10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 30, 2007
Commission File Number 333-49389

Activant Solutions Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-2160013
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
7683 Southfront Road
Livermore, CA 94551	94551
(Address of principal executive offices)	(Zip Code)

(925) 449-0606
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes þ No o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o    Accelerated filer o    Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No þ

No public trading market exists for the Common Stock, par value $0.01 per share, of Activant Solutions Inc. The aggregate market value of the common stock held by non-affiliates of the registrant was zero as of March 31, 2007, the last business day of the registrant’s most recently completed second fiscal quarter. All of the outstanding shares of Common Stock, par value $0.01 per share, of Activant Solutions Inc. are held by Activant Group Inc.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at December 21, 2007
Common Stock, par value $0.01 per share	10 shares

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. None.

ACTIVANT SOLUTIONS INC.

INDEX

FORWARD-LOOKING STATEMENTS	3
USE OF TRADEMARKS AND TRADENAMES	3
PART I	4
Item 1. Business	4
Item 1A. Risk Factors	15
Item 1B. Unresolved Staff Comments	21
Item 2. Properties	22
Item 3. Legal Proceedings	22
Item 4. Submission of Matters to a Vote of Security Holders	22
PART II	23
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6. Selected Financial Data	24
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	43
Item 8. Financial Statements and Supplementary Data	44
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	74
Item 9A. Controls and Procedures	74
Item 9B. Other Information	74
PART III	75
Item 10. Directors, Executive Officers and Corporate Governance	75
Item 11. Executive Compensation	78
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	89
Item 13. Certain Relationships and Related Transactions, and Director Independence	91
Item 14. Principal Accountant Fees and Services	95
PART IV	96
Item 15. Exhibits, Financial Statement Schedules	96
Bylaws of Activant Solutions Inc.
Option Rollover Agreement
Offer Letter
Agreement with Marcel Bernard
Canadian Executive Retention Bonus Award Letter
CEO Executive Retention Bonus Award Letter
U.S. Executive Retention Bonus Award Letter
U.S Executive Retention Bonus Award Letter
U.S. Executive Retention Bonus Award Letter
Transition and Severance Agreement
Amended and Restated Stock Incentive Plan
Form of Option Agreement (General Version)
Form of Option Agreement (for Canadian Employees)
Activant Solutions Corporate Incentive Bonus Plan
Activant Solutions Business Units Incentive Bonus Plan
Activant Executive Severance Plan
Statement of Compution of Ratio of Earnings to Fixed Charges
Activant Solutions Inc. Code of Ethics
List of Subsidiaries of Activant Soulutions Inc.
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

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FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “anticipate,” “believe,” “estimate,” “expect,” “is likely,” “predict,” “will be,” “will continue,” “intend,” “plan,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this report under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” are forward-looking statements. We have based these forward-looking statements on our current expectations about future events. While we believe these expectations are reasonable, these forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual results may differ materially from those suggested by these forward-looking statements for various reasons, including those discussed in this report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof. Except as required by law, we do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.

USE OF TRADEMARKS AND TRADENAMES

Several trademarks and tradenames appear in this Annual Report. Activant, the Activant stylized logo design, J-CON, VISTA, AConneX, PartExpert, Activant Eagle, Activant Vision, Activant Falcon, Activant iNet, Activant Prism, ePartExpert, ePartInsight, Prelude Systems, Enterprise, Speedware and Prophet 21 and Vista are registered trademarks of ours. Other trademarks of ours include Activant Eclipse, Activant Silk, Activant Cover to Cover, Activant Dimensions Canada, Ultimate, Series 12, Eclipse, Eagle, Falcon, CSD, IDW, IDX, LOADSTAR, INet, Version 2, 4GL, Open ERP Solutions, ECS Pro, Dimensions, Prelude, Silk, TPW, CommerceCenter, and Vision. Windows is either a registered trademark or tradename of Microsoft Corporation in the United States and/or other countries. Other trademarks and tradenames are used in this report, which identify other entities claiming the marks and names of their products. We disclaim proprietary interest in such marks and names of others.

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PART I

Item 1. Business.

On May 2, 2006, Activant Group Inc. (formerly known as Lone Star Holding Corp.), or Activant Group, Lone Star Merger Corp., or Merger Sub, and Activant Solutions Holdings Inc., or Holdings (the “Predecessor Company”), consummated a merger, whereupon Holdings became wholly owned by Activant Group, which is wholly owned by investment funds affiliated with Hellman & Friedman LLC, or Hellman & Friedman, Thoma Cressey Bravo, Inc., or Thoma Cressey, and JMI Equity and certain members of our management. Following the merger, on May 2, 2006, Holdings merged with and into Activant Solutions Inc., with Activant Solutions Inc. continuing as the surviving corporation and wholly owned subsidiary of Activant Group. These mergers are referred to as the “mergers” and the transactions related to the mergers are referred to collectively as the “transactions.” The transaction was treated as a purchase and thus the assets and liabilities were recorded at their fair value as of the closing date. Activant Group was incorporated on March 7, 2006 for the purpose of acquiring Holdings and did not have any operations prior to May 2, 2006 other than in connection with the Holdings acquisition. Activant Solutions Inc., or Activant, was incorporated in 1972 under the name of Triad Systems Corporation. In 1997, it merged into CCI Acquisition Corp., becoming a Delaware corporation named Cooperative Computing, Inc., and in October 2003, it changed its name to Activant Solutions Inc. Unless the context otherwise requires, references in this report to “we,” “our,” “us” and the “Company” refer to Activant Solutions Inc. and its consolidated subsidiaries.

Overview

We are a leading provider of business management solutions to distribution and retail businesses. With over 30 years of operating history, we have developed substantial expertise in serving businesses in three primary vertical markets: hardlines and lumber; wholesale distribution; and the automotive parts aftermarket. The vertical markets we serve have the shared characteristic of being complex distribution businesses with advanced inventory management needs. Using a combination of proprietary software and extensive expertise in these vertical markets, we provide complete business management solutions consisting of tailored systems, product support, content, supply chain products and services and professional services designed to meet the unique requirements of our customers. Our fully integrated systems and services include point-of-sale, inventory management, general accounting, e-Commerce, and product data that enable our customers to manage their day-to-day business operations. We believe our solutions allow our customers to increase sales, boost productivity, operate more cost efficiently, improve inventory turns and enhance trading partner relationships.

We have built a large base of approximately 14,500 customers on product support, operating in approximately 30,000 business locations. In addition, our electronic automotive parts and applications catalog is used in approximately 27,000 business locations (a subset of which includes certain product support customers). We have developed strategic relationships with many well-known and influential market participants in each of our primary vertical markets who have a significant effect on their customers’ buying decisions. For example, we are a preferred or recommended business management solutions provider for the members of Ace Hardware Corp. and Do it Best Corp. hardware cooperatives and for Aftermarket Auto Parts Alliance, Inc. pursuant to agreements we have entered into with each of them and their members who are our customers. In addition, we have licensing agreements with many well-known participants in each of the vertical markets we serve, including O’Reilly Automotive, Inc. and the Industry Data Exchange Association, each of which is one of our top five customers within their vertical market. No single customer represents more than 10% of our total sales. Based on number of customers and revenues, we believe we have the leading market position in the United States serving the independently owned and operated hardlines and lumber vertical market and the automotive parts aftermarket. We also believe we are one of the leading providers of business management solutions to the domestic wholesale distribution vertical market.

In May 2007, we acquired all of the outstanding common stock of Silk Systems, Inc. for a total purchase price of $6.5 million, net of $0.7 million cash received. In addition, in August 2007, we purchased substantially all of the assets of the Intuit Eclipse Distribution Management Solutions business for cash consideration of $101.3 million.

Market Opportunity

We focus our products and services on distribution and retail customers that operate in three primary vertical markets: hardlines and lumber; wholesale distribution; and the automotive parts aftermarket. We believe that these businesses are increasingly taking advantage of information technology to more effectively manage their operations.

We have identified a number of common factors driving this demand for technology solutions within our vertical market customers:

• Need for turnkey business management solutions with vertical specific functionality. We believe that software applications from vendors such as Intuit Inc., Microsoft Corporation, Oracle Corporation, The Sage Group PLC and SAP AG, with a broad, general

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or horizontal approach, do not adequately address the needs of businesses that have specific functionality requirements. In addition, our typical customer generally does not have a dedicated technology team to plan, purchase, integrate and manage highly complex information technology solutions. As a result, these businesses prefer a single vendor to provide and support a large portion of their information technology infrastructure, which may include software, hardware, product support, network management, professional services, and content and supply chain services.

• Complex supply chains. Our customers operate in markets that have multi level supply chains consisting of service dealers, builders and other professional installers and do it yourselfers that purchase parts or products from local or regional stores and distributors. These businesses, in turn, are connected to one or more warehouses or distributors, which, in turn, are connected to manufacturers. Many of these connections are now Internet-based to facilitate e-commerce. Businesses with complex supply chains require more sophisticated systems and services to operate efficiently.

• Inventory management. Our customers operate in complex distribution environments and manage, market and sell large quantities of diverse types of products, requiring them to manage extensive inventory. Their ability to track and manage that inventory more efficiently can improve their operational and financial performance.

• Need for modern technology. Many of the systems currently in use in the vertical markets we serve are older, character-based or in-house systems with limited extensibility or flexibility. These businesses will need to replace their older systems with more modern, comprehensive business management solutions.

• High customer service requirements. Our customers seek to differentiate themselves in their respective marketplaces by providing a high degree of customer service and value added services. Our systems and services are specifically designed to facilitate this level of customer service. For example, professional contractors expect on-time delivery of complex orders to their building sites, the ability to charge the orders to their account and the ability to receive a credit for any unused materials. In order to meet these high service requirements, businesses in the vertical markets we serve are increasingly adopting more advanced and industry tailored business management solutions.

Our Business Model

Our systems revenues are generally derived from one-time sales while our services revenues generally consist of subscription-based sales that are generally recurring in nature. For fiscal year 2007, our systems revenues were approximately 42% of our total revenues and our services revenues accounted for approximately 58% of our total revenues. Our services revenues consist of product support, content and supply chain services and other services. The components of our business management solutions include the following segments:

Systems

We provide proprietary vertical specific software applications, implementation, training, consulting and third party software, hardware and peripherals. Our software applications are tailored to the unique business processes of our target vertical markets. Depending on the vertical market and specific customer requirements, these systems can provide in-store, retail, contractor and distributor based solutions with fully integrated applications that manage the workflows of a customer’s business operations. In addition, our systems include productivity and customer service tools, add-on modules, replacement hardware and upgrade applications for our existing installed base of customers. Our selling prices for systems can range from $10,000 to over $1,000,000 depending on the size of the business, the software applications needed and the complexity of the implementation.

We provide industry specific implementation, training, consulting and custom programming services to our customers to ensure they receive full value from the technology investments they have made with us and to help them run their business using the best practices found in their particular industry.

Product Support

We provide comprehensive maintenance and customer support. We sell a variety of post-sale support programs that can include customer support activities; including support through our advice line, software updates, preventive and remedial on-site maintenance and depot repair services. Our product support is generally provided on a subscription basis, and accordingly, revenues are generally recurring in nature. Virtually all new systems customers subscribe to product support and continue to subscribe as long as they use the system.

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Content and Supply Chain Products and Services

We provide a full range of additional value added products and services to our customers. Our content and supply chain products and services include proprietary database and data management products for the vertical markets we serve (such as our comprehensive electronic automotive parts and applications catalog and point-of-sale business analysis data), connectivity services, e-commerce, networking and security monitoring management solutions. We sell a majority of our content and supply chain products and services on a subscription basis.

Other Services

Our other services are comprised primarily of business products, such as forms and other paper products.

Vertical Market Focus

Our business management solutions serve customers that operate in three primary vertical markets where we have developed specific expertise and have a significant presence as a technology provider. The vertical markets we serve have the shared characteristic of being complex distribution businesses with unique needs that our software addresses.

Hardlines and Lumber

The hardlines and lumber vertical market consists of hardware retailers, home improvement centers, paint, glass and wallpaper stores, farm supply stores, retail nurseries and garden centers, and lumber and building material yards.

Independent hardware and lumber retailers are often affiliated with cooperatives, distributors and buying groups, such as Ace Hardware Corp., Do it Best Corp., True Value Company, Orgill Inc, and Lumbermens Merchandising Corporation that enable members to compete through optimized product assortment, buying power, brand and member wide customer loyalty programs and promotions, along with the incorporation of best business practices. These cooperatives, distributors and buying groups also influence the information technology buying decisions of their large groups of members. We work to insure that these key influencers are aware of and recommend our products and services. National chains that are generally larger than our customers such as The Home Depot, Inc., Lowe’s Home Centers, Inc. and Menard, Inc., generally utilize advanced information technology solution within their businesses. Their adoption of advanced technology often creates demand within our hardware and lumber market for similar solutions.

We believe that a number of trends, including new home construction and sales, increased spending on home improvement, favorable demographic trends and generally positive economic conditions, among others, have driven growth in this vertical market. With the current slowing of housing starts and the migration of cooperatives from their legacy systems to our modern systems almost complete, our continued growth will be dependent on products and services that allow independents in the home improvement industry to compete with chains by broadening the services they offer, excelling at customers service, and maximizing pricing, personnel productivity and other efficiencies.

Wholesale Distribution

The wholesale distribution vertical market includes distributors of a range of products including electrical supply, medical supply, plumbing, heating and air conditioning, brick, stone and related materials, roofing, siding, insulation, industrial machinery and equipment, industrial supplies, fluid power, janitorial and sanitation products, paper and packaging and service establishment equipment.

The business of wholesale distributors revolves around tracking and managing product inventory and servicing customers with high service level requirements, such as product knowledge and availability, flexible delivery schedules, returns management and complex invoicing. In addition, wholesale distributors operate in multiple locations. The ability to manage these operations with a single inventory management system is essential to the success of their business. Wholesale distributors are increasingly using more sophisticated information technology systems to improve inventory turns, increase sales, reduce carrying and other operating costs and improve customer service.

We believe that growth in this vertical market is being driven by increased spending on commercial construction and industrial production, among others.

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Automotive Parts Aftermarket

There are three distinct distribution channels through which automotive parts distribution occurs: the wholesale, retail and new car manufacturer channels. The automotive parts aftermarket consists of businesses engaged in the manufacture, distribution, sale and installation of new and remanufactured parts used in the maintenance and repair of automobiles and light trucks. Our systems solutions target primarily the wholesale channel and our content and data services target the wholesale and retail channel.

Participants in the automotive parts aftermarket are required to manage large quantities of data. There are over 4.5 million different stock keeping units, or SKUs, available to parts sellers. As a result, most automotive parts aftermarket participants require comprehensive inventory management systems and catalogs to keep track of these parts. In addition, consumer demand for same day repair service and the need to quickly turn repair bays encourage professional installers to require prompt delivery of specific parts from their suppliers. Therefore, the ability of either a warehouse distributor or parts store to access information about a part’s availability and price and to promptly supply the required product is critical to its success.

We believe that growth in the automotive parts aftermarket in the United States will be driven by a number of factors, including growth in the aggregate number of vehicles in use, increases in the average age of vehicles in operation and increased vehicle complexity.

Competitive Strengths

We believe that the following strengths have contributed to the growth of our systems revenues and our high customer retention rate. We believe that systems revenue is a factor that influences growth in our subscription-based product support revenues.

Provide a Turnkey Business Management Solution to the Vertical Markets We Serve. Using a combination of proprietary software and extensive expertise in the vertical markets we serve, we provide complete solutions and services for our customers. Our solutions and services provide tailored systems, product support, professional services, and content and data services that are designed to meet the unique requirements of our customers and enable them to interact with a single vendor for their business management solutions.

Leading Market Position in the Vertical Markets We Serve. With over 30 years of operating history, we have developed substantial expertise in serving businesses with complex distribution requirements. Based on the number of customers and revenues, we believe we have a leading position in the United States serving the hardlines and lumber vertical market and the automotive parts aftermarket. We also believe we are one of the leading providers of business management solutions to the wholesale distribution vertical market in the United States.

Large Base of Customers with High Retention. We have built a large base of approximately 14,500 product support customers operating in approximately 30,000 business locations. Our electronic automotive parts and applications catalog is used in approximately 27,000 business locations (a subset of which includes certain product support customers). In our experience, our systems and services are integral to the operations of our customers’ businesses and switching from our systems generally requires a great deal of time and expense and may present a significant operating risk for our customers. As a result, we have historically had high levels of customer retention. For example, our average annual product support retention rates for the last three fiscal years for our Activant Eagle, Activant Falcon, Prelude and Prophet 21 products, four of our key business management solutions, have been greater than 93%.

Relationships with Well Known Market Participants. We have developed strategic relationships with many well-known market participants in the hardlines and lumber vertical market and the automotive parts aftermarket. For example, we are the preferred or a recommended business management solutions provider for members of Ace Hardware Corp. and Do it Best Corp. cooperatives and for Aftermarket Auto Parts Alliance, Inc. pursuant to agreements we have entered into with each of them and their members who are our customers. In addition, we have licensing agreements with many well-known participants in each of the vertical markets we serve, including O’Reilly Automotive, Inc. and the Industry Data Exchange Association.

Flexible Systems Offerings. Depending on our customers’ size, complexity of business and technology requirements, we have a range of systems offerings. In our hardlines and lumber vertical market, we provide our Activant Eagle product that, while still tailored to the vertical markets it serves, has a more standard functionality for customers with lower complexity of operations and technology needs. In each of the vertical markets we serve, we also provide a higher-end business management solution for customers with more complex operations and technology needs. By providing flexible systems offerings, we are able to access a broader segment of the addressable market in each of the vertical markets we serve. In addition, the modular design of our productivity tools and add-on modules provides our customers with flexibility to deploy all of our add-on offerings at once or to implement our offerings individually or incrementally.

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Large Base of Recurring Subscription Revenues. Product support and content and supply chain services revenues comprise nearly all of our services revenues. These revenues are generally recurring in nature since they are derived primarily from subscriptions to our support and maintenance services, our electronic automotive parts and applications catalog, databases, connectivity and other services. Services revenues accounted for approximately 58% of our total revenues for fiscal year 2007. We believe that the generally recurring nature of our product support and content and supply chain revenues provides us with a more predictable and stable stream of revenues relative to systems revenues that are primarily one-time purchases. Virtually all new systems customers subscribe to product support and continue to subscribe as long as they use the system.

Products and Services

Our principal products and services offerings consist of:

• Systems. We provide vertical specific proprietary software applications, consultation, training and implementation services, and third party software, hardware and peripherals.

• Product Support. We sell a variety of post sale support programs that include daily operating support through our advice line, software updates, preventive and remedial on-site maintenance and depot repair services.

• Content and Supply Chain. Our content and supply chain offerings include proprietary database and data management products for the vertical markets we serve (such as our comprehensive electronic automotive parts and applications catalog and point of sale business analysis data), connectivity services, e-commerce, networking and security monitoring management solutions.

Systems

We offer systems consisting of proprietary vertical specific software applications, implementation and training and third party software, hardware and peripherals. Our products provide in-store, retail, distributor and warehouse based solutions with fully integrated applications that manage the workflows and data relating to a customer’s typical sales transactions and automate and streamline a customer’s inventory, sales and distribution operations. These applications include order management and fulfillment, barcode scanning and processing, inventory control, pricing, purchasing, accounts receivables and payables, special order processing, quote and bid processing, vendor and manufacturer communications, payroll, general ledger and credit and debit card authorization. The selling price of our products depends on a variety of factors, including the number of locations and users and the products requirements of the customer.

In addition, we offer productivity tools and add-on modules to our customers to enhance the capabilities of our products. The modular design of our productivity tools and add-on modules, such as business intelligence, credit card signature capture and delivery tracking, provides our customers with flexibility to deploy or implement our offerings individually or incrementally.

When we sell a new system or add-on module, our professional services team works to minimize disruption during the conversion process and to optimize our customers’ use of the product by training them to use the primary and specialized features of the software. In addition, we integrate most of our products with hardware components and software products of third-party vendors prior to distributing the products to our customers. We primarily use Dell Inc.’s industry standard server and workstation hardware to power our software solutions. In addition, we offer hardware solutions from International Business Machines Incorporated and Hewlett Packard Company for certain of our solutions.

The following outlines our primary systems offerings:

• Activant Eagle. Our Activant Eagle product is designed for small and medium sized retail stores across multiple vertical markets, including hardware and home center, lumber and building materials and its sub-verticals and select auto jobber distributors.

• Prophet 21. Our Prophet 21 product, formerly known as CommerceCenter, is designed for distributors across multiple segments of the wholesale distribution vertical market including but not limited to industrial, electrical, fastener, fluid power, tile and floor covering, heating and air conditioning, and medical supply.

• Activant Prism. Our Activant Prism product is designed to meet the needs of both national and independent stores as well as smaller businesses in the automotive parts aftermarket.

• Activant Falcon. Our Activant Falcon product is designed for large multi-location hardlines and lumber operations.

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• Activant Vision. Our Activant Vision product is designed for, and targeted to, local, regional and national warehouse distributors in the automotive parts aftermarket and office product market.

• Activant Eclipse. Our Activant Eclipse product is a fully integrated, real-time business management solution specifically designed for plumbing and electrical wholesalers.

• Activant Dimensions Canada. Our Activant Dimensions Canada product is designed for small and medium sized stores across multiple vertical markets within Canada, including hardware and home center, lumber and building materials and its sub-verticals.

Systems We Continue to Support. In addition to our primary system offerings, we also service and maintain, but do not actively sell to new customers, additional legacy systems including:

• Automotive Aftermarket — J-CON , Loadstar, Series 12, Activant ServiceWriter, Eclipse, A-DIS, Ultimate

• Lumber Dealers — CSD, Dimensions, Version 2, 4GL

• Wholesale Distributors — Acclaim, XL, Array, DISC, D2K, FasPac, SDI, StanPak, Turns

Currently, we realize significant product support revenues from customers using these products. We have built upgrade and conversion paths to our primary system offerings for the customers on our legacy products.

Product Support

We provide comprehensive maintenance and customer support for each of our products. Our customers are principally independent businesses that require a high level of service, training and customer support to train users and to maintain their systems. We believe that we offer the broadest set of implementation and support services to businesses in our vertical markets. Our product support offerings include:

• Access to Software Updates. We provide our product support customers with regular software updates, which, among other things, provide bug fixes, selected functionality enhancements and efficiency improvements.

• Advice Line Support. Our team of software and applications specialists provides customers with telephonic and Internet training, troubleshooting and other support related to our software and hardware. This team provides technical and industry specific support for our systems through real time diagnostics, access to our extensive knowledge base and assistance in optimizing our customers’ usage of our systems for their businesses. We offer our customers several service plan options to accommodate their support needs and requirements for their businesses. In addition, our product development team is available to address the most complex systems issues.

• Nationwide Hardware and Networking Specialists. Our field service team can be dispatched throughout the United States, Canada and Puerto Rico to diagnose and repair hardware and software on-site. We believe that this team of service professionals provides us with a competitive advantage. Because these services are provided on-site, the customer often develops a working relationship with its hardware and networking specialist. We do not believe any of our primary competitors offers nationwide on-site support and service.

• Server and Peripheral Repair. We support server and peripheral repair via overnight exchange and other programs from our repair facility and through outsourced peripheral repair services.

We have web-based product support that allows customers direct access to a call tracking system, online product training courses and an online knowledge base. These features allow customers to request support services, review specific calls or their entire call history, increase employee system knowledge through online coursework or search a knowledge base to obtain ready answers to questions. In addition, we provide Advice Line support through e-mail and have recently deployed a new customer relationship management system to improve our call center infrastructure and provide better service to our customers.

Virtually all new systems customers subscribe to product support and continue to subscribe as long as they use the system. Product support subscriptions vary from a monthly to an annual basis depending on the product, and the subscription fees vary by system size, number of users and configuration. In addition, we offer seminars and workshops to assist customers in understanding the capabilities of their systems. We strive to provide comprehensive information technology support to small and medium sized business customers to build customer relationships, enhance customer satisfaction and maximize customer retention rates.

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Content and Supply Chain

Our content and supply chain products and services include database services with information and reports related to point-of-sale activity, and connectivity services. These services are specific to the retail and wholesale trade vertical markets we serve and complement our systems offerings.

Automotive Parts Aftermarket: We provide electronic catalogs, barcodes, related repair information and reports based on point of sale activity through a variety of data services. These proprietary database products and services generate recurring revenues through period (generally monthly) subscription fees and differentiate our products from those of our competitors. We offer data services to our automotive parts aftermarket customers, including warehouse distributors, manufacturers and parts stores and professional installers. Our principal content and supply chain products and services are:

• PartExpert. Our electronic automotive parts and application catalog provides access to a database of over 300 million unique automobile part applications for approximately 7,500 automotive parts aftermarket product lines. These products significantly reduce the time consuming and cumbersome use of printed catalogs and are designed to increase productivity and accuracy in parts selection and handling. Our Auto systems are integrated with PartExpert. For our PartExpert product, we acquire, enter, clean, standardize and format data from over 800 nationally branded automotive parts manufacturers in an original, creative and unique manner. This data comes from manufacturers in paper or electronic format. We generally produce catalog updates on compact discs or DVD’s approximately ten to twelve times per year from our facilities in Livermore, California, Austin, Texas and Longford, Ireland.

• Interchange. Our electronic automotive, medium/heavy-duty truck, agricultural and commercial parts interchange product provides access to a database of over 16 million OEM-to-aftermarket and aftermarket-to-aftermarket interchange records.

• Activant Cover-to-Cover. The Activant Cover-to-Cover add-on provides extended automotive aftermarket part information to PartExpert and ePartExpert customers such as product images, specifications, installation instructions, warranty information and technical service bulletins.

• LaborExpert. Our LaborExpert offering provides a powerful electronic labor-estimating tool based on the Mitchell labor database. This product is used primarily by the installer segment.

• Service Intervals Plus. Our Service Intervals Plus offering provides access to a database of service intervals for both routine and severe service maintenance schedules. This product is used primarily by the installer segment.

• Buyer Assist. Our electronic automotive aftermarket buyer’s guide provides vehicle coverage listings, list price, package quantities, manufacturers’ popularity codes and per-car quantities. This product is used primarily by warehouse distributor and part store buyers and inventory managers.

• ePartExpert. Our ePartExpert service enables service professionals and consumers to access our automotive parts database online. This product is used by the manufacturer, warehouse distributor and professional installer segments of the automotive parts aftermarket.

• Price Updating Services. Our pricing distribution and updating services provide automated and timely automotive aftermarket price information updating. These products are targeted primarily at warehouse distributors and parts stores. We acquire, enter, clean, standardize and format data from manufacturers and distributors with custom pricing, then securely distribute price updates via telecommunication or compact discs.

• ePartInsight. Our ePartInsight service provides data hub capability that allows large buying groups to access inventory and sales information throughout the buying group simultaneously, which allows better visibility into product sales and inventory trends. This data warehouse product can be connected to our entire automotive parts aftermarket warehouse distributor and parts store products as well as third party software.

We also market the following content and supply chain products and services to our vertical markets.

• Trading Partner Connect. Our Trading Partner Connect offering is an Internet trading network that streamlines the commerce process between distributors, their manufacturers and/or suppliers, and end users, thereby extending geographic reach of a distributor, increasing sales and improving customer service while reducing operating costs. Through Trading Partner Connect, distributors can access millions of items, enabling them to compete on a larger scale and improve customer service. Distributors further benefit from reduced costs related to EDI and surplus inventory. Trading Partner Connect also provides distributors with a web-based storefront designed to give end users online customer service as well as ordering capabilities 24 hours a day, seven days a week (excluding normal maintenance periods). Trading Partner Connect offers several components, including B2B Marketplace, B2B Buyer, B2B Alliance, B2B Gateway and B2B Seller.

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• Networking Support & Security Monitoring. Our Networking Support & Security Monitoring offerings are targeted primarily at the hardlines and lumber vertical market and the automotive parts aftermarket, but are applicable to all of our three vertical markets. These offerings provide network installation, provisioning, troubleshooting and problem resolution, firewall installation and configuration and virus protection services.

• VISTA. Our VISTA offering is targeted for manufacturers in all three of the vertical markets we serve. Information provided by the VISTA service gives manufacturers insight into how a specific product or brand performs against its competitors and the market in general based upon actual sales history provided from our systems customers and consumer market surveys and through collaboration with other sources of industry sales data. We provide this data to our customers in a variety of formats.

• IDW and IDX. Our IDW and IDX offerings are targeted at the wholesale distribution vertical market. They enable electrical parts manufacturers and warehouse distributors to exchange product information, purchase orders and related documents using electronic data interchange and Internet technologies.

• Activant Inet. Our Activant Inet offering is targeted at the hardlines and lumber vertical market. Inet provides e–commerce capabilities to our customers such as the ability to conduct business online with their vendors and customers, including e-store ordering, invoicing and e-statement functionality.

• AConneX. We offer Internet and modem based communication services that connect the automotive parts aftermarket from manufacturers through warehouse distributors and parts stores to professional installers. Our flagship service, AConneX, uses the Internet to allow communication between and among our software systems and other companies’ software systems. AConneX enables parts to be ordered by professional installers from eStore partners and creates a trading network among parts stores and warehouse distributors. In addition, we offer an electronic data interchange interface between warehouse distributors and manufacturers.

• Activant B2B Seller. The Activant B2B Seller offering is targeted at the wholesale distribution markets. Activant B2B Seller provides e-commerce capabilities to our customers such as the ability to conduct business on-line with their vendors and customers, including e-store ordering, product catalogs, invoicing, e-statement, remittance and reporting functionality.

Other Offerings

In addition to systems, product support and content and supply chain offerings, we offer our customers migration tools and services, and other business products.

• Productivity Tools and Services. We provide a complete suite of professional services and software tools for customers who wish to migrate their applications and databases from the Hewlett Packard e3000 to Unix or Windows platform systems. In November 2001, the Hewlett Packard Company announced that it is ending sales and support for this platform over a seven year period, which has since been extended by two years, that will likely result in the decline of our migration business as we approach the end of that nine year period.

• Business Products. We offer both standard and custom third-party record keeping and sales forms and other office supplies, primarily to our existing customer base. These forms and supplies include purchase order forms, checks, invoices, ink, toner and ribbons that are compatible with our software and hardware systems.

Sales and Marketing

We have dedicated sales groups to each of the hardlines and lumber, wholesale distribution vertical markets and the automotive parts aftermarket. Our sales and marketing strategy is to provide relevant business expertise to target customers by using sales representatives with strong industry specific knowledge.

Within these vertical markets, we use a combination of field sales, inside sales, value added resellers and national account programs. We seek to partner with large customers or groups of customers and leverage these program groups to sell to their members. Incentive pay is a significant portion of the total compensation package for all sales representatives and sales managers. Our field sales teams generally focus on identifying and selling to new customers, while our inside sales team focuses on selling upgrades and new software applications to our installed base of customers.

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Our marketing approach is to develop strategic relationships with many of the well-known market participants in the vertical markets that we service. For example, we are a preferred or recommended business management solutions provider for the members of Ace Hardware Corp. and Do it Best Corp. cooperatives for the hardlines and lumber vertical market, Netplus and NISSCO for the wholesale distribution market, and Aftermarket Auto Parts Alliance, Inc. for the automotive vertical market pursuant to agreements we have entered into with each of them and their members who are our customers. In addition, we have agreements with many of the well-known participants in the vertical markets we serve, including O’Reilly Automotive, Inc. and the Industry Data Exchange Association. This strategy includes obtaining endorsements, warehouse distributor partnerships and other alliances. The goal of these programs is to enhance the productivity of the field sales team and to create leveraged selling opportunities for system sales and content and supply chain offerings. These relationships have allowed us to streamline the distribution channel and to reduce our direct sales costs.

Product Development

Our product development strategy combines innovation and the introduction of new technology with our commitment to the long-term support of the unique needs of our customers. We seek to enhance our existing product lines, offer streamlined upgrade and migration options for our existing customers and develop compelling new products for our existing customer base and prospective new customers.

Our customer base includes long-term customers using our older, character based systems, as well as those who have upgraded to our most recently developed products running on Microsoft Windows, Linux, AIX and several UNIX platforms. A large portion of our current installed customer base is using older character-based systems, especially in the automotive parts aftermarket. We believe there is a significant opportunity for us to migrate these customers to our current generation of systems offerings running on more modern technology platforms. We have developed our current generation of products to provide an efficient migration path for customers operating older systems while preserving existing functionality and offering significant advantages in ease of use and new e-commerce capabilities.

In the development of our software, we use industry standard tools such as .Net, Java, Microsoft and Progress toolsets and a variety of open source based technologies. We are also developing a next generation industry catalog and continuing to expand our next generation e-commerce and connectivity offerings.

We also leverage a set of key technology relationships with third-party vendors to offer or facilitate a complete turnkey business management solution to our customers. We have relationships with several third party vendors including (1) Dell Inc., International Business Machines Incorporated, Hewlett Packard Company and Motorola (Symbol Technologies) for hardware platforms, (2) Microsoft for tools, operating systems and databases, (3) Progress Software for development tools, (4) Sterling Commerce and Inovis for EDI and (5) SonicWALL, Inc. for security solutions.

We have a centrally managed development organization designed to develop shared products and technologies that are used across multiple vertical markets as well as specific vertical markets.

Intellectual Property

We have approximately 268 registered copyrights, 86 registered trademarks and six issued patents. We attempt to protect our intellectual property in a number of ways. First, we distribute, or enable access to, our proprietary software and database products through licensing agreements, which require licensees to acknowledge our ownership of the software and databases and the confidential nature of our proprietary information, and grant limited usage rights. Secondly, all of our personnel are required to assign to us all rights of such personnel to inventions, patents, works of authorship and confidential information developed in conjunction with their employment relationship and agree to keep confidential our proprietary information. Finally, we require that third parties receiving our confidential information execute a non-disclosure agreement.

In general, copyright in a work created on or after January 1, 1978, subsists from its creation and endures for a term consisting of the life of the author and 70 years after the author’s death. The duration of our trademark registrations varies from country to country. In the U.S., we generally are able to maintain our trademark rights and renew trademark registrations for as long as the trademarks are in use. The duration of our patents issued in the U.S. is typically 17 years from the date of issuance of the patent or 20 years from the date of filing of the patent application.

While we believe that our ability to maintain and protect our intellectual property rights is important to our success, we also believe that our business as a whole is not materially dependent on any particular patent, trademark, license or other intellectual property right. Legal protections for some information products may be limited and technical means may not be available to protect against unauthorized use, access, display, reproduction or distribution. We may not be able to adequately protect our technology and competitors may develop similar technology independently.

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Customers

For fiscal year 2007, no single customer accounted for more than 10% of our total revenues. Our top ten customers accounted for 6.3% of our total revenues. Some of our top ten customers included (1) Ace Hardware Corp. and True Value Company in the hardlines and lumber vertical market, (2) the Industry Data Exchange Association, a joint venture formed by the National Electrical Manufacturers Association and the National Association of Electrical Distributors, in the wholesale distribution vertical market and (3) General Parts, Inc., Aftermarket Auto Parts Alliance, Inc. and O’Reilly Automotive, Inc. in the automotive parts aftermarket. We have approximately 14,500 systems customers, of which approximately 1,200 were added as a result of the Silk Systems and Eclipse acquisitions.

Competition

The vertical markets we serve are highly fragmented and served by many competitors. In the vertical markets we serve, we primarily compete against smaller software companies with solutions for a single vertical market or with proprietary systems developed by or for industry participants. The key factors influencing customers’ technology purchase decisions in the vertical markets we serve include, among others: ability to provide a turnkey business management solution with vertical specific functionality, depth of vertical expertise, pricing, level of services offered, credibility and scale of the technology vendor and connectivity with chosen industry trading partners. Many of our smaller competitors offer solutions that contain fewer features and compete by pricing their products and services below our prices.

In the hardlines and lumber vertical market, we compete primarily with smaller, niche-focused companies, many of which target specific geographic regions. Some of our competitors in this vertical market include Spruce Computer Systems, Inc., ECI² and Progressive Solutions, Inc.

We compete with several other vertically focused software providers in the wholesale distribution vertical market, including a division of Infor Global Solutions, Inc., Sage Software and NetSuite Inc. Other competitors include vertically focused software vendors in the building material, distribution and manufacturing markets, as well as independent software vendors, software tool developers and vendors and database vendors in other markets.

In the automotive parts aftermarket we compete primarily with smaller software and content companies that operate regionally or in a specific niche of the market and with proprietary systems developed by or for industry participants. Some of our competitors in this vertical market include Autologue Computer Systems Inc., in systems, and WHI in systems and content and data services. Genuine Parts Company (NAPA) and General Parts, Inc. (“GPI”) each offer its own branded solution to its company owned and independently affiliated stores.

Several large software companies have made public announcements regarding the attractiveness of various markets we serve and their intention to expand their focus in these markets, including Microsoft Corporation, Oracle Corporation, and SAP AG. These large software companies rarely compete directly with us except on larger, national focused transactions. However, these and other large software companies have made public announcements regarding the attractiveness of various small and medium-sized business markets and their intention to expand their focus in these markets. As a result, we expect competition with these large software companies may increase in the future.

Suppliers

For fiscal year 2007, Dell Inc. was our largest supplier of hardware supplies used in our solutions. No other supplier accounted for more than 10% of our total hardware supply expense. We have a number of competitive sources for supplies used in our operations.

Employees

We have approximately 2,200 employees as of September 30, 2007. None of our employees are represented by unions. We have not experienced any labor problems resulting in a work stoppage and believe we have good relations with our employees.

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Joint Venture

We own approximately 46% of the outstanding common stock of Internet Autoparts, Inc., or Internet Autoparts, a joint venture among us and some of our key customers and other investors, which was formed in May 2000. Internet Autoparts provides the automotive parts aftermarket with a web-based parts ordering and communications platform linking automotive service providers with wholesale distributors and other trading partners.

We granted certain non-exclusive, perpetual, non-transferable licenses to Internet Autoparts in connection with our investment in Internet Autoparts. Internet Autoparts agreed, subject to certain exceptions, not to compete with us in the businesses in which we are engaged. In addition, we agreed, subject to certain exceptions, not to compete with Internet Autoparts in the business of selling new or rebuilt automotive parts over the Internet to professional installers and consumers.

Internet Autoparts utilizes our web-based parts catalog, ePartExpert, and has access to our Internet communications gateway, AConneX, which provides ready communications among its various business platforms and third-party management systems. AconneX is available for licensing to third-party management systems in addition to Internet Autoparts. The licenses granted to Internet Autoparts provide for the payment to us of royalties based upon a percentage of net sales made by Internet Autoparts using the licensed technology. We have no commitment to invest additional funds in Internet Autoparts, although, we are obligated to provide service and support for AConneX.

Segment Reporting

See Note 14 of Notes to Consolidated Financial Statements.

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Item 1A. Risk Factors.

Any of the following risks could materially and adversely affect our business, financial condition or results of operations. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially adversely affect our business, financial condition or results of operations.

If we cannot successfully anticipate or respond to our customers’ needs and requirements, our revenues could decline significantly and our operating results could be materially adversely affected.

The business management solutions industry is characterized by technological advances, adoption of evolving industry standards in computer hardware and software technology and new product introductions. Our future success will depend in part on our ability to:

• maintain and enhance our systems and services;

• successfully anticipate or respond to our customers’ needs and requirements, including with regard to advancements in user interface, connectivity and ease of use requirements; and

• develop and market our electronic automotive parts and applications catalog and other products and services in order to meet changing customer needs.

We may not be able to effectively respond to the changing technological requirements of the vertical markets we serve. To the extent we determine that new software and hardware technologies are required to remain competitive or our customers demand more advanced offerings, the development, acquisition and implementation of these technologies are likely to require significant capital investments by us and significant time for development, integration and implementation. Capital may not be available for these purposes and investments in technologies may not timely meet market requirements or result in commercially viable products. In addition, we may not be able to maintain our electronic automotive parts and applications catalog or introduce new versions or releases in a timely manner, and we may not be able to implement these new versions or releases in a manner that will meet the needs of our customers and maintain their proprietary nature. In the event we are not able to respond to changing technological requirements in the vertical markets we serve or our customers’ needs, our revenues could decline significantly and our operating results could be materially adversely affected.

If we do not develop new relationships and maintain our existing relationships with key customers and/or well-known market participants, our revenues could decline significantly and our operating results could be materially adversely affected.

We have developed strategic relationships with many well-known market participants in the hardlines and lumber vertical market and the automotive parts aftermarket. For example, we are an exclusive, a preferred and/or a recommended business management solutions provider for the members of the Ace Hardware Corp. and Do it Best Corp. cooperatives and Aftermarket Auto Parts Alliance, Inc. We believe that our ability to increase revenues depends in part upon maintaining our existing customer and market relationships, including exclusive, preferred and/or recommended provider status, and developing new relationships. We may not be able to renew or replace our existing licensing agreements upon expiration or maintain our market relationships that allow us to market and sell our products effectively. The loss or diminishment of key relationships, in whole or in part, could materially adversely impact our business.

Approximately 58% of our total revenues for fiscal year 2007 was derived from product support, content and supply chain services and other services, which generally are subscription -based and not governed by long-term contracts, and therefore, if our current customers do not continue their subscriptions, our revenues could decline significantly and our operating results could be materially adversely affected.

Our product support and content and supply chain services are typically provided on a subscription basis, subject to cancellation on 30 to 60 days’ notice without penalty. Accordingly, our customers may not continue to subscribe to our services. As we stop actively improving and selling several of our older systems, we experience reduced rates of customer retention, which has been particularly evident in the automotive parts aftermarket. These developments have resulted in a decrease in our automotive parts aftermarket product support revenues from $29.2 million for fiscal year 2006 to $26.2 million for fiscal year 2007, representing a decrease of 10%. We expect the decreases in automotive parts aftermarket product support revenues to continue, although we cannot predict with certainty the magnitude and timing of future decreases.

Our success is dependent in part upon the performance of our new chief executive officer and on the performance and integration of new members of our senior management replacing those members of our senior management who left us in 2006-2007. If we are unable to integrate our new chief executive officer and other members of senior management who replaced members of our senior management who have terminated their employment with us, there could be a negative effect on our ability to operate our business.

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Our success and ability to implement our business strategy, including integrating acquisitions, depend upon the continued contributions of our management team and others, including our technical employees. On May 2, 2006, Mr. Pervez A. Qureshi, formerly our chief operating officer, became our chief executive officer and president. Our business and operations are substantially dependent on the performance and integration of our new chief executive officer and president. We also relocated our headquarters to our Livermore, California office. Mr. Greg Petersen resigned as Executive Vice President, effective January 5, 2007, and Mr. Christopher Speltz resigned as Senior Vice President of Finance and Treasurer, effective January 2, 2007, due to their inability to relocate to Livermore. Mr. Richard Rew (our former vice president, general counsel and secretary) resigned for similar reasons effective on July 14, 2006. Mr. Timothy F. Taich joined us as our new Vice President and General Counsel as of September 18, 2006. Mr. Brian E. Agle, who was subsequently hired as our Senior Vice President and Chief Financial Officer, resigned on February 9, 2007. Ms. Kathleen M. Crusco joined us as our new Senior Vice President and Chief Financial Officer as of May 3, 2007. Mr. Peter Donnelly, our former Senior Vice President of Operations, resigned from the Company as of October 31, 2007. We also lost our Senior Vice President of Human Resources, Ms. Beth Taylor, who passed away on November 23, 2007. Our future success also depends on the performance and integration of our new senior management and our ability to attract and retain qualified personnel. A failure to retain members of our senior management team or attract other qualified personnel could reduce our revenues, increase our expenses and reduce our profitability.

