EX-10.2 COMMON STOCK OPTION AGREEMENT



 




COMMON STOCK OPTION AGREEMENT


     
STOCK OPTION AGREEMENT, dated as of
August 2, 2003, by and among Ascential Software
Corporation, a Delaware corporation (“Parent”), Greek
Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Parent (the “Purchaser”),
and Mercator Software, Inc., a Delaware corporation (the
“Company”).



     
WHEREAS, the Company, Parent and the Purchaser
are entering into an Agreement and Plan of Merger (the
“Merger Agreement”) of even date herewith providing
for (i) a cash tender offer to purchase any and all
outstanding shares of Common Stock, par value $0.01 per share,
of the Company (the “Common Shares”), at a price of
$3.00 per share, net to the seller in cash upon the terms and
subject to the conditions set forth in the Merger Agreement (the
“Offer”); and (ii) the merger (the
“Merger”) of the Purchaser into the Company; and



     
WHEREAS, as a condition to the willingness of
Parent and the Purchaser to enter into the Merger Agreement and
commence the Offer, Parent and Purchaser have requested, and the
Company has agreed to grant the Purchaser, the option to
purchase, as described herein, authorized but unissued Common
Shares.



     
NOW THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements set forth herein, and
for other good and valuable consideration the sufficiency of
which is hereby acknowledged, the parties agree as follows:




		
	 	     
    1.     Grant of
    Option. On the terms and subject to the conditions of this
    Agreement, the Company hereby grants to the Purchaser an
    irrevocable option (the “Option”) to purchase for the
    Offer Price as defined in the Merger Agreement (the
    “Purchase Price”) no more than 19.99% of the then
    outstanding Common Shares in the aggregate (collectively, the
    “Optioned Shares”).
    
	 
	 	     
    2.     Exercise of
    Option. Subject to the immediately succeeding sentence, the
    Option may be exercised by the Purchaser, in whole or in part,
    at any time or from time to time after Purchaser has purchased
    Shares pursuant to the Offer until the earlier of
    (i) immediately following the Effective Time (as defined in
    the Merger Agreement) and (ii) the termination of the
    Merger Agreement in accordance with its terms. The exercise of
    the Option for Common Shares is conditioned upon the Purchaser
    and the Parent owning, immediately following such exercise, in
    the aggregate, at least 90% of the outstanding Common Shares. In
    the event the Purchaser wishes to exercise the Option, the
    Purchaser shall give a written notice (the “Notice”)
    to the Company of its intention to exercise the Option,
    specifying the number of Optioned Shares to be purchased. Such
    notice shall be delivered to the Company in accordance with the
    requirements of Section 7(d), and shall specify a date
    (which may be the date of such notice) not more than ten
    business days from the date such Notice is given for the
    purchase of the Optioned Shares. The closing (the
    “Closing”) of the purchase of the Optioned Shares
    shall take place at the offices of Skadden, Arps, Slate,
    Meagher & Flom LLP, One Beacon Street, Boston,
    Massachusetts 02108 or at such other location as the Purchaser
    shall elect. If any decree, injunction, order, law or regulation
    shall not permit the purchase of the Optioned Shares to be
    consummated on the date specified in such Notice, the date for
    the Closing shall be as soon as practicable following the
    cessation of such restriction on consummation, but in any event
    within two business days thereof.
    
	 
	 	     
    3.     Payment and
    Delivery of Certificate(s). At any Closing hereunder,
    (a) the Purchaser shall make payment to the Company of the
    aggregate price for the par value of the Optioned Shares so
    purchased in official bank check or by wire transfer to a bank
    designated by the Company; (b) the Purchaser shall deliver
    to the Company a Promissory Note substantially in the form
    attached hereto as Exhibit A (the “Note”)
    for the aggregate price for the Optioned Shares so purchased
    less the amount paid in accordance with clause 3(a); and
    (c) the Company shall deliver to the Purchaser a
    certificate or certificates representing the number of Optioned
    Shares so purchased registered in the
    




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    name of the Purchaser. Certificates for Optioned
    Shares delivered at the Closing may be endorsed with a
    restrictive legend that shall read substantially as follows:
    





		
	 	     
    “THE SECURITIES OFFERED HEREBY ARE SUBJECT
    TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
    TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
    ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
    REGISTRATION OR EXEMPTION THEREFROM.”
    
	 
	 	     
    It is understood and agreed that the reference to
    the resale restrictions of the Securities Act of 1933 in the
    above legend shall be removed by delivery of substitute
    certificate(s) without such reference if Parent shall have
    delivered to the Company a copy of a letter from the staff of
    the Securities and Exchange Commission, or an opinion of counsel
    reasonably satisfactory to the Company, to the effect that
    registration of the future resale of the Optioned Shares is not
    required and that such legend is not required for purposes of
    the Securities Act.
    





