EXHIBIT 3
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as
of September 23, 2001, between Illuminet Holdings, Inc., a Delaware corporation
("Company"), and VeriSign, Inc., a Delaware corporation ("Parent").
RECITALS
A. Concurrently with the execution and delivery of this Agreement, Company,
Parent and Illinois Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Parent ("Merger Sub"), are entering into an Agreement and
Plan of Merger (the "Merger Agreement"), that provides, among other things, that
upon the terms and subject to the conditions thereof, for the merger of Merger
Sub and Company (the "Merger"). Capitalized terms used in this Agreement but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
B. As a condition to Parent's willingness to enter into the Merger
Agreement, Parent has required that Company agree, and Company has agreed, to
grant to Parent an option to acquire shares of Company Common Stock ("Company
Shares"), upon the terms and subject to the conditions set forth herein.
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 agree as follows:
1. Grant of Option. Company hereby grants to Parent an irrevocable option
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(the "Option"), exercisable following the occurrence of an Exercise Event (as
defined in Section 2(a)), to acquire up to a number of Company Shares equal to
19.9% of the Company Shares issued and outstanding as of the date upon which an
Exercise Notice (as defined in Section 2(b) below) shall have been delivered
(the "Option Shares"), in the manner set forth below by paying cash at a price
of $35.62 per share (the "Exercise Price"). All references in this Agreement to
Company Shares issued to Parent hereunder shall be deemed to include any
associated Company Rights.
2. Exercise of Option; Profit Cap.
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(a) For all purposes of this Agreement, an "Exercise Event" shall mean
the occurrence of any of (i) a Triggering Event (as such term is defined in the
Merger Agreement), (ii) the amendment by Company of the Company Rights Agreement
or the taking by Company of any corporate action that removes any applicable
restrictions under Section 203 of the Delaware Law or under any other Takeover
Statute, in each case, in connection with any Acquisition Proposal; (iii)
Company's failure to take all action necessary to convene the Company's
Stockholders' Meeting as promptly as practicable, and in any event within 45
days after the declaration of effectiveness of the Registration Statement, (iv)
(A) the public announcement of an acquisition or purchase 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 20%
beneficial ownership interest in the total outstanding voting securities of
Company or any of its subsidiaries; (B) the public announcement or commencement
of any tender offer or exchange offer that if consummated would result in any
person or "group" beneficially owning 20% or more of the total outstanding
voting securities of Company or any of its subsidiaries; (C) the public
announcement of a bona fide proposal or offer by a person or entity reasonably
able to consummate any of the following: a merger, consolidation, business
combination or similar transaction involving Company pursuant to which the
stockholders of Company immediately preceding such transaction hold less than
80% of the equity interests in the surviving or resulting entity of such
transaction; or (D) a sale, lease, exchange, transfer, license (other than in
the ordinary course of business), acquisition, or disposition of any material
portion of the assets of Company; or (v) the commencement of a solicitation
within the meaning of Rule 14a-1(l) by any person or entity other than Company
or its Board of Directors (or any person or entity acting on behalf of Company
or its Board of Directors) seeking to alter the composition of Company's Board
of Directors. Company shall notify Parent promptly in writing of the occurrence
of any Exercise Event of which it has knowledge.
(b) At any time following the occurrence of an Exercise Event, Holder
may deliver to Company a written notice (an "Exercise Notice") specifying that
it wishes to exercise its rights to acquire Company Shares under the Option and
close a purchase of Option Shares and specifying the total number of Option
Shares it wishes to acquire. Unless such Exercise Notice is withdrawn by Holder,
the closing of a purchase of such Option Shares (a "Closing") shall take place
at the principal offices of Company upon such date (which shall be no earlier
than three business days following the delivery of the Exercise Notice) as may
be designated by Holder in the Exercise Notice. For purposes of this Agreement
Parent and each person holding an interest in the Option or the Option Shares as
Parent's transferee are referred to collectively as the "Holder."
(c) The Option shall terminate upon the earlier to occur of (i) the
Effective Time (as such term is defined in the Merger Agreement) or (ii) 12
months following the termination of the Merger Agreement in accordance with its
terms under any circumstances; provided, however, that if the Option is
exercisable but 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 shall not have expired or been terminated, or because any other
condition to closing under Section 3 hereof has not been satisfied, then the
Option shall not terminate until the tenth business day after all such
impediments to exercise shall have been removed or shall have become final and
not subject to appeal.