Our new Activant Eagle and Activant Vision product extensions for the automotive parts aftermarket are key elements to our strategy to re-establish growth in the automotive parts aftermarket, and if these product extensions do not gain market acceptance within that market our future growth and operating results could be adversely affected.

A component of our business strategy is to re-establish growth in the automotive parts aftermarket through the introduction of new systems and services. We have developed a version of our Activant Eagle product, a Windows-based system that has versions currently targeted at the hardlines and lumber vertical markets, that targets the automotive parts aftermarket. In the event our version of Activant Eagle for the automotive parts aftermarket does not gain acceptance within that market, our future growth and operating results could be adversely affected. In addition, we have introduced the Activant Vision product, which we acquired in conjunction with our acquisition of The System House, Inc. in 2005. If we are unable to successfully introduce the Activant Vision product with features required for the automotive aftermarket, our future growth and operating results could be adversely affected.

Our substantial indebtedness could adversely affect our business.

We have a substantial amount of indebtedness. As of September 30, 2007, we had total debt of $632.8 million and $20.0 million was available for additional borrowing under our senior secured revolving credit facility, including letters of credit up to a maximum of $5.0 million. Our substantial indebtedness has important consequences, including:

• requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;

• exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our senior secured credit facilities, the outstanding floating rate senior notes and our receivables facility will be at variable rates of interest;

• restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

• increasing our vulnerability to general adverse economic and industry conditions;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, other general corporate requirements and acquisitions;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry; and

• placing us at a competitive disadvantage compared to our competitors with less indebtedness.

In addition, our senior secured credit facilities and the indenture governing the notes permit us to incur substantial additional indebtedness in the future. For example, we utilized $20.0 million of our $40.0 million revolving credit facility in conjunction with the acquisition of the Eclipse business described below. If new indebtedness is added to our and our subsidiaries’ current debt levels, the risks described above would intensify.

We may be unable to service our indebtedness.

Our ability to make scheduled payments on or to refinance our obligations with respect to our indebtedness depends on our financial and operating performance, which are affected by general economic, financial, competitive, business and other factors beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings may not be available to us under

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our senior secured revolving credit facility in an amount sufficient to enable us to service our debt or to fund our other liquidity needs. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our debt or sell certain of our assets on or before the maturity of our debt. We may not be able to restructure or refinance any of our debt on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

Our operations are substantially restricted by the terms of our indebtedness, which could adversely affect us.

Our senior secured credit facilities and the indenture governing our senior subordinated notes contain a number of significant covenants. These covenants limit our ability and the ability of our restricted subsidiaries to, among other things:

• incur additional indebtedness and issue additional preferred stock;

• make capital expenditures and other investments;

• merge, consolidate or dispose of our assets or the capital stock or assets of any restricted subsidiary;

• engage in sale-leaseback transactions;

• pay dividends, make distributions or redeem capital stock;

• change our line of business;

• enter into transactions with our affiliates; and

• grant liens on our assets or the assets of our restricted subsidiaries.

Our senior secured credit facilities require us to meet certain financial tests. The failure to comply with any of these covenants or tests would cause a default under our senior secured credit facilities. A default, if not waived, could result in acceleration of the outstanding indebtedness under the notes and our senior secured credit facilities, in which case the debt would become immediately due and payable. In addition, a default or acceleration of indebtedness under our senior subordinated notes or our senior secured credit facilities could result in a default or acceleration of other indebtedness we may incur with cross-default or cross-acceleration provisions. If this occurs, we may not be able to pay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be available on terms that are acceptable to us, particularly given the recent trends in the debt market in which the general availability of credit is reduced and the cost of borrowing is generally higher with more restrictive terms Complying with these covenants and tests may cause us to take actions that we otherwise would not take or not take actions that we otherwise could take.

The costs and difficulties of integrating current and future acquisitions could impede our future growth, diminish our competitiveness and materially adversely affect our operations.

In May 2007, we acquired Silk Systems, Inc. (“Silk Systems”) and in August 2007, we acquired the Intuit Eclipse Distribution Management Solutions (“Eclipse”) business. These acquisitions increased the size and geographic scope of our operations. Additionally, we may pursue further acquisitions as part of our expansion strategy or to augment our sales, including additional acquisitions that extend our presence outside of North America. We cannot be certain that our current or future transactions will be successful and will not materially adversely affect the conduct, operating results or financial results of our business. With respect to any future acquisitions, we may be unable to identify additional potential acquisition targets, integrate and manage successfully any acquired businesses or achieve a substantial portion of any anticipated cost savings or other anticipated benefits from other acquisitions in the timeframe we anticipate, or at all. In addition, many transactions are subject to closing conditions, which may not be satisfied, and transactions may not be successfully completed even after their public announcement. Acquisitions, including, Silk Systems and Eclipse, involve numerous risks, such as difficulties in the assimilation of the operations, technologies, services and products of the acquired companies, market acceptance of our integrated product offerings, risks related to potential unknown liabilities associated with acquired businesses, personnel turnover and the diversion of management’s attention from other business concerns. Acquisitions of foreign businesses involve numerous additional risks, including difficulty enforcing agreements and collecting receivables under foreign laws and regulations, unexpected political, legal, trade or economic changes or instability, more stringent regulatory requirements or rules relating to labor or the environment, difficulty enforcing our intellectual property rights and increased exposure to foreign exchange rate fluctuations. We generally have paid cash for our recent acquisitions, including Silk Systems and Eclipse. Any future acquisitions may involve further use of our cash resources, the issuance of equity or debt securities and/or the incurrence of other forms of debt.

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A significant portion of our total assets consist of goodwill and other intangible assets, which may be subject to impairment charges in the future depending upon the financial results of our business.

Approximately $599 million of the purchase price paid in connection with the transactions completed in May 2006 was allocated to acquired goodwill. In addition, approximately $75 million of the purchase prices for Silk Systems and Eclipse was allocated to acquired goodwill. Acquired goodwill must be assessed for impairment at least annually. In the future, if our business does not yield expected financial results we may be required to take charges to our earnings based on this impairment assessment process, which could materially adversely affect our financial position.

We rely on third-party information for our electronic automotive parts and applications catalog and we are increasingly facing pressure to present our electronic automotive parts and applications catalog in a flexible format, each of which could expose us to a variety of risks, including increased pressure on our pricing.

We are dependent upon third parties to supply information for our electronic automotive parts and applications catalog. Currently, we obtain most of this information without a contract. In the future, more third-party suppliers may require us to enter into a license agreement and/or pay a fee for the use of the information or may make it more generally available to others. For example, an industry association is currently developing a data collection format that would make this information more accessible to consumers and provide it in a more usable format. We rely on this third-party information to continuously update our catalog. In addition, as a result of competitive pressures, we may begin providing our electronic automotive parts and applications catalog in a flexible format which could make it more difficult for us to maintain control over the way information presented in our catalog is used. Any change in the manner or basis on which we currently receive this information or in which it is made available to others who are or who could become competitors could have a material adverse effect on our electronic automotive parts and applications catalog business, which could have a material adverse effect on our business and results of operations.

If our existing customers who operate systems that we no longer actively sell do not upgrade or delay upgrading to our current generation of systems or upgrade to a system not sold by us, our operating results could be materially adversely affected.

Approximately half of our existing customers currently operate systems that we service and maintain but do not actively sell. Although we have developed upgrade paths to newer technologies for substantially all of these older systems, we cannot predict if or when our customers will upgrade to these newer technologies. If our customers do not upgrade or delay the upgrade cycle, or if they upgrade to a competitive system, our systems sales and services revenues and operating results could be materially adversely affected.

We compete with many other technology providers in connection with the sale of our business management solutions to the retail and wholesale distribution market and our failure to effectively compete may negatively impact our market share and/or revenue.

The retail and wholesale distribution market is highly fragmented and the technology needs in this market are supplied by many competitors. In the hardlines and lumber vertical market we compete primarily with smaller, niche-focused companies, many of which target specific geographic regions. In the automotive parts aftermarket, we compete primarily with smaller software companies that may operate regionally or in a specific niche of the market. In addition, we may also experience future competition from some of our current larger customers to the extent they decide to develop their own systems and/or provide related services to themselves or their respective affiliated companies or members in lieu of obtaining such systems and services from us. We also compete with several companies in the wholesale distribution vertical market that are larger than us, including Infor Global Solutions, Inc. In addition, there are also several niche competitors in the wholesale distribution vertical market. Further, several large software companies have made public announcements regarding the attractiveness of various small and medium-sized business markets and their intention to expand their focus in these markets, including Intuit Inc., Microsoft Corporation, Oracle Corporation, SAP AG and The Sage Group plc. To date, we have rarely competed directly with any of these larger software companies, except on larger, nationally focused transactions. However, we expect such competition may increase in the future.

Many of the competitors described above price their products and services below our prices, which over time may impact our pricing and profit margins. Our present and future competitors may have greater financial and other resources than we do and may develop better solutions than those offered by us. If increased spending is required to maintain market share or a rapid technological change in the industry occurs, we may encounter additional competitive pressures which could materially adversely affect our market share and/or profit margin.

Because of the varying sales cycles applicable to our systems sales, our quarterly systems revenues and other operating results can be difficult to predict and may fluctuate substantially.

Our systems revenues have increased from approximately 27% of our total revenues for fiscal year 2002 to approximately 42% of our total revenues for fiscal year 2007. We expect our systems revenues to continue to represent a material percentage of our total revenues. The sales cycle for our systems generally ranges from 90 days to 12 months, and it may be difficult to predict when a sale will close, if at all. It is therefore difficult to predict the quarter in which a particular sale will occur and to plan our expenditures accordingly.

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Because of quarterly fluctuations, we believe that quarter-to-quarter comparisons of our operating results are not necessarily meaningful. The delay or failure to complete systems sales in a particular quarter would reduce our revenues in that quarter and until any such sale is made, and increase revenues in any subsequent quarters over which revenues for any such sale would likely be recognized.

Future consolidation among our customers and other businesses in the markets in which we operate may reduce our revenues, which would negatively impact our financial performance.

The markets we serve are highly fragmented. These markets have in the past and are expected to continue to experience consolidation. For example, the hardlines and lumber vertical market has experienced consolidation as retail hardware stores and lumber and building materials dealers try to compete with mass merchandisers such as The Home Depot Inc., Lowe’s Home Centers, Inc. and Menard, Inc. In addition, some of the mass merchandisers, such as HD Supply (comprised of businesses formerly owned by The Home Depot Inc.), and many large distributors have been acquiring smaller chains and independent stores. We may lose customers as a result of this consolidation. Our customers may be acquired by companies with their own proprietary business management systems or by companies that utilize a competitor’s system, or our customers may be forced to shut down due to this competition. Additionally, if original equipment manufacturers successfully increase sales into the automotive parts aftermarket, our customers in this vertical market may lose revenues, which could adversely affect their ability to purchase and maintain our solutions or stay in business.

If we fail to adequately protect our proprietary rights and intellectual property, we may incur unanticipated costs and our competitive position may suffer.

Our success and ability to compete effectively depend in part on our proprietary technology. We have approximately 268 registered copyrights, 86 registered trademarks and six registered patents in the United States. We attempt to protect our proprietary technology through the use of trademarks, patents, copyrights, trade secrets and confidentiality agreements. Legal protections for information products may be limited and technical means may not be available to protect against unauthorized use, access, display, reproduction or distribution. We may not be able to adequately protect our technology and competitors may develop similar technology independently.

If we become subject to adverse claims alleging infringement of third-party proprietary rights, we may incur unanticipated costs and our competitive position may suffer.

We are subject to the risk that we are infringing on the proprietary rights of third parties. Although we are not aware of any infringement by our technology on the proprietary rights of others and are not currently subject to any legal proceedings involving claimed infringements by our products, we may be subject to such third-party claims, litigation or indemnity demands and these claims may be successful. If a claim or indemnity demand were to be brought against us, it could result in costly litigation or product shipment delays or force us to stop selling such product or providing such services or to enter into royalty or license agreements that may require substantial royalty or licensing payments. There can be no assurance we would be able to enter into these agreements on commercially acceptable terms or at all.

Our software and information services could contain design defects or errors that could affect our reputation, result in significant costs to us and impair our ability to sell our products.

Our software and information services are highly complex and sophisticated and could, from time to time, contain design defects or errors. Additionally, third-party information supplied to us for inclusion in our electronic automotive parts and applications catalog may not be complete, accurate or timely. These defects or errors may delay the release or shipment of our products or, if the defect or error is discovered only after customers have received the products, that these defects or errors could result in increased costs, litigation, customer attrition, reduced market acceptance of our systems and services or damage to our reputation.

If we fail to obtain software and information we license from third parties on acceptable terms, we may experience delays and disruptions that could materially and adversely affect our business and results of operations.

We license and use software and information from third parties in our business. These third party software and information licenses may not continue to be available to us on acceptable terms. In addition, these third parties may, from time to time, receive claims that they have infringed the intellectual property rights of others, including patent and copyright infringement claims, which may affect our ability to continue licensing their software or information. Our inability to use any of this third party software and information could result in shipment delays or other disruptions in our business, which could materially and adversely affect our operating results.

Interruptions in our connectivity applications and our systems could disrupt the services that we provide and materially adversely affect our business and results of operations.

Certain of our customers depend on the efficient and uninterrupted operation of our software connectivity applications, such as AConneX. In addition, our businesses are highly dependent on our ability to communicate with our customers in providing services and

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to process, on a daily basis, a large number of transactions. We rely heavily on our telecommunications and information technology infrastructure, as well as payroll, financial, accounting and other data processing systems. These applications and systems are vulnerable to damage or interruption from a variety of sources, including natural disasters, telecommunications failures and electricity brownouts or blackouts. If any of these systems fail to operate properly or become disabled, we could suffer financial loss, a disruption of our businesses, or damage to our reputation. Our insurance policies may not adequately compensate us for any losses that may occur due to any failures in our connectivity applications or in these services. We have disaster recovery plans in place to protect our businesses against natural disasters, security breaches, power or communications failures or similar events. At the same time, we have concluded it is not cost effective at this time to maintain any secondary “off-site” systems to replicate our connectivity applications, and we do not maintain and are not contractually required to maintain a formal disaster recovery plan with respect to these applications. Despite our preparations, in the event of a catastrophic occurrence, our disaster recovery plans may not be successful in preventing loss of customer data, service interruptions, disruptions to our operations or ability to communicate with our customers, or damage to our important locations. To the extent that any disruptions result in a loss or damage to our data center, telecommunications or information technology infrastructure, or our connectivity applications, it could result in damage to our reputation and lost revenues due to service interruptions and adverse customer reactions.

In the event of a failure in a customer’s computer system installed by us, a claim for damages may be made against us regardless of our responsibility for the failure, which could expose us to liability.

We provide business management solutions that we believe are critical to the operations of our customers’ businesses and provide benefits that may be difficult to quantify. Any failure of a customer’s system installed by us could result in a claim for substantial damages against us, regardless of our responsibility for the failure. Although we attempt to limit our contractual liability for damages resulting from negligent acts, errors, mistakes or omissions in rendering our services, the limitations on liability we include in our agreements may not be enforceable in all cases, and those limitations on liability may not otherwise protect us from liability for damages. Furthermore, our insurance coverage may not be adequate and that coverage may not remain available at acceptable costs. Successful claims brought against us in excess of our insurance coverage could seriously harm our business, prospects, financial condition and results of operations. Even if not successful, large claims against us could result in significant legal and other costs and may be a distraction to our senior management.

Because we sell to small and medium-sized retail and wholesale distribution businesses, prolonged unfavorable general economic and market conditions could negatively impact our sales.

We sell our systems and services to a large number of small and medium-sized businesses. These businesses may be more likely to be impacted by unfavorable general economic and market conditions than larger and better capitalized companies. Furthermore, the businesses of our customers in the hardlines and lumber vertical market are affected by trends in the new housing and home improvements market, and our customers in the wholesale distribution vertical market are affected by trends in general construction and industrial production markets, which could be negatively impacted by an increase in interest rates or a decline in the general economy. For example, the general decline in the housing and related financing markets that began during 2006 and has continued into 2007 has adversely affected the new housing and home improvement market. Therefore, unfavorable general economic and market conditions in the United States (including as a result of terrorist activities) could have a negative impact on our sales.

Fluctuations in the value of foreign currencies could result in currency transaction losses.

Generally, our international business is conducted in foreign currencies, principally the British pound, the Euro and the Canadian dollar. Fluctuations in the value of foreign currencies relative to the U.S. dollar will continue to cause currency transaction gains and losses. We cannot predict the effect of exchange rate fluctuations upon future operating results. We may experience currency losses in the future. We monitor our foreign currency exposure and, from time to time, will attempt to reduce our exposure through hedging. At September 30, 2007, we had no foreign currency contracts outstanding.

Natural disasters, terrorist attacks or other catastrophic events could harm our operations and adversely affect our future operating results.

Our operations could be subject to natural disasters and other business disruptions, which could harm our future revenue and financial condition and increase our costs and expenses. For example, our corporate headquarters are located near major earthquake fault lines. In the event that an earthquake, terrorist attack or other natural or manmade catastrophe were to destroy any part of our facilities, destroy or disrupt vital infrastructure systems or interrupt our operations for any extended period of time, our business, financial condition and operating results would be materially adversely affected.

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The interests of our controlling stockholders or investors, may differ from the interests of the holders of our other security holders.

We are a wholly-owned subsidiary of Activant Group. Affiliates of Hellman & Freidman LLC, Thoma Cressey Bravo, Inc. and JMI Equity, which we refer to as the “sponsors,” beneficially own, in the aggregate, over 99% of Activant Group’s common stock and an affiliate of Hellman & Friedman LLC beneficially owns the only authorized share of Activant Group’s Series A preferred stock. In addition, a stockholders agreement entered into by Activant Group, us and the sponsors prior to the mergers provides affiliates of Hellman & Friedman LLC with the right to vote the shares of Activant Group common stock held by the other sponsors under certain circumstances. As a result of this ownership of common stock and the share of Series A preferred stock and the terms of the stockholders agreement, these affiliates of Hellman & Friedman LLC are entitled to elect directors with majority voting power with respect to the Activant Group board of directors, to appoint new management and to approve most actions requiring the approval of the holders of outstanding Activant Group voting shares as a single class, including adopting most amendments to the Activant Group certificate of incorporation and approving mergers or sales of all or substantially all of our assets. These affiliates of Hellman & Friedman LLC, through their control of Activant Group, control us and all of our subsidiaries that are guarantors of our senior subordinated notes.

The interests of the sponsors may differ from our other security holders in material respects. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of the sponsors and their affiliates, as equity holders of Activant Group, might conflict with the interests of the holders of our senior subordinated notes. The sponsors and their affiliates may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though such transactions might involve risks to the holders of our senior subordinated notes, including the incurrence of additional indebtedness. Additionally, the indentures governing the senior subordinated notes permits us to pay fees, dividends or make other restricted payments under certain circumstances, and the sponsors may have an interest in our doing so.

The sponsors and their affiliates are in the business of making investments in companies and may, from time to time in the future, acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. You should consider that the interests of the sponsors may differ from yours in material respects. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties.

Our properties are leased, and include integration and distribution, software development and data entry facilities and administrative, executive, sales, and customer support offices. Our principal executive offices are located at 7683 Southfront Road, Livermore, CA 94551. We consider our properties suitable for their present and intended purposes and adequate for our current level of operations.

As of December 21, 2007, our facilities consisted of the principal properties listed in the table below.

	Approx.
	Size			Lease
Location	(Sq. ft.)		Description of Use	Termination
Livermore, California		86,300	Principal and management offices; product support;     software development; data entry; sales; administrative		2012
Austin, Texas		76,300	Management offices; product support; software     development; data entry; sales; administrative		2015
Yardley, Pennsylvania		65,000	Management offices; product support; software     development; sales; administrative		2012
Westminster, Colorado		41,600	Management offices; product support; software     development; sales; administrative		2011
Austin, Texas		23,300	Systems integration and distribution		2013
Longford, Ireland		21,000	Data entry; sales; administrative		2008
Hyannis, Massachusetts		20,400	Systems integration and distribution		2011
Greenville, South Carolina		19,400	Product support; software development; sales;     administrative		2012
London, Ontario		15,000	Product support; software development; sales;     administrative		2009
Montreal, Quebec		14,800	Management offices; product support; software     development; sales; administrative		2010
Plano, Texas		13,300	Product support; sales		2012
Austin, Texas		10,900	Hardware computer repair		2011
Austin, Texas		9,300	Data center		2013

In addition, we have short-term leases on over 40 offices and field service locations in the United States, Canada, and the United Kingdom.

Item 3. Legal Proceedings.

We are a party to various legal proceedings and administrative actions, all of which are of an ordinary or routine nature incidental to our operations. We do not believe that such proceedings and actions will, individually or in the aggregate, have a material adverse effect on our results of operations, financial condition or cash flows.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

There is no established public trading market for any class of our common stock. All of our common stock is held by Activant Group Inc., a Delaware corporation. No dividends were declared on our common stock during the fiscal years ended September 30, 2006 and 2007. We have not paid any cash dividends and do not currently have plans to do so in the foreseeable future. Our ability to pay any dividends in the future is limited by the terms of our senior secured credit agreement and the indentures governing our 9 ¹/2% senior subordinated notes due 2016. See “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Equity Compensation Plan Information

The following table provides certain information as of September 30, 2007, with respect to Activant Group’s equity compensation plans in effect on that date under which shares of Activant Group’s common stock are authorized for issuance.

						Number of
						securities
						remaining available
	Number of					for future
	securities to be					issuance under
	issued upon			Weighted		equity compensation
	exercise			average exercise		plans (excluding
	of outstanding			price of outstanding		securities
	options, warrants			options, warrants		reflected incolumn
Plan Category	and rights (A)			and rights (B)		(A)) (C)
Equity compensation plans approved by stockholders		7,092,407	(1)	$	4.22		1,002,885
Equity compensation plans not approved by stockholders (2)		—			—		—

(1)	Includes shares of Activant Group’s common stock to be issued upon the exercise of options granted under the Activant Group Inc. 2006 Stock Incentive Plan and 333,334 shares of Activant Group’s common stock to be issued upon the exercise of certain rollover options granted to Mr. Pervez A. Qureshi in connection with the mergers.
(2)	As of September 30, 2007, we did not have any equity compensation plans that were not approved by Activant Group’s or our stockholders.

Purchases of Equity Securities of the Issuer and Affiliated Purchasers

Neither we nor any affiliated purchaser repurchased any of our equity securities in the fourth quarter of fiscal year 2007.

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Item 6. Selected Financial Data.

The following table sets forth our selected financial data for the years ended September 30, 2003, 2004, 2005, the periods from October 1, 2005 to May 2, 2006 and from May 2, 2006 (our “Inception”) to September 30, 2006, and the year ended September 2007. The balance sheet data as of September 30, 2006 and 2007, and the statement of operations data for the year ended September 30, 2005, the periods from October 1, 2005 to May 2, 2006 and from Inception to September 30, 2006 and the year ended September 30, 2007 set forth below are derived from the audited consolidated financial statements of Activant Solutions Holdings Inc. (the “Predecessor Company”) and Activant Solutions Inc. (the “Successor Company”) included elsewhere herein. The balance sheet data as of September 30, 2003, 2004 and 2005 and the statement of operations data for the year ended September 30, 2003 and 2004 set forth below are derived from Predecessor Company audited consolidated financial statements that are not included herein. The selected financial data below should be read in conjunction with the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the audited consolidated financial statements included elsewhere herein.

Our and our Predecessor’s results of operations include the results of Speedware commencing after the consummation of the Speedware acquisition on March 30, 2005, the results of Prophet 21 commencing after the consummation of the Prophet 21 acquisition on September 13, 2005, the results of Silk Systems commencing after the consummation of the Silk Systems acquisition on May 31, 2007, and the results of Eclipse commencing after the consummation of the Eclipse acquisition on August 17, 2007. Accordingly, the results of operations are not directly comparable to periods subsequent to the acquisitions.

	Predecessor Company												Activant Solutions Inc.
										Period from			From
	Year Ended			Year Ended			Year Ended			October 1,			Inception to			Year Ended
	September 30,			September 30,			September 30,			2005 to May 2,			September 30,			September 30,
(in thousands)	2003			2004			2005			2006			2006			2007
Statement of Operations Data:
Revenues	$	221,546		$	225,806		$	265,991		$	225,215		$	164,190		$	409,122
Cost of revenues (exclusive of depreciation and amortization shown separately below)		93,887			97,137			118,126			96,128			71,858			175,986
Gross profit		127,659			128,669			147,865			129,087			92,332			233,136
Sales and marketing		31,589			31,596			38,076			30,549			24,192			60,856
Product development		15,653			15,562			21,379			21,986			15,934			38,907
General and administrative		24,244			24,283			28,068			21,459			14,327			40,219
Depreciation and amortization		22,768			16,584			16,114			15,511			11,773			29,735
Acquisition-related costs		—			—			—			32,291			194			531
Restructuring costs		—			—			—			116			802			1,109
Total operating expenses		94,254			88,025			103,637			121,912			67,222			171,357
Operating income		33,405			40,644			44,228			7,175			25,110			61,779
Interest expense		(14,782	)		(19,367	)		(25,728	)		(33,000	)		(20,340	)		(48,398	)
Expenses related to debt refinancing		(6,313	)		(524	)		—			(15,994	)		—			—
Premium on debt repurchase		—			—			—			(26,671	)		—			—
Gain on sale of assets		—			6,270			—			—			—			—
Other income (expense), net		(144	)		305			428			733			335			1,529
Income (loss) before income taxes		12,166			27,328			18,928			(67,757	)		5,105			14,910
Income tax expense (benefit)		4,351			10,561			5,645			(22,553	)		2,025			9,987
Net income (loss)	$	7,815		$	16,767		$	13,283		$	(45,204	)	$	3,080		$	4,923
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	10,215		$	32,065		$	10,952					$	36,383		$	33,379
Working capital		21,214			28,549			(3,752	)					30,731			27,576
Total assets		202,285			188,905			569,437						967,686			1,050,609
Total debt, including current maturities		173,300			155,714			455,477						565,050			632,863
Stockholders’ equity (deficit)	$	(36,662	)	$	(20,020	)	$	(5,674	)				$	247,673		$	256,194

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our results of operations and financial condition includes the Predecessor Company periods prior to the consummation of the transactions. We refer to the operations of both the Predecessor Company and the Successor Company as ours, unless specifically stated otherwise. You should read the following discussion and analysis in conjunction with our financial statements and related notes included herein. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under “Risk Factors”.

On May 2, 2006, Activant Group Inc. (formerly known as Lone Star Holding Corp.), or Activant Group, Lone Star Merger Corp., or Merger Sub, and Activant Solutions Holdings Inc., or Holdings, consummated a merger, whereupon, Holdings became wholly owned by Activant Group, which is wholly owned by investment funds affiliated with Hellman & Friedman LLC, Thoma Cressey Bravo, Inc. and JMI Equity, and certain members of our management. Following the merger, on May 2, 2006, Holdings merged with and into Activant Solutions Inc., with Activant Solutions Inc., or the Successor Company, continuing as the surviving corporation and as a wholly-owned subsidiary of Activant Group. These mergers are referred to in this report as the “mergers” and the transactions related to the mergers are referred to collectively in this report as the “transactions.” The transactions closed on May 2, 2006.

In our discussion of our results of operations in 2006, we discuss each line item in the statement of operations on a combined Predecessor/Successor basis for comparative purposes. These combined amounts represent the sum of the financial data for the Predecessor Company and us for the period from October 1, 2005 through September 30, 2006. These combined amounts are for informational purposes only. In this report, the terms the “Company”, “we”, “us” and “our” refer to the combined operations of Activant Solutions Inc. and the Predecessor Company, unless specifically stated otherwise.

Overview

We are a leading provider of business management solutions serving small and medium-sized businesses in three primary vertical markets: hardlines and lumber, wholesale distribution and the automotive parts aftermarket (“Auto”). Using a combination of proprietary software and extensive expertise in these vertical markets, we provide complete business management solutions consisting of tailored systems, product support and content and supply chain services designed to meet the unique requirements of our customers. Our fully integrated systems and services include point-of-sale, inventory management, general accounting and enhanced data management that enable our customers to manage their day-to-day operations. Our revenues are derived from our four reporting segments which are organized around the following business management solutions:

§	Systems, which is comprised primarily of proprietary software applications, implementation and training and third-party software, hardware and peripherals. For the year ended September 30, 2007, systems revenues accounted for approximately 42% of our total revenues;
§	Product Support, which is comprised primarily of customer support activities, including support through our advice line, software updates, preventive and remedial on-site maintenance and depot repair services. Our product support services are generally provided on a subscription basis, and accordingly, revenues from this segment are generally recurring in nature. For the year ended September 30, 2007, product support revenues accounted for approximately 39% of our total revenues;
§	Content and Supply Chain, which is comprised primarily of proprietary database and data management products for the vertical markets we serve (such as our comprehensive electronic automotive parts and applications catalog and point-of-sale business analysis data), connectivity services, e-commerce, networking and security monitoring management solutions. Our content and supply chain products and services are generally provided on a monthly subscription basis and accordingly, revenues from this segment are generally recurring in nature. For the year ended September 30, 2007, content and supply chain revenues accounted for approximately 16% of our total revenues; and
§	Other Services, which is comprised primarily of business products, such as forms and other paper products. For the year ended September 30, 2007, other services revenues accounted for approximately 2% of our total revenues.

For the year ended September 30, 2007, our revenues were derived from customers that operate in three vertical markets, hardlines and lumber, wholesale distribution and automotive parts aftermarket, and from our productivity tools business.

§ The hardlines and lumber vertical market consists of independent hardware retailers, home improvement centers, paint, glass and wallpaper stores, farm supply stores, retail nurseries and garden centers and independent lumber and building material

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	dealers primarily in the United States. For the year ended September 30, 2007, we generated approximately 42% of our total revenues from the hardlines and lumber vertical market.
§	The wholesale distribution vertical market consists of distributors of a range of products including electrical supply, plumbing, medical supply, heating and air conditioning, brick, stone and related materials, roofing, siding, insulation, industrial machinery and equipment, industrial supplies, fluid power, janitorial and sanitation products, paper and packaging and service establishment equipment vendors, primarily in the United States. For the year ended September 30, 2007, we generated approximately 31% of our total revenues from the wholesale distribution vertical market.
§	The automotive parts aftermarket consists of customers involved in the manufacture, distribution, sale and installation of new and remanufactured parts used in the maintenance and repair of automobiles and light trucks, and includes manufacturers, warehouse distributors, parts stores, professional installers and several chains in North America and Europe. For the year ended September 30, 2007, we generated approximately 22% of our total revenues from Auto.
§	The productivity tools business, which primarily consists of software migration and application development tools, was acquired as a part of the Speedware acquisition. For the year ended September 30, 2007, we generated approximately 5% of our total revenues from the productivity tools business.

Key Trends

§	Growth in our revenues from the hardlines and lumber and wholesale distribution vertical markets. Our systems revenues from the hardlines and lumber and wholesale distribution vertical markets have grown at a compound annual growth rate of approximately 30% from fiscal year 2002 through fiscal year 2007. Our acquisitions of Speedware, Prophet 21, Silk Systems and Eclipse have increased our revenues in the hardlines and lumber and wholesale distribution vertical markets within Canada and the United States. Our organic growth has been a result of the development of stronger relationships and licensing agreements with cooperatives in the hardlines and lumber vertical market, increased sales of upgraded software applications to customers and increased demand for our Activant Eagle and Activant Falcon product in the hardlines and lumber vertical market. Increased systems revenues generally result in increased product support revenues in future years as we add new customers and new products. In each of the last three fiscal years, product support revenues have increased as we added several new customers to our product support business and sold additional add-on modules.
§	Lower customer retention in our Auto vertical market. As we stop actively developing and selling several of our older systems, especially in our Auto vertical market, we have experienced reduced rates of customer retention. We have developed various upgrade paths for these customers and have undertaken a specific customer services campaign to increase retention rates for customers who elect to continue to operate with our older systems. Despite our efforts, we have experienced year-over-year decreases in our Auto product support revenues and we expect lower levels of customer retention to continue. We introduced in 2006 our Eagle platform as an upgrade path for our Auto customers on our J-CON system.
§	Consolidation of our customers’ vertical markets. Our customers are undergoing consolidation. When one of our customers acquires a company that does not currently use our systems, we typically benefit from new systems sales and increased services revenues associated with that customer. When a company not currently using our systems acquires one of our customers, we typically lose services revenues. We believe that consolidation has been neither a material benefit nor a material detriment to our operating results over the past three years. Recent trends in the automotive marketplace may cause additional consolidation to become detrimental in future years.

Acquisitions

Speedware Corporation Inc. In March and April 2005, we acquired the common stock of Speedware Corporation Inc. (“Speedware”) for cash consideration of $100.8 million. The Speedware acquisition solidifies our position as a provider of business management solutions to the hardlines and lumber vertical market through the addition of over 700 customers in this vertical market.

The Systems House, Inc. On May 16, 2005, we purchased substantially all of the assets of The Systems House, Inc. Their next generation business management solution, Activant Vision, is designed for warehouse distributors in the automotive parts aftermarket. The total consideration paid for the acquisition was approximately $2.6 million in cash.

Prophet 21, Inc. In September 2005, we acquired all of the outstanding capital stock of Prophet 21, Inc. (“Prophet 21”) for cash consideration of $218.2 million. Prophet 21 is a provider of business management solutions to the wholesale distribution vertical

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market. The integration of Prophet 21 into our operations has significantly enhanced our position and expertise serving the wholesale distribution vertical market and provided additional systems and service offerings for our customers.

Silk Systems, Inc. In May 2007, we acquired the common stock of Silk Systems, Inc. (“Silk Systems”) for a total purchase price of $6.5 million, net of $0.7 million cash received. Silk Systems is one of the leading computer software solutions providers for the Canadian home improvement, wholesale distribution and building materials industries. This acquisition expands our presence and commitment to the Canadian market while building on current technology and service offerings for customers across North America.

Intuit Eclipse Distribution Management Solutions. In August 2007, we purchased substantially all of the assets of Intuit Eclipse Distribution Management Solutions (“Eclipse”) for cash consideration of approximately $101.3 million. Eclipse is a leading enterprise software provider to the wholesale distribution segment and this acquisition strengthens our position with larger wholesale distribution businesses.

Our results of operations include results of Speedware commencing after the consummation of the Speedware acquisition on March 30, 2005, the results of Prophet 21 commencing after the consummation of the Prophet 21 acquisition on September 13, 2005, the results of Silk commencing after the consummation of the Silk acquisition on May 31, 2007, and the results of Eclipse commencing after the consummation of the Eclipse acquisition on August 17, 2007. Accordingly, our results of operations for the years ended September 30, 2007, 2006 and 2005 are not directly comparable.

Segment Reporting and Classification

We organize our business around four reportable segments (the “Segments”) consisting of (i) Systems, (ii) Product Support, (iii) Content and Supply Chain and (iv) Other Services. We sell our products and services to three distinct vertical markets consisting of hardlines and lumber, wholesale distribution and the automotive parts aftermarket and through our productivity tools business. Revenue for each Segment is also reported by each of these three vertical markets and productivity tools.

Our president and chief executive officer (the “CEO”) has been identified as the chief operating decision maker in assessing the performance of our Segments and the allocation of resources to them. Each Segment is managed separately. The CEO relies on the information derived directly from our management reporting system. The primary financial measure used by the CEO in assessing performance and allocating resources to the Segments is gross profit, a measure that is comprised of revenues less cost of revenues.

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Historical Results of Operations

Year Ended September 30, 2007 Compared to Year Ended September 30, 2006

The combined results for the year ended September 30, 2006 represent the combination of the predecessor period from October 1, 2005 through May 2, 2006 and the successor period from Inception through September 30, 2006. This combination does not comply with GAAP but is presented because we believe it provides the most meaningful comparison of our results.

Revenues. The following table sets forth, for the periods indicated, our Segment revenues by vertical market and for productivity tools and the variance thereof.

	Predecessor		Activant
	Company		Solutions Inc.		Combined
	Period from		Period from		Year Ended		Year Ended
	Oct 1, 2005 to		Inception to		Sept 30,		Sept 30,
(in thousands)	May 2, 2006		Sept 30, 2006		2006		2007		Variance $			Variance %
Systems Revenues:
Hardlines and Lumber	$	49,784	$	35,563	$	85,347	$	88,040	$	2,693			3.2	%
Auto		10,590		7,133		17,723		15,137		(2,586	)		(14.6	)
Wholesale Distribution		27,108		22,272		49,380		55,545		6,165			12.5
Productivity Tools		3,922		4,275		8,197		14,569		6,372			77.7
Total Systems Revenues	$	91,404	$	69,243	$	160,647	$	173,291	$	12,644			7.9	%
Product Support Revenues:
Hardlines and Lumber	$	38,012	$	27,555	$	65,567	$	69,690	$	4,123			6.3	%
Auto		17,612		11,554		29,166		26,217		(2,949	)		(10.1	)
Wholesale Distribution		31,365		22,249		53,614		58,399		4,785			8.9
Productivity Tools		4,750		2,868		7,618		6,199		(1,419	)		(18.6	)
Total Product Support Revenues	$	91,739	$	64,226	$	155,965	$	160,505	$	4,540			2.9	%
Content and Supply Chain Revenues:
Hardlines and Lumber	$	4,607	$	3,625	$	8,232	$	7,104	$	(1,128	)		(13.7	)%
Auto		27,935		19,664		47,599		48,439		840			1.8
Wholesale Distribution		4,123		3,722		7,845		11,715		3,870			49.3
Productivity Tools		—		—		—		—		—			—
Total Content and Supply Chain Revenues	$	36,665	$	27,011	$	63,676	$	67,258	$	3,582			5.6	%
Other Services Revenues:
Hardlines and Lumber	$	5,407	$	3,710	$	9,117	$	8,068	$	(1,049	)		(11.5	)%
Auto		—		—		—		—		—			—
Wholesale Distribution		—		—		—		—		—			—
Productivity Tools		—		—		—		—		—			—
Total Other Revenues	$	5,407	$	3,710	$	9,117	$	8,068	$	(1,049	)		(11.5	)%
Total Revenues:
Hardlines and Lumber	$	97,810	$	70,453	$	168,263	$	172,902	$	4,639			2.8	%
Auto		56,137		38,351		94,488		89,793		(4,695	)		(5.0	)
Wholesale Distribution		62,596		48,243		110,839		125,659		14,820			13.4
Productivity Tools		8,672		7,143		15,815		20,768		4,953			31.3
Total Revenues	$	225,215	$	164,190	$	389,405	$	409,122	$	19,717			5.1	%

Total revenues for the year ended September 30, 2007 increased by $19.7 million, or 5.1%, compared to the year ended September 30, 2006. This increase was comprised of $12.6 million increase in Systems revenues, primarily in the Wholesale Distribution and Productivity Tools vertical markets; $4.5 million increase in Product Support revenues, primarily in the Hardlines and Lumber and Wholesale Distribution vertical markets; and $3.6 million increase in Content and Supply Chain revenues, primarily in the Wholesale Distribution vertical market.

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Factors affecting Systems revenues for the year ended September 30, 2007.

Systems revenues for the year ended September 30, 2007 increased by $12.6 million, or 7.9%, compared to the year ended September 30, 2006. This increase was primarily attributable to higher Systems revenues in the Hardlines and Lumber, Wholesale Distribution and Productivity Tools vertical markets, partially offset by a decline in Systems revenues in Auto.

• Systems revenue from our Hardlines and Lumber vertical market increased by $2.7 million, or 3.2%, primarily due to increased revenues from co-op members. One of our co-ops announced that they are ending support for their legacy system and have encouraged their stores to purchase our Activant Eagle product in 2007, which resulted in increased sales for the year ended September 30, 2007. This activity had rapidly declined by our fiscal year end.

• The $2.6 million decrease, or 14.6%, in Systems revenues for Auto was primarily due to decreased installations of certain warehouse systems and lower shipments of add-ons and upgrades for our legacy products.

• Systems revenue from our Wholesale Distributions vertical market increased by $6.2 million, or 12.5%, due to a higher percentage of sales to large strategic customers, who generally have a higher average selling price, or ASP, due to their size and complexity.

• The $6.4 million increase, or 77.7%, in Productivity Tools Systems revenues was attributable to an increase in the number of platform migration projects currently being implemented with our customers.

Factors affecting Product Support revenues for the year ended September 30, 2007.

Product Support revenues for the year ended September 30, 2007 increased by $4.5 million, or 2.9%, compared to the year ended September 30, 2006. Increased Product Support revenues from the Hardlines and Lumber and Wholesale Distribution vertical markets were partially offset by a decline in Auto and Productivity Tools Product Support revenues.

• The $4.1 million, or 6.3%, increase in Product Support revenues from our Hardlines and Lumber vertical market was primarily attributable to increased systems sales in prior periods, which over time, results in increased Product Support revenues.

• Auto Product Support revenues declined by $2.9 million or 10.1%. Auto experienced a decline of approximately $1.5 million in Product Support revenues associated with customer attrition from our older systems that we continue to support but do not actively sell to new customers. We expect that Product Support revenues from our older systems will continue to decline. Approximately $1.2 million of the decline was associated with General Parts, Inc.’s decision to replace our J-CON system with its own branded store system as well as a contractual decline in support revenues for their warehouse systems. We do not expect to recapture this Product Support revenue.

• The $4.8 million, or 8.9%, increase in Product Support revenues from our Wholesale Distribution vertical market is primarily attributable to an increase in add-on licenses, support from prior period Systems sales, and increased support fees.

• The $1.4 million decrease in Productivity Tools Product Support revenues is attributable to attrition in legacy products.

Factors affecting Content and Supply Chain revenues for the year ended September 30, 2007.

Content and Supply Chain revenues for the year ended September 30, 2007 increased by $3.6 million, or 5.6%, compared to the year ended September 30, 2006. Increased Content and Supply Chain revenues from the Auto and Wholesale Distribution vertical markets were partially offset by a decline in Hardlines and Lumber Content and Supply Chain revenues.

• Content and Supply Chain revenues from our Hardlines and Lumber vertical market decreased by $1.1 million, or 13.7%, primarily attributable to the reclassification of IDW/IDX revenues to the Wholesale Distribution vertical market.

• Auto Content and Supply Chain revenues increased by $0.8 million, or 1.8%, primarily due to new customers and increased demand from existing customers for Catalog, Data Warehouse and Vista data services.

• Content and Supply Chain revenues from our Wholesale Distribution vertical market increased by $3.9 million, or 49.3%, mainly due to an increase in web hosting services and the reclassification of IDW/IDX revenues from the Hardlines and Lumber vertical market.

