Exhibit 1
SKILLSOFT OPTION AGREEMENT
THIS SKILLSOFT OPTION AGREEMENT (this "Agreement") is made and entered
into as of June 10, 2002 among SkillSoft Corporation, a Delaware corporation
("SkillSoft"), and SmartForce Public Limited Company, a public limited company
organized under the laws of the Republic of Ireland ("SmartForce"). Capitalized
terms used but not otherwise defined herein will have the meanings ascribed to
them in the Merger Agreement (as defined below).
RECITALS
A. SmartForce, the Transitory Subsidiary, as defined below, and SkillSoft
have entered into an Agreement and Plan of Merger dated June 10, 2002 (the
"Merger Agreement") which provides for the merger (the "Merger") of a
wholly-owned subsidiary of SmartForce ("Transitory Subsidiary") with and into
SkillSoft. Pursuant to the Merger, all outstanding capital stock of SkillSoft
will be converted into the right to receive American Depository Shares of
SmartForce ("SmartForce ADSs") evidenced by American Depository Receipts of
SmartForce ("SmartForce ADRs").
B. As a condition to SkillSoft's willingness to enter into the Merger
Agreement, SkillSoft has requested that SmartForce agree, and SmartForce has so
agreed, to grant to SkillSoft an option to acquire SmartForce ADSs, upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option. Subject to the terms and conditions of this Agreement,
SmartForce hereby grants to SkillSoft an irrevocable option (the "Option") to
subscribe for up to 11,351,738 SmartForce ADSs (as adjusted as set forth herein)
(the "Option Shares"), in the manner set forth below by paying cash at a price
of $5.32 per share (the "Exercise Price").
2. Exercise of Option.
(a) Subject to the terms and conditions of this Agreement, the
Option may be exercised by SkillSoft, in whole or in part, at any time or from
time to time (i) after the termination of the Merger Agreement under the
conditions described in clauses (ii) or (iii) of Section 8.3(e) of the Merger
Agreement or (ii) immediately prior to the occurrence of any event causing the
termination fee to become payable pursuant to clause (i) of Section 8.3(e) of
the Merger Agreement (any of the conditions described in this sentence being
referred to herein as an "Exercise Event"). In the event SkillSoft wishes to
exercise the Option, SkillSoft will deliver to SmartForce a written notice (each
an "Exercise Notice") specifying the total number of Option Shares it wishes to
subscribe for. Each closing of a purchase of Option Shares (a "Closing") will
occur on a date and at a time prior to the termination of the Option designated
by SkillSoft in an Exercise Notice delivered at least two business days prior to
the date of such Closing, which Closing will be held at the principal offices of
SkillSoft.
(b) The Option will terminate upon the earliest of (i) the Effective
Time, (ii) twelve months following the date on which the Merger Agreement is
terminated pursuant to Section 8.1(d) thereof under the circumstances under
which the termination fee may become payable under clause (i) of Section 8.3(e),
if no event causing such termination fee to become payable pursuant to clause
(i) of Section 8.3(e) of the Merger Agreement occurs during such twelve-month
period, (iii) twelve months following the date on which the termination fee is
paid pursuant to Section 8.3(e) of the Merger Agreement and (iv) the date on
which the Merger Agreement is otherwise terminated; provided, however, that if
the Option cannot be exercised by reason of any applicable government order or
because the waiting period related to the issuance of the Option Shares under
the HSR Act or the Irish Mergers Act will not have expired or been terminated,
then the Option will not terminate until the tenth business day after such
impediment to exercise has been removed or has become final and not subject to
appeal.
3. Conditions to Closing. The obligation of SmartForce to issue Option
Shares to SkillSoft hereunder is subject to the conditions that (A) any waiting
period under the HSR Act or the Irish Mergers Act applicable to the issuance of
the Option Shares hereunder will have expired or been terminated; (B) all
material consents, approvals, orders or authorizations of, or registrations,
declarations or filings with, any Federal, state, local or foreign
administrative agency or commission or other Federal, state, local or foreign
governmental authority or instrumentality, if any, required in connection with
the issuance of the Option Shares hereunder will have been obtained or made, as
the case may be; and (C) no preliminary or permanent injunction or other order
by any court of competent jurisdiction prohibiting or otherwise restraining such
issuance will be in effect. It is understood and agreed that at any time during
which the Option is exercisable, the parties will each use commercially
reasonable efforts, to satisfy all conditions to Closing, so that a Closing may
take place as promptly as practicable.