(d) Company shall pay all expenses, and any and all United States
federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates under
this Section 2.
(e) This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of Holder, upon presentation and surrender of
this Agreement at the principal office of Company, for other Agreements
providing for Options of different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same conditions as are set forth
herein, in the aggregate the same number of Company Shares purchasable
hereunder. The terms "Agreement" and "Option" as used herein include any Stock
Option Agreements and related Options for which this Agreement (and the Option
granted hereby) may be exchanged. Upon receipt by Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Company will execute and deliver a new Agreement of
like tenor and date.
(f) If the sum of (i) any Termination Fee received by Parent under
Section 7.3(b) of the Merger Agreement plus (ii) the proceeds received by Holder
for any sales or other dispositions of Option Shares in excess of Holder's
purchase price for such Option Shares plus (iii) the proceeds received by Holder
for any sales or other dispositions of the Option (including pursuant to
Parent's exercise of its rights to surrender the Option pursuant to Section 9
hereof), plus (iv) any dividends or distributions received by Parent declared on
Option Shares is, in the aggregate, greater than $65.0 million (such cumulative
amount, the "Profit Cap"), then all such proceeds received by Parent in excess
of the Profit Cap shall be promptly remitted in cash by Parent to Company.
3. Conditions to Closing. The obligation of Company to issue Option Shares
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to Holder hereunder is subject to the conditions that (a) any waiting period
under the HSR Act applicable to the issuance of the Option Shares hereunder
shall have expired or been terminated; (b) all material consents, approvals,
orders or authorizations of, or registrations, declarations or filings with, any
Governmental Entity, if any, required in connection with the issuance of the
Option Shares hereunder shall 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 shall
be in effect. It is understood and agreed that at any time during which Holder
shall be entitled to deliver to Company an Exercise Notice, the parties will use
their respective reasonable efforts to satisfy all conditions to Closing, so
that a Closing may take place as promptly as practicable.
4. Closing. At any Closing, (a) Company shall deliver to Holder a
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certificate in definitive form representing the number of Company Shares
designated by Holder in its Exercise Notice consistent with this Agreement, such
certificate to be registered in the name of Holder and to bear the legend set
forth in Section 11 hereof, against delivery of (b) payment by Holder to Company
of the aggregate Exercise Price for the Company Shares so designated and being
purchased by delivery of a certified check, bank check or wire transfer of
immediately available funds.
5. Representations and Warranties of Company. Company represents and
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warrants to Parent that (a) Company 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
Company and consummation by Company of the transactions contemplated hereby have
been duly 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 any of the transactions contemplated hereby; (c)
this Agreement has been duly executed and delivered by Company and constitutes
the legal, valid and binding obligation of Company and, assuming this Agreement
has been duly executed and delivered by Parent, is
enforceable against Company in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally and general principles of equity; (d) except for
any filings, authorizations, approvals or orders required under the HSR Act and
the applicable blue sky laws of any state, and the rules and regulations
promulgated thereunder, or by the Nasdaq Stock Market, Company 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 Company Shares for Parent to exercise the Option
in full and will take all necessary corporate or other action to authorize and
reserve for issuance all additional Company Shares or other securities which may
be issuable pursuant to Section 8(a) upon exercise of the Option, all of which,
upon their issuance and delivery in accordance with the terms of this Agreement
and payment therefor by Parent, will be validly issued, fully paid and
nonassessable; (e) upon delivery of the Company Shares and any other securities
to Parent upon exercise of the Option, Parent will acquire such Company Shares
or other securities free and clear of all Encumbrances, excluding those imposed
by Parent; (f) the execution and delivery of this Agreement by Company do not,
and the performance of this Agreement by Company will not, (i) violate the
Certificate of Incorporation or Bylaws of Company, (ii) conflict with or violate
any order applicable to Company or any of its subsidiaries or by which they or
any of their material property is bound or affected or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material Encumbrance on any material property or assets of Company
or any of its subsidiaries pursuant to, any material contract or agreement to
which Company or any of its subsidiaries is a party or by which Company or any
of its subsidiaries or any of their material property is bound or affected; and
(g) the execution and delivery of this Agreement by Company does not, and the
performance of this Agreement by Company 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 and except for any filings
required under the blue sky laws of any state and the rules and regulations
promulgated thereunder or by the Nasdaq Stock Market.