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Cost of revenues and gross margins as a percentage of revenues.

The following table sets forth, for the periods indicated, our cost of revenues and the variance thereof.

	Predecessor		Activant
	Company		Solutions Inc.		Combined
	Period from		Period from		Year Ended		Year Ended
	Oct 1, 2005 to		Inception to		Sept 30,		Sept 30,
(in thousands)	May 2, 2006		Sept 30, 2006		2006		2007		Variance $			Variance %
Cost of Revenues:
Systems	$	47,547	$	35,673	$	83,220	$	90,256	$	7,036			8.5	%
Product Support		36,694		27,066		63,760		64,796		1,036			1.6
Content and Supply Chain		8,125		6,446		14,571		15,041		470			3.2
Other Services		3,762		2,673		6,435		5,893		(542	)		(8.4	)
Total Cost of Revenues	$	96,128	$	71,858	$	167,986	$	175,986	$	8,000			4.8	%

The following table sets forth, for the periods indicated, our gross margin as a percentage of revenues.

	Predecessor			Activant
	Company			Solutions Inc.			Combined
	Period from			Period from			Year Ended			Year Ended
	Oct 1, 2005 to			Inception to			Sept 30,			Sept 30,
	May 2, 2006			Sept 30, 2006			2006			2007
Gross margin as a percentage of revenues by segment:
Systems		48.0	%		48.5	%		48.2	%		47.9	%
Product Support		60.0			57.9			59.1			59.7
Content and Supply Chain		77.8			76.1			77.1			77.6
Other Services		30.4			28.0			29.4			26.9
Total gross margin as a percentage of revenues		57.3	%		56.2	%		56.9	%		57.0	%

Total cost of revenues for the year ended September 30, 2007 increased by $8.0 million, or 4.8%, compared to the year ended September 30, 2006. This increase was comprised primarily of higher System sales. Gross margin as a percentage of revenues increased slightly from 56.9% for the year ended September 30, 2006 to 57.0% for the year ended September 30, 2007.

• Cost of Systems Revenues. Total cost of Systems revenues for the year ended September 30, 2007 increased by $7.0 million, or 8.5%. This increase was comprised primarily of $12.6 million increase in Systems revenues. Gross margin as a percentage of revenues decreased from 48.2% for the year ended September 30, 2006 to 47.9% for the year ended September 30, 2007. The decline in Systems gross margin is predominantly due to higher labor and material costs.

• Cost of Product Support Revenues. Total cost of Product Support revenues for the year ended September 30, 2007 increased by $1.0 million, or 1.6%, compared to the year ended September 30, 2006. This increase was comprised primarily of higher labor costs. Gross margin as a percentage of revenues increased from 59.1% for the year ended September 30, 2006 to 59.7% for the year ended September 30, 2007.

• Cost of Content and Supply Chain Revenues. Total cost of Content and Supply Chain revenues for the year ended September 30, 2007 increased by $0.5 million, or 3.2%, compared to the year ended September 30, 2006. Gross margin as a percentage of Content and Supply chain revenues improved from 77.1% for the year ended September 30, 2006 to 77.6% for the year ended September 30, 2007.

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     Operating Expenses. The following table sets forth, for the periods indicated, operating expenses and the variance thereof.

	Predecessor		Activant
	Company		Solutions Inc.
	Period from		Period from		Combined		Year Ended
	October 1, 2005		Inception to		Year Ended		Sept 30,					Variance
(in thousands)	to May 2, 2006		Sept 30, 2006		Sept 30, 2006		2007		Variance $			%
Operating expenses:
Sales and marketing	$	30,549	$	24,192	$	54,741	$	60,856	$	6,115			11.2	%
Product development		21,986		15,934		37,920		38,907		987			2.6
General and administrative		21,459		14,327		35,786		40,219		4,433			12.4
Depreciation and amortization		15,511		11,773		27,284		29,735		2,451			9.0
Acquisition-related costs		32,291		194		32,485		531		(31,954	)		(98.4	)
Restructuring costs		116		802		918		1,109		191			20.8
Total operating expenses	$	121,912	$	67,222	$	189,134	$	171,357	$	(17,777	)		(9.4	)%

The following table sets forth, for the periods indicated, our operating expenses as a percentage of revenues.

	Predecessor			Activant
	Company			Solutions Inc.						Activant
	Period from			Period from			Combined			Solutions Inc.
	October 1, 2005			Inception to			Year Ended Sept			Year Ended Sept
	to May 2, 2006			June 30, 2006			30, 2006			30, 2007
Operating expenses as a percentage of revenues:
Sales and marketing		13.6	%		14.7	%		14.1	%		14.9	%
Product development		9.8			9.7			9.7			9.5
General and administrative		9.5			8.7			9.2			9.8
Depreciation and amortization		6.9			7.2			7.0			7.3
Acquisition-related costs		14.3			0.1			8.3			0.1
Restructuring costs		0.1			0.5			0.2			0.3
Total operating expenses as a percentage of revenues		54.1	%		40.9	%		48.6	%		41.9	%

Total operating expenses decreased by $17.8 million, or 9.4%, for the year ended September 30, 2007 compared to the year ended September 30, 2006. Excluding acquisition related costs, operating expenses increased by $14.2 million, or 9.1%, primarily from increased costs in sales and marketing, and general and administrative.

• Sales and Marketing Expense. Total sales and marketing expense increased by $6.1 million, or 11.2%, for the year ended September 30, 2007 compared to the year ended September 30, 2006. The increase was primarily due to increased salary expense of $3.5 million as we continue to expand the sales force and higher commission expense of $1.8 million, partially offset by a decrease in bad debt expense of $0.3 million. Sales and marketing expense also included share-based payment expense of $1.0 million for the year ended September 30, 2007.

• Product Development Expense. Total product development expense increased by $1.0 million, or 2.6%, for the year ended September 30, 2007 compared to the year ended September 30, 2006. The increase was primarily a result of higher compensation and benefit expense and third-party outsourcing costs. Product development expense also included share-based payment expense of $0.4 million for the year ended September 30, 2007.

• General and Administrative Expense. Total general and administrative expense increased by $4.4 million, or 12.4%, for the year ended September 30, 2007 compared to the year ended September 30, 2006. The increase was primarily a result of higher compensation and benefit expense of $3.2 million and severance costs to former executives of $0.6 million, which was partially offset by rebates and refunds of $1.0 million related to telecom and insurance costs. General and administrative expense included share-based payment expense of $2.4 million and $1.4 million for the year ended September 30, 2007 and September 30, 2006, respectively.

• Depreciation and Amortization. Total depreciation and amortization expense increased by $2.5 million or 9.0%. The increase was primarily a result of increased intangible amortization expense related to previous acquisitions and the mergers.

• Acquisition-related costs. Total acquisition-related costs decreased by $32.0 million or 98.4%. Included in the year ended September 30, 2006 were $30.4 million of transaction fees associated with the mergers and $1.8 for other professional service expenses incurred in connection with an initial public offering of our common stock, which offering was withdrawn in connection

31

with the mergers. Acquisition-related costs for the year ended September 30, 2007 included post-acquisition costs related to Silk and Eclipse, primarily third-party system integration costs and travel expenses.

•

Restructuring costs. Total restructuring costs increased by $0.2 million or 20.8%. One-time benefits paid to certain employees separated in connection with the relocation of our corporate offices from Austin, Texas to Livermore, California were $0.9 million and $0.3 million for the years ended September 30, 2006 and September 30, 2007, respectively. Also included in the year ended September 30, 2007 were $0.3 million of severance costs related to outsourcing certain operations and $0.5 million of costs related to organizational restructuring.

Operating Income. Due to the above factors, total operating income for the year ended September 30, 2007 increased by $29.5 million, or 91.5%. Excluding the transaction costs related to the mergers of $32.4 million, operating income would have decreased by $3.0 million from $64.8 million for the year ended September 30, 2006 to $61.8 million for the year ended September 30, 2007.

Interest Expense Total interest expense for the year ended September 30, 2007 was $48.4 million compared to $53.3 million for the year ended September 30, 2006, a decrease of $4.9 million. The decrease is primarily a result of lower interest rates associated with our debt offerings related to the mergers, which was partially offset by additional debt associated with the Eclipse acquisition.

Income Tax Expense. We recognized an income tax expense of approximately $10.0 million, or 67.0% of pre-tax income for the year ended September 30, 2007.

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Year Ended September 30, 2006 Compared to Year Ended September 30, 2005

The combined results for the year ended September 30, 2006 represent the combination of the predecessor period from October 1, 2005 through May 2, 2006 and the successor period from Inception through September 30, 2006. This combination does not comply with GAAP but is presented because we believe it provides the most meaningful comparison of our results.

Revenues. The following table sets forth, for the periods indicated, our Segment revenues by vertical market and for productivity tools and the variance thereof.

					Activant
	Predecessor Company				Solutions Inc.		Combined
			Period from		Period from
	Year Ended		October 1,		Inception to		Year Ended
	September 30,		2005 to		September 30,		September 30,
(in thousands)	2005		May 2, 2006		2006		2006		Variance
Systems Revenues:
Hardlines and Lumber	$	79,579	$	49,784	$	35,563	$	85,347	$	5,768
Auto		14,935		10,590		7,133		17,723		2,788
Wholesale Distribution		8,937		27,108		22,272		49,380		40,443
Productivity Tools		1,338		3,922		4,275		8,197		6,859
Total Systems Revenues	$	104,789	$	91,404	$	69,243	$	160,647	$	55,858
Product Support Revenues:
Hardlines and Lumber	$	50,031	$	38,012	$	27,555	$	65,567	$	15,536
Auto		34,484		17,612		11,554		29,166		(5,318	)
Wholesale Distribution		8,033		31,365		22,249		53,614		45,581
Productivity Tools		3,719		4,750		2,868		7,618		3,899
Total Product Support Revenues	$	96,267	$	91,739	$	64,226	$	155,965	$	59,698
Content and Supply Chain Revenues:
Hardlines and Lumber	$	5,336	$	4,607	$	3,625	$	8,232	$	2,896
Auto		49,578		27,935		19,664		47,599		(1,979	)
Wholesale Distribution		2,178		4,123		3,722		7,845		5,667
Productivity Tools		2		—		—		—		(2	)
Total Content and Supply Chain Revenues	$	57,094	$	36,665	$	27,011	$	63,676	$	6,582
Other Services Revenues:
Hardlines and Lumber	$	7,104	$	5,407	$	3,710	$	9,117	$	2,013
Auto		415		—		—		—		(415	)
Wholesale Distribution		322		—		—		—		(322	)
Productivity Tools		—		—		—		—		—
Total Other Revenues	$	7,841	$	5,407	$	3,710	$	9,117	$	1,276
Total Revenues:
Hardlines and Lumber	$	142,050	$	97,810	$	70,453	$	168,263	$	26,213
Auto		99,412		56,137		38,351		94,488		(4,924	)
Wholesale Distribution		19,470		62,596		48,243		110,839		91,369
Productivity Tools		5,059		8,672		7,143		15,815		10,756
Total Revenues	$	265,991	$	225,215	$	164,190	$	389,405	$	123,414

Total combined revenues for the year ended September 30, 2006 increased by $123.4 million, or 46.4%, compared to the year ended September 30, 2005. This increase was comprised primarily of $83.6 million in revenues attributable to the Prophet 21 acquisition and $32.2 million in revenues attributable to the Speedware acquisition.

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Factors affecting combined systems revenues for the year ended September 30, 2006.

• Systems revenue from our hardlines and lumber vertical market increased by $5.8 million, or 7.2%, primarily due to $4.1 million of revenues attributable to the Speedware acquisition.

• The $2.8 million increase, or 18.7%, in systems revenues for Auto is primarily due to a focus on migrating customers to Activant Prism and Activant Vision platforms as well as higher sales of TPW and Ultimate peripherals and upgrades.

• The $40.4 million increase in Wholesale Distribution systems revenues is due to $38.6 million and $4.3 million of revenues attributable to the Prophet 21 acquisition and the Speedware acquisition, respectively.

• The $6.9 million increase in productivity tools systems revenues is attributable to the Speedware acquisition.

Factors affecting combined product support revenues for the year ended September 30, 2006.

• The $15.5 million, or 31.1%, increase in product support revenues from our hardlines and lumber vertical market is primarily due to $8.4 million of revenues attributable to the Speedware acquisition. Increased systems sales generally result in increased product support revenues over time.

• Auto product support revenues declined by $5.3 million or 15.4%. Auto experienced a decline of approximately $1.5 million in product support revenues associated with customer attrition from our older systems that we continue to support but do not actively sell to prospective customers. We expect that product support revenues from our older systems will continue to decline. Approximately $3.3 million of the decline was associated with General Parts, Inc.’s decision to begin replacing our J-CON parts store system with its own branded store system and approximately $0.4 million of the decline was due to the transfer of several of our product support employees to General Parts, Inc. Prior to the transfer of these employees, General Parts, Inc. paid us a fee substantially equivalent to the salary and benefits of these employees plus a markup. We do not expect to recapture this product support revenue.

• The $45.6 million increase in product support revenues from our wholesale distribution vertical market is primarily attributable to the Speedware and Prophet 21 acquisitions.

• The $3.9 million increase in productivity tools product support revenues is attributable to the Speedware acquisition.

Factors affecting combined content and supply chain revenues for the year ended September 30, 2006.

• Content and supply chain revenues from our hardlines and lumber vertical market increased by $2.9 million, or 54.3%, primarily attributable to increased revenues from our point-of-sale business analysis data and revenues attributable to the Speedware acquisition.

• Auto content and supply chain revenues declined by $2.0 million, or 4.0%, primarily due to a decline of approximately $1.3 million associated with customer attrition from our older systems, that we continue to support but do not actively sell to prospective customers, and a decline of $1.6 million related to a revised contract and simplified service terms with a large customer. These declines were offset by $0.9 million of new electronic automotive parts and applications catalog sales to non-systems customers and a $0.7 million increase in revenues from our AConneX connectivity product.

• Content and supply chain revenues from our wholesale distribution vertical market increased by $5.7 million mainly due to the
Prophet 21 acquisition.

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Total combined cost of revenues and gross margins as a percentage of revenues.

The following table sets forth, for the periods indicated, our cost of revenues and the variance thereof.

					Activant
	Predecessor Company				Solutions Inc.		Combined
			Period from		Period from
	Year Ended		October 1,		Inception to		Year Ended
	September 30,		2005 to		September 30,		September 30,
(in thousands)	2005		May 2, 2006		2006		2006		Variance
Cost of revenues (exclusive of depreciation and amortization):
Systems	$	59,179	$	47,547	$	35,673	$	83,220	$	24,041
Product Support		41,616		36,694		27,066		63,760		22,144
Content and Supply Chain		12,036		8,125		6,446		14,571		2,535
Other Services		5,295		3,762		2,673		6,435		1,140
Total cost of revenues	$	118,126	$	96,128	$	71,858	$	167,986	$	49,860

The following table sets forth, for the periods indicated, our gross margin as a percentage of revenues.

	Predecessor Company						Activant Solutions Inc.			Combined
				Period from			Period from
	Year Ended			October 1,			Inception to			Year Ended
	September 30,			2005 to			September 30,			September 30,
	2005			May 2, 2006			2006			2006
Gross margin as a percentage of revenues by segment:
Systems		43.5	%		48.0	%		48.5	%		48.2	%
Product Support		56.8	%		60.0	%		57.9	%		59.1	%
Content and Supply Chain		78.9	%		77.8	%		76.1	%		77.1	%
Other Services		32.5	%		30.4	%		28.0	%		29.4	%
Total gross margin as a percentage of revenues		55.6	%		57.3	%		56.2	%		56.9	%

Total combined cost of revenues for the year ended September 30, 2006 increased by $49.9 million, or 42.2%, compared to the year ended September 30, 2005. This increase was comprised primarily of $30.5 million and $13.1 million in costs attributable to Prophet 21 and Speedware product sales, respectively. Approximately $4.0 million of the increase was attributable to increased system sales, primarily our Activant Eagle and Falcon platforms, and $4.5 million of the increase was attributable to higher product support costs for our Activant Eagle platform. Gross margin as a percentage of revenues increased from 55.6% for the year ended September 30, 2005 to 56.9% for the year ended September 30, 2006.

• Cost of Systems Revenues. Combined cost of systems revenues for the year ended September 30, 2006 increased by $24.0 million, or 40.6%. This increase was comprised primarily of $22.9 million in costs attributable to Speedware and Prophet 21 Systems revenues and higher systems sales volumes. Gross margin as a percentage of revenues increased from 43.5% for the year ended September 30, 2005 to 48.2% for the year ended September 30, 2006. The improvement in systems gross margin is predominantly due to higher margins associated with sales of Speedware and Prophet 21 systems products.

• Cost of Product Support Revenues. Combined cost of product support revenues for the year ended September 30, 2006 increased by $22.1 million, or 53.2%, compared to the year ended September 30, 2005. This increase was comprised primarily of $18.2 million in costs attributable to Speedware and Prophet 21 Product Support sales and $1.1 million of transaction costs associated with the mergers and investments made in additional people and tools for our advice line customer support. Gross margin as a percentage of revenues increased from 56.8% for the year ended September 30, 2005 to 59.1% for the year ended September 30, 2006. The improvement in product support gross margin is predominantly due to costs increasing at a lower rate than revenue increases.

• Cost of Content and Supply Chain Revenues. Combined cost of content and supply chain revenues for the year ended September 30, 2006 increased by $2.5 million, or 21.1%, compared to the year ended September 30, 2005. Approximately $1.5 million of the increase was due to the Prophet 21 acquisition while the remainder increase represented additional investments in our electronic automotive parts and applications catalog and our point-of-sale business analysis data. Gross margin as a percentage of content and supply chain revenues declined from 78.9% for the year ended September 30, 2005 to 77.1% for the year ended September 30, 2006. We expect our cost of content and supply chain revenues to continue to increase as we raise our investment in our electronic catalog for Auto and point-of sale business analysis data.

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Operating Expenses. The following table sets forth, for the periods indicated, operating expenses and the variance thereof.

					Activant
	Predecessor Company				Solutions Inc.		Combined
			Period from		Period from
	Year Ended		October 1,		Inception to		Year Ended
	September 30,		2005 to		September 30,		September 30,
(in thousands)	2005		May 2, 2006		2006		2006		Variance
Sales and Marketing Expense	$	38,076	$	30,549	$	24,192	$	54,741	$	16,665
Product Development Expense		21,379		21,986		15,934		37,920		16,541
General and Administrative Expense		28,068		21,459		14,327		35,786		7,718
Depreciation and Amortization		16,114		15,511		11,773		27,284		11,170
Acquisition-related Costs		—		32,291		194		32,485		32,485
Restructuring Costs		—		116		802		918		918
Total Operating Expenses	$	103,637	$	121,912	$	67,222	$	189,134	$	85,497

Total combined operating expenses increased by $85.5 million, or 82.5%, for the year ended September 30, 2006 compared to the year ended September 30, 2005. The increase was primarily a result of the inclusion of Speedware and Prophet 21 operating expenses subsequent to the acquisitions of $38.1 million, transaction costs related to the mergers of $30.5 million and increased amortization of purchased intangibles of $11.2 million.

• Sales and Marketing Expense. Combined sales and marketing expense increased by $16.7 million, or 43.8%, for the year ended September 30, 2006 compared to the year ended September 30, 2005. The increase was primarily a result of the inclusion of $15.3 million of sales and marketing costs related to the Speedware, The Systems House and Prophet 21 acquisitions.

• Product Development Expense. Combined product development expense increased by $16.5 million, or 77.4%, for the year ended September 30, 2006 compared to the year ended September 30, 2005. Approximately $16.0 million of the increase was related to the inclusion of product development costs related to the Speedware, The Systems House and Prophet 21 acquisitions.

• General and Administrative Expense. Combined general and administrative expense increased by $7.7 million, or 27.5%, for the year ended September 30, 2006 compared to the year ended September 30, 2005. The increase was primarily a result of the inclusion of $6.7 million general and administrative costs related to the Speedware and Prophet 21 acquisitions. General and administrative expense included share-based payment expense of $1.4 million for the year ended September 30, 2006.

• Depreciation and Amortization. Combined depreciation and amortization expense increased by $11.2 million or 69.3%. The increase was primarily a result of increased intangible amortization expense related to previous acquisitions and the mergers.

• Acquisition-related Costs. Total acquisition-related costs for the year ended September 30, 2006 were $32.5 million, which included $30.4 million of transaction fees associated with the mergers and $1.8 for other professional service expenses incurred in connection with an initial public offering of our common stock, which offering was withdrawn in connection with the mergers.

• Restructuring Costs. Total restructuring costs for the year ended September 30, 2006 were $0.9 million, which related to one-time benefits paid to certain employees separated in connection with the relocation of our corporate offices from Austin, Texas to Livermore, California.

Operating Income. Due to the above factors, combined operating income for the year ended September 30, 2006 decreased by $11.9 million, or 27.0%. Excluding the transaction costs related to the mergers of $32.4 million, the $11.2 million increase in depreciation and amortization expense related to the acquisitions of Speedware and Prophet 21, and the mergers, operating income would have increased by $31.7 million from $44.2 million for the year ended September 30, 2005 to $75.9 million for the year ended September 30, 2006.

Interest Expense Combined interest expense for the year ended September 30, 2006 was $53.3 million compared to $25.7 million for the year ended September 30, 2005, an increase of $27.6 million. The increase is primarily a result of interest expense associated with our debt offerings, which we used to finance the Speedware and Prophet 21 acquisitions and the mergers.

Income Tax Expense. We recognized a combined income tax benefit of $20.5 million, or 32.8% of pre-tax losses for the year ended September 30, 2006.

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Liquidity and Capital Resources

Our principal liquidity requirements are for debt service, capital expenditures and working capital.

Our ability to service our indebtedness will depend on our ability to generate cash in the future. As of September 30, 2007, our net cash provided by operating activities was $51.2 million. Included in net cash flow from operating activities were depreciation and amortization expenses of $6.0 million and $23.7 million, respectively. We expect to incur approximately $27.8 million per year in amortization of purchased intangible assets.

Our cash balance at September 30, 2007 was $33.4 million. As of September 30, 2007, we had $632.9 million in outstanding indebtedness comprised primarily of $437.9 million of a senior secured term loan pursuant to our senior secured credit agreement, $175.0 million senior subordinated notes due 2016 and $20.0 million aggregate principal amount from our revolving credit facility. Our senior secured credit agreement provides for maximum borrowings of up to $40.0 million, including letters of credit up to a maximum limit of $5.0 million. At September 30, 2007, we had $0.5 million of letters of credit issued and outstanding.

On May 2, 2006, in connection with the consummation of the transactions, we entered into a senior secured credit agreement. The senior secured credit agreement provides for (i) a seven-year term loan in the amount of $390.0 million, amortized at a rate of 1.00% per year on a quarterly basis for the first six and three-quarters years after May 2, 2006, with the balance paid at maturity, and (ii) a five-year revolving credit facility that permits loans in an aggregate amount of up to $40.0 million, which includes a letter of credit facility and a swing line facility. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity, five years from May 2, 2006. During the year ended September 30, 2007, we repaid $25.0 million in principal towards the $390.0 million term loan, which reduced the future unamortized principal payments due per the amortization schedule. In addition, subject to certain terms and conditions, the senior secured credit agreement initially provided for one or more uncommitted incremental term loan and/or revolving credit facilities in an aggregate amount not to exceed $75.0 million. Proceeds of the term loan on the initial borrowing date were used to partially finance the mergers, to refinance certain of our indebtedness and to pay fees and expenses incurred in connection with the mergers and the related financings and transactions. In August 2007, we borrowed the $75.0 million incremental term loan. permitted under the senior secured credit agreement, as well as $20.0 million of the revolving credit facility. These amounts were used to partially finance the acquisition of Eclipse.

The borrowings under the senior secured credit agreement bear interest at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Deutsche Bank Trust Company Americas, and (2) the federal funds rate plus 1/2 of 1%; or (b) a reserve adjusted Eurodollar rate on deposits for periods of one-, two-, three-, or six-months (or, to the extent agreed to by each applicable lender, nine- or twelve-months or less than one month). The initial applicable margin for borrowings is:

• under the revolving credit facility, 1.25% with respect to base rate borrowings and 2.25% with respect to Eurodollar rate borrowings, which may be reduced subject to our attainment of certain leverage ratios; and

• under the term loan facilities, 1.00% with respect to base rate borrowings and 2.00% with respect to Eurodollar rate borrowings.

In addition to paying interest on outstanding principal under the senior secured credit agreement, we are required to pay a commitment fee to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder. The initial commitment fee rate is 0.50% per annum. The commitment fee rate may be reduced subject to our attaining certain leverage ratios, none of which had been obtained as of September 30, 2007. We must also pay customary letter of credit fees for issued and outstanding letters of credit. For a description of the covenants and certain other terms under our senior secured credit facilities, please refer to the caption below titled “Senior Secured Credit Facilities.”

On April 27, 2006, we issued $175.0 million aggregate principal amount of 9¹/2% senior subordinated notes due May 2, 2016. Each of our domestic subsidiaries, as primary obligors and not merely as sureties, jointly and severally, irrevocably and unconditionally guaranteed, on an unsecured senior subordinated basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all of our obligations under the indenture and the notes. The notes are our unsecured senior subordinated obligations and are subordinated in right of payment to all of our existing and future senior indebtedness (including the senior secured credit agreement), are effectively subordinated to all of our secured indebtedness (including the senior secured credit agreement) and senior in right of payment to all of our existing and future subordinated indebtedness. For a description of the covenants under the indenture governing our senior subordinated notes, please refer to the caption below titled “Senior Subordinated Notes.”

We believe that cash flows from operations, together with amounts available under the senior secured credit agreement, will be sufficient to fund our working capital, capital expenditures and debt service requirements for at least the next twelve months. Our ability to meet our working capital and debt service requirements, however, is subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. If we are not able to meet such requirements, we may be required to

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seek additional financing. There can be no assurance that we will be able to obtain financing from other sources on terms acceptable to us, if at all.

From time to time, we intend to pursue acquisitions, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We expect to fund future acquisitions primarily with cash flow from operations and borrowings, including borrowing from amounts available under our senior secured credit agreement or through new debt issuances. We may also issue additional equity either directly or in connection with any such acquisitions. There can be no assurance that acquisition funds will be available on terms acceptable to us, or at all.

Year Ended September 30, 2007 Compared to Year Ended September 30, 2006

Our net cash provided by operating activities was $51.2 million and $43.4 million for the fiscal years ended September 30, 2007 and 2006, respectively. Net cash provided by operating activities increased by $7.8 million primarily due to an increase in net income partially offset by changes in working capital. Of the $51.2 million net cash provided by operating activities for the fiscal year ended September 30, 2007, net income provided $4.9 million, noncash depreciation and amortization provided $29.7 million, and stock option expenses further increased cash provided by operating activities by $4.2 million.

Our investing activities used net cash of $119.5 million and $792.9 million during the fiscal years ended September 30, 2007 and 2006, respectively. During the fiscal year ended September 30, 2007, we used $108.2 million in cash to fund the acquisitions of Eclipse and Silk Systems. During the fiscal year ended September 30, 2006, we used $783.0 million in cash to fund the acquisition of Activant Solutions Inc. Our capital expenditures were $12.3 million and $11.2 million for the fiscal years ended September 30, 2007 and 2006, respectively. These amounts included capitalized computer software and database costs of $5.3 million and $5.7 million for the fiscal years ended September 30, 2007 and 2006, respectively.

Our financing activities generated cash of $65.3 million for the fiscal year ended September 30, 2007, primarily consisting of $95 million in proceeds from borrowings, comprised of $75 million of a senior secured term loan due 2013 and $20 million revolving line of credit due 2011, related to the acquisition of Eclipse. During the year ended September 30, 2007, we repaid $25.2 million of the senior secured loan and the remaining $2.0 million of the 10 ¹/2 % senior notes due 2011. In the fiscal year ended September 30, 2006, our financing activities generated cash of $793.3 million, primarily consisting of $565.0 million in proceeds from borrowings, comprised of $390.0 million of a senior secured term loan and $175.0 million senior subordinated notes due 2016, net of $19.5 million of related fees, and $245.6 million in capital contribution from the mergers.

Year Ended September 30, 2006 Compared to Year Ended September 30, 2005

Our net cash provided by operating activities was $43.4 million and $20.2 million for the fiscal years ended September 30, 2006 and 2005, respectively. The increase in cash flow provided by operating activities for the fiscal year ended September 30, 2006 compared to the fiscal year ended September 30, 2005 was primarily due to a $44.7 million difference in the change in operating assets and liabilities compared to the prior period offset by higher interest expense and write-off of prior capitalized expenses.

Our investing activities used net cash of $792.9 million and $330.6 million during the fiscal years ended September 30, 2006 and 2005, respectively. During the fiscal year ended September 30, 2006, we used $783.0 million in cash to fund the acquisition of Activant Solutions Inc. During the fiscal year ended September 30, 2005, we used $321.7 to purchase Speedware, Prophet 21 and The Systems House. Our capital expenditures were $11.2 million and $9.5 million for the fiscal years ended September 30, 2006 and 2005, respectively. These amounts included capitalized computer software and database costs of $5.7 million and $5.1 million for the fiscal years ended September 30, 2006 and 2005, respectively.

Our financing activities generated cash of $793.3 million for the fiscal year ended September 30, 2006, primarily consisting of $565.0 million in proceeds from borrowings, comprised of $390.0 million of a senior secured term loan and $175.0 million senior subordinated notes due 2016, net of $19.5 million of related fees and $245.6 million in capital contribution from the mergers. In the fiscal year ended September 30, 2005, we generated cash of $289.3 million, primarily from borrowings related to the acquisition of Speedware and Prophet 21.

Contractual Obligations and Commercial Commitments

Our current sources of short-term funding are our operating cash flows and our senior secured credit agreement. Our existing senior secured credit agreement contains customary terms and conditions, including minimum levels of debt and interest coverage and limitations on leverage. As of September 30, 2007, we were in compliance with all of the terms and conditions of our senior secured credit agreement.

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The following table summarizes our contractual obligations and payments at September 30, 2007:

	Payment Due or Expiration by Fiscal Year
(in thousands)	Total		2008		2009-10		2011-12		2013+
Debt:
Senior secured credit agreement	$	363,050	$	—	$	—	$	—	$	363,050
Senior secured credit agreement		74,813		750		1,500		1,500		71,063
Revolving Line		20,000		—		—		20,000		—
Senior subordinated notes		175,000		—		—		—		175,000
Total debt		632,863		750		1,500		21,500		609,113
Operating leases (1)		41,650		8,529		15,819		11,869		5,433
Total	$	674,513	$	9,279	$	17,319	$	33,369	$	614,546

(1) See the discussion in Note 11—Commitments and Contingencies in the notes to our financial statements included in this Annual Report.

The following table summarizes our commercial commitments at September 30, 2007:

	Expiration by Fiscal Year
(in thousands)	Total		2008		2009-10		2011-12		2013+
Standby letters of credit (1)	$	465	$	465	$	—	$	—	$	—

(1)  There are two standby letters of credit that secure certain demand deposit accounts belonging to our European subsidiaries, and workers compensation insurance.

Senior Secured Credit Facilities

Amortization. We are required to repay installments on the loans under the term loan facility in quarterly principal amounts of 1.0% of their funded total principal amount for the first six years and nine months, with the remaining amount payable on the date that is seven years from the date of the closing of the senior secured credit facilities. In the year ended September 30, 2007, we made a prepayment of $25.0 million in principal towards the $390.0 million term loan under the Senior Secured Credit Agreement. This reduced the future unamortized principal payments due per the amortization schedule.

Certain Covenants and Events of Default. The senior secured credit agreement will contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to:

• incur additional indebtedness (including contingent liabilities and seller notes);

• create liens on assets;

• enter into sale-leaseback transactions;

• engage in mergers or acquisitions;

• dispose of assets;

• pay dividends and restricted payments;

• make investments (including joint ventures);

• make capital expenditures;

• prepay other indebtedness (including the notes);

• engage in certain transactions with affiliates;

• amend agreements governing our subordinated indebtedness (including the notes);

• amend organizational documents and other material agreements; and

• change the nature of our business.

In addition, the senior secured credit agreement requires us to maintain the following financial covenants:

• a maximum total net leverage ratio; and

• a minimum interest coverage ratio.

The senior secured credit agreement also contains certain customary affirmative covenants and events of default. See “Item 13. Certain Relationships and Related Transactions, and Directors Independence”.

Covenant Compliance. Under the senior secured credit facilities, we are required to satisfy a maximum total leverage ratio, a minimum interest coverage ratio and other financial conditions tests, which become increasingly stringent over the term of the credit facility. As

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of September 30, 2007, we are in compliance with the financial and non-financial covenants. Our continued ability to meet those financial ratios and tests can be affected by events beyond our control or risks in our business (see “Item 1A. Risk Factors”), and we cannot assure you that we will meet those ratios and tests. A breach of any of these covenants could result in a default under the senior secured credit facilities. Upon the occurrence of an event of default under the senior secured credit facilities, the lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable and terminate all commitments to extend further credit.

Senior Subordinated Notes

The indenture governing our senior subordinated notes limits our (and most or all of our subsidiaries’) ability to:

• incur additional indebtedness;

• pay dividends on or make other distributions or repurchase our capital stock;

• make certain investments;

• enter into certain types of transactions with affiliates;

• use assets as security in other transactions; and

• sell certain assets or merge with or into other companies.

Subject to certain exceptions, the indenture governing the notes permits us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness.

Income from Partnership Investments

We, as general partner, own an approximate 20% interest in two separate partnerships with certain customers. We provide management information systems and services to these partnerships. The Predecessor Company recorded service revenue from these partnerships of $3.7 million and $1.2 million for the year ended September 2005 and from October 1, 2005 to May 2, 2006, respectively. From Inception to September 30, 2006 and for the year ended September 30, 2007, respectively, we recorded service revenue from these partnerships of $0.4 million and $0.4 million, respectively. The Predecessor Company recorded equity income from these partnerships of $0.3 million and $0.1 million for the year ended September 30, 2005 and the period from October 1, 2005 to May 2, 2006, respectively.

Off-Balance Sheet Arrangements

As of September 30, 2007, we did not have any material off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K).

Critical Accounting Policies and Estimates

The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, management evaluates estimates, including those discussed below. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, as amended by Staff Accounting Bulletin No. 104, Revenue Recognition, Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and Statement of Position 97-2, Software Revenue Recognition. We derive revenue from software license fees, computer hardware, implementation and training, software and hardware maintenance and support, content and data services and other services. We generally utilize written contracts as the means to establish the terms and conditions by which our licenses, products, maintenance and services are sold to our customers. Revenue is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, no significant obligations remain, the fee is fixed and determinable and collection is probable. We record revenue net of our sales tax obligations.

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We use the following revenue recognition policies for sales of our systems, which generally consist of software, hardware, implementation and training:

• Residual method. For the majority of systems sales, we use the residual method of revenue recognition. Under the residual method, we have established vendor specific objective evidence of fair value for each element of the system sale (i.e., software, hardware and implementation and training) and have determined that implementation and training services are not essential to the functionality of the delivered system. The revenues of the undelivered element of the system sale (i.e., implementation and training) are deferred until provided. The revenue for the hardware and software portion of the system sale are recognized upon shipment.

• Percentage of completion. For those systems that include significant customization or modification of the software and where estimates of costs to complete and monitor the progress of the customization or modification are reasonably dependable, percentage of completion contract accounting is applied to both the software and implementation and training elements of the sale. Systems revenue from the software and implementation and training elements are recognized on a percentage-of-completion method with progress-to-completion measured based upon installation hours incurred. Hardware is not essential to the functionality of the overall system and thus the hardware portion of the system is recognized upon delivery. Currently, approximately fourteen percent of our systems revenue and six percent of our total revenues are recognized using percentage of completion accounting.

• Completed contract. For those systems that include significant customization or modification of the software and where costs or estimates are not dependable, systems revenue from these sales are recognized at completion of the implementation and training based upon the completed contract method.

• Upon shipment. When products are shipped to a customer and no contractual obligation exists that would warrant the percentage of completion method or the completed contract method, the revenue is recognized at time of shipment. For example, we recognize revenues when a current customer purchases additional hardware or software licenses.

Product support and content and supply chain are primarily provided on a monthly subscription basis and are therefore recognized on the same monthly basis.

These policies require our management, at the time of the transaction, to assess whether the amounts due are fixed and determinable, collection is reasonably assured and future performance obligations exist. These assessments are based on the terms of the agreement with the customer, past history and the customer’s credit worthiness. If management determines that collection is not reasonably assured or future performance obligations exist, revenue recognition is deferred until these conditions are satisfied.

Software and Database Development Costs

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed, costs incurred internally in creating computer software products are expensed until technological feasibility has been established, which is typically evidenced by a completed program design. Thereafter, applicable software development costs are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Costs incurred related to the accumulation of data for the development of databases are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized using the greater of the amount computed using (a) the ratio that current gross revenues bear to the total anticipated future gross revenues or (b) the straight-line method over the estimated economic life of the product not to exceed five years. We are required to use our professional judgment in determining whether software development costs meet the criteria for immediate expense or capitalization using the criteria described above and evaluate software and database development costs for impairment at each balance sheet date by comparing the unamortized capitalized costs to the net realizable value. The net realizable value is the estimated future gross revenue from that product reduced by the estimated future costs of completing, maintaining and disposing of the product. The Predecessor Company capitalized approximately $3.5 million software and database development costs and recorded related amortization expense of approximately $3.3 million from October 1, 2005 to May 2, 2006. We did not record any write-offs of software and database development costs during that same period. We capitalized approximately $2.2 million and $5.3 million software and development costs and recorded related amortization expense of approximately $0.1 million and $1.3 million from Inception to September 30, 2006 and for the year ended September 30, 2007, respectively. We had no write-offs of software and database development costs from Inception to September 30, 2006 and for the year ended September 30, 2007.

Allowance for Doubtful Accounts

In accordance with SFAS No. 5, Accounting for Contingencies, we maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers was to deteriorate

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due to industry factors, general economic factors or otherwise, resulting in an impairment of their ability to make payments, additional allowances may be required.

Valuation of Goodwill and Other Intangibles

We account for intangible assets in accordance with SFAS No. 141, Business Combinations, SFAS No. 142, Goodwill and Other Intangible Assets, and SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Business acquisitions typically result in goodwill and other intangible assets, and the recorded values of those assets may become impaired in the future. The determination of the value of these intangible assets requires management to make estimates and assumptions that affect our consolidated financial statements. We evaluate goodwill and other intangibles on an annual basis and assess potential impairments to intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Our judgments regarding the existence of impairment indicators and future cash flows related to intangible assets are based on the operational performance of the acquired businesses, market conditions and other factors. Future events could cause us to conclude that impairment indicators exist and that goodwill associated with the acquired businesses is impaired. Any resulting impairment loss could have a material adverse impact on our results of operations. The Predecessor Company recorded related amortization expense of $10.8 million for the year ended September 30, 2005 and $12.0 million from October 1, 2005 to May 2, 2006. They did not record any write-offs of goodwill or intangibles during that same period. From Inception to September 30, 2006 and for the year ended September 30, 2007, we recorded amortization expense of $9.2 million and $23.7 million, respectively. We had no write-offs of goodwill or other intangibles from Inception to September 30, 2006 and for the year ended September 30, 2007.

Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No.159 provides companies with an option to report selected financial assets and liabilities at fair value. It also establishes presentation and disclosure requirements to facilitate comparisons between companies using different measurement attributes for similar types of assets and liabilities. The statement is effective for fiscal years beginning after November 15, 2007. Earlier application is permitted provided we also apply the provisions of SFAS No. 157, Fair Value Measurements. We are currently in the process of evaluating the impact SFAS No. 159 will have on our consolidated financial statements.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, rather it applies to existing accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. We are currently in the process of evaluating the impact SFAS No. 157 will have on our consolidated financial statements.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for our fiscal year beginning October 1, 2007. We are currently evaluating the impact of adopting FIN 48 on the consolidated financial statements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

At September 30, 2007, we had outstanding $437.9 million aggregate principal amount of a term loan due 2013, $175.0 million of senior subordinated notes and $20.0 million under our revolving credit facility. The term notes due 2013 and the revolving credit facility bear interest at floating rates. In May 2006, we entered into four interest rate swaps to manage and reduce the risk inherent in interest rate fluctuations and to effectively convert a notional amount of $245.0 million of floating rate debt to fixed rate debt. Giving effect to the interest rate swap, a 0.25% increase in floating rates would increase our interest expense by $0.6 million annually. See Note 4 of Notes to Consolidated Financial Statements, which is incorporated herein by reference.

Foreign Currency Risk

The majority of our operations are based in the United States and, accordingly, the majority of our transactions are denominated in U.S. dollars; however, we do have foreign based operations where transactions are denominated in foreign currencies and are subject to market risk with respect to fluctuations in the relative value of currencies. Currently, we have operations in Canada, the United Kingdom and Ireland and conduct transactions in the local currency of each location.

We monitor our foreign currency exposure and, from time to time, will attempt to reduce our exposure through hedging. At September 30, 2007, we had no foreign currency contracts outstanding.

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Item 8. Financial Statements and Supplementary Data.

Index to Consolidated Financial Statements

Activant Solutions Inc.
Audited Consolidated Financial Statements

Report of Independent Auditors	45
Consolidated Balance Sheets as of September 30, 2006 and September 30, 2007	46
Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended September 30, 2005, the period October 1, 2005 to May 2, 2006 (Predecessor), the period from Inception to September 30, 2006, and the year ended September 30, 2007	47
Consolidated Statements of Stockholders’ Equity (Deficit) for the year ended September 30, 2005, the period October 1, 2005 to May 2, 2006 (Predecessor), the period from Inception to September 30, 2006, and the year ended September 30, 2007	48
Consolidated Statements of Cash Flows for the year ended September 30, 2005, the period October 1, 2005 to May 2, 2006 (Predecessor), the period from Inception to September 30, 2006 and the year ended September 30, 2007	49
Notes to Consolidated Financial Statements	50

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of
Activant Solutions Inc.

We have audited the accompanying consolidated balance sheets of Activant Solutions Inc. (the Company) as of September 30, 2007 and 2006, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the year ended September 30, 2007 and for the period from March 7, 2006 (Inception) to September 2006; and the related statements of operations and comprehensive income (loss), stockholders’ equity (deficit), and cash flows of Activant Solutions Holdings Inc. (Predecessor Company) for the period from October 1, 2005 to May 2, 2006 and for the year ended September 30, 2005. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Activant Solutions Inc. at September 30, 2007 and 2006, and the consolidated results of its operations and its cash flows for the year ended September 30, 2007 and for the period from March 7, 2006 (Inception) to September 30, 2006; and the consolidated results of the operations and cash flows for Activant Solutions Holdings Inc. (Predecessor Company) for the period from October 1, 2005 to May 2, 2006 and for the year ended September 30, 2005, in conformity with U.S. generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Austin, Texas
December 20, 2007

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ACTIVANT SOLUTIONS INC.