4. Closing. At any Closing, SmartForce will deliver to SkillSoft
SmartForce ADRs representing the number of SmartForce ADSs designated by
SkillSoft in its Exercise Notice, such SmartForce ADRs to be registered in the
name of SkillSoft and to bear the legend set forth in Section 10 hereof, against
delivery of payment by SkillSoft to SmartForce of the Exercise Price for
SmartForce ADSs so designated and being purchased by delivery of immediately
available funds.
5. Representations and Warranties of SmartForce. SmartForce represents and
warrants to SkillSoft that (A) SmartForce is a public limited liability company
duly organized, validly existing and in good standing under the laws of the
Republic of Ireland and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder; (B) the execution and
delivery of this Agreement by SmartForce and consummation by SmartForce of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of SmartForce and no other corporate proceedings on
the part of SmartForce are necessary to authorize this Agreement or any of the
transactions contemplated hereby; (C) this Agreement has been duly executed and
delivered by SmartForce and constitutes a legal, valid and binding obligation of
SmartForce and, assuming this
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Agreement constitutes a legal, valid and binding obligation of SkillSoft, is
enforceable against SmartForce in accordance with its terms subject to the
Bankruptcy and Equity Exception; (D) except for any filings required under the
HSR Act or the Irish Mergers Act, SmartForce has taken all necessary corporate
and other action to authorize and reserve for issuance and to permit it to issue
upon exercise of the Option, and at all times from the date hereof until the
termination of the Option will have reserved for issuance, a sufficient number
of unissued SmartForce Ordinary Shares and SmartForce ADSs for SkillSoft to
exercise the Option in full and will take all necessary corporate or other
action to authorize and reserve for issuance all additional SmartForce ADSs and
SmartForce Ordinary Shares underlying such SmartForce ADSs or other securities
which may be issuable pursuant to Section 9 upon exercise of the Option, all of
which, upon their issuance and delivery in accordance with the terms of this
Agreement, will be validly issued and fully paid; (E) upon delivery of
SmartForce ADRs evidencing SmartForce ADSs and any other securities to SkillSoft
upon exercise of the Option, SkillSoft will acquire such SmartForce ADSs or
other securities free and clear of all material claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever, excluding
those imposed by SkillSoft and by applicable securities laws; (F) the execution
and delivery of this Agreement by SmartForce does not, and the performance of
this Agreement by SmartForce will not, (i) conflict with or violate SmartForce
Charter Documents or equivalent organizational documents of any of SmartForce's
Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to SmartForce or any of its Subsidiaries or by
which its or any of their respective properties is 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 SmartForce'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 SmartForce 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 SmartForce or any of its Subsidiaries is a party or by which SmartForce
or any of its Subsidiaries or any of their respective properties are bound or
affected; and (G) the execution and delivery of this Agreement by SmartForce
does not, and the performance of this Agreement by SmartForce will not, require
any consent, approval, authorization or permit of, or filing with, or
notification to, any Governmental Entity except pursuant to the HSR Act or the
Irish Mergers Act.
