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EXHIBIT 2.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of February 6, 2000, by and between InterVU Inc., a Delaware corporation
("Issuer"), and Akamai Technologies, Inc., a Delaware corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement and
Plan of Merger, dated as of February 6, 2000 (the "Merger Agreement"), providing
for, among other things, the merger of a wholly owned Subsidiary of Grantee with
and into Issuer, with Issuer as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has agreed,
to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 3,102,592 shares (as adjusted as set forth herein, the "Option
Shares") of common stock, $.001 par value per share ("Issuer Common Stock"), of
Issuer at a purchase price per Option Share (subject to adjustment as set forth
herein, the "Purchase Price") equal to $117.00.
3. EXERCISE OF OPTION.
(a) Holder may exercise the Option, in whole or in part, at any
time and from time to time following the date on which Grantee becomes
unconditionally entitled to receive the Termination Fee pursuant to Section
11.2(b) of the Merger Agreement (the "Exercise Date") and prior to the
Expiration Date (as defined below); provided that Grantee is not on the Exercise
Date or the Closing Date (as defined below) in material breach of its
obligations under this Agreement or the Merger Agreement; and provided further,
that any purchase of shares upon exercise of the Option shall be subject to
compliance with applicable Law. The rights set forth in Section 8 shall
terminate when the right to exercise the Option terminates (other than as a
result of a complete exercise of the Option) as set forth herein; provided, that
notwithstanding the termination of the Option, Grantee shall be entitled to
purchase those Option Shares with respect to which an Option Notice is given
prior to the Expiration Date, and the termination of the Option will not affect
any rights hereunder which by their terms do not terminate or expire prior to or
at the Expiration Date.
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(b) The term "Expiration Date" shall be the date of the earliest
to occur of (A) the Effective Time, (B) nine months after the first occurrence
of an Exercise Date, and (C) the date of termination of the Merger Agreement,
unless, in the case of this clause (C), Grantee has the right to receive the
Termination Fee either (x) upon or (y) following such termination upon the
occurrence of certain events, in which case the Option will not terminate until
the later of (x) 15 business days following the time the Termination Fee becomes
unconditionally payable and (y) the expiration of the period in which Grantee
has such right to receive the Termination Fee. The term "Holder" shall mean the
holder or holders of the Option from time to time, and which initially is the
Grantee. The term "person" shall have the meaning specified in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act.
(c) In the event Holder wishes to exercise the Option, it shall
send to Issuer a written notice (the "Option Notice") specifying (i) the total
number of Option Shares it intends to purchase pursuant to such exercise and
(ii) a place and date not earlier than three business days nor later than 15
business days from the date of the Option Notice (the "Notice Date") for the
closing (the "Closing") of such purchase (the "Closing Date"); provided, that
the Closing shall be held only if (i) such purchase would not otherwise violate
or cause the violation of, any applicable material Law (including the HSR Act)
and (ii) no material Orders shall have been promulgated, enacted, entered into,
or enforced by any Regulatory Authority which prohibits delivery of the Option
Shares, whether temporary, preliminary or permanent; provided, however, that the
parties hereto shall use their reasonable best efforts to (x) promptly make and
process all necessary filings and applications and obtain all Consents and to
comply with any such applicable Laws and (y) have any such Order vacated or
reversed. In the event the Closing is delayed pursuant to clause (i) or (ii)
above, the Closing shall be within ten Business Days following the cessation of
such restriction, violation, Law or Order or the receipt of any necessary
Consent, as the case may be (so long as the Option Notice was delivered prior to
the Expiration Date); provided further that, notwithstanding any prior Option
Notice, Grantee shall be entitled to rescind such Option Notice and shall not be
obligated to purchase any Option Shares in connection with such exercise upon
written notice to such effect to Issuer.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified in Section 13(f)
hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever and subject to no pre-emptive rights, and
(B) if the Option is exercised in part only, an executed new agreement with the
same terms as this Agreement evidencing the right to purchase the balance of the
shares of Issuer Common Stock purchasable hereunder, and (ii) Holder shall
deliver to Issuer a letter agreeing that Holder shall not offer to
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sell or otherwise dispose of such Option Shares in violation of applicable
federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY
6, 2000. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions pursuant to
this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such legend if such Option Shares have been registered
pursuant to the Securities Act, such Option Shares have been sold in reliance on
and in accordance with Rule 144 under the Securities Act, or Holder shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion
of counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act and (ii) the reference to restrictions pursuant to this Agreement
in the above legend will be removed by delivery of substitute certificate(s)
without such reference if the Option Shares evidenced by certificate(s)
containing such reference have been sold or transferred in compliance with the
provisions of this Agreement under circumstances that do not require the
retention of such reference.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals referred to
herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Issuer. This Agreement has
been duly executed and delivered by Issuer. The execution and delivery
of this Agreement, the consummation of the transactions contemplated
hereby and compliance by Issuer with any of the provisions hereof will
not (i) conflict with or result in a breach of any provision of its
Certificate of Incorporation or Bylaws or a default (or give rise to any
right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, debenture, mortgage,
indenture, license, material agreement or other material instrument or
obligation to which Issuer is bound, or (ii) violate any order, writ,
injunction, or decree applicable to Issuer or any of its properties or
assets. No Consent by any governmental or regulatory agency or
authority, other than compliance with applicable federal and state
securities laws and the HSR Act, is required of Issuer in
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connection with the execution and delivery by Issuer of this Agreement
or the consummation by Issuer of the transactions contemplated hereby.