6. Representations and Warranties of Parent. Parent represents and warrants
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to Company that (i) the execution and delivery of this Agreement by Parent and
the consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and this
Agreement has been duly executed and delivered by a duly authorized officer of
Parent and will constitute a legal, valid and binding obligation of Parent and,
assuming this Agreement has been duly executed and delivered by Parent, is
enforceable against Company in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally and general principles of equity; and (ii) Parent
is acquiring the Option, and, if and when the Parent exercises the Option, it
will be acquiring the Option Shares issuable upon the exercise thereof for its
own account and not with a view to distribution or resale in any manner which
would be in violation of the Securities Act of 1933, as amended (the "Securities
Act").
7. Registration Rights.
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(a) Following the termination of the Merger Agreement, Holder may by
written notice (a "Registration Notice") to Company (sometimes referred to
herein as the "Registrant") request the Registrant to promptly prepare, file and
keep current a shelf registration statement under the Securities Act covering
this Option and any shares issued and issuable pursuant to this Option and
Company shall use reasonable best efforts to cause such registration statement
to become effective, as promptly as practicable, and keep such registration
statement current in order to permit the sale or other disposition of this
Option and any Option Shares (such Option Shares, together with any other shares
of Company's capital stock issuable in lieu of or with respect to such Option
Shares, the "Registrable Securities") in accordance with any plan of disposition
requested by Holder. Company shall use its reasonable best efforts to cause such
registration statement to become effective and remain effective for such period
not in excess of 180 days from the date such registration statement first
becomes effective or such shorter time as may be necessary to effect such sales
or other dispositions.
(b) (i) Holder shall not be entitled to more than two effective
registrations hereunder; provided that no registration of Registrable Securities
shall be deemed to be a registration for purposes of this clause (i) unless such
registration shall have become and remained effective pursuant to Section 7(a)
hereof; (ii) the Registrant will not be required to file any such registration
statement or maintain its effectiveness during any period of time (not to exceed
60 days in the aggregate) when (A) the Registrant is in possession of material
non-public information which it reasonably believes would be detrimental to be
disclosed at such time and such information would have to be disclosed if a
registration statement were filed or effective at that time; (B) the Registrant
is required under the Securities Act to include audited financial statements for
any period in such registration statement and such financial statements are not
yet available for inclusion in such registration statement; or (C) the
Registrant determines, in its good faith, reasonable judgment, that such
registration would materially interfere with any financing, acquisition or other
material transaction involving the Registrant; and (iii) the Registrant will not
be required to maintain the effectiveness of any such registration statement for
a period greater than 180 days. The Registrant shall use all reasonable best
efforts to cause any Registrable Securities registered pursuant to this Section
7 to be qualified for sale under the securities or blue sky laws of such
jurisdictions as Holder may reasonably request and shall continue such
registration or qualification in effect in such jurisdictions until Holder has
sold or otherwise disposed of all of the securities subject to the registration
statement; provided, however, that the Registrant shall not be required to
qualify to do business in, or consent to general service of process in, any
jurisdiction by reason of this provision.
(c) The registration rights set forth in this Section 7 are subject to
the condition that Holder shall provide the Registrant with such information
with respect to Holder's Registrable Securities, the plan for distribution
thereof, and such other information with respect to 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, including the identity of Holder and
Holder's plan of distribution.
(d) A registration effected under this Section 7 shall be effected at
the Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to Holder, and the Registrant shall use all
reasonable best efforts to: (i) provide such documentation (including
certificates, opinions of counsel and "comfort" letters from auditors) as are
customary in connection with underwritten public offerings and as an underwriter
may reasonably require, (ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statements as may be necessary to comply with the
provisions of the Securities Act and (iii) furnish to Holder and to any
underwriter of such securities such number of copies of the final prospectus and
such other documents as Holder or underwriters may reasonably request. In
connection with any registration which Holder requests be underwritten, 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.
(e) Indemnification
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(i) The Registrant will indemnify Holder, each of Holder's directors
and officers and each person who controls Holder within the meaning of Section
15 of the Securities Act, and each underwriter of the Registrant's securities,
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 action or litigation, commenced or
threatened (each, a "Damage Claim"), arising out of or based on (A) any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, (B) 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 (C) any violation by the Registrant of any rule or regulation
promulgated under the Securities Act, the Securities Exchange Act of 1934, as
amended, any federal or state securities law or any rule or regulation
promulgated under any of them applicable to the Registrant (each matter in
clause (A), (B) or (C), a "Violation"), in each case in connection with any such
registration, qualification or compliance, and the Registrant will reimburse
Holder and, each of its directors and officers and each person who controls
Holder within the meaning of Section 15 of the Securities Act, and each
underwriter for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such Damage Claim,
provided that the Registrant will not be liable in any such case to the extent
that any such Damage Claim arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Registrant by Holder or
director or officer or controlling person or underwriter, and provided, further,
that the indemnity agreement contained in this Section 7(e)(i) shall not apply
to amounts paid in settlement of any such Damage Claim (including defense costs)
if such settlement is effected without the consent of the Registrant, which
consent shall not be unreasonably withheld.
