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Exhibit 2.2
Execution Copy
SHARE OPTION AGREEMENT
SHARE OPTION AGREEMENT, dated as of March 2, 1999, by and between
Architel Systems Corporation, a Canadian corporation ("Company"), and Amdocs
(Denmark) ApS., a Danish corporation ("Grantee").
RECITALS
A. Amdocs Limited, a Guernsey corporation ("Amdocs"), Company, Grantee, a wholly
owned subsidiary of Amdocs, and 3026191 Nova Scotia ULC, a Nova Scotia unlimited
liability company and a wholly-owned subsidiary of Grantee, propose to enter
into a Combination Agreement providing, among other things, for an arrangement
(the "Arrangement") under section 192 of the Canada Business Corporations Act.
B. The Board of Directors of Grantee has approved the Combination Agreement, the
Arrangement and this Agreement.
C. The Board of Directors of Company has approved the Combination Agreement, the
Arrangement and this Agreement and has resolved to recommend approval of the
Combination Agreement and the transactions contemplated thereby, including the
Arrangement, by holders of common shares, without par value, of Company (the
"Common Shares") and has concluded that the Combination Agreement, the
Arrangement and this Agreement are in the best interests of the Company's
shareholders.
D. As a condition and inducement to Grantee's willingness to enter into the
Combination Agreement (and in consideration for Grantee causing its wholly-owned
subsidiary, Amdocs Holdco, to enter into the Combination Agreement), Grantee has
requested that Company agree, and Company has agreed, to grant Grantee the Share
Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Agreement, Company and Grantee agree as follows:
1. GRANT OF SHARE OPTION
Company hereby grants to Grantee an irrevocable option (the "Share
Option") to purchase for US$23.25 per share (the "Exercise Price") in cash up to
1,350,901 Common Shares (the "Shares"), provided, that in no event shall the
number of Option Shares for which this Option is exercisable, when added to the
number of Shares and Additional Shares subject to the option granted under the
Voting and Option Agreement dated even date herewith between Company and certain
of Company's shareholders exceed 19.9% of the number of Common Shares currently
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issued and outstanding. Notwithstanding the foregoing, if at any time that this
Share Option is exercisable pursuant to the terms and conditions of this
Agreement an Acquisition Proposal has theretofore been made for a per Share
value (such value to be determined as of the close of the market on the trading
day immediately prior to the date of the Exercise Notice) below the Exercise
Price, then the Exercise Price as to 1,000 shares (as such 1,000 shares may be
adjusted pursuant to Section 5) will be adjusted to be 90% of such per Share
value (it being understood that such adjusted Exercise Price will not apply as
to any other Option Shares).
2. EXERCISE OF SHARE OPTION
(a) Grantee may, subject to the provisions of this Section, exercise the
Share Option, in whole or in part, at any time or from time to time,
after the occurrence of a Trigger Event and prior to the Termination
Date. "Trigger Event" means the occurrence of an event that will
entitle Grantee to receive the Termination Fee contemplated by the
second sentence of Section 9.4(a) of the Combination Agreement.
"Termination Date" means the earliest to occur of (i) the Effective
Time (as defined in the Combination Agreement); (ii) one year after the
first occurrence of a Trigger Event; or (iii) the termination of the
Combination Agreement (A) if, but only if, the Combination Agreement is
terminated for reasons that are not directly or indirectly related to
(x) the commencement of, or any person's direct or indirect indication
of interest in making, an Acquisition Proposal (as defined in the
Combination Agreement) or (y) the breach of any provision of Section
4.4 or 4.11 thereof or (B) by Company pursuant to Section 9.1(b)
thereof. Notwithstanding the occurrence of the Termination Date,
Grantee shall be entitled to purchase Common Shares pursuant to any
exercise of the Share Option if Grantee exercised the Share Option
prior to the occurrence of the Termination Date.
(b) Grantee may purchase Shares pursuant to the Share Option only if both
of the following conditions are satisfied: (i) no preliminary or
permanent injunction or other order, decree or ruling against the sale
or delivery of the Shares issued by any federal, provincial or state
court of competent jurisdiction in the United States or Canada is in
effect at such time and (ii) any applicable waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇")
shall have expired or been terminated at or prior to such time.