(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from
the date hereof until the obligation to deliver Issuer Common Stock upon
the exercise of the Option terminates, will have reserved for issuance,
upon exercise of the Option, the number of shares of Issuer Common Stock
necessary for Holder to exercise the Option. The shares of Issuer Common
Stock to be issued upon due exercise of the Option, including all
additional shares of Issuer Common Stock or other securities which may
be issuable pursuant to Section 7, upon issuance pursuant hereto, shall
be duly and validly issued, fully paid, and nonassessable, and shall be
delivered free and clear of all liens, claims, charges, and encumbrances
of any kind or nature whatsoever, including any preemptive rights of any
stockholder of Issuer.
(c) Issuer has taken all action required under the provisions of
Section 203 of the Delaware General Corporation Law to make the
provisions of Section 203 inapplicable to, and to ensure that Grantee
shall not become an "interested stockholder" within the meaning of
Section 203 by reason of, the grant or any exercise of the Option or any
right under this Agreement. No provision of the Certificate of
Incorporation or Bylaws of Issuer or any agreement to which Issuer is a
party (i) would or would purport to impose restrictions which might
adversely affect or delay the consummation of the transactions
contemplated by this Agreement, or (ii) as a result of the consummation
of the transactions contemplated by this Agreement, (x) would or would
purport to restrict or impair the ability of Grantee to vote or
otherwise exercise the rights of a stockholder with respect to
securities of Issuer or any of its Subsidiaries that may be acquired or
controlled by Grantee or (y) would or would purport to entitle any
Person to acquire securities of Issuer or Grantee.
6. REPRESENTATIONS AND WARRANTS OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered
or exempt from registration under the Securities Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
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(a) In the event of any change in Issuer Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, 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 Issuer Common Stock if the Option had
been exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after the
date of this Agreement (other than pursuant to an event described in the first
sentence of this Section 7(a)), the number of shares of Issuer Common Stock
subject to the Option shall be adjusted so that, after such issuance, it,
together with any shares of Issuer Common Stock previously issued pursuant
hereto, equals 19.9% of the number of shares of Issuer Common Stock then issued
and outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement: (i)
to consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property or
the outstanding shares of Issuer Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; or (iii) to sell or otherwise transfer
all or substantially all of its Assets to any person, other than Grantee or one
of its Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, Holder shall receive for each Option Share with respect to which the
Option has not been exercised an amount of consideration in the form of and
equal to the per share amount of consideration that would be received by the
holder of one share of Issuer Common Stock less the Purchase Price (and, in the
event of an election or similar arrangement with respect to the type of
consideration to be received by the holders of Issuer Common Stock, subject to
the foregoing, proper provision shall be made so that Holder would have the same
election or similar rights as would the holder of the number of shares of Issuer
Common Stock for which the Option is then exercisable).
(c) Issuer shall give Grantee at least ten days' prior written
notice before setting the record date for determining the holders of record of
shares of Company Common Stock entitled to notice of, or to vote on, any matter,
to receive any dividend or distribution or to participate in any rights offering
or make any election or any other matter, or to receive any other benefit or
right, with respect to shares of Company Common Stock. Any failure to give any
such notice, however, shall not affect the legality or validity of any such
action.
(d) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the other party thereto assumes in
writing all the obligations of Issuer hereunder and take all other actions that
may be necessary so that the provisions of this Section 7
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are given full force and effect (including, without limitation, an agreement by
such other party to provide the funding required for Issuer to pay the
Repurchase Consideration).
