Exhibit 10.1
EXPENSES REIMBURSEMENT
&
NON-SOLICITATION AGREEMENT
by and among
SPK ACQUISITIONS LIMITED
and
IONA TECHNOLOGIES PLC
Dated as of June 25, 2008
 

 

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THIS AGREEMENT is made on June 25, 2008
BETWEEN:
SPK Acquisitions Limited
having its registered office at
Earlsfort Centre, Earlsfort Terrace,
Dublin 2, Ireland
(hereinafter referred to as “Buyer”)
- and -
IONA Technologies plc
having its registered office at
The IONA Building, Shelbourne Road,
Ballsbridge, Dublin 4, Ireland
(hereinafter referred to as “IONA”)
WHEREAS:

A.   This Agreement is the Expenses Reimbursement Agreement provided for in the
Implementation Agreement dated as of the date hereof between Buyer, IONA, and
with respect to Section 7.4 and Section 7.7 only, Progress Software Corporation
(the “Implementation Agreement”) relating to certain expenses incurred and to be
incurred by Buyer in connection with the Proposal (as defined below).   B.  
This Agreement sets out the agreement between the parties as to the
reimbursement of expenses incurred and to be incurred by Buyer in relation to
the Proposal, the non-solicitation of other offers for the share capital of IONA
and certain other matters.

NOW IT IS HEREBY AGREED as follows:

1.   Definitions   1.1   In this Agreement (including in the Recitals), the
following expressions shall have the following meaning:       “Act”, the Irish
Takeover Panel Act 1997;       “Acting in Concert”, shall have the meaning given
to that term in Regulation 8(2) of the 2006 Regulations;       “Associate”,
shall have the meaning given to that term in the Rules;

 

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    “Board”, the directors of IONA;       “Buyer”, SPK Acquisitions Limited;    
  “Competing Offer”, any offer or potential offer by a party other than Buyer
(or an Associate of Buyer or a party Acting in Concert with Buyer);      
“Exclusivity Period”, shall have the meaning given to that term in Clause 4.1.1;
      “Group”, IONA and its Subsidiaries;       “Implementation Agreement”,
shall have the meaning given to that term in the Recitals;       “IONA”, IONA
Technologies PLC;       “IONA Representatives”, shall have the meaning given to
that term in Clause 4.1;       “IONA’s Shareholders”, shall have the meaning
given to that term in the Implementation Agreement;       “Irish Courts”, shall
have meaning given to that term in the Implementation Agreement;       “Lehman”,
Lehman Brothers Inc.;       “Ordinary Share”, an ordinary share of €0.0025 par
value per share in the capital of IONA;       “Panel”, the Irish Takeover Panel;
      “Proposal”, the proposal to acquire the entire issued and to be issued
share capital of IONA by means of the Scheme, at a price of not less than
US$4.05 per Ordinary Share as set out in the Implementation Agreement and the
Rule 2.5 Announcement;       “Rule 2.5 Announcement”, shall have the meaning
given to that term in the Implementation Agreement;       “Rules”, the Irish
Takeover Panel Act, 1997, Takeover Rules, 2007 and the Irish Takeover Panel Act,
1997, Substantial Acquisition Rules, 2007;       “Scheme”, the proposed
acquisition (by means of a scheme of arrangement under section 201 of the
Companies Act 1963) by Buyer of the entire issued and to be issued share capital
of IONA at the Scheme Price;

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    “Scheme Price”, the price per Ordinary Share offered pursuant to the
Proposal (including any price offered as part of a revised Offer);      
“Subsidiaries”, shall have the meaning given to that term in the Implementation
Agreement;       “Takeover Offer”, shall have the meaning ascribed to the term
takeover in the Act and shall be deemed to include a takeover effected by a
Takeover Scheme or by a Takeover Offer;       “Takeover Rules”, shall have the
meaning given to that term in the Implementation Agreement;       “Takeover
Scheme”, shall have the meaning ascribed to that term in the Rules;       “Third
Party Announcement”, means an announcement (whether by IONA or any other person
other than Buyer or an Associate of Buyer or a party Acting in Concert with
Buyer) of a Competing Offer or that any such third party is considering, or has
approached or will approach IONA or is in talks with IONA that may or may not
lead to, a Competing Offer;       “Third Party Payments”, the payment(s)
provided for in Clause 3.1; and       “2006 Regulations”, the European
Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006.   1.2   In
this Agreement, the expression “offer” shall include:

  1.2.1   an offer, scheme of arrangement, re-capitalisation or other
transaction of any nature whatsoever made by or on behalf of a party (other than
Buyer or any party Acting in Concert with Buyer) which, if completed, would
result in such third party or its associates holding more than 50% of the voting
or other equity securities of IONA or any material Subsidiary of IONA; or    
1.2.2   a sale of assets which, if completed, would result in the sale or
transfer to such third party or its Associates of more than 50% of the
consolidated net assets of the Group.