(c) If Grantee wishes to exercise the Share Option, it shall do so by
giving Company written notice to such effect (the "Exercise Notice"),
specifying the number of Shares to be purchased and a place and closing
date not earlier than one business day nor later than 10 business days
from the date of the notice. If the closing cannot be consummated on
such date because any condition to the purchase of Shares has not been
satisfied or as a result of any restriction arising under any
applicable law or regulation, the closing shall occur five days (or
such earlier time as Grantee may specify) after satisfaction of all
such conditions and the cessation of all such restrictions.
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(d) At any closing, (i) Grantee shall make payment to Company of the
aggregate purchase price for the Shares to be purchased by delivery to
Company of a certified, cashier's or bank check payable to the order of
Company or otherwise as mutually agreed and (ii) Company shall deliver
to Grantee a certificate representing the purchased Shares, registered
in the name of Grantee or its designee.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Grantee as follows:
(a) Company is a corporation duly organized, validly existing and in good
standing under the laws of Canada. The execution, delivery and
performance by Company of this Agreement and the consummation of the
transactions contemplated hereby are within Company's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body,
agency, official, except for any filings required to be made under the
HSR Act, do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of Company or of any judgment, injunction,
order or decree binding upon Company or any of its subsidiaries and
will not require any consent, approval or notice under and will not
conflict with, or result in the breach or termination of any provision
of or constitute a default (with or without the giving of notice or the
lapse of time or both) under, or allow the acceleration of the
performance of, any material obligation of Company or any of its
subsidiaries under, or result in the creation of a lien, charge or
encumbrance upon, any of the properties, assets or business of Company
or any of its subsidiaries under any indenture, mortgage, deed of
trust, lease, licensing agreement, contract, instrument or other
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 respective
assets or properties is subject or bound. This Agreement has been duly
executed and delivered by Company and constitutes a valid and binding
agreement of Company.
(b) Except for any filings required to be made under the HSR Act, Company
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 such time as the obligation to deliver Shares upon the
exercise of the Share Option terminates, will have reserved for
issuance, upon any exercise of the Share Option, the number of Shares
subject to the Share Option (less the number of Shares previously
issued upon any partial exercise of the Share Option). All of the
Shares to be issued pursuant to the Share Option have been duly
authorized and, upon issuance and delivery thereof pursuant to this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all claims,
liens, charges, encumbrances and security interests. Shares issued upon
exercise of the Share Option will not be subject to any preemptive or
similar rights.
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(c) The Common Shares are registered pursuant to Section 12(g) of the 1934
Act and are listed on the Nasdaq National Market ("Nasdaq") and The
Toronto Stock Exchange (the "TSE"). The Company is a reporting issuer
under the Securities Act (Ontario) and has been since at least June 1,
1996. Company has taken no action designed to cause, or likely to
result in, the termination of the registration of the Common Shares
under the Securities Exchange Act of 1934, as amended, or Company's
reporting issuer status under the Securities Act (Ontario) or the
delisting of the Common Shares from Nasdaq or the TSE, nor has Company
received any notification that the Securities and Exchange Commission
or the Canadian Securities Commissions or the National Association of
Securities Dealers, Inc., or the TSE is contemplating the termination
of such registration or listing.
(d) The representations and warranties of Company contained in the
Combination Agreement are true and correct.
4. REPRESENTATIONS AND WARRANTIES OF GRANTEE
Grantee hereby represents and warrants to Company that the Share Option
and any Shares acquired upon exercise of the Share Option will not be sold or
otherwise disposed of by Grantee except in compliance with the Securities Act of
1933, as amended (the "Securities Act"), and applicable Canadian federal and
provincial securities laws.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER
(a) In the event of any change in Company's capital stock by reason of a
stock dividend, split-up, merger, recapitalization, combination,
exchange of shares, or similar transaction, the type and number of
shares or securities subject to the Share Option, and the Exercise
Price thereof, will be adjusted appropriately, and proper provision
will be made in the agreements governing such transaction, so that
Grantee will receive upon exercise of the Share Option the number and
class of shares or other securities or property that Grantee would have
received in respect of Common Shares if the Share Option had been
exercised immediately prior to such event or the record date therefor,
as applicable. Without limiting the parties' relative rights and
obligations under the Combination Agreement, if any additional Common
Shares are issued after the date of this Agreement (other than pursuant
to an event described in the first sentence of this Section), the
number of Common Shares subject to the Share Option will be adjusted so
that, after such issuance, it equals 8.90% of the number of Common
Shares then issued and outstanding, without giving affect to any shares
subject to or issued pursuant to the Share Option.