		
	 	     
    4.     Representations
    and Warranties of the Company. The Company hereby represents
    and warrants (such representations and warranties being deemed
    repeated at and as of any Closing hereunder) to Parent and the
    Purchaser as follows:
    





		
	 	     
    (a) Due Incorporation. The Company is
    a corporation duly organized, validly existing and in good
    standing under the laws of the State of Delaware and has the
    requisite corporate power and authority to enter into and
    perform this Agreement.
    
	 
	 	     
    (b) Due Authorization, etc. This
    Agreement and the consummation of the transactions contemplated
    hereby have been duly authorized by all necessary corporate
    action on the part of the Company. This Agreement has been duly
    executed and delivered by a duly authorized officer of the
    Company and constitutes the valid and binding obligation of the
    Company, enforceable against the Company in accordance with its
    terms.
    
	 
	 	     
    (c) Company’s Capital Stock. The
    Company has taken all necessary corporate action to authorize
    and reserve for issuance upon exercise of the Option the
    Optioned Shares, and at all times from the date hereof through
    the date of termination of this Agreement will keep reserved for
    issuance upon exercise of the Option the number of Common Shares
    that the Purchaser is then entitled to purchase pursuant to the
    Option. The Common Shares to be issued upon due exercise, in
    whole or in part, of the Option shall, when issued, be validly
    issued, fully-paid and non-assessable, and shall be delivered
    free and clear of all claims, liens, encumbrances and security
    interests, including any preemptive right of any of the
    stockholders of the Company.
    





		
	 	     
    5.     Representations
    and Warranties of the Purchaser and Parent. Parent and the
    Purchaser hereby jointly and severally represent and warrant
    (such representations and warranties being deemed repeated at
    and as of any Closing hereunder) to the Company as follows:
    





		
	 	     
    (a) Due Incorporation. Each of Parent
    and the Purchaser is a corporation duly organized, validly
    existing and in good standing under the laws of the State of
    Delaware and has the requisite corporate power and authority to
    enter into and perform this Agreement.
    
	 
	 	     
    (b) Due Authorization, etc. This
    Agreement and the consummation of the transactions contemplated
    hereby have been duly authorized by all necessary corporate
    action on the part of the Purchaser and Parent. This Agreement
    has been duly executed and delivered by a duly authorized
    officer of the Purchaser and of Parent, and constitutes the
    valid and binding obligation of the Purchaser and of Parent,
    enforceable against each in accordance with its terms.
    
	 
	 	     
    (c) Distribution. The Purchaser is
    acquiring the Option and will acquire the Optioned Shares to be
    purchased upon exercise of the Option for its own account and
    not with a view to the distribution thereof within the meaning
    of the Securities Act of 1933. The foregoing representation and
    warranty shall be made by any assignee under Section 7(a)
    and shall be binding upon such assignee.
    




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    6.     Adjustment
    Upon Changes in Capitalization. In the event of any change
    in the shares of the Company’s capital stock by reason of
    any stock dividend, split-up, merger, recapitalization,
    combination, conversion, exchange of shares, issuance of shares
    (or agreements or commitments to issue shares) or the like, the
    number of Optioned Shares subject to the Option and the purchase
    price per Optioned Share shall be appropriately adjusted.
    
	 
	 	     
    7.     Miscellaneous.
    





		
	 	     
    (a) Assignment; Guarantee of the
    Purchaser’s Obligations. This Agreement shall not be
    assigned by the Purchaser, except to Parent or a wholly-owned
    subsidiary of Parent, without the prior written consent of the
    Company, which consent may be withheld, conditioned or delayed
    in the Company’s sole and absolute discretion. Parent
    hereby unconditionally guarantees the full and punctual
    performance by Purchaser of all of the obligations of Purchaser
    or any of its assignees or delegates hereunder and under the
    Note. In connection with the obligations of Parent under the
    immediately preceding sentence, Parent hereby waives any and all
    rights, notices and defenses to which it otherwise would be
    entitled solely in its capacity as a guarantor under this
    Agreement or the Note.
    
	 
	 	     
    (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) Non-survival of representations,
    etc. All representations, warranties and agreements in this
    Agreement shall terminate at the Closing.
    
	 
	 	     
    (d) 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, by cable, telegram or
    telex, or by mail (registered or certified mail, postage
    prepaid, return receipt requested) to the respective parties as
    follows:
    





		
	 	
    If to the Company:
    
	 
	 	
    Mercator Software, Inc.
    