6. Representations and Warranties of SkillSoft. SkillSoft represents
and warrants to SmartForce that (A) SkillSoft is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder; (B) the execution and delivery of this
Agreement by SkillSoft and consummation by SkillSoft of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of SkillSoft and no other corporate proceedings on the part of
SkillSoft are necessary to authorize this Agreement or any of the transactions
contemplated hereby; (C) this Agreement has been duly executed and delivered by
SkillSoft and constitutes a legal, valid and binding obligation of SkillSoft
and, assuming this Agreement constitutes a legal, valid and binding obligation
of SmartForce, is enforceable against SkillSoft in accordance with its terms
subject to the Bankruptcy and Equity Exception; (D) except for any filings
required under the HSR Act or the Irish Mergers Act, SkillSoft has taken all
necessary corporate and other action to permit it to
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exercise the Option; (E) the execution and delivery of this Agreement by
SkillSoft does not, and the performance of this Agreement by SkillSoft will not,
(i) conflict with or violate the organizational documents of SkillSoft or any of
its Subsidiaries, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to SkillSoft or any of its Subsidiaries or
by which its or any of their respective properties is 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 SkillSoft'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 SkillSoft 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 SkillSoft or any of its Subsidiaries is a party or by which SkillSoft
or any of its Subsidiaries or its or any of their respective properties are
bound or affected; (F) the execution and delivery of this Agreement by SkillSoft
does not, and the performance of this Agreement by SkillSoft will not, require
any consent, approval, authorization or permit of, or filing with, or
notification to, any Governmental Entity except pursuant to the HSR Act or the
Irish Mergers Act; and (G) SkillSoft is an "accredited investor" within the
meaning of Rule 501 under the Securities Act and the Option and any Option
Shares that SkillSoft may hereafter purchase are being purchased by SkillSoft
for its own account, for investment and not with a view to the distribution or
resale thereof, except in compliance with the Securities Act and applicable
state securities and blue sky laws. SkillSoft has sufficient knowledge and
experience in investing in securities similar to the Option and to the Option
Shares so as to be able to evaluate the risks and merits of any investment in
the Option and in the Option Shares and is able financially to bear the risks
thereof, including a complete loss of its investment.
7. Certain Rights.
(a) SkillSoft Put. At the request of and upon notice by SkillSoft
(the "Put Notice"), at any time during the period during which the Option is
exercisable pursuant to Section 2 (the "Purchase Period"), SmartForce (or any
successor entity thereof) will purchase from SkillSoft all or any portion of the
Option, to the extent not previously exercised, at the price which equals the
difference between the Market/Tender Offer Price (as defined below) for
SmartForce ADSs as of the date SkillSoft gives notice of its intent to exercise
its rights under this Section 7(a) and the Exercise Price, multiplied by the
number of SmartForce ADSs purchasable pursuant to the Option. The "Market/Tender
Offer Price" shall mean the higher of (A) the highest price per share of
SmartForce ADSs offered to be paid by a person pursuant to any Acquisition
Proposal with respect to SmartForce which was made after the date of this
Agreement and on or prior to the delivery of the Put Notice and not terminated
or withdrawn as of the date of delivery of the Put Notice and (B) the average
closing sale price of SmartForce ADSs on the Nasdaq National Market during the
20 trading days ending on and including the trading day immediately preceding
such date. For purposes of determining the highest price offered pursuant to any
Acquisition Proposal which involves consideration other than cash, the value of
such consideration will be equal to the higher of (x) if securities of the same
class of the proponent as such consideration are traded on any national
securities exchange or by any registered securities association, a value based
on the closing sale price or asked price for such securities on their principal
trading market on such date and (y) the value ascribed to such
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consideration by the proponent of such Acquisition Proposal, or if no such value
is ascribed, a value determined in good faith by the Board of Directors of
SmartForce.
(b) Payment and Redelivery of Option. In the event SkillSoft
exercises its rights under Section 7(a) by delivery of a Put Notice, SmartForce
will, within five business days after SkillSoft delivers such Put Notice, pay
the required amount to SkillSoft in immediately available funds and SkillSoft
will surrender to SmartForce all or such portion of the Option with respect to
which the Put Notice relates and SmartForce shall, upon receipt of the Option or
any portion of the Option, immediately terminate such Option or portion of such
Option so surrendered.