(b) Without limiting the parties' relative rights and obligations under the
Combination Agreement, in the event that Company enters into an
agreement (i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and Company will not be the
continuing or surviving corporation in such consolidation
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or merger, to permit any person, other than Grantee or one of its
subsidiaries, (ii) to merge into Company and Company will be the
continuing or surviving corporation, but in connection with such
merger, the Common Shares outstanding immediately prior to the
consummation of such merger will be changed into or exchanged for stock
or other securities of Company or any other person or cash or any other
property, or the Common Shares outstanding immediately prior to the
consummation of such merger will, after such merger, represent less
than 50% of the outstanding voting securities 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
will make proper provision so that the Share Option will, upon the
consummation of any such transaction and upon the terms and conditions
set forth herein, be converted into, or exchanged for, an option with
identical terms appropriately adjusted to acquire the number and class
of shares or other securities or property that Grantee would have
received in respect of Common Shares if the Share Option had been
exercised immediately prior to such consolidation, merger, sale or
transfer or the record date therefor, as applicable and make any other
necessary adjustments.
6. FURTHER ASSURANCES: REMEDIES
(a) Company agrees to execute and deliver such other documents and
instruments and take much further actions as may be necessary or
appropriate or as Grantee may reasonably request in order to ensure
that Grantee receives the full benefits of this Agreement, including
the filing with the TSE and Nasdaq as soon as possible of all documents
required in connection with the approval of the Share Option and the
listing of the Shares. Prior to the Termination Date, Company will
refrain from taking any action which would have the effect of
preventing or disabling Company from delivering the Shares to Grantee
upon any exercise of the Share Option, or from otherwise performing its
obligations under this Agreement.
(b) The parties agree that Grantee would be irreparably damaged if for any
reason Company failed to issue any of the Shares (or other securities
or property deliverable pursuant to Section 5) upon exercise of the
Share Option or to perform any of its other obligations under this
Agreement, and that Grantee would not have an adequate remedy at law
for money damages in much event. Accordingly, Grantee shall be entitled
to specific performance and injunctive and other equitable relief to
enforce the performance of this Agreement by Company. This provision is
without prejudice to any other rights that Grantee may have against
Company for any failure to perform its obligations under this
Agreement.
7. HSR FILING; LISTING OF SHARES; NOTIFICATION OF RECORD DATES
(a) Promptly after the date hereof, and from time to time thereafter, if
necessary, Grantee and Company shall each file with the Federal Trade
Commission and the
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Antitrust Division of the United States Department of Justice (and, if
requested by Grantee, under the Competition Act (Canada)) all required
pre-merger notification and report forms and other documents and
exhibits required to be filed under the HSR Act (and, if applicable,
the Competition Act (Canada)) to permit the purchase of the Shares
pursuant hereto. Company agrees to use its commercially reasonable
efforts to assist Grantee in satisfying the condition described in
Section 2(b)(ii).
(b) Company shall give Grantee at least 7 days' prior written notice before
setting the record date for determining the holders of record of Common
Shares entitled to notice of, or to vote on, any matter, to receive any
dividend or distribution or to participate in any rights offering or
other matter, or to receive any other benefit or right, with respect to
Common Shares.
(c) The Company will make application as soon as possible to the TSE and
Nasdaq for the grant of the Share Option and the issuance of the Shares
upon the exercise of the Share Option (and the listing of the Shares
upon issuance).
