MISSION CRITICAL SOFTWARE, INC.
FORM OF KEY EMPLOYEE STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of March 10, 2000, between Mission Critical
Software, Inc., a Delaware corporation (the "Parent") and the stockholders of
Ganymede Software Inc., a Delaware corporation (the "Company") whose names
appear in the signature block to this Agreement, ______________ (the "Key
Employee") and ________________ (the "Affiliated Stockholder").
W I T N E S S E T H :
WHEREAS, Parent and the Company have entered into an Agreement and
Plan of Merger dated March 10, 2000 (the "Merger Agreement"), pursuant to which
the Company will merge into a wholly-owned subsidiary of the Parent (the
"Merger").
WHEREAS, the Key Employee and Affiliated Stockholder have approved of
the Merger Agreement and the Merger.
WHEREAS, the Parent will issue shares of its common stock, par value
$0.001 per share (the "Parent Stock"), as consideration for the Key Employee's
and Affiliated Stockholder's shares of common stock, par value $0.001 per
share, of the Company ("Company Stock"), upon the terms and subject to the
conditions hereinafter set forth.
WHEREAS, in consideration of the mutual promises made herein and in
the Merger Agreement, the Key Employee and Affiliated Stockholder have executed
a proxy agreement in favor of Parent (the "Proxy Agreement"), dated the date
hereof, the Key Employee and Affiliated Stockholder will enter into a
Registration Rights Agreement and Restricted Stock Agreement at the Closing (as
defined herein), and the Key Employee will enter into an Employment Agreement
at the Closing (as defined herein).
WHEREAS, it is the intent of Parent, the Key Employee and the
Affiliated Stockholder that the transactions contemplated by this Agreement and
the Merger Agreement constitute an exchange qualifying for tax-free treatment
pursuant to Section 368 of the Internal Revenue Code of 1986, as amended.
The parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE
SECTION 1.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, the Parent agrees to purchase from the Key
Employee and the Affiliated Stockholder, and the Key Employee and the
Affiliated Stockholder agree to sell to Parent, those shares of Company Stock
held by such Key Employee and Affiliated Stockholder as indicated on the final
page of this Agreement under such Key Employee's and such Affiliated
Stockholder's signature. The Company Stock held by the Key Employee and the
Affiliated Stockholder shall be exchanged, at the Closing, for the number of
shares of Parent Stock (rounded to the nearest ten-thousandth of a share) equal
to the number of shares of Common Stock multiplied by the Exchange Ratio, as
such term is defined in the Merger Agreement.
SECTION 1.02. Adjustments. If, during the period between the date of
this Agreement and the Closing, any change in the outstanding shares of capital
stock of Company or Parent shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period, the Merger Consideration and any other amounts payable pursuant to
this Agreement and, if applicable, the Exchange Ratio and its determination
shall be appropriately adjusted.
SECTION 1.03. Fractional Shares. No fractional shares of Parent Stock
shall be issued pursuant to this Agreement. Such holder shall be entitled to
receive, in lieu thereof, an amount in cash without interest determined by
multiplying the closing sale price of a share of Parent Stock on the Nasdaq
National Market on the trading day immediately preceding the Closing by the
fraction of a share of Parent Stock to which such holder would otherwise have
been entitled.
SECTION 1.04. Withholding Rights. The Parent shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article such amounts as it is required to deduct and withhold
with respect to the making of any payment under any provision of federal,
state, local or foreign tax law. If the Parent so withholds such tax amounts,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Stock with respect to whom the
Parent made such deduction and withholding.
SECTION 1.05. Closing. The closing (the "Closing") of the purchase of
the Company Stock shall take place at the offices of Xxxxx Xxxx & Xxxxxxxx at
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1600 El Camino Real in Menlo Park, California, at such time as Parent shall
determine that it has received the Stock Purchase Agreements and Proxy
Agreements representing at least eighty percent (80%) of the outstanding voting
securities of the Company, or at such other time or place as the Company and
the Parent may agree (the "Closing Date"). At the Closing:
(a) The Key Employee and the Affiliated Stockholder shall deliver to
the Parent certificates evidencing his shares of Company Stock.