Consolidated Balance Sheets

	September 30,
(in thousands, except share data)	2006			2007
Assets
Current assets:
Cash and cash equivalents	$	36,383		$	33,379
Trade accounts receivable, net of allowance for doubtful accounts of $2,205 and $5,378 at September 30, 2006 and 2007, respectively		55,689			57,144
Inventories, net		4,355			5,359
Deferred income taxes		5,401			8,622
Income taxes receivable		12,906			2,681
Prepaid expenses and other current assets		5,231			5,736
Total current assets		119,965			112,921
Property and equipment, net		8,727			10,074
Intangible assets, net		221,380			235,566
Goodwill		598,532			672,206
Deferred financing costs		15,137			15,501
Other assets		3,945			4,341
Total assets	$	967,686		$	1,050,609
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	13,944		$	18,401
Payroll related accruals		18,266			15,974
Deferred revenue		29,688			29,671
Current portion of long-term debt		3,900			750
Accrued expenses and other current liabilities		23,436			20,549
Total current liabilities		89,234			85,345
Long-term debt, net of discount		561,150			632,113
Deferred tax liabilities		64,817			67,072
Other liabilities		4,812			9,885
Total liabilities		720,013			794,415
Commitments and contingencies (See Note 11)		—			—
Stockholders’ equity:
Common Stock:
Par value $0.01, authorized 1,000 shares, 10 shares issued and outstanding at September 30, 2006 and 2007		—			—
Additional paid-in capital		246,744			250,893
Retained earnings		3,080			8,003
Other accumulated comprehensive income (loss):
Unrealized loss on cash flow hedges		(2,103	)		(2,891	)
Cumulative translation adjustment		(48	)		189
Total stockholders’ equity		247,673			256,194
Total liabilities and stockholders’ equity	$	967,686		$	1,050,609

The accompanying notes are an integral part of these Consolidated Financial Statements.

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ACTIVANT SOLUTIONS INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Predecessor Company						Activant Solutions Inc.
							Period from
	Year Ended			Period from			Inception to			Year Ended
	September 30,			October 1, 2005			September 30,			September 30,
(in thousands)	2005			to May 2, 2006			2006			2007
Revenues:
Systems	$	104,789		$	91,404		$	69,243		$	173,291
Services		161,202			133,811			94,947			235,831
Total revenues		265,991			225,215			164,190			409,122
Cost of revenues (exclusive of depreciation and amortization shown separately below):
Systems (1)		59,179			47,547			35,673			90,256
Services (1)		58,947			48,581			36,185			85,730
Total cost of revenues		118,126			96,128			71,858			175,986
Gross profit		147,865			129,087			92,332			233,136
Operating expenses:
Sales and marketing (1)		38,076			30,549			24,192			60,856
Product development (1)		21,379			21,986			15,934			38,907
General and administrative (1)		28,068			21,459			14,327			40,219
Depreciation and amortization		16,114			15,511			11,773			29,735
Acquisition costs		—			32,291			194			531
Restructuring costs		—			116			802			1,109
Total operating expenses		103,637			121,912			67,222			171,357
Operating income		44,228			7,175			25,110			61,779
Interest expense		(25,728	)		(33,000	)		(20,340	)		(48,398	)
Write-off of prior deferred financing costs		—			(15,994	)		—			—
Premium on debt repurchase		—			(26,671	)		—			—
Other income, net		428			733			335			1,529
Income (loss) before income taxes		18,928			(67,757	)		5,105			14,910
Income tax expense (benefit)		5,645			(22,553	)		2,025			9,987
Net income (loss)	$	13,283		$	(45,204	)	$	3,080		$	4,923
Comprehensive income (loss):
Net income (loss)	$	13,283		$	(45,204	)	$	3,080		$	4,923
Unrealized loss on cash flow hedges		—			—			(2,103	)		(788	)
Foreign currency translation adjustments		971			(131	)		(48	)		237
Comprehensive income (loss)	$	14,254		$	(45,335	)	$	929		$	4,372
(1)   Includes share-based payment expense as follows:
Cost of revenues
Systems	$	—		$	—		$	—		$	43
Services		—			—			—			351
Operating expenses		—			—			—
Sales and marketing		—			—			—			1,020
Product development		—			—			—			390
General and administrative		—			1,393			—			2,359

The accompanying notes are an integral part of these Consolidated Financial Statements.

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ACTIVANT SOLUTIONS INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

Predecessor Company

	Class A						Additional						Other Accumulated			Total
	Common		Common Stock				Paid-in			Retained			Comprehensive			Stockholders’
(in thousands)	Amount		Shares		Amount		Capital			Deficit			Income (Loss)			Deficit
Balance, September 30, 2004	$	3		19,220	$	2	$	85,503		$	(105,007	)	$	(521	)	$	(20,020	)
Foreign currency translation adjustments		—		—		—		—			—			971			971
Exercise of options		—		83		—		92			—			—			92
Net income		—		—		—		—			13,283			—			13,283
Balance, September 30, 2005		3		19,303		2		85,595			(91,724	)		450			(5,674	)
Foreign currency translation adjustments		—		—		—		—			—			(131	)		(131	)
Stock Compensation		—		—		—		1,393			—			—			1,393
Repurchase of common stock								(840	)								(840	)
Exercise of options		—		—		—		105			—			—			105
Net loss		—		—		—		—			(45,204	)		—			(45,204	)
Balance, May 2, 2006	$	3		19,303	$	2	$	86,253		$	(136,928	)	$	319		$	(50,351	)

Activant Solutions Inc.

					Additional					Other Accumulated			Total
	Common Stock				Paid-in			Retained		Comprehensive			Stockholders’
(in thousands)	Shares		Amount		Capital			Earnings		Loss			Equity
Issuance of common stock at Inception		10	$	—	$	245,625		$	—	$	—		$	245,625
Exchange of stock options upon completion of Merger		—		—		1,119			—		—			1,119
Foreign currency translation adjustments		—		—		—			—		(48	)		(48	)
Unrealized loss on cash flow hedges		—		—		—			—		(2,103	)		(2,103	)
Net income		—		—		—			3,080		—			3,080
Balance, September 30, 2006		10		—		246,744			3,080		(2,151	)		247,673
Foreign currency translation adjustments		—		—		—			—		237			237
Repurchase of Activant Group common stock		—		—		(13	)							(13	)
Stock-based compensation		—		—		4,162								4,162
Unrealized loss on cash flow hedges		—		—		—					(788	)		(788	)
Net income		—		—		—			4,923		—			4,923
Balance, September 30, 2007		10	$	—	$	250,893		$	8,003	$	(2,702	)	$	256,194

The accompanying notes are an integral part of these Consolidated Financial Statements.

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ACTIVANT SOLUTIONS INC.

Consolidated Statements of Cash Flows

	Predecessor Company						Activant Solutions Inc.
							Period from
	Year Ended			Period from			Inception to			Year Ended
	September 30,			October 1, 2005			September 30,			September 30,
(in thousands)	2005			to May 2, 2006			2006			2007
Operating activities
Net income (loss)	$	13,283		$	(45,204	)	$	3,080		$	4,923
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		5,311			3,498			2,551			6,048
Stock compensation		—			1,393			—			4,163
Amortization of intangible assets		10,803			12,013			9,222			23,687
Amortization of deferred financing costs		1,402			1,783			842			2,176
Deferred income taxes		(8,253	)		(10,192	)		2,475			(966	)
Write-off of prior deferred financing costs		—			15,994			—			—
Write-off of capitalized IPO costs		—			1,776			—			—
Provision for doubtful accounts		2,146			1,558			2,205			3,173
Other, net		1,174			1,331			(96	)		443
Changes in assets and liabilities:
Trade accounts receivable		(937	)		1,797			(14,116	)		969
Inventories		(411	)		(2,128	)		1,876			(62	)
Prepaid expenses and other assets		5,227			(22,531	)		5,170			9,152
Accounts payable		(951	)		(224	)		(2,075	)		4,457
Deferred revenue		(1,532	)		(4,944	)		9,733			(5,446	)
Accrued expenses and other liabilities		(7,054	)		56,751			9,825			(1,473	)
Net cash provided by operating activities		20,208			12,671			30,692			51,244
Investing activities
Acquisition of Activant Solutions Inc.		—			—			(782,894	)		—
Purchase of Speedware, net of cash acquired		(100,834	)		—			—			—
Purchase of Prophet 21, net of cash acquired		(218,200	)		—			—			—
Purchase of Silk Systems, net of cash acquired		—			—			—			(6,912	)
Purchase of Eclipse, net of cash acquired		—			—			—			(101,260	)
Purchase of other business		(2,646	)		—			—			—
Purchase of property and equipment		(4,410	)		(3,586	)		(1,909	)		(7,056	)
Capitalized computer software costs and databases		(5,052	)		(3,455	)		(2,202	)		(5,276	)
Equity distributions from partnerships		542			679			—			—
Unrealized loss on cash flow hedge, net		—			—			—			(788	)
Purchase price adjustments		—			508			—			1,784
Net cash used in investing activities		(330,600	)		(5,854	)		(787,005	)		(119,508	)
Financing activities
Issuance of common stock at Inception		—			—			245,625			—
Proceeds from long-term debt		300,000			185,000			565,000			75,000
Repayment of senior unsecured bridge loan		—			(180,000	)		—			—
Deferred financing costs		(10,320	)		(3,561	)		(15,979	)		(2,540	)
Proceeds from credit facility		—			10,000			—			20,000
Repayment of credit facility		—			(10,000	)		—			—
Payment on long-term debt		(493	)		(149	)		(1,950	)		(25,187	)
Repayment of senior notes		—			—			—			(2,000	)
Exercise of options		92			105			—			—
Repurchase of common stock		—			(840	)		—			(13	)
Net cash provided by financing activities		289,279			555			792,696			65,260
Change in cash and cash equivalents		(21,113	)		7,372			36,383			(3,004	)
Cash and cash equivalents, beginning of period		32,065			10,952			—			36,383
Cash and cash equivalents, end of period	$	10,952		$	18,324		$	36,383		$	33,379
Supplemental disclosures of cash flow information
Cash paid during the period for interest	$	23,023		$	26,155		$	7,324		$	29,637
Cash paid (received) during the period for income taxes	$	6,342		$	8,311		$	417		$	(3,642	)

The accompanying notes are an integral part of these Consolidated Financial Statements.

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ACTIVANT SOLUTIONS INC.

Notes to Consolidated Financial Statements

September 30, 2007

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

On May 2, 2006, Activant Group Inc. (formerly known as Lone Star Holding Corp.), or Activant Group, Lone Star Merger Corp., or Merger Sub, and Activant Solutions Holdings Inc., or Holdings (the “Predecessor Company”), consummated a merger, whereupon Holdings became wholly owned by Activant Group, which is wholly owned by investment funds affiliated with Hellman & Friedman LLC, Thoma Cressey Bravo, Inc., or Thoma Cressey, and JMI Equity and certain members of our management. Following the merger, on May 2, 2006, Holdings merged with and into Activant Solutions Inc., with Activant Solutions Inc. continuing as the surviving corporation and wholly owned subsidiary of Activant Group. These mergers are referred to as the “mergers” and the transactions related to the mergers are referred to collectively as the “transactions.” The transaction was treated as a purchase and thus the assets and liabilities were recorded at their fair value as of the closing date. Activant Group was incorporated on March 7, 2006 for the purpose of acquiring Holdings and did not have any operations prior to May 2, 2006 other than in connection with the Holdings acquisition. Unless the context otherwise requires references in this report to “we,” “our,” “us,” and the “Company” refer to Activant Solutions Inc. and its consolidated subsidiaries.

The accompanying consolidated statements of operations and cash flows for the periods ended September 30, 2005 and from October 1, 2005 to May 2, 2006 represent the results of operations and cash flows of the Predecessor Company and its wholly owned subsidiaries. The accompanying consolidated balance sheets as of September 30, 2006 and 2007, consolidated statements of operations and cash flows for the periods from Inception to September 30, 2006 and the year ended September 30, 2007, represent our financial position, results of operations and cash flows. Certain reclassifications have been made to prior periods’ consolidated financial statements to conform to current period presentation.

Description of Business

We are a provider of business management solutions serving small and medium-sized retail and wholesale distribution businesses. We have experience serving businesses with complex distribution requirements in three primary vertical markets: hardlines and lumber; wholesale distribution; and the automotive parts aftermarket. Using a combination of proprietary software and experience in these vertical markets, we provide complete business management solutions consisting of tailored systems, product support, and content and supply chain products and services designed to meet the unique requirements of our customers. Our fully integrated systems and services include point-of-sale, inventory management, general accounting and enhanced data management that enable our customers to manage their day-to-day operations.

The consolidated financial statements include the accounts of our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Cash Equivalents

We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Inventories

Inventories primarily consist of purchased parts and finished goods. Inventories are stated at the lower of cost or market, using the average cost method, and include amounts that ultimately may be transferred to equipment or service parts. Inventories are recorded net of inventory reserves of $0.8 million and $1.1 million at September 30, 2006 and September 30, 2007, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets (two to ten years). Leasehold improvements are amortized using the straight-line method over the life of the lease or the estimated useful life, whichever is shorter. Service parts used for servicing installed equipment are stated at cost and are depreciated over a period not exceeding two years using the straight-line method.

Capitalized Computer Software Costs

Costs relating to the conceptual formulation and design of software products are expensed as product development. Costs incurred subsequent to establishing the technological feasibility of software products are capitalized. Amortization of capitalized software costs begins when the products are available for general release to customers. Costs are amortized using the greater of the amount computed using (a) the ratio that current gross revenues bear to the total anticipated future gross revenues or (b) the straight-line method, generally over a period of two to five years. Management assesses the recoverability of its capitalized costs periodically based principally upon comparison of the net book value of

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the asset to the expected future revenue stream to be generated by the asset. If management finds evidence of asset impairment, the net book value is adjusted down to its fair value based upon the discounted cash flows. Amortization of capitalized software is included in the depreciation and amortization line of operating expenses. The Predecessor Company recorded capitalized software amortization expense of approximately $1.3 million from October 1, 2005 to May 2, 2006. We recorded capitalized software amortization expense of approximately $0.4 million for the year ended September 30, 2007.

Capitalized Database Costs

Database development costs consist primarily of direct labor costs associated with the accumulation of data received from auto parts manufacturers and the conversion of that information to an electronic format. Costs are amortized using the greater of the amount computed using (a) the ratio that current gross revenues bear to the total anticipated future gross revenues or (b) the straight-line method over the approximate life cycle of the data (generally over a period of two to five years). Management assesses the recoverability of its database costs periodically based principally upon comparison of the net book value of the asset to the expected future revenue stream to be generated by the asset. If management finds evidence of asset impairment, its net book value is adjusted to its fair value. Amortization of databases is included in the depreciation and amortization line of operating expenses. The Predecessor Company recorded capitalized database amortization expense of approximately $2.0 million from October 1, 2005 to May 2, 2006. We recorded capitalized software amortization expense of approximately $0.1 million and $0.9 million from Inception to September 30, 2006 and for the year ended September 30, 2007, respectively.

Deferred Financing Costs

Financing costs are deferred and amortized to interest expense using the straight-line method over the terms of the related debt, which approximates the effective interest method. Amortization of such costs of Predecessor Company for the year ended September 30, 2005 and for the period from October 1, 2005 to May 2, 2006 was $1.4 million and $1.8 million, respectively. From inception to September 30, 2006 and for the year ended September 30, 2007, we recognized amortization costs totaling $0.8 million and $2.2 million, respectively.

Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. Goodwill and indefinite life intangible assets are tested for impairment on an annual basis as of July 1, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach. No impairment of goodwill or indefinite life intangible assets has been identified during any of the periods presented.

We amortize other finite life intangible assets using the straight-line method over their estimated period of benefit, ranging from two to ten years. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. No impairments of finite life intangible assets have been identified during any of the periods presented.

Long-Lived Assets

We periodically review the carrying amounts of property and equipment and other long-lived assets to determine whether current events or circumstances, as defined in SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, warrant adjustments to such carrying amounts by considering, among other things, the future cash inflows expected to result from the use of the asset and its eventual disposition less the future cash outflows expected to be necessary to obtain those inflows. At this time, future cash inflows exceed the carrying value of the assets; thus, no impairment loss has been recognized.

Revenue Recognition

We recognize revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue Recognition, Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and Statement of Position 97-2, Software Revenue Recognition. We derive revenue from software license fees, computer hardware, implementation and training, software and hardware maintenance and support, content and data services and other services. We generally utilize written contracts as the means to establish the terms and conditions by which our licenses, products, maintenance and services are sold to our customers. Revenue is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, no significant obligations remain, the fee is fixed and determinable and collection is probable. We record revenue net of our sales tax obligations.

We use the following revenue recognition policies for sales of our systems, which generally consist of software, hardware, implementation and training:

§ Residual method. For the majority of systems sales, we use the residual method of revenue recognition. Under the residual method, we have established vendor specific objective evidence of fair value for each undelivered element of the system sale (i.e., implementation and training services) and have determined that these services are not essential to the functionality of the delivered system. The revenues of the undelivered element of the system sale are deferred until provided. The revenue for the hardware and software elements of the system sale are recognized upon shipment.

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§ Percentage of completion. For those systems that include significant customization or modification of the software and where estimates of costs to complete and monitor the progress of the customization or modification are reasonably dependable, percentage of completion contract accounting is applied to both the software and implementation and training elements of the sale. Systems revenue from the software and implementation and training elements are recognized on a percentage-of-completion method with progress-to-completion measured based upon output measures. Hardware is not essential to the functionality of the overall system and thus the hardware portion of the system is recognized upon delivery. Currently, approximately fourteen percent of our systems revenue and six percent of our total revenues are recognized using percentage of completion accounting.

§ Completed contract. For those systems that include significant customization or modification of the software and where costs or estimates are not dependable, systems revenue from these sales are recognized at completion of the implementation and training based upon the completed contract method.

§ Upon shipment. When products are shipped to a customer and no contractual obligation exists that would warrant the percentage of completion method or the completed contract method, the revenue is recognized at time of shipment. For example, we recognize revenues when a current customer purchases additional hardware or software licenses, when those items are shipped.

Product support, and content and supply chain products and services are primarily provided on a monthly subscription basis and are therefore recognized on the same monthly basis.

These policies require our management, at the time of the transaction, to assess whether the amounts due are fixed and determinable, collection is reasonably assured and future performance obligations exist. These assessments are based on the terms of the agreement with the customer, past history and the customer’s credit worthiness. If management determines that collection is not reasonably assured or future performance obligations exist, revenue recognition is deferred until these conditions are satisfied.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is based on our assessment of the collectibility of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balance, and current economic conditions that may affect a customer’s ability to pay. A specific reserve for individual accounts is recorded when we become aware of a customer’s inability to meet its financial obligations, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position.

Product Development Costs

We account for development costs related to products to be sold in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Development costs are capitalized beginning when a product’s technological feasibility has been established and ending when the product is available for general release to customers. Technological feasibility is achieved when the detailed program design is complete. For the year ended September 30, 2005, the predecessor company capitalized $5.1 million of software and database development costs. During the period from October 1, 2005 to May 2, 2006, Predecessor Company capitalized $3.5 million of software and database development costs. From Inception to September 30, 2006 and for the year ended September 30, 2007, we capitalized $2.2 million and $5.3 million, respectively of software and database development costs. Amortization of capitalized software and database development costs for Predecessor Company was $7.0 million for the year ended September 30, 2005. During the period from October 1, 2005 to May 2, 2006, amortization of software and database development costs was $3.3 million for Predecessor Company. From Inception to September 30, 2006 and for the year ended September 30 2007, we amortized $0.1 million and $1.3 million, respectively of software and database development costs.

Advertising Costs

We expense all advertising costs as incurred and the amounts were not material for any of the periods presented.

Income Taxes

Deferred income taxes are provided for all temporary differences based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income taxes are provided on the undistributed earnings of foreign subsidiaries that are not considered to be permanently reinvested.

There are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves when, despite our belief that the tax return positions are fully supportable, we believe that certain positions are likely to be challenged and may not be sustained on review by tax authorities. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit. The provision of income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

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Fair Value of Financial Instruments

The carrying amounts of certain of our financial instruments including cash and cash equivalents, accounts receivable and accounts payable, approximate fair value because of their short maturities.

Our long-term debt consists of obligations with both variable and fixed interest rates. The carrying value of debt obligations with variable interest rates is considered to approximate fair value. The estimated fair value of debt obligations with fixed interest rates is based on the quoted market prices for such debt obligations. The estimated fair value of long-term debt with fixed interest rates at September 30, 2007 with a carrying value of $175 million is $154 million.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Certain Risks and Concentrations

We perform ongoing credit evaluations of our customers and generally do not require collateral from our customers. Most of our customers are in the automotive parts aftermarket, hardlines and lumber and wholesale distribution industries.

No customer accounted for more than 10% of our revenues during the years ended September 30, 2005, 2006 and 2007.

For the year ended September 30, 2007, Dell Inc. was our largest supplier of hardware supplies used in our solutions. No other supplier accounted for more than 10% of our total supply expense. We have a number of competitive sources of supply for supplies used in our operations.

Foreign Currency

Assets and liabilities of subsidiary operations denominated in foreign currencies are translated at the year-end rates of exchange and the income statements are translated at the average rates of exchange for the year. Translation adjustments resulting from this process are charged or credited to other comprehensive income. Local currencies are considered to be the functional currencies.

Stock Based Compensation

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which replaced SFAS No. 123, Accounting for Stock-Based Compensation, and superseded APB Opinion No. 25, Accounting for Stock Issued to Employees. This revised standard addresses the accounting for stock-based payment transactions in which a company receives employee services in exchange for either equity instruments of the company or liabilities that are based on the fair value of the company’s equity instruments or that may be settled by the issuance of such equity instruments. SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values beginning with the first interim or annual period after June 15, 2005, with early adoption encouraged. The Predecessor Company adopted SFAS 123(R) in the quarter ended December 31, 2005. Prior to SFAS 123(R) adoption, the Predecessor Company accounted for share-based payments under APB 25.

Determining the appropriate fair value model and calculating the fair value of share-based payment awards require the input of highly subjective assumptions, including the expected life of the share-based payment awards and stock price volatility. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If our actual forfeiture rate is materially different from our estimate, the stock-based compensation expense could be significantly different from the amount we have recorded in the current period.

Recently Issued Accounting Standards

In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No.159 provides companies with an option to report selected financial assets and liabilities at fair value. It also establishes presentation and disclosure requirements to facilitate comparisons between companies using different measurement attributes for similar types of assets and liabilities. The statement is effective for fiscal years beginning after November 15, 2007. Earlier application is permitted provided we also apply the provisions of Statement 157, Fair Value Measurements. We are currently in the process of evaluating the impact SFAS No. 159 will have on our consolidated financial statements.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, rather it applies to existing accounting pronouncements that require or permit fair value measurements.

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SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. We are currently in the process of evaluating the impact SFAS No. 157 will have on our consolidated financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for our fiscal year beginning October 1, 2007. We are currently evaluating the impact of adopting FIN 48 on the consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current presentation.

Note 2. Merger and Related Transactions

On May 2, 2006, Holdings became wholly owned by Activant Group, which is wholly owned by funds affiliated with Hellman & Friedman LLC, Thoma Cressey Bravo, Inc. and JMI Equity and certain members of our management. Following the merger, on May 2, 2006, Holdings merged with and into the Company, with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Activant Group. The transaction was treated as a purchase and thus the assets and liabilities were recorded at their fair value as of the closing date.

The mergers and related transactions were funded by a combination of approximately $245.7 million proceeds of common stock, a $390.0 million senior secured term loan facility and $175.0 million in senior subordinated notes, less cash received. The mergers have been recorded using the purchase method of accounting. The purchase price allocation was based upon the relative fair values of the identifiable assets acquired and liabilities assumed. The excess purchase price over those fair values was recorded as goodwill. The goodwill recorded as a result of these acquisitions is not expected to be deductible for tax purposes.

Note 3. Acquisitions

Acquisitions have been recorded using the purchase method of accounting, and, accordingly, the results of operations are included in our consolidated results as of the date of each acquisition. We allocate the purchase price of our acquisitions to the tangible assets, liabilities and intangible assets acquired, based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. The goodwill recorded as a result of these acquisitions is not expected to be deductible for tax purposes.

Speedware Corporation Inc.

In March and April 2005, the Predecessor Company acquired all of the common stock of Speedware Corporation Inc. (“Speedware”) for $100.8 million in cash.

Prophet 21, Inc.

In September 2005, the Predecessor Company acquired all of the common stock of Prophet 21, Inc. (“Prophet 21”). The Predecessor Company paid $218.2 million in cash for 100% of Prophet 21’s common stock.

The Systems House, Inc.

In May 2005, the Predecessor Company acquired substantially all of the assets of The Systems House, Inc. for a total purchase price of $2.6 million.

Silk Systems, Inc.

On May 31, 2007, we acquired the common stock of Silk Systems, Inc. (“Silk Systems”) for a total purchase price of $6.5 million, net of $0.7 million cash received. Silk Systems is one of the leading computer software solutions providers for the Canadian home improvement, wholesale distribution and building materials industries. This acquisition expands our presence and commitment to the Canadian market while building on current technology and service offerings for customers across North America.

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Eclipse Distribution Management Solutions

On August 17, 2007, we acquired substantially all of the assets of Intuit Eclipse Distribution Management Solutions (“Eclipse”) for cash consideration of approximately $101.3 million. Eclipse is a leading enterprise software provider to the wholesale distribution segment and this acquisition strengthens our position with larger wholesale distribution businesses. The purchase price was allocated based on the fair value of net assets acquired as follows (in thousands):

Trade receivables	$	4,506
Inventory		705
Property and equipment		266
Other assets		48
Goodwill		70,496
Other intangible assets		30,000
Deferred revenue		(4,761	)
Total purchase price	$	101,260

Acquired intangible assets consist primarily of customer contracts, customer lists and acquired technology with a weighted average estimated useful life of ten years. The amortization expense related to the acquired intangible assets is estimated to be approximately $3.0 million per annum. Goodwill is deductible for tax purposes.

The Company is in the process of determining values of certain tangible and intangible assets; thus, the allocation of the purchase price to the assets acquired and liabilities assumed in connection with the acquisition is subject to change. The preliminary purchase price allocation is based upon management’s best estimates of the relative fair values of the identifiable assets acquired and liabilities assumed.

Pro forma results (unaudited)

The following table presents the unaudited pro forma combined results of our operations with Eclipse for the year ended September 30, 2006 and 2007, after giving effect to certain pro forma adjustments primarily related to the elimination of certain Intuit allocations, restructuring activities, amortization of acquired intangible assets and interest expense. These unaudited pro forma results are not necessarily indicative of the actual consolidated results of operations had the acquisition actually occurred on the first day of the respective periods or of future results of operations of the consolidated entities (in thousands).

	Year Ended September 30,
	2006			2007
Total revenues	$	439,186		$	453,278
Total cost of revenues		194,797			200,717
Gross profit		244,389			252,561
Total operating expenses		203,628			184,519
Operating income		40,761			68,042
Interest expense		(61,183	)		(55,260	)
Other income (expense), net		(41,595	)		1,529
Income (loss) before taxes		(62,017	)		14,311
Income tax expense (benefit)		(20,307	)		9,777
Net income (loss)	$	(41,710	)	$	4,394

Note 4. Hedging and Derivative Instruments

In May 2006, we issued $390.0 million of floating rate debt (See Note 8). During the same period, we entered into four interest rate swaps to manage and reduce the risk inherent in interest rate fluctuations and to effectively convert a notional amount of $245.0 million of floating rate debt to fixed rate debt. As of September 30, 2007, the fair value of our interest rate swaps were as follows (in thousands):

Notional Amount		Maturity Date		Fixed Rate			Fair Value
$	140,000		2011		5.42	%	$	(3,822	)
$	50,000		2009		5.32	%	$	(763	)
$	30,000		2008		5.29	%	$	(189	)
$	25,000		2007		5.23	%	$	8

We account for the interest rate swaps discussed above as cash flow hedges. The realized gains and losses on these instruments are recorded in earnings as adjustments to interest expense. The unrealized gains and losses are recognized in other comprehensive income. From Inception to September 30, 2006 and for the year ended September 30, 2007, we recorded an unrealized loss of $3.5 million ($2.1 million, net of tax) and $1.3 million ($0.8 million, net of tax), respectively in other comprehensive income on these hedges.

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Note 5. Property and Equipment

Property and equipment consist of the following:

	September 30,
(in thousands)	2006			2007
Furniture and equipment	$	9,133		$	10,934
Service parts		944			3,555
Leasehold improvements		1,201			2,138
Gross property and equipment		11,278			16,627
Less accumulated depreciation		(2,551	)		(6,553	)
Net property and equipment	$	8,727		$	10,074

Note 6. Goodwill

The carrying amount of goodwill by reportable segment is as follows:

	September 30,
(in thousands)	2006		2007
Systems	$	191,530	$	220,736
Product Support		236,420		280,134
Content and Supply Chain		163,998		164,723
Other		6,584		6,613
Total	$	598,532	$	672,206

Changes in the carrying amount of goodwill for fiscal 2007 are as follows (in thousands):

Balance as of September 30, 2006	$	598,532
Acquisition of Silk Systems		4,962
Acquisition of Eclipse		70,496
Purchase accounting adjustments		(1,784	)
Balance as of September 30, 2007	$	672,206

We test goodwill for impairment annually during the fourth quarter of each fiscal year at the reporting unit level using a fair value approach, in accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. Our annual testing resulted in no impairment charges to goodwill in the years ended September 30, 2005, 2006 and 2007. If an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, goodwill will be evaluated for impairment between annual tests.

For the year ended September 30, 2007, we decreased goodwill by approximately $1.8 million, related to the resolution of additional pre-acquisition income tax uncertainties and basis adjustments related to temporary differences of acquired assets that are not expected to reverse.

Note 7. Intangible Assets

The components of purchased intangible assets are as follows:

	September 30, 2006
	Gross carrying		Accumulated			Net carrying		Weighted
(in thousands)	amount		amortization			amount		Average Life
Technology based	$	58,100	$	(3,879	)	$	54,221	6.6 years
Customer based		139,800		(5,246	)		134,554	11.2 years
Capitalized software and database costs		2,202		(97	)		2,105	3.0 years
Total amortizable intangible assets		200,102		(9,222	)		190,880
Trademarks and tradenames		30,500		—			30,500	Indefinite
Total	$	230,602	$	(9,222	)	$	221,380

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	September 30, 2007
	Gross carrying		Accumulated			Net carrying		Weighted
(in thousands)	amount		amortization			amount		Average Life
Technology based	$	73,100	$	(13,356	)	$	59,744	7.3 years
Customer based		156,628		(18,079	)		138,549	11.1 years
Other		768		(68	)		700	4.0 years
Capitalized software and database costs		7,478		(1,405	)		6,073	3.0 years
Total amortizable intangible assets		237,974		(32,908	)		205,066
Trademarks and tradenames		30,500		—			30,500	Indefinite
Total	$	268,474	$	(32,908	)	$	235,566

During the year ended September 30, 2007, we recorded additions to intangible assets of $37.9 million. We estimate that we have no significant residual value related to our finite-lived intangible assets.

Acquired finite-lived intangibles are generally amortized on a straight-line basis over the weighted average periods. The Predecessor Company recorded related amortization expense of $10.8 million for the year ended September 30, 2005 and $12.0 million from October 1, 2005 to May 2, 2006. From Inception to September 30, 2006 and for the year ended September 30, 2007, we recorded amortization expense of $9.2 million and $23.7 million, respectively. Estimated amortization expense is approximately $27.8 million in each of the next five fiscal years.

We evaluate the purchased intangible assets with an indefinite life on an annual basis as of the beginning of the fourth quarter, and whenever events and changes in circumstances indicate that there may be a potential impairment. Future impairment tests could result in a charge to earnings.

Note 8. Debt

Long-term debt consisted of the following:

	September 30,
(in thousands)	2006			2007
10 1/2 % senior notes due 2011, net of discount	$	2,000		$	—
Senior secured credit agreement due 2013		388,050			437,863
Senior subordinated notes		175,000			175,000
Revolving credit agreement due 2011		—			20,000
Total debt		565,050			632,863
Current portion		(3,900	)		(750	)
Long-term debt	$	561,150		$	632,113

Senior Secured Credit Agreement

On May 2, 2006, in connection with the consummation of the mergers, we entered into a senior secured credit agreement. The senior secured credit agreement provides for (i) a seven-year term loan in the amount of $390.0 million, amortized at a rate of 1.00% per year on a quarterly basis for the first six and three-quarters years after May 2, 2006, with the balance paid at maturity, and (ii) a five-year revolving credit facility that permits loans in an aggregate amount of up to $40.0 million, which includes a letter of credit facility and a swing line facility. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity, five years from May 2, 2006. During the year ended September 30, 2007, we repaid $25.0 million in principal towards the $390.0 million term loan, which reduced the future unamortized principal payments due per the amortization schedule. In addition, subject to certain terms and conditions, the senior secured credit agreement provides for one or more uncommitted incremental term loan and/or revolving credit facilities in an aggregate amount not to exceed $75.0 million. Proceeds of the term loan on the initial borrowing date were used to partially finance the mergers, to refinance certain of our indebtedness and to pay fees and expenses incurred in connection with the mergers and the related financings and transactions. In August 2007, we borrowed the $75.0 million incremental term loan as well as $20.0 million of the revolving credit facility. These amounts were used to partially finance the acquisition of Eclipse.

The borrowings under the senior secured credit agreement bear interest at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Deutsche Bank Trust Company Americas, and (2) the federal funds rate plus 1/2 of 1%; or (b) a reserve adjusted Eurodollar rate on deposits for periods of one-, two-, three-, or six-months (or, to the extent agreed to by each applicable lender, nine- or twelve-months or less than one month). The initial applicable margin for borrowings is:

• under the revolving credit facility, 1.25% with respect to base rate borrowings and 2.25% with respect to Eurodollar rate borrowings, which may be reduced subject to our attainment of certain leverage ratios; and

• under the term loan facilities, 1.00% with respect to base rate borrowings and 2.00% with respect to Eurodollar rate borrowings.

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In addition to paying interest on outstanding principal under the senior secured credit agreement, we will be required to pay a commitment fee to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder. The initial commitment fee rate is 0.50% per annum. The commitment fee rate may be reduced subject to our attaining certain leverage ratios. We must also pay customary letter of credit fees for issued and outstanding letters of credit.

Substantially all of our assets and those of our subsidiaries are pledged as collateral on the senior secured credit agreement.

Senior Subordinated Notes Due 2016

On April 27, 2006, we issued $175.0 million aggregate principal amount of 9.50% senior subordinated notes due May 2, 2016. The notes were issued in a private transaction that was not subject to the registration requirements of the Securities Act of 1933. The notes were exchanged for substantially identical notes registered with the SEC, pursuant to a registration rights agreement entered into in connection with the indenture.

Each of our domestic subsidiaries, as primary obligors and not merely as sureties, jointly and severally, irrevocably and unconditionally guarantee, on an unsecured senior subordinated basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all of our obligations under the indenture and the notes. The notes are our unsecured senior subordinated obligations and are subordinated in right of payment to all of our existing and future senior indebtedness (including the senior secured credit agreement), are effectively subordinated to all of our secured indebtedness (including the senior secured credit agreement); and senior in right of payment to all of our existing and future subordinated indebtedness.

The terms of the senior secured credit agreement and the senior subordinated notes restrict certain activities, the most significant of which include limitations on additional indebtedness, liens, guarantees, payment or declaration of dividends, sale of assets and transactions with affiliates. In addition, the senior secured credit agreement requires us to maintain a maximum total net leverage ratio and a minimum interest coverage ratio. The senior secured credit agreement also contains certain customary affirmative covenants and events of default. At September 30, 2007, we were in compliance with all of the senior secured credit agreement’s and the senior subordinated notes’ covenants.

Aggregate maturities of debt are as follows (in thousands):

2008	$	750
2009		750
2010		750
2011		20,750
2012		750
Thereafter		609,113
Total	$	632,863

Note 9. Income Taxes

Significant components of the income tax expense (benefit) attributable to continuing operations are as follows:

	Predecessor Company						Activant Solutions Inc.
	Year Ended			October 1,			Inception to			Year Ended
	September 30,			2005 to May 2,			September 30,			September 30,
(in thousands)	2005			2006			2006			2007
Current:
Federal	$	8,842		$	(3,537	)	$	108		$	1,742
State		1,128			(143	)		457			3,758
Foreign		1,012			540			285			230
Total Current		10,982			(3,140	)		850			5,730
Deferred:
Federal		(4,805	)		(16,959	)		1,474			3,423
State		(600	)		(2,415	)		(254	)		473
Foreign		68			(39	)		(45	)		361
Total Deferred		(5,337	)		(19,413	)		1,175			4,257
Income tax expense (benefit)	$	5,645		$	(22,553	)	$	2,025		$	9,987

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The provision for income taxes differs from the expected tax expense (benefit) amount computed by applying the statutory federal income tax rate of 35% to income before income taxes as a result of the following:

	Predecessor Company						Activant Solutions Inc.
	Year Ended			October 1,			Inception to			Year Ended
	September 30,			2005 to May			September 30,			September 30,
(in thousands)	2005			2, 2006			2006			2007
Income tax expense (benefit) at U.S. statutory income tax rate	$	6,708		$	(23,717	)	$	1,787		$	5,219
State taxes, net of U.S. income tax expense (benefit)		837			(2,488	)		232			2,436
Permanent differences		47			4,193			71			298
Tax credits and other		(1,947	)		(541	)		(65	)		(40	)
Change in tax rates applied to deferred taxes		—			—			—			585
Change in reserves and valuation allowance		—			—			—			1,489
Income tax expense (benefit)	$	5,645		$	(22,553	)	$	2,025		$	9,987

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes are as follows:

(in thousands)	September 30, 2006			September 30, 2007
Deferred tax assets :
Current deferred tax assets:
Inventory and sales return reserves	$	1,229		$	1,387
Accrued expenses		4,226			2,758
Bad debts and other		2,826			3,245
Deferred income		813			56
Unrealized losses		1,365			1,898
		10,459			9,344
Non-current deferred tax assets:
Net operating losses and tax credit carryforward		12,721			11,175
Depreciation and amortization		9,092			4,180
Stock compensation		—			1,658
		21,813			17,013
Valuation allowance		(2,076	)		(5,951	)
Total deferred tax assets		30,196			20,406
Deferred tax liabilities:
Software and intangible assets		(88,267	)		(78,693	)
Other		(1,345	)		(163	)
Total deferred tax liabilities		(89,612	)		(78,856	)
Net deferred tax assets (liabilities)	$	(59,416	)	$	(58,450	)

As of September 30, 2006 and 2007, we had $14.3 million and $20.4 million, respectively of federal and state net operating loss carry-forwards. As of September 30, 2006 and 2007, we had $10.7 million and $2.8, respectively of federal business tax credit carry-forwards. The valuation allowance increased by approximately $3.9 million during the year and is primarily comprised of allowances against net operating loss carry-forwards. The net operating losses expire between 2009 and 2017.

Substantially all of our operating income was generated from domestic operations during 2006 and 2007. Undistributed earnings, if any, of our foreign subsidiaries is considered to be permanently reinvested and, accordingly, no U.S. Federal or state income taxes have been provided thereon.

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Note 10. Employee Stock and Savings Plans

Common Stock Option Plan

Activant Solutions Inc.

During 2006, Activant Group, our parent company, adopted the Activant Group Inc. 2006 Stock Incentive Plan (the “2006 Option Plan”), which as of September 30, 2007 had 7,761,958 authorized shares. The option price may not be less than the fair market value at the date of grant as determined in good faith by the board of directors of Activant Group from time to time. Options vest in varying amounts over a period up to five years and expire ten years from the date of the grant.

The Company estimates the fair value of stock options using a Black-Scholes option pricing model that uses certain assumptions including expected term, expected volatility of the underlying stock, expected dividend pay-out rate and risk-free rate of return. The expected term was based on historical data and represents the period of time that stock options granted were expected to be outstanding. Due to the fact that the common stock underlying the options is not publicly traded, the expected volatility was based on a comparable group of companies for the period. We do not intend to pay dividends on our common stock for the foreseeable future, and accordingly, used a dividend yield of zero. The risk-free rate for periods within the contractual life of the option was based on the Treasury Bill coupon rate for U.S Treasury securities in effect at the time of the grant with a maturity approximating the expected term. From Inception to September 30, 2006, there were no stock options granted and therefore no compensation expense was recognized. For the fiscal year ended September 30, 2007, we recorded share- based payment expense of approximately $4.2 million, with a total income tax benefit recognized in the income statement of approximately $1.7 million.

The fair value of each award granted from the 2006 Option Plan during the year ended September 30, 2007 was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Expected term	6.66 years
Expected volatility		50.00	%
Expected dividends		0.00	%
Risk-free rate		4.68	%

The weighted average estimated grant date fair value, as defined by SFAS 123R, for options granted under the 2006 Option Plan during the fiscal year ended September 30, 2007 was $2.46 per share.

Information with respect to stock option activity for the year ended September 30, 2007 is as follows:

	2006 Option Plan
				Weighted
	Number of			Average Exercise
	Shares			Price
Total options outstanding at September 30, 2006		—		$	—
Options granted		7,303,073			4.38
Options forfeited		(544,000	)		4.35
Options exercised		—			—
Total options outstanding at September 30, 2007		6,759,073		$	4.38
Total options exercisable at September 30, 2007		1,478,817		$	4.38

At September 30, 2007, the total intrinsic value of outstanding stock options was approximately $3.6 million. At September 30, 2007, there was approximately $12.5 million of total unrecognized shared-based payment expense related to unvested stock options which we expect to recognize as expense in future periods through 2012.

Predecessor Company

In connection with the mergers, Activant Group entered into an option rollover agreement with Mr. Pervez A. Qureshi, our Chief Executive Officer and President, pursuant to which Mr. Qureshi agreed to rollover $1.0 million of spread value of his then outstanding stock options into 333,334 vested stock options to purchase shares of common stock of Activant Group at an exercise price of $1.00 per share. Pursuant to the option rollover agreement, Activant Group agreed to assume these options pursuant to the terms of the Activant Solutions Holdings Inc. Second Amended and Restated Stock Option Plan for Key Employees, as amended (the “Predecessor Company Plan”), which is the stock option plan under which these options were originally granted.

The Predecessor Company adopted SFAS 123R in the quarter ended December 31, 2005 using the prospective method. The Predecessor Company recorded share-based payment expense of approximately $1.4 million for the period from October 1, 2005 to May 2, 2006, with a total income tax benefit recognized in the income statement of approximately $0.5 million.

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Information on stock options for the fiscal year ended September 30, 2007 under the Predecessor Company Plan is as follows:

	Predecessor Company Plan
	Number of		Weighted Average
	Shares		Exercise Price
Total options outstanding at September 30, 2006		333,334	$	1.00
Options granted		—		—
Options forfeited		—		—
Options exercised		—		—
Total options outstanding at September 30, 2007		333,334	$	1.00

Prior to October 1, 2005, Predecessor Company used the intrinsic value method in accounting for employee stock options. Because the exercise price of the employee stock options was greater than or equal to the market price of the underlying stock, as determined by Predecessor Company’s board of directors, on the date of grant, no compensation expense was recognized.