1.3   In this Agreement reference to the word “person” is deemed to include
references to natural persons, firms, partnerships, companies, corporations,
associations, bodies corporate, trusts and investment funds (in each case
whether or not having a separate legal personality).

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2.   Pre-condition       This Agreement shall not have effect unless and until
the Rule 2.5 Announcement has been issued.   3.   Reimbursement   3.1   Subject
to the provisions of Clause 3.3, in consideration of Buyer expending the time
and expense to make the Proposal and engaging advisers to assist in the process,
preparing the Offer and taking all further steps necessary to make the Rule 2.5
Announcement and making the Proposal itself, IONA agrees to pay to Buyer an
amount equal to all specific quantifiable and documented third party costs and
expenses incurred in connection with the Proposal including but not limited to:

  3.1.1   exploratory work carried out in contemplation of and in connection
with the Proposal;     3.1.2   legal, financial and commercial due diligence;
and     3.1.3   the costs associated with engaging advisers to assist in the
process;

    provided that the gross amount payable to Buyer (inclusive of irrecoverable
VAT only) pursuant to this Agreement shall not, in any event, exceed such sum as
is equal to 1% of the aggregate value of the number of shares in IONA which are
the subject of the Proposal multiplied by the Scheme Price.   3.2   Subject to
the terms of Clause 3.3, the obligation of IONA to make the Third Party Payments
shall apply only if, following the making of the Rule 2.5 Announcement:

  3.2.1   the Board, or any one or more of them, withdraw or adversely modify
their recommendation of the Scheme or recommend (or indicate or announce an
intention to recommend) any Competing Offer; or     3.2.2   IONA withdraws the
Scheme or materially alters any term of the Scheme or takes or omits to take any
action in breach of the Implementation Agreement the result of which is to
prevent IONA’s Shareholders from voting at any meetings to approve the Scheme;
or     3.2.3   if the Scheme subsequently lapses or (with the consent of IONA)
is withdrawn or does not become effective and, prior to this occurring, a Third
Party Announcement is made in relation to a Competing Offer and that Competing
Offer

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      subsequently becomes effective or unconditional within 12 months of the
Third Party Announcement.

3.3   No Third Party Payments are payable:

  3.3.1   under Clause 3.2.3, if the Proposal is withdrawn or lapses and, at the
time the Proposal is withdrawn or has lapsed, there has been no Third Party
Announcement of a Competing Offer; or     3.3.2   under Clause 3.2, if following
the making of the Rule 2.5 Announcement, either (i) a document incorporating the
terms of the Scheme is not posted within 28 days of the date of the issue of the
Rule 2.5 Announcement solely as a result of the actions or omissions of Buyer in
breach of the Implementation Agreement or (ii) the Implementation Agreement is
validly terminated by IONA other than pursuant to Section 10.1 of the
Implementation Agreement.

3.4   Any Third Party Payments due to be paid in accordance with this Clause 3
shall be paid (without any set off, withholding or other deduction) no later
than seven calendar days after the submission to IONA of a written request for
such payment with written evidence (including written invoices and written
supporting documentation) vouching that expenditure. Buyer shall be entitled to
charge value added tax on any amounts payable hereunder to the extent that it is
required to do so.   3.5   Where the Third Party Payments are payable to Buyer
pursuant to Clause 3.2.3, IONA shall, subject to Buyer providing supporting
documentation vouching expenditure in accordance with Clause 3.4, procure that
all such Third Party Payments are approved for payment by IONA prior to that
Competing Offer becoming effective or unconditional such that such Third Party
Payments will be transferred to Buyer on such Competing Offer becoming effective
or unconditional.   4.   Non-Solicitation   4.1   Subject to any actions which
IONA is required to take so as to comply with the requirements of the Rules
and/or with the fiduciary duties of the Board, IONA agrees that neither it nor
any member of the Group nor any of their respective directors, officers,
employees or advisers (collectively, the “IONA Representatives”) shall:

  4.1.1   directly or indirectly, solicit, initiate or knowingly facilitate any
discussions with, or enquiries or proposals from, any person other than Buyer in
respect of or in

