreement ............................ 9
2.5 No Conflict; Required Filings and Consents ...................... 10
2.6 Compliance; Permits ............................................. 11
2.7 SEC Filings; Financial Statements ............................... 11
2.8 No Undisclosed Liabilities ...................................... 12
2.9 Absence of Certain Changes or Events ............................ 12
2.10 Absence of Litigation ........................................... 13
2.11 Employee Benefit Plans .......................................... 13
2.12 Labor Matters ................................................... 15
2.13 Registration Statement/Joint Proxy Statement/Prospectus ......... 16
2.14 Restrictions on Business Activities ............................. 16
2.15 Title to Property ............................................... 16
2.16 Taxes ........................................................... 17
2.17 Environmental Matters ........................................... 18
2.18 Brokers ......................................................... 19
2.19 Intellectual Property ........................................... 19
2.20 Agreements, Contracts and Commitments ........................... 24
2.21 Insurance ....................................................... 25
2.22 Opinion of Financial Advisor .................................... 25
2.23 Board Approval .................................................. 26
2.24 Vote Required ................................................... 26
2.25 State Takeover Statutes ......................................... 26
-i-
TABLE OF CONTENTS
(continued)
Page
----
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB .......... 26
3.1 Organization and Qualification; Subsidiaries ...................... 26
3.2 Certificate of Incorporation and Bylaws ........................... 27
3.3 Capitalization .................................................... 27
3.4 Authority Relative to this Agreement .............................. 28
3.5 No Conflict; Required Filings and Consents ........................ 28
3.6 SEC Filings; Financial Statements ................................. 29
3.7 No Undisclosed Liabilities ........................................ 30
3.8 Absence of Certain Changes or Events .............................. 30
3.9 Absence of Litigation ............................................. 30
3.10 Registration Statement; Joint Proxy Statement/Prospectus .......... 30
3.11 Brokers ........................................................... 31
3.12 Opinion of Financial Advisor ...................................... 31
3.13 Board Approval .................................................... 31
3.14 Vote Required ..................................................... 31
3.15 Compliance; Permits ............................................... 31
3.16 Intellectual Property ............................................. 31
3.17 Taxes ............................................................. 32
3.18 Benefit Plans ..................................................... 33
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME ............................... 34
4.1 Conduct of Business by Company .................................... 34
4.2 Conduct of Business by Parent ..................................... 37
ARTICLE V ADDITIONAL AGREEMENTS .............................................. 38
5.1 Joint Proxy Statement/Prospectus; Registration Statement .......... 38
5.2 Stockholder Meetings .............................................. 39
5.3 Confidentiality; Access to Information ............................ 40
5.4 No Solicitation ................................................... 40
5.5 Public Disclosure ................................................. 42
5.6 Reasonable Efforts; Notification .................................. 42
5.7 Third Party Consents .............................................. 43
5.8 Stock Options; Stock Purchase Plan ................................ 43
5.9 Employee Compensation ............................................. 44
5.10 Form S-8 .......................................................... 45
5.11 Indemnification ................................................... 45
5.12 Nasdaq Listing .................................................... 45
5.13 Affiliates ........................................................ 45
5.14 Board of Directors of Parent; Officer Appointment ................. 46
-ii-
TABLE OF CONTENTS
(continued)
Page
----
5.15 Regulatory Filings; Reasonable Efforts .................................... 46
5.16 Tax-Free Reorganization ................................................... 46
5.17 Section 16 Matters ........................................................ 46
5.18 Benefit Plans ............................................................. 47
ARTICLE VI CONDITIONS TO THE MERGER .................................................. 48
6.1 Conditions to Obligations of Each Party to Effect the Merger .............. 48
6.2 Additional Conditions to Obligations of Company ........................... 48
6.3 Additional Conditions to the Obligations of Parent and Merger Sub ......... 49
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER ........................................ 50
7.1 Termination ............................................................... 50
7.2 Notice of Termination; Effect of Termination .............................. 52
7.3 Fees and Expenses ......................................................... 52
7.4 Amendment ................................................................. 53
7.5 Extension; Waiver ......................................................... 53
ARTICLE VIII GENERAL PROVISIONS ...................................................... 54
8.1 Survival of Representations and Warranties ................................ 54
8.2 Notices ................................................................... 54
8.3 Interpretation; Definitions ............................................... 55
8.4 Counterparts .............................................................. 56
8.5 Entire Agreement; Third Party Beneficiaries ............................... 56
8.6 Severability .............................................................. 56
8.7 Other Remedies; Specific Performance ...................................... 57
8.8 Governing Law ............................................................. 57
8.9 Rules of Construction ..................................................... 57
8.10 Assignment ................................................................ 57
INDEX OF EXHIBITS
-----------------
Exhibit A-1 Persons and Entities to Sign Company Voting Agreements
Exhibit A-2 Form of Company Voting Agreement
Exhibit B-1 Persons and Entities to Sign Parent Voting Agreements
Exhibit B-2 Form of Parent Voting Agreement
Exhibit C Form of Affiliate Agreement
-iii-
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and entered
into as of January 16, 2002, among SmartForce PLC, a public limited liability
company organized under the laws of the Republic of Ireland ("Parent"), Atlantic
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and Centra Software, Inc., a Delaware corporation
("Company").
RECITALS
--------
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the General Corporation Law
of the State of Delaware ("Delaware Law"), Parent and Company intend to enter
into a business combination transaction.
B. The Board of Directors of Company (i) has determined that the Merger
(as defined in Section 1.1) is consistent with and in furtherance of the
long-term business strategy of Company and fair to, and in the best interests
of, Company and its stockholders, (ii) has approved and declared advisable this
Agreement, and has approved the Merger and the other transactions contemplated
by this Agreement and (iii) has determined to recommend that the stockholders of
Company adopt and approve this Agreement and approve the Merger.
C. The Board of Directors of Parent (i) has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of Parent
and is fair to, and in the best interests of, Parent and its stockholders, (ii)
has approved this Agreement, the Merger and the other transactions contemplated
by this Agreement and (iii) has determined to recommend that the shareholders of
Parent approve the issuance of Parent ADSs (as defined below) pursuant to the
Merger (the "Share Issuance").
D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, the persons
and entities listed on Exhibit A-1 are entering into stockholder agreements in
-----------
the form attached hereto as Exhibit A-2 (the "Company Voting Agreements"); and
-----------
as a condition and inducement to Company's willingness to enter into this
Agreement, the persons listed on Exhibit B-1 are entering into stockholder
-----------
agreements in the form attached hereto as Exhibit B-2 (the "Parent Voting
-----------
Agreements").
E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
----------
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "Merger"), the separate corporate existence of Merger Sub shall
cease and Company shall continue as the surviving corporation. Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
-----------------------
the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware Law (the "Certificate of
Merger") (the time of such filing (or such later time as may be agreed in
writing by Company and Parent and specified in the Certificate of Merger) being
the "Effective Time") as soon as practicable on the Closing Date (as herein
defined). Unless the context otherwise requires, the term "Agreement" as used
herein refers collectively to this Agreement and Plan of Merger and
Reorganization and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, at a time and date to
be specified by the parties, which shall be no later than the second business
day after the satisfaction or waiver of the conditions set forth in Article VI,
or at such other time, date and location as the parties hereto agree in writing
(the "Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
--------------------
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Company and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
------------------------------------
(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; provided, however, that at the Effective Time the
-------- -------
Certificate of Incorporation of the Surviving Corporation shall be amended so
that the name of the Surviving Corporation shall be as agreed upon by Parent and
Company prior to the Effective Time.
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
-2-
1.5 Directors and Officers. The initial directors of the Surviving
----------------------
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or appointed
and qualified. The initial officers of the Surviving Corporation shall be the
officers of Merger Sub immediately prior to the Effective Time, until their
respective successors are duly appointed.
1.6 Effect on Capital Stock. Subject to the terms and conditions of this
-----------------------
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub, Company or the holders of any of the following
securities, the following shall occur:
(a) Conversion of Company Common Stock. Each share of Common Stock,
----------------------------------
$0.001 par value per share, of Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time, other than any shares of
Company Common Stock to be canceled pursuant to Section 1.6(b), will be canceled
and extinguished and automatically converted (subject to Sections 1.6(e) and
(f)) into the right to receive 0.425 (the "Exchange Ratio") American Depositary
Shares of Parent (the "Parent ADSs") upon surrender of the certificate
representing such share of Company Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9). If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company, then the shares of
Parent ADSs issued in exchange for such shares of Company Common Stock will also
be unvested and subject to the same repurchase option, risk of forfeiture or
other condition, and the ADRs (as defined in Section 1.7) representing such
Parent ADSs may accordingly be marked with appropriate legends. The Company
shall take all action that may be necessary to ensure that, from and after the
Effective Time, Parent is entitled to exercise any such repurchase option or
other right set forth in any such restricted stock purchase agreement or other
agreement.
(b) Cancellation of Parent-Owned Stock. Each share of Company Common
----------------------------------
Stock held by Company or owned by Merger Sub, Parent or any direct or indirect
wholly-owned subsidiary of Company or of Parent immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Stock Plans. At the Effective Time, all options to purchase
-----------
Company Common Stock then outstanding under Company's 1995 Stock Plan (the "1995
Stock Plan"), Company's 1999 Stock Incentive Plan (the "1999 Stock Plan"),
Company's 1999 Director Plan (the "Director Plan," together with the 1995 Stock
Plan and the 1999 Stock Plan, collectively the "Company Option Plans") shall be
assumed by Parent in accordance with Section 5.8 hereof. At the Effective Time,
all rights outstanding under Company's 1999 Employee Stock Purchase Plan (the
"Company Stock Purchase Plan") shall be treated as set forth in Section 5.8
hereof.
(d) Capital Stock of Merger Sub. Each share of Common Stock, $0.001
---------------------------
par value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of Common Stock, $0.001 par
value per share, of the Surviving Corporation. Each certificate
-3-
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
-----------------------------
adjusted to reflect appropriately the effect of any share split, reverse share
split, share dividend (including any dividend or distribution of securities
convertible into Parent ADSs or Company Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Parent
Ordinary Shares (as defined in Section 3.3), Parent ADSs or Company Common Stock
occurring on or after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a Parent ADS will be issued by
-----------------
virtue of the Merger, but in lieu thereof each holder of shares of Company
Common Stock who would otherwise be entitled to a fraction of a Parent ADS
(after aggregating all fractional Parent ADSs that otherwise would be received
by such holder) shall, upon surrender of such holder's Certificates(s) (as
defined in Section 1.7(c)) receive from Parent an amount of cash (rounded to the
nearest whole cent), without interest, equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of Parent ADSs for the
ten trading days immediately preceding the last full trading day prior to the
Effective Time, as reported on the Nasdaq National Market System ("Nasdaq").
1.7 Surrender of Certificates.
-------------------------
(a) Exchange Agent. Parent shall select a bank or trust company
--------------
reasonably acceptable to Company to act as the exchange agent (the "Exchange
Agent") in the Merger.
(b) Parent to Provide ADSs. As promptly as practicable after the
----------------------
Effective Time, Parent shall make available to the Exchange Agent for exchange
in accordance with this Article I, that number of Parent ADSs as is issuable
pursuant to Section 1.6 in exchange for outstanding shares of Company Common
Stock and cash in an amount sufficient for payment in lieu of fractional shares
pursuant to Section 1.6(f) and any dividends or distributions to which holders
of shares of Company Common Stock may be entitled pursuant to Section 1.7(d).
(c) Exchange Procedures. As soon as practicable after the Effective
-------------------
Time, Parent shall cause the Exchange Agent to mail to each holder of record (as
of the Effective Time) of a certificate or certificates (the "Certificates"),
which immediately prior to the Effective Time represented outstanding shares of
Company Common Stock whose shares were converted into the right to receive
Parent ADSs pursuant to Section 1.6, cash in lieu of any fractional shares
pursuant to Section 1.6(f) and any dividends or other distributions pursuant to
Section 1.7(d), (i) a letter of transmittal in customary form (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall contain such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for American Depositary Receipts ("ADRs") representing Parent ADSs,
cash in lieu of any fractional shares pursuant to Section 1.6(f) and any
dividends or other distributions pursuant to Section 1.7(d). Upon surrender of
Certificates for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly completed and validly executed in accordance
-4-
with the instructions thereto, the holders of such Certificates shall be
entitled to receive in exchange therefor ADRs representing the number of whole
Parent ADSs into which their shares of Company Common Stock were converted at
the Effective Time, payment in lieu of fractional shares which such holders have
the right to receive pursuant to Section 1.6(f) and any dividends or
distributions payable pursuant to Section 1.7(d), and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, subject to Section 1.7(d) as to the payment of dividends, to evidence
only the ownership of the number of full Parent ADSs into which such shares of
Company Common Stock shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in accordance
with Section 1.6(f) and any dividends or distributions payable pursuant to
Section 1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions declared or made after the date of this Agreement with
respect to Parent ADSs with a record date after the Effective Time will be paid
to the holders of any unsurrendered Certificates with respect to the Parent ADSs
represented thereby until the holders of record of such Certificates shall
surrender such Certificates. Subject to applicable law, following surrender of
any such Certificates, the Exchange Agent shall promptly deliver to the record
holders thereof, without interest, ADRs representing whole Parent ADSs issued in
exchange therefor along with payment in lieu of fractional shares pursuant to
Section 1.6(f) hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable with respect
to such whole Parent ADSs.
(e) Transfers of Ownership. If ADRs representing Parent ADSs are to
----------------------
be issued in a name other than that in which the Certificates surrendered in
exchange therefor are registered, it will be a condition of the issuance thereof
that the Certificates so surrendered will be properly endorsed and otherwise in
proper form for transfer and that the persons requesting such exchange will have
paid to Parent or any agent designated by it any transfer or other taxes
required by reason of the issuance of ADRs representing Parent ADSs in any name
other than that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Parent or any agent designated by it that
such tax has been paid or is not payable.
(f) Required Withholding. Each of the Exchange Agent, Parent and the
--------------------
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be deducted or withheld therefrom under the Code or under any provision of
state, local or foreign tax law or under any other applicable legal requirement.
To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person
to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary in this
------------
Section 1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor
any party hereto shall be liable to
-5-
a holder of Parent ADSs or Company Common Stock for any amount properly paid to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
1.8 No Further Ownership Rights in Company Common Stock. All Parent ADSs
---------------------------------------------------
issued in accordance with the terms hereof (together with any cash paid in
respect thereof pursuant to Sections 1.6(f) and 1.7(d)) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and there shall be no further registration of transfers on
the records of the Surviving Corporation of shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
--------------------------------------
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, ADRs representing the
Parent ADSs into which the shares of Company Common Stock represented by such
Certificates were converted pursuant to Section 1.6, cash for fractional shares,
if any, as may be required pursuant to Section 1.6(f) and any dividends or
distributions payable pursuant to Section 1.7(d); provided, however, that Parent
-------- -------
may, in its discretion and as a condition precedent to the issuance of such ADRs
representing Parent ADSs, cash and other distributions, require the owner of
such lost, stolen or destroyed Certificates to deliver a bond in such sum as it
may reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
1.10 Tax Consequences. The parties hereto intend that the Merger shall
----------------
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
1.11 Taking of Necessary Action; Further Action. If, at any time after the
------------------------------------------
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the Company and Merger Sub will cause
their respective current officers to take all such lawful and necessary action.
Parent shall cause Merger Sub to perform all of its obligations relating to this
Agreement and the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub, subject to such
exceptions as are specifically disclosed in writing in the disclosure schedule
supplied by Company to Parent dated as of the date hereof (the "Company
Schedule") referencing a specific representation, as follows:
-6-
2.1 Organization and Qualification; Subsidiaries.
--------------------------------------------
(a) Each of Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted. Each of Company and its subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Approvals") necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted, except where the
failure to have such Approvals would not, individually or in the aggregate, be
material to the Company and its subsidiaries, taken as a whole. Each of Company
and its subsidiaries is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would
not, either individually or in the aggregate, be material to the Company and its
subsidiaries taken as a whole.
(b) Company has no subsidiaries except for the corporations
identified in Section 2.1(b) of the Company Schedule. Neither Company nor any of
its subsidiaries has agreed nor is obligated to make nor be bound by any written
or oral agreement, contract, subcontract, lease, binding understanding,
instrument, note, option, warranty, purchase order, license, sublicense,
insurance policy, benefit plan, commitment or undertaking of any nature, as of
the date hereof or as may hereafter be in effect (a "Contract") under which it
may become obligated to make, any future investment in or capital contribution
to any entity other than Company or a direct or indirect wholly-owned subsidiary
of Company. Neither Company nor any of its subsidiaries directly or indirectly
owns any equity or similar interest in or any interest convertible, exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business, association or entity other than
the entities listed in Section 2.1(b) of the Company Schedule, all of which are
direct or indirect wholly-owned subsidiaries of Company.
2.2 Certificate of Incorporation and Bylaws. Company has previously
---------------------------------------
furnished to Parent a complete and correct copy of its certificate of
incorporation and bylaws and equivalent organizational documents of each of its
subsidiaries, each as amended to date (together, the "Company Charter
Documents"), and such Company Charter Documents are in full force and effect.
Neither Company nor any of its subsidiaries is in violation of any of the
provisions of its respective Company Charter Documents.
2.3 Capitalization.
--------------
(a) The authorized capital stock of Company consists of 100,000,000
shares of Company Common Stock and 10,000,000 shares of Preferred Stock
("Company Preferred Stock"), each having par value $0.001 per share. As of the
close of business on January 15, 2002 (i) 25,418,045 shares of Company Common
Stock are issued and outstanding; (ii) no shares of Company Common Stock are
held in treasury by Company or by subsidiaries of Company; (iii) 747,514 shares
of Company Common Stock are reserved for issuance upon the exercise of
-7-
outstanding options to purchase Company Common Stock under the 1995 Stock Plan;
(iv) 4,320,656 shares of Company Common Stock are reserved for issuance upon the
exercise of outstanding options to purchase Company Common Stock under the 1999
Stock Plan; (v) no shares of Company Common Stock are reserved for issuance upon
the exercise of outstanding options to purchase Company Common Stock under the
Directors Plan; (vi) 1,286,598 shares of Company Common Stock are reserved for
future issuance under the Company Stock Purchase Plan; (vii) not more than
3,489,986 shares of Company Common Stock are available for future grant under
the 1995 Stock Plan; (viii) 688,934 shares of Company Common Stock are available
for future grant under the 1999 Stock Plan; (ix) 200,000 shares of Company
Common Stock are available for future grant under the Directors Plan; and (x) no
shares of Company Preferred Stock are issued or outstanding. From the close of
business on January 15, 2002 through the date hereof, the Company has not issued
any shares of Company Common Stock (other than shares of Company Common Stock
issued pursuant to the exercise of options purported in this Section 2.3(a) to
be outstanding) or any options, warrants or other rights to acquire Company
Common Stock. All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Company Charter Documents or any
agreement or document to which Company is a party or by which it is bound.
Section 2.3(a) of the Company Schedule sets forth the following information with
respect to each Company Stock Option (as defined in Section 5.8) outstanding as
of the date of this Agreement: (i) the name and address of the optionee; (ii)
the particular plan pursuant to which such Company Stock Option was granted;
(iii) the number of shares of Company Common Stock subject to such Company Stock
Option; (iv) the exercise price of such Company Stock Option; (v) the date on
which such Company Stock Option was granted; and (vi) the applicable vesting
schedule. Company has made available to Parent accurate and complete copies of
all stock option plans pursuant to which the Company has granted such Company
Stock Options that are currently outstanding and the form of all stock option
agreements evidencing such Company Stock Options. All shares of Company Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instrument pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. Except
as set forth in Section 2.3(a) of the Company Schedule, there are no commitments
or agreements of any character to which the Company is bound obligating the
Company to accelerate the vesting of any Company Stock Option as a result of the
Merger. All outstanding shares of Company Common Stock, all outstanding Company
Stock Options, and all outstanding shares of capital stock of each subsidiary of
the Company have been issued and granted in compliance with all applicable
securities laws and other applicable Legal Requirements (as defined below). For
the purposes of this Agreement, "Legal Requirements" means any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Entity (as defined
below) and (ii) all requirements set forth in applicable contracts, agreements,
and instruments.