8. Registration Rights.
(a) During the period beginning on the date of the termination of
the Merger Agreement in accordance with its terms and until such date as of
which all Option Shares issued to SkillSoft may be sold pursuant to Rule 144(k)
of the Securities Act (the "Registration Period"), SkillSoft (sometimes referred
to herein as the "Holder") may by written notice (a "Registration Notice") to
SmartForce (the "Registrant") request the Registrant to register under the
Securities Act all or any part of the shares acquired by the Holder pursuant to
this Agreement (such shares requested to be registered, the "Registrable
Securities") in order to permit the sale or other disposition of any or all of
the Registrable Securities that have been acquired by or are issuable to Holder
upon exercise of the Option in accordance with the intended method of sale or
other disposition stated by Holder, including a "shelf" registration statement
under Rule 415 under the Securities Act or any successor provision.
The Registrant will use commercially reasonable efforts to effect, as
promptly as practicable, the registration under the Securities Act of the
Registrable Securities requested to be registered in the Registration Notice (a
"Demand Registration Statement") and to keep such registration statement
effective for a period up to 180 calendar days from the day such registration
statement first becomes effective to permit the Holder to effect such sale or
other disposition; provided, however, that the Holder will not be entitled to
more than an aggregate of four effective Demand Registration Statements
hereunder. The obligations of the Registrant hereunder to file a Demand
Registration Statement and to maintain its effectiveness may be suspended for up
to 90 calendar days in the aggregate if the Board of Directors of the Registrant
shall have determined, in its good faith judgment, that the filing of such
Demand Registration Statement or the maintenance of its effectiveness would
require premature disclosure of material nonpublic information that would
materially and adversely affect the Registrant or otherwise materially interfere
with or adversely affect any pending or proposed offering of securities of the
Registrant or any other material transaction involving the Registrant. The
Registrant will use commercially reasonable efforts to cause any Registrable
Securities registered pursuant to this Section 8 to be qualified for sale under
the securities or blue sky laws of such jurisdictions as the Holder may
reasonably request and will continue such registration or qualification in
effect in such jurisdictions; provided, however, that the Registrant will not be
required to qualify to do business in, or consent to general service of process
in, any jurisdiction by reason of this provision. If, during the Registration
Period, the Registrant shall propose to register under the Securities Act the
offering, sale and delivery of SmartForce ADSs for cash pursuant to a firm
commitment underwriting, it shall, in addition to the Registrant's other
obligations under this
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Section 8, allow the Holder the right to participate in such registration for
its Registrable Securities (a "Piggy-back Registration") provided that the
Holder participates in the underwriting, and such participation will not affect
the obligation of the Registrant to effect Demand Registration Statements for
Holder under this Section 8; provided that, if the managing underwriters of such
offering advise the Registrant in writing that in their opinion the number of
SmartForce ADSs requested to be included in such registration exceeds the number
which can be sold in such offering, the Registrant may reduce or eliminate the
shares requested to be included therein by Holder pro rata based on the number
of shares intended to be included therein by other shareholders of the
Registrant. The Registrant shall not be required to effect more than two
Piggy-back Registrations at the request of the Holder pursuant to this Section
8. In connection with any offering, sale and delivery of SmartForce ADSs
pursuant to a registration statement effected pursuant to this Section 8, the
Registrant and the Holder shall provide each other and each underwriter of the
offering with customary representations, warranties and covenants, including
covenants of indemnification and contribution, and opinions of counsel. The
registration rights under this Section 8 shall not apply to any shares acquired
upon exercise of the Option to the extent such shares may be sold pursuant to
Rule 144(k) under the Securities Act.
(b) The registration rights set forth in this Section 8 are subject
to the condition that the Holder will provide the Registrant with such
information with respect to the Holder's Registrable Securities, the plan for
distribution thereof and such other information with respect to the Holder as,
in the reasonable judgment of counsel for the Registrant, is necessary to enable
the Registrant to include in a registration statement all material facts
required to be disclosed with respect to a registration thereunder.
(c) A registration effected under this Section 8 will be effected at
the Registrant's expense, except for underwriting discounts and commissions and
expenses of the Holder's counsel, and the Registrant will provide to the
underwriters such documentation (including certificates, opinions of counsel and
"comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the Holder and the Registrant agree to
enter into an underwriting agreement reasonably acceptable to each such party,
in form and substance customary for transactions of this type with the
underwriters participating in such offering.