Pro forma information regarding net income is shown below as if Predecessor Company had accounted for its employee stock options granted under the fair value method prescribed by SFAS No. 123(R). The Predecessor Company used the minimum value method in determining the option value under SFAS 123 for all options granted prior to June 2005. The Company adopted SFAS 123(R) using the prospective method for all options issued after June 2005. The fair value of these options was estimated at the date of grant using the minimum value option pricing model with the following assumptions:

	Year Ended
	September 30,
	2005
Risk-free interest rate	4.2%
Weighted-average expected life of the options	6.64 years
Dividend rate	0%
Assumed volatility	50%

For purposes of pro forma disclosure, the estimated fair value of the options was amortized to expense over the options’ vesting period. The Predecessor Company pro forma information for the year ended September 30, 2005 was as follows:

(in thousands)
Net income as reported	$	13,283
Pro forma stock-based compensation expense		744
Pro forma net income	$	12,539

The weighted average fair value of options granted during the period from October 1, 2005 to May 2, 2006 was $2.09.

401(k) Plan

We have a savings and investment plan known as the Activant Solutions Inc. Savings and Investment Plan (the “Plan”) as allowed under Sections 401(k) and 401(a) of the Internal Revenue Code. The Plan provides employees with tax deferred salary deductions and alternative investment options. Employees are eligible to participate the first day of hire and are able to apply for and secure loans from their account in the Plan.

The Plan provides for contributions as determined annually by the board of directors. We match 50% of the first 6% of compensation contributed by each employee and the deferred amount cannot exceed 25% of the annual aggregate salaries of those employees eligible for participation. Highly compensated executive participants are limited to a maximum of 10%. Contributions to the Plan amounted to $1.4 million in the year ended September 30, 2005. We contributed $1.0 million for the period from October 1, 2005 to May 2, 2006 and $1.0 million from Inception to September 30, 2006. For the year ended September 30, 2007 contributions amounted to $2.7 million.

Note 11. Commitments and Contingencies

Operating Leases

We rent integration and distribution, software development and data entry facilities; administrative, executive, sales, and customer support offices; and, certain office equipment under non-cancelable operating lease agreements. Certain lease agreements contain renewal options and rate adjustments. Predecessor Company recorded rental expense of $7.5 million and $5.9 million for the year ended September 30, 2005 and the period from October 1, 2005 to May 2, 2006, respectively. We recorded rental expense of $4.1 million and $10.2 million from Inception to

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September 30, 2006 and the year ended September 30, 2007, respectively. Future minimum rental commitments under all non-cancelable operating leases are as follows (in thousands):

2008	$	8,529
2009		8,056
2010		7,763
2011		7,338
2012		4,531
Thereafter		5,433
Total	$	41,650

Legal Matters

We are involved in litigation arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the resolution of these matters is not expected to have a material adverse effect on our results of operations or financial position.

Note 12. Restructuring Costs

During the year ended September 30, 2007, our management approved a restructuring plan for eliminating certain positions associated with outsourcing certain activities to third-party providers. In accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, we recorded a charge of approximately $0.3 million related to workforce reductions, which events were communicated to the impacted employees or incurred during the period. The charge was comprised of severance and other employee termination benefits related to these workforce reductions. Approximately $0.2 million remains to be paid as of September 30, 2007 related to these actions and are anticipated to be paid over the next twelve months.

During the year ended September 30, 2007, our management also approved a restructuring plan for eliminating certain positions with the intent to streamline and focus our efforts and more properly align our cost structure with our projected revenue streams. In accordance with SFAS 146, we recorded a charge of approximately $0.5 million related to this workforce reduction, which was communicated to impacted employees during the period. All payments related to this action are anticipated to be made over the next twelve months.

During the periods from October 1, 2006 to May 2, 2006 and Inception to September 30, 2006, the Predecessor Company and we, incurred, in accordance with SFAS 146, restructuring costs of $0.9 million. These were one-time benefits paid to certain employees separated in connection with the relocation of our corporate offices from Austin, Texas to Livermore, California. We also incurred $0.3 million in costs related to this action during the year ended September 30, 2007. All payments related to this action were made by September 30, 2007.

Note 13. Related Party Transactions

As of September 30, 2007, we owned approximately 46% of Internet Autoparts, Inc. (“Internet Autoparts”), a web-based parts ordering and communication company. For the year ended September 30, 2007, we received a dividend from Internet Autoparts of approximately $0.5 million. Currently, we have an accumulated loss in our investment in Internet Autoparts and have temporarily discontinued applying the equity method of recording investment earnings in accordance with APB No. 18, The Equity Method of Accounting for Investments in Common Stock, as we have no requirement to fund future losses. If Internet Autoparts becomes profitable, and we are able to recover the net losses accumulated over the years, we will then resume applying the equity method to our investment in Internet Autoparts.

We, as general partner, own an approximate 20% interest in two separate partnerships with certain customers. We provide management information systems and services to these partnerships. The Predecessor Company recorded service revenue from these partnerships of $3.7 million and $1.2 million for the year ended September 2005 and from October 1, 2005 to May 2, 2006, respectively. From Inception to September 30, 2006 and for the year ended September 30, 2007, respectively, we recorded service revenue from these partnerships of $0.4 million and $0.4 million, respectively. The Predecessor Company recorded equity income from these partnerships of $0.3 million and $0.1 million for the year ended September 30, 2005 and the period from October 1, 2005 to May 2, 2006, respectively.

Note 14. Segment Reporting

We have organized our business around our products and services (“Segments”) as follows:

• Systems, which is comprised primarily of proprietary software applications, third-party hardware and peripherals and implementation and training;

• Product Support, which is comprised of daily operating support through our advice line, software updates, preventive and remedial on-site maintenance and depot repair services;

62

• Content and Supply Chain, which is comprised primarily of databases, exchanges and other information services, including our electronic catalog in the automotive parts aftermarket; and

• Other Services, which is comprised primarily of business products, such as forms and other paper products.

Each reportable Segment is managed separately on a revenue and gross profit basis. We do not allocate operating expenses, interest expense, other expenses or assets to each Segment, as this information is not used to measure the operating performance of the Segments.

Organizationally, the functional operating areas that support all of our Segments, including systems integration, installation and training, product support, data services, product development and sales and marketing, are integrated under a common reporting and management structure to achieve operating efficiencies.

The following tables set forth, for the periods indicated, our revenues, cost of revenues, gross profit and gross profit as a percentage of revenue by Segment:

	Predecessor Company
	Year ended September 30, 2005
				Product			Content &			Other
(in thousands)	Systems			Support			Supply Chain			Services			Total
Revenues	$	104,789		$	96,267		$	57,094		$	7,841		$	265,991
Cost of Revenues (exclusive of depreciation and amortization)		59,179			41,616			12,036			5,295			118,126
Gross Profit	$	45,610		$	54,651		$	45,058		$	2,546		$	147,865
Gross Profit as a Percentage of Revenues		43.5	%		56.8	%		78.9	%		32.5	%		55.6	%

	Predecessor Company
	Period from October 1, 2005 to May 2, 2006
				Product			Content &			Other
(in thousands)	Systems			Support			Supply Chain			Services			Total
Revenues	$	91,404		$	91,739		$	36,665		$	5,407		$	225,215
Cost of Revenues (exclusive of depreciation and amortization)		47,547			36,694			8,125			3,762			96,128
Gross Profit	$	43,857		$	55,045		$	28,540		$	1,645		$	129,087
Gross Profit as a Percentage of Revenues		48.0	%		60.0	%		77.8	%		30.4	%		57.3	%

	Activant Solutions Inc.
	Inception to September 30, 2006
				Product			Content &			Other
(in thousands)	Systems			Support			Supply Chain			Services			Total
Revenues	$	69,243		$	64,226		$	27,011		$	3,710		$	164,190
Cost of Revenues (exclusive of depreciation and amortization)		35,673			27,066			6,446			2,673			71,858
Gross Profit	$	33,570		$	37,160		$	20,565		$	1,037		$	92,332
Gross Profit as a Percentage of Revenues		48.5	%		57.9	%		76.1	%		28.0	%		56.2	%

	Activant Solutions Inc.
	Year Ended September 30, 2007
				Product			Content &			Other
(in thousands)	Systems			Support			Supply Chain			Services			Total
Revenues	$	173,291		$	160,505		$	67,258		$	8,068		$	409,122
Cost of Revenues (exclusive of depreciation and amortization)		90,256			64,796			15,041			5,893			175,986
Gross Profit	$	83,035		$	95,709		$	52,217		$	2,175		$	233,136
Gross Profit as a Percentage of Revenues		47.9	%		59.6	%		77.6	%		27.0	%		57.0	%

63

Geographic segments

A breakdown by geographic area of revenues and total assets is shown below. The Americas geographic area covers the United States and Canada. The Europe geographic area covers the United Kingdom, Ireland and France.

	Predecessor Company				Activant Solutions Inc.
	Year Ended		Period from		Inception to		Year Ended
	September 30,		October 1, 2005		September 30,		September 30,
(in thousands)	2005		to May 2, 2006		2006		2007
Revenues:
Americas	$	258,864	$	221,247	$	161,489	$	402,656
Europe		7,127		3,968		2,701		6,466
Total revenues	$	265,991	$	225,215	$	164,190	$	409,122

	September 30,		September 30,
	2006		2007
Assets:
Americas	$	965,217	$	1,047,960
Europe		2,469		2,649
Total assets	$	967,686	$	1,050,609

64

Note 15. Guarantor Consolidation

The senior secured credit agreement and the senior subordinated notes are guaranteed by our existing, wholly-owned domestic subsidiaries HM COOP LLC, Speedware USA, Inc., Prelude Systems Inc., Activant Wholesale Distribution Solutions Inc., and Greenland Holding Corp. Since September 30, 2006, (i) the following subsidiaries have been merged into Activant Solutions Inc.: Triad Systems Financial Corporation, Triad Data Corporation, CCI/TRIAD Gem, Inc., Enterprise Computing Inc., Speedware Holdings, Inc., and CCI/ARD, Inc.; and (ii) the following subsidiaries have been merged into Activant Wholesale Distribution Solutions Inc. (formerly known as Prophet 21 New Jersey, Inc.): Prophet 21 Investment Corporation, Prophet 21 Canada, Inc., SDI Merger Corporation, Distributor Information Systems Corporation, Trade Services Systems, Inc., and STANPak Systems, Inc. Our other subsidiaries (the “Non-Guarantors”) are not guarantors of the senior secured credit agreement and the senior subordinated notes. The following consolidated statements of operations and cash flows for the year ended September 30, 2005 and the period from October 1, 2005 to May 2, 2006, represent the results of operations and cash flows of the Predecessor Company’s Guarantors and Non-Guarantors. The accompanying consolidated balance sheet as of September 30, 2006 and 2007 and the accompanying consolidated statements of operations and cash flows from Inception to September 30, 2006 and the year ended September 30, 2007 represent the financial position, results of operations and cash flows of the Company’s Guarantors and Non-Guarantors.

Consolidating Balance Sheet as of September 30, 2007

	Guarantor
	Principal		Guarantor			Non-Guarantor
(in thousands)	Operations		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	24,862	$	4,154		$	4,363		$	—		$	33,379
Trade accounts receivable, net of allowance for doubtful accounts		39,382		14,408			3,354			—			57,144
Inventories, net		4,061		1,014			284			—			5,359
Income taxes receivable		1,638		514			529			—			2,681
Deferred income taxes		7,534		942			146			—			8,622
Prepaid expenses and other current assets		5,119		398			219			—			5,736
Total current assets		82,596		21,430			8,895			—			112,921
Property and equipment, net		8,066		1,359			649			—			10,074
Intangible assets, net		203,447		29,667			2,452			—			235,566
Goodwill		560,880		103,420			1,869			6,037			672,206
Investments in subsidiaries		9,656		—			885			(10,541	)		—
Intercompany receivables (payables)		78,175		(52,525	)		(25,650	)		—			—
Deferred financing costs		15,501		—			—			—			15,501
Other assets		4,108		143			95			(5	)		4,341
Total assets	$	962,429	$	103,494		$	(10,805	)	$	(4,509	)	$	1,050,609
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	13,606	$	3,104		$	1,691		$	—		$	18,401
Payroll related accruals		11,168		3,500			1,306			—			15,974
Deferred revenue		12,277		16,104			1,290			—			29,671
Current portion of long-term debt		750		—			—			—			750
Accrued expenses and other current liabilities		19,042		1,472			35			—			20,549
Total current liabilities		56,843		24,180			4,322			—			85,345
Long-term debt, net of discount		632,113		—			—			—			632,113
Deferred tax liabilities and other liabilities		79,941		(3,049	)		65			—			76,957
Total liabilities		768,897		21,131			4,387			—			794,415
Total stockholders’ equity (deficit)		193,532		82,363			(15,192	)		(4,509	)		256,194
Total liabilities and stockholders’ equity	$	962,429	$	103,494		$	(10,805	)	$	(4,509	)	$	1,050,609

65

Consolidating Balance Sheet as of September 30, 2006

	Guarantor
	Principal			Guarantor			Non-Guarantor
(in thousands)	Operations			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	26,498		$	7,772		$	2,113		$	—		$	36,383
Trade accounts receivable, net of allowance for doubtful accounts		39,134			12,681			3,874			—			55,689
Inventories, net		3,724			467			164			—			4,355
Income taxes receivable		12,195			406			305			—			12,906
Defe5rred income taxes		4,184			946			271			—			5,401
Prepaid expenses and other current assets		(26,400	)		32,843			(1,212	)		—			5,231
Total current assets		59,335			55,115			5,515			—			119,965
Property and equipment, net		6,717			1,341			669			—			8,727
Intangible assets, net		221,380			—			—			—			221,380
Goodwill		598,532			—			—			—			598,532
Investments in subsidiaries		16,911			(7,772	)		3,437			(12,576	)		—
Deferred financing costs		15,137			—			—			—			15,137
Other assets		3,734			127			84			—			3,945
Total assets	$	921,746		$	48,811		$	9,705		$	(12,576	)	$	967,686
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	10,996		$	2,597		$	351		$	—		$	13,944
Payroll related accruals		13,362			3,362			1,542			—			18,266
Deferred revenue		14,186			11,763			3,739			—			29,688
Current portion of long-term debt		3,900			—			—			—			3,900
Accrued expenses and other current liabilities		21,798			1,585			53			—			23,436
Total current liabilities		64,242			19,307			5,685			—			89,234
Long-term debt, net of discount		561,150			—			—			—			561,150
Deferred tax liabilities and other liabilities		61,006			7,599			1,024			—			69,629
Total liabilities		686,398			26,906			6,709			—			720,013
Total stockholders’ equity (deficit)		235,348			21,905			2,996			(12,576	)		247,673
Total liabilities and stockholders’ equity	$	921,746		$	48,811		$	9,705		$	(12,576	)	$	967,686

66

Consolidating Statement of Operations for the Year Ended September 30, 2007

	Guarantor						Non-
	Principal			Guarantor			Guarantor
(in thousands)	Operations			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Revenues:
Systems	$	110,467		$	55,750		$	7,074		$	—	$	173,291
Services		149,076			70,814			15,941			—		235,831
Total Revenues		259,543			126,564			23,015			—		409,122
Cost of revenues (exclusive of depreciation and amortization shown separately below):
Systems		57,951			20,720			11,585			—		90,256
Services		60,288			17,474			7,968			—		85,730
Total cost of revenues		118,239			38,194			19,553			—		175,986
Gross profit		141,304			88,370			3,462			—		233,136
Operating expenses:
Sales and marketing		36,843			19,292			4,721			—		60,856
Product development		21,457			14,602			2,848			—		38,907
General and administrative		31,682			4,569			3,968			—		40,219
Depreciation and amortization		28,086			1,176			473			—		29,735
Acquisition-related costs		529			2			—			—		531
Restructuring costs		1,109			—			—			—		1,109
Total operating expenses		119,706			39,641			12,010			—		171,357
Operating income (loss)		21,598			48,729			(8,548	)		—		61,779
Interest expense		(48,387	)		(4	)		(7	)		—		(48,398	)
Other income (expense), net		1,810			(443	)		162			—		1,529
Income (loss) before income taxes		(24,979	)		48,282			(8,393	)		—		14,910
Income tax expense (benefit)		20,489			(12,186	)		1,684			—		9,987
Net income (loss)	$	(45,468	)	$	60,468		$	(10,077	)	$	—	$	4,923

67

Consolidating Statement of Operations from Inception to September 30, 2006

	Guarantor						Non-
	Principal			Guarantor			Guarantor
(in thousands)	Operations			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Systems	$	45,903		$	22,151		$	1,193		$	(4	)	$	69,243
Services		63,529			25,131			6,287			—			94,947
Total Revenues		109,432			47,282			7,480			(4	)		164,190
Cost of revenues (exclusive of depreciation and amortization shown separately below):
Systems		24,482			8,791			2,400			—			35,673
Services		25,858			7,152			3,179			(4	)		36,185
Total cost of revenues		50,340			15,943			5,579			(4	)		71,858
Gross profit		59,092			31,339			1,901			—			92,332
Operating expenses:
Sales and marketing		15,093			7,319			1,780			—			24,192
Product development		8,555			6,279			1,100			—			15,934
General and administrative		9,930			2,917			1,480			—			14,327
Depreciation and amortization		11,230			421			122			—			11,773
Acquisition-related costs		194			—			—			—			194
Restructuring costs		802			—			—			—			802
Total operating expenses		45,804			16,936			4,482			—			67,222
Operating income		13,288			14,403			(2,581	)		—			25,110
Interest expense		(20,308	)		(25	)		(7	)		—			(20,340	)
Other income, net		70			148			117			—			335
Income (loss) before income taxes		(6,950	)		14,526			(2,471	)		—			5,105
Income tax expense		1,164			509			352			—			2,025
Net income (loss)	$	(8,114	)	$	14,017		$	(2,823	)	$	—		$	3,080

68

Predecessor Company
Condensed Consolidating Statement of Operations for the period from October 1, 2005 to May 2, 2006

				Guarantor						Non-
	Parent			Principal			Guarantor			Guarantor
(in thousands)	Company			Operations			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Revenues:
Systems	$	—		$	62,373		$	27,108		$	1,923		$	—	$	91,404
Services		—			89,292			35,759			8,760			—		133,811
Total revenues		—			151,665			62,867			10,683			—		225,215
Cost of revenues (exclusive of depreciation and amortization shown separately below):
Systems		—			35,001			11,201			1,345			—		47,547
Services		—			32,396			10,146			6,039			—		48,581
Total cost of revenues		—			67,397			21,347			7,384			—		96,128
Gross profit		—			84,268			41,520			3,299			—		129,087
Operating expenses:
Sales and marketing		—			20,375			8,256			1,918			—		30,549
Product development		—			11,606			9,037			1,343			—		21,986
General and administrative		—			14,392			4,951			2,116			—		21,459
Depreciation and amortization		—			14,310			613			588			—		15,511
Acquisition-related costs		563			31,728			—			—			—		32,291
Restructuring costs		116			—			—			—			—		116
Total operating expenses		679			92,411			22,857			5,965			—		121,912
Operating income		(679	)		(8,143	)		18,663			(2,666	)		—		7,175
Interest expense		(3,213	)		(29,760	)		(9	)		(18	)		—		(33,000	)
Write-off of prior deferred financing costs		(1,774	)		(14,220	)		—			—			—		(15,994	)
Premiums on debt repurchase		(5,120	)		(21,551	)		—			—			—		(26,671	)
Other income, net		—			281			234			218			—		733
Income (loss) before income taxes		(10,786	)		(73,393	)		18,888			(2,466	)		—		(67,757	)
Income tax expense (benefit)		(1,436	)		(21,708	)		7			584			—		(22,553	)
Net income (loss)	$	(9,350	)	$	(51,685	)	$	18,881		$	(3,050	)	$	—	$	(45,204	)

69

Predecessor Company
Consolidating Statement of Operations for the Year Ended September 30, 2005

				Guarantor
	Parent			Principal			Guarantor			Non-Guarantor
(in thousands)	Company			Operations			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Systems	$	—		$	89,601		$	12,252		$	2,940		$	(4	)	$	104,789
Services		—			130,295			17,277			13,630			—			161,202
Total Revenues		—			219,896			29,529			16,570			(4	)		265,991
Cost of revenues (exclusive of depreciation and amortization shown separately below):
Systems		—			52,901			4,887			1,391			—			59,179
Services		—			44,218			6,911			7,822			(4	)		58,947
Total cost of revenues		—			97,119			11,798			9,213			(4	)		118,126
Gross profit		—			122,777			17,731			7,357			—			147,865
Operating expenses:
Sales and marketing		—			33,108			2,231			2,737			—			38,076
Product development		—			16,514			3,549			1,316			—			21,379
General and administrative		—			20,816			5,321			1,931			—			28,068
Depreciation and amortization		—			15,188			302			624			—			16,114
Total operating expenses		—			85,626			11,403			6,608			—			103,637
Operating income		—			37,151			6,328			749			—			44,228
Interest expense		(235	)		(25,499	)		(18	)		24			—			(25,728	)
Other income (expense), net		—			651			70			(293	)		—			428
Income (loss) before income taxes		(235	)		12,303			6,380			480			—			18,928
Income tax expense		—			3,210			2,035			400			—			5,645
Net income (loss)	$	(235	)	$	9,093		$	4,345		$	80		$	—		$	13,283

70

Consolidating Statement of Cash Flows for the year ended September 30, 2007

	Guarantor
	Principal			Guarantor			Non-Guarantor
(in thousands)	Operations			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	52,180		$	(1,618	)	$	682		$	—	$	51,244
Investing activities
Purchase of Silk Systems, net of cash		(6,912	)		—			—			—		(6,912	)
Purchase of Eclipse, net of cash		(101,260	)		—			—			—		(101,260	)
Purchase of property and equipment		(6,276	)		(592	)		(188	)		—		(7,056	)
Capitalized software costs and databases		(5,276	)		—			—			—		(5,276	)
Unrealized loss on cash flow hedge, net		(788	)		—			—			—		(788	)
Purchase Price Adjustment		1,436			(1,408	)		1,756			—		1,784
Net cash provided by (used in) investing activities		(119,076	)		(2,000	)		1,568			—		(119,508	)
Financing activities
Proceeds from long-term debt		75,000			—			—			—		75,000
Deferred financing costs		(2,540	)		—			—			—		(2,540	)
Proceeds from credit facility		20,000			—			—			—		20,000
Payment on long-term debt		(25,187	)		—			—			—		(25,187	)
Repayment of senior notes		(2,000	)		—			—			—		(2,000	)
Repurchase of common stock		(13	)		—			—			—		(13	)
Net cash provided by financing activities		65,260			—			—			—		65,260
Change in cash and cash equivalents		(1,636	)		(3,618	)		2,250			—		(3,004	)
Cash and cash equivalents, beginning of period		26,498			7,772			2,113			—		36,383
Cash and cash equivalents, end of period	$	24,862		$	4,154		$	4,363		$	—	$	33,379

Consolidating Statement of Cash Flows from Inception to September 30, 2006

	Guarantor
	Principal			Guarantor			Non-Guarantor
(in thousands)	Operations			Subsidiaries			Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	20,762		$	7,857		$	2,073	$	—	$	30,692
Investing activities
Purchase of Activant Solutions Inc, net of cash		(782,894	)		—			—		—		(782,894	)
Purchase of property and equipment		(1,864	)		(85	)		40		—		(1,909	)
Capitalized software costs and databases		(2,202	)		—			—		—		(2,202	)
Net cash used in investing activities		(786,960	)		(85	)		40		—		(787,005	)
Financing activities
Issuance of common stock at inception		245,625			—			—		—		245,625
Proceeds from long-term debt		565,000			—			—		—		565,000
Payment on long-term debt		(1,950	)		—			—		—		(1,950	)
Deferred financing costs		(15,979	)		—			—		—		(15,979	)
Net cash used in financing activities		792,696			—			—		—		792,696
Change in cash and cash equivalents		26,498			7,772			2,113		—		36,383
Cash and cash equivalents, beginning of period		—			—			—		—		—
Cash and cash equivalents, end of period	$	26,498		$	7,772		$	2,113	$	—	$	36,383

71

Predecessor Company
Condensed Consolidating Statement of Cash Flows for the period from October 1, 2005 to May 2, 2006

				Guarantor						Non-
	Parent			Principal			Guarantor			Guarantor
(in thousands)	Company			Operations			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	(6,856	)	$	20,888		$	(998	)	$	(363	)	$	—	$	12,671
Investing activities
Purchase of property and equipment		—			(3,232	)		(210	)		(144	)		—		(3,586	)
Capitalized software costs and databases		—			(3,455	)		—			—			—		(3,455	)
Purchase price adjustments		—			508			—			—			—		508
Equity distributions from partnerships		—			679			—			—			—		679
Net cash used in investing activities		—			(5,500	)		(210	)		(144	)		—		(5,854	)
Financing activities
Proceeds from long-term debt		40,000			145,000			—			—			—		185,000
Repayment of senior unsecured bridge loan		(40,000	)		(140,000	)		—			—			—		(180,000	)
Proceeds from credit facility		—			10,000			—			—			—		10,000
Repayment on credit facility		—			(10,000	)										(10,000	)
Payment on long-term debt		—			—			(149	)		—			—		(149	)
Repurchase of common stock		(840	)		—			—			—			—		(840	)
Dividend to/from parent		8,384			(8,384	)		—			—			—		—
Exercise of stock options		105			—			—			—			—		105
Deferred financing costs		(793	)		(2,768	)		—			—			—		(3,561	)
Net cash provided by (used in) financing activities		6,856			(6,152	)		(149	)		—			—		555
Net change in cash and cash equivalents		—			9,236			(1,357	)		(507	)		—		7,372
Cash and cash equivalents, beginning of period		—			5,800			3,943			1,209			—		10,952
Cash and cash equivalents, end of period	$	—		$	15,036		$	2,586		$	702		$	—	$	18,324

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Predecessor Company
Consolidating Statement of Cash Flows for the Year Ended September 30, 2005

				Guarantor						Non-
	Parent			Principal			Guarantor			Guarantor
(in thousands)	Company			Operations			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by operating activities	$	(679	)	$	38,304		$	(5,336	)	$	(12,081	)	$	—	$	20,208
Investing activities
Purchase of Speedware, net of cash					(117,062	)		6,071			10,157					(100,834	)
Purchase of Prophet 21 , net of cash					(221,848	)		3,648								(218,200	)
Purchase of other businesses		—			(2,646	)		—			—			—		(2,646	)
Purchase of property and equipment		—			(3,922	)		(40	)		(448	)		—		(4,410	)
Capitalized software costs and databases		—			(5,052	)		—			—			—		(5,052	)
Equity distributions from partnerships		—			542			—			—			—		542
Net cash used in investing activities		—			(349,988	)		9,679			9,709			—		(330,600	)
Financing activities
Proceeds from long-term debt		40,000			260,000			—			—			—		300,000
Deferred finance costs		(1,014	)		(9,306	)		—			—			—		(10,320	)
Payment on long-term debt		—			(200	)		(293	)		—			—		(493	)
Exercise of stock options		92			—			—			—			—		92
Capital contribution from parent		(38,399	)		38,399			—			—			—		—
Net cash used in financing activities		679			288,893			(293	)		—			—		289,279
Change in cash and cash equivalents		—			(22,791	)		4,050			(2,372	)		—		(21,113	)
Cash and cash equivalents, beginning of period		—			28,591			(107	)		3,581			—		32,065
Cash and cash equivalents, end of period	$	—		$	5,800		$	3,943		$	1,209		$	—	$	10,952

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Principal Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures. Our disclosure controls and procedures are the controls and other procedures that we have designed to ensure that information required to be disclosed by us in the reports that we file with or submit to the SEC is recorded, processed, summarized and reported within the time periods specified by the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file with or submit to the SEC is accumulated and communicated too our management, including our CEO and CFO, to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as described above, our CEO and CFO have concluded that as of September 30, 2007 our disclosure controls and procedures were effective.

Internal Controls Over Financial Reporting

During our fiscal quarter ended September 30, 2007, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting due to a transition period established by rules of the SEC for companies that were not required to file an annual report pursuant to section 13(a) or 15(d) of the Exchange Act for the prior fiscal year or had not filed an annual report with the SEC for the prior fiscal year.

Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and the Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurances that the objectives of the control system are met. The design of a control system reflects resource constraints, and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, have been or will be detected.

Item 9B. Other Information.

Ernst & Young LLP (“E&Y”) has a business relationship with a company other than us that is also controlled by affiliates of Hellman & Friedman, LLC, our majority stockholder. The other company provides expert services to E&Y in connection with E&Y’s defense of certain professional liability litigation matters. E&Y is not the auditor of the other company, and does not believe the services provided, or the amounts paid therefore, are material to either the other company or E&Y. This relationship does not involve Activant nor have any impact on its consolidated financial statements. Our audit committee and E&Y have separately considered the impact that this relationship may have had on E&Y’s independence with respect to us. Both our audit committee and E&Y have concluded that this relationship with the other company does not impact E&Y’s independence. In making this determination, both our audit committee and E&Y considered, among other things, the immaterial, indirect nature of the relationship as it relates to us.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Set forth below are the names, ages and positions of our and Activant Group’s directors and executive officers as of December 21, 2007. All directors hold office until the next annual meeting our stockholders or Activant Group, as the case may be, or until their successors are duly elected and qualified.

Name	Age		Position
Pervez A. Qureshi		51	President, Chief Executive Officer and Director
Kathleen M. Crusco		42	Senior Vice President and Chief Financial Officer
William Wilson		49	Senior Vice President of Product Development
Stephen A. McLaughlin		50	Senior Vice President and General Manager of Wholesale Distribution
Scott B. Hanson		53	Senior Vice President and General Manager of Hardlines and Lumber
David F. Petroni		40	Senior Vice President of Corporate Development
Timothy F. Taich		51	Vice President, General Counsel and Secretary
Robert B. Henske		46	Chairman of the Board of Directors (1),(2) **
C. Andrew Ballard		35	Director (1),(2) *
Paul V. Barber		46	Director (1)
Marcel Bernard		69	Director
Orlando Bravo		37	Director (2)
S. Scott Crabill		37	Director
David R. Tunnell		37	Director (2)

(1)	Denotes a member of the Audit Committee, “*” denotes Chair of Audit Committee.
(2)	Denotes a member of the Compensation Committee, “**” denotes Chair of Compensation Committee.

Mr. Qureshi has been employed by us since 1994. He was appointed as our President and Chief Executive Officer at the effective time of the mergers, or May 2, 2006. Mr. Qureshi joined us as Director of Marketing in 1994. He became Senior Vice President and General Manager of our Hardlines and Lumber division in 1999. He became Group President of our vertical markets in 2004, Senior Vice President and Chief Operating Officer in April 2005, and Executive Vice President in October 2005. Prior to joining us, Mr. Qureshi was President of a management consulting company he founded and was Vice President of Marketing at Harvest Software. He has also held management positions at Metaphor Computer Systems and Hewlett-Packard Company and engineering positions at International Business Machines Incorporated. Mr. Qureshi holds a B.S.E.E. degree from the University of Lowell, in Lowell, Massachusetts and an M.B.A. from the Darden Graduate School of Business at the University of Virginia.

Ms. Crusco joined us as Senior Vice President and Chief Financial Officer on May 3, 2007. Prior to joining us, Ms. Crusco was Vice President, Finance at Polycom, Inc. from March 2005 to May 2007 and Vice President, Worldwide Controller from January 2002 to March 2005. In addition, Ms. Crusco served as Chief Accounting Officer from August 2002 through March 2005. From April 1999 through January 2002, Ms. Crusco served as Vice President, Worldwide Controller at Documentum, Inc. and from July 1997 through April 1999 as Director of Finance at Adaptec, Inc. Ms. Crusco also spent 10 years at Price Waterhouse LLP in various management roles. Ms. Crusco has a B.S. in Business Administration with an emphasis in accounting from California State University of Chico.

Mr. Wilson joined us in 1981 as a software engineer. He became Vice President of Product Development for our non-automotive vertical markets in 1999 and for all of our vertical markets in 2004. Mr. Wilson was promoted to Senior Vice President of Product Development in October 2005. Prior to joining us, Mr. Wilson worked at the consulting firm of Towers Perrin. Mr. Wilson has a B.A. from Yale University.

Mr. McLaughlin has been employed by us since 1982 and has been our Senior Vice President and General Manager of the Wholesale Distribution Group since October 2005. Mr. McLaughlin joined us as a Sales Representative in our Automotive/Tire Division in 1982 and has served in several sales and sales management capacities since then. Mr. McLaughlin became Vice President and General Manager of the Lumber and Building Materials Group in October 1999 and held that role until October 2005. Mr. McLaughlin has a B.S. in Business Economics from the University of San Francisco.

Mr. Hanson has been employed by us since June 1, 1978 and has been our Senior Vice President of Hardlines and Lumber since October 2007. Mr. Hanson joined us as a Sales Representative in our Automotive Division in 1978 and has served in several sales and management capacities since then. Mr. Hanson became Vice President of Sales in 1998 and held that role until becoming Vice President of Marketing in 2001. In 2004, he became Vice President National Accounts and Customer Sales and held that role until 2005. He then served as Vice President and General Manager of Hardware and Home Center from 2006 to 2007.

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Mr. Petroni joined us on December 11, 2006 as Senior Vice President of Corporate Development. Prior to joining us, Mr. Petroni served as Vice President of Corporate Development for Valchemy Inc. during 2006 and Chief Financial Officer from 2004 through 2005. From 2001 to 2004, Mr. Petroni also served as Vice President of Corporate Business Development at PeopleSoft, Inc. Prior to PeopleSoft, Mr. Petroni held senior M&A and finance roles for Vignette Corporation, OnDisplay, Inc., General Electric Company, and National Semiconductor, Inc. Mr. Petroni holds both a B.S. in Agricultural Managerial Economics and a B.A. in Political Science from the University of California at Davis. Mr. Petroni also holds an M.B.A. from Georgetown University.

Mr. Taich joined us on September 18, 2006 as Vice President, General Counsel and Secretary. Prior to joining us, Mr. Taich served as acting General Counsel at Maxtor Corporation, where he held various positions in the Legal Department from 2001 to 2006. Mr. Taich served as Corporate Legal Counsel for Triad Systems Corporation from 1991 to 1997, a publicly traded company and predecessor of Activant. Mr. Taich also served in the Legal Department of Compaq Computer Corporation (and previously Tandem Computers, which was acquired by Compaq in 1998) from 1997 to 1999, and as a principal and venture partner of Palo Alto Ventures and Wingspring, Inc., respectively. Mr. Taich began his career as an associate at the law firm of Ware & Friedenrich (now DLA Piper Rudnick) from 1986 to 1991. He is a member of the State Bar of California and holds a J.D. from the University of California, Berkeley (Boalt Hall) and a B.S. in Business from the University of Colorado, Boulder.

Mr. Henske became one of our directors, and the Chairman of our Board of Directors, on November 2, 2007. Mr. Henske has served as a Managing Director of Hellman & Friedman LLC since July 2007. From May 2005 until July 2007, he served as Senior Vice President and General Manager of the Consumer Tax Group of Intuit Inc. He was Intuit’s Chief Financial Officer from January 2003 to September 2005. Prior to joining Intuit, he served as Senior Vice President and Chief Financial Officer of Synopsys, Inc., a supplier of electronic design automation software, from May 2000 until January 2003. From January 1997 to May 2000, Mr. Henske was at Oak Hill Capital Management, a Robert M. Bass Group private equity investment firm, where he was a partner. Mr. Henske also serves on the board of directors of VeriFone, Inc. Mr. Henske holds a B.S. in Chemical Engineering from Rice University and an M.B.A. in Finance and Strategic Management from The Wharton School of Business, University of Pennsylvania.

Mr. Ballard became one of our directors on May 2, 2006. Mr. Ballard is a Managing Director at Hellman & Friedman LLC. He also serves as a director of DoubleClick, Inc., Vertafore, Inc. and Catalina Marketing, Inc. Prior to joining Hellman & Friedman in 2004, Mr. Ballard was employed by Bain Capital in San Francisco and Boston. Prior to that, he worked for Bain & Company. Mr. Ballard graduated cum laude from Harvard College and has an M.B.A. from the Stanford Graduate School of Business.

Mr. Barber became one of our directors on May 2, 2006. Mr. Barber is a General Partner of JMI Equity. Mr. Barber joined JMI in 1998. He serves on the board of directors of Blackbaud, Inc., Burr Wolff Management, Inc., DoubleClick, Inc., Service-now.com, TC3 Health, Inc. and Vertafore, Inc. Mr. Barber was formerly a Director of Blackbaud, Inc., Mitchell International, Inc. and Sterling Software, Inc. and a Trustee of Stanford University. From 1990 to 1998, Mr. Barber was employed by Alex.Brown serving as a Managing Director and Head of the Software Investment Banking Practice. In 1989, Mr. Barber worked in Product Marketing at Microsoft Corporation. Mr. Barber began his career at Merrill Lynch & Co. Mr. Barber received an A.B. from Stanford University and an M.B.A. from the Harvard Business School.

Mr. Bernard became one of our directors on May 2, 2006. Mr. Bernard is an executive business consultant. From 1994 to 2000, Mr. Bernard was Corporate Vice President, Operations, of Geac Computer Corporation, a performance management software company, where he was responsible for the management and overall performance of several company businesses located in North America, Europe and the United Kingdom, representing $250 million in annual revenues. From 1992 to 1994, Mr. Bernard was Senior Vice President, Ontario Division, of St. Lawrence Cement, a Canadian producer and supplier of products and services to the construction industry. At St. Lawrence Cement, Mr. Bernard was responsible for the management of all Ontario business units, representing over $400 million in revenues. From 1991 to 1992, Mr. Bernard was President and CEO of SaskTel, Saskatchewan’s largest phone company with $600 million in revenues and over 4,200 employees. Prior to this, Mr. Bernard occupied various positions at Motorola, most notably as President of Motorola Canada from 1982 to 1991. Mr. Bernard serves or has served on the board of several organizations, including most recently Datatel, Inc., Prophet 21, Inc., VECTORsgi, Inc. (now a subsidiary of Metavante), Vision Solutions, Inc., and Embarcadero Technologies, Inc.

Mr. Bravo became one of our directors on May 2, 2006. Mr. Bravo is a Managing Partner at Thoma Cressey Bravo, Inc. Mr. Bravo joined Thoma Cressey Bravo at its formation in 1998. He previously worked in the Mergers & Acquisitions group of Morgan Stanley & Co. based in New York. He is a director of Datatel, Inc., JDA Software Group, Inc., Consona, Inc., Hyland Software Inc., Embarcadero Technologies, Inc. and Sirius Computer Solutions, Inc. Mr. Bravo was the former Chairman of Prophet 21, Inc. and former director of VECTORsgi, Inc. Mr. Bravo has undergraduate degrees in Economics and Political Science from Brown University, a J.D. from the Stanford Law School and an M.B.A. from the Stanford Graduate School of Business.

Mr. Crabill became one of our directors on May 2, 2006. Mr. Crabill is a Partner at Thoma Cressey Bravo Inc. Mr. Crabill joined Thoma Cressey from Summit Partners, a leading private equity firm, where he invested in and worked with companies in many growth sectors, including software, electronics and IT services. Previously, he was with the private equity firm of Whitney & Co., Stamford, Connecticut, where he was active in middle-market buyouts and growth equity financings. His other experience includes employment with Hewlett-Packard Company as a product manager and with Alex.Brown & Sons in corporate finance and mergers & acquisitions. He is a Director of AttachmateWRQ, Inc. Mr. Crabill earned a B.S. in Industrial Engineering from Stanford University and an M.B.A. from Stanford’s Graduate School of Business.

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Mr. Tunnell became one of our directors on May 2, 2006. Mr. Tunnell is a Managing Director at Hellman & Friedman LLC. He is also a director of GeoVera Insurance Group Holdings, Ltd., as well as the Chairman of the Board of Directors of Vertafore, Inc. He was formerly a director of Arch Capital Group Ltd., Blackbaud, Inc., and Eastern Sea Laem Chabang Terminal Co., Ltd. Mr. Tunnell is also a Term Member of the Council on Foreign Relations. Prior to joining Hellman & Friedman in 1994, Mr. Tunnell was employed by the Banking Group of Lazard Frères & Co. in New York. Mr. Tunnell graduated magna cum laude from Harvard College and has an M.B.A. from the Harvard Business School.

Board Composition and Governance

The composition of our board of directors is established by the terms of the stockholders agreement entered into by us, Activant Group, funds affiliated with Hellman & Friedman, Thoma Cressey and JMI Equity and certain members of our management. Among other things, this stockholders agreement provides that, prior to an initial public offering of the shares of Activant Group’s common stock, the parties that beneficially own shares of Activant Group common stock will vote those shares to elect a board of directors comprised of the following persons:

• our chief executive officer;

• up to two board members designated by Thoma Cressey (currently Messrs. Bravo and Crabill);

• one board member designated by JMI (currently Mr. Barber); and

• the remaining board members designated by Hellman & Friedman (currently Messrs. Ballard, Bernard, Henske and Tunnell).

For a discussion regarding the stockholders agreement, please refer to “Item 13. Certain Relationships and Related Transactions, and Director Independence—Stockholders Agreement.”

The committees of our board of directors currently consist of an audit committee and a compensation committee. None of the members of our audit committee and compensation committee is independent. Our board of directors is not comprised of a majority of independent directors, and its committees are not comprised entirely of independent directors, because we are a privately held company and not subject to applicable listing standards. Please see “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

Audit Committee Financial Expert

Our board of directors has determined that Mr. Ballard and Mr. Barber each, qualify as an “audit committee financial expert,” as this term has been defined by the SEC in Item 407(d)(5) of Regulation S-K. Messrs. Ballard and Barber were determined by our board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules, including based on his prior experience of actively supervising chief financial officers.

Our board of directors determined that Mr. Ballard acquired the required attributes for such designation as a result of the following relevant experience, which forms of experience are not listed in any order of importance and were not assigned any relative weights or values by our board in making such determination:

• experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements, including experience serving as Audit Committee Chair for DoubleClick, Inc. from July 2005 to date and Audit Committee Chair for Vertafore, Inc. from December 2004 to date;

• experience as a private equity investor for ten years, including managing all aspects and facets of accounting due diligence and issuing accounting statements;

• M.B.A. from Stanford University, including advanced accounting coursework; and

• continued periodic study of recent accounting pronouncements.

Our board of directors determined that Mr. Barber acquired the required attributes for such designation as a result of the following relevant experience, which forms of experience are not listed in any order of importance and were not assigned any relative weights or values by our board in making such determination:

• experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements, including experience serving on the Audit Committee for Stanford University from 2003 —to 2005, eBenX, Inc. (NASDAQ: EBEX) from 1999 to 2003, and Blackbaud Inc. from 1999 to 2005;

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• experience as a private equity investor for over nine years, including managing all aspects and facets of accounting due diligence and issuing accounting statements;

• M.B.A. from Harvard University; and

• continued periodic study of recent accounting pronouncements.