(b) Except for securities Company owns free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests, encumbrances,
claims, infringements, interferences, options, right of first refusals,
preemptive rights, community property interests or
-8-
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset but excluding restrictions on transfer under applicable
securities laws) directly or indirectly through one or more subsidiaries, there
are no equity securities, partnership interests or similar ownership interests
of any class of equity security of any subsidiary of the Company, or any
security exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding.
(c) Except as set forth in Section 2.3(a) or Section 2.3(c) of the
Company Schedule, there are no subscriptions, options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which Company or any of its subsidiaries is a party or by which it is bound
obligating Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, or repurchase, redeem or otherwise
acquire, or cause the repurchase, redemption or acquisition of, any shares of
capital stock, partnership interests or similar ownership interests of the
Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to grant, extend, accelerate the vesting of or enter into any such
subscription, option, warrant, equity security, call, right, commitment or
agreement. Except as set forth in Section 2.3(c) of the Company Schedule, there
are no registration rights and there is, except for the Company Voting
Agreements, no voting trust, proxy, rights plan, antitakeover plan or other
similar agreement or understanding to which the Company or any of its
subsidiaries is a party or by which they are bound with respect to any equity
security of any class of the Company or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
subsidiaries. Stockholders of the Company will not be entitled to dissenters'
rights under applicable state law in connection with the Merger. There are no
equity-based compensation awards (whether payable in cash or otherwise)
outstanding nor are there any commitments to issue any such awards.
2.4 Authority Relative to this Agreement. Company has all necessary
------------------------------------
corporate power and authority to execute and deliver this Agreement and the
Parent Voting Agreements and to perform its obligations hereunder and thereunder
and, subject to obtaining the approval of the stockholders of Company of the
Merger, to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Parent Voting Agreements by
Company and the consummation by Company of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement or the Parent Voting
Agreements, or to consummate the transactions so contemplated (other than, with
respect to the Merger, the approval and adoption of this Agreement by holders of
a majority of the outstanding shares of Company Common Stock in accordance with
Delaware Law and the Company Charter Documents and the filing of the Certificate
of Merger pursuant to Delaware Law). This Agreement and the Parent Voting
Agreements have been duly and validly executed and delivered by Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub,
constitute legal and binding obligations of Company, enforceable against Company
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization,
-9-
moratorium and other similar laws affecting creditors' rights generally and
general principles of equity.
2.5 No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement and the Parent
Voting Agreements by Company do not, and the performance of this Agreement and
the Parent Voting Agreements by Company will not, (i) conflict with or violate
the Company Charter Documents, (ii) subject to obtaining the approval of
Company's stockholders of the Merger and compliance with the requirements set
forth in Section 2.5(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, or (iii) except as set forth in Section 2.5(a) of the Company
Schedule, result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair
Company's or any of its subsidiaries' rights or alter the rights or obligations
of any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of Company or any of its
subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Company or any of its subsidiaries is a party or by which
Company or any of its subsidiaries or its or any of their respective properties
are bound or affected. Section 2.5(a) of the Company Schedule lists all
consents, waivers and approvals under any of Company's or any of its
subsidiaries' agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated hereby,
which, if individually or in the aggregate were not obtained, would result in a
material loss of benefits or any material liability to Company, its
subsidiaries, Parent or the Surviving Corporation.
(b) The execution and delivery of this Agreement and the Parent
Voting Agreements by Company do not, and the performance of this Agreement and
the Parent Voting Agreements by Company shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative agency, commission, governmental or regulatory authority,
domestic or foreign (a "Governmental Entity"), except (A) for applicable
requirements, if any, of the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
state securities laws ("Blue Sky Laws"), the securities laws of any foreign
country ("Foreign Securities Laws"), the pre-merger notification requirements
(the "HSR Approval") of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Mergers Take-Overs and Monopolies
(Control) Xxx, 0000, of Ireland as amended (the "Irish Merger Act"), comparable
requirements of the anti-competition authorities of other foreign jurisdictions,
the rules and regulations of Nasdaq, and the filing and recordation of the
Certificate of Merger as required by Delaware Law and (B) where the failure to
obtain such other consents, approvals, authorizations or permits, or to make
such filings or notifications, would not have a material adverse effect on the
parties' ability to consummate the Merger or perform their obligations under
this Agreement.
-10-
2.6 Compliance; Permits.
-------------------
(a) Neither Company nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any material law, rule, regulation, order,
judgment or decree (each, a "Law") applicable to Company or any of its
subsidiaries or by which its or any of their respective properties is bound or
affected, or (ii) any Company Contract (as defined below) or any other material
note, bond, mortgage, indenture, lease, license, permit, franchise or other
instrument or obligation to which Company or any of its subsidiaries is a party
or by which Company or any of its subsidiaries or any of their respective
properties is bound or affected. No investigation or review by any governmental
or regulatory body or authority is pending or, to the knowledge of Company,
threatened against Company or any of its subsidiaries, nor, to the knowledge of
Company, has any governmental or regulatory body or authority indicated an
intention to conduct the same, other than, in each such case, those the outcome
of which could not, individually or in the aggregate, reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of
the Company or any of its subsidiaries, any acquisition of material property by
the Company or any of its subsidiaries or the conduct of business by the Company
or any of its subsidiaries as currently conducted.
(b) Company and each of its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities which
are material to operation of the business of Company and its subsidiaries taken
as a whole (collectively, the "Company Permits"). Company and its subsidiaries
are in compliance in all material respects with the terms of the Company
Permits.
2.7 SEC Filings; Financial Statements.
---------------------------------
(a) Company has made available to Parent a correct and complete copy
of each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") after
January 1, 2001 (the "Company SEC Reports"), which are all the forms, reports
and documents required to be filed by Company with the SEC after January 1,
2001. The Company SEC Reports (X) were prepared in accordance in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Reports and (Y) did not at the time they were filed (and if
amended or superseded by a filing prior to the date of this Agreement then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of Company's subsidiaries is required to file any
reports or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports, including
any Company SEC Reports filed after the date hereof until the Closing, (X)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (Y) was prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of
-11-
unaudited statements, for the absence footnotes as permitted by Form 10-Q of the
Exchange Act) and (Z) fairly presents in all material respects the consolidated
financial position of Company and its subsidiaries at the respective dates
thereof and the consolidated results of operations and cash flows for the
periods indicated, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and correct
copy of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant to
the Securities Act or the Exchange Act.
2.8 No Undisclosed Liabilities. Neither Company nor any of its
--------------------------
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Company and its subsidiaries taken as a
whole, except (i) liabilities provided for in Company's balance sheet as of
September 30, 2001 or (ii) liabilities incurred since September 30, 2001 in the
ordinary course of business, none of which is individually or in the aggregate
are material to the business, results of operations or financial condition of
Company and its subsidiaries, taken as a whole.
2.9 Absence of Certain Changes or Events. Since September 30, 2001, there
------------------------------------
has not been: (i) any Material Adverse Effect on Company, (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock or property) in respect of, any of Company's or any of its
subsidiaries' capital stock, or any purchase, redemption or other acquisition by
Company of any of Company's capital stock or any other securities of Company or
its subsidiaries or any options, warrants, calls or rights to acquire any such
shares or other securities except for repurchases from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements, (iii) any split, combination or reclassification of any of Company's
or any of its subsidiaries' capital stock, (iv) any granting by Company or any
of its subsidiaries of any increase in compensation or fringe benefits, except
for normal increases of cash compensation to non-officer employees in the
ordinary course of business consistent with past practice, or any payment by
Company or any of its subsidiaries of any bonus, except for bonuses made to
non-officer employees in the ordinary course of business consistent with past
practice, or any granting by Company or any of its subsidiaries of any increase
in severance or termination pay or any entry by Company or any of its
subsidiaries into any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving Company or any of its subsidiaries of the nature
contemplated hereby, (v) entry by Company or any of its subsidiaries into any
licensing or other agreement with regard to the acquisition or disposition of
any Intellectual Property (as defined in Section 2.19) other than licenses in
the ordinary course of business consistent with past practice or any amendment
or consent with respect to any licensing agreement filed or required to be filed
by Company with the SEC, (vi) any material change by Company in its accounting
methods, principles or practices, except as required by concurrent changes in
GAAP, or (vii) any revaluation by Company of any of its assets, including,
-12-
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable or any sale of assets of the Company other than
in the ordinary course of business.
2.10 Absence of Litigation. Except as set forth in Section 2.10 of the
---------------------
Company Schedule, there are no material claims, actions, suits or proceedings
pending or, to the knowledge of Company, threatened (or, to the knowledge of
Company, any governmental or regulatory investigation pending or threatened)
against Company or any of its subsidiaries or any properties or rights of
Company or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign.
2.11 Employee Benefit Plans.
----------------------
(a) All employee compensation, incentive, fringe or benefit plans,
programs, policies, practices, contracts, agreements, commitments or other
arrangements (whether or not set forth in a written document and including,
without limitation, all "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) covering any active or former employee, director or consultant of
Company, any subsidiary of Company or any trade or business (whether or not
incorporated) which is a Benefits Affiliate (as defined below)("Employee") with
respect to which Company or any Benefits Affiliate has or may in the future have
liability are listed in Section 2.11(a) of the Company Schedule (the "Plans").
Company has provided to Parent correct and complete copies of (i) all documents
embodying each Plan and management, employment, severance, consulting,
relocation, repatriation, expatriation or other written agreements or contracts
between the Company and Employee including (without limitation) all amendments
thereto (the "Employee Agreements"), all related trust documents, and all
written agreements and contracts relating to each such Plan; (ii) the three (3)
most recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Plan; (iv) all IRS or DOL
determination, opinion, notification and advisory letters; (v) all material
correspondence to or from any governmental agency relating to any Plan; (vi) all
standard Company forms of COBRA notice or such similar forms and notices as
required under applicable law; (vii) all discrimination tests for each Plan for
the most recent three (3) plan years; (viii) the most recent annual actuarial
valuations, if any, prepared for each Plan; (ix) if the Plan is funded, the most
recent annual and periodic accounting of Plan assets; (x) all written agreements
and contracts relating to each Plan, including, but not limited to,
administrative service agreements, group annuity contracts and group insurance
contracts; (xi) all material communications to employees or former employees
relating to any amendments, terminations, establishments, increases or decreases
in benefits, acceleration of payments or vesting schedules or other events which
would result in any material liability under any Plan or proposed Plan; (xii)
all policies pertaining to fiduciary liability insurance covering the
fiduciaries for each Plan; and (xiii) all registration statements, annual
reports (Form 11-K and all attachments thereto) and prospectuses prepared in
connection with any Plan. For purposes of Sections 2.11 and 5.8, a "Benefits
Affiliate" means any partnership, corporation, association, joint stock company,
trust, joint venture, unincorporated organization or other entity that is a
member of a controlled group or
-13-
which is under common control with Company within the meaning of Section 414 of
the Code and the rules and regulations promulgated thereunder.
(b) The Company has performed in all material respects all
obligations required to be performed by it under, is not in default or violation
of, and has no knowledge of any default or violation by any other party to, each
Plan, and each Plan has been established, maintained and administered in all
material respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations (foreign or
domestic), including but not limited to ERISA and the Code, which are applicable
to such Plans. No suit, action, claim or other litigation (excluding claims for
benefits incurred in the ordinary course of Plan activities) has been brought,
or to the knowledge of Company or any Benefits Affiliate is threatened, against
or with respect to any such Plan. There are no audits, inquiries or proceedings
pending or, to the knowledge of Company, threatened by the Internal Revenue
Service (the "IRS") or Department of Labor (the "DOL") with respect to any
Plans. All contributions, reserves or premium payments required to be made or
accrued as of the date hereof to the Plans have been timely made or accrued. Any
Plan intended to be qualified under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code (i) has either obtained a
favorable determination, notification, advisory and/or opinion letter, as
applicable, as to its qualified status from the IRS or still has a remaining
period of time under applicable Treasury Regulations or IRS pronouncements in
which to apply for such letter and to make any amendments necessary to obtain a
favorable determination, and (ii) incorporates or has been amended to
incorporate all provisions required to comply with the Tax Reform Act of 1986
and subsequent legislation, or, where any amendment is required in order to
comply with recent legislative changes, is currently within the permitted
remedial amendment period to incorporate legislative changes. Company does not
have any plan or commitment to establish any new Plan, to modify any Plan
(except to the extent required by law or to conform any such Plan to the
requirements of any applicable law, in each case as previously disclosed to
Parent in writing, or as required by this Agreement), or to enter into any new
Plan. Each Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Parent,
Company or any of its Benefits Affiliates (other than ordinary administration
expenses). The terms of the Company Option Plans and Company Stock Options
permit the assumption by Parent of the Company Stock Options as provided in this
Agreement and without the consent or approval of the holders of the Company
Stock Options and/or the holders of Company Common Stock.
(c) Neither Company, any of its subsidiaries, nor any of their
Benefits Affiliates maintains or has at any time ever maintained, established,
sponsored, participated in, or contributed to any plan subject to Title IV of
ERISA or Section 412 of the Code and at no time has Company or any of its
subsidiaries contributed to or been requested to contribute to any
"multiemployer plan," as such term is defined in ERISA Section 3(37) or to any
plan described in Section 413 of the Code. Neither Company, any of its
subsidiaries, nor any officer or director of Company or any of its subsidiaries
is subject to any liability or penalty under Section 4975 through 4980B of the
Code or Title I of ERISA. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA or
-14-
Section 4975 of the Code (or any administrative class exemption issued
thereunder), has occurred with respect to any Plan.
(d) Neither Company, any of its subsidiaries, nor any of their
Benefits Affiliates has, prior to the Effective Time and in any material
respect, violated any of the health continuation requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
the requirements of the Family Medical Leave Act of 1993, as amended, the
requirements of the Health Insurance Portability and Accountability Act of 1996,
as amended, the requirements of the Women's Health and Cancer Rights Act of
1998, as amended, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, as amended, or any similar provisions of state law
applicable to Employees of the Company or any of its subsidiaries or any of
their Benefits Affiliates. None of the Plans promises or provides retiree
medical or other retiree welfare benefits to any person except as required by
applicable law, and neither Company nor any of its subsidiaries has represented,
promised or contracted (whether in oral or written form) to provide such retiree
benefits to any employee, former employee, director, consultant or other person,
except to the extent required by statute. Except as set forth in Section 2.11(d)
of the Company Schedule, no Plan or Employee Agreement provides health benefits
that are not fully insured through an insurance contract.
(e) Except as set forth in Section 2.11(e) of the Company Schedule,
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will (either alone or upon the occurrence
of any additional or subsequent events) (i) constitute an event under any Plan,
Employee Agreement, trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee; or (ii) result in any payment,
compensation or benefit which will or may be made by Parent, Company or its
Benefits Affiliates with respect to any Employee or any other "disqualified
individual" being characterized as a "parachute payment" (within the meaning of
Section 280G(b)(2) of the Code). Section 2.11(e) of the Company Schedule lists
all persons who the Company reasonably believes are, with respect to the Company
or any of its subsidiaries, "disqualified individuals" (within the meaning of
Section 280G of the Code and the regulations promulgated thereunder) as
determined as of the date hereof. Within a reasonable time after the last
business day of each month after the date hereof and on or about the date which
is five business days prior to the expected date of the Closing, Company shall,
as and to the extent necessary, deliver to Parent a revised Section 2.11(e) of
the Company Schedule which sets forth any additional information which Company
reasonably believes would affect the determination of the persons who are, with
respect to the Company or any of its subsidiaries, deemed to be "disqualified
individuals" (within the meaning of Section 280G of the Code and the regulations
promulgated thereunder) as of the date of each such revised Section 2.11(e) of
the Company Schedule.
2.12 Labor Matters. (i) There are no controversies pending or, to the
-------------
knowledge of each of Company and its subsidiaries, threatened, between Company
or any of its subsidiaries and any of their respective employees; (ii) as of the
date of this Agreement, neither Company nor any of its subsidiaries is bound by
or subject to (and none of its respective assets or properties is bound by or
-15-
subject to) any collective bargaining agreement or other labor union contract
applicable to persons employed by Company or its subsidiaries nor does Company
or its subsidiaries know of any activities or proceedings of any union to
organize any such employees; and (iii) as of the date of this Agreement, neither
Company nor any of its subsidiaries has any knowledge of any strikes, slowdowns,
work stoppages or lockouts, or threats thereof, by or with respect to any group
of employees of Company or any of its subsidiaries. There is no pending or, to
the knowledge of Company, threatened labor dispute involving Company and any
group of its employees nor has Company experienced any labor interruptions over
the past three (3) years, and Company considers its relationship with its
employees to be good. Company and its subsidiaries are in compliance in all
respects with all applicable material foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours.
2.13 Registration Statement/Joint Proxy Statement/Prospectus. None of
-------------------------------------------------------
the information supplied or to be supplied by Company for inclusion or
incorporation by reference in (i) the registration statement on Form S-4 to be
filed with the SEC by Parent in connection with the issuance of the Parent ADSs
in or as a result of the Merger (the "S-4") will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and (ii) the
joint proxy statement/prospectus to be filed with the SEC by Company pursuant to
Section 5.1 hereof (the "Joint Proxy Statement/Prospectus") will, at the dates
mailed to the stockholders of Company, at the times of the stockholders' meeting
of Company (the "Company Stockholders' Meeting") in connection with the
transactions contemplated hereby, at the dates mailed to the shareholders of
Parent, at the times of the shareholders' meeting of Parent (the "Parent
Shareholders' Meeting") in connection with the Share Issuance and as of the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The Joint Proxy Statement/Prospectus will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
Company makes no representation or warranty with respect to any statement made,
omitted or incorporated by reference on the basis of information supplied by
Parent or Merger Sub which is contained or incorporated by reference in, or
omitted from, any of the foregoing documents.
2.14 Restrictions on Business Activities. Except as set forth in
-----------------------------------
Section 2.14 of the Company Schedule, there is no agreement, commitment,
judgment, injunction, order or decree binding upon Company or its subsidiaries
or to which the Company or any of its subsidiaries is a party which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of Company or any of its subsidiaries, any acquisition of
property by Company or any of its subsidiaries or the conduct of business by
Company or any of its subsidiaries as currently conducted.
2.15 Title to Property. Neither Company nor any of its subsidiaries
-----------------
owns any real property. Company and each of its subsidiaries have good and
defensible title to all of their material
-16-
properties and assets, free and clear of all liens, claims, charges,
encumbrances and other third party rights of any kind except as described in
Section 2.15 of the Company Schedule and except liens for taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby; and all leases pursuant to which Company or any of
its subsidiaries lease from others material real or personal property are in
full force and effect, valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any existing material default
or event of default (or any event which with notice or lapse of time, or both,
would constitute a material default and in respect of which Company or any of
its subsidiary has not taken adequate steps to prevent such default from
occurring). All the plants, structures and equipment of Company and its
subsidiaries, except such as may be under construction, are in good operating
condition and repair, in all material respects.
2.16 Taxes.
-----
(a) For the purposes of this Agreement, "Tax" or "Taxes", means
any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts.
(b) (i) The Company and each of its subsidiaries have timely
filed all federal, state, local and foreign returns, estimates, information
statements and reports ("Returns") relating to Taxes required to be filed by the
Company and each of its subsidiaries with any Tax authority, except such Returns
which are not material to the Company or any of its subsidiaries. Such Returns
are true and correct in all material respects and have been completed in
accordance with applicable law. The Company and each of its subsidiaries have
paid all Taxes shown to be due on such Returns.
(ii) The Company and each of its subsidiaries as of the
Effective Time will have withheld with respect to its employees (and timely paid
over to the appropriate Taxing authority) all federal and state income taxes,
Taxes pursuant to the Federal Insurance Contribution Act, Taxes pursuant to the
Federal Unemployment Tax Act and other Taxes required to be withheld, except
such Taxes which are not material to the Company or any of its subsidiaries.
(iii) Neither the Company nor any of its subsidiaries has
been delinquent in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against the Company or any of its
subsidiaries raised by any Tax authority in a writing received by the Company or
such subsidiary, nor has the Company or any of its subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.