(d) The Registrant will indemnify the Holder, each of its directors
and officers and each person who controls the Holder within the meaning of
Section 15 of the Securities Act, with respect to any registration,
qualification or compliance which has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus or offering circular, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Registrant of any rule or regulation promulgated under
the Securities Act applicable to the Registrant in connection with any such
registration, qualification or compliance, and the Registrant will reimburse the
Holder and, each of its directors and officers and each person who controls the
Holder within the meaning of
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Section 15 of the Securities Act, any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action; provided, that the Registrant will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made (i) in reliance upon and
in conformity with written information furnished to the Registrant by the Holder
or director or officer or controlling person of the Holder or (ii) in a
preliminary prospectus (or in a prospectus that was subsequently amended or
supplemented) if a copy of the final prospectus (or amendment or supplement)
filed with the Securities and Exchange Commission ("SEC") was not furnished to
the person asserting the claim, loss, damage, liability or expense at or prior
to the time such action is required by the Securities Act, and if such final
prospectus (or amendment or supplement) cured the untrue statement, alleged
untrue statement, omission or alleged omission giving rise to the claim, loss,
damage, liability or expense.
(i) The Holder will indemnify the Registrant, each of its
directors and officers, each person who controls the Registrant within the
meaning of Section 15 of the Securities Act, and each other seller of securities
covered by such registration statement against all claims, expenses, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus or
offering circular or any amendment or supplement thereto, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made not misleading, or any violation by the Holder of any rule
or regulation promulgated under the Securities Act applicable to the Holder in
connection with any such registration, qualification or compliance, and the
Holder will reimburse the Registrant, such directors, officers or control
persons or such other selling shareholders for any legal or any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus or offering circular or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Registrant by the Holder or any director, officer or control person of the
Holder for use therein; provided, that in no event will any indemnity under this
Section 8(e) exceed the gross proceeds of the offering received by the Holder.
(ii) Each party entitled to indemnification under this Section
8(e) (the "Indemnified Party") will give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and will
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided, that counsel for the Indemnifying
Party, who will conduct the defense of such claim or litigation, will be
approved by the Indemnified Party (whose approval will not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party will pay such
expense if representation of the Indemnified Party by counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential materially
differing interests between the Indemnified Party and any other party
represented by
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such counsel in such proceeding, and provided further, however, that the failure
of any Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its obligations under this Section 8(e) except to the
extent that the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action. Unless the Indemnified Party
consents in writing (which consent shall not be unreasonably withheld), no
Indemnifying Party, in the defense of any such claim or litigation, will consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party will be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which will not be unreasonably withheld).
9. Adjustment Upon Changes in Capitalization. In the event of any change
in SmartForce Ordinary Shares or SmartForce ADSs by reason of share dividends,
share splits, reverse share splits, mergers (other than the Merger),
recapitalizations, combinations, exchanges of shares and the like, the type and
number of shares or securities subject to the Option and the Exercise Price will
be adjusted appropriately, and proper provision will be made in the agreements
governing such transaction so that SkillSoft will receive, upon exercise of the
Option, the number and class of shares or other securities or property that
SkillSoft would have received in respect of SmartForce ADSs if the Option had
been exercised immediately prior to such event or the record date therefor, as
applicable.
10. Restrictive Legends. Each SmartForce ADR or other certificate
representing Option Shares issued to SkillSoft hereunder will include a legend
in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER, AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN
THE OPTION AGREEMENT DATED AS OF JUNE 10, 2002, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER.
It is understood and agreed that the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such reference if such Option Shares have been
sold pursuant to a registration statement under the Securities Act, such Option
Shares have been sold in reliance on and in accordance with Rule 144 under the
Securities Act or Holder has delivered to Registrant a copy of a letter from the
staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Registrant and its counsel, to the effect that such legend is
not required for purposes of the Securities Act.