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to Section 12, at any time on or after the Exercise
Date and prior to the Expiration Date, Grantee shall have the right (the
"Repurchase Right") to require Issuer to repurchase from Grantee the Option and
all shares of Issuer Common Stock purchased by Grantee pursuant hereto with
respect to which Grantee then has beneficial ownership. Such repurchase shall be
at an aggregate price (the "Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any
shares of Issuer Common Stock acquired by Holder pursuant to the Option
with respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7), multiplied
by the number of shares of Issuer Common Stock with respect to which the
Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Holder for
each share of Issuer Common Stock with respect to which the Option has
been exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
(b) Grantee shall exercise its Repurchase Right by delivering to
Issuer written notice (a "Repurchase Notice") stating that Grantee elects to
require Issuer to repurchase all or a portion of the Option and/or the Option
Shares as specified therein. The closing of the Repurchase Right (the
"Repurchase Closing") shall take place in the United States at the place, time
and date specified in the Repurchase Notice, which date shall not be less than
two Business Days nor more than ten Business Days from date of the Repurchase
Notice (the "Request Date"). At the Repurchase Closing, subject to the receipt
of a writing evidencing the surrender of the Option and/or certificates
representing Option Shares, as the case may be, Issuer shall pay the Repurchase
Consideration to Holder in immediately available funds (or the portion thereof
that Issuer is not then prohibited under applicable Law from so delivering) and
if the Option is repurchased only in part, Issuer and Grantee shall execute and
deliver an amendment to this Agreement reflecting the Option Shares for which
the Option is not being repurchased.
(c) To the extent that Issuer is prohibited under applicable Law
from repurchasing the portion of the Option or the Option Shares designated in
such Repurchase Notice, Issuer shall immediately so notify Grantee and
thereafter deliver, from time to time, to Grantee the portion of the Repurchase
Consideration, respectively, that it is no longer prohibited from delivering,
within five Business Days after the date on which Issuer is no longer so
prohibited; provided, however, that if Issuer at any time after delivery of a
Repurchase Notice is
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prohibited under applicable Law from delivering to Grantee the full amount of
the Repurchase Consideration for the Option or Option Shares to be repurchased,
Grantee may rescind the exercise of the Repurchase Right, whether in whole, in
part or to the extent of the prohibition, and, to the extent rescinded, no part
of the amounts, terms or the rights with respect to the Option or Repurchase
Right shall be changed or affected as if such Repurchase Right were not
exercised. Issuer shall use its reasonable best efforts to obtain all required
regulatory and legal approvals and to file any required notices to permit
Grantee to exercise its Repurchase Right and shall use its reasonable best
efforts to avoid or cause to be rescinded or rendered inapplicable any
prohibition on Issuer's repurchase of the Option or the Option Shares.
(d) For purposes of this Agreement, the "Applicable Price" means
the greater of (i) the price per share of Issuer Common Stock received by
holders of Issuer Common Stock in connection with any merger or other business
combination transaction described in Section 7(b) or (ii) the average of the
closing sales prices per share of Issuer Common Stock quoted on the Nasdaq
National Market (or if Issuer Common Stock is not quoted on the Nasdaq National
Market, the highest bid price per share as quoted on the principal trading
market or securities exchange on which such shares are traded as reported by a
recognized source chosen by Holder) for the ten business days preceding the
Request Date; provided, that in the event of a sale of less than all of Issuer's
Assets, the Applicable Price shall be the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of Issuer as
determined by an independent nationally recognized investment banking firm
selected by mutual agreement of Issuer and Holder (which determination shall be
conclusive for all purposes of this Agreement), divided by the number of shares
of the Issuer Common Stock outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to either of the
foregoing clause (i) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent nationally
recognized investment banking firm selected by mutual agreement of Issuer and
Holder, which determination shall be conclusive for all purposes of this
Agreement.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of subparagraph (c)
below, if requested by any Holder, including Grantee and any permitted
transferee ("Selling Holder"), as expeditiously as possible prepare and file a
registration statement under the Securities Laws if necessary in order to permit
the sale or other disposition of any or all shares of Issuer Common Stock that
have been acquired by Selling Holder upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by Selling Holder
in such request, including, without limitation, a "shelf" registration statement
under Rule 415 under the Securities Act or any successor provision, and Issuer
shall use its reasonable best efforts to qualify such shares or other securities
for sale under any applicable state securities laws.