(iv) Except as set forth in Section 2.16(b)(iv) of the
Company Schedule, no audit or other examination of any Return of the Company or
any of its subsidiaries by any Tax
-17-
authority is presently in progress, nor has the Company or any of its
subsidiaries been notified in writing of any request for such an audit or other
examination.
(v) Neither the Company nor any of its subsidiaries has
any liability for any material unpaid Taxes which has not been accrued for or
reserved on the Company balance sheet dated September 30, 2001 in accordance
with GAAP, whether asserted or unasserted, contingent or otherwise, which is
material to the Company, other than any liability for unpaid Taxes that may have
accrued since September 30, 2001 in connection with the operation of the
business of the Company and its subsidiaries in the ordinary course.
(vi) Except as set forth in Section 2.16(b)(vi) of the
Company Schedule, there is no contract, agreement, plan or arrangement to which
the Company or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of the Company or any of its
subsidiaries that, individually or collectively, would reasonably be expected to
give rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Code. There is no contract, agreement, plan
or arrangement to which the Company or any of its subsidiaries is a party or by
which it is bound to compensate any individual for excise taxes paid pursuant to
Section 4999 of the Code.
(vii) Neither the Company nor any of its subsidiaries has
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by the Company or any of its
subsidiaries.
(viii) Neither the Company nor any of its subsidiaries (a)
is party to or has any obligation under any Tax sharing, indemnity or allocation
agreement or arrangement, (b) has ever been a member of an affiliated group
(within the meaning of Code ss.1504(a)) filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company), or (c)
has any liability for the Taxes of any person (other than the Company or any of
its subsidiaries) under Treas. Reg. ss. 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(ix) Neither the Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock intended to qualify for tax-free treatment under Section
355 of the Code (x) in the two years prior to the date of this Agreement or (y)
in a distribution which could otherwise constitute part of a "plan" or "Series
of related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
2.17 Environmental Matters. Company and each of its subsidiaries (i)
---------------------
has obtained all applicable permits, licenses and other authorizations that are
required under Environmental Laws the absence of which would have a Material
Adverse Effect on Company; (ii) is in compliance in all material respects with
all material terms and conditions of such required permits, licenses and
authorizations, and also is in compliance in all material respects with all
other material limitations,
-18-
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder; and (iii) as of the date hereof, has no
knowledge of and has not received notice of any event, condition, circumstance,
activity, practice, incident, action or plan that is reasonably likely to
interfere with or prevent continued compliance or that would give rise to any
common law or statutory liability, or otherwise form the basis of any
Environmental Claim with respect to Company, any of its subsidiaries or any
person or entity whose liability for any Environmental Claim Company has
retained or assumed either contractually or by operation of law. To the
Company's knowledge, no Hazardous Materials are present in, on or under any
properties owned, leased or used at any time (including both land and
improvements thereon) by Company or any of its subsidiaries, which may
reasonably give rise to any liability on the part of the Company or any of its
subsidiaries or corrective or remedial obligation on the part of the Company or
any of its subsidiaries under any Environmental Laws. For the purposes of this
Section 2.17, "Environmental Claim" means any notice, claim, act, cause of
action or investigation by any person alleging potential liability (including
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal injuries
or penalties) arising out of, based on or resulting from (i) the presence, or
release into the environment, of any Hazardous Materials or (ii) any violation,
or alleged violation, of any Environmental Laws. "Environmental Laws" means all
Federal, state, local and foreign laws and regulations relating to pollution of
the environment (including ambient air, surface water, ground water, land
surface or subsurface strata) or the protection of human health and worker
safety, including, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of Hazardous Materials,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"Hazardous Materials" means chemicals, pollutants, contaminants, wastes, toxic
substances, radioactive and biological materials, asbestos-containing materials,
hazardous substances, petroleum and petroleum products or any fraction thereof,
excluding, however, Hazardous Materials contained in products typically used for
office and janitorial purposes properly and safely maintained in accordance with
Environmental Laws.
2.18 Brokers. Except for fees payable to Xxxxxxx, Xxxxx & Co. pursuant
-------
to an engagement letter dated September 7, 2001, a copy of which has been
provided to Parent, Company has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
2.19 Intellectual Property. For the purposes of this Agreement, the
---------------------
following terms have the following definitions:
"Intellectual Property" shall mean any or all of the following and all
rights in or, arising out of: (i) all United States and foreign patents
and applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part
thereof ("Patents"); (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, technical data
-19-
and customer lists, and all documentation relating to any of the
foregoing; (iii) all works of authorship, copyrights, copyright
registrations and applications therefor and all other rights
corresponding thereto throughout the world; (iv) all industrial designs
and any registrations and applications therefor throughout the world;
(v) all trade names, logos, common law trademarks and service marks;
trademark and service xxxx registrations and applications therefor and
all goodwill associated therewith throughout the world; (vi) all
databases and data collections and all rights therein throughout the
world; (vii) all Web addresses, sites and domain names; and (viii) any
similar, corresponding or equivalent rights to any of the foregoing.
"Off-the-Shelf Product" shall mean any commercial, off-the-shelf
software, other than Company Products, that is generally available to
the public through retail dealers and that is licensed in object code
form subject to a perpetual, fully-paid license under which no future
royalties are payable.
"Company Intellectual Property" shall mean any Intellectual Property
that is owned by or exclusively licensed to the Company or any of its
subsidiaries. Without in any way limiting the generality of the
foregoing, Company Intellectual Property includes all Intellectual
Property owned by or exclusively licensed to the Company or any of its
subsidiaries incorporated in the products of the Company or any of its
subsidiaries, including without limitation all rights in any design
code and documentation in connection with all current products and
products in design and development.
"Registered Intellectual Property" shall mean all United States,
international and foreign: (i) patents; (ii) registered trademarks or
other registrations related to trademarks; (iii) registered copyrights;
and (iv) any domain name registrations.
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or
any of its subsidiaries.
"Intellectual Property Application" shall mean all United States,
international and foreign: (i) patent applications (including
provisional applications); (ii) applications to register trademarks,
intent to use applications, or other applications related to
trademarks; (iii) applications for copyright registration; and (iv)
applications to register or record any other Company Intellectual
Property.
"Company Intellectual Property Applications" shall mean all of the
Intellectual Property Applications filed by or in the name of the
Company or any of its subsidiaries.
(a) Disclosure of Registered Intellectual Property. Section 2.19
----------------------------------------------
(a) of the Company Schedule is a complete and accurate list of all Company
Registered Intellectual Property and Company Intellectual Property Applications
and specifies, where applicable, the jurisdictions in which each such item of
Company Registered Intellectual Property or such Company Intellectual Property
Application has been issued, registered or filed and lists any proceedings or
actions before
-00-
xxx xxxxx, xxxxxxxx (xxxxxxxxx xxx Xxxxxx Xxxxxx Patent and Trademark Office
(the "PTO") or equivalent authority anywhere in the world) related to any of the
Company Registered Intellectual Property.
(b) Disclosure of Products. Section 2.19(b) of the Company Schedule is a
----------------------
complete and accurate list (by name and version number) of all software products
or service offerings of the Company or any of it subsidiaries ("Company
Products") that have been distributed or provided in the five (5)-year period
preceding the date hereof or which the Company or any of its subsidiaries
intends to distribute or provide in the future, including any products or
service offerings under development.
(c) No Orders or Decrees. Except as set forth in Section 2.19(c) of the
--------------------
Company Schedule, no Company Intellectual Property or Company Product is subject
to any proceeding or outstanding decree, order, judgment, contract, license,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by Company or any of its subsidiaries. Except as set forth in
Section 2.19(c) of the Company Schedule, no Company Registered Intellectual
Property or Company Intellectual Property Applications is subject to any
proceeding or outstanding decree, order, judgment, contract, license, agreement
or stipulation which may adversely affect the validity, use or enforceability of
such Company Intellectual Property or Company Product.
(d) Validity and Filings. Except as set forth in Section 2.19(d) of the
--------------------
Company Schedule, each item of Company Registered Intellectual Property is, to
the Company's knowledge, valid and subsisting, all necessary registration,
maintenance and renewal fees currently due in connection with any Company
Registered Intellectual Property or material Company Intellectual Property
Applications have been made and all necessary documents, recordations and
certificates in connection with such Company Registered Intellectual Property or
material Company Intellectual Property Applications have been filed with the
relevant patent, copyright, trademark or other authorities in the United States
or foreign jurisdictions, as the case may be, for the purposes of maintaining
such Company Registered Intellectual Property or material Company Intellectual
Property Applications.
(e) Ownership. Except as set forth in Section 2.19(e) of the Company
---------
Schedule, Company owns and has good and exclusive title to, or an exclusive
license to each item of Company Intellectual Property free and clear of any
lien, claim, charge, encumbrance or other third party rights of any description
whatsoever (excluding non-exclusive end user licenses granted in the ordinary
course), except for liens for taxes not yet due and payable. Without limiting
the foregoing: (i) Company is the exclusive owner of all trademarks and trade
names used in connection with the operation or conduct of the business of
Company and its subsidiaries as currently conducted including the sale,
distribution or provision of any Company Products by Company or its
subsidiaries; (ii) Company owns exclusively, and has good title to, all
copyrighted works that are Company Products or which Company or any of its
subsidiaries otherwise purports to own; and (iii) to the Company's knowledge, to
the extent that any Patents would be infringed by the manufacture, use or sale
of any Company Products, Company is the exclusive owner of such Patents.
-21-
(f) Invention Assignments. To the extent that any technology, software or
---------------------
material Intellectual Property has been developed or created independently or
jointly by a third party for Company or any of its subsidiaries or is
incorporated into any of the Company Products, Company has a written agreement
with such third party with respect thereto and Company thereby either (i) has
obtained ownership of, and is the exclusive owner of, or (ii) has obtained a
license (sufficient for the conduct of its business as currently conducted and
as proposed to be conducted) to all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment.
(g) No Prior Transfers. Except as set forth in Section 2.19(g) of the
------------------
Company Schedules, neither Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any Intellectual
Property that is Company Intellectual Property, to any third party, or permitted
Company's rights or the rights of any of its subsidiaries in such Company
Intellectual Property to lapse or enter the public domain.
(h) Intellectual Property Contracts. Section 2.19(h) of the Company
-------------------------------
Schedule lists all contracts, licenses and agreements to which Company or any of
its subsidiaries is a party: (i) with respect to Company Intellectual Property
licensed or transferred to any third party (other than end-user licenses in the
ordinary course); or (ii) pursuant to which a third party has licensed or
transferred any Intellectual Property to Company or any of its subsidiaries,
other than contracts, licenses and agreements for Off-the-Shelf Products.
(i) No Breach. All contracts, licenses and agreements pursuant to which
---------
(i) any third party is entitled to use or otherwise practice Company
Intellectual Property or (ii) Company or any of its subsidiaries uses or
otherwise practices Intellectual Property of a third party (other than
Off-the-Shelf Products) used in the business of Company or any of its
subsidiaries in the conduct of its business as currently conducted, are in full
force and effect, except for immaterial breaches of Company end-user licenses
that do not, in any event, permit the third party to terminate such licenses.
The consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination or
suspension of such contracts, licenses and agreements. Each of Company and its
subsidiaries is in compliance with, and has not breached any term of any such
contracts, licenses and agreements and, to the knowledge of Company, all other
parties to such contracts, licenses and agreements are in compliance with, and
have not materially breached any term of, any of such contracts, licenses and
agreements. Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of Company's rights and the rights of all of its
subsidiaries under such contracts, licenses and agreements to the same extent
Company and its subsidiaries would have been able to had the transactions
contemplated by this Agreement not occurred with such exceptions as do not
materially detract from the value to Company of, or interfere with Company's use
of, such Intellectual Property and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments which Company or
any of its subsidiaries would otherwise be required to pay. Neither this
Agreement nor the transactions contemplated by this Agreement, including the
assignment to Parent or Merger Sub by operation of law or otherwise of any
contracts or agreements to which the Company or any of its subsidiaries is a
party, will result in (i) either Parent's or the Merger Sub's granting to any
third party
-22-
any right to or with respect to any Intellectual Property right owned by, or
licensed to, either of them (except to the extent that Parent or Merger Sub
choose to grant such rights after the Effective Time), (ii) either the Parent's
or the Merger Sub's being bound by, or subject to, any non-compete or other
restriction on the operation or scope of their respective businesses, or (iii)
either the Parent's or the Merger Sub's being obligated to pay any royalties or
other material amounts to any third party with respect to any Intellectual
Property at rates in excess of those payable by Company with respect to such
Intellectual Property prior to the Closing.
(j) Non-Infringement. Except as set forth in Section 2.19(j) of the Company
----------------
Schedule, to the Company's knowledge, the operation of the business of the
Company and its subsidiaries as such business currently is conducted and as
proposed to be conducted, including (i) Company's and its subsidiaries' design,
development, manufacture, distribution, reproduction, marketing or sale of the
products or services of Company and its subsidiaries (including Company
Products) and (ii) the Company's or any of its subsidiaries' use of any product,
device or process, has not, does not and will not infringe or misappropriate the
Intellectual Property of any third party or constitute unfair competition or
trade practices under the laws of any jurisdiction.
(k) No Notice of Infringement. Except as set forth in Section 2.19(k) of
-------------------------
the Company Schedule, neither Company nor any of its subsidiaries has received
notice from any third party that the operation of the business of Company or any
of its subsidiaries or any act, product or service of Company or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction.
(l) No Infringement by Third Parties. To the knowledge of Company, no
--------------------------------
person has or is infringing or misappropriating any Company Intellectual
Property.
(m) Protection of Trade Secrets. Company and each of its subsidiaries has
---------------------------
taken commercially reasonable steps to protect Company's and its subsidiaries'
rights in Company's confidential information and trade secrets that it wishes to
protect or any trade secrets or confidential information of third parties
provided to Company or any of its subsidiaries and that Company is contractually
obligated to protect, and, without limiting the foregoing, each of Company and
its subsidiaries has and enforces a policy requiring each employee and
contractor who has access to material, non-public information of Company or any
of its subsidiaries to execute a proprietary information/confidentiality
agreement substantially in the form provided to Parent and all current and
former employees and contractors of Company and any of its subsidiaries have
executed such an agreement.
(n) Software. The Company has the right to use, pursuant to valid licenses,
--------
all software development tools, library functions, compilers and all other
third-party software that are material to the operation of the business of the
Company or its subsidiaries. No open source or public library software,
including any version of any software licensed pursuant to any GNU public
license, is, in whole or in part, embodied or incorporated into any Company
Product. Section 2.19(n) of the Company Schedule lists all licenses to third
parties of Company Products in source code format (other than Company Products
that are written in non-compiled programming
-23-
languages). Company has secured any export licenses that are necessary or
appropriate for the distribution of the Company Products outside the United
States. The Company Products do not contain any virus, Trojan horse, worm, or,
except as disclosed in the documentation supplied to customers for such Company
Products, other software routines or hardware components designed to permit
unauthorized access, to disable, erase, or otherwise harm software, hardware or
data.
2.20 Agreements, Contracts and Commitments. Except as set forth in Section
-------------------------------------
2.20 of the Company Schedule, neither Company nor any of its subsidiaries is a
party to or is bound by:
(a) any employment or consulting agreement, contract or
commitment with any officer or vice president or higher level employee or member
of Company's Board of Directors, other than those that are terminable by Company
or any of its subsidiaries on no more than thirty (30) days' notice without
liability or financial obligation to the Company or any of its subsidiaries;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
(c) any agreement of indemnification or any guaranty other than any
product warranty or agreement of indemnification substantially in the Company's
standard form for the applicable standard form of customer agreement in which
the warranty or indemnification agreement is incorporated entered into in
connection with the sale or license of software products in the ordinary course
of business;
(d) any agreement, contract or commitment containing any covenant
limiting in any respect the right of Company or any of its subsidiaries to
engage in any line of business or to compete with any person or granting any
exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating
to the disposition or acquisition by Company or any of its subsidiaries after
the date of this Agreement of a material amount of assets not in the ordinary
course of business or pursuant to which Company or any of its subsidiaries has
any material ownership interest in any corporation, partnership, joint venture
or other business enterprise other than Company's subsidiaries;
(f) any dealer, distributor, joint marketing or development agreement
currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of ninety (90)
days or less, or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Company or
any of its subsidiaries and which may not be canceled without penalty upon
notice of ninety (90) days or less;
-24-
(g) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that is
material to Company and its subsidiaries taken as a whole;
(h) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any product, service or
technology of Company or any of its subsidiaries or any agreement, contract or
commitment currently in force to sell or distribute any products, service or
technology of Company or any of its subsidiaries except agreements with
distributors or sales representative in the normal course of business cancelable
without penalty upon notice of ninety (90) days or less and substantially in the
form previously provided to Parent;
(i) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit;
(j) any settlement agreement entered into within five (5) years prior
to the date of this Agreement; or
(k) any other agreement, contract or commitment currently in force
under which Company will pay, or expects to receive, after the date hereof an
amount in excess of $150,000 or more individually.
Neither Company nor any of its subsidiaries, nor to Company's knowledge any
other party to a Company Contract (as defined below), is in breach, violation or
default under, and neither Company nor any of its subsidiaries has received
written notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any agreements, contracts or commitments to
which Company or any of its subsidiaries is a party or by which any of them are
bound that are required to be disclosed in Sections 2.19(h) or 2.20 of the
Company Schedule or that are otherwise material to Company or any of its
subsidiaries (any such agreement, contract or commitment, a "Company Contract")
in such a manner as would permit any other party to cancel or terminate any such
Company Contract, or would permit any other party to seek material damages or
other remedies (for any or all of such breaches, violations or defaults, in the
aggregate).
2.21 Insurance. Company maintains insurance policies and fidelity bonds
---------
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Company and its subsidiaries (collectively, the
"Insurance Policies") which are of the type and in amounts customarily carried
by persons conducting businesses similar to those of Company and its
subsidiaries. There is no material claim by Company or any of its subsidiaries
pending under any of the material Insurance Policies as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds.
2.22 Opinion of Financial Advisor. The Board of Directors of Company has
----------------------------
received the opinion, dated as of the date of this Agreement, of its financial
advisor, Xxxxxxx, Xxxxx & Co., to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair to the holders of shares of
-25-
Company Common Stock from a financial point of view. Company will deliver a copy
of the written opinion of Xxxxxxx, Sachs & Co. to Parent upon receipt thereof.
2.23 Board Approval. The Board of Directors of Company has, as of the
--------------
date of this Agreement, unanimously (i) approved and declared advisable this
Agreement and has approved the Merger and the other transactions contemplated
hereby, (ii) determined that the Merger is consistent with and in furtherance of
the long-term business strategy of Company and fair to, and in the best
interests of, Company and its stockholders and (iii) determined to recommend
that the stockholders of Company adopt and approve this Agreement and approve
the Merger.
2.24 Vote Required. The affirmative vote of the holders of a majority of
-------------
the outstanding shares of Company Common Stock entitled to vote with respect
to the Merger is the only vote of the holders of any class or series of
Company's capital stock necessary to adopt and approve this Agreement and
approve the transactions contemplated hereby.
2.25 State Takeover Statutes. The Board of Directors of the Company has
-----------------------
approved the Merger, this Agreement and the Parent Voting Agreements and the
transactions contemplated hereby and thereby, and such approval is sufficient to
render inapplicable to the Merger, this Agreement and such Parent Voting
Agreements and the transactions contemplated hereby and thereby the provisions
of Section 203 of the Delaware Law to the extent, if any, such Section is
applicable to the Merger, this Agreement and such Parent Voting Agreements and
the transactions contemplated hereby and thereby. To the Company's knowledge, no
other state takeover statute or similar statute or regulation applies to or
purports to apply to the Merger, this Agreement and the Parent Voting Agreements
or the transactions contemplated hereby and thereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the disclosure schedule supplied by Parent to Company dated as of the date
hereof (the "Parent Schedule") referencing a specific representation, as
follows:
3.1 Organization and Qualification; Subsidiaries. Each of Parent and
--------------------------------------------
its subsidiaries is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted, except where the failure to
do so would not, individually or in the aggregate, have a Material Adverse
Effect on Parent. Each of Parent and its subsidiaries is in possession of all
Approvals necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is now being conducted,
except where the failure to have such Approvals would not, individually or in
the aggregate, have a Material Adverse Effect on Parent. Each of Parent and its
subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each
-26-
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on Parent.