11. Listing and HSR or Irish Mergers Act Filing. SmartForce, upon the
request of SkillSoft, will promptly file an application or notice to list the
SmartForce ADSs to be acquired
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upon exercise of the Option for quotation on the Nasdaq National Market and will
use commercially reasonable efforts to obtain approval or effectiveness of such
listing as soon as practicable. Promptly after the date hereof, each of the
parties hereto will promptly file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice and any applicable
Irish governmental authority all required premerger notification and report
forms and other documents and exhibits required to be filed under the HSR Act or
the Irish Mergers Act to permit the acquisition of SmartForce ADSs subject to
the Option at the earliest possible date.
12. Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto and their respective
successors and permitted assigns any rights or remedies of any nature whatsoever
by reason of this Agreement. SmartForce ADRs representing SmartForce ADSs sold
in a registered public offering pursuant to Section 8 will not be required to
bear the legend set forth in Section 10.
13. Specific Performance. The parties hereto recognize and agree that if
for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party hereto agrees that in addition to
other remedies the other party hereto will be entitled to an injunction
restraining any violation or threatened violation of the provisions of this
Agreement or the right to enforce any of the covenants or agreements set forth
herein by specific performance. In the event that any action will be brought in
equity to enforce the provisions of this Agreement, neither party hereto will
allege, and each party hereto hereby waives the defense, that there is an
adequate remedy at law.
14. Entire Agreement. This Agreement, the Merger Agreement and any other
agreements referred to in the Merger Agreement constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof.
15. Further Assurances. Each party hereto will execute and deliver all
such further documents and instruments and take all such further action as the
other party may reasonably deem necessary in order to consummate the
transactions contemplated hereby.
16. Validity. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of the other provisions
of this Agreement, which will remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto will negotiate
in good faith and will execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
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17. Notices. All notices and other communications hereunder will be in
writing and will be deemed given (a) on the date of delivery if delivered
personally or (b) on the date of confirmation of receipt of transmission by
telecopy or telefacsimile or by commercial delivery service, to the parties in
the manner set forth in the Merger Agreement.
18. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State, without regard to any conflict
of law rules.
19. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement, including taxes and duties arising
from the actions taken pursuant to this Agreement, will be paid by the party
incurring such expenses.
20. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
21. Assignment. Neither of the parties hereto may sell, transfer, assign
or otherwise dispose of any of its rights or obligations under this Agreement or
the Option created hereunder to any other person, without the express written
consent of the other party, except that the rights and obligations hereunder
will inure to the benefit of and be binding upon any successor of a party
hereto.
22. Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed to be an original, but both of which, taken together, will
constitute one and the same instrument.
23. Profit Limitation.
(a) Notwithstanding any other provision in this Agreement, in no
event shall SkillSoft's Total Profit (as defined below) exceed the amount of the
fee set forth in Section 8.3(e) of the Merger Agreement (the "Maximum Profit")
and, if SkillSoft's Total Profit otherwise would exceed the Maximum Profit,
SkillSoft, at its sole discretion shall either (i) reduce the number of Option
Shares subject to the Option, (ii) pay cash to SmartForce, or (iii) any
combination of the foregoing, so that SkillSoft's actually realized Total Profit
shall not exceed the Maximum Profit after taking into account the foregoing
action.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i)
the aggregate amount (before taxes) of (A) any excess of (x) the net cash
amounts or fair market value of any property received by SkillSoft pursuant to a
sale of Option Shares (or securities into which such shares are converted or
exchanged) as determined in good faith by the Board of Directors of SmartForce
on the date of the receipt of such property by SkillSoft over (y) SkillSoft's
aggregate purchase price for such Option Shares (or other securities), plus (B)
any amounts received by SkillSoft on the repurchase of the Option by SmartForce
pursuant to Section 7, plus (C) any termination fee paid by SmartForce and
received by SkillSoft pursuant to
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the Merger Agreement, minus (ii) the amounts of any cash previously paid by
SkillSoft to SmartForce pursuant to this Section 23.
(c) The provisions of this Section 23 shall survive any termination
or cancellation of the Option under the terms of this Agreement or otherwise.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
SKILLSOFT CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
SMARTFORCE PUBLIC LIMITED COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and CEO
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