(b) If Issuer at any time after the exercise of the Option
proposes to register any shares of Issuer Common Stock under the Securities Laws
in connection with an underwritten public offering of such Issuer Common Stock,
Issuer will promptly give written notice to Holder of its intention to do so
and, upon the written request of Holder given within ten days after receipt of
any such notice (which request shall specify the number of shares of Issuer
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Common Stock intended to be included in such underwritten public offering by
Selling Holder), Issuer will cause all such shares, the holders of which shall
have requested participation in such registration, to be so registered and
included in such underwritten public offering; provided, that Issuer may elect
to not cause any such shares to be so registered (i) if the underwriters in good
faith object for valid business reasons, or (ii) in the case of a registration
solely to implement a dividend reinvestment or similar plan, an employee benefit
plan or a registration filed on Form S-4 or any successor form, or a
registration filed on a form which does not permit registrations of resales;
provided, further, that such election pursuant to clause (i) may only be made
two times. If some but not all the shares of Issuer Common Stock, with respect
to which Issuer shall have received requests for registration pursuant to this
subparagraph (b), shall be excluded from such registration, Issuer shall make
appropriate allocation of shares to be registered among Selling Holders and any
other person (other than Issuer or any person exercising demand registration
rights in connection with such registration) who or which is permitted to
register their shares of Issuer Common Stock in connection with such
registration pro rata in the proportion that the number of shares requested to
be registered by each Selling Holder bears to the total number of shares
requested to be registered by all persons then desiring to have Issuer Common
Stock registered for sale.
(c) Issuer shall use all reasonable efforts to cause each
registration statement referred to in subparagraph (a) above to become effective
and to obtain all consents or waivers of other parties which are required
therefor and to keep such registration statement effective, provided, that
Issuer may delay any registration of Option Shares required pursuant to
subparagraph (a) above for a period not exceeding 90 days provided Issuer shall
in good faith determine that any such registration would require premature
disclosure of any material corporate development or otherwise interfere with or
adversely affect an offering or contemplated offering of other securities by
Issuer, and Issuer shall not be required to register Option Shares under the
Securities Laws pursuant to subparagraph (a) above:
(i) on more than two occasions;
(ii) more than once during any calendar year; and
(iii) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to which the
Selling Holders concerned were afforded the opportunity to register such
shares under the Securities Laws and such shares were registered as
requested.
In addition to the foregoing, Issuer shall not be required
to maintain the effectiveness of any registration statement after the expiration
of 90 days from the effective date of such registration statement. Issuer shall
use all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares, provided, that Issuer shall not
be required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business. The obligations of Issuer under subsections
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(a) and (b) above shall terminate with respect to a Holder's Option Shares at
such time as such Holder may sell all such Option Shares without restriction
under Rule 144(k).
(d) Except where applicable state law prohibits such payments,
Issuer will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of counsel), accounting expenses, legal expenses including the reasonable fees
and expenses of one counsel to the Selling Holders, and printing expenses in
connection with each registration pursuant to subparagraph (a) or (b) above
(including the related offerings and sales by Selling Holders) and all other
qualifications, notifications or exemptions pursuant to subparagraph (a) or (b)
above. Underwriting discounts and commissions relating to Option Shares, fees
and disbursements of counsel to the Selling Holders and any other expenses
incurred by such Selling Holders in connection with any such registration shall
be borne by such Selling Holders.
(e) In connection with any registration under subparagraph (a) or
(b) above Issuer hereby indemnifies the Selling Holders, and each underwriter
thereof, if any, including each person, if any, who controls such Selling Holder
or underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement of a material fact contained in any registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Selling Holder, or by such underwriter, as the case may be,
for all such expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement, that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this subparagraph (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it
of any liability which it may otherwise have to any indemnified party under this
subparagraph (e). In case notice of commencement of any such action shall be
given to the indemnifying party as above provided, the indemnifying party shall
be entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel
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in any such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall be
paid by the indemnified party unless (i) the indemnifying party either agrees to
pay the same, (ii) the indemnifying party falls to assume the defense of such
action with counsel' satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph
(e) is unavailable to a party otherwise entitled to be indemnified in respect of
any expenses, losses, claims, damages or liabilities referred to herein, then
the indemnifying party, in lieu of indemnifying such party otherwise entitled to
be indemnified, shall contribute to the amount paid or payable by such party to
be indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, all selling stockholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, all
selling stockholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, that in no case shall
any Selling Holder be responsible, in the aggregate, for any amount in excess of
the net offering proceeds attributable to its Option Shares included in the
offering. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Any
obligation by any holder to indemnify shall be several and not joint with other
holders.