(b) The Parent shall deliver, or cause to be delivered, to the Key
Employee and the Affiliated Stockholder certificates, or other appropriate
documentation, evidencing shares of Parent Stock, duly registered with Parent's
stock transfer agent in the name of such Key Employee and such Affiliated
Stockholder, respectively; provided that seventy-five percent (75%) of the
shares of Parent Stock to be received by each Key Employee and Affiliated
Stockholder pursuant to this Agreement shall be placed in escrow (for each Key
Employee, the "Key Employee's Restricted Shares" and for each Affiliated
Stockholder, the "Affiliated Stockholder's Restricted Shares") pursuant to the
terms of a Restricted Stock Agreement (the "Restricted Stock Agreement"), to be
entered into by Parent, each Key Employee, and each Affiliated Stockholder
substantially in the form attached hereto as Exhibit A.
(c) Each Key Employee, Affiliated Stockholder and Parent shall
execute a Restricted Stock Agreement, substantially in the form attached hereto
as Exhibit A and a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit C, a Waiver of Notice, substantially in the form
attached hereto as Exhibit D, and a Written Consent of Stockholders approving
the Merger, the Merger Agreement and the transactions comtemplated thereby,
substantially in the form attached hereto as Exhibit E, and each Key Employee
shall execute an Employment Agreement, substantially in the form attached
hereto as Exhibit B.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF KEY EMPLOYEE AND AFFILIATED
STOCKHOLDER
The Key Employee and the Affiliated Stockholder represents and
warrants to the Parent, as of the date hereof and as of the Closing Date that:
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SECTION 2.01. Authorization. The execution, delivery and performance
by such Key Employee and such Affiliated Stockholder of this Agreement, and the
consummation of the transactions contemplated hereby are or, when executed,
will be within the powers (corporate, partnership or otherwise) of such Key
Employee and such Affiliated Stockholder and this Agreement has been or will
have been duly authorized by all necessary action on the part of such Key
Employee and such Affiliated Stockholder. This Agreement constitutes a valid
and binding agreement of such Key Employee and Affiliated Stockholder,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement or creditors' rights generally or (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
SECTION 2.02. Governmental Authorization. The execution, delivery and
performance by such Key Employee and Affiliated Stockholder of this Agreement
and the consummation of the transactions contemplated hereby require no order,
license, consent, authorization or approval of, or exemption by, or action by
or in respect of, or notice to, or filing or registration with, any
governmental body, agency or official.
SECTION 2.03. Investigation of Parent's Business. The Key Employee
and the Affiliated Stockholder:
(a) are aware of the Parent's business affairs and financial
condition and has acquired sufficient information about the Parent to reach an
informed and knowledgeable decision to acquire shares of Parent Stock;
(b) have completed his due diligence investigation; and
(c) have reviewed the registration statements and other reports filed
with the Securities and Exchange Commission by Parent, including the disclosure
under "Item 5 - Other Information - Factors That May Affect Future Results" in
Parent's 10-Q for the quarter ended December 31, 1999 relating to the risks of
Parent's business.
SECTION 2.04. Acquisition for Investment. The Key Employee and the
Affiliated Stockholder are acquiring the Parent Stock for investment for each
of their own accounts and not with a view to, or for sale in connection with,
any distribution thereof.
SECTION 2.05. Ownership of Shares. The Key Employee and the
Affiliated Stockholder are the record and beneficial owners of the shares of
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Company Stock as indicated on the signature page hereof, free and clear of any
lien and any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of his, shares of Company Stock), and
will transfer and deliver to Parent at the Closing valid title to each of their
shares free and clear of any lien and any such limitation or restriction.
SECTION 2.06. Private Placement. (a) The Key Employee and the
Affiliated Stockholder understand that the offering of the shares of Parent
Stock hereby is intended to be exempt from registration under the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder,
which exemption depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Key Employee's and the Affiliated
Stockholder's representations expressed herein.
(b) The Key Employee and the Affiliated Stockholder are accredited
investors as that term is defined in Rule 501(a) promulgated under the
Securities Act of 1933, as amended.
(c) The Key Employee's and the Affiliated Stockholder's financial
situations are such that each can afford to bear the economic risk of holding
the shares of Parent Stock acquired hereunder for an indefinite period of time,
and the Key Employee and the Affiliated Stockholder can afford to suffer the
complete loss of the investment in the shares of Parent Stock.
(d) The Key Employee and the Affilated Stockholder understand that
the Certificates evidencing the shares of Parent Stock, and any securities
issued upon conversion or in respect thereof, will bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE THEREWITH."