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      connection with the acquisition of control (as defined in the Takeover
Rules) of IONA, whether by means of an offer or scheme of arrangement or
otherwise, or the disposal of any interest in a material part of the business of
IONA or any subsidiary of IONA, or a disposal or acquisition of material assets
by IONA or its subsidiaries, or a share exchange (any matter described in the
preceding portion of this clause 4.1.1, a “Third Party Transaction Proposal”)
during the period commencing on the date of this Agreement and ending on the
earlier of (i) December 15, 2008 and (ii) date on which the Scheme is withdrawn
by Buyer or lapses or becomes effective (the “Exclusivity Period”);     4.1.2  
directly or indirectly, respond to enquiries or proposals from, or engage in
negotiations with, any person other than Buyer in respect of or in connection
with any Third Party Transaction Proposal during the Exclusivity Period;    
4.1.3   continue pursuing any discussions existing at the date of this Agreement
with any other person, or enter into or continue, facilitate or encourage any
discussions or commitments or agreements in respect of or in connection with any
Third Party Transaction Proposal during the Exclusivity Period;     4.1.4  
enter into any expenses reimbursement or similar agreement or any inducement fee
agreement of any nature with any person other than Buyer during the Exclusivity
Period; or     4.1.5   make available any information relating to IONA and/or
its assets and/or its business and/or any Subsidiary of IONA in respect of or in
connection with a Third Party Transaction Proposal other than to Buyer.

4.2   During the Exclusivity Period, IONA further agrees that, subject to any
provision to the contrary in the Takeover Rules applicable to the Scheme, IONA
shall promptly advise Buyer orally with written confirmation to follow within 24
hours, of any Competing Offer or any request for non public information in
connection with any Competing Offer, or any inquiry with respect to, or that
would reasonably be expected to lead to any Competing Offer, the material terms
and conditions of any such Competing Offer or inquiry and identity of the person
making any such Competing Offer or inquiry. IONA shall (i) keep Buyer fully
informed, on a current basis, of the status and material terms and conditions
(including any material change to such terms) of any such Competing Offer or
inquiry, (ii) provide to Buyer as soon as practicable after receipt or delivery
thereof copies of any proposals received by IONA with respect to such Competing
Offer and any draft or final version of any acquisition agreement relating to
such Competing Offer and (iii) if Buyer shall make a counterproposal,

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    consider in good faith the terms of such counterproposal. Contemporaneously
with providing any information to a third party in connection with any such
Competing Offer or inquiry, IONA shall furnish a copy of such information to
Buyer unless such information has been previously provided or furnished to Buyer
by IONA or an IONA Representative.

For the avoidance of doubt and notwithstanding any other term of this Agreement,
nothing shall preclude, restrict or hinder the Board or the directors of any
Group company from considering and engaging with any unsolicited Takeover
Offer(s) or unsolicited proposals with a view to a Takeover Offer being made, in
each case to the extent (and only to the extent) required by the Takeover Rules
or by any decision or direction of the Panel.

5.   Other Matters   5.1   The parties agree that the provisions contained in
Clause 3 and Clause 4 of this Agreement shall not come into effect until such
time as they have been approved by the Panel in accordance with the Takeover
Rules.   5.2   IONA confirms that it has discussed the terms of this Agreement
with its Rule 3 adviser, Lehman, and that Lehman has sent a letter to the Panel
confirming that the terms of this Agreement are in the best interest of IONA’s
Shareholders.   5.3   The invalidity, illegality or unenforceability of a
provision of this Agreement does not affect or impair the continuance in force
of the remainder of this Agreement.   5.4   This Agreement shall be construed in
accordance with and governed by the laws of Ireland. The parties submit to the
exclusive jurisdiction of the Irish Courts in relation to any disputes arising
out of this Agreement.   5.5   This Agreement may be executed in any number of
counterparts, and by the parties on separate counterparts, but shall not be
effective until each party has executed at least one counterpart. Each
counterpart shall constitute an original of this Agreement, but all the
counterparts shall together constitute one and the same instrument.

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IN WITNESS whereof the parties have executed these presents the day and year
above written.

         
PRESENT when the common seal
       
of SPK ACQUISITIONS LIMITED
       
was affixed hereto:
      /s/ Norman R. Robertson 
 
       
 
      Director
     [seal affixed]
      Norman R. Robertson 
 
       
 
      Print name
 
      /s/ Peter M. Moloney 

       
 
      Director/Secretary
 
      Peter M. Moloney 
 
       
 
      Print name
 
       
PRESENT when the common seal
       
of IONA TECHNOLOGIES PLC
       
was affixed hereto:
      /s/ Peter M. Zotto 
 
       
 
      Director
 
      Peter M. Zotto 
 
       
 
      Print name
     [seal affixed] 
      /s/ Christopher Mirabile 
 
       
 
      Director/Secretary
 
      Christopher Mirabile 
 
       
 
      Print name