3.2 Certificate of Incorporation and Bylaws. Parent has previously
---------------------------------------
furnished to Company complete and correct copies of (i) its Memorandum and
Articles of Association, as amended to date (together, the "Parent Charter
Documents") and (ii) the Certificate of Incorporation and By-laws of Merger Sub,
as amended to date (together, the "Merger Sub Charter Documents"). Such Parent
Charter Documents, Merger Sub Charter Documents and equivalent organizational
documents of each of Parent's other subsidiaries are in full force and effect.
Parent is not in violation of any of the provisions of the Parent Charter
Documents, Merger Sub is not in violation of any of the Merger Sub Charter
Documents, and no other subsidiary of Parent is in violation of any of its
equivalent organizational documents. Neither Parent nor, to Parent's knowledge,
The Bank of New York is in material breach of the Deposit Agreement or the
Affiliate Deposit Agreement.
3.3 Capitalization. The authorized share capital stock of Parent is
--------------
13,200,000 euro divided into 120,000,000 Ordinary Shares, par value 0.11 euro
per share ("Parent Ordinary Shares"). At the close of business on January 14,
2002, (i) 56,955,470 Parent Ordinary Shares were issued and outstanding, (ii) no
Parent Ordinary Shares were held in treasury by Parent or by subsidiaries of
Parent, (iii) 15,434,470 Parent Ordinary Shares were reserved for future
issuance upon the exercise of outstanding options ("Parent Options") to purchase
Parent Ordinary Shares or Parent ADSs, and (iv) each Parent ADS represented one
Parent Ordinary Share. The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $0.001 per share, all of which, as of
the date hereof, are issued and outstanding. All of the outstanding shares of
Parent's and Merger Sub's respective capital stock have been duly authorized and
validly issued and are fully paid and, in the case of Merger Sub, nonassessable.
Merger Sub was formed for the purpose of consummating the Merger and has no
material assets or liabilities except as necessary for such purpose. All Parent
Ordinary Shares subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall, and the Parent Ordinary Shares underlying the Parent ADSs to be issued
pursuant to the Merger will be, duly authorized, validly issued and fully paid.
Upon the due issuance by The Bank of New York, as depositary, of ADRs evidencing
Parent ADSs to be issued pursuant to the Merger against the deposit of the
Parent Ordinary Shares underlying such Parent ADSs in accordance with this
Agreement and the provisions of the Deposit Agreement or, with respect to
Company Affiliates (as defined below), the Affiliate Deposit Agreement, such
ADRs will be duly and validly issued, and persons in whose name such ADRs are
registered will be entitled to the rights of registered holders of ADRs
specified in such ADRs and in the Deposit Agreement or Affiliate Deposit
Agreement, as applicable. Except as set forth in the Affiliate Deposit
Agreement, the Parent ADSs to be issued in the Merger, when issued in accordance
with the provisions of this Agreement and the Deposit Agreement or the Affiliate
Deposit Agreement, as applicable, will not be subject to any restrictions on
resale under the Securities Act, other than restrictions imposed by Rule 145
promulgated under the Securities Act. Except as set forth in the Parent SEC
Reports (as defined below) and except as set forth in Section 3.3 of the Parent
Schedule, all of the outstanding shares of capital stock (other than directors'
-27-
qualifying shares) of each of Parent's subsidiaries are duly authorized, validly
issued, fully paid and nonassessable and all such shares (other than directors'
qualifying shares) are owned by Parent or a direct or indirect wholly-owned
subsidiary of Parent free and clear of all security interests, liens, claims,
pledges, agreements, limitations in Parent's voting rights, charges or other
encumbrances of any nature whatsoever.
3.4 Authority Relative to this Agreement. Each of Parent and Merger Sub
------------------------------------
has all necessary corporate power and authority to execute and deliver this
Agreement and the Company Voting Agreements to which it is a party and to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Company Voting Agreements to which it is a party by Parent and
Merger Sub and the consummation by Parent and Merger Sub of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of Parent and Merger Sub, and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or the Company Voting Agreements to which it is a
party, or to consummate the transactions so contemplated, subject only to the
approval of the Share Issuance by Parent's shareholders and the filing of the
Certificate of Merger pursuant to Delaware Law. This Agreement and the Company
Voting Agreements to which it is a party have been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by Company, constitute legal and binding obligations of
Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and general principles of equity.
3.5 No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement and the Company
Voting Agreements to which it is a party by Parent and Merger Sub do not, and
the performance of this Agreement and the Company Voting Agreements to which it
is a party by Parent and Merger Sub will not, (i) conflict with or violate the
Parent Charter Documents or equivalent organizational documents of Parent or any
of its subsidiaries, (ii) subject to compliance with the requirements set forth
in Section 3.5(b) below, conflict with or violate any Law applicable to Parent
or any of its subsidiaries or by which it or their respective properties are
bound or affected, or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or impair Parent's or any such subsidiary's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
or any of its subsidiaries pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which Parent or any of its subsidiaries or its or any of their respective
properties are bound or affected.
(b) The execution and delivery of this Agreement and the Company
Voting Agreements to which it is a party by Parent and Merger Sub do not, and
the performance of this
-28-
Agreement and the Company Voting Agreements to which it is a party by Parent and
Merger Sub shall not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act, Blue
Sky Laws, Foreign Securities Laws, the pre-merger notification requirements of
the HSR Act, the Irish Merger Act, comparable requirements of the
anti-competition authorities of other foreign jurisdictions, the rules and
regulations of Nasdaq, and the filing and recordation of the Certificate of
Merger as required by Delaware Law and (ii) where the failure to obtain such
other consents, approvals, authorizations or permits, or to make such filings or
notifications, would not have a material adverse effect on the parties' ability
to consummate the Merger or perform their obligations under this Agreement.
3.6 SEC Filings; Financial Statements.
---------------------------------
(a) Parent has made available to Company a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by Parent with the SEC after January 1, 2001 (the "Parent SEC
Reports"), which are all the forms, reports and documents required to be filed
by Parent with the SEC after January 1, 2001. The Parent SEC Reports (X) were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Parent SEC Reports and (Y)
did not at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of Parent's subsidiaries is required to file any reports or
other documents with the SEC.
(b) Each set of consolidated financial statements (including, in
each case, any related notes thereto) contained in the Parent SEC Reports,
including any Parent SEC Reports filed after the date hereof until the Closing,
(X) complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (Y) was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto or, in the case of unaudited statements,
for the absence footnotes as permitted by Form 10-Q of the Exchange Act) and (Z)
fairly presents in all material respects the consolidated financial position of
Parent and its subsidiaries at the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount.
(c) Parent has previously furnished to Company a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Parent with the SEC
pursuant to the Securities Act or the Exchange Act. Except for this Agreement,
as of the date hereof, there are no agreements entered into by Parent since
September 30, 2001 that are required to be filed as exhibits to Parent's Form
10-K for the year ended December 31,
-29-
2001 or Form 10-Q for the quarter ending March 31, 2002. Except as previously
disclosed in the Parent SEC Reports, as of the date hereof, there are no
transactions that are required to be disclosed in Parent's proxy statement for
its 2002 Annual General Meeting pursuant to Item 404(a) of Regulation S-K
promulgated under the Securities Act.
3.7 No Undisclosed Liabilities. Neither Parent nor any of its
--------------------------
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Parent and its subsidiaries taken as a
whole, except (i) liabilities provided for in Parent's balance sheet as of
September 30, 2001 or (ii) liabilities incurred since September 30, 2001 in the
ordinary course of business, none of which is material to the business, results
of operations or financial condition of Parent and its subsidiaries, taken as a
whole.
3.8 Absence of Certain Changes or Events. Since September 30, 2001,
------------------------------------
there has not been: (i) any Material Adverse Effect on Parent, (ii) except as
set forth in Section 3.8 of the Parent Schedule, any declaration, setting aside
or payment of any dividend on, or other distribution (whether in cash, stock or
property) in respect of, any of Parent's or any of its subsidiaries' share
capital, or any purchase, redemption or other acquisition by Parent of any of
Parent's share capital or any other securities of Parent or its subsidiaries or
any options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from employees following their termination
pursuant to the terms of their pre-existing stock option or purchase agreements,
(iii) any split, combination or reclassification of any of Parent's or any of
its subsidiaries' share capital, (iv) any material change by Parent in its
accounting methods, principles or practices, except as required by concurrent
changes in GAAP, or (v) any revaluation by Parent of any of its assets,
including, without limitation, writing down the value of capitalized inventory
or writing off notes or accounts receivable or any sale of assets of the Parent
other than in the ordinary course of business.
3.9 Absence of Litigation. Except as disclosed in the Parent SEC
---------------------
Reports, there are no material claims, actions, suits or proceedings pending or,
to the knowledge of Parent, threatened (or, to the knowledge of Parent, any
governmental or regulatory investigation pending or threatened) against Parent
or any of its subsidiaries or any properties or rights of Parent or any of its
subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign.
3.10 Registration Statement; Joint Proxy Statement/Prospectus. None of
--------------------------------------------------------
the information supplied or to be supplied by Parent for inclusion or
incorporation by reference in (i) the S-4 will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and (ii) the
Joint Proxy Statement/Prospectus will, at the dates mailed to the stockholders
of Company and of Parent, at the time of the Company Stockholders' Meeting, the
time of the Parent Shareholders' Meeting and as of the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The S-4 will comply as to form in all material respects with
-30-
the provisions of the Securities Act and the rules and regulations promulgated
by the SEC thereunder. Notwithstanding the foregoing, Parent makes no
representation or warranty with respect to any statement made, omitted or
incorporated by reference on the basis of information supplied by the Company
which is contained or incorporated by reference in, or omitted from, any of the
foregoing documents.
3.11 Brokers. Except for fees payable to Credit Suisse First Boston
-------
Corporation pursuant to an engagement letter dated December 18, 2001, Parent has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.12 Opinion of Financial Advisor. Parent's Board of Directors has
----------------------------
received an opinion from Credit Suisse First Boston Corporation, dated as of the
date hereof, to the effect that as of the date hereof, the Exchange Ratio is
fair to Parent from a financial point of view. Parent will deliver a copy of the
written opinion of Credit Suisse First Boston Corporation to Company upon
receipt thereof.
3.13 Board Approval. The Board of Directors of Parent has, as of the
--------------
date of this Agreement, unanimously (i) determined that the Merger is consistent
with and in furtherance of the long-term business strategy of Parent and is fair
to, and in the best interests of, Parent and its stockholders, (ii) approved
this Agreement, the Merger and the other transactions contemplated by this
Agreement and (iii) determined to recommend that the shareholders of Parent
approve the Share Issuance.
3.14 Vote Required. The affirmative vote of the holders of a majority
-------------
of the Parent ADSs that cast votes regarding the Share Issuance in person or by
proxy at the Parent Shareholders' Meeting is the only vote of the holders of any
class or series of Parent's capital stock necessary to approve this Agreement
and the transactions contemplated hereby.
3.15 Compliance; Permits. Neither Parent nor any of its subsidiaries
-------------------
is in conflict with, or in default or violation of, any material Law applicable
to Parent or any of its subsidiaries or by which its or any of their respective
properties is bound or affected, and no investigation or review by any
governmental or regulatory body or authority is pending or, to the knowledge of
Parent, threatened against Parent or any of its subsidiaries, nor, to the
knowledge of Parent, has any governmental or regulatory body or authority
indicated an intention to conduct the same, other than, in each such case, those
the outcome of which could not, individually or in the aggregate, reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of the Company or any of its subsidiaries, any acquisition of material
property by the Company or any of its subsidiaries or the conduct of business by
the Company or any of its subsidiaries as currently conducted.
3.16 Intellectual Property. For the purposes of this Agreement, the
---------------------
term "Parent Products" means all products or service offerings of Parent of any
of its subsidiaries that have been distributed or provided in the five (5)-year
period preceding the date hereof or which Parent or any
-31-
of its subsidiaries intends to distribute or provide within the next six (6)
months, including any such products or service offerings under development.
(a) Ownership. Parent (i) owns exclusively, and has good title
---------
to, or has licensed from a third party in a manner consistent with Parent's use
thereof in connection with the business of Parent as currently conducted, all
copyrighted works that are Parent Products; and (ii) to the extent that any
Patents would be infringed by the manufacture, use or sale of any Parent
Products, is the exclusive owner of such Patents, except in each of clause (i)
and (ii) for such failures to own, have good title or license as would not have
a Material Adverse Effect on Parent.
(b) Non-Infringement. To the Parent's knowledge, the operation
----------------
of the business of the Parent and its subsidiaries as such business currently is
conducted, including (i) Parent's and its subsidiaries' design, development,
manufacture, distribution, reproduction, marketing or sale of the products or
services of Parent and its subsidiaries (including Parent Products) and (ii) the
Parent's or any of its subsidiaries' use of any product, device or process, has
not and does not infringe or misappropriate the Intellectual Property of any
third party or constitute unfair competition or trade practices under the laws
of any jurisdiction, which infringement or misappropriation would have a
Material Adverse Effect on Parent.
(c) No Notice of Infringement. To the Parent's knowledge,
-------------------------
neither Parent nor any of its subsidiaries has received written notice from any
third party that the operation of the business of Parent or any of its
subsidiaries or any material act, product or service of Parent or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction.
3.17 Taxes.
-----
(a) Parent and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports ("Parent Returns") relating to Taxes required to be filed by Parent and
each of its subsidiaries with any Tax authority, except such Parent Returns
which are not material to Parent or any of its subsidiaries. Such Parent Returns
are true and correct in all material respects and have been completed in
accordance with applicable law. Parent and each of its subsidiaries have paid
all Taxes shown to be due on such Parent Returns.
(b) Neither Parent nor any of its subsidiaries has been
delinquent in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against Parent or any of its
subsidiaries raised by any Tax authority in a writing received by Parent or any
of its subsidiaries, nor has Parent or any of its subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.
(c) Except as set forth in Section 3.17(c) of the Parent
Schedule, no audit or other examination of any Parent Return by any Tax
authority is presently in progress, nor has Parent or any of its subsidiaries
been notified in writing of any request for such an audit or other examination.
-32-
(d) Neither Parent nor any of its subsidiaries has any liability
for any material unpaid Taxes which has not been accrued for or reserved on the
Parent balance sheet dated September 30, 2001 in accordance with GAAP, whether
asserted or unasserted, contingent or otherwise, which is material to the
Parent, other than any liability for unpaid Taxes that may have accrued since
September 30, 2001 in connection with the operation of the business of the
Parent and its subsidiaries in the ordinary course.
(e) Neither Parent nor any of its subsidiaries is party to or
has any obligation under any Tax sharing, indemnity or allocation agreement or
arrangement. None of Parent's U.S. subsidiaries (a) has ever been a member of an
affiliated group (within the meaning of Code ss.1504(a)) filing a consolidated
federal income Tax Return (other than a group the common parent of which was a
U.S. subsidiary of Parent), or (b) has any liability for the Taxes of any person
(other than any U.S. subsidiaries of Parent) under Treas. Reg. ss. 1.1502-6 (or
any similar provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise.
(f) None of Parent's U.S. subsidiaries has constituted either a
"distributing corporation" or a "controlled corporation" in a distribution of
stock intended to qualify for tax-free treatment under Section 355 of the Code
(x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "Series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
3.18 Benefit Plans.
-------------
(a) Parent has performed all obligations required to be
performed by it under, is not in default or violation of, and has no knowledge
of any default or violation by any other party to, each material employee
compensation, incentive, fringe or benefit plans, programs, policies, practices,
contracts, agreements, commitments or other arrangements (whether or not set
forth in a written document and including, without limitation, all "employee
benefit plans" within the meaning of Section 3(3) of ERISA) covering any active
or former employee, director or consultant of Parent, any subsidiary of Parent
or any trade or business (whether or not incorporated) which is a Parent
Affiliate (the "Parent Plans"), except for such failures to perform, defaults
and violations as would not have a Material Adverse Effect on Parent. Each such
Parent Plan has been established, maintained and administered with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations (foreign or domestic), including but not limited to ERISA and the
Code, which are applicable to such Parent Plans, except for such violations as
would not have a Material Adverse Effect on Parent. No suit, action, claim or
other litigation (excluding claims for benefits incurred in the ordinary course
of Parent Plan activities) has been brought, or to the knowledge of Parent is
threatened, against or with respect to any such Parent Plan and there are no
audits, inquiries or proceedings pending or, to the knowledge of Parent,
threatened by the IRS or DOL with respect to any Parent Plans that would have a
Material Adverse Effect on Parent. All contributions, reserves or premium
payments required to be made or accrued as of the date hereof to the Parent
Plans have been timely made or accrued. Any Parent Plan intended to be qualified
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code (i) has either obtained a favorable determination,
notification, advisory and/or opinion letter, as
-33-
applicable, as to its qualified status from the IRS or still has a remaining
period of time under applicable Treasury Regulations or IRS pronouncements in
which to apply for such letter and to make any amendments necessary to obtain a
favorable determination. For purposes of Section 3.16, a "Parent Affiliate"
means any partnership, corporation, association, joint stock company, trust,
joint venture, unincorporated organization or other entity that is a member of a
controlled group or which is under common control with Parent within the meaning
of Section 414(b), (c), (m), or (o) of the Code and the rules and regulations
promulgated thereunder.
(b) Neither Parent, any of its subsidiaries, nor any of the
Parent Affiliates maintains or has at any time ever maintained, established,
sponsored, participated in, or contributed to any plan subject to Title IV of
ERISA or Section 412 of the Code and at no time has Parent or any of its
subsidiaries contributed to or been requested to contribute to any
"multiemployer plan," as such term is defined in ERISA Section 3(37) or to any
plan described in Section 413 of the Code. Neither Parent, any of its
subsidiaries, nor any officer or director of Parent or any of its subsidiaries
is subject to any liability or penalty under Section 4975 through 4980B of the
Code or Title I of ERISA. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA or Section 4975 of the Code (or any
administrative class exemption issued thereunder), has occurred with respect to
any Plan.
(c) None of the Parent Plans promises or provides retiree
medical or other retiree welfare benefits to any person except as required by
applicable law, and neither Parent nor any of its subsidiaries has represented,
promised or contracted (whether in oral or written form) to provide such retiree
benefits to any employee, former employee, director, consultant or other person,
except to the extent required by statute.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the date
------------------------------
of this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Company shall, and shall
cause each of its subsidiaries to, except to the extent that Parent shall
otherwise consent in writing, carry on its business, in the usual, regular and
ordinary course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to (i) preserve intact its present
business organization, (ii) keep available the services of its present officers
and employees and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.
In addition, except as expressly permitted by the terms of this
Agreement, without the prior written consent of Parent, during the period from
the date of this Agreement and continuing until the
-34-
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company shall not do any of the following and shall not permit
its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant (whether in cash, stock, equity securities, property
or otherwise) any severance or termination pay to any officer or employee except
pursuant to written agreements outstanding, or policies existing, on the date
hereof and as previously disclosed in writing or made available to Parent, or
adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the Company Intellectual Property, or
enter into grants to transfer or license to any person future patent rights
other than in the ordinary course of business consistent with past practices,
provided that in no event shall Company license on an exclusive basis or sell
any Company Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company or its subsidiaries, except
repurchases of unvested shares at cost in connection with the termination of the
employment relationship with any employee pursuant to stock option or purchase
agreements in effect on the date hereof;
(f) Issue, grant, deliver, sell, authorize, pledge or otherwise
encumber or propose any of the foregoing with respect to, any shares of capital
stock or any securities convertible into shares of capital stock, or
subscriptions, rights, warrants or options to acquire any shares of capital
stock or any securities convertible into shares of capital stock, or enter into
other agreements or commitments of any character obligating it to issue any such
shares or convertible securities, other than the issuance, delivery and/or sale
of shares of Company Common Stock pursuant to the exercise of (i) stock options
outstanding as of the date of this Agreement, (ii) up to an aggregate of 200,000
stock options granted to new hires (who are not officers or directors) in the
ordinary course of business after the date of this Agreement in reasonable
amounts consistent with Company's past practices, and (iii) options granted or
deemed to have been granted in any offering period under the Company Stock
Purchase Plan that is in progress on, or commences after, the date of this
Agreement;
(g) Cause, permit or propose any amendments to the Company
Charter Documents;
-35-
(h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets or enter into any joint ventures, strategic partnerships or
alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory or product licenses to end users
in the ordinary course of business consistent with past practice, except for the
sale, lease or disposition (other than through licensing) of property or assets
which are not material, individually or in the aggregate, to the business of
Company or any of its subsidiaries, or lend funds to any third party (other than
intercompany loans in the ordinary course of business or advances to employees
for travel and other reasonable business expenses in the ordinary course of
business);
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Company, enter
into any "keep well" or other agreement to maintain any financial statement
condition or enter into any arrangement having the economic effect of any of the
foregoing other than (i) in connection with the financing of ordinary course
trade payables consistent with past practice, and (ii) pursuant to credit
facilities existing as of the date of this Agreement.