8. REGISTRATION OF THE SHARES
(a) If Grantee requests Company in writing to register under the Securities
Act or file a prospectus under the securities acts of the provinces of
Canada to qualify a sale of any of the Shares purchased by Grantee
hereunder, Company will use its commercially reasonable efforts to
cause the offering of the Shares so specified in such request to be
registered or qualified as soon as practicable so as to permit the sale
or other distribution by Grantee of the Shares specified in its request
(and to keep such registration in effect for a period of at least 90
days), and in connection therewith prepare and file as promptly as
reasonably possible (but in no event later than 60 days from receipt of
Grantee's request) a registration statement under the Securities Act
and a preliminary prospectus under the securities acts of the provinces
of Canada to effect such registration or qualification on an
appropriate form, which would permit the sale of the Shares by Grantee
in the manner specified by Grantee in its request. Company shall not be
obligated to make effective more than one registration statement or
prospectus pursuant to the foregoing sentence.
(b) Company shall notify Grantee in writing not less than 10 days prior to
filing a registration statement under the Securities Act (other than a
filing on Form S-4 or S-8, F-8 or F-80) or a prospectus in Canada with
respect to any Common Shares. If Grantee wishes to have any portion of
its Shares included in such registration statement or prospectus, it
shall advise Company in writing to that effect within two business days
following receipt of such notice, and Company will thereupon include
the number of Shares indicated by Grantee under such registration
statement or prospectus.
(c) Any registration statement or prospectus prepared and filed under this
Section 8 and any sale covered thereby, will be at Company's expense
except for
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underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto or as otherwise
required by Canadian law. In connection with any registration pursuant
to this Section 8, Company and Grantee will provide each other and any
underwriter of the offering with customary representations, warranties,
covenants, indemnification and contribution in connection with such
registration.
9. TAX INDEMNIFICATION
Grantee agrees to indemnify and save harmless Company and each of
Company's directors, officers and employees (collectively, the "Company
Indemnitees") from all taxes, interest or penalties for which Company or any of
the Company Indemnitees may be assessed or held liable relating to or arising
from the granting, exercise or expiry of the Share Option and any costs or
expenses (including any reasonable legal or other professional fees and
disbursements) incurred by any such party in connection with any claim, demand,
proceeding for such taxes, interest or penalties. Without prejudice to any
available rights of objection or appeal, Grantee agrees to pay to the relevant
taxing authority when due any taxes, interest or penalties for which Amdocs,
Grantee, Company or any of the Company Indemnitees is assessed relating to or
arising from the granting, exercise or expiry of the Share Option.
10. MISCELLANEOUS
(a) No Canadian Trade. Grantee and Company acknowledge that the grant of
the Share Option is being made exclusively pursuant to an exemption
from registration under the Securities Act of 1933, as amended and is
not a trade which took place in Ontario or any other Canadian province
for purposes of Canadian securities laws.
(b) Amendments. 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) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by delivery in
person or by facsimile transmission, cable, telegram or telex (with
copies by registered or certified mail, postage prepaid, return receipt
requested), to the respective parties as follows:
If to the Company to:
Architel Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Fasken ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Toronto Dominion Centre
Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Grantee to it:
c/o Amdocs (UK) Limited
Grand Buildings
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Reboul, MacMurrray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall only be effective upon receipt.
(d) Severability. If any term, provision, covenant or restriction of this
Agreement is held 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.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
(g) Headings. The section headings herein are for convenience only and
shall not affect the construction hereof.
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(h) Assignment. This Agreement shall be binding upon each party hereto and
such party's successors and assigns. This Agreement shall not be
assignable by Company, except by operation of law, but may be assigned
by Grantee in whole or in part to any affiliate of Grantee.
(i) Survival. All representations, warranties and covenants contained
herein shall survive the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, except as
otherwise provided herein.
(j) Time of the Essence. The parties agree that time shall be of the
essence in the performance of obligations hereunder.
(k) Extension of Exercise Periods. The periods for exercise of certain
rights under Section 2 hereof shall be extended in each such case at
the request of Grantee to the extent necessary to avoid liability by
Grantee under Section 16(b) of the Exchange Act by reason of such
exercise.
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IN WITNESS WHEREOF, Company and Grantee have caused this
Agreement to be duly executed as of the day and year first above written.
ARCHITEL SYSTEMS CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Director
AMDOCS (DENMARK) APS.
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Director