Code of Ethics for Senior Financial Management

We have adopted a Code of Ethics for Senior Financial Management (the “Code of Ethics”) which is applicable to our Chief Executive Officer, Chief Financial Officer, Vice President of Finance and Controller. To date, we have not granted any waivers to the Code of Ethics. We have filed a copy of our Code of Ethics as Exhibit 14.1 to this Annual Report on Form 10-K. A free copy of our Code of Ethics may be obtained by directing your request to Activant Solutions Inc., 7683 Southfront Road, Livermore, CA 94551 Attn: General Counsel.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

Our executive compensation program, including with respect to our Named Executive Officers, is overseen and administered by the Compensation Committee of our Board of Directors (“Board”). Our “Named Executive Officers” are (1) our current chief executive officer, (2) our current chief financial officer, (3) each of our three other most highly compensated executive officers who were serving as executive officers at the end of September 30, 2007 and (4) our former chief financial officers, each of whom would have been one of our three most highly compensated executive officers but for the fact that he or she was not serving as one of our executive officers at September 30, 2007.

The Board has appointed Messrs. Henske, Ballard, Bravo and Tunnell to serve on the Compensation Committee. None of our executive officers has served as a member of the Compensation Committee (or other committee serving an equivalent function) of any other entity, whose executive officers served as a director of our company or member of our Compensation Committee. Messrs. Ballard, Henske and Tunnell are managing directors of Hellman & Friedman LLC and Mr. Bravo is a partner of Thoma Cressey Bravo, Inc. Affiliates of Hellman & Friedman LLC and Thoma Cressey Bravo, Inc. together beneficially own approximately 95.5% of the outstanding common stock of Activant Group. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

The Compensation Committee operates under a written charter adopted by our Board and has responsibility for discharging the responsibilities of the Board relating to the review of the compensation of our executive officers and making recommendations to the non-executive directors for approval. Compensation decisions with respect to our Named Executive Officers, other than our chief executive officer, generally are made by means of reviews of executive compensation by our chief executive officer and our senior vice-president of human resources in consultation with other members of the executive management team, which typically would include any other Named Executive Officer to whom the applicable executive officer directly reports. Once such consultations and reviews are complete, our chief executive officer makes recommendations regarding the compensation of these Named Executive Officers to our Compensation Committee, which may accept, modify or reject one or more of the recommendations. All recommendations with respect to the compensation of our chief executive officer are made solely by our Compensation Committee. Our Compensation Committee then submits its final recommendations to our non-executive directors for approval. Our Compensation Committee and the nonexecutive directors exercise their discretion in accepting, modifying or rejecting management’s recommendations regarding executive compensation, as described below.

Objectives of Our Compensation Program

Our executive compensation program is intended to meet three principal objectives:

• to provide competitive compensation packages to attract and retain superior executive talent;

• to reward successful performance by the executive and the company by linking a significant portion of compensation to our financial results; and

• to align the interests of executive officers with those of our stockholders by providing long-term equity compensation and meaningful equity ownership.

To meet these objectives, our compensation program balances short-term and long-term goals and mixes fixed and at-risk compensation related to the overall financial performance of the company. Our compensation program for senior executives, including the Named Executive Officers, is generally designed to reward the achievement of targeted financial goals. The compensation program is intended to reinforce the importance of performance and accountability at various operational levels, and a significant portion of total compensation is provided in the form of cash compensation incentives that reward performance as measured against corporate established financial goals, including revenue and EBITDA targets, adjusted to include or exclude transactions agreed upon by the Compensation Committee. EBITDA represents earnings before interest, taxes, depreciation and amortization. Each element of our compensation program is reviewed individually and considered

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collectively with the other elements of our compensation program to ensure that it is consistent with the goals and objectives of both that particular element of compensation and our overall compensation program.

Elements of Our Executive Compensation Program

Overview

For fiscal year 2007, the principal elements of compensation for our Named Executive Officers included:

• annual cash compensation consisting of base salary and performance-based incentive bonuses

• long-term equity incentive compensation

• health and welfare benefits

• severance and/or change of control benefits

Annual Cash Compensation — Base Salary

For fiscal year 2007, the compensation for each of Messrs. Qureshi, McLaughlin, Wilson and Hanson, who were employed by us at the time of the mergers, was negotiated and determined by such Named Executive Officer and affiliates of Hellman & Friedman at the time of the mergers. For Named Executive Officers hired after the merger, compensation was based on our historical compensation practices, the experience and existing compensation arrangements of the executive officer, competitive factors existing in the employment market, competitive compensation practices within the industry based on the recommendations of the professional recruiter, if any, that we engaged in connection with a search for candidates for such executive position, the experiences of our non-executive directors, and individual negotiations with these executive officers.

In assessing compensation for our executives, we use compensation survey data for a broad set of companies in a comparable industry and size. We believe that this aggregated data provides us with appropriate benchmarks because these companies provide technology products and services and compete with us for executives and other employees. The survey data is derived from the Radford Executive Survey, and includes data relative to (i) an overall group of companies across a variety of industries, (ii) software companies with revenue between $200 million and $1 billion, (iii) the overall survey group of companies with revenue between $200 million and $500 million, (iv) the overall survey group of companies with revenue between $200 million and $1 billion and located in Northern California and (v) the overall survey group of companies with revenue between $200 million and $1 billion and located outside Northern California. In performing the analysis, our Compensation Committee reviewed the relevant data obtained from the categories or sub-categories of data identified above both in relation to base salary and in relation to performance-based cash compensation payable to our Named Executive Officers.

Our annual cash compensation for our Named Executive Officers includes base salary and performance-based cash compensation. We generally target base salary at the 50th percentile based on our analysis of the applicable survey data described above, and total cash compensation (assuming that 100% of the target performance-based incentive bonus is earned) slightly above the 50th percentile based on such survey data. However, in establishing or reviewing the base salary and annual performance-based cash compensation for each individual, we also consider the individual’s performance, achievement of management objectives and contributions to our overall business. Therefore, the Compensation Committee may and does exercise its discretion to award cash compensation for any Named Executive Officer either below or above the 50th percentile level identified by the survey data reviewed.

Annual compensation reviews are typically performed in April of each year and total compensation is adjusted for each Named Executive Officer after his or her annual review has been completed. However, increases in compensation may be made at other times of the year based on changes in responsibilities or other considerations that may apply to our Named Executive Officers. For example, as a result of our acquisition of the Eclipse business during our fiscal year 2007 and the inclusion of this business within our Wholesale Distribution line of business, Mr. McLaughlin received an increase in his annual base salary effective October 1, 2007 to $250,000 to reflect the addition of responsibility for the Eclipse business unit. Similarly, during our fiscal year 2007, Mr. Hanson’s responsibilities were expanded to cover customers in the lumber industry, in addition to his previous responsibility for hardlines customers. As a result, Mr. Hanson received an increase in his annual base salary effective October 1, 2007 to $220,000.

The base salaries paid to our Named Executive Officers for fiscal year 2007 are shown in the Summary Compensation Table below.

Annual Cash Compensation — Bonus Plan

Our Incentive Bonus Plan (“IB Plan”) is designed to reward our executives for the achievement of annual financial targets and management objectives. As described in greater detail below, the targets and objectives for those of our Named Executive Officers with responsibilities that cover our entire business are based on the achievement of corporate-wide performance targets while the targets and objectives for those of our Named Executive Officers with responsibilities generally related to only one of our business units are based on a combination of the achievement of corporate-wide performance targets and applicable business unit performance targets. Generally, for fiscal year 2007, the Named Executive Officers were eligible to receive performance-based incentive bonuses under the IB Plan with target payouts ranging from 0% to 175% of a participant’s annual target bonus amount. The actual bonus is payable upon achievement of targeted revenue and targeted

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EBITDA (as such term is defined in our existing bank loan agreement), subject to certain adjustments which are approved by the board of directors. The above metrics were used to align the performance of each executive officer with objectives related to the company and their respective functional areas, where applicable. Under the IB Plan, the incentive bonuses are generally paid on a quarterly basis for the first three quarters of each fiscal year if the financial performance for each quarter, as well as year-to-date performance, indicates that we will meet our annual targets. The final bonus payment, if any, is made to our Named Executive Officers after the end of a fiscal year on the basis of the financial performance for the entire year, less any amounts previously paid in one or more quarterly installments.

For the 2007 fiscal year, three of our Named Executive Officers, Messrs. Qureshi and Wilson and Ms. Crusco, were eligible to receive a bonus under the IB Plan determined solely by the Company’s overall financial performance as measured by a combination of revenue and EBITDA targets. We selected revenue and EBITDA as the most appropriate measures upon which to base the annual incentive bonus for our executive officers because they are important metrics used by our management and investors to evaluate the performance of the company. We established revenue and EBITDA targets at the commencement of the measurement period. The IB Plan for Messrs. Qureshi and Wilson and Ms. Crusco required a minimum achievement of 98% of the annual EBITDA target and 95% of revenue target in order to achieve a 50% payout of the target bonus; 100% achievement of the EBITDA and revenue targets for a payout of 100% of the target bonus; and 105% achievement of the EBITDA target and 100% of revenue target for a payout of 175% of the target bonus. The IB Plan was capped relative to achievement of the EBITDA and revenue targets at a 175% payout. As a result of our fiscal year 2007 performance, we will make a bonus payout at 90% of the target bonus amount to each of these three executives. Our former chief financial officer who resigned in January 2007 received a performance-based incentive bonus at 100% of target for the first three quarters of fiscal year 2007 but was not entitled to receive any further bonus payments.

The IB Plan for our remaining two Named Executive Officers, Messrs. McLaughlin and Hanson, was structured similarly to the bonus plan as described above, except that the individual’s performance was measured by a combination of the achievement of corporate-wide financial metrics and business unit financial metrics. For the 2007 fiscal year, the IB Plan for Steve McLaughlin was weighted 35% towards the achievement of corporate-wide revenue and EBITDA targets and 65% towards the achievement of “business unit contribution” targets for the business unit he manages. For purposes of the IB Plan, “business unit contribution” means both the revenue generated by the business unit and the business unit gross profit, less direct sales, marketing product development and advice line costs, measured as a percent of plan for the business unit. The percentage payout under the business unit portion of the IB Plan is then determined by a combination of the achievement of the business unit revenue targets and business unit earnings targets described above, calculated in a similar fashion as for the corporate-wide performance targets described above. For fiscal year 2007, the IB Plan for Scott B. Hanson was weighted 62.5% towards the achievement of corporate-wide revenue and EBITDA targets and 37.5% towards the achievement of business unit contribution targets for the business unit he manages. As a result of our fiscal year 2007 performance, we will make a bonus payment to Mr. McLaughlin of 123% of his target bonus amount and a bonus payment to Mr. Hanson of 75% of his target bonus amount.

For the 2007 fiscal year, the targets established under the IB Plan for all of our Named Executive Officers were in line with the annual operating plan established by our Board. While our Compensation Committee considers the annual bonus targets for our Named Executive Officers to be attainable, the targets require significant and sustained effort on the part of our company and the applicable business units for the Named Executive Officers to earn a bonus equal to or in excess of their respective target amounts. Performance-based incentive bonuses earned by the Named Executive Officers for fiscal year 2007 are shown in the Summary Compensation Table below.

The IB Plan for our fiscal year 2008 is expected to be similar in structure to the IB Plan for fiscal year 2007 with the exception of the following modifications: (i) the addition of a 10%-20% individual performance component to the mix of targets and objectives required to be achieved and a corresponding reduction in the corporate-wide and business unit targets, as applicable; (ii) a potential payout of 110% of the target bonus amount for 100% achievement of budgeted EBITDA and revenue targets; and (iii) with respect to the Named Executive Officers whose primary responsibility relates to a single business unit, an overall weighting of achievement between corporate and business unit performance of 70% and 30%, respectively.

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Long-Term Equity Compensation

We intend for our stock option incentive program to be the primary vehicle for offering long-term incentives and rewarding our executive officers, managers and key employees. Because of the direct relationship between the value of an option and the value of our stock, we believe that granting options is a method of motivating our executive officers to manage our company in a manner that is consistent with the interests of the company and our stockholders. We also regard our option program as a key retention tool. Retention is an important factor in our determination of the number of underlying shares to grant.

Following the completion of the mergers, Activant Group established a new stock incentive plan, the 2006 Stock Incentive Plan (“Stock Incentive Plan”), which governs, among other things, the grant of options, restricted stock and other equity-based awards. In connection with the completion of the merger, we reserved a pool of options to acquire Activant Group common stock under the Stock Incentive Plan to be granted to select employees, including our Named Executive Officers, after the mergers. A portion of that pool was also reserved for grants to new hires. As a general matter, it is our policy to grant stock options to our Named Executive Officers only upon commencement of employment or in connection with a promotion or assignment of additional responsibilities. For example, as a result of the addition of the responsibility for managing the Eclipse business unit, on November 2, 2007, Mr. McLaughlin was granted an option to acquire 60,000 shares of our common stock at an exercise price of $4.92 per share. Similarly, as a result of the increase in his responsibilities, on November 2, 2007, Mr. Hanson was granted an option to acquire 25,000 shares of our common stock at an exercise price of $4.92 per share. We do not currently anticipate making annual options grants and do not presently intend to make any additional option grants to Named Executive Officers other than in connection with new hires or promotions.

All stock options that have been granted under the stock incentive plan are “time-based options” that vest and become exercisable over a five-year period. For a more detailed discussion regarding the 2006 Stock Incentive Plan and the options granted under that plan, see the section entitled “2006 Stock Incentive Plan.” Additional information regarding grants made to the Named Executive Officers is included in the tables below.

Cash Retention Bonus

On November 15, 2006, our Board approved a cash retention bonus plan (“Cash Retention Bonus Plan”) for the payment of a bonus to those employees, including our Named Executive Officers, who had been granted an option through that date under the Stock Incentive Plan, calculated by the number of options granted for such employee times $0.35. In the case of the Named Executive Officers, payment of the retention bonus vests twenty percent (20%) per year, commencing on September 30, 2007 and each September 30th for the next four subsequent years. Vesting under the Cash Retention Bonus Plan accelerates in the event of a Change in Control, as defined under the Stock Incentive Plan. In addition, in the event that we terminate Mr. Qureshi’s employment without “cause” or if he resigns for “good reason” (as each term is defined in his employment agreement), and one or more of the payment dates has not occurred as of such termination, any annual installment that he would have received on or prior to the six month anniversary of such termination of employment will become immediately vested and payable.

					Amount Outstanding and
					Subject to Annual Vesting
			Amount Vested During		over Four Years
Named Executive	Total Cash Retention		Fiscal Year Ended		commencing
Officer	Bonus Amount		September 30, 2007		September 30, 2008
Pervez Qureshi	$	758,333.45	$	151,666.69	$	606,666.76
Stephen McLaughlin	$	113,750.00	$	22,750.00	$	91,000.00
Bill Wilson	$	131,250.00	$	26,250.00	$	105,000.00
Scott B. Hanson	$	96,250.00	$	19,250.00	$	77,000.00

Benefits

We offer a variety of health and welfare programs to all eligible employees, including the Named Executive Officers. The Named Executive Officers generally are eligible for the same benefit programs on the same basis as the rest of our employees, including medical and dental care coverage, life insurance coverage, short-and long-term disability and a 401(k) plan. We do not provide perquisites as part of our executive compensation program.

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Employment Agreements and Severance and Change of Control Benefits

Activant Executive Severance Plan

On February 1, 2005, we adopted the Activant Executive Severance Plan (the “Executive Plan”) effective as of January 1, 2005, which covered each officer, vice president or other senior executive employee of us (other than our chief executive officer) and who was designated as an “Eligible Employee” by and in the discretion of the plan administrator. An Eligible Employee was entitled to severance under the Executive Plan if such Eligible Employee was involuntarily terminated without cause and not as a result of such Eligible Employee’s death or disability (an “Executive Qualified Termination”). An Executive Qualified Termination also includes a termination occurring as a result of or in connection with the sale or other divestiture of the company or the sale or other divestiture of a division, subsidiary, assets or other entity or business segment where the Eligible Employee is required to work at a job site over 50 miles from his or her job site immediately prior to such sale or divestiture or where the Eligible Employee’s base pay is reduced by more than 10% when compared to the base pay earned immediately prior to such sale or divestiture. Upon an Executive Qualified Termination, an Eligible Employee was entitled to receive a single lump sum severance payment equal to six months base salary if the Eligible Employee executed a release of all claims against us. Notwithstanding the foregoing, in no event would such severance payment, when aggregated with all other payments to such Eligible Employee on account of the same Executive Qualified Termination under any of our other sponsored severance arrangements, exceed twice the annual compensation of such Eligible Employee for the calendar year immediately preceding the calendar year during which the Executive Qualified Termination occurred. Additionally, severance payments payable under the Executive Plan to an Eligible Employee would be offset and reduced for any and all severance amounts paid or payable to the Eligible Employee under any individual employment or severance agreement or under any applicable law.

On November 2, 2007, we amended and restated the Executive Plan to ensure that benefits paid under it will not be subject to excise tax under Section 409A of the Internal Revenue Code. In connection with such amendment and restatement, we also revised the definition of Eligible Employee under the Executive Plan to clarify that it covers each of our executives who is either a senior vice president, executive vice president or vice president, as well as any of our other senior level employees who is specifically designated to participate in the Executive Plan, as well as revised the definition of an Executive Qualified Termination to include termination resulting from an acquirer offering employment to the employee, the terms of which are a material change to the employee’s employment. The Executive Plan was also further amended to provide for enhanced severance benefits upon an Executive Qualified Termination, whereby an Eligible Employee who is either a senior vice president or executive vice president will be entitled to receive severance benefits consisting of severance pay equal to nine months of such Eligible Employee’s base salary and target bonus for such year (which may, in the plan administrator’s sole discretion, be paid in a lump-sum or over the applicable nine-month period following the termination of the executive), as well as the payment of the Eligible Employee’s COBRA premiums under our health plans for nine months. Similarly, an Eligible Employee who is a vice president (other than a senior vice president or executive vice president) or a specifically designated senior level employee will be entitled to receive, upon an Executive Qualified Termination, severance pay equal to six months of such Eligible Employee’s base salary and target bonus for such year (which may, in the plan administrator’s sole discretion, be paid in a lump-sum or over the applicable six-month period following the termination of the executive), as well as the payment of the Eligible Employee’s COBRA premiums under our health plans for six months. Additionally, severance payments payable under the Executive Severance Plan to an Eligible Employee will be offset and reduced for any and all severance amounts paid or payable to the Eligible Employee under any individual employment or severance agreement, plan or program, or under any other obligation or applicable law.

Each of Ms. Crusco, and Messrs. Hanson, Wilson, Bieszczat, McLaughlin, Petroni and Taich is entitled to receive severance benefits under the amended and restated Executive Plan. With respect to each of Ms. Crusco and Messrs. Wilson, McLaughlin and Petroni, any such severance payment would be offset and reduced by severance amounts payable pursuant to her or his employment agreement, which right to receive severance was granted pursuant to the Select Plan described below.

Activant Severance Plan for Select Employees

The Activant Severance Plan for Select Employees, originally effective May 8, 1998, and amended and restated February 1, 2005 (the “Select Plan”) was a broad-based plan available to each employee who was designated as an “Eligible Employee” in the sole and absolute discretion of the plan administrator. An Eligible Employee was entitled to severance under the Select Plan if such Eligible Employee’s termination was designated by the plan administrator in its discretion as a qualified termination and such termination was not as a result of the death of such Eligible Employee (a “Select Qualified Termination”). A Select Qualified Termination also includes a termination occurring as a result of or in connection with the sale or other divestiture of a division, subsidiary, assets or other entity or business segment where the Eligible Employee is required to work at a job site over 50 miles from his or her job site immediately prior to such sale or divestiture or where the Eligible Employee’s base pay is reduced by more than 25% when compared to the base pay earned immediately prior to such sale or divestiture. Upon a Select Qualified Termination, an Eligible Employee was entitled to a severance payment in an amount determined by the plan administrator in its sole and absolute discretion and approved by our chief executive officer, to be paid as quickly as administratively practicable after termination if the Eligible Employee executed a release of all claims against us. Notwithstanding the foregoing, in no event will such severance payment, when aggregated with all other payments to such Eligible Employee on account of the same Select Qualified Termination under any of our other sponsored severance arrangements, exceed twice the annual compensation of such Eligible Employee for the calendar year immediately preceding the calendar year during which the Select Qualified Termination occurred.

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On November 2, 2007, we approved the combination of the Select Plan with the Activant Standard Severance Plan with the Standard Plan as the surviving plan (as combined, the “Standard Severance Plan”). The Standard Severance Plan has been amended to provide that benefits paid under it will not be subject to excise tax under Section 409A of the Internal Revenue Code. The Standard Plan is a broad based plan that covers each employee other than union, temporary or leased employees. The Standard Plan specifically excludes from participation individuals who are participants in the Executive Plan. The amount of severance payable to a participant under the Standard Severance Plan is generally dependent on the participant’s job with us, as well as the participant’s years of service prior to such termination, with a maximum amount of severance payable under the Standard Severance Plan equal to 12 weeks of the Eligible Employee’s base pay. Additionally, severance payments payable under the Standard Severance Plan to an Eligible Employee will be offset and reduced for any and all severance amounts paid or payable to the Eligible Employee under any individual employment or severance agreement, plan or program, or under any other obligation or applicable law.

Each of Messrs. Qureshi, Wilson, McLaughlin and Petroni and Ms. Crusco is entitled to receive severance benefits under his or her employment agreement, which right to receive severance would have been pursuant to the Select Plan, but as the Select Plan was combined with the Standard Plan which specifically excludes participants in the Executive Plan, these individuals will now be covered under the Executive Plan, including the offset provisions of the Executive Plan, whereby payments under the Executive Plan are offset by any amounts paid or payable under any individual employment or severance agreement, plan, program or under any other obligations or applicable law.

Employment and Severance Agreements and Arrangements with our Named Executive Officers

Pervez A. Qureshi. In connection with the transactions, Mr. Qureshi entered into a definitive employment agreement with Activant Group that governs the terms of his employment with Activant Group, the material terms of which include the following:

• Mr. Qureshi serves as the president and chief executive officer of Activant Group.

• The employment agreement took effect upon the closing of the mergers and the term of the employment agreement is for an indefinite period. However, the executive or Activant Group may end the employment at any time.

• Mr. Qureshi is paid a base salary of $400,000 per annum. Any adjustments to the base salary are made by the compensation committee of the Activant Group board of directors.

• Mr. Qureshi is provided the opportunity to earn annual cash performance bonuses in amounts equal to up to 175% of base salary based upon the achievement of cumulative quarterly or annual performance targets established by the compensation committee and the board of directors of Activant Group, consistent with our existing fiscal year 2006 incentive performance plan.

• Activant Group agreed to grant to Mr. Qureshi 2,166,667 options to purchase shares of Activant Group common stock. These options vest over five years, provided that these options will become fully vested and exercisable in the event of a sale or change of control of Activant Group.

• Mr. Qureshi is provided with employee benefits in accordance with our programs as in effect from time to time and applicable to our executive officers, as well as a life insurance benefit of up to $2.0 million.

• Subject to his execution of an effective release of claims in favor of us and certain other parties, and his continued compliance with the restrictive covenants described below, Mr. Qureshi has the right to receive the following severance payments and benefits in the event that he is involuntarily terminated by us without ‘‘cause,’’ as defined in the agreement, or if he resigns for ‘‘good reason,’’ as defined in the agreement:

• base salary through the date of termination, any earned but unpaid portion of the annual or quarterly performance bonus award, any accrued but unused vacation, reimbursement for any unreimbursed business expenses properly incurred by him in accordance with our policy prior to the date of termination and any employee benefits to which the executive may be entitled under any employee benefit plans, such amounts, and any other severance benefits owed, reduced by any amounts owed to us or our affiliates by the executive,

• pro rata portion of any annual performance bonus that an executive would have earned in the year in which such termination of employment occurs, generally payable within ten days of the termination date,

• termination payment equal to 150% of the executive’s then effective annual base salary, generally payable within ten business days of the termination date, and an additional termination payment equal to 150% of the executive’s then effective annual base salary, payable in equal monthly payments over the nine month period following termination,

• continued coverage for a period of eighteen months following termination of employment under our health plans in accordance with the terms thereof, and

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• accelerated vesting of his options equal to the number of shares that would have vested if the executive had continued to be employed by us for an additional six months and a period of 180 days following termination to exercise all vested options.

• While Activant Group’s common stock is not publicly traded, Mr. Qureshi and Activant will use commercially reasonable efforts to obtain stockholder approval in accordance with the terms of section 280G of the Internal Revenue Code for any payments and benefits contingent upon the occurrence of a change in control. The executive’s employment agreement also contains a clause cutting back such payments and benefits for the purposes of Section 280G of the Internal Revenue Code in the event that such a cutback would allow the executive to obtain a higher after-tax value from such payments and benefits.

• While employed by us and for a period of eighteen months thereafter, except for the confidentiality covenant whose duration is for an indefinite term, Mr. Qureshi is subject to compliance with various restrictive covenants, including non-competition and non-solicitation/non-hire, for the benefit of us and certain other parties. See “Item 13. Certain Relationships and Related Transactions, and Director Independence – Qureshi Letter Agreement.”

At the effective time of the mergers, Mr. Qureshi also entered into an option rollover agreement pursuant to which he agreed to rollover $1 million of spread value of his then outstanding stock options into 333,334 vested stock options to purchase shares of common stock of Activant Group at an exercise price of $1.00 per share. Pursuant to the rollover agreement, Activant Group agreed to assume these options pursuant to the terms of the Activant Solutions Holdings Inc. Second Amended and Restated Stock Option Plan for Key Employees, as amended, which is the stock option plan under which these options were originally granted.

Kathleen Crusco. On March 19, 2007, we entered into an offer letter agreement with Kathleen Crusco for the position of Senior Vice President and Chief Financial Officer, with an effective start date of May 3, 2007. Pursuant to Ms. Crusco’s offer letter, Ms. Crusco is entitled to receive an annual base salary of $290,000 and is eligible to receive a target incentive bonus under the Activant Incentive Bonus Plan of $145,000. The offer letter also provides for (i) a stock option grant for 425,000 shares of common stock of Activant Group under the Stock Incentive Plan; (ii) a signing bonus of $100,000 which Ms. Crusco must reimburse in full if she voluntarily terminates her employment with us prior to 12 months from her start date, and (iii) severance of (A) nine months of base salary, (B) nine-months pro-rated target incentive bonus, and (C) nine months of COBRA payments in the event Ms. Crusco’s employment is involuntarily terminated by us without cause or if Ms. Crusco voluntarily terminated her employment for good reason.

William Wilson. On February 14, 2005, we entered into a letter agreement with Mr. Wilson containing the terms of our severance obligations to him. The letter agreement provides that if his employment is involuntarily terminated by us without cause or if he voluntarily terminates his employment for good reason, Mr. Wilson will be entitled to receive severance in a lump sum amount equal to the sum of (i) nine months of base salary, (ii) nine months of his incentive bonus, and (iii) nine months of COBRA payments, subject to the terms of our severance plans. Pursuant to his employment arrangement with the Company, Mr. Wilson is entitled to receive a base salary of $230,000 and is eligible to receive a target incentive bonus under the Activant Incentive Bonus Plan of $125,000.

Stephen A. McLaughlin. In September of 2005 we entered into a letter agreement with Mr. McLaughlin containing the terms of our severance obligations to him. The letter agreement provides that if his employment is involuntarily terminated by us without cause, Mr. McLaughlin will be entitled to receive severance in a lump sum amount equal to the sum of (i) nine months of base salary, (ii) nine months of his incentive bonus, and (iii) nine months of COBRA payments, subject to the terms of our severance plans. This letter agreement became effective upon his relocation to our Yardley, Pennsylvania offices. Pursuant to his employment arrangement with the Company, Mr. McLaughlin is entitled to receive a base salary of $250,000 and is eligible to receive a target incentive bonus under the Activant Incentive Bonus Plan of $160,000.

Scott B. Hanson. Mr. Hanson has not entered into a formal employment agreement with the Company. Pursuant to the Activant Executive Severance Plan, Mr. Hanson will be entitled to the same severance benefits as other Senior Vice Presidents of the Company. Pursuant to his employment arrangement with the Company, Mr. Hanson is entitled to receive a base salary of $220,000 and is eligible to receive a target incentive bonus under the Activant Incentive Bonus Plan of $140,000.

Greg Petersen. Soon after the mergers in 2006, we relocated our headquarters to our Livermore, California office. Mr. Petersen indicated that he was unable to relocate to Livermore. Mr. Petersen executed agreements that provided for lump sum severance payments in the amount of $500,000, in addition to certain other benefits, and the termination of his employment with us in January 2007. This agreement became effective upon consummation of the mergers.

Brian Agle. Effective February 9, 2007, Brian Agle resigned as our Senior Vice President and Chief Financial Officer and from all other positions held by him with us and our affiliates. In connection with the termination of Mr. Agle’s employment, Mr. Agle granted a release to us and our affiliates and we agreed to pay to Mr. Agle the severance benefits set forth in his offer letter, which are summarized below under the caption titled “Potential Payments Upon Termination or Change of Control.”

2006 Stock Incentive Plan

Following the completion of the merger, Activant Group terminated all of Holdings outstanding equity incentive plans and established the Stock Incentive Plan, which governs, among other things, the grant of options to purchase common stock of Activant Group to members of management and other service providers following the completion of the mergers. Each grant of options under the Stock Incentive Plan

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specifies the applicable option exercise period, option exercise price and such other terms and conditions as deemed appropriate. A total of 7,961,958 shares have been reserved for issuance under the Stock Incentive Plan. All options granted under the Stock Incentive Plan will expire no later than ten years from the date of grant, but generally will terminate earlier upon termination of employment. The options that have been granted under the Stock Incentive Plan are subject to a five-year vesting schedule, with 20% vesting on the first anniversary of the vesting commencement date and the remaining 80% vesting in equal quarterly installments over the next four years such that the option will be fully vested on the fifth anniversary of the vesting commencement date. In the event of a sale of substantially all of the assets of the company, or a merger or acquisition of the company, the board of directors may provide that awards granted under the Stock Incentive Plan will be cashed out, continued, replaced with new awards or terminated; provided that all outstanding options will accelerate upon such a change of control. Each Named Executive Officer who exercises his or her options is also required to become a party to the Stockholders Agreement described below, unless he or she has already been made a party to such agreement. See “Item 13. Certain Relationships and Related Transactions, and Director Independence – Stockholders Agreement.”

Rollover Options

Pursuant to a letter agreement entered into in connection with the Merger Agreement on May 2, 2006, Pervez Qureshi rolled over $1.0 million of the “in the money” value of his options in Holdings into 333,334 stock options to purchase shares of Activant Group. See “Item 13. Certain Relationships and Related Transactions, and Director Independence — Qureshi Letter Agreement” and “Employment Agreements, above.”

Change of Control Agreements

Except with regard to the applicable provisions of the Executive Severance Plan, Cash Retention Bonus Plan and the Stock Incentive Plan and the foregoing described employment agreements with the Named Executive Officers described above, the Company has not entered into any agreement with regard to a change in control of the company with our Named Executive Officers.

Accounting and Tax Implications

The accounting and tax treatment of particular forms of compensation do not materially affect our compensation committee’s decisions. However, we evaluate the effect of such accounting and tax treatment on an ongoing basis and will make appropriate modifications to compensation policies where appropriate.

Stock Ownership

We do not have a formal policy requiring stock ownership by management.

Stock Option Grant Practices

All grants of stock options under the 2006 Stock Incentive Plan have had an exercise price equal to the fair market value of our common stock on the date of grant. Because the company is a privately-held company and there is no market for our common stock, the fair market value of our common stock is determined by our compensation committee based on available information that is material to the value of our common stock, including the value of the company immediately prior to the merger, the principal amount of the company’s indebtedness, the company’s actual and projected financial results, and fluctuations in the market value of publicly-traded companies in the software industry. In August 2007, we obtained an independent valuation of our common stock and we expect to update the independent valuation on a quarterly basis in connection with periodic option grants.

Our compensation committee approves stock option grants at either a regularly scheduled compensation committee meeting or by a unanimous written consent signed by all of the members of our compensation committee. All stock options are granted as of the date of the meeting or upon execution of the unanimous written consent in lieu of a meeting, as applicable. We generally grant stock options on a quarterly basis.

Compensation Committee Report

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to our Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

Robert B. Henske, Chairperson
C. Andrew Ballard
Orlando Bravo
David R. Tunnell

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The following table sets forth information regarding compensation paid by us for services rendered during our fiscal year 2007 for our Named Executive Officers.”

Summary Compensation Table

											Non-Equity
									Option		incentive plan		All other
	Fiscal		Salary		Bonus		Stock		awards		compen-		compen-
Name and principal position	year		($)		($)		awards		(1)		sation (2)		sation (3)		Total
Pervez A. Qureshi		2007	$	400,000	$	151,667	$	—	$	1,496,837	$	360,000	$	3,000	$	2,411,504
President and Chief Executive Officer
Kathleen M. Crusco (4)		2007	$	113,769	$	100,000	$	—	$	92,668	$	32,625	$	1,558	$	340,620
Senior Vice President and Chief Financial Officer
William Wilson		2007	$	222,983	$	26,250	$	—	$	259,069	$	108,000	$	3,000	$	619,302
Senior Vice President of Product Development
Stephen A. McLaughlin (5)		2007	$	221,001	$	67,750	$	—	$	224,524	$	162,975	$	3,000	$	679,250
Senior Vice President of Wholesale Distribution
Scott B. Hanson		2007	$	195,835	$	19,250	$	—	$	189,983	$	74,825	$	3,000	$	482,893
Senior Vice President of Hardlines and Lumber
Greg Petersen (6)		2007	$	85,885	$	—	$	—	$	—	$	52,500	$	523,165	$	661,550
Former Executive Vice President and Chief Financial Officer
Brian Agle (7)		2007	$	77,046	$	250,000	$	—	$	212,657	$	—	$	394,343	$	934,046
Former Senior Vice President and Chief Financial Officer

(1)	The amounts in this column reflect the dollar amount of expense recognized for financial statement reporting purposes in fiscal year 2007 with respect to stock options granted in fiscal year 2007 as well as prior years in accordance with FAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 10 to our Consolidated Financial Statements for the year ended September 30, 2007.
(2)	The amounts in this column reflect the cash awards earned under the IB Plan, which is discussed in more detail under “Elements of Our Executive Compensation Program — Annual Cash Compensation – Bonus Plan.”
(3)	The amounts include matching 401(k) plan contributions and severance payments to former executive officers.
(4)	Ms. Crusco’s employment with the company commenced on May 3, 2007. The amount reflected in the table under the column titled “Bonus” represents a signing bonus Ms. Crusco received in connection with such commencement.
(5)	Mr. McLaughlin received a $45,000 bonus as part of a relocation package to move to Colorado, which amount is reflected in the table under the column titled “Bonus”..
(6)	Mr. Petersen’s employment with the company terminated on December 31, 2006. Other compensation includes: (i) matching 401(k) savings plan contributions while he was employed by the company; (ii) severance of $500,000; (iii) the estimated cost of COBRA coverage of $14,484 for a period of 12 months; and (iv) accrued vacation of $20,165 existing as of Mr. Petersen’s termination date. For additional information regarding the separation agreement and general release with Mr. Petersen, see “Employment Agreements and Severance and Change of Control Benefits — Agreements with our Named Executive Officers – Greg Petersen.”
(7)	Mr. Agle’s employment with the company commenced on October 17, 2006. The bonus of $250,000 represents a signing bonus. Mr. Agle terminated his employment on February 9, 2007. Other compensation includes: (i) severance of $391,471 and (ii) accrued vacation of $2,872 existing as of Mr. Agle’s termination date. For additional information regarding the separation agreement and general release with Mr. Agle, see “Employment Agreements and Severance and Change of Control Benefits — Agreements with our Named Executive Officers – Brian Agle.”

Grant of Plan-Based Awards in Fiscal Year 2007

																	All other
															All other		option		Exercise
			Estimated future payouts under												stock		awards:		or base		Grant date
			non-equity incentive plan awards						Estimated future payouts under						awards:		number of		price of		fair value
			(1)						equity incentive plan awards						number		securities		option		of stock
			Thres-hold		Target		Maximum		Thres-hold		Target		Maximum		of shares		underlying		awards		and option
Name	Grant date		($)		($)		($)		(#)		(#)		(#)		of stock		options (2)		($/share)		awards
Named Executive Officers:
Pervez Qureshi		11/16/06	$	200,000	$	400,000	$	700,000		—		—		—		—		2,166,667	$	4.35	$	5,286,667
Kathleen M. Crusco		05/03/07	$	72,500	$	145,000	$	253,750		—		—		—		—		425,000	$	4.71	$	1,126,250
William Wilson		11/16/06	$	60,000	$	120,000	$	210,000		—		—		—		—		375,000	$	4.35	$	915,000
Stephen McLaughlin		11/16/06	$	66,500	$	133,000	$	232,750		—		—		—		—		325,000	$	4.35	$	793,000
Scott B. Hanson		11/16/06	$	51,500	$	103,000	$	180,250		—		—		—		—		275,000	$	4.35	$	671,000
Former Executive Officers:
Greg Petersen		—	$	—	$	—	$	—		—		—		—		—		—	$	—	$	—
Brian Agle		11/16/06	$	—	$	—	$	—		—		—		—		—		500,000	$	4.35	$	1,220,000

(1)	The amounts in this column represent performance incentives under our IB Plan. For a further discussion of the IB Plan, see “Elements of Our Executive Compensation Program – Annual Cash Compensation – Bonus Plan.”
(2)	The amounts in this column represent the number of options granted under the 2006 Stock Incentive Plan.

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Outstanding Equity Awards at September 30, 2007

	Option Awards											Stock Awards
																		Equity incentive
				Number of		Number of						Number		Market		Equity incentive		plan awards:
				securities		securities						of shares		value of		plan awards:		market or
				underlying		underlying						of stock		shares of		number of		payout value of
				unexercised		unexercised		Option		Option		that		stock that		unearned shares		unearned shares
				options		options		exercise		expiration		have not		have not		that have not		that have not
Name	Grant date			exercisable		unexercisable		price ($)		date		vested		vested		vested (#)		vested ($)
Executive Officers:
Pervez Qureshi		05/02/06	(1)		333,334		—	$	1.00		05/02/16		—	$	—		—	$	—
		11/16/06	(2)		433,333		1,733,334	$	4.35		11/16/16		—	$	—		—	$	—
Kathleen M. Crusco		05/03/07	(2)		—		425,000	$	4.71		05/03/17		—	$	—		—	$	—
William Wilson		11/16/06	(2)		75,000		300,000	$	4.35		11/16/16		—	$	—		—	$	—
Stephen McLaughlin		11/16/06	(2)		65,000		260,000	$	4.35		11/16/16		—	$	—		—	$	—
Scott B. Hanson		11/16/06	(2)		55,000		220,000	$	4.35		11/16/16		—	$	—		—	$	—
Former Executive Officers:
Greg Petersen		—			—		—		—		—		—	$	—		—	$	—
Brian Agle		—			—		—		—		—		—	$	—		—	$	—

(1)

These options became fully vested as of May 2, 2006 in connection with the mergers. These options represent stock options of Holdings prior to the mergers, which options were converted into stock options to acquire common stock of Group immediately following the mergers. For a further discussion regarding these “rollover options,” see the section entitled “Employment Agreements and Severance and Change of Control Benefits — Rollover Options.”

(2)

For all Named Executive Officers except Ms. Crusco, time-based stock options vest over five years with 20% vesting on May 2, 2007 and 5% vesting the last day of each three-month period thereafter. Ms. Crusco’s options were granted with a vesting commencement date of May 3, 2007, but are otherwise subject to the same general vesting schedule as applies to our other Named Executive Officers. For a further discussion regarding time-based options, see the section entitled “Employment Agreements and Severance and Change of Control Benefits — 2006 Stock Incentive Plan.”

Option Exercises and Stock Vested

None of our Named Executive Officers exercised stock options in the year ended September 30, 2007.

Employment and Change of Control Agreements

As discussed above, the company’s Executive Severance Plan, Cash Bonus Plan and Stock Incentive Plan include provisions with regard to a change in control of the Company, and we entered into definitive employment agreements with certain of the Named Executive Officers which include provisions relating to a change in control of the Company. The terms of these agreements are described above under “Employment Agreements and Severance and Change of Control Benefits.”

Potential Payments Upon Termination or Change of Control

The tables below reflect the amount of potential payments to each of the Named Executive Officers, other than Mr. Petersen and Mr. Agle, in the event of termination of employment of the Named Executive Officer. The amounts shown below assume that the termination was effective as of September 30, 2007, and include estimates of the amounts which would be paid to each executive officer upon his or her termination. The actual amount of any severance or change of control benefits to be paid out to a Named Executive Officer, other than Mr. Petersen and Mr. Agle, can only be determined at the time of the termination of employment of the Named Executive Officer. For Mr. Petersen and Mr. Agle, the amounts shown below reflect the actual amounts paid by us in connection with the termination of his employment with the company. For a discussion regarding these severance and change of control benefits, see “Employment Agreements and Severance and Change of Control Benefits — Employment Agreement with our Chief Executive Officer,” “- Employment Agreements with our Chief Financial Officer,” “- Employment Agreements with our Other Executive Officers,” “- Agreements with our Former Chief Financial Officers,” and “- Change of Control Agreements.”

Without Cause or for Good Reason

			Target		Cash
			Incentive		Retention		Stock Options				Accrued
Executive	Base Salary		Bonus		Bonus (3)		(4)		Health Benefits		Vacation Pay (5)		Total
Pervez Qureshi (1)	$	1,200,000	$	400,000	$	—	$	123,500	$	21,355	$	33,846	$	1,778,701
Kathleen M. Crusco (2)		217,500		108,750		—		—		10,863		3,250		340,463
William Wilson (2)		172,500		93,750		—		—		10,863		13,813		290,926
Stephen McLaughlin (2)		187,500		120,000		—		—		10,863		17,834		336,197
Scott B. Hanson (2)		165,000		105,000		—		—		10,863		15,503		296,366

(1) Represents the executive officer’s base salary for a period of 36 months, target bonus for a period of 12 months, and the estimated cost of COBRA coverage for the executive officer’s current health benefits for a period of 18 months.

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(2)	Represents the executive officer’s base salary for a period of 9 months, target bonus for a period of 9 months, and the estimated cost of COBRA coverage for the executive officer’s current health benefits for a period of 9 months.
(3)	In the event of termination without cause or resignation for good reason not in connection with a change of control, Mr. Qureshi would be entitled to receive an installment of $151,667 if he would have been entitled to receive such installment on or prior to the six month anniversary of the termination of his employment. None of our other Named Executive Officers are entitled to an acceleration of their unvested cash retention bonuses in connection with a termination of their employment. For additional information, see “Elements of Our Executive Compensation Program – Cash Retention Bonus.”
(4)	Represents the difference between the exercise price of accelerated options and the fair market value of Activant Group’s common stock of $4.92 per share for such options as of September 30, 2007 as determined in good faith by the Board. For additional information regarding partial acceleration of vesting upon a change of control, see “Employment Agreements and Severance and Change of Control Benefits — Employment Agreement with our Named Executive Officers – Pervez Qureshi.”
(5)	Represents accrued vacation existing as of September 30, 2007.