(ii) The Holder will indemnify the Registrant, each of the
Registrant's directors and officers and each underwriter of the Registrant's
securities covered by such
registration statement and each person who controls the Registrant within the
meaning of Section 15 of the Securities Act, against all Damage Claims arising
out of or based on any Violation in connection with any such registration,
qualification or compliance, and will reimburse the Registrant, such directors,
officers or control persons or underwriters for any legal or any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such Damage Claim, in each case to the extent, but only to the extent, that such
Violation occurs in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Registrant by Holder expressly for use therein, provided that
in no event shall any indemnity under this Section 7(e)(ii) exceed the gross
proceeds of the offering received by Holder and provided, further that the
indemnity agreement contained in this Section 7(e)(ii) shall not apply to
amounts paid in settlement of any such Damage Claim (including defense costs) if
such settlement is effected without the consent of Holder, which consent shall
not be unreasonably withheld.
(iii) Each party entitled to indemnification under this Section 7(e)
(the "Indemnified Party") shall 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 shall
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 shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall pay such
expense if representation of the Indemnified Party by counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding, and provided, further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7(e) unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action. No Indemnifying Party, in the defense of any such claim
or litigation shall, except with the consent of each Indemnified Party, 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 shall be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which shall not be unreasonably withheld).
(iv) If the indemnification provided for in this Section 7(e) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any Damage Claim, then the Indemnifying Party, in lieu of
indemnifying the Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party with respect to such Damage Claim in the
proportion that is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Party in connection with the statements or omissions
that resulted in such Damage Claim, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact or the omission to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to
correct or prevent such statement or omission. In any such case, (A) Holder will
not be required to contribute any amount in excess of the aggregate public
offering price of all such Registrable Securities offered and sold by Holder
pursuant to such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
8. Adjustment Upon Changes in Capitalization; Rights Plans
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(a) In the event of any change in the Company Shares by reason of stock
dividends, stock splits, reverse stock 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
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that Holder shall receive, upon
exercise of the Option, the number and class of shares or other securities or
property that Holder would have received in respect of the Company Shares if the
Option had been exercised immediately prior to such event or the record date
therefor, as applicable. Company shall use all reasonable best efforts to
promptly take all action necessary to protect the rights of Holder against
dilution.
(b) Prior to such time as the Option is terminated, and at any time
after the Option is exercised (in whole or in part, if at all), Company shall
not (i) amend (nor permit the amendment of) its Company Rights Agreement nor
adopt (nor permit the adoption of) a new stockholders rights plan that contains
provisions for the distribution or exercise of rights thereunder as a result of
Holder or any affiliate or transferee being the beneficial owner of shares of
Company by virtue of the Option being exercisable or having been exercised (or
as a result of beneficially owning shares issuable in respect of any Option
Shares), or (ii) take any other action which would prevent or disable Holder
from exercising its rights under this Agreement or enjoying the full rights and
privileges possessed by other holders of Company Shares generally with respect
to the Option Shares obtained by Holder upon exercise of the Option.
9. Surrender of Option. At any time following the occurrence of an Exercise
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Event, Holder may, at its sole option and upon Holder's written request to
Company, surrender the Option, to the extent not previously exercised, to
Company in exchange for the payment by Company to Holder in immediately
available funds of an amount equal to the product of: (x) the excess, if any, of
(i) the greater of (A) the highest price per share paid or agreed to be paid by
an acquiring person for any Company Shares in the transaction that causes an
Exercise Event (or, in the event of a sale of all or a substantially portion of
Company's assets, the sum of the price paid for such assets and the current
market value of the remaining assets of Company, divided by the number of
Company Shares then outstanding (the value of any consideration other than cash
to be determined, in the case of consideration with a readily ascertainable
market value, by reference to such market value and, in any case where the
market value of the consideration is not so ascertainable, by agreement in good
faith between Holder and Company)) or (B) the highest closing sale price of
Company Shares on the Nasdaq Stock Market during the 30 day period ending with
the trading day immediately preceding the date of such request over (ii) the
Exercise Price, multiplied by (y) the total number of Option Shares as to which
the Option has not theretofore been exercised. Upon the delivery by Holder to
Company of a surrender request,
each party shall take all actions necessary to consummate such surrender
transaction as expeditiously as possible. Upon exercise of its right to
surrender the Option or any portion thereof and full payment therefor to Holder
pursuant to this Section 9, any and all rights of Holder with respect to the
portion of the Option so surrendered shall be terminated.