	 	
    45 Danbury Road
    
	 	
    Wilton, Connecticut
    
	 	
    Attention: General Counsel
    
	 	
    Facsimile: (203) 563-1361
    
	 
	 	
    With a copy to:
    
	 
	 	
    Jenkens & Gilchrist Parker Chapin LLP
    
	 	
    450 Lexington Avenue
    
	 	
    Chrysler Building
    
	 	
    New York, New York 10023
    
	 	
    Attention: Michael Weinseir, Esq.
    
	 	
    Facsimile: (212) 704-6288
    
	 
	 	
    If to Parent or the Purchaser:
    
	 
	 	
    Ascential Software Corporation
    
	 	
    50 Washington Street
    
	 	
    Westborough, MA 01581
    
	 	
    Attention: General Counsel
    
	 	
    Facsimile: (508) 389-8711
    




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    With copies to:
    
	 
	 	
    Skadden, Arps, Slate, Meagher & Flom LLP
    
	 	
    One Beacon Street
    
	 	
    Boston, MA 02108
    
	 	
    Attention: Louis Goodman, Esq.
    
	 	
    Facsimile: (617) 573-4822
    





		
	 	
    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 be effective only upon
    receipt.
    





		
	 	     
    (e) Governing Law. This Agreement
    shall be governed by and construed in accordance with the
    substantive law of the State of Delaware without giving effect
    to the principles of conflict of laws thereof.
    
	 
	 	     
    (f) Counterparts. This Agreement may
    be executed in several counterparts, each of which shall be an
    original, but all of which together shall constitute one and the
    same agreement.
    
	 
	 	     
    (g) Effect of Headings. The Section
    headings herein are for convenience only and shall not affect
    the construction hereof.
    
	 
	 	     
    (h) Entire Agreement. This Agreement
    constitutes the entire agreement among the parties with respect
    to the matters referred to herein and supersedes all prior
    agreements or understandings, both written or oral, among the
    parties, or any of them, with respect to the subject matter
    hereof.
    
	 
	 	     
    (i) Specific Performance. Purchaser,
    Parent and the Company each acknowledge and agree that the other
    would be irreparably damaged in the event any of the provisions
    of this Agreement were not performed by it in accordance with
    the specific terms or were otherwise breached. The Company
    agrees that if for any reason the Company shall have failed to
    issue Optioned Shares or to perform any of its other obligations
    under the Agreement, then the Purchaser and Parent shall be
    entitled to specific performance and injunctive and other
    equitable relief and the Company agrees to waive any requirement
    for the securing or posting of a bond in connection with the
    obtaining of any such injunctive or other equitable relief. This
    provision is without prejudice to any other rights the Purchaser
    and Parent may have against the Company for any failure to
    perform its obligations under this Agreement.
    





[Signature Page Follows]



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IN WITNESS WHEREOF, Parent, the Purchaser and the
Company have caused this Company Stock Option Agreement to be
duly executed on the day and year first above written.




		
	 	
    ASCENTIAL SOFTWARE CORPORATION
    





			
	 	By: 	
    /s/ PETER GYENES
    



		
	 	
    

	 	
    Name: Peter Gyenes
    
	 	
    Title: Chairman and Chief Executive Officer
    
	 
	 	
    GREEK ACQUISITION CORPORATION
    





			
	 	By: 	
    /s/ PETER FIORE
    



		
	 	
    

	 	
    Name: Peter Fiore
    
	 	
    Title: President
    
	 
	 	
    MERCATOR SOFTWARE, INC.
    





			
	 	By: 	
    /s/ ROY C. KING
    



		
	 	
    

	 	
    Name: Roy C. King
    
	 	
    Title: Chairman and Chief Executive Officer
    





Signature Page to Option Agreement


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Exhibit A



NON-TRANSFERABLE PROMISSORY NOTE


     
FOR VALUE RECEIVED, Greek Acquisition
Corporation, a Delaware corporation (“the Maker”),
hereby promises to pay to Mercator Software, Inc., a Delaware
Corporation, the principal amount of
[                              ]
($                    )],
with no interest, on [insert date that is six months after the
date of exercise] by wire transfer of immediately available
funds to an account designated by the payee. The amount due
hereunder shall be payable in money of the United States of
America lawful at such time for the payment of public and
private debts.



     
The Maker hereby waives presentment, diligence,
protest and demand, notice of protest, demand, dishonor and
nonpayment of this Note, and all other notices of any kind in
connection with the delivery, acceptance, performance, default
or enforcement of this Note.



     
This Note shall be governed by and construed in
accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of laws thereof.



     
IN WITNESS WHEREOF, the Maker has caused this
Note to be executed as of
the           day
of                     ,
2003.




		
	 	
    GREEK ACQUISITION CORPORATION
    
	 
	 	
    By:

    




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