(k) Except as set forth in Section 4.1(k) of the Company Schedule,
adopt or amend any employee benefit plan, policy or arrangement, any employee
stock purchase or employee stock option plan, or enter into any employment
contract or collective bargaining agreement (other than offer letters and letter
agreements entered into in the ordinary course of business consistent with past
practice with employees who are terminable "at will"), pay any special bonus or
special remuneration to any director or employee, increase the salaries, wage
rates, fringe benefits (including rights to severance or indemnification) or
other compensation of any of its directors, officers, employees or consultants
or those of any of its subsidiaries, or grant any equity-based compensation
award (whether payable in cash, shares or otherwise);
(l) (i) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of this
Agreement) other than the payment, discharge, settlement or satisfaction, (A) in
the ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities recognized or disclosed in the most recent
consolidated financial statements (or the notes thereto) of Company included in
the Company SEC Reports or incurred since the date of such financial statements,
and (B) of such other claims, liabilities and obligations which do not, in the
aggregate, exceed $150,000, or (ii) waive the benefits of, agree to modify in
any manner, terminate, release any person from or fail to enforce any material
confidentiality or similar agreement to which Company or any of its subsidiaries
is a party or of which Company or any of its subsidiaries is a beneficiary;
-36-
(m) Make any individual or series of related payments outside of the
ordinary course of business in excess of $150,000, provided that it is
understood that payment by Company, before or after the Effective Time, of the
reasonable actual fees and expenses of any financial, legal, accounting or other
professional service advisors for services provided prior to the Effective Time
with respect to the transactions contemplated by this Agreement or otherwise,
shall not constitute a payment outside of the ordinary course of business;
(n) Except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement to which
Company or any of its subsidiaries thereof is a party if doing so would be
adverse to the Company or any of its subsidiaries or waive, delay the exercise
of, release or assign any material rights or claims thereunder;
(o) Enter into or materially modify in any manner adverse to Company
or any of its subsidiaries contracts, agreements, or obligations relating to the
distribution, sale, license (other than to end users in the ordinary course of
business) or marketing by third parties of the products of Company or any of its
subsidiaries or products licensed by Company or any of its subsidiaries;
(p) Revalue any of the assets of Company or any of its subsidiaries
or, except as required by GAAP, make any change in accounting methods,
principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside
of the ordinary course of business in excess of $150,000 individually;
(r) Engage in any action that would be reasonably likely to cause the
Merger to fail to qualify as a "reorganization" under Section 368(a) of the Code
whether or not otherwise permitted by the provisions of this Article IV;
(s) Make any tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the tax liability
or tax attributes of Company or any of its subsidiaries or settle or compromise
any material income tax liability; or
(t) Agree in writing or otherwise to take any of the actions
described in Section 4.1 (a) through (s) above.
4.2 Conduct of Business by Parent. During the period from the date of this
-----------------------------
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Parent shall, and shall cause each
of its subsidiaries to, except to the extent that Company shall otherwise
consent in writing, continue to engage primarily in the business of providing
e-learning solutions. In addition, without the prior written consent of Company,
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Parent shall not do any of the following and shall not permit
its subsidiaries to do any of the following:
(a) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, shares, equity securities or property) in
respect of any share capital or split,
-37-
combine or reclassify any share capital or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for any
capital stock, other than dividends or distributions by any of Parent's
subsidiaries to Parent or any of Parent's subsidiaries;
(b) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Parent or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(c) Cause, permit or propose any amendments to the Parent Charter
Documents (or similar governing instruments of any of its subsidiaries);
(d) Revalue any of its assets or, except as required by GAAP, make any
change in accounting methods, principles or practices;
(e) Engage in any action that could cause the Merger to fail to qualify
as a "reorganization" under Section 368(a) of the Code, whether or not otherwise
permitted by the provisions of this Article IV; or
(f) Agree in writing or otherwise to take any of the actions described
in Section 4.2 (a) through (e) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement.
--------------------------------------------------------
(a) Promptly after the execution of this Agreement, Parent and Company
shall jointly prepare and shall file with the SEC a document or documents that
will constitute (i) the prospectus forming part of the registration statement on
the S-4 and (ii) the Joint Proxy Statement/Prospectus. Each of the parties
hereto shall use commercially reasonable efforts to cause the S-4 to become
effective promptly after the date hereof, and, prior to and after the effective
date of the S-4, except as otherwise provided in this Agreement, the Parent
shall take all action reasonably required under any applicable Laws in
connection with the issuance of Parent ADSs pursuant to the Merger. Parent or
Company, as the case may be, shall promptly furnish all information concerning
Parent or Company as the other party may reasonably request in connection with
such actions and the preparation of the S-4 and the Joint Proxy
Statement/Prospectus. Promptly after the effective date of the S-4, the Joint
Proxy Statement/Prospectus shall be mailed to the stockholders of Company and of
Parent. Each of the parties hereto shall cause the Joint Proxy
Statement/Prospectus to comply as to form and substance with respect to such
party in all material respects with the applicable requirements of (i) the
Exchange Act, (ii) the Securities Act, (iii) the Foreign Securities Laws, (iv)
the rules and regulations of the Nasdaq and (v) the laws of the Republic of
Ireland.
-38-
(b) The Joint Proxy Statement/Prospectus shall (i) solicit the
approval of this Agreement and the Merger and include the recommendation of the
Board of Directors of Company to Company's stockholders that they vote in favor
of approval of this Agreement and the Merger, subject to the right of the Board
of Directors of the Company to withdraw its recommendation and recommend a
Superior Offer determined to be such in compliance with Section 5.4 of this
Agreement, and (ii) include the opinion of Xxxxxxx, Xxxxx & Co. referred to in
Section 2.22; provided, however, that the Board of Directors of Company shall
-------- -------
submit this Agreement to Company's stockholders whether or not at any time
subsequent to the date hereof such board determines that it can no longer make
such recommendation. The Joint Proxy Statement/Prospectus shall (A) solicit the
approval of the Share Issuance and include the recommendation of the Board of
Directors of Parent to Parent's shareholders that they vote in favor of approval
of the Share Issuance, and (B) include the opinion of Credit Suisse First Boston
Corporation referred to in Section 3.12.
(c) Each of Parent and the Company shall promptly amend or supplement
the Joint Proxy Statement/Prospectus to the extent required by law to do so. No
amendment or supplement to the Joint Proxy Statement/Prospectus or the S-4 shall
be made without the approval of Parent and Company, which approval shall not be
unreasonably withheld or delayed. Each of the parties hereto shall advise the
other parties hereto, promptly after it receives notice thereof, of the time
when the S-4 has become effective or any supplement or amendment has been filed,
of the issuance of any stop order, of the suspension of the qualification of the
Parent ADSs issuable in connection with the Merger for offering or sale in any
jurisdiction, or of any request by the SEC for amendment of the Joint Proxy
Statement/Prospectus or the S-4 or comments thereon and responses thereto or
requests by the SEC for additional information.
5.2 Stockholder Meetings. Company shall call the Company Stockholders'
--------------------
Meeting and Parent shall call the Parent Shareholders' Meeting as promptly as
practicable after the date hereof for the purpose of voting upon the approval of
this Agreement and the Merger or the Share Issuance, as the case may be,
pursuant to the Joint Proxy Statement/Prospectus, and Company and Parent shall
use reasonable efforts to hold the Parent Shareholders' Meeting and the Company
Stockholders' Meeting promptly, and in no event more than 90 days, after the
date on which the S-4 becomes effective. Nothing herein shall prevent Company or
Parent from adjourning or postponing the Company Stockholders' Meeting or the
Parent Shareholders' Meeting, as the case may be, if there are insufficient
shares of Company Common Stock or Parent ADSs, as the case may be, necessary to
conduct business at their respective meetings of the stockholders or to approve
this Agreement and the Merger or the Share Issuance, as the case may be. Unless
Company's Board of Directors has withdrawn its recommendation of this Agreement
and the Merger in compliance with Section 5.4, Company shall use commercially
reasonable efforts to solicit from its stockholders proxies in favor of the
approval of this Agreement and the Merger pursuant to the Joint Proxy
Statement/Prospectus and shall take all other reasonable action necessary or
advisable to secure the vote or consent of its stockholders required by Delaware
Law or applicable stock exchange requirements to obtain such approval. Parent
shall use commercially reasonable efforts to solicit from its stockholders
proxies in favor of the Share Issuance pursuant to the Joint Proxy
Statement/Prospectus and shall take all other reasonable action necessary or
advisable to secure the vote or consent of its stockholders required by
applicable stock exchange requirements to obtain such approval. Each of the
parties hereto shall
-39-
take all other action reasonably necessary or advisable to promptly secure any
vote or consent of stockholders required by applicable Law and such party's
certificate of incorporation and bylaws or equivalent organizational documents
to effect the Merger. Company shall call and hold the Company Stockholders'
Meeting for the purpose of voting upon the approval of this Agreement and the
Merger whether or not Company's Board of Directors at any time subsequent to the
date hereof determines that this Agreement is no longer advisable or recommends
that Company's stockholders reject it.
5.3 Confidentiality; Access to Information.
--------------------------------------
(a) The parties acknowledge that Company and Parent have previously
executed a Confidentiality Agreement, dated as of November 30, 2001 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.
(b) Each of the Company and Parent will afford the other and the
other's accountants, counsel and other representatives reasonable access to its
properties, books, records and personnel during the period prior to the
Effective Time to obtain all information concerning its business as such other
party may reasonably request. No information or knowledge obtained in any
investigation pursuant to this Section 5.3 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
5.4 No Solicitation.
---------------
(a) From and after the date of this Agreement until the Effective
Time or termination of this Agreement pursuant to Article VII, Company and its
subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them to, directly or
indirectly, (i) solicit, initiate, encourage or induce the making, submission or
announcement of any Acquisition Proposal (as defined below), (ii) participate in
any discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal, (iii) engage in discussions with
any person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Transaction (as defined below); provided,
--------
however, that nothing contained in this Section 5.4 shall prohibit the Board of
-------
Directors of Company in response to a Superior Offer (as defined below) from
engaging in discussions with and furnishing information to the party making such
Acquisition Proposal and withdrawing, adversely modifying or withholding its
recommendation of this Agreement and the Merger to the extent (A) the Board of
Directors of the Company determines in good faith after considering the advice
of its outside legal counsel that its fiduciary obligations under applicable law
require it to do so, (B) (x) at least three days prior to furnishing any such
nonpublic information to, or entering into discussions or negotiations with,
such party, Company gives Parent written notice of Company's intention to
furnish nonpublic information to, or enter into discussions or negotiations
with, such party and (y) Company receives from such
-40-
party an executed confidentiality agreement containing customary limitations on
the use and disclosure of all nonpublic written and oral information furnished
to such party by or on behalf of Company, (C) contemporaneously with furnishing
any such nonpublic information to such party, Company furnishes such nonpublic
information to Parent (to the extent such nonpublic information has not been
previously furnished by the Company to Parent) and (D) Company has otherwise
acted in full compliance with this Section 5.4. Company and its subsidiaries
will immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal.
For purposes of this Agreement, (A) "Acquisition Proposal" shall mean any
offer or proposal (other than an offer or proposal by Parent) relating to any
Acquisition Transaction. For the purposes of this Agreement, "Acquisition
Transaction" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from the Company by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) of more than a 15% interest in the total outstanding voting
securities of the Company or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 15% or more of the total outstanding voting
securities of the Company or any of its subsidiaries or any merger,
consolidation, business combination or similar transaction involving the Company
pursuant to which the stockholders of the Company immediately preceding such
transaction hold less than 85% of the equity interests in the surviving or
resulting entity of such transaction; (B) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than 15% of the
assets of the Company; or (C) any liquidation, dissolution, recapitalization or
other significant corporate reorganization of the Company. For purposes of this
Agreement, "Superior Offer" shall mean an unsolicited, bona fide, written
Acquisition Proposal proposing the acquisition of all of the outstanding voting
securities of the Company (x) that if any cash consideration is involved, is not
subject to any financing contingency, (y) with respect to which Company's Board
of Directors shall have determined in good faith (after considering the advice
of Company's independent financial advisors) that the acquiring party is
reasonably capable of consummating the proposed Acquisition Transaction on the
terms proposed, and (z) that Company's Board of Directors shall have determined
in good faith provides greater value to the stockholders of Company than the
Merger (after considering the advice of Company's independent financial
advisors).
(b) In addition to the obligations of Company set forth in paragraph
(a) of this Section 5.4, Company as promptly as practicable, and in any event
within 24 hours, shall advise Parent orally and in writing of any request for
information which Company reasonably believes would lead to an Acquisition
Proposal or of any Acquisition Proposal, or any inquiry with respect to or which
Company reasonably should believe would lead to any Acquisition Proposal, the
material terms and conditions of such request, Acquisition Proposal or inquiry,
and the identity of the person or group making any such request, Acquisition
Proposal or inquiry. Company will keep Parent informed in all material respects
of the status and details (including amendments or proposed amendments) of any
such request, Acquisition Proposal or inquiry. In addition to the foregoing,
-41-
Company shall (i) provide Parent with at least 48 hours prior notice (or such
lesser prior notice as provided to the members of Company's Board of Directors
but in no event less than eight hours) of any meeting of Company's Board of
Directors at which Company's Board of Directors is reasonably expected to
consider a Superior Offer and (ii) provide Parent with at least three (3)
business days prior written notice of a meeting of Company's Board of Directors
at which Company's Board of Directors is reasonably expected to recommend a
Superior Offer to its stockholders and together with such notice a copy of the
definitive documentation relating to such Superior Offer.
(c) Nothing contained in this Agreement shall prohibit Company or its
Board of Directors from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act;
provided that the content of any such disclosure thereunder shall be governed by
--------
the terms of Section 5.4(a) of this Agreement. Without limiting the foregoing
proviso, Company shall not effect any change to, modify or withdraw its
recommendation unless specifically permitted pursuant to the terms of Section
5.4(a).
5.5 Public Disclosure. Parent and Company will consult with each other and
-----------------
agree before issuing any press release or otherwise making any public statement
with respect to the Merger, this Agreement or an Acquisition Proposal and will
not issue any such press release or make any such public statement prior to such
agreement, except as may be required by law or any listing agreement with a
national securities exchange, in which case reasonable efforts to consult with
the other party will be made prior to any such release or public statement;
provided that the foregoing obligations shall terminate immediately following
--------
any withdrawal, modification or change by the Board of Directors of Company of
its recommendation of this Agreement or the Merger in a manner adverse to Parent
or Parent's shareholders. The parties have agreed to the text of the joint press
release announcing the signing of this Agreement.
5.6 Reasonable Efforts; Notification.
--------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective the Merger and the other
transactions contemplated by this Agreement, including using commercially
reasonable efforts to accomplish the following: (i) the obtaining of all
necessary actions or nonactions, waivers, consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any) and the taking of commercially
reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Entity, (ii) the defending of
any suits, claims, actions, investigations or proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iii) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. In connection with and without
limiting the foregoing, Company and
-42-
its Board of Directors shall, if any state takeover statute or similar statute
or regulation is or becomes applicable to the Merger, this Agreement or the
Parent Voting Agreements or any of the transactions contemplated hereby or
thereby, use commercially reasonable efforts to ensure that the Merger and the
other transactions contemplated by this Agreement and by the Parent Voting
Agreements may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise to minimize the effect of such
statute or regulation on the Merger, this Agreement, the Parent Voting
Agreements and the transactions contemplated hereby and thereby. Notwithstanding
anything herein to the contrary, nothing in this Agreement shall be deemed to
require Parent or Company or any subsidiary or affiliate thereof to agree to any
divestiture by itself or any of its affiliates of shares of capital stock or of
any business, assets or property, or the imposition of any material limitation
on the ability of any of them to conduct their business or to own or exercise
control of such assets, properties and stock.
(b) Company shall give prompt notice to Parent of any representation
or warranty made by it contained in this Agreement becoming untrue or
inaccurate, or any failure of Company to comply with or satisfy in any respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in
Section 6.3(a) or 6.3(b) could reasonably be expected to not be satisfied;
provided, however, that no such notification shall affect the representations,
-------- -------
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
(c) Parent shall give prompt notice to Company of any representation
or warranty made by it or Merger Sub contained in this Agreement becoming untrue
or inaccurate, or any failure of Parent or Merger Sub to comply with or satisfy
in any respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.2(a) or 6.2(b) could reasonably be expected to not be
satisfied; provided, however, that no such notification shall affect the
-------- -------
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.7 Third Party Consents. As soon as practicable following the date
--------------------
hereof, Parent and Company will each use its commercially reasonable efforts to
obtain any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby.
5.8 Stock Options; Stock Purchase Plan.
----------------------------------
(a) At the Effective Time, each outstanding option to purchase shares
of Company Common Stock (each, a "Company Stock Option") under the Company
Option Plans, whether or not vested, shall by virtue of the Merger be assumed by
Parent. Each Company Stock Option so assumed by Parent under this Agreement will
be (or become) exercisable for that number of whole Parent ADSs equal to the
product (rounded down to the nearest whole number of Parent ADSs) of the number
of shares of Company Common Stock that were issuable upon exercise of such
Company Stock Option immediately prior to the Effective Time multiplied by the
Exchange Ratio and (ii) the per share exercise price for the Parent ADSs
issuable upon exercise of such assumed
-43-
Company Stock Option will be equal to the quotient (rounded up to the nearest
whole cent) determined by dividing the exercise price per share of Company
Common Stock at which such Company Stock Option was exercisable immediately
prior to the Effective Time by the Exchange Ratio. Parent shall reserve a
sufficient number of shares of Parent ADSs for issuance upon exercise of the
assumed Company Stock Options.
(b) Company shall take all actions necessary, including, if
appropriate, amending the terms of the Company Stock Purchase Plan (i) to cause
the rights of participants in the Company Stock Purchase Plan with respect to
any offering period underway as of the Effective Time pursuant to the Company
Stock Purchase Plan to be determined by treating the last business day prior to
the Effective Time (or, for administrative convenience, the last day of the last
full payroll period prior to the Effective Time) as the last day of such
offering period and to prevent any offering period from commencing or occurring
after the termination of such offering period, (ii) to make such other pro-rata
adjustments as may be necessary to reflect the reduced offering period but
otherwise treating such offering period as a fully effective and completed
offering period for all purposes of the Company Stock Purchase Plan, and (iii)
to cause the Company Stock Purchase Plan and all rights of participants therein
and any other employees of the Company thereunder (except for ordinary and
necessary administrative obligations) to be terminated prior to the Effective
Time.
(c) Effective as of the day immediately preceding the Effective Time,
the Company and its Benefits Affiliates, as applicable, shall each terminate any
and all group severance, separation or salary continuation plans, programs or
arrangements and any and all plans intended to include a Code Section 401(k)
arrangement (unless Parent provides written notice to the Company that such
401(k) plans shall not be terminated) (collectively, "Company Employee Plans").
Unless Parent provides such written notice to the Company, no later than three
business days prior to the Effective Time, the Company shall provide Parent with
evidence that such Company Employee Plan(s) have been terminated (effective as
of the day immediately preceding the Effective Time) pursuant to resolutions of
the Company's Board of Directors. The form and substance of such resolutions
shall be subject to review and approval of Parent. The Company also shall take
such other actions in furtherance of terminating such Company Employee Plan(s)
as Parent may reasonably require. In the event that distribution or rollover of
assets from the trust of a 401(k) Plan that is terminated (or to be terminated)
is reasonably anticipated to trigger liquidation, surrender or other fees to be
paid from plan assets or by the Company or any of its subsidiaries, Company
shall take such actions as are necessary to reasonably estimate the amount of
such fees and provide such estimate to Parent at least 30 days prior to the
Effective Time.