For Cause or Without Good Reason

			Target Incentive						Accrued
Executive	Base Salary		Bonus		Stock Options		Health Benefits		Vacation Pay (1)		Total
Pervez Qureshi	$	—	$	—	$	—	$	—	$	33,846	$	33,846
Kathleen M. Crusco		—		—		—		—		3,250		3,250
William Wilson		—		—		—		—		13,813		13,813
Stephen McLaughlin		—		—		—		—		17,834		17,834
Scott B. Hanson		—		—		—		—		15,503		15,503

(1) Represents accrued vacation existing as of September 30, 2007.

Change of Control or Sale of Business

			Target		Cash						Accrued
			Incentive		Retention		Stock Options				Vacation Pay
Executive	Base Salary		Bonus		Bonus (3)		(4)		Health Benefits		(5)		Total
Pervez Qureshi (1)	$	1,200,000	$	400,000	$	606,667	$	988,000	$	21,355	$	33,846	$	3,249,868
Kathleen M. Crusco (2)		217,500		108,750		—		89,250		10,863		3,250		429,613
William Wilson (2)		172,500		93,750		105,000		171,000		10,863		13,813		566,926
Stephen McLaughlin (2)		187,500		120,000		91,000		148,200		10,863		17,834		575,397
Scott B. Hanson (2)		165,000		105,000		77,000		125,400		10,863		15,503		498,766

(1)	Represents the executive officer’s base salary for a period of 36 months, target bonus for a period of 12 months, and the estimated cost of COBRA coverage for the executive officer’s current health benefits for a period of 18 months.
(2)	Represents the executive officer’s base salary for a period of 9 months, target bonus for a period of 9 months, and the estimated cost of COBRA coverage for the executive officer’s current health benefits for a period of 9 months.
(3)	Represents the unvested portion of the Cash Retention Bonus that accelerates upon a change of control, as defined in our Stock Incentive Plan. For additional information, see “Elements of Our Executive Compensation Program – Cash Retention Bonus.”
(4)	Represents the difference between the exercise price of all options that would accelerate upon a change of control and the fair market value of Activant Group’s common stock of $4.92 per share as of September 30, 2007 as determined in good faith by the Board, multiplied by the number of such unvested options that would have accelerated had a change of control occurred on September 30, 2007. Note that such acceleration would occur regardless of whether the executive’s employment was terminated in connection with such change of control transaction. For additional information regarding acceleration of vesting upon a change of control, see “Employment Agreements and Severance and Change of Control Benefits – Change of Control Agreements.”
(5)	Represents accrued vacation existing as of September 30, 2007.

Director Compensation

We reimburse non-employee directors for all out-of-pocket expenses incurred in the performance of their duties as directors, but, except with respect to the agreements with Mr. Bernard described below, we do not pay any fees to directors for attendance at meetings or their service as members of the board of directors.

In connection with the agreement of Marcel Bernard to serve on the board of directors of Activant Group, Activant Group agreed to grant Mr. Bernard 61,406 options to purchase shares of common stock of Activant Group, which options will vest over five years. In addition, Mr. Bernard receives a cash consulting fee of $100,000 per year, payable quarterly in advance. On November 15, 2006, our Board approved the payment of a cash retention bonus to Mr. Bernard, calculated by the number of options which had been granted to him times $0.35. The aggregate bonus payment of $21,492.10 due to Mr. Bernard vests in three equal installments, commencing on September 30, 2007 provided, however, that vesting accelerates in the event of a Change in Control, as defined under the Stock Incentive Plan.

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The following table contains compensation received by Mr. Bernard during the fiscal year ended September 30, 2007.

									Change in
							Non-equity		pension value
	Fees						incentive		and nonqualified		All other
	earned or		Stock				plan		deferred		compen-
	paid in		awards		Option		compensation		compensation		sation ($)
Name	cash ($)		($)		awards ($)		($)		earnings ($)		(1)		Total
Director:
Marcel Bernard	$	100,000	$	—	$	42,420	$	—	$	—	$	7,174	$	149,594

(1) Represents 33 1/3% of the cash retention bonus payable to Mr. Bernard pursuant to the terms of the bonus award letter dated November 17, 2006.

Compensation Committee Interlocks and Insider Participation

Compensation decisions are made by the Board of Directors and the Compensation Committee of Activant Group. The Board has appointed Messrs. Henske, Ballard, Bravo and Tunnell to serve on the Compensation Committee. None of our executive officers has served as a member of the Compensation Committee (or other committee serving an equivalent function) of any other entity, whose executive officers served as a director of our company or member of our Compensation Committee. No interlocking relationships exist between any member of Activant’s Board of Directors or Compensation Committee and any member of the Board of Directors or Compensation Committee of any other company nor has any such interlocking relationship existed in the past. No member of the Compensation Committee is or was formerly an officer or an employee of Activant or its subsidiaries.

Messrs. Henske, Ballard and Tunnell are managing directors of Hellman & Friedman LLC and Mr. Bravo is a partner of Thoma Cressey Bravo, Inc. Affiliates of Hellman & Friedman LLC and Thoma Cressey Bravo, Inc. together control approximately 95% of the outstanding common stock of Activant Group. See “Item 13. Certain Relationships and Related Transactions, and Director Independence.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

We are a wholly owned subsidiary of Activant Group, which owns all of our issued and outstanding capital stock. All of Activant Group’s issued and outstanding capital stock is owned by funds affiliated with Hellman & Friedman LLC, Thoma Cressey Bravo, Inc. and JMI Equity, which funds we refer to as the “sponsors” and certain members of our management, which we refer to as the “management investors.”

The sponsors are able to control all actions by the board of directors of Activant Group by virtue of their being able to appoint a majority of the directors, their rights under the stockholders agreement to which they and Activant Group are parties and the beneficial ownership by an affiliate of Hellman & Friedman LLC of the only authorized and outstanding share of Series A preferred stock issued in connection with the mergers. In addition, as a result of the voting and transfer provisions of the stockholders agreement, the sponsors may be deemed to constitute a group within the meaning of Section 13(d)(3) of the Exchange Act. Accordingly, each of the members of this group may be deemed to beneficially own all of the shares of Activant Group common stock held by the sponsors and the management investors. Each of the sponsors disclaims any beneficial ownership of shares of Activant Group common stock held by the other sponsors and the management investors. See “Item 13. Certain Relationships and Related Transactions, and Director Independence—Agreements Related to the Mergers—Stockholders Agreement.”

All of our issued and outstanding shares of capital stock have been pledged as collateral to the lenders under the senior secured credit agreement described under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”. If we were to default on our senior secured credit facilities, the lenders could foreclose on these shares of our common stock, which would result in a change of control.

The following table sets forth as of December 15, 2007, certain information regarding the beneficial ownership of the voting securities of Activant Group Inc. by:

• each person who beneficially owns more than 5% of Activant Group common stock;

• each of our directors and Named Executive Officers, individually; and

• all of our directors and executive officers as a group.

Percentage ownership of common stock of Activant Group in the table is based on 61,403,211 shares of common stock of Activant Group outstanding on December 15, 2007. Except as otherwise noted below, the address for each person listed on the table is c/o Activant Solutions Inc., 7683 Southfront Road, Livermore, California 94551. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

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Beneficial ownership is determined in accordance with the rules that generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares subject to options held by that person that were exercisable as of December 15, 2007 or will become exercisable within 60 days after such date are deemed outstanding, although the shares are not deemed outstanding for purposes of computing percentage ownership of any other person.

	Beneficial Ownership of Activant Group
	Common Stock
	Number of
Name of Beneficial Owner	Shares			Percentage
5% Stockholders:
Funds affiliated with Hellman & Friedman LLC		46,440,270	(1)		75.6	%
Funds affiliated with Thoma Cressey Bravo, Inc.		12,235,066	(3)		19.9	%
Directors and Named Executive Officers:
C. Andrew Ballard (2)		—			—
Paul V. Barber (4)		2,500,000			4.1	%
Marcel Bernard		21,492	(5)		*
Orlando Bravo (3)		12,235,066			19.9	%
S. Scott Crabill (3)		12,235,066			19.9	%
Robert B. Henske (2)		—			—
David R. Tunnell (2)		—			—
Pervez A. Qureshi		1,091,667	(6)		1.7	%
Kathleen M. Crusco		—			—
William Wilson		181,250	(7)		*
Stephen A. McLaughlin		176,250	(8)		*
Scott B. Hanson		133,750	(9)		*
Brian E. Agle (10)		—			—
Greg Petersen (11)		—			—
All current directors and executive officers as a group (15 persons)		16,534,101	(12)		26.2	%

*	Represents less than 1%.
(1)	Consists of 40,830,287 shares held by Hellman & Friedman Capital Partners V, L.P. (“HFCP V”), 5,586,763 shares held by Hellman & Friedman Capital Partners V (Parallel), L.P. (“HFCP V (Parallel)),” and 23,220 shares held by Hellman & Friedman Capital Associates V, LLC (“HFCA V,” and together with HFCP V and HFCP V (Parallel), the “H&F Entities”). Hellman & Friedman Investors V, LLC (“H&F Investors V”) is the general partner of HFCP V and HFCP V (Parallel). Hellman & Friedman LLC is the managing member of HFCA V and H&F Investors V. The investment decisions of each of the H&F Entities are made by a five-member investment committee of Hellman & Friedman LLC, which exercises voting and dispositive power over these shares. Each of the members of the investment committee disclaims beneficial ownership of these shares except to the extent of their respective pecuniary interest therein.
(2)	Does not include shares held by the H&F Entities. See note (1) above. Each of Messrs. Ballard and Tunnell is a managing director of H&F Investors V and each of Messrs. Ballard, Henske and Tunnell is a managing director of Hellman & Friedman LLC. None of Messrs. Ballard, Henske and Tunnell is on the investment committee of Hellman & Friedman LLC. Each of Messrs. Ballard, Henske and Tunnell disclaims beneficial ownership of the shares held indirectly by Hellman & Friedman LLC, except, in the case of Messrs. Ballard and Tunnell to the extent of their respective pecuniary interest therein. The address for the H&F Entities and each of Messrs. Ballard, Henske and Tunnell is One Maritime Plaza, 12th Floor, San Francisco, CA 94111.
(3)	Consists of 6,023,445 shares held by Thoma Cressey Fund VII, L.P. (“TCF VII”), 94,088 shares held by Thoma Cressey Friends Fund VII, L.P. (“TCFF VII”), and 6,117,533 shares held by Thoma Cressey Fund VIII, L.P. (“TCF VIII,” and together with TCF VII and TCFF VII, the “TCB Entities”). TC Partners VII, L.P. (“TC Partners VII”), as the general partner of TCF VII and TCFF VII, and TC Partners VIII, L.P. (“TC Partners VIII”), as the general partner of TCF VIII may, for purposes of Rule I3d-3 under the Securities Exchange Act of 1934, as amended, be deemed to beneficially own the shares held by TCF VII and TCFF VII, and TCF VIII, respectively. Thoma Cressey Bravo, Inc., as the general partner of TC Partners VII and TC Partners VIII, may, for purposes of Rule 13d-3, be deemed to own beneficially the shares held by TCF VII, TCFF VII and TCF VIII. Bryan C. Cressey, Orlando Bravo, Lee M. Mitchell and Carl D. Thoma are directors and officers of Thoma Cressey Bravo, Inc. and accordingly possess voting and dispositive power over all of the shares owned by the TCB entities. Messrs. Bravo and Crabill disclaim beneficial ownership of these shares except to the extent of their individual pecuniary interest in these entities. The address for the TCB Entities, Messrs. Bravo and Crabill is 600 Montgomery Street, 32nd Floor, San Francisco, CA 94111.
(4)	Consists of 2,363,131 shares held by JMI Equity Fund V, L.P. (“JMI V”) and 136,869 shares held by JMI Equity Fund V (AI), L.P. (“JMI V (AI),” and together with JMI V, the “JMI Entities”). JMI Associates V, L.L.C. is the general partner of each of the JMI Entities and may be deemed the beneficial owner of the shares held by such entities. Paul V. Barber is one of six managing members of JMI Associates V, L.L.C. Mr. Barber disclaims beneficial ownership of the shares beneficially owned by JMI Associates V, L.L.C., JMI V and JMI V (AI), except to the extent of his pecuniary interest therein. The address for the JMI Entities is 2 Hamill Road, Suite 272, Baltimore, MD 21210, and for Mr. Barber is 12265 El Camino Real, Suite 300, San Diego, CA 92130.
(5)	Consists of 21,492 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.
(6)	Consists of 1,091,667 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.
(7)	Includes 131,250 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.
(8)	Includes 113,750 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.
(9)	Includes 96,250 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.
(10)	Former Senior Vice President and Chief Financial Officer.
(11)	Former Senior Vice President of Finance and Treasurer.
(12)	Includes 1,633,159 shares of common stock issuable pursuant to options that are exercisable within 60 days of December 15, 2007.

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Item 13. Certain Relationships and Related Transactions, and Director Independence.

Certain Relationships and Related Transactions

Since October 1, 2004, there has not been, nor is there currently planned, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeds $120,000 and in which any director, executive officer or holder of more than 5% of our capital stock or any member of such persons’ immediate families had or will have a direct or indirect material interest, other than agreements and transactions which are described under “Compensation Discussion and Analysis—Employment Agreements and Severance and Change of Control Benefits” and the transactions described below.

Agreements Related to the Mergers

We entered into several related party agreements in contemplation of the mergers, to which the company succeeded by operation of law as a result of the mergers.

Merger Agreement

On March 12, 2006, Activant Group, Merger Sub and Holdings entered into an agreement and plan of merger pursuant to which Merger Sub merged with and into Holdings, subject to the terms and conditions set forth in the merger agreement. The survivor then merged with and into Activant Solutions, Inc. At the effective time of the merger of Merger Sub into Holdings, each share of (a) Holdings common stock issued and outstanding immediately prior to the effective time of that merger (other than shares held in the treasury of Holdings, owned by Merger Sub, Activant Group or any direct or indirect wholly-owned subsidiary of Holdings or held by Holdings stockholders who were entitled to and who properly exercised appraisal rights under Delaware law) were converted into the right to receive $4.00 in cash, without interest, and (b) Holdings Class A common stock issued and outstanding immediately prior to the effective time of that merger (other than shares held in the treasury of Holdings, owned by Merger Sub, Activant Group or any direct or indirect wholly-owned subsidiary of Holdings or held by Holdings stockholders who were entitled to and who properly exercised appraisal rights under Delaware law) were converted into the right to receive $7.2965 per share in cash, without interest.

In addition, except with respect to Mr. Pervez A. Qureshi, our president and chief executive officer, who agreed prior to the merger of Merger Sub with and into Holdings to rollover a portion of his existing options to acquire Holdings common stock into options to acquire Activant Group common stock in lieu of such rollover options being cancelled and converted into the right to receive a cash payment, all options to acquire Holdings common stock that were vested and exercisable immediately prior to that merger were cancelled and converted into the right to receive a payment in cash, without interest, equal to the product of (A) the total number of shares of Holdings common stock as to which the option is vested and exercisable immediately prior to that merger and (B) the excess, if any, of $4.00 over the exercise price per share of Holdings common stock subject to such option, less applicable withholding taxes. All other options were cancelled and terminated without the right to receive any payment. As a result of the foregoing, the following payments in excess of $120,000 were received by our current or former executive officers:

Name	Net Proceeds
Pervez A. Qureshi	$	525,000
William Wilson		694,000
Stephen A. McLaughlin		447,500
Scott B. Hanson		372,375
Greg Petersen		1,306,250

Equity Commitment Letter and Subscription Agreement

In connection with the mergers, Activant Group and certain funds affiliated with Hellman & Friedman LLC, or Hellman & Friedman, and Thoma Cressey Bravo, Inc., or Thoma Cressey, which we together refer to as the “sponsors” entered into an equity commitment letter agreement, dated March 12, 2006, pursuant to which the parties to the agreement agreed to make cash investments in Activant Group immediately prior to the completion of the mergers. In connection with the closing of the mergers, the funds affiliated with Hellman & Friedman invested approximately $195.0 million and the funds affiliated with Thoma Cressey invested approximately $48.7 million. The commitments of the sponsors were reduced on a pro rata basis by the amount of equity investments in Activant Group by the management investors. Prior to the mergers, the funds affiliated with Hellman & Friedman assigned an aggregate of approximately $10.0 million of the amount they committed to invest to affiliates of JMI Equity, at which time these affiliates of JMI Equity became “sponsors” along with the funds affiliated with Hellman & Friedman and Thoma Cressey that made investments in Activant Group pursuant to a Subscription Agreement dated May 2, 2006. In exchange for these investments, Activant Group issued shares of its common stock to the sponsors, at a price of $4.00 per share, and issued one share of its Series A preferred stock to a fund affiliated with Hellman & Friedman.

The one share of Series A preferred stock, which ranks senior to Activant Group common stock as to rights of payment upon liquidation, is the only outstanding share of Series A preferred stock of Activant Group. The share of Series A preferred stock is not entitled to receive or participate in any dividends. The holder of the Series A preferred stock, voting as a separate class, has the right to elect one director of Activant Group, and the director designated by the holder of the series A preferred stock is entitled at any meeting of the board of directors to exercise

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one vote more than all votes entitled to be cast by all other directors at such time. Activant Group is required to redeem the series A preferred stock for $1.00 upon the earliest of the following to occur:

• Hellman & Friedman and its affiliates, in the aggregate, no longer beneficially own a number of outstanding share equivalents that is at least (a) 40% of Activant Group’s outstanding ‘‘share equivalents’’ and (b) 200% more than the number of outstanding share equivalents beneficially owned by Thomas Cressey and its affiliates, in the aggregate;

• Hellman & Friedman and their affiliates, in the aggregate, no longer beneficially own at least 20% of the outstanding share equivalents of Activant Group; or

• the consummation of an underwritten public offering of Activant Group common stock registered under the Securities Act.

For purposes of the Series A preferred stock and the stockholders agreement described below, “share equivalents’’ are shares of Activant Group common stock and the number of shares of common stock issuable, without payment to Activant Group of additional consideration, upon exercise, conversion or exchange of any other security.

Stockholders Agreement

In connection with the closing of the mergers, we, Activant Group, funds affiliated with Hellman & Friedman, which we refer to as the “Hellman & Friedman Investors,” funds affiliated with Thoma Cressey, which we refer to as the “Thoma Cressey Investors,” funds affiliated with JMI Equity, which we refer to as the “JMI Investors,” and certain members of our management, which we refer to as the “management investors,” entered into a stockholders agreement that generally contains the following provisions:

Board of Directors. The stockholders agreement requires that, until an initial public offering of shares of Activant Group’s common stock, the parties that beneficially own shares of Activant Group common stock will vote those shares to elect a board of directors of Activant Group comprised of the following persons:

• the chief executive officer of Activant Group,

• up to two board members designated by the Thoma Cressey Investors,

• one board member designated by the JMI Investors, and

• the remaining board members designated by the Hellman & Friedman Investors.

In addition, in the event that the Thoma Cressey Investors are only entitled to designate one director, the Thoma Cressey Investors will have the right to designate one non-voting observer to the board of directors of Activant Group. The board representation rights of the Thoma Cressey Investors and the JMI Investors are subject to reduction if their beneficial ownership of Activant Group share equivalents decreases below specified thresholds and are not transferable in connection with any transfer of Activant Group shares.

As described in greater detail in the section above titled ‘‘Equity Commitment Letter,’’ the share of Series A preferred stock held by one of the Hellman & Friedman Investors entitle it to elect a director of Activant Group with the power to determine the outcome of all votes of the board of directors prior to an initial public offering. After an initial public offering of common stock of Activant Group:

• the Thoma Cressey Investors will have the right to nominate one individual for election to the board of directors, provided the Thoma Cressey Investors and its permitted transferees beneficially own at least a specified amount of the outstanding share equivalents of Activant Group;

• the JMI Investors will have the right to nominate one individual for election to the board of directors, provided the JMI Investors and its permitted transferees beneficially own at least a specified amount of the outstanding share equivalents of Activant Group; and

• the Hellman & Friedman Investors and their affiliates will have the right to nominate the number of individuals for election to the board of directors that is equal to the product of the percentage of share equivalents of Activant Group held by the Hellman & Friedman Investors and their affiliates, multiplied by the number of directors then on the board, rounded up to the nearest whole number.

For so long as the Thoma Cressey Investors, the JMI Investors and/or the Hellman & Friedman Investors are entitled to nominate an individual for election to the board of directors, Activant Group is required to nominate such individual for election as a director as part of the slate that is included in the proxy statement or consent solicitation relating to such election and provide the highest level of support for the election of such individual as it provides to any other individual standing for election as part of Activant Group’s slate.

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Voting Rights and Minority Rights. For as long as the Hellman & Friedman Investors own at least 20% of all outstanding share equivalents of Activant Group, all of the other sponsors must vote their shares in the same manner as the Hellman & Friedman Investors vote their shares of common stock with respect to any of the following:

• altering or amending the Activant Group certificate of incorporation or bylaws (except with respect to any alteration or amendment that is detrimental to the rights of the Thoma Cressey Investors or the JMI Investors relative to the Hellman & Friedman Investors);

• engaging in any liquidation or dissolution; or

• approving any employee benefit, stock option or equity incentive plan recommended by the board of directors of Activant Group.

The stockholders agreement also provides the following minority rights with respect to certain of the sponsors that will apply prior to an initial public offering:

• the consent of the Thoma Cressey Investors and the JMI Investors is required with respect to specified types of transactions between the Hellman & Friedman Investors or their affiliates, on the one hand, and Activant Group or any of its subsidiaries, on the other hand;

• for so long as the Thoma Cressey Investors beneficially own, in the aggregate, at least 5% of the outstanding share equivalents of Activant Group, the consent of the Thoma Cressey Investors are required with respect to any acquisition by Activant Group or its subsidiaries involving a purchase price of less than $100.0 million; and

• with respect to certain future issuances of equity securities to the Hellman & Friedman Investors or their affiliates, the Thoma Cressey Investors are able to require Activant Group to engage an independent third party to establish the fair market value of such securities.

Indemnification. We and Activant Group are required to indemnify and hold harmless each of the stockholders that is party to the stockholders agreement, together with its partners, stockholders, members, affiliates, directors, officers, fiduciaries, controlling persons, employees and agents from any losses arising out of either of the following, subject to limited exceptions:

• the stockholder’s or its affiliate’s ownership of securities of Activant Group and us or its ability to control or influence Activant Group and us, and

• the business, operations, properties, assets or other rights or liabilities of Activant Group, us or any of our subsidiaries.

Participation Rights. Subject to specified exceptions, until an initial public offering, Activant Group may not issue equity securities without permitting each sponsor the opportunity to purchase a pro rata share of the securities being issued. Also prior to an initial public offering, if Activant Group or any of its subsidiaries issues debt securities to the Hellman & Friedman Investors or their affiliates, each of the other sponsors will be provided the opportunity to purchase a pro rata portion of such debt securities, based on the sponsor’s respective ownership of share equivalents at that time.

Transfer Provisions and Registration Rights. The stockholders agreement also contains (1) transfer restrictions applicable to the share equivalents held by the Thoma Cressey Investors, the JMI Investors and the management investors, (2) tag-along rights in favor of the Thoma Cressey Investors, the JMI Investors and the management investors, (3) drag-along rights in favor of the Hellman & Friedman Investors, (4) repurchase rights in favor of Activant Group and the sponsors with respect to the shares equivalents of the management investors, including any share equivalents they receive upon exercise of options, in the event of the termination of a management investor’s employment with Activant Group and (5) certain registration rights (including customary indemnification) and Rule 144 sale provisions applicable to the sponsors and their affiliates and the management investors.

Qureshi Letter Agreement

In connection with entering into the Merger Agreement and in contemplation of the mergers, as of March 12, 2006, Mr. Pervez A. Qureshi, who is our chief executive officer and president, entered into a letter agreement with Activant Group, pursuant to which:

• At the effective time of the mergers, Mr. Qureshi became our chief executive officer and president.;

• At the effective time of the mergers, Mr. Qureshi rolled over $1 million of the spread value of his current stock options in Holdings into 333,334 stock options to purchase shares of common stock of Activant Group, with an exercise price of $1.00 per share pursuant to the terms of an option rollover agreement, which is described under “Item 11. Executive Compensation—Employment Agreements and Severance and Change of Control Benefits Employment Agreements—Rollover Options.” These options and the additional stock options granted to Mr. Qureshi pursuant to his new employment agreement became subject to the stockholders agreement described above;

• Activant Group and Mr. Qureshi agreed to the terms and conditions of Mr. Qureshi’s employment after the closing of the mergers, which are described under “Item 11. Executive Compensation—Employment Agreements and Severance and Change of Control Benefits.”

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Management Subscription Agreements

Prior to the consummation of the transactions, certain members of our management entered into management subscription agreements pursuant to which, upon the terms and subject to the conditions set forth in the agreements, these members of management agreed to assign to Activant Group a portion of the proceeds they would otherwise be entitled to receive pursuant to the merger agreement for their options to acquire Holdings common stock as consideration for the acquisition of newly-issued shares of common stock of Activant Group for a price of $4.00 per share. The members of our management that entered into management subscription agreements included the following:

• Stephen McLaughlin, our senior vice president and general manager of wholesale distribution, who assigned an aggregate of $250,000 of proceeds he would have been entitled to receive for his options in exchange for the issuance to him of 62,500 shares of Activant Group common stock.

• William Wilson, our senior vice president of product development, who assigned an aggregate of $200,000 of proceeds he would have been entitled to receive for his options in exchange for the issuance to him of 50,000 shares of Activant Group common stock.

• Scott B. Hanson, our senior vice president and general manager of hardlines and lumber, who assigned an aggregate of $150,000 of proceeds he would have been entitled to receive for his options in exchange for the issuance to him of 37,500 shares of Activant Group common stock.

Transition Agreement

Soon after the consummation of the mergers, we relocated our headquarters to our Livermore, California office. Mr. Petersen indicated that he was unable to relocate to Livermore. Mr. Petersen an executed agreement that provided for lump sum severance payment in the amount of $500,000, in addition to certain other benefits and the termination of his employment with us in early 2007.

Cash Incentive Payments

We entered into letter agreements with certain of our employees that provided for the payment of cash incentive bonuses to them in an aggregate amount of $16,960,000 upon the consummation of the mergers, which were subject to prior approval of such payments by our stockholders. These cash payments were in lieu of the granting of shares of our restricted common stock as previously disclosed in our Current Report on Form 8-K filed with the SEC on January 30, 2006. A portion of these cash incentive bonus payments were made to our “Named Executive Officers” (as defined in “Item 11. Executive Compensation”) as follows: $3,200,000 to Pervez A. Qureshi; $2,200,000 to Greg Petersen; $1,400,000 to William Wilson; $1,000,000 to Stephen A. McLaughlin and $1,000,000 to Scott B. Hanson.

Policies and Procedures for Review and Approval of Related Party Transactions

We do not have a formal policy and related procedures for the review, approval and ratification of transactions that are required to be reported pursuant to this Item 13. Since the completion of the mergers, if and when any such transactions have been proposed, they have been reviewed by our board of directors and subject to its approval. We expect to continue this policy in the future.

Indemnification of Directors and Officers

Activant Group, as the surviving corporation of the mergers, agreed that for a period of six years following the effective time of the mergers, or May 2, 2006, it will indemnify each of the present and former directors and officers of Holdings to the fullest extent permitted by Delaware law against claims arising out of or pertaining to the fact that the person is or was an officer or director of Holdings or any of its subsidiaries prior to the mergers. Our certificate of incorporation provides that it will indemnify each of our directors and officers to the fullest extent permitted under the General Corporation Law of the State of Delaware for claims arising by reason of the fact that he or she is a director, officer, employee, or agent of the Company or any of its subsidiaries

In addition, each of our executive officers and directors has entered into an indemnification agreement with Activant Group and us, or “Activant.” Each of the indemnification agreements provides that we will indemnify and advance expenses to the indemnified officers and directors, or the indemnitees, to the fullest extent provided under our certificate of incorporation and bylaws, as in effect from time to time. We will not, without the prior written consent of each indemnitee, adopt any amendment to their respective certificates of incorporation, which would adversely affect the rights of the indemnitees, except as required by law. The right of such indemnitee to receive indemnification and advancement of expenses under this agreement is not exclusive of any other right, to which the indemnitee may, at any time be entitled. The agreement is valid for so long as such indemnitee serves as an officer or director of Activant, or at its request, any other entity, and terminates upon the later of (a) the expiration of six (6) years after the latest date that such indemnitee ceases to serve as an officer or director, (b) the final termination of all pending proceedings in respect of which such indemnitee is granted rights of indemnification or advancement of expenses, or

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(c) the expiration of all statutes of limitation applicable to possible claims arising out of such indemnitee’s status as an officer or director of Activant. The terms and provisions of the indemnification agreement are binding upon Activant’s successors and assigns.

Director Independence

Our board of directors has determined that Mr. Marcel Bernard is an “independent” director as defined under Nasdaq Marketplace Rule 4200-1(a)(15), which is the definition used by our board of directors for determining the independence of its directors. Mr. Bernard is our sole independent director. None of the members of our audit committee and compensation committee are independent. Our board of directors is not comprised of a majority of independent directors, and its committees are not comprised solely of independent directors, because we are a privately held company and not subject to applicable listing standards. The terms of the stockholders agreement described above require that certain members of our board of directors be comprised of persons affiliated with our company and the one share of Series A preferred stock held by an affiliate of Hellman & Friedman LLC, entitles the holder to designate one director with the power to cast one more vote than all votes entitled to be cast by all other directors.

Item 14. Principal Accountant Fees and Services.

The audit committee of the board of directors has selected Ernst & Young LLP as registered independent public accounting firm to audit our consolidated financial statements for the fiscal year ending September 30, 2007. Ernst & Young LLP currently serves as our registered independent public accounting firm. Fees paid to Ernst & Young for each of the last two fiscal years were as follows:

	Year Ended September 30,
(in thousands)	2006		2007
Audit fees (1)	$	714,000	$	604,000
Audit related fees (2)		471,000		210,000
Tax fees (3)		185,000		140,300
All other fees		—		—
Total	$	1,370,000	$	954,300

(1)	Audit fees include the annual audit and quarterly reviews of our financial statements, consultation on new accounting standards and current transactions and normal assistance with annual and periodic filings with the SEC or internet postings of our financial statements.
(2)	Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees”. These services primarily relate to the registration statement filings for financing activities and consultations concerning registration statement filings.
(3)	Tax fees include assistance in the preparation of our federal, state and foreign income and franchise tax returns and in the periodic examinations thereof by regulatory authorities and consultation on the tax treatment for transactions.

Audit Committee Pre-Approval Policy for Services Provided by Independent Registered Public Accounting Firm

All services provided by the registered independent public accounting firm have been pre-approved by our audit committee. Under the pre-approval policy, the committee pre-approves, by type and amount, the services expected to be provided by the registered independent public accounting firm during the coming year. This pre-approval is done annually and is documented as an exhibit to the minutes of the audit committee meeting. Any services to be provided by the registered independent public accounting firm that are not pre-approved as part of the annual process must be separately pre-approved by the audit committee, including the related fees. The audit committee must separately pre-approve any significant changes in scope or fees for any approved service. Pre-approval authority may not be delegated to management. Although pre-approval authority may be delegated to one or more members of the audit committee, no such delegation has been made.

The types of services the Committee pre-approves annually are audit, audit-related and certain tax services. Audit services include the annual audit and quarterly reviews, statutory audits, and normal assistance with periodic SEC filings. Audit-related services include consultation on the application of proposed accounting standards and consultation on the accounting for proposed transactions. Tax services include assistance in the preparation of sale tax returns and consultation on related tax matters.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) (1) Financial Statements – the consolidated financial statements of Activant Solutions Inc. are incorporated by reference to Part II, Item 8 of this report.

(2) Financial Statement Schedules – See Schedule II – Valuation and Qualifying Accounts below.

All other schedules have been omitted because they are not applicable, not required under the instructions, or the information requested is set forth in the consolidated financial statements or related notes included in Part II, Item 8 of this report..

(3) Exhibits:

EXHIBIT INDEX

Exhibit						Exhibit		Provided
Number		Exhibit Description	Incorporated by Reference			Number		Herewith
					Date of First
			Form	File No.	Filing
	3.1	Amended and Restated Certificate of Incorporation of Activant Solutions Inc.	S-4	333-138081	October 19, 2006		3.1
	3.2	Bylaws of Activant Solutions Inc.						X
	4.1	Indenture, dated May 2, 2006, by and among Lone Star Merger Corp., Activant Solutions Inc., Activant Solutions Holdings Inc., the Guarantors named therein and Wells Fargo Bank, National Association, as Trustee, relating to the 91/2% Senior Subordinated Notes due 2016	S-4	333-138081	October 19, 2006		4.1
	10.1	Credit Agreement, dated May 2, 2006, by and among Lone Star Merger Corp., Lone Star Holding Corp., Deutsche Bank Trust Company Americas, as Administrative Agent, Swing Line Lender and an L/C Issuer, each lender from time to time party thereto, JP Morgan Chase Bank, N.A., as Syndication Agent and Lehman Commercial Paper Inc., as Documentation Agent	S-4	333-138081	October 19, 2006		10.1
	10.2	Guarantee Agreement, dated May 2, 2006, by and among Lone Star Merger Corp., Lone Star Holding Corp., the Subsidiaries of the Borrower identified therein and Deutsche Bank Trust Company Americas, as Administrative Agent	S-4	333-138081	October 19, 2006		10.2
	10.3	Security Agreement, dated May 2, 2006, by and among Lone Star Merger Corp., Lone Star Holding Corp., the Subsidiaries of Holdings identified therein and Deutsche Bank Trust Company Americas, as Collateral Agent for the Secured Parties (as defined therein)	S-4	333-138081	October 19, 2006		10.3
	10.4	Intellectual Property Security Agreement, dated May 2, 2006, by and among Lone Star Merger Corp., Lone Star Holding Corp., the Subsidiaries of Holdings identified therein and Deutsche Bank Trust Company Americas, as Collateral Agent for the Secured Parties (as defined therein)	S-4	333-138081	October 19, 2006		10.4

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Exhibit						Exhibit		Provided
Number		Exhibit Description	Incorporated by Reference			Number		Herewith
					Date of First
			Form	File No.	Filing
	10.5	First Incremental Amendment to Credit Agreement, dated August 17, 2007, by and among Activant Group Inc., Activant Solutions Inc. and Deutsche Bank Trust Company Americas, as Administrative Agent and the 2007 Term Lenders (as defined therein)	8-K	333-49389	August 23, 2007		10.1
	10.6	Stockholders Agreement, dated May 2, 2006, by and among Lone Star Holding Corp., Lone Star Merger Corp., Hellman & Friedman Capital Partners V, L.P., Hellman & Friedman Capital Partners V (Parallel), L.P., Hellman & Friedman Capital Associates V, LLC, Thoma Cressey Fund VII, L.P., Thoma Cressey Friends Fund VII, L.P., Thoma Cressey Fund VIII, L.P., JMI Equity Fund V, L.P., JMI Equity Fund V (AI), L.P. and the other signatories thereto	S-4	333-138081	October 19, 2006		10.7
	10.7	Employment Agreement, dated May 2, 2006, by and between Lone Star Holding Corp. and Pervez A. Qureshi*	S-4	333-138081	October 19, 2006		10.6
	10.8	Option Rollover Agreement, dated May 1, 2006, by and among Lone Star Holding Corp., Activant Solutions Holdings Inc. and Pervez A. Qureshi*						X
	10.9	Offer Letter, dated March 19, 2007, by and between Activant Solutions Inc. and Kathleen M. Crusco*	8-K	333-49389	March, 22, 2007		10.1
	10.10	Executive Employment Agreement, dated February 14, 2005, by and between Activant Solutions Inc. and William Wilson*	10-K	333-49389	December 22, 2005		10.52
	10.11	Offer Letter, dated September 6, 2005, by and between Activant Solutions Inc. and Stephen A. McLaughlin*						X
	10.12	Agreement with Marcel Bernard, dated April 7, 2006, assumed by Lone Star Holding Corp. on October 13, 2006*						X
	10.13	Canadian Executive Retention Bonus Award Letter, dated November 17, 2006, by and between Activant Group Inc. and Marcel Bernard*						X
	10.14	CEO Executive Retention Bonus Award Letter, dated November 17, 2006, by and between Activant Group Inc. and Pervez A. Qureshi*						X
	10.15	U.S. Executive Retention Bonus Award Letter, dated November 17, 2006, by and between Activant Group Inc. and William Wilson*						X
	10.16	U.S. Executive Retention Bonus Award Letter, dated November 17, 2006, by and between Activant Group Inc. and Stephen A. McLaughlin*						X
	10.17	U.S. Executive Retention Bonus Award Letter, dated November 17, 2006, by and between Activant Group Inc. and Scott B. Hanson*						X
	10.18	Transition and Severance Agreement, by and between Lone Star Merger Corp. and Greg Petersen*						X
	10.19	Offer Letter, dated October 17, 2006, by and between Activant Solutions Inc. and Brian E. Agle*	10-Q	333-49389	February 14, 2007		10.1

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Exhibit						Exhibit		Provided
Number		Exhibit Description	Incorporated by Reference			Number		Herewith
					Date of First
			Form	File No.	Filing
	10.20	Form of Indemnification Agreement among Activant Group Inc., Activant Solutions Inc. and each of its directors and executive officers	8-K	333-49389	March 8, 2007		10.1
	10.21	Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan*						X
	10.22	Form of Option Agreement (General) under the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan *						X
	10.23	Form of Option Agreement (for Canadian employees) under the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan *						X
	10.24	Activant Solutions Holdings, Inc. Second Amended and Restated 2000 Stock Option Plan for Key Employees*	10-K	333-49389	December 22, 2004		10.46
	10.25	Activant Solutions Corporate Incentive Bonus Plan for Fiscal Year 2007*						X
	10.26	Activant Solutions Business Units Incentive Bonus Plan for Fiscal Year 2007*						X
	10.27	Activant Executive Severance Plan*						X
	10.28	Asset Purchase Agreement, dated July 2, 2007, by and between Activant Solutions Inc., Greenland Holding Corp., and Intuit Inc.	8-K	333-49389	July 9, 2007		2.1
	12.1	Statement of Computation of Ratio of Earnings to Fixed Charges						X
	14.1	Activant Solutions Inc. Code of Ethics for Senior Financial Management						X
	21.1	List of Subsidiaries of Activant Solutions Inc.						X
	24.1	Power of Attorney (included on signature page to this report)						X
	31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Pervez A. Qureshi						X
	31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Kathleen M. Crusco						X
	32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Pervez A. Qureshi**						X
	32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Kathleen M. Crusco**						X

*	Represents a management contract or compensatory plan.
**	This certification is not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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ACTIVANT SOLUTIONS INC.

Schedule II — Valuation and Qualifying Accounts

			Additions
	Balance at		Charged to				Balance at
	Beginning		Costs and				End of
Description	of Period		Expenses		Deductions		Period
			(in thousands)
Year ended September 30, 2005:
Allowance for doubtful accounts	$	5,639	$	2,146	$	2,577	$	5,208
Inventory valuation		720		797		838		679
From inception to September 30, 2006:
Allowance for doubtful accounts	$	—	$	2,205	$	—	$	2,205
Inventory valuation		—		133		129		4
Year ended September 30, 2007:
Allowance for doubtful accounts	$	2,205	$	3,174	$	—	$	5,379
Inventory valuation		4		1,383		336		1,051

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ACTIVANT SOLUTIONS INC.
By:	/s/ Kathleen M. Crusco
	Name:	Kathleen M. Crusco
	Title:	Senior Vice President and Chief Financial Officer
	Date:	December 21, 2007

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Pervez A. Qureshi and Kathleen M. Crusco, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Pervez A. Qureshi Pervez A. Qureshi	President, Chief Executive Officer and Director (Principal Executive Officer)	December 21, 2007
/s/ Kathleen M. Crusco Kathleen M. Crusco	Senior Vice President and Chief Financial Officer (Principal Accounting Officer)	December 21, 2007
/s/ Robert B. Henske Robert B. Henske	Chairman of the Board of Director	December 21, 2007
/s/ C. Andrew Ballard C. Andrew Ballard	Director	December 21, 2007
/s/ Paul V. Barber Paul V. Barber	Director	December 21, 2007
/s/ Marcel Bernard Marcel Bernard	Director	December 21, 2007
/s/ Orlando Bravo Orlando Bravo	Director	December 21, 2007
/s/ S. Scott Crabill S. Scott Crabill	Director	December 21, 2007
/s/ David R. Tunnell David R. Tunnell	Director	December 21, 2007

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EX-3.2

Exhibit 3.2

BYLAWS

of

ACTIVANT SOLUTIONS INC.

(hereinafter, the “Corporation”)

ARTICLE I

OFFICES

     Section 1. Registered Office. The registered office and registered agent of the Corporation shall be as designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of the State of Delaware.

     Section 2. Other Offices. The Corporation may also have offices at such other places both within and outside the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine.

ARTICLE II

MEETING OF STOCKHOLDERS

     Section 1. Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or outside the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

     Section 2. Annual Meetings. The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Except as otherwise provided by law or by the certificate of incorporation of the Corporation (as amended or restated from time to time, the (“Certificate of Incorporation”), at such meeting the stockholders shall elect a Board of Directors by a plurality vote, and transact such other business as may properly be brought before the meeting.

     Section 3. Special Meetings. Special meetings of stockholders, for any purpose or purposes, may be called by the (i) President, Secretary or Treasurer, and shall be called by any such officer at the request in writing of any member or members of the Board of Directors representing a majority of the votes entitled to be cast at a meeting of the Board of Directors or (ii) stockholders holding shares in the aggregate entitled to cast not less than 30% of the votes at a meeting of stockholders. Such request shall state the purpose or purposes of the proposed meeting.

     Section 4. Notice of Meetings. Written notice of an annual meeting of stockholders or special meeting of stockholders stating the place, date, and hour of the meeting and in the case of a special meeting of stockholders, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. Pursuant to Article V, Section 2, a waiver shall constitute timely written notice.

     Section 5. Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.

     Section 6. Voting. Any questions brought before any meeting of stockholders shall be decided by a majority vote of the number of shares entitled to vote, present in person or represented by proxy. Such votes may be cast in person or by proxy, but no proxy shall be voted on or after three (3) years from its date, unless such proxy provides for a longer period.

     Section 7. Action by Consent. Any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

     Section 1. Number and Election of Directors. The number of directors that shall constitute the Board of Directors shall be not less than one (1) nor more than fifteen (15). The first Board of Directors shall consist of three (3) directors and one (1) non-voting observer. Thereafter, within the limits specified above, the number of directors shall be determined by the Board of Directors or by the stockholders. Except as provided in Section 2 of this Article III or the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast at annual meetings of stockholders, and each director so elected shall hold office until the next annual meeting of stockholders and until his successor is duly elected and qualified, or until his earlier resignation or removal.