10. Substitute Option. Company shall not enter into any Company Acquisition
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unless the acquiring person or any person that controls such acquiring person,
as designated by Holder, assumes in writing all obligations of Company
hereunder.
11. Restrictive Legends. Each certificate representing Option Shares issued
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to Holder hereunder (other than certificates representing shares sold in a
registered public offering pursuant to Section 7) shall 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 AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
12. Listing and HSR Filing. The Company, upon the request of Holder, shall
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promptly file an application to list the Company Shares to be acquired upon
exercise of the Option for quotation on the Nasdaq Stock Market and shall use
its reasonable efforts to obtain approval of such listing as soon as
practicable. Promptly after the date hereof, upon request by Holder, each of the
parties hereto shall file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice all required premerger
notification and report forms and other documents and exhibits required to be
filed under the HSR Act ("HSR Filings") to permit the acquisition of the Company
Shares subject to the Option at the earliest possible date. In the event that
Holder does not exercise its rights to acquire Company Shares hereunder before
the expiration of the period for which permission has initially been granted
pursuant to the HSR Act, Company shall, upon request of Holder in connection
with Holder's election to exercise this option, promptly prepare and file all
additional HSR Filings to permit acquisition of the Company Shares subject to
the Option as soon as possible after delivery of the Exercise Notice and demand
by Holder for preparation and filing by Company of such additional HSR Filings.
All such fees and expense (other than fees and expenses for counsel to Holder)
in connection with such listing application or HSR Filings will be paid for by
Company.
13. Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective successors and permitted
assigns. Except as set forth in Sections 2(b) and 7, 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.
14. Specific Performance; Fees.
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(a) 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 agrees that in addition to other remedies the other
party shall 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 shall be brought in equity to enforce the provisions
of the Agreement, neither party will allege, and each party hereby waives the
defense, that there is an adequate remedy at law.
(b) If any action, suit or other proceeding (whether at law, in equity
or otherwise) is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover, in
addition to any other remedy granted to such party therein, all such party's
costs and attorneys fees incurred in connection with the prosecution or defense
of such action, suit or other proceeding.
15. Entire Agreement. This Agreement and the Merger Agreement (including
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the appendices and exhibits thereto) constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
16. Further Assurances. Each party will execute and deliver all such
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further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
17. Severability. In the event that any provision of this Agreement or the
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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, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
18. Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed duly given (i) on the date of delivery if delivered
personally, (ii) on the date of confirmation of receipt (or, the first business
day following such receipt if the date is not a business day) of transmission by
facsimile, or (iii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day) if
delivered by a nationally recognized courier service. Subject to the foregoing,
all notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(a) if to Parent, to:
VeriSign, Inc.
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, General Counsel
Facsimile No.: 000-000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
(b) if to Company, to:
Illuminet Holdings, Inc.
0000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
Two Pershing Square
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxx
Xxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
19. 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.
20. 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.
21. 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 shall be paid by the party incurring
such expenses.
22. 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.
23. Assignment. Company may not 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 Parent.
The rights and obligations hereunder shall inure to the benefit of and be
binding upon any successor or permitted assign of a party hereto. No consent
shall be required in connection with a merger, consolidation, reorganization,
sale of substantially all assets or similar transaction with respect to a party
hereto. Any purported assignment in violation of this Section shall be void.
24. Public Announcement. Company shall consult with Parent and Parent shall
-------------------
consult with Company before issuing any press release with respect to the
initial announcement of this Agreement or the transactions contemplated hereby
and neither party shall issue any such press release prior to such consultation
except as may be required by law.
25. Waiver Of Jury Trial. EACH OF PARENT AND COMPANY HEREBY IRREVOCABLY
--------------------
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT OR COMPANY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Stock Option
Agreement to be executed by their duly authorized respective officers as of the
date first written above.
VERISIGN, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ILLUMINET HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