5.9 Employee Compensation. Each person who was an employee of the Company
---------------------
immediately prior to the Effective Time, shall be, at the Effective Time, an
at-will employee of Parent or the Surviving Corporation, to the extent permitted
by applicable law (a "Continuing Employee"); provided that each employee
employed in the United States shall provide proof satisfactory to Parent of the
right to work in the United States. Arrangements with respect to compensation
and retention of specified key employees of Company shall be as set forth in
Section 5.9 of the Parent Schedule.
-44-
5.10 Form S-8. Parent agrees to file a registration statement on Form S-8
--------
for the Parent ADSs issuable with respect to assumed Company Stock Options
promptly (but in no event later than five (5) business days) after the Effective
Time and agrees to use commercially reasonable efforts to keep such registration
statement effective for so long as any such options remain outstanding.
5.11 Indemnification.
---------------
(a) From and after the Effective Time, Parent will cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
Company pursuant to any indemnification agreements between Company and any
person who served as a director or officer at any time prior to the Effective
Time in effect immediately prior to the Effective Time and any indemnification
provisions under the Company Charter Documents as in effect on the date hereof.
The Certificate of Incorporation and Bylaws of the Surviving Corporation will
contain provisions with respect to exculpation and indemnification that are at
least as favorable to the indemnified parties thereunder (the "Indemnified
Parties") as those contained in the Company Charter Documents as in effect on
the date hereof, which provisions will not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of the Indemnified Parties, unless
such modification is required by law.
(b) For a period of six years after the Effective Time, Parent will
cause the Surviving Corporation to use its commercially reasonable efforts to
maintain in effect, if available, directors' and officers' liability insurance
covering those persons who are currently covered by the Company's directors' and
officers' liability insurance policy on terms (including coverage) comparable to
(and not substantially less advantageous than) those applicable to the current
directors and officers of the Company; provided, however, that in no event will
-------- -------
Parent or the Surviving Corporation be required to expend an annual premium for
such coverage in excess of 150% of the annual premium currently paid by the
Company.
(c) This Section 5.11 shall survive the consummation of the Merger,
is intended to benefit the Surviving Corporation and each Indemnified Party,
shall be binding on all successors and assigns of the Surviving Corporation and
Parent, and shall be enforceable by the Indemnified Parties. Parent shall cause
SmartForce, a Delaware corporation and a wholly-owned subsidiary of Parent, to
guarantee to each person to whom the Surviving Corporation has obligations under
this Section 5.11 that the Surviving Corporation will fulfill those obligations
and agrees that each of those persons is an intended beneficiary of that
guarantee and shall have the right to enforce it against SmartForce, with regard
to himself or herself.
5.12 Nasdaq Listing. Parent agrees to use reasonable efforts to cause the
--------------
authorization for listing on Nasdaq of the Parent ADSs issuable, and those
required to be reserved for issuance, in connection with the Merger, upon
official notice of issuance.
5.13 Affiliates. Set forth in Section 5.13 of the Company Schedule is a
----------
list of those persons who may be deemed to be, in Company's reasonable judgment,
affiliates of Company within the meaning of Rule 145 promulgated under the
Securities Act (each, a "Company Affiliate").
-45-
Company will provide Parent with such information and documents as Parent
reasonably requests for purposes of reviewing such list. Company will use its
commercially reasonable efforts to deliver or cause to be delivered to Parent,
as promptly as practicable on or following the date hereof, from each Company
Affiliate an executed affiliate agreement in substantially the form attached
hereto as Exhibit C (the "Affiliate Agreement"), each of which will be in full
force and effect as of the Effective Time. Parent will be entitled to place
appropriate legends on the ADRs evidencing any Parent ADSs to be received by a
Company Affiliate pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the Parent
ADSs, consistent with the terms of the Affiliate Agreement.
5.14 Board of Directors of Parent; Officer Appointment. Parent will cause
-------------------------------------------------
to be taken all actions necessary to appoint the Company's current chief
executive officer (i) to the position of Chief Technology Officer of Parent
effective as of the Effective Time and (ii) to the Board of Directors of Parent
immediately after the Effective Time.
5.15 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
--------------------------------------
practicable, Company and Parent each shall file with the United States Federal
Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the Irish Merger Act or any
other merger notification or control laws and regulations of any applicable
jurisdiction, as agreed to by the parties. Company and Parent each shall
promptly (a) supply the other with any information which may be required in
order to effectuate such filings and (b) supply any additional information which
reasonably may be required by the FTC, the DOJ or the competition or merger
control authorities of Ireland or any other jurisdiction and which the parties
may reasonably deem appropriate; provided, however, that Parent shall not be
-------- -------
required to agree to any divestiture by Parent or the Company or any of Parent's
or Company's subsidiaries or affiliates of shares of capital stock or of any
business, assets or property of Parent or its subsidiaries or affiliates or of
the Company or its subsidiaries, its affiliates, or the imposition of any
material limitation on the ability of any of them to conduct their businesses or
to own or exercise control of such assets, properties and stock.
5.16 Tax-Free Reorganization. From and after the Effective Time, Parent
-----------------------
will not take any action if such action would cause the Merger to fail to
qualify as a tax-free reorganization described in Section 368(a) of the Code.
Without limiting the generality of the foregoing, after the Merger, (a) Parent
will cause Company to continue its historic business or use a significant
portion of its historic business assets in a business and to comply with the
reporting requirements set forth in Treasury Regulation Section
1.367(a)-3(c)(6); and (b) Parent will not, and will not permit the Company to,
take any position in or with regard to their respective tax returns (or any
amendments thereto) that is inconsistent with the treatment of the Merger as a
tax-free reorganization described in Section 368 of the Code.
5.17 Section 16 Matters. Prior to the Effective Time, the Board of
------------------
Directors of each of Parent and Company shall adopt a resolution consistent with
the interpretative guidance of the SEC so that (i) the assumption of Company
Stock Options held by Company Insiders (as defined below)
-46-
pursuant to this Agreement, and (ii) the receipt by Company Insiders of Parent
ADSs in exchange for Company Common Stock pursuant to the Merger, shall be
exempt transactions for purposes of Section 16 of the Exchange Act by any
officer or director of Company who may become a covered person for purposes of
Section 16 of the Exchange Act (a "Company Insider").
5.18 Benefit Plans.
-------------
(a) As soon as administratively practicable after the Effective Time,
Parent shall take commercially reasonable action so that employees of Company
and its subsidiaries shall be entitled to participate in such employee benefit
plans, programs or arrangements of Parent ("Parent Benefits Plans") so that each
Company employee who becomes a Parent employee is eligible for benefits that are
substantially similar in the aggregate to those provided to similarly-a situated
employee of Parent and its subsidiaries (it being understood that inclusion of
the employees of the Parent and its subsidiaries in the Parent Benefit Plans may
occur at different times with respect to different plans). To the extent
permitted under the Parent Benefits Plans, Parent shall cause each Parent
Benefit Plan in which employees of the Parent and its subsidiaries are eligible
to participate to take into account for purposes of eligibility and vesting
thereunder the service of such employees with Company and its subsidiaries to
the same extent such service was credited for such purposes by Company under
comparable benefit plans (but in no event shall such accounting for prior
service result in additional benefit accruals or amounts).
(b) If former or active employees of Company or any of its
subsidiaries become eligible to participate in a medical, dental or vision
benefits plan of Parent, Parent shall use commercially reasonable efforts to
cause each such plan to (i) waive any preexisting condition limitations to the
extent such conditions are covered under the applicable medical, dental or
vision benefits plans of Parent, (ii) honor under such plans any deductible,
co-payment and out-of-pocket expenses incurred by the employees and their
beneficiaries during the portion of the calendar year prior to such
participation and (iii) waive any waiting period limitation or evidence of
insurability requirement which would otherwise be applicable to such employee on
or after the Effective Time to the extent such employee had satisfied any
similar limitation or requirement under an analogous Company Employee Plan prior
to the Effective Time.
(c) If, in accordance with Section 5.8(c) of this Agreement, Company
is required to terminate its plan which is qualified under Section 401(k) of the
Code (the "Company 401k Plan"), the Parent hereby agrees that, subject to the
approval of the plan administrator and in accordance with the terms of the
Parent's tax-qualified 401(k) plan (the "Parent's 401(k) Plan"), Parent will use
commercially reasonable efforts to cause Parent's 401(k) Plan to accept
rollovers or direct rollovers of "eligible rollover distributions" within the
meaning of Section 402(c) of the Code made with respect to Company's employees
pursuant to the Company's 401(k) Plan by reason of the transactions contemplated
by this Agreement. Rollover amounts contributed to Parent's 401(k) Plan in
accordance with this Section 5.18(c) shall at all times be 100% vested and shall
be invested in accordance with the provisions of Parent's 401(k) Plan.
-47-
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
------------------------------------------------------------
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. This Agreement shall have been approved
---------------------
and adopted, and the Merger shall have been duly approved, by the requisite vote
under applicable law, by the stockholders of Company. The Share Issuance shall
have been approved by the requisite vote under applicable Nasdaq rules and
applicable law by the shareholders of Parent.
(b) Registration Statement Effective. The SEC shall have declared the
--------------------------------
S-4 effective. No stop order suspending the effectiveness of the S-4 or any part
thereof shall have been issued and no proceeding for that purpose, and no
similar proceeding in respect of the Joint Proxy Statement/Prospectus, shall
have been initiated or threatened in writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
-----------------
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all foreign
antitrust approvals required to be obtained prior to the Merger in connection
with the transactions contemplated hereby shall have been obtained.
(d) Tax Opinions. Parent and Company shall each have received written
------------
opinions from their respective tax counsel (Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, and Folely, Xxxx & Eliot LLP, respectively), in form
and substance reasonably satisfactory to them, to the effect that the Merger
will constitute a reorganization within the meaning of Section 368(a) of the
Code and such opinions shall not have been withdrawn. Each of the Company and
Parent agrees to make such reasonable representations as requested by such
counsel for the purpose of rendering such opinions.
(e) Nasdaq Listing. The Parent ADSs issuable to the stockholders of
--------------
Company pursuant to this Agreement and such other shares required to be reserved
for issuance in connection with the Merger shall have been authorized for
listing on Nasdaq upon official notice of issuance.
6.2 Additional Conditions to Obligations of Company. The obligation of
-----------------------------------------------
Company to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by Company:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Parent and Merger Sub contained in this Agreement (i) that are
qualified as to Material Adverse Effect
-48-
shall be true and correct in all respects as of the date of this Agreement and
as of immediately prior to the Effective Time (except to the extent such
representations and warranties shall refer to a specific date, in which case
such representations and warranties shall have been so true and correct in all
respects as of such date) with the same force and effect as if then made, (ii)
contained in Section 3.3, 3.4, 3.12, 3.13 and 3.14 shall be true and correct in
all material respects as of the date of this Agreement and as of immediately
prior to the Effective Time, and (iii) that are not qualified as to Material
Adverse Effect or referenced in clause (ii) shall be true and correct in all
respects as of the date of this Agreement and as of immediately prior to the
Effective Time (except to the extent such representations and warranties shall
have been made as of an earlier date, in which case such representations and
warranties shall have been true and correct in all respects as of such earlier
date) with the same force and effect as if then made, except that this clause
(iii) shall be deemed to be satisfied so long as any failures of such
representations and warranties to be true and correct, taken together, have not
had a Material Adverse Effect on Parent (it being understood that for purposes
of determining the accuracy of the representations and warranties referred to in
clauses (ii) and (iii) all qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded). Company shall have received a certificate with respect to the
foregoing signed on behalf of Parent by the Chief Executive Officer and Chief
Financial Officer of Parent.
(b) Agreements and Covenants. Parent and Merger Sub shall have in all
------------------------
material respects performed or complied with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and Company shall have received a certificate to such
effect signed on behalf of Parent by the Chief Executive Officer and Chief
Financial Officer of Parent.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The
-----------------------------------------------------------------
obligations of Parent and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Company contained in this Agreement (i) that are qualified as to
Material Adverse Effect shall be true and correct in all respects as of the date
of this Agreement and as of immediately prior to the Effective Time (except to
the extent such representations and warranties shall refer to a specific date,
in which case such representations and warranties shall have been so true and
correct in all respects as of such date) with the same force and effect as if
then made, (ii) contained in Section 2.3, 2.4, and 2.22 through 2.25 shall be
true and correct in all material respects as of the date of this Agreement and
as of immediately prior to the Effective Time, and (iii) that are not qualified
as to Material Adverse Effect or referenced in clause (ii) shall be true and
correct in all respects as of the date of this Agreement and as of immediately
prior to the Effective Time (except to the extent such representations and
warranties shall have been made as of an earlier date, in which case such
representations and warranties shall have been true and correct in all respects
as of such earlier date) with the same force and effect as if then made, except
that this clause (iii) shall be deemed to be satisfied so long as any failures
of such representations and warranties to be true and correct, taken
-49-
together, have not had a Material Adverse Effect on Company (it being understood
that for purposes of determining the accuracy of the representations and
warranties referred to in clauses (ii) and (iii) all qualifications based on the
word "material" or similar phrases contained in such representations and
warranties shall be disregarded). Parent shall have received a certificate with
respect to the foregoing signed on behalf of Company by the Chief Executive
Officer and the Chief Financial Officer of Company.
(b) Agreements and Covenants. Company shall have in all material
------------------------
respects performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer and the Chief Financial Officer
of Company.
(c) Consents. Company shall have obtained all consents, waivers and
--------
approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses or
leases set forth on Section 6.3(c) of the Parent Schedule.
(d) Irish Merger Act. Either (i) the Minister for Enterprise, Trade
----------------
and Employment of Ireland (the "Minister") shall state in writing that she does
not intend to make an order under Section 9 of the Irish Merger Act in relation
to the proposed Merger; (ii) if she makes an order subject to conditions, the
Parent shall have accepted the conditions to the proposed Merger set forth in
the order; or (iii) if no such order is made and the Minister does not state in
writing that she does not intend to make such order, the relevant period within
the meaning of Section 6 of the Irish Merger Act shall have elapsed.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
-----------
Effective Time, whether before or after the requisite approval of the
stockholders of Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Company or Parent if the Merger shall not have been
consummated by July 16, 2002 (the "Outside Date") for any reason; provided,
--------
however, that the right to terminate this Agreement under this Section 7.1(b)
-------
shall not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement;
(c) by either Company or Parent if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case having
the effect of permanently
-50-
restraining, enjoining or otherwise prohibiting the Merger, which order, decree,
ruling or other action is final and nonappealable;
(d) by either Company or Parent if (i) the approval of the
stockholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Company stockholders duly convened therefor or at any adjournment thereof or
(ii) the approval by the shareholders of Parent of the Share Issuance required
under applicable Nasdaq rules or applicable law shall not have been obtained by
reason of the failure to obtain the required vote at a meeting of Parent
stockholders duly convened therefor or at any adjournment thereof; provided,
--------
however, that the right to terminate this Agreement under this Section 7.1(d)
-------
shall not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure to obtain such stockholder
approval and such action or failure to act constitutes a breach of this
Agreement;
(e) by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; provided, that if such
--------
inaccuracy in Parent's representations and warranties or breach by Parent is
curable by Parent, then Company may not terminate this Agreement under this
Section 7.1(e) for thirty (30) days after delivery of written notice from
Company to Parent of such breach, provided Parent continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Company may not terminate this Agreement pursuant to this paragraph (e) if such
breach by Parent is cured during such thirty (30)-day period);
(f) by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of Company set forth in this Agreement, or if
any representation or warranty of Company shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; provided, that if such
--------
inaccuracy in Company's representations and warranties or breach by Company is
curable by Company, then Parent may not terminate this Agreement under this
Section 7.1(f) for thirty (30) days after delivery of written notice from Parent
to Company of such breach, provided Company continues to exercise commercially
reasonably efforts to cure such breach (it being understood that Parent may not
terminate this Agreement pursuant to this paragraph (f) such breach by Company
is cured during such thirty (30)-day period); or
(g) by Parent, if (i) the Board of Directors of Company withdraws,
modifies or changes its recommendation of this Agreement or the Merger in a
manner adverse to Parent or its shareholders, (ii) the Board of Directors of
Company shall have recommended to the stockholders of Company an Acquisition
Proposal, (iii) the Company fails to comply with Section 5.2 or Section 5.4 in
any material respect, (iv) an Acquisition Proposal shall have been announced or
otherwise become publicly known and the Board of Directors of Company shall have
(A) failed to recommend against
-51-
acceptance of such by Company's stockholders (including by taking no position,
or indicating its inability to take a position, with respect to the acceptance
by its stockholders of an Acquisition Proposal involving a tender offer or
exchange offer) or (B) failed to reconfirm its approval and recommendation of
this Agreement and the transactions contemplated hereby within ten business days
thereafter, or (v) the Board of Directors of Company resolves to take any of the
actions described above (each of the foregoing, a "Trigger Event").
7.2 Notice of Termination; Effect of Termination. Any termination of this
--------------------------------------------
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto
(or such later time as may be required by Section 7.1). In the event of the
termination of this Agreement as provided in Section 7.1, this Agreement shall
be of no further force or effect, except (i) as set forth in this Section 7.2,
Section 5.3(a), Section 7.3 and Article VIII, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any party
from liability for fraud in connection with, or any willful breach of, this
Agreement (it being understood that, for purposes of this Section 7.2, the
representations and warranties of Company and Parent in Sections 2 and 3 of this
Agreement, respectively, are made solely as of the date of this Agreement).
Payment of the fees described in Section 7.3(b) shall not be in lieu of damages,
if any, incurred in the event of breach of this Agreement.
7.3 Fees and Expenses.
-----------------
(a) General. Except as set forth in this Section 7.3, all fees and
-------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
-------- -------
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing of the Joint
Proxy Statement/Prospectus (including any preliminary materials related thereto)
and the S-4 (including financial statements and exhibits) and any amendments or
supplements thereto.
(b) Termination Fee.
---------------
(i) In the event that (A) Parent shall terminate this Agreement
pursuant to Section 7.1(g), (B) this Agreement shall be terminated pursuant to
Section 7.1(b), Section 7.1(d)(i) or Section 7.1(f) and (1) at or prior to such
termination, there shall exist or have been proposed an Acquisition Proposal
which has not been withdrawn prior to such termination and, solely with respect
to a termination pursuant to Section 7.1(d))(i), such Acquisition Proposal shall
have been publicly announced, and (2) within six months after such termination,
Company shall enter into a definitive agreement with respect to any Company
Acquisition (and such Company Acquisition is consummated regardless of whether
such consummation occurs during such six month period) or any Company
Acquisition shall be consummated, or (C) this Agreement shall be terminated
pursuant to Section 7.1(d)(i) and prior to or concurrent with the Company
Stockholders' Meeting or an adjournment thereof there shall have occurred a
Trigger Event, then, in the case of (A) or (C), promptly after such termination,
or in the case of (B), immediately prior to the consummation of such Company
Acquisition, Company shall pay to Parent an amount in cash equal to $12.0
million (the "Termination Fee"). Notwithstanding the foregoing, a Termination
Fee will not
-52-
be payable pursuant to a termination pursuant to Section 7.1(b) if (a) as of the
Outside Date (as such date may be extended pursuant to the terms of this
Agreement): (i) the conditions set forth in Section 6.2(a) or 6.2(b) shall have
not been satisfied or waived, (ii) the condition set forth in Section 6.1(e)
shall have not been satisfied, (iii) the shareholders of Parent shall have voted
against the Share Issuance at a meeting called for that purpose, or (iv)
Parent's legal counsel shall have not delivered to Parent the opinion referenced
in Section 6.1(d) and Company's legal counsel shall have delivered the opinion
referenced in Section 6.1(d) to Company; or (b) Company shall have sustained the
burden of proving, in a court of competent jurisdiction, that any of the
following resulted from the material breach by Parent of its obligations under
Sections 5.1, 5.2 and 5.15 of this Agreement (x) the S-4 shall have not been
declared effective as of the Outside Date (as such date may be extended pursuant
to the terms of this Agreement), (y) requisite waiting periods under the HSR Act
shall have not expired or terminated early and requisite foreign antitrust
approvals shall have not been obtained as of the Outside Date (as such date may
be extended pursuant to the terms of this Agreement), or (z) the Parent
Stockholders' Meeting shall have not been held as of the Outside Date (as such
date may be extended pursuant to the terms of this Agreement).
