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OPTION ROLLOVER AGREEMENT

Option Agreement

OPTION ROLLOVER AGREEMENT | Document Parties: Activant Solutions Holdings Inc | Activant Solutions Inc | Lone Star Holding Corp You are currently viewing:
This Option Agreement involves

Activant Solutions Holdings Inc | Activant Solutions Inc | Lone Star Holding Corp

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Title: OPTION ROLLOVER AGREEMENT
Governing Law: Delaware     Date: 12/21/2007

OPTION ROLLOVER AGREEMENT, Parties: activant solutions holdings inc , activant solutions inc , lone star holding corp
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Exhibit 10.8
OPTION ROLLOVER AGREEMENT
     This OPTION ROLLOVER AGREEMENT dated May 1, 2006 (this “ Agreement ”), is made by and between Lone Star Holding Corp. (“ Lone Star ”), Activant Solutions Holdings Inc. (the “ Company ”) and Pervez Qureshi (the “ Investor ”). Unless expressly provided otherwise in this Agreement, capitalized terms defined in the Merger Agreement (as defined below) when used in this Agreement shall have the same meanings provided to such terms in the Merger Agreement.
     WHEREAS, the Company entered into an Agreement and Plan of Merger dated as of March 12, 2006 (the “ Merger Agreement ”) with Lone Star Merger Corp. (“ Merger Sub ”) and Lone Star, pursuant to which and subject to the terms and conditions thereof, Merger Sub shall merge with and into the Company, with the Company as the surviving entity (the “ Front-End Merger ”);
     WHEREAS, immediately following the Front-End Merger, the surviving entity of the Front-End Merger shall be merged with and into Activant Solutions Inc. (“ Activant ”), with Activant as the surviving corporation (the “ Back-End Merger ”; and, together with the Front-End Merger, the “ Mergers ”), such that Activant shall thereafter be a wholly owned subsidiary of Lone Star;
     WHEREAS, in connection with the consummation of the Mergers and the transactions contemplated by this Agreement, the Investor shall become a party to a stockholders agreement in the form attached hereto as Exhibit A (the “ Stockholders Agreement ”); and
     WHEREAS, the parties hereto desire to make certain agreements, representations, warranties and covenants in connection with the Mergers, the Merger Agreement and the Stockholders Agreement and the transactions contemplated hereby and thereby (collectively, the “ Transactions ”).
     NOW, THEREFORE, in consideration of the mutual covenants and conditions as hereinafter set forth, the parties hereto do hereby agree as follows:
I. Assumption and Rollover
     1.1 No Option Payment . On the terms and subject to the conditions of this Agreement, the Investor hereby agrees that effective at the Closing of the Front-End Merger, Activant Solutions Holdings Inc. shall not cancel and terminate those outstanding Options listed in Table 1 below that were previously granted to Investor under the Company’s stock option plans (the “ Company Options ”) and shall not convert any part of the Company Options into a right to receive the Option Payment with respect to the Company Options, which Option Payment would be $1,000,000 (such amount, the “ Option Consideration ”) but for the terms of this Agreement. The Investor understands and agrees that, pursuant to the terms of this Agreement, he or she shall have no right to receive the Option Payment with respect to the Company Options.

 


 
Table 1
                                 
            Number of        
            shares subject        
            to Company        
            Options not        
    Company   being cashed   Exercise price   Spread value (at
Grant date   option plan   out   per share   $4 per share)
   2/16/2000
    2000       125,000     $ 1.00     $ 375,000  
1/1/2001
    2000       25,000     $ 1.00     $ 75,000  
1/1/2002
    2000       25,000     $ 1.00     $ 75,000  
   6/30/2004
    2000       50,000     $ 2.25     $ 87,500  
2/1/2005
    2000       221,429     $ 2.25     $ 387,500  
Total number rolled:
    446,429     Total spread:   $ 1,000,000  
     1.2 Assumption and Granting of Rollover Options . In consideration for the Investor’s agreement to forego payment of the Option Consideration, Lone Star hereby agrees to assume the Company Options as of the Closing and automatically convert the Company Options into stock options to acquire an aggregate of 333,334 shares of Lone Star common stock, par value $0.01 per share (the “ Rollover Options ”), as set forth in Table 2 below. The Rollover Options will be fully vested, non-statutory stock options, and except as otherwise set forth in this Agreement, will be subject to the terms and conditions of the Company stock option plans under which they originally were granted. The per share exercise price of each of the Rollover Options is equal to 25% of the “Subscription Price” (as defined below). The number of shares of Lone Star common stock subject to each of the Rollover Options has been determined by dividing (A) the total option spread for each respective Company Option (i.e., the product of (i) the difference between $4.00 and the exercise price of such Company Option and (ii) the total number of shares of Common Stock subject to such Company Option) by (B) 75% of the Subscription Price. In making this adjustment, the adjusted number of shares of Lone Star common stock subject to the Rollover Options has been rounded up to the nearest whole share, to the extent necessary. For purposes of this Agreement, the term “ Subscription Price ” shall mean $4, which is the per share price paid by Hellman & Friedman Capital Partners V, L.P., a Delaware limited partnership, Hellman & Friedman Capital Partners V (Parallel), L.P., a Delaware limited partnership, and Hellman & Friedman Capital Associates V, LLC, a Delaware limited liability company (collectively, the “ H&F Parties ”), Thoma Cressey Fund VII, L.P., a Delaware limited partnership, Thoma Cressey Fund VIII, L.P., a Delaware limited partnership, and Thoma Cressey Friends Fund VIII, L.P., a Delaware limited partnership (collectively, the “ TCEP Parties ”), and JMI Equity Fund IV, L.P., a Delaware limited partnership, and JMI Equity Fund IV (AI), L.P., a Delaware limited partnership (collectively, the “ JMI Parties ”) to subscribe for shares of Lone Star common stock on the Closing Date. You will not be issued new option agreements for your Rollover Options.

 


 
Table 2
                         
    Company   Number of Lone Star   Exercise price
Grant date   option plan   shares   per share
   2/16/2000
    2000       125,000     $ 1.00  
1/1/2001
    2000       25,000     $ 1.00  
1/1/2002
    2000       25,000     $ 1.00  
   6/30/2004
    2000       29,167     $ 1.00  
2/1/2005
    2000       129,167     $ 1.00  
 
  Total shares:     333,334          
     1.3 Compliance with Applicable Laws . The parties contemplate that the assumption of the Company Options and the conversion thereof into Rollover Options will qualify as a transaction satisfying the requirements of Section and 409A of the Internal Revenue Code of 1986, as amended, and the regulatory guidance promulgated thereunder (the “ Code ”).
     1.4 Condition to the Obligations of the Investor . The obligations of the Investor to consummate the transactions contemplated by this Agreement shall be subject to the following conditions:
          (a) the Company shall determine that all conditions to the Company’s obligation to close under the Merger Agreement shall have been satisfied, or waived by the Company, on or before the Closing and the Company shall confirm to the Investor that the Mergers shall occur on the Closing Date; and
          (b)&n

 
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