SECTION 2.07. Brokers or Finders' Fees. There is no investment banker,
broker, finder or other intermediary which has been retained by, will be
retained by or is authorized to act on behalf of the Key Employee and the
Affiliated Stockholder who might be entitled to any fee or commission from the
Parent, the Key Employee or the Affiliated Stockholder upon consummation of the
transactions contemplated by this Agreement.
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ARTICLE 3
CONDITIONS TO CLOSING
SECTION 3.01. Conditions to Obligations of the Key Employee, the
Affiliated Stockholder and the Parent. The obligations of the Key Employee, the
Affiliated Stockholder and the Parent to consummate the Closing are subject to
the satisfaction of the following conditions:
(a) No provision of any applicable law, rule or regulation and no
judgment, injunction, order or decree by any governmental entity of
competent jurisdiction shall prohibit the consummation of the Closing.
(b) All material actions by or in respect of, or filings with,
any governmental body, agency, official or authority required to permit
the consummation of the Closing shall have been taken, made or
obtained.
SECTION 3.02. Conditions to Obligation of the Parent. The obligation
of the Parent to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) Parent shall have received all documents it may reasonably
request relating to the authority of each Key Employee and each
Affiliated Stockholder to enter into this Agreement, all in form and
substance reasonably satisfactory to the Parent.
(b) The representations and warranties of each Key Employee and
each Affiliated Stockholder shall be true in all material respects at
and as of the Closing as if made at and as of such time.
(c) Each Key Employee and each Affiliated Stockholder shall have
delivered to Parent a Restricted Stock Agreement, a Registration
Rights Agreement, substantially in the form attached hereto as
Exhibits A and C, respectively, and each Key Employee shall have
delivered to Parent an Employment Agreement, substantially in the form
attached hereto as Exhibit B.
(d) Each Key Employee and each Affiliated Stockholder shall have
delivered to Parent a Waiver of Notice and a Written Consent approving
the Merger Agreement in substantially the forms attached hereto as
Exhibits D and E, respectively.
(e) Parent shall have entered into Stock Purchase Agreements with
stockholders of the Company who together hold at least eighty
6
percent (80%) of the outstanding voting securities of the Company and
certificates representing such securities have been presented at the
Closing.
(f) The Merger Agreement and the Merger shall have been approved
by the Board of Directors of the Company.
SECTION 3.03. Conditions to Obligation of the Key Employee and the
Affiliated Stockholder. The obligation of the Key Employee and the Affiliated
Stockholder to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) Parent shall have delivered to the Key Employee and the
Affiliated Stockholder certificates representing those shares of
Parent Stock issued in exchange for the Company Stock held by the Key
Employee and the Affiliated Stockholder pursuant to this Agreement.
(b) Parent shall have delivered to the Key Employee and the
Affiliated Stockholder a Restricted Stock Agreement and a Registration
Rights Agreement, substantially in the form attached hereto as
Exhibits A and C, respectively, and Parent shall have delivered to the
Key Employee an Employment Agreement, substantially in the form
attached hereto as Exhibit B.
ARTICLE 4
MISCELLANEOUS
SECTION 4.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Key Employee or to Affiliated Stockholder to:
Xxxxxx Xxxxxxxx
Chief Financial Officer
Ganymede Software Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
if to the Parent to:
Xxxxxxx X. Xxxx
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Mission Critical Software, Inc.
Ganymede Software, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Fax (000) 000-0000
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice.
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place
of receipt.
SECTION 4.02. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 4.03. Expenses; Other Payments. All costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring
such cost or expense. Any expense other than Registration Expenses, as that
term is defined in Section 2.02 of the Registration Rights Agreement attached
hereto as Exhibit A (in such case limited to $5,000 in the aggregate in the
case of counsel to Key Employee and the Affiliated Stockholder), incurred by
separate legal counsel for the Key Employee and the Affiliated Stockholder in
connection with the
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transactions contemplated by this Agreement shall be borne by such Key Employee
and such Affiliated Stockholder.
SECTION 4.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 4.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws, but not the choice of law
rules, of the State of Delaware.
SECTION 4.06. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of Delaware or any Delaware
state court, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 4.01 shall
be deemed effective service of process on such party.
SECTION 4.07. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement shall confer upon any person other than
the parties hereto any rights or remedies hereunder.
SECTION 4.08. Entire Agreement. This Agreement and the Merger
Agreement, together with their respective exhibits and schedules, constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and the Merger Agreement and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.
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SECTION 4.09. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 4.10. Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall
be interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by law.
SECTION 4.11. Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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