(ii) The Company acknowledges that the agreements contained in
this Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter into
this Agreement; accordingly, if the Company fails to pay in a timely manner the
amounts due pursuant to this Section 7.3(b) and, in order to obtain such
payment, Parent makes a claim that results in a judgment against the Company for
the amounts set forth in this Section 7.3(b), the Company shall pay to Parent
its costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amounts set forth in
this Section 7.3(b) at the prime rate of Bank of America N.A. in effect on the
date such payment was required to be made. For the purposes of this Agreement,
"Company Acquisition" shall mean any of the following transactions (other than
the transactions contemplated by this Agreement): (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 55% of the
aggregate equity interests in the surviving, resulting or acquiring entity of
such transaction, (ii) a sale or other disposition by the Company of assets
representing in excess of 45% of the aggregate fair market value of the
Company's business immediately prior to such sale or (iii) the acquisition by
any person or group (including by way of a tender offer or an exchange offer or
issuance by the Company), directly or indirectly, of beneficial ownership or a
right to acquire beneficial ownership of shares representing in excess of 45% of
the voting power of the then outstanding shares of capital stock of the Company.
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
---------
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent, Merger Sub and Company.
7.5 Extension; Waiver. At any time prior to the Effective Time, any party
-----------------
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties
-53-
made to such party contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. Delay in exercising any
right under this Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations and Warranties. The representations and
------------------------------------------
warranties of Company, Parent and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
SmartForce PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
-54-
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(b) if to Company, to:
Centra Software, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxx, Xx.
Telecopy No.: (000) 000-0000
8.3 Interpretation; Definitions.
---------------------------
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement:
(i) the term "knowledge" means with respect to a party hereto,
with respect to any matter in question, the actual knowledge of the executive
officers of such party after reasonable inquiry;
(ii) the term "Material Adverse Effect," when used in connection
with an entity, means any fact, change, event, development, violation,
inaccuracy, circumstance or effect (any such item, an "Effect"), individually or
when taken together with all other Effects that have occurred prior to the date
of determination of the occurrence of the Material Adverse Effect, that is or is
reasonably likely to be materially adverse to the business, assets (including
intangible assets),
-55-
capitalization, financial condition or results of operations of such entity
taken as a whole with its subsidiaries; provided, however, that, in no event
-------- -------
shall any of the following, alone or in combination, be deemed to constitute,
nor shall any of the following be taken into account in determining whether
there has been or will be, a Material Adverse Effect on any entity: (A) any
Effect resulting from the announcement or pendency of the Merger, (B) any change
in such entity's stock price or trading volume, in and of itself, (C) any Effect
that results from changes affecting any of the industries in which such entity
operates generally or the United States economy generally, or (D) any Effect
that results from changes affecting general worldwide economic or capital market
conditions;
(iii) the term "person" shall mean any individual, corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization, entity or Governmental Entity;
(iv) the term "Deposit Agreement" shall mean that certain
Deposit Agreement, dated as of April 13, 1995, as amended and restated as of May
22, 1998, among Parent, The Bank of New York, as Depositary, and the owners and
beneficial owners from time to time of American Depositary Receipts; and
(v) the term "Affiliate Deposit Agreement" shall mean that
certain Deposit Agreement, dated as of November 30, 1995, as amended and
restated as of May 22, 1998, among Parent, The Bank of New York, as Depositary,
and the owners and beneficial owners from time to time of Restricted American
Depositary Receipts.
8.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
-------------------------------------------
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedule and the
Parent Schedule (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) are not intended to confer upon any other
person any rights or remedies hereunder, except as specifically provided in
Section 5.11.
8.6 Severability. In the event that any provision of this Agreement, or
------------
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve,
-56-
to the extent possible, the economic, business and other purposes of such void
or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
------------------------------------
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
---------------------
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
----------
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Any purported assignment in
violation of this Section 8.10 shall be void.
*****
-57-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
SMARTFORCE PLC
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Chairman of the Board,
President and Chief Executive
Officer
------------------------------
ATLANTIC ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
-------------------------------
Title: President
------------------------------
CENTRA SOFTWARE, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
-------------------------------
Title: Chairman and CEO
------------------------------
EXHIBIT A-1
-----------
PERSONS TO SIGN VOTING AGREEMENTS
Xxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx X'Xxxxx
Xxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxxxxx
EXHIBIT A-2
-----------
FORM OF COMPANY VOTING AGREEMENT
THIS COMPANY VOTING AGREEMENT (this "Agreement") is made and entered into
---------
as of January __, 2002, by and between SmartForce PLC, a corporation organized
under the laws of the Republic of Ireland ("Parent"), and the undersigned
------
stockholder (the "Stockholder") of Centra Software, Inc., a Delaware corporation
-----------
(the "Company").
-------
RECITALS
--------
A. The Company and Parent have entered into an Agreement and Plan of Merger
and Reorganization (the "Reorganization Agreement"), which provides for the
------------------------
merger (the "Merger") of a wholly owned subsidiary of Parent with and into the
------
Company. Pursuant to the Merger, all outstanding capital stock of the Company
shall be converted into the right to receive American Depositary Shares of
Parent, as set forth in the Reorganization Agreement;
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such number
------------
of shares of the outstanding capital stock of the Company and shares subject to
outstanding options and warrants as is indicated on the signature page of this
Agreement; and
C. In consideration of the execution of the Reorganization Agreement by
Parent, Stockholder (solely in his or her capacity as such) agrees to vote the
Shares (as defined below) so as to facilitate consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
1. Certain Definitions. Capitalized terms not defined herein shall have the
-------------------
meanings ascribed to them in the Reorganization Agreement. For purposes of this
Agreement:
(a) "Expiration Date" shall mean the earlier to occur of (i) such date
---------------
and time as the Reorganization Agreement shall have been terminated pursuant to
Article VII thereof, or (ii) such date and time as the Merger shall become
effective in accordance with the terms and provisions of the Reorganization
Agreement.
(b) "Person" shall mean any (i) individual, (ii) corporation, limited
------
liability company, partnership or other entity, or (iii) governmental authority.
(c) "Shares" shall mean: (i) all securities of the Company (including
------
all shares of Company Common Stock and all options, warrants and other
rights to acquire shares of Company Common Stock) owned of record or
beneficially by Stockholder as of the date of this Agreement; and
(ii) all additional securities of the Company (including all additional shares
of Company Common Stock and all additional options, warrants and other rights to
acquire shares of Company Common Stock) of which Stockholder acquires ownership
during the period from the date of this Agreement through the Expiration Date;
provided that "Shares" shall not include any securities of Company sold pursuant
to a plan for trading securities adopted prior to the date hereof by Stockholder
designed to avail Stockholder of the affirmative defense provided by Rule 10b5-1
promulgated under the Exchange Act (a "Rule 10b5-1 Plan") or pursuant to a
----------------
margin agreement or similar agreement entered into by Stockholder prior to the
date hereof.
(d) Transfer. A Person shall be deemed to have effected a "Transfer"
--------
of a security if such person directly or indirectly: (i) sells, offers to sell,
makes any short sales of, pledges, encumbers, lends, hypothecates, enters into
any type of equity swap or hedging of, grants an option with respect to,
transfers or disposes of such security, any interest therein, or the economic
consequences of ownership of such security or (ii) enters into an agreement,
contract or commitment providing for the sale of, making any short sales of,
pledge of, lending of, encumbrance of, equity swap or hedging of, grant of an
option with respect to, transfer of or disposition of such security, any
interest therein or the economic consequences of ownership of such security,
other than any such actions pursuant to which such Person maintains all voting
rights with respect to such security.
2. Transfer of Shares.
------------------
(a) Transferee of Shares to be Bound by this Agreement. Stockholder
--------------------------------------------------
agrees that, during the period from the date of this Agreement through the
Expiration Date, Stockholder shall not cause or permit any Transfer (other than
a Transfer (i) pursuant to a Rule 10b5-1 Plan adopted prior to the date hereof
by Stockholder, (ii) pursuant to any margin agreement or similar agreement
entered into by Stockholder prior to the date hereof which Transfer does not,
when aggregated with all other Transfers after the date hereof and prior to the
Expiration Date pursuant to any margin agreement or similar agreement by other
directors and executive officers of Company, exceed 2.2% of the outstanding
number of shares of common stock of Company as of the date hereof), (iii) made
in accordance with the Reorganization Agreement, or (iv) specifically required
by court order) of any of the Shares to be effected unless each Person to which
any of such Shares, or any interest in any of such Shares, is or may be
transferred shall have executed a counterpart of this Agreement and a proxy in
the form attached hereto as Exhibit A (with such modifications as Parent may
---------
reasonably request) and delivered such executed counterpart of this Agreement
and the attached proxy to Parent.
(b) Transfer of Voting Rights. Stockholder agrees that, during the
-------------------------
period from the date of this Agreement through the Expiration Date, Stockholder
shall not deposit (or permit the deposit of) any Shares in a voting trust or
grant any proxy or enter into any voting agreement or similar agreement in
contravention of the obligations of Stockholder under this Agreement with
respect to any of the Shares, except as expressly provided in this Agreement or
as may be specifically required by court order.
(c) No Limitation on Discretion as Director. This Agreement is
---------------------------------------
intended solely to apply to the exercise by Stockholder of rights attaching to
ownership of the Shares, and nothing herein shall be deemed to apply to, or to
limit in any manner the discretion of Stockholder who is a director of
-2-
the Company with respect to, any action which may be taken or omitted by
Stockholder acting in Stockholder's fiduciary capacity as a director of the
Company.
3. Agreement to Vote Shares.
------------------------
(a) Agreement to Vote. Until the Expiration Date, at every meeting
-----------------
of the stockholders of the Company called, and at every adjournment thereof, and
on every action or approval by written consent of the stockholders of the
Company, Stockholder (in his or her capacity as such) shall cause the Shares to
be voted (i) to adopt and approve the Reorganization Agreement and approve the
Merger (the "Company Approval Matters"), (ii) in favor of any transaction
------------------------
contemplated by the Merger or the Reorganization Agreement and (iii) in favor of
any matter that could reasonably be expected to facilitate the Merger and
against any matter that is inconsistent with the consummation of the Merger and
other transactions contemplated by the Reorganization Agreement (including,
without limitation, against any Acquisition Proposal).
(b) No other Agreement. Prior to the Expiration Date, the
------------------
Stockholder shall not enter into any agreement or understanding with any Person
to vote or give instructions in any manner inconsistent with the terms of this
Section 3.
4. Irrevocable Proxy. Concurrently with the execution of this Agreement,
-----------------
Stockholder agrees to deliver to Parent a proxy in the form attached hereto as
Exhibit A (the "Proxy"), which shall be irrevocable to the fullest extent
--------- -----
permissible by law, with respect to the Shares.
5. Representations and Warranties of the Stockholder. Stockholder (i) is
-------------------------------------------------
the beneficial owner of the shares of Company Common Stock indicated on the
final page of this Agreement; (ii) on and as of the date hereof, does not
beneficially own any securities of the Company other than the shares of Company
Common Stock and options and warrants to purchase shares of Common Stock of the
Company indicated on the final page of this Agreement; and (iii) has full power
and authority to make, enter into and carry out the terms of this Agreement and
the Proxy (including but not limited to the voting of the Shares in favor of any
transaction contemplated by the Merger or the Reorganization Agreement).
6. Additional Documents; Consents. Stockholder (solely in his or her
------------------------------
capacity as such) hereby covenants and agrees to (a) execute and deliver any
additional documents necessary or desirable, in the reasonable opinion of
Parent, to carry out the intent of this Agreement, and (b) obtain any consents
or approvals necessary or desirable, in the reasonable opinion of Parent, to
carry out the intent of this Agreement.
7. Termination. This Agreement shall terminate and shall have no further
-----------
force or effect as of the Expiration Date.
8. Miscellaneous.
-------------
(a) Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the
-3-
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
(b) Binding Effect and Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without prior written consent of the other.
(c) Amendments and Modification. This Agreement may not be modified,
---------------------------
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(d) Specific Performance; Injunctive Relief. The parties hereto
---------------------------------------
acknowledge that Parent shall be irreparably harmed and that there shall be no
adequate remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Parent upon any such violation, Parent
shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Parent at law
or in equity.
(e) Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Parent: SmartForce PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
With copies to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Telecopy No: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
and
-4-
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
One Market
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy No: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
If to Stockholder: To the address for notice set forth on the signature
page hereof.
(f) Governing Law. This Agreement shall be governed by the laws of
-------------
the State of Delaware, without reference to rules of conflicts of law.
(g) Entire Agreement. This Agreement and the Proxy contain the
----------------
entire understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
(h) Effect of Headings. The section headings are for convenience
------------------
only and shall not affect the construction or interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
[The remainder of this page has been intentionally left blank]
-5-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written. The undersigned is executing
this Agreement only in his capacity as a stockholder. Such signature in no way
affects his obligations as an officer or director of the Company.
SMARTFORCE PLC STOCKHOLDER
By:_________________________________ By:____ _________________________________
Signature of Authorized Signatory Signature
Name:_______________________________ Name:
____________________________________
Title:______________________________ Title:
__________________________________
_________________________________________
_________________________________________
Print Address
_________________________________________
Telephone
_________________________________________
Facsimile No.
Shares beneficially owned:
__________ shares of Company Common Stock
__________ shares of Company Common Stock
issuable upon exercise outstanding
options, warrants or other rights
[Signature Page to Voting Agreement]
Exhibit A
IRREVOCABLE PROXY
The undersigned stockholder of Centra Software, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints _____________________ and ____________________________ and each
of them, as the sole and exclusive attorneys and proxies of the undersigned,
with full power of substitution and resubstitution, to vote and exercise all
voting and related rights (to the full extent that the undersigned is entitled
to do so) with respect to all of the shares of capital stock of the Company that
now are or hereafter may be beneficially owned by the undersigned, and any and
all other shares or securities of the Company issued or issuable in respect
thereof on or after the date hereof (collectively, the "Shares") in accordance
------
with the terms of this Proxy. The Shares beneficially owned by the undersigned
stockholder of the Company as of the date of this Proxy are listed on the final
page of this Proxy. Upon the undersigned's execution of this Proxy, any and all
prior proxies given by the undersigned with respect to any Shares are hereby
revoked and the undersigned agrees not to grant any subsequent proxies with
respect to the Shares until after the Expiration Date (as defined below).
This Proxy is irrevocable (to the fullest extent permitted by law), is
coupled with an interest and is granted pursuant to that certain Company Voting
Agreement of even date herewith by and among SmartForce PLC, a corporation
organized under the laws of the Republic of Ireland ("Parent"), and the
------
undersigned stockholder (the "Voting Agreement"), and is granted in
----------------
consideration of Parent entering into that certain Agreement and Plan of Merger
and Reorganization (the "Reorganization Agreement"), by and among Parent, a
------------------------
wholly owned subsidiary of Parent ("Merger Sub") and the Company. The
----------
Reorganization Agreement provides for the merger of Merger Sub with and into the
Company in accordance with its terms (the "Merger"). As used herein, the term
------
"Expiration Date" shall mean the earlier to occur of (i) such date and time as
---------------
the Reorganization Agreement shall have been validly terminated pursuant to
Article VII thereof or (ii) such date and time as the Merger shall become
effective in accordance with the terms and provisions of the Reorganization
Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting, consent and similar rights of the undersigned with respect
to the Shares (including, without limitation, the power to execute and deliver
written consents) at every annual, special or adjourned meeting of stockholders
of the Company and in every written consent in lieu of such meeting (i) in favor
of the Reorganization Agreement and to approve the Merger (the "Company Approval
----------------
Matters"), (ii) in favor of any transaction contemplated by the Merger or the
-------
Reorganization Agreement and (iii) in favor of any matter that could reasonably
be expected to facilitate the Merger and against any matter that is inconsistent
with the consummation of the Merger and other transactions contemplated by the
Reorganization Agreement (including, without limitation, against any Acquisition
Proposal).
The attorneys and proxies named above may not exercise this Proxy on any
other matter except as provided above. The undersigned stockholder may vote the
Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
This Proxy is irrevocable (to the fullest extent permitted by law). This
Proxy shall terminate, and be of no further force and effect, automatically upon
the Expiration Date; provided that, solely with respect to (i) Shares sold prior
to the Expiration Date pursuant to a plan for trading securities (a "Trading
Plan") adopted prior to the date hereof by the undersigned stockholder designed
to avail the undersigned stockholder of the affirmative defense provided by Rule
10b5-1 promulgated under the Exchange Act ("Rule 10b5-1 Shares") or (ii) Shares
sold prior to the Expiration Date pursuant to any margin agreement or similar
agreement entered into prior to the date hereof by the undersigned stockholder
("Margin Shares"), this Proxy shall terminate and be of no further force and
effect with respect to such Rule 10b5-1 Shares or Margin Shares immediately
prior to the sale of such Rule 10b5-1 Shares or Margin Shares pursuant to any
Trading Plan or margin agreement or similar agreement, respectively. The
undersigned is executing this Proxy only in his capacity as a stockholder. Such
signature in no way affects his obligations as an officer or director of the
Company
Dated: January __, 2002
Signature of Stockholder:_______________________
Print Name of Stockholder:______________________
Shares beneficially owned:
________ shares of the Company Common Stock
________ shares of the Company Common Stock
issuable upon exercise of outstanding
options, warrants or other rights.
[Signature Page to Irrevocable Proxy]
EXHIBIT B-1
-----------
PERSONS TO SIGN VOTING AGREEMENTS
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxx X. XxXxxxxxx
Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxxxx XxXxxxxx
Xxxxx Xxxxxxxxx
Xxxxxxxxx von-Prondzynski
EXHIBIT B-2
-----------
FORM OF PARENT VOTING AGREEMENT
THIS PARENT VOTING AGREEMENT (this "Agreement") is made and entered into
---------
as of January __, 2002, by and between Centra Software, Inc., a Delaware
corporation (the "Company") and the undersigned stockholder (the "Stockholder")
------- -----------
of SmartForce PLC, a corporation organized under the laws of the Republic of
Ireland ("Parent").
------
RECITALS
--------
A. The Company and Parent have entered into an Agreement and Plan of
Merger and Reorganization (the "Reorganization Agreement"), which provides for
------------------------
the merger (the "Merger") of a wholly owned subsidiary of Parent with and into
------
the Company. Pursuant to the Merger, all outstanding capital stock of the
Company shall be converted into the right to receive American Depositary Shares
of Parent, as set forth in the Reorganization Agreement;
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such
------------
number of shares of the outstanding capital stock of the Parent and shares
subject to outstanding options and warrants as is indicated on the signature
page of this Agreement; and
C. In consideration of the execution of the Reorganization Agreement by
Company, Stockholder (in his or her capacity as such) agrees to vote the Shares
(as defined below) so as to facilitate consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
1. Certain Definitions. Capitalized terms not defined herein shall have
-------------------
the meanings ascribed to them in the Reorganization Agreement. For purposes of
this Agreement:
(a) "Expiration Date" shall mean the earlier to occur of (i) such
---------------
date and time as the Reorganization Agreement shall have been terminated
pursuant to Article VII thereof, or (ii) such date and time as the Merger shall
become effective in accordance with the terms and provisions of the
Reorganization Agreement.
(b) "Person" shall mean any (i) individual, (ii) corporation,
------
limited liability company, partnership or other entity, or (iii) governmental
authority.
(c) "Shares" shall mean: (i) all securities of the Parent (including
------
all Parent Ordinary Shares, Parent American Depositary Shares ("ADSs") and all
----
options, warrants and other rights to acquire Parent Ordinary Shares or ADSs)
owned of record or beneficially by Stockholder as of the date
of this Agreement; and (ii) all additional securities of the Parent (including
all additional Parent Ordinary Shares or ADSs and all additional options,
warrants and other rights to acquire Parent Ordinary Shares or ADSs) of which
Stockholder acquires ownership during the period from the date of this Agreement
through the Expiration Date; provided that "Shares" shall not include any
securities of Parent sold pursuant to a plan for trading securities adopted
prior to the date hereof by Stockholder designed to avail Stockholder of the
affirmative defense provided by Rule 10b5-1 promulgated under the Exchange Act
(a "Rule 10b5-1 Plan") or pursuant to a margin agreement or similar agreement
----------------
entered into by Stockholder prior to the date hereof.