(f) Issuer shall comply with all reporting requirements and will
do all such other things as may be necessary to permit the expeditious sale at
any time of any Option Shares by Holder in accordance with and to the extent
permitted by any rule or regulation promulgated by the SEC from time to time,
including, without limitation, Rules 144 and 144A. Issuer shall at its expense
provide Holder with any information necessary in connection with the completion
and filing of any reports or forms required to be filed by them under the
Securities Laws, or required pursuant to any state securities laws or the rules
of any stock exchange.
(g) Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the exercise
of the Option, and will save Holder harmless, without limitation as to time,
against any and all liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized for
quotation or trading or listing on the Nasdaq National Market or any national
securities exchange or other automated quotations
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system maintained by a self-regulatory organization, Issuer, upon the request of
Holder, will promptly file a notification of additional listing or an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the Nasdaq National Market or any national securities exchange
or other automated quotations system maintained by a self-regulatory
organization and will use its best efforts to obtain approval, if required, of
such quotation or listing as soon as practicable.
11. DIVISION OF OPTION. 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 Issuer
for other Agreements providing for Options of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer 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, Issuer will execute and deliver a new Agreement
of like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
12. TOTAL PROFIT.
(a) Notwithstanding any other provision of this Agreement, in no
event shall Grantee's Total Profit (as hereinafter defined) plus any Termination
Fee paid pursuant to Section 11.2(b) of the Merger Agreement exceed in the
aggregate $114 million (the "Limitation Amount"), and, if the total amount that
would otherwise be received by Grantee otherwise would exceed the Limitation
Amount, Grantee, at its sole election, shall either (i) reduce the number of
shares of Issuer Common Stock subject to this Option, (ii) deliver to Issuer for
cancellation Option Shares previously purchased by Grantee, (iii) reduce the
amount of the Repurchase Consideration, (iv) pay cash to Issuer, or (v) any
combination of the foregoing, so that Grantee's actually realized Total Profit,
when aggregated with the Termination Fee actually paid to Grantee, shall not
exceed the Limitation Amount after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of Option Shares as would, as of the
date of exercise, result in a Notional Total Profit (as defined below) which,
together with the Termination Fee theretofore paid to Grantee, would exceed the
Limitation Amount; provided, that nothing in this sentence shall restrict any
exercise of the Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount received by
Grantee pursuant to Issuer's repurchase of the Option (or any portion thereof)
pursuant to Section 8, (ii) (x) the amount received by Grantee pursuant to
Issuer's repurchase of Option Shares pursuant to Section 8, less
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(y) Grantee's Purchase Price for such Option Shares, (iii) (x) the net cash
amounts received by Grantee pursuant to any consummated arm's-length sales of
Option Shares (or any other securities into which such Option Shares are
converted or exchanged) to any unaffiliated party, less (y) Grantee's Purchase
Price of such Option Shares.
(d) As used herein, the term "Notional Total Profit" with respect
to any number of Option Shares as to which Grantee may propose to exercise the
Option shall be the Total Profit determined as of the date of such proposal
assuming that the Option was exercised on such date for such number of Option
Shares and assuming that such Option Shares, together with all other Option
Shares held by Grantee and its affiliates as of such date, were sold for cash at
the closing market price (less customary brokerage commissions) for shares of
Issuer Common Stock on the preceding trading day on the Nasdaq National Market
(or on any other national securities exchange or automated trading or quotations
system on which shares of Issuer Common Stock are then so listed or traded).
13. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section 10, each of
the parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY.
This Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 13(h)) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a federal or state
governmental or regulatory agency or authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Holder to acquire,
or does not require Issuer to repurchase, the full number of shares of Issuer
Common Stock as provided in Sections 3 and 8 (as adjusted pursuant to Section
7), it is the express intention of Issuer to allow Holder to acquire or to
require Issuer to repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
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(d) GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger Agreement(or
at such other address for a party as shall be specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned Subsidiary of Grantee in whole or in part. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of the
Option by Holder, Issuer and Holder shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
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(j) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
INTERVU INC.
By: /s/ XXXXX X. XXXXXX
--------------------------
AKAMAI TECHNOLOGIES, INC.
By: /s/ XXXX XXXXX
--------------------------
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