(d) Transfer. A Person shall be deemed to have effected a "Transfer"
-------- --------
of a security if such person directly or indirectly: (i) sells, offers to sell,
makes any short sales of, pledges, encumbers, lends, hypothecates, enters into
any type of equity swap or hedging of, grants an option with respect to,
transfers or disposes of such security, any interest therein, or the economic
consequences of ownership of such security or (ii) enters into an agreement,
contract or commitment providing for the sale of, making any short sales of,
pledge of, lending of, encumbrance of, equity swap or hedging of, grant of an
option with respect to, transfer of or disposition of such security, any
interest therein or the economic consequences of ownership of such security,
other than any such actions pursuant to which such Person maintains all voting
rights with respect to such security.
2. Transfer of Shares.
------------------
(a) Transferee of Shares to be Bound by this Agreement. Stockholder
--------------------------------------------------
agrees that, during the period from the date of this Agreement through the
Expiration Date, Stockholder shall not cause or permit any Transfer (other than
a Transfer (i) pursuant to a Rule 10b5-1 Plan adopted prior to the date hereof
by Stockholder, (ii) pursuant to any margin agreement or similar agreement
entered into by Stockholder prior to the date hereof which Transfer does not,
when aggregated with all other Transfers after the date hereof and prior to the
Expiration Date pursuant to any margin agreement or similar agreement by other
directors and executive officers of Parent, exceed 2.2% of the outstanding
number of ADSs of Parent as of the date hereof), or (iii) specifically required
by court order) of any of the Shares to be effected unless each Person to which
any of such Shares, or any interest in any of such Shares, is or may be
transferred shall have executed a counterpart of this Agreement and a proxy in
the form attached hereto as Exhibit A (with such modifications as Company may
---------
reasonably request) and delivered such executed counterpart of this Agreement
and the attached proxy to Company.
(b) Transfer of Voting Rights. Stockholder agrees that, during the
-------------------------
period from the date of this Agreement through the Expiration Date, Stockholder
shall not deposit (or permit the deposit of) any Shares in a voting trust or
grant any proxy or enter into any voting agreement or similar agreement in
contravention of the obligations of Stockholder under this Agreement with
respect to any of the Shares, except as expressly provided in this Agreement or
as may be specifically required by court order.
(c) No Limitation on Discretion as Director. This Agreement is
---------------------------------------
intended solely to apply to the exercise by Stockholder of rights attaching to
ownership of the Shares, and nothing herein shall be deemed to apply to, or to
limit in any manner the discretion of Stockholder who is a director of
the Parent with respect to, any action which may be taken or omitted by
Stockholder acting in Stockholder's fiduciary capacity as a director of the
Parent.
3. Agreement to Vote Shares.
------------------------
(a) Agreement to Vote. Until the Expiration Date, at every meeting
-----------------
of the stockholders of the Parent called, and at every adjournment thereof, and
on every action or approval by written consent, proxy or otherwise of the
stockholders of the Parent, Stockholder (solely in his or her capacity as such)
shall cause the Shares to be voted (i) to approve the issuance of the Parent
ADSs pursuant to the Merger (the "Parent Approval Matters"), (ii) in favor of
-----------------------
any transaction contemplated by the Merger or the Reorganization and (iii) in
favor of any matter that could reasonably be expected to facilitate the Merger.
(b) No other Agreement. Prior to the Expiration Date, the
------------------
Stockholder shall not enter into any agreement or understanding with any Person
to vote or give instructions in any manner inconsistent with the terms of this
Section 3.
4. Irrevocable Proxy. Concurrently with the execution of this Agreement,
-----------------
Stockholder agrees to deliver to Company a proxy in the form attached hereto as
Exhibit A (the "Proxy"), which shall be irrevocable to the fullest extent
--------- -----
permissible by law, with respect to the Shares.
5. Representations and Warranties of the Stockholder. Stockholder (i) is
-------------------------------------------------
the beneficial owner of the Parent Ordinary Shares or ADSs indicated on the
final page of this Agreement; (ii) on and as of the date hereof, does not
beneficially own any securities of the Company other than the Parent Ordinary
Shares or ADSs and options and warrants to purchase Parent Ordinary Shares or
ADSs indicated on the final page of this Agreement; and (iii) has full power and
authority to make, enter into and carry out the terms of this Agreement and the
Proxy (including but not limited to the voting of the Shares in favor of any
transaction contemplated by the Merger or the Reorganization Agreement).
6. Additional Documents; Consents. Stockholder (solely in his or her
------------------------------
capacity as such) hereby covenants and agrees to (a) execute and deliver any
additional documents necessary or desirable, in the reasonable opinion of
Company, to carry out the intent of this Agreement, and (b) obtain any consents
or approvals necessary or desirable, in the reasonable opinion of Company, to
carry out the intent of this Agreement.
7. Termination. This Agreement shall terminate and shall have no
-----------
further force or effect as of the Expiration Date.
8. Miscellaneous.
-------------
(a) Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
(b) Binding Effect and Assignment. This Agreement and all of the provisions
-----------------------------
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of the
parties without prior written consent of the other.
(c) Amendments and Modification. This Agreement may not be modified,
---------------------------
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(d) Specific Performance; Injunctive Relief. The parties hereto acknowledge
---------------------------------------
that Company shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Company upon any such violation, Company
shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Company at law
or in equity.
(e) Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Company: Centra Software, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxx Xxxxxxxx
With copies to: Xxxxx Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxxx Xxxxx
If to Stockholder: To the address for notice set forth on the signature
page hereof.
(f) Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Delaware, without reference to rules of conflicts of law. If, however,
the laws of the Republic of Ireland require that Irish law be applied to this
Agreement, then in any such case the laws of the Republic of Ireland shall
govern.
-4-
(g) Entire Agreement. This Agreement and the Proxy contain the entire
----------------
understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
(h) Effect of Headings. The section headings are for convenience only and
------------------
shall not affect the construction or interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
[The remainder of this page has been intentionally left blank]
-5-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written. The undersigned is executing
this Agreement only in his capacity as a stockholder. Such signature in no way
affects his obligations as an officer or director of the Parent.
CENTRA SOFTWARE, INC. STOCKHOLDER
By:____________________________________ By:_____ ____________________________
Signature of Authorized signatory Signature
Name:__________________________________ Name:___ ____________________________
Title:_________________________________ Title:__ ____________________________
_____________________________________
________ ____________________________
Print Address
________ ____________________________
________ ____________________________
Telephone
________ ____________________________
Facsimile No.
Shares beneficially owned:
________ __ Parent ADS or Ordinary
Shares
________ __ Parent ADS or Ordinary
Shares issuable upon exercise of
outstanding options, warrants or
other rights
[Signature Page to Voting Agreement]
Exhibit A
IRREVOCABLE PROXY
The undersigned stockholder of SmartForce PLC, a public limited company
organized under the laws of the Republic of Ireland (the "Parent"), hereby
------
irrevocably (to the fullest extent permitted by law) appoints
____________________________ and _____________________________________ and each
of them, as the sole and exclusive attorneys and proxies of the undersigned,
with full power of substitution and resubstitution, to vote and exercise all
voting and related rights (to the full extent that the undersigned is entitled
to do so) with respect to all of the Parent Ordinary Shares or American
Depositary Shares ("ADSs") that now are or hereafter may be beneficially owned
by the undersigned, and any and all other shares or securities of the Parent
issued or issuable in respect thereof on or after the date hereof (collectively,
the "Shares") in accordance with the terms of this Proxy. The Shares
------
beneficially owned by the undersigned stockholder of the Parent as of the date
of this Proxy are listed on the final page of this Proxy. Upon the undersigned's
execution of this Proxy, any and all prior proxies given by the undersigned with
respect to any Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the Expiration
Date (as defined below).
This Proxy is irrevocable (to the fullest extent permitted by law), is
coupled with an interest and is granted pursuant to that certain Parent Voting
Agreement of even date herewith by and among Centra Software, Inc., a Delaware
corporation ("Company"), and the undersigned stockholder (the "Voting
------
Agreement"), and is granted in consideration of Company entering into that
---------
certain Agreement and Plan of Merger and Reorganization (the "Reorganization
--------------
Agreement"), by and among Parent, a wholly owned subsidiary of Parent ("Merger
--------- ------
Sub") and the Company. The Reorganization Agreement provides for the merger of
---
Merger Sub with and into the Company in accordance with its terms (the
"Merger"). As used herein, the term "Expiration Date" shall mean the earlier to
------ ---------------
occur of (i) such date and time as the Reorganization Agreement shall have been
validly terminated pursuant to Article VII thereof or (ii) such date and time as
the Merger shall become effective in accordance with the terms and provisions of
the Reorganization Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting, consent and similar rights of the undersigned with respect
to the Shares (including, without limitation, the power to execute and deliver
written consents) at every annual, special or adjourned meeting of stockholders
of the Parent and in every written consent in lieu of such meeting (i) in favor
of the Parent Approval Matters (as defined in the Voting Agreement), (ii) in
favor of any transaction contemplated by the Merger or the Reorganization and
(iii) in favor of any matter that could reasonably be expected to facilitate the
Merger.
The attorneys and proxies named above may not exercise this Proxy on any
other matter except as provided above. The undersigned stockholder may vote the
Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
This Proxy is irrevocable (to the fullest extent permitted by law). This
Proxy shall terminate, and be of no further force and effect, automatically upon
the Expiration Date; provided that, solely with respect to Shares sold prior to
the Expiration Date pursuant to a plan for trading securities (a "Trading Plan")
adopted prior to the date hereof by the undersigned stockholder designed to
avail the undersigned stockholder of the affirmative defense provided by Rule
10b5-1 promulgated under the Exchange Act ("Rule 10b5-1 Shares") or (ii) Shares
sold prior to the Expiration Date pursuant to any margin agreement or similar
agreement entered into prior to the date hereof by the undersigned stockholder
("Margin Shares"), this Proxy shall terminate and be of no further force and
effect with respect to such Rule 10b5-1 Shares or Margin Shares immediately
prior to the sale of such Rule 10b5-1 Shares or Margin Shares pursuant to any
Trading Plan or margin agreement or similar agreement, respectively. The
undersigned is executing this Proxy only in his capacity as a stockholder. Such
signature in no way affects his obligations as an officer or director of the
Parent.
Dated: January __, 2002
Signature of Stockholder:____________________
Print Name of Stockholder:___________________
Shares beneficially owned:___________________
________ __ Parent ADS or Ordinary Shares
________ __ Parent ADS or Ordinary Shares
issuable upon exercise of outstanding
options, warrants or other rights.
[Signature Page to Irrevocable Proxy]
EXHIBIT C
---------
FORM OF AFFILIATE AGREEMENT
THIS AFFILIATE AGREEMENT (this "Agreement") is made and entered into as of
---------
January _, 2002, by and between SmartForce PLC, a public limited company
organized under the laws of the Republic of Ireland ("Parent"), and the
------
undersigned stockholder who may be deemed an affiliate ("Affiliate") of Centra
---------
Software, Inc., a Delaware corporation ("Company"). Capitalized terms used but
-------
not otherwise defined herein shall have the meanings ascribed to them in the
Reorganization Agreement (as defined below).
RECITALS
--------
A. The Company, Merger Sub (as defined below) and Parent have entered into
an Agreement and Plan of Merger and Reorganization (the "Reorganization
--------------
Agreement") which provides for the merger (the "Merger") of a wholly-owned
---------
subsidiary of Parent ("Merger Sub") with and into the Company. Pursuant to the
----------
Merger, all outstanding capital stock of the Company (the "Company Capital
---------------
Stock") shall be converted into the right to receive American Depositary Shares
-----
of Parent as described in the Reorganization Agreement;
B. Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of the Company, as the term "affiliate" is used for purposes of Rule
145 ("Rule 145") of the Rules and Regulations promulgated under the Securities
--------
Act of 1933, as amended (the "Securities Act") by the Securities and Exchange
--------------
Commission (the "SEC"); and
---
C. The execution and delivery of this Agreement by Affiliate is a material
inducement to Parent to enter into the Reorganization Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
1. Acknowledgments by Affiliate. Affiliate acknowledges and understands
----------------------------
that the representations, warranties and covenants by Affiliate set forth herein
shall be relied upon by Parent, the Company and their respective affiliates and
counsel, and that substantial losses and damages may be incurred by these
persons if Affiliate's representations, warranties or covenants are breached.
Affiliate has carefully read this Agreement and the Reorganization Agreement and
has discussed the requirements of this Agreement with Affiliate's professional
advisors, who are qualified to advise Affiliate with regard to such matters.
2. Beneficial Ownership of Company Capital Stock. The Affiliate is the
---------------------------------------------
sole record and beneficial owner of the number of shares of Company Capital
Stock set forth next to its name on the signature page hereto (the "Shares").
------
Except for Shares subject to a margin agreement or similar agreement, there are
no options, warrants, calls, rights, commitments or agreements of any character,
written or oral, to which Affiliate is party or by which it is bound obligating
Affiliate to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any Shares or obligating Affiliate to
grant or enter into any such option, warrant, call, right, commitment or
agreement. The Shares constitute all shares of Company Capital Stock owned,
beneficially or of record, by the Affiliate. The Shares are not subject to
preemptive rights created by any agreement to which Affiliate is party.
Affiliate has not engaged in any sale or other transfer of the Shares in
contemplation of the Merger.
3. Compliance with Rule 145 and the Securities Act.
-----------------------------------------------
(a) Affiliate has been advised that (i) the issuance of Parent ADSs in
connection with the Merger is expected to be effected pursuant to a registration
statement on Form S-4, and the resale of such shares shall be subject to
restrictions set forth in Rule 145, and (ii) Affiliate may be deemed to be an
affiliate of the Company as defined by paragraphs (c) and (d) of Rule 145.
Affiliate accordingly agrees not to sell, transfer or otherwise dispose of any
American Depositary Shares ("Parent ADSs") issued to Affiliate in the Merger
unless (i) such sale, transfer or other disposition is made in conformity with
the requirements of Rule 145(d)(1) and, to the extent required by the terms of
the Deposit Agreement (as defined below), Rule 144(h), or (ii) such sale,
transfer or other disposition is made pursuant to an effective registration
statement under the Securities Act or an appropriate exemption from
registration, or (iii) Affiliate delivers to Parent a written opinion of
counsel, reasonably acceptable to Parent in form and substance, that such sale,
transfer or other disposition is otherwise exempt from registration under the
Securities Act. Affiliate acknowledges that the Parent ADSs issued to Affiliate
in the Merger will be deposited in a restricted ADR (as defined below) facility
pursuant to that certain Deposit Agreement, dated as of November 30, 1995, as
amended and restated as of May 22, 1998, among Parent, The Bank of New York and
all owners and beneficial owners from time to time of restricted ADRs issued
thereunder (the "Deposit Agreement") and that, pursuant to the Deposit
Agreement, among other things, except as provided in clause (ii) of the
preceding sentence, sales of Parent ADSs issued to Affiliate in the Merger may
only be effected pursuant to Rule 145(d)(1). In addition to any other
requirements of this Agreement, Affiliate agrees to comply with the requirements
of Rule 144(h) with respect to the sale, transfer or other disposition of Parent
ADSs acquired by Affiliate in the Merger to the extent required by the terms of
the Deposit Agreement.
(b) Parent shall give stop transfer instructions to its transfer agent
with respect to any Parent ADSs received by Affiliate pursuant to the Merger and
there shall be placed on the American Depositary Receipt ("ADR") representing
---
such Parent ADSs, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT APPLIES AND MAY
ONLY BE TRANSFERRED IN CONFORMITY WITH RULE 145(d)(1) OR PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL,
REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT SUCH
-2-
TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED."
The legend set forth above shall be removed (by delivery of a substitute ADR
without such legend) and Parent shall so instruct its transfer agent, if
Affiliate delivers to Parent (i) written evidence satisfactory to Parent that
the shares have been sold in compliance with Rule 145(d)(1) (in which case, the
substitute ADR shall be issued in the name of the transferee), or (ii) an
opinion of counsel, in form and substance reasonably satisfactory to Parent, to
the effect that public sale of the shares by the holder thereof is no longer
subject to Rule 145.
(c) Affiliate understands that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a registration
statement, Parent reserves the right to put the following legend on the ADRs
issued to his transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FROM A
PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145
PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE
BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES" ACT) OR IN ACCORDANCE WITH A WRITTEN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE,
THAT SUCH SALE, PLEDGE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT."
4. No Obligation to Register. Affiliate understands that Parent is under
-------------------------
no obligation to register the sale, transfer or other disposition of the Parent
ADSs by or on Affiliate's behalf under the Act or, to take any other action
necessary in order to make compliance with an exemption from such registration
available.
5. Termination. This Agreement shall automatically terminate and shall be
-----------
of no further force and effect in the event of the termination of the
Reorganization Agreement pursuant to Article VII of the Reorganization
Agreement.
6. Miscellaneous.
-------------
(a) Waiver; Severability. No waiver by any party hereto of any
--------------------
condition or of any breach of any provision of this Agreement shall be effective
unless in writing and signed by each party hereto. In the event that any
provision of this Agreement, or the application of any such provision to any
person, entity or set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this Agreement,
and the application of such
-3-
provision to persons, entities or circumstances other than those as to which it
is determined to be invalid, unlawful, void or unenforceable, shall not be
impaired or otherwise affected and shall continue to be valid and enforceable to
the fullest extent permitted by law.
(b) Binding Effect and Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without prior written consent of the other party hereto.
(c) Amendments and Modification. This Agreement may not be modified,
---------------------------
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(d) Injunctive Relief. Each of the parties acknowledge that (i) the
-----------------
covenants and the restrictions contained in this Agreement are necessary,
fundamental, and required for the protection of Parent and the Company; (ii)
such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a special, unique, and
extraordinary value; and (iii) a breach of any such covenants or any other
provision of this Agreement shall result in irreparable harm and damages to
Parent and the Company which cannot be adequately compensated by a monetary
award. Accordingly, it is expressly agreed that in addition to all other
remedies available at law or in equity, Parent and the Company shall be entitled
to the immediate remedy of a temporary restraining order, preliminary
injunction, or such other form of injunctive or equitable relief as may be used
by any court of competent jurisdiction to restrain or enjoin any of the parties
hereto from breaching any such covenant or provision or to specifically enforce
the provisions hereof.
(e) Governing Law. This Agreement shall be governed by and construed,
-------------
interpreted and enforced in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of law provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Delaware.
(f) Entire Agreement. This Agreement sets forth the entire
----------------
understanding of Affiliate and Parent relating to the subject matter hereof and
supersedes all prior agreements and understandings between Affiliate and Parent
relating to the subject matter hereof.
(g) Attorneys' Fees. In the event of any legal actions or proceeding
---------------
to enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
(h) Further Assurances. Affiliate shall execute and/or cause to be
------------------
delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
-4-
(i) Third Party Reliance. Counsel to Parent shall be entitled to rely
--------------------
upon this Affiliate Agreement.
(j) Survival. The representations, warranties, covenants and other
--------
provisions contained in this Agreement shall survive the Merger.
(k) Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Parent: SmartForce PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copies to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to Affiliate: To the address for notice set forth on the signature
page hereof.
(l) Counterparts. This Agreement shall be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
-5-
IN WITNESS WHEREOF, the parties have caused this Affiliate Agreement to be
duly executed on the day and year first above written.
SMARTFORCE PLC AFFILIATE
By:___________________________________ By:___________________________________
Name:_________________________________ Affiliate's Address for Notice:
Title:________________________________ _______ ______________________________
_______ ______________________________
_______ ______________________________
Shares beneficially owned:
_______ shares of Company Common Stock
_______ shares of Company Common Stock
issuable upon exercise of
outstanding options, warrants
or other rights
_______ shares of Parent ADS
[Signature Page to Affiliate Agreement]