     Section 2. Vacancies. Except as otherwise provided by law or the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the

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authorized number of directors may be filled by a majority vote of all directors, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier resignation or removal. If only a sole remaining director is a member of the Board of Directors, such director’s presence shall constitute a quorum and may act by written resolution, which shall be considered unanimous.

     Section 3. Committees. The Board of Directors may designate one or more committees, which committees shall, to the extent provided in the resolution of the Board of Directors establishing such a committee, have all authority and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation to the extent lawful under the General Corporation Law of the State of Delaware (the “DGCL”).

     Section 4. Duties and Powers. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

     Section 5. Meetings. The Board of Directors may hold meetings, both regular and special, either within or outside the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the President or any one director with one (1) day’s notice to each director, either personally or by mail, telephone or facsimile transmission. Notice of meetings may be waived to the fullest extent permitted by law.

     Section 6. Quorum; Board Action. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business, and the act of the member or members of the Board of Directors present at any meeting at which there is a quorum and representing a majority of the votes entitled to be cast at such meeting shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. If only a sole remaining director is a member of the Board of Directors, such director’s presence shall constitute a quorum.

     Section 7. Actions of Board. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee or sole remaining director, as the case may be, consent or consents thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

     Section 8. Compensation. The Corporation shall reimburse the reasonable expenses incurred by members of the Board of Directors in connection with attendance at

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meetings of the Board of Directors and non-voting observer and of any committee on which a member serves; provided, that the foregoing shall not preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

     Section 9. Removal. Unless otherwise restricted by the Certificate of Incorporation, any stockholders agreement between the Corporation and any of its stockholders or by law, any director, non-voting observer or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

ARTICLE IV

OFFICERS

     The officers of the Corporation shall consist of a President, a Secretary, a Treasurer and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Corporation may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE V

NOTICES

     Section 1. Notices. Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee, non-voting observer or stockholder, such notice may be given by mail, addressed to such director, member of a committee, non-voting observer or stockholder, at his or her address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex or cable.

     Section 2. Waivers of Notice. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee, non-voting observer or stockholder, a waiver thereof in writing, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

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ARTICLE VI

GENERAL PROVISIONS

     Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

     Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

     Section 3. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

ARTICLE VII

AMENDMENTS

     Section 1. These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the vote of any member or members of the Board of Directors representing a majority of the votes entitled to be cast at a meeting of the entire Board of Directors.

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EX-10.8

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) the Company, Merger Sub, the H&F Parties, the TCEP Parties and the JMI Parties shall have executed and delivered the Stockholders Agreement.

     1.5 Termination. This Agreement shall be terminated and the transactions contemplated herein shall be abandoned at any time prior to the Closing by any of the parties hereto if the Merger Agreement shall have been terminated in accordance with its terms. In the event of any termination of the Agreement as provided in this Section 1.5, this Agreement shall forthwith become wholly void and of no further force or effect (except Article IV) and there shall be no liability on the part of any parties hereto or their respective officers or directors, except as provided in Article IV. Notwithstanding the foregoing, no party hereto shall be relieved from liability for any willful breach of this Agreement.

II. Representations and Warranties

     2.1 Representations and Warranties of Lone Star and Merger Sub. Each of Lone Star and Merger Sub represents and warrants to the Investor that it has the full power, authority and legal right to execute, deliver and perform this Agreement and to consummate the transactions contemplated herein. This Agreement has been duly executed and delivered by such company and constitutes its legal, valid and binding obligation, enforceable against it in accordance with

its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally.

     2.2 Representations and Warranties of the Investor; Acknowledgments of Investor. The Investor represents and warrants, severally and not jointly, to each of Lone Star and Merger Sub that:

          (a) The Investor has full legal capacity, power and authority to execute and deliver this Agreement and to perform his or her obligations hereunder. This Agreement has been duly executed and delivered by the Investor and is the legal, valid and binding obligation of the Investor enforceable against it in accordance with the terms hereof, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally.

          (b) The Investor has been furnished and has carefully read this Agreement, the Merger Agreement and the Stockholders Agreement and understands that the Rollover Options and any shares of Lone Star common stock purchased upon the exercise thereof will be subject to the terms and conditions of the applicable Company stock option plan(s) under which the Company Options were granted and the Stockholders Agreement. In the event of any conflict between the original terms of the Company Options and the terms of the Stockholders Agreement, the terms of the Stockholders Agreement will govern and prevail.

          (c) To the full satisfaction of the Investor, the Investor has been furnished any materials the Investor has requested relating to Lone Star and Merger Sub and the shares of Lone Star common stock that may be acquired upon the exercise of the Rollover Options, and the Investor has been afforded the opportunity to ask questions of representatives of Lone Star and Merger Sub concerning this Agreement and to obtain any additional information necessary to verify the accuracy of any information provided to him.

          (d) The Investor has, independently and without reliance upon Lone Star and Merger Sub, any Affiliate of the foregoing or any agent of them, and based on such documents and information as the Investor has deemed appropriate, made his or her own appraisal of and investigation into the business, operations, property, financial and other condition of Lone Star and Merger Sub and made his or her own investment decision with respect to the investment represented by the Rollover Options and the shares of Lone Star common stock that may be purchased upon the exercise thereof. The Investor has consulted, to the extent deemed appropriate by the Investor, with the Investor’s own advisers as to the financial, tax, legal and related matters concerning an investment in the Rollover Options and the shares of Lone Star common stock that may be purchased upon the exercise thereof and on that basis understands the financial, legal, tax and related consequences of an investment in the Rollover Options and the shares of Lone Star common stock that may be purchased upon the exercise thereof, and believes that an investment in the Rollover Options and the shares of Lone Star common stock that may be purchased upon the exercise thereof is suitable and appropriate for the Investor.

          (e) The Investor has been advised that shares of Lone Star common stock for which the Rollover Options are exercisable have not been registered under the Securities Act of

1933, as amended (the “Securities Act”), or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. The Investor is aware that, except as otherwise provided in the Stockholders Agreement, Lone Star is under no obligation to effect any such registration with respect to such shares of Lone Star common stock or to file for or comply with any exemption from registration. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the transactions contemplated by this Agreement and understands that any investment in the Rollover Options and the shares of Lone Star common stock that may be purchased upon the exercise thereof is a speculative investment that has limited liquidity and is subject to the risk of complete loss.

          (f) The Investor has received a copy of the Confidential Preliminary Offering Memorandum of Merger Sub dated April 14, 2006 with respect to the offering of Senior Subordinated Notes due 2016 and has read all of such Confidential Preliminary Offering Memorandum, including, without limitation, the section titled “Risk Factors.”

III. Other Covenants

     3.1 Merger Agreement. The parties hereto acknowledge and agree that Lone Star will have sole discretion with respect to (i) determining whether the conditions set forth in the Merger Agreement have been satisfied and/or whether to waive any of such conditions pursuant to the terms of the Merger Agreement, and (ii) the manner and timing of the compliance by Lone Star and Merger Sub with the covenants applicable to each of them under the Merger Agreement.

     3.2 Agreement to Cooperate; Further Assurances. Subject to the terms and conditions of this Agreement, each of the parties hereto shall use all reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including providing information and using reasonable best efforts to obtain all necessary or appropriate waivers, consents and approvals, and effecting all necessary registrations and filings.

     3.3 Execution of Stockholders Agreement. At or prior to the Closing, the Investor agrees to execute and deliver to the other parties thereto the Stockholders Agreement.

     3.4 Transfers. The Investor agrees not to enter into any plan, agreement, arrangement or understanding to transfer the Company Options or the shares of Common Stock subject thereto prior to and including the Closing, other than as expressly contemplated hereby.

IV. Miscellaneous

     4.1 Notices. Any notices and other communications required or permitted in this Agreement shall be effective if in writing and delivered as provided in the Stockholders Agreement.

     4.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts entered into and performed entirely within such State.

     4.3 Assignment. This Agreement may not be assigned by the Investor without the prior written consent of the Company. Any assignment or delegation in derogation of this provision shall be null and void. The provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, executors and administrators of the parties hereto.

     4.4 Entire Agreement. This Agreement and the other agreements referred to herein set forth the entire understanding among the parties with respect to the subject matter hereof.

     4.5 Amendment. This Agreement can be amended only by an instrument in writing signed by each of the parties hereto. Any provision of this Agreement may be waived if, but only if, such waiver is in writing and is signed by the party against whom the waiver is to be effective. 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 provided herein shall be cumulative and not exclusive of any rights or remedies provided by law.

     4.6 Survival. All covenants, agreements, representations and warranties made herein shall survive the execution and delivery hereof, the granting of the Rollover Options, and the purchase of any shares of Lone Star common stock upon the exercise thereof.

     4.7 Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     4.8 No Employment Rights. None of the assumption of your Company Options, the issuance of the Rollover Options or the entry into this Agreement is intended to constitute an employment contract or agreement, and neither should be interpreted to prohibit you, Lone Star or Activant from terminating your employment or services at any time, with or without cause.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

LONE STAR HOLDING CORP.
By:
	Name:	David Tunnell
	Title:	President
ACTIVANT SOLUTIONS HOLDINGS INC.
By:
	Name:	Richard Rew
	Title:	Vice President, General Counsel & Secretary
INVESTOR:
Pervez Qureshi

Exhibit A

Form of Stockholders’ Agreement

EX-10.11

Exhibit 10.11

September 6, 2005

Steve McLaughlin

Dear Steve:

On behalf of Activant Solutions Inc., I am pleased to extend an offer to you for the position of Vice President and General Manager, Wholesale Distribution Group, reporting to Pervez Qureshi, Chief Operating Officer. This offer includes the following terms:

• A base salary of $215,000 annually.

• Target annual incentive on the Corporate Incentive Bonus Program of $125,000. In addition, we guarantee that you will receive $93,750 of that bonus amount for FY 2006.

• A Wholesale Distribution performance bonus (for FY 2006 only) with a total target of $45,000 at 110% of plan paid at the end of the fiscal year (based on certain performance metrics that are to be determined.) In addition, we guarantee that you will receive $33,750 of that bonus amount.

• A one time ‘reporting bonus’ of a gross sum of $30,000 payable immediately upon your acceptance of the job.

• A grant of 90,000 stock options pursuant to the Company’s 2000 Stock Option Plan (subject to approval of the Board of Directors)

• Severance protection as follows: If Activant terminates your employment other than for cause (as defined in the Plan), you will receive thirty nine (39) weeks of separation pay at the rate of your base salary plus target Corporate Incentive Bonus as well as cobra costs for the severance period provided you agree to the terms of the relevant severance policy, including but not limited to, execution of a standard general release.

• Effective October 1, 2005

This job requires you to relocate to a location that is proximal to the Yardley, PA office by December 31, 2005. To assist you with the costs of this move, Activant is offering you the choice between two options:

1)	Based on your expressed desire to have flexibility on retaining your current property in Denver, Activant will provide you with a gross sum of $100,000 to assist with your relocation in lieu of reimbursing any specific relocation costs.
2)	If you decide to sell your property in Denver within 90 days of accepting this offer, we will provide reimbursement to you for appropriate move related costs (excluding reimbursement for any points paid on any future mortgage) not to exceed $90,000. Activant will also apply the appropriate gross up to your reimbursed costs in the reimbursement you receive.

This offer is not an employment contract or an offer of employment for a specific term and your employment at Activant is still considered “at-will. This means that either you or Activant may terminate the employment relationship at any time and for any reason not otherwise prohibited by law. This offer supersedes any other representations which may have been made or which may be made to you. If you accept this offer, the terms described in this letter shall be the terms of your employment. Any additions or modifications of these terms must be in writing and signed by yourself and an authorized representative of Activant.

Sincerely,

l  Page 2
Todd Nalodka
Vice President, Human Resources December 17,2007

EX-10.12

Exhibit 10.12

ASSUMPTION AND RELEASE AGREEMENT

     THIS ASSUMPTION AND RELEASE AGREEMENT (the “Agreement”) is made effective as of October 13, 2006, by and among Lone Star Holding Corp., a Delaware corporation (“Lone Star”), Hellman & Friedman Capital Partners V, L.P., a Delaware corporation (“H&F”), Thoma Cressey Fund VII, L.P., a Delaware limited partnership (“TCEP”), and Marcel Bernard, an individual.

RECITALS:

     A. Affiliates of each of H&F and TCEP entered into a letter agreement (the “Letter”), dated as of April 7, 2006, with Marcel Bernard, regarding, among other things, his role and responsibilities at Activant Solutions Holdings Inc., a Delaware corporation (“ASHI”) or its holding company.

     B. On May 2, 2006, Lone Star Merger Corp., a Delaware corporation and wholly-owned subsidiary of Lone Star merged with and into ASHI, with ASHI surviving the merger (the “First Merger”). Immediately following the First Merger, ASHI merged with and into Activant Solutions Inc., a Delaware corporation (“ASI”), and wholly-owned subsidiary of ASHI, with ASI surviving the merger (the “Second Merger”). As a result of the Second Merger, Lone Star became the holding company of ASI.

     C. As of the date of this Agreement, Marcel Bernard is a member of the board of directors of ASI and Lone Star.

     D. The parties hereto have each agreed to execute and deliver this Agreement to confirm that (i) Lone Star will assume the obligations and liabilities of H&F and TCEP under the Letter from and after the date hereof and (ii) each of H&F and its affiliates, TCEP and its affiliates and each of their respective directors, officers, employees, partners, members, managers and representatives shall be fully released of any and all obligations and liabilities thereunder as of the date hereof.

AGREEMENT:

     In consideration of the foregoing and the mutual covenants and promises set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lone Star, H&F, TCEP and Marcel Bernard agree as follows:

     1. Assumption of Obligation. Lone Star agrees to, and does hereby assume, the performance of all of the terms, covenants and conditions of the Letter and all of the obligations and liabilities of H&F and TCEP, arising out of, or relating to, the Letter, whether accruing, or being required to be paid or performed, prior to, on or after the date hereof. Lone Star further agrees to abide by, and be bound by, all of the terms of the Letter, as though the Letter had been made, executed and delivered by Lone Star. The provisions of the Letter are incorporated herein by this reference, as if fully set forth herein. Lone Star acknowledges and agrees that any reference to H&F or TCEP in the Letter shall be deemed to refer to Lone Star from and after the date of this Agreement.

     2. Release of H&F and TCEP. In consideration of the mutual covenants contained herein, Marcel Bernard unconditionally and irrevocably releases and forever discharges H&F and its affiliates, TCEP and its affiliates and each of their respective directors, officers, employees, partners, members, managers and representatives (each of the foregoing, a “Releasee,” and collectively, the “Releasees”) from any and all obligations and liabilities arising out of or relating to the Letter, whether accruing, or being required to be paid or performed, prior to, on or after the date hereof (the “Released Matters”). Each of Lone Star and Marcel Bernard expressly acknowledges that it or he has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the California Civil Code with respect to the Released Matters and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542 which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

     3. Miscellaneous.

     (a) This Agreement shall be construed according to and governed by the laws of the State of California without regard to its conflicts of law principles.

     (b) If any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable, in whole or in part, it will be deemed omitted to that extent and all other provisions of this Agreement will remain in full force and effect.

     (c) No change or modification of this Agreement shall be valid unless the same is in writing and signed by all parties hereto.

     (d) The captions contained in this Agreement are for convenience of reference only and in no event define, describe or limit the scope or intent of this Agreement or any of the provisions or terms hereof.

     (e) This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors and permitted assigns. In addition, the provisions of Section 2 of this Agreement are also intended to be for the benefit of, and shall be enforceable by, each Releasee, and each such of such Releasee’s heirs, representatives, successors or assigns, it being expressly agreed that the Releasees shall be third party beneficiaries of Section 2 of this Agreement.

     (f) This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be necessary to produce one such counterpart.

     (g) This Agreement represents the final agreement between the parties hereto and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements.

[Signature page follows]

     IN WITNESS WHEREOF, the parties have executed this Assumption and Release Agreement as of the date first above written.

	LONE STAR HOLDING CORP.
	By:
	Name:	Pervez Qureshi
	Title:	President & Chief Executive Officer
	HELLMAN & FRIEDMAN CAPITAL PARTNERS V, L.P.
	By:
+	Name:	David Tunnell
	Title:	Managing Director
	THOMA CRESSEY EQUITY PARTNERS, INC.
	By:
	Name:	Orlando Bravo
	Title:	Managing Partner
	Marcel Bernard

EX-10.13

Exhibit 10.13

November 17, 2006

Marcel Bernand
12 Jeremy Drive
Unionville, Ontario L3R 3K6 CN

Dear Marcel Bernand:

     Activant Group Inc., a Delaware corporation (“Activant”), is pleased to inform you that you are eligible to receive a retention bonus of $21,492.10 (the “Bonus”), payable in three equal annual installments, as provided below, as a reward for your continued service as a director, consultant or employee of Activant or its holding company:

Date of Bonus Payment	Amount of Bonus
September 30, 2007	33-1/3%
September 30, 2008	33-1/3%
September 30, 2009	33-1/3%

Notwithstanding the foregoing, in the event of the consummation of a Change in Control (as defined in the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan) of Activant, all annual installments set forth above not previously paid shall become immediately due and payable upon such consummation, subject to the following paragraph of this letter.

     You must be serving as a director, consultant or employee of Activant or its holding company at the time each installment is payable in order to earn and receive such installment, but there are no other conditions to the Bonus. In the event that your service relationship with Activant or its holding company terminates prior to the time any annual installment is payable, you will forfeit that and all subsequent installments. Activant may withhold from the Bonus any such Federal, state, local or other taxes, including applicable taxes of any jurisdiction outside the United States, as shall be required to be withheld pursuant to any applicable law or regulation.

     You understand that the Bonus made available to you hereunder does not constitute a guarantee of continued service as a director, consultant or employee of Activant or its holding company, and that your service relationship with Activant or its holding company is at will. As such, you or the shareholders of Activant or its holding company may terminate your service as a director at any time and for any reason or no reason and you or Activant or its holding company may terminate your service as a consultant or employee at any time and for any reason or nor reason, in either case, with or without cause or advance notice. In addition, Activant and its subsidiaries retain the right to modify your compensation and benefits, other than this Bonus, within their sole discretion, upon notice to you, to the fullest extent allowed by law.

     Unless otherwise determined by Activant’s Board of Directors, any payments made hereunder will not be taken into account in computing your compensation for the purposes of determining any benefits or compensation under (i) any retirement, life insurance or other benefit plan of Activant or (ii) any agreement between Activant and you.

Sincerely,
 

/s/ Greg Petersen  

Greg Petersen, 

Executive Vice President 

EX-10.14

Exhibit 10.14

November 17, 2006

Pervez Qureshi
1584 Cielo Court
Livermore, CA 94550

Dear Mr. Qureshi:

     Activant Group Inc., a Delaware corporation (“Activant”), is pleased to inform you that you are eligible to receive a retention bonus of $758,333.45 (the “Bonus”), payable in five equal annual installments, as provided below, as a reward for your continued employment with Activant or one of its subsidiaries:

Date of Bonus Payment	Amount of Bonus
September 30, 2007	20%
September 30, 2008	20%
September 30, 2009	20%
September 30, 2010	20%
September 30, 2011	20%

Notwithstanding the foregoing, (i) in the event of the consummation of a Change in Control (as defined in the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan) of Activant, all annual installments set forth above not previously paid shall become immediately due and payable upon such consummation, subject to the following paragraph of this letter, and (ii) in the event your employment is terminated by Activant without Cause (as defined in the Employment Agreement, dated as of May 2, 2006, between you and Activant (as amended from time to time, the “Employment Agreement”)) (and other than by reason of death or Disability (as defined in the Employment Agreement)) or if you resign for Good Reason (as defined in the Employment Agreement) and one or more of the payment dates for the annual installments set forth above has not occurred as of such termination, any annual installment that you would have received on or prior to the six (6) month anniversary of the termination of your employment based on the payment dates set forth above if you had otherwise remained employed by Activant or one of its subsidiaries through such six (6) month anniversary shall become immediately due and payable upon such termination of your employment.

     You must be employed by Activant or one of its subsidiaries, whether as an employee, consultant or advisor, at the time each installment is payable in order to earn and receive such installment, but there are no other conditions to the Bonus. In the event that your service relationship with Activant or one of its subsidiaries terminates prior to the time any annual installment is payable, you will forfeit that and all subsequent installments. Activant may withhold from the Bonus any such Federal, state, local or other taxes, including applicable taxes of any jurisdiction outside the United States, as shall be required to be withheld pursuant to any applicable law or regulation.

     You understand that the Bonus made available to you hereunder does not constitute a guarantee of continued employment with Activant or one of its subsidiaries, and that your service relationship with Activant or its subsidiaries is at will. As such, you or Activant or its subsidiaries may terminate your employment at any time and for any reason or no reason, either with or without cause or advance notice. In addition, Activant and its subsidiaries retain the right to modify your compensation and benefits, other than this Bonus, within their sole discretion, upon notice to you, to the fullest extent allowed by law.

     Unless otherwise determinded by Activant’s Board of Directors, any payments made hereunder will not be taken into account in computing your salary or compensation for the purposes of determining any benefits or compensation under (i) any retirement, life insurance or other benefit plan of Activant or (ii) any agreement between Activant and you.

Sincerely,
 

/s/ Greg Petersen  

Greg Petersen, 

Executive Vice President 

EX-10.15

Exhibit 10.15

November 17, 2006

Bill Wilson
3143 Holyrood Drive
Oakland, CA 94611

Dear Mr. Wilson:

     Activant Group Inc., a Delaware corporation (“Activant”), is pleased to inform you that you are eligible to receive a retention bonus of $131,250.00 (the “Bonus”), payable in five equal annual installments, as provided below, as a reward for your continued employment with Activant or one of its subsidiaries:

Date of Bonus Payment	Amount of Bonus
September 30, 2007	20%
September 30, 2008	20%
September 30, 2009	20%
September 30, 2010	20%
September 30, 2011	20%

Notwithstanding the foregoing, in the event of the consummation of a Change in Control (as defined in the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan) of Activant, all annual installments set forth above not previously paid shall become immediately due and payable upon such consummation, subject to the following paragraph of this letter.

     You must be employed by Activant or one of its subsidiaries, whether as an employee, consultant or advisor, at the time each installment is payable in order to earn and receive such installment, but there are no other conditions to the Bonus. In the event that your service relationship with Activant or one of its subsidiaries terminates prior to the time any annual installment is payable, you will forfeit that and all subsequent installments. Activant may withhold from the Bonus any such Federal, state, local or other taxes, including applicable taxes of any jurisdiction outside the United States, as shall be required to be withheld pursuant to any applicable law or regulation.

     You understand that the Bonus made available to you hereunder does not constitute a guarantee of continued employment with Activant or one of its subsidiaries, and that your service relationship with Activant or its subsidiaries is at will. As such, you or Activant or its subsidiaries may terminate your employment at any time and for any reason or no reason, either with or without cause or advance notice. In addition, Activant and its subsidiaries retain the right to modify your compensation and benefits, other than this Bonus, within their sole discretion, upon notice to you, to the fullest extent allowed by law.

     Unless otherwise determined by Activant’s Board of Directors, any payments made hereunder will not be taken into account in computing your salary or compensation for the purposes of determining any benefits or compensation under (i) any retirement, life insurance or other benefit plan of Activant or (ii) any agreement between Activant and you.

Sincerely,
 

/s/ Greg Petersen  

Greg Petersen, 

Executive Vice President 

EX-10.16

Exhibit 10.16

November 17, 2006

Steve McLaughlin
1220 Bridgetown Pike
Langhorne, PA 19053

Dear Mr. McLaughlin:

     Activant Group Inc., a Delaware corporation (“Activant”), is pleased to inform you that you are eligible to receive a retention bonus of $113,750.00 (the “Bonus”), payable in five equal annual installments, as provided below, as a reward for your continued employment with Activant or one of its subsidiaries:

Date of Bonus Payment	Amount of Bonus
September 30, 2007	20%
September 30, 2008	20%
September 30, 2009	20%
September 30, 2010	20%
September 30, 2011	20%

Notwithstanding the foregoing, in the event of the consummation of a Change in Control (as defined in the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan) of Activant, all annual installments set forth above not previously paid shall become immediately due and payable upon such consummation, subject to the following paragraph of this letter.

     You must be employed by Activant or one of its subsidiaries, whether as an employee, consultant or advisor, at the time each installment is payable in order to earn and receive such installment, but there are no other conditions to the Bonus. In the event that your service relationship with Activant or one of its subsidiaries terminates prior to the time any annual installment is payable, you will forfeit that and all subsequent installments. Activant may withhold from the Bonus any such Federal, state, local or other taxes, including applicable taxes of any jurisdiction outside the United States, as shall be required to be withheld pursuant to any applicable law or regulation.

     You understand that the Bonus made available to you hereunder does not constitute a guarantee of continued employment with Activant or one of its subsidiaries, and that your service relationship with Activant or its subsidiaries is at will. As such, you or Activant or its subsidiaries may terminate your employment at any time and for any reason or no reason, either with or without cause or advance notice. In addition, Activant and its subsidiaries retain the right to modify your compensation and benefits, other than this Bonus, within their sole discretion, upon notice to you, to the fullest extent allowed by law.

     Unless otherwise determined by Activant’s Board of Directors, any payments made hereunder will not be taken into account in computing your salary or compensation for the purposes of determining any benefits or compensation under (i) any retirement, life insurance or other benefit plan of Activant or (ii) any agreement between Activant and you.

Sincerely,

/s/ Greg Petersen

Greg Petersen,

Executive Vice President

EX-10.17

Exhibit 10.17

November 17, 2006

Scott Hanson
513 Winding Brook Court
San Ramon, CA 94583

Dear Mr. Hanson:

     Activant Group Inc., a Delaware corporation (“Activant”), is pleased to inform you that you are eligible to receive a retention bonus of $96,250.00 (the “Bonus”), payable in five equal annual installments, as provided below, as a reward for your continued employment with Activant or one of its subsidiaries:

Date of Bonus Payment	Amount of Bonus
September 30, 2007	20%
September 30, 2008	20%
September 30, 2009	20%
September 30, 2010	20%
September 30, 2011	20%

Notwithstanding the foregoing, in the event of the consummation of a Change in Control (as defined in the Amended and Restated Activant Group Inc. 2006 Stock Incentive Plan) of Activant, all annual installments set forth above not previously paid shall become immediately due and payable upon such consummation, subject to the following paragraph of this letter.

     You must be employed by Activant or one of its subsidiaries, whether as an employee, consultant or advisor, at the time each installment is payable in order to earn and receive such installment, but there are no other conditions to the Bonus. In the event that your service relationship with Activant or one of its subsidiaries terminates prior to the time any annual installment is payable, you will forfeit that and all subsequent installments. Activant may withhold from the Bonus any such Federal, state, local or other taxes, including applicable taxes of any jurisdiction outside the United States, as shall be required to be withheld pursuant to any applicable law or regulation.

     You understand that the Bonus made available to you hereunder does not constitute a guarantee of continued employment with Activant or one of its subsidiaries, and that your service relationship with Activant or its subsidiaries is at will. As such, you or Activant or its subsidiaries may terminate your employment at any time and for any reason or no reason, either with or without cause or advance notice. In addition, Activant and its subsidiaries retain the right to modify your compensation and benefits, other than this Bonus, within their sole discretion, upon notice to you, to the fullest extent allowed by law.

     Unless otherwise determined by Activant’s Board of Directors, any payments made hereunder will not be taken into account in computing your salary or compensation for the purposes of determining any benefits or compensation under (i) any retirement, life insurance or other benefit plan of Activant or (ii) any agreement between Activant and you.

Sincerely,

/s/ Greg Petersen

Greg Petersen,

Executive Vice President

EX-10.18

Exhibit 10.18

Transition and Severance Agreement

Greg Petersen (“Petersen”) and LONE STAR MERGER CORP. (“Company”) agree as follows for terms of employment to be effective immediately, without any further action required by either party, upon the closing of the merger transaction between ACTIVANT SOLUTIONS HOLDINGS and Lone Star Merger Corp.

Title:	Executive Vice President & Chief Financial Officer (title may be changed simply to ‘Executive Vice President’ upon hiring of successor CFO)
Reporting to:	President & CEO
Responsibilities:	May be reduced by the CEO / Board with consent of Petersen not to be unreasonably withheld. No responsibilities will be added nor will Petersen be required to serve on any Boards, or Committees, without Petersen’s consent.
Location:	Duties will be carried out from the Company’s Las Cimas facility in Austin, but certain travel may be required in accordance with reasonable demands considering Petersen’s responsibilities as an Executive Vice President of the Company. In no event will Petersen be asked to move.
Term of Employment:	Company shall employ Petersen commencing at the close of the merger transaction referenced above and ending on January 5, 2007. In the event that the merger referenced above is not consummated, this Transition and Severance Agreement shall be void ab initio.
Annual Base Salary:	$290,000 paid to Petersen in accordance with Company’s generally applicable payroll practices.

Incentive Bonus:	Petersen shall be paid bonuses reflecting a $210,000 annualized target for fiscal year 2006 and a $52,500 target for the 1st quarter of FY 2007 ending on December 31, 2006, each to be calculated and paid in accordance with the same formula or methodology applied to other senior executives (those having the rank of senior vice president and above), provided in the case of the FY 2006 bonus paid not later than December 31, 2006 and in the case of the 1st Quarter 2007 bonus paid not later than February 15, 2007. Company shall establish a formula and methodology for the 1st quarter of FY 2007 similar in type and attainability as for FY 2006; if Company does not do so the bonus for the 1st quarter of FY 2007 will be fixed at $52,500.
Lump Sum Severance Payment:	On January 5, 2007, company will pay $500,000 in a lump sum; and will provide 12 months of company paid COBRA benefits.
Interest in Company:	Petersen will be paid for the interests Petersen has in Company (whether stock, option, restricted stock or other) in accordance with the agreements and other documents governing the merger transaction referenced above or other applicable agreements and documents.
Early Termination:	By Petersen: If Petersen voluntary terminates employment prior to January 5, 2007 the Company will not pay the Lump Sum Severance Payment. He will be eligible for his base salary and bonuses up to the date of voluntary termination on the same basis as other senior executives, as defined above, when they voluntary terminate. Death or “disability” (as defined under Section 22(e)(3) of the Internal Revenue Code of 1986, as amended) will not be considered termination and all payments specified herein will be paid to Petersen or to Petersen’s estate or representative, as appropriate, in the event of death or disability on or before January 5, 2007.
	By the Company: If the Company chooses to terminate Petersen prior to January 5, 2007 other than for Cause, Company will pay (i) a lump sum equal to the January severance payment plus the

remaining base salary through January 5, 2007 in a lump sum within 5 days of termination, plus (ii) if the termination is prior to September 30, 2006, Petersen will be paid a full FY 2006 bonus as if he had been employed for the full FY 2006, and if the termination is after September 30, 2006, Petersen will be paid a full FY 2006 bonus plus a pro rata bonus for the 1^st quarter of FY 2007.

“Cause” is defined as any of the following:

1.	Conviction of a felony or a crime involving moral turpitude;
2.	Violation of any non-competition or on-solicitation agreement, or material violation of any confidentiality agreement;
3.	Material dishonesty or fraud in performing responsibilities hereunder; and/or
4.	Gross negligence in performing responsibilities hereunder.

Benefits:	Petersen will continue to participate in the company’s standard benefit programs at the same level, including accruing vacation at the rate of four weeks per year.
D&O Coverage:	Company will provide at its expense extended (“tail”) coverage for Petersen for the same term as provided to other officers or directors but in any event not less than 6 years from the closing of the merger transaction referenced above
Release/Restrictive Covenants:	The payment of the Early Termination Benefits described above and the Lump Sum Severance Payment shall be subject to Petersen’s execution of an effective release in the form attached hereto. Petersen acknowledges that the restrictive covenants provided for in the Employee Confidentiality, Non-disclosure, Intellectual Property, Non-solicitation and Non-competition Agreement dated September 13, 2001 between Petersen and the Company will continue for 2 years from January 5, 2007.

AGREED:
/s/ Greg Petersen
Greg Petersen
Lone Star Merger Corp
By:	/s/ C Andrew Ballard
	Name: C Andrew Ballard
	Title: Vice President

EX-10.21

Exhibit 10.21

AMENDED AND RESTATED
ACTIVANT GROUP INC.
2006 STOCK INCENTIVE PLAN

1. Purpose of the Plan.

     The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining service providers of outstanding ability and to motivate such persons to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Stock Awards. The Company expects that it will benefit from the added interest that such persons will have in the welfare of the Company as a result of their proprietary interest in the Company.

2. Definitions.

     (a) Affiliate. Affiliate means, (i) with respect to the Company, any entity directly, or indirectly through one or more intermediaries, controlling or controlled by (but not under common control with) the Company, and (ii) with respect to the Initial Investors, any entity directly, or indirectly through one or more intermediaries, controlling or controlled by or under common control with the Initial Investors, respectively, but excluding the Company and the Company’s Subsidiaries and other Affiliates that the Company controls. Solely with respect to the granting of any Incentive Stock Options, Affiliate of the Company means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

     (b) Applicable Law. Applicable Law means the legal requirements relating to the administration of an equity compensation plan under applicable U.S. federal and state corporate and securities laws, the Code, any stock exchange rules or regulations, and the applicable laws of any other country or jurisdiction, as such laws, rules, regulations and requirements shall be in place from time to time.

     (c) Applicable Stockholders Agreement. Applicable Stockholders Agreement shall mean whichever of the Stockholders Agreement or the Employee Stockholders Agreement to which a Participant shall be required to become a party pursuant to Section 14(a) hereto.

     (d) Beneficial Owner. The term “beneficial owner” shall have the meaning given to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act (or any successor rules thereto).

     (e) Board. Board means the Board of Directors of the Company.

     (f) Cause. Cause means any of the following: (i) the Participant’s theft, dishonesty, or falsification of any documents or records related to the Company or any of its Affiliates; (ii) the Participant’s improper use or disclosure of the Company’s or any of its Affiliate’s confidential or proprietary information; (iii) any action by the Participant which has a material detrimental effect on the reputation or business of the Company or any of its Affiliates; (iv) the Participant’s failure or inability to perform any reasonable assigned duties, if such failure or inability is reasonably capable of cure, after being provided with a reasonable opportunity to cure, such failure or

inability; (v) any material breach by the Participant of any employment or service agreement between the Participant and the Company or any of its Affiliates or applicable policy of the Company or any of its Affiliates, which breach is not cured pursuant to the terms of such agreement; or (vi) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Participant’s ability to perform his or her duties with the Company or any of its Affiliates. Notwithstanding the foregoing, the definition of “Cause” in an individual written agreement between the Company or any of its Affiliates and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such individual agreement (it being understood, however, that if no definition of the term Cause is set forth in such an individual written agreement, the foregoing definition shall apply).

     (g) Change in Control. Change in Control means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

          (i) The sale or other disposition, in one or a series of related transactions, of all or substantially all, of the consolidated assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Exchange Act) other than the Initial Investors or its Affiliates; or

          (ii) (A) Any person or group, other than the Initial Investors or any of their Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company (or any entity which controls the Company, or which is a successor to all or substantially all of the consolidated assets of the Company), including by way of merger, consolidation, or otherwise, and (B) the Initial Investors or its Affiliates (individually or in the aggregate) cease to control the Board.

     (h) Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

     (i) Committee. Committee means a committee of one or more members of the Board appointed by the Board in accordance with Section
 3(d).

     (j) Common Stock. Common Stock means the common stock, par value $0.01 per share, of the Company.

     (k) Company. Company means Activant Group Inc., a Delaware corporation.

     (l) Consultant. Consultant means any person engaged by the Company, a Subsidiary, or an Affiliate to render consulting or advisory services and who is compensated for such services (other than as an Employee or Director). For the purposes of determining eligibility to participate in the Plan, the term Consultant shall be clarified pursuant to the provisions of Section 5(d).

     (m) Continuous Service. Continuous Service means that the Participant’s service with the Company, a Subsidiary or an Affiliate in his or her capacity as an Employee, Director, or Consultant, as applicable, is not interrupted or terminated. The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting only to such extent as may be expressly

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provided in the Company’s leave of absence policy or in the written terms of the Participant’s leave of absence documentation.

     (n) Covered Employee. Covered Employee means the chief executive officer and the four (4) other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code, as such determination may be amended from time to time.

     (o) Director. Director means a member of the Board of Directors of the Company.

     (p) Disability. Disability (i) means, to the extent necessary for qualification of Options as Incentive Stock Options, the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code, and (ii) for all other purposes, has the meaning under Section 409A(a)(2)(C)(i) of the Code, that is, the Participant (1) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (2) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death, or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant’s employer.

     (q) Effective Date. Effective Date means September 28, 2006, the date the Board first approved the Plan.

     (r) Employee. Employee means any person employed by the Company or an Affiliate. Service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.

     (s) Employee Stockholders Agreement. Employee Stockholders Agreement means the Employee Stockholders Agreement among the Company, HFCP and various other holders of equity interests in the Company that are parties thereto, as such agreement may be amended from time to time.

     (t) Exchange Act. Exchange Act means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, as each may be amended from time to time.

     (u) Fair Market Value. Fair Market Value means, as of any date, the value of a share of Common Stock determined as follows:

          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

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          (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.

          (iii) Prior to the Listing Date, the value of the Common Stock shall be determined in a manner consistent with Section 260.140.50 of Title 10 of the California Code of Regulations or any successor thereto.

          (iv) Notwithstanding the foregoing, the value of the Common Stock shall at all times be determined in a manner consistent with Section 409A of the Code (and the regulations and guidance promulgated thereunder), as may be amended from time to time.

     (v) HFCP. HFCP means Hellman & Friedman Capital Partners V, L.P.

     (w) Incentive Stock Option. Incentive Stock Option means a stock option to acquire Common Stock intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder, as amended from time to time.

     (x) Initial Investors. Initial Investors means HFCP and its affiliated funds, Thoma Cressey Fund VII, LP and its affiliated funds, and JMI Equity Fund IV, L.P. and its affiliated funds.

     (y) Initial Public Offering. Initial Public Offering means the consummation of an underwritten public offering (or series of offerings) of Common Stock pursuant to a registration statement under the Securities Act.

     (z) Listing Date. Listing Date means the first date upon which any shares of Common Stock of the Company are listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has been certified in accordance with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968. For greater certainty, any public offerings or listing of the stock of any predecessor to the Company shall not be considered for this purpose.

     (aa) Non-Employee Director. Non-Employee Director means a Director who is considered a “non-employee director” for purposes of Rule 16b-3.

     (bb) Nonstatutory Stock Option. Nonstatutory Stock Option means a stock option to acquire Common Stock not intended to qualify as an Incentive Stock Option.

     (cc) Officer. Officer means (i) before the Listing Date, any person designated by the Company as an officer and (ii) on and after the Listing Date, a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

     (dd) Option. Option means an Incentive Stock Option or Nonstatutory Stock Option granted pursuant to the Plan.

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     (ee) Option Agreement. Option Agreement means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (ff) Optionholder. Optionholder means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

     (gg) Outside Director. Outside Director means a Director who is considered an “outside director” for purposes of Section 162(m) of the Code.

     (hh) Own, Owned, Owner, Ownership. Except as otherwise required by Applicable Law, a person or entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

     (ii) Participant. Participant means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

     (jj) Performance-Based Award. Performance-Based Award means a Stock Award granted pursuant to the provisions of Section 8 hereof.

     (kk) Performance Share Bonus. Performance Share Bonus means a grant of shares of the Company’s Common Stock not requiring a Participant to pay any amount of monetary consideration (other than par value to the extent required by Applicable Law), made pursuant to Section 7(a) of the Plan.

     (II) Performance Share Unit. Performance Share Unit means the right to receive the value of one (1) share of the Company’s Common Stock at the time the Performance Share Unit vests, with the further right to elect to defer receipt of that value otherwise deliverable upon the vesting of an award of Performance Share Units to the extent permitted in the Participant’s agreement. Performance Share Units are granted pursuant to Section 7(a) of the Plan.

     (mm) Permitted Transferee. Permitted Transferee means: (i) to the extent provided by the Applicable Stockholders Agreement with respect to a Participant, (1) a trust or custodianship the beneficiaries of which may include only the Participant, his or her spouse and his or her lineal descendants (including children by adoption and step children) or (2) any limited liability company or partnership (I) with respect to which all of the outstanding equity interests are beneficially owned solely by the Participant, his or her spouse and his or her lineal descendants (including children by adoption and step children) and (II) with respect to which the Participant is the sole manager or managing member (if a limited liability company) or the sole general partner (if a limited partnership) and otherwise has the sole power to direct or cause the direction of the management and policies, directly or indirectly, of such limited liability company or partnership, whether through the ownership of voting securities, by contract or otherwise and (ii) in all cases, a person to whom a Stock Award or share of Common Stock is permitted to be transferred pursuant to the provisions of this Plan.

     (nn) Person. The term “person” shall have the meaning given to such term by 13(d) or 14(d) of the Exchange Act (or any successor section thereto).

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     (oo) Phantom Stock Unit. Phantom Stock Unit means the right to receive the value of one (1) share of the Company’s Common Stock, which Award is made pursuant to Section 7(a) of the Plan.

     (pp) Plan. Plan means this Activant Group Inc. 2006 Stock Incentive Plan, as amended from time to time.

     (qq) Restricted Stock Purchase Award. Restricted Stock Purchase Award means the right to acquire shares of the Company’s Common Stock upon the payment of the agreed-upon monetary consideration, if any, granted pursuant to the provisions of Section 7(a) of the Plan.

     (rr) Restricted Stock Unit. Restricted Stock Unit means the right to receive one (1) share of the Company’s Common Stock at the time the Restricted Stock Unit vests, granted pursuant to the provisions of Section 7(a) of the Plan.

     (ss) Rule 16b-3. Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

     (tt) Securities Act. Securities Act means the Securities Act of 1933 and the rules and regulations promulgated thereunder, as each may be amended from time to time.

     (uu) Stock Appreciation Right. Stock Appreciation Right means a stock appreciation right granted pursuant to the provisions of Section 7(b) of the Plan.

     (vv) Stock Award. Stock Award means any right granted under the Plan, including, but not limited to: (i) Options (including Incentive Stock Options and Nonstatutory Stock Options), (ii) Restricted Stock Purchase Awards, (iii) Restricted Stock Units, (iv) Phantom Stock Units, (v) Performance Share Unit, (vi) Performance Share Bonus, and (vii) Stock Appreciation Rights.

     (ww) Stock Award Agreement. Stock Award Agreement means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award, including but not limited to an Option Agreement. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.

     (xx) Stockholders Agreement. Stockholders Agreement means the Stockholders Agreement entered into, effective as of May 2, 2006, among the Company, HFCP and various other holders of equity interests in the Company that are parties thereto, as such agreement may be amended from time to time.

     (yy) Subsidiary. Subsidiary means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

     (zz) Ten Percent Stockholder. Ten Percent Stockholder means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent

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(10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

3. Administration.

     (a) Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in Section 3(d).

     (b) Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

          (i) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person; and whether and how a Stock Award will be adjusted to account for dividends paid with respect to the Company’s Common Stock.

          (ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan and any Stock Award fully effective.

          (iii) To amend the Plan or a Stock Award, as provided in the Plan.

          (iv) To terminate or suspend the Plan, as provided in the Plan.

          (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company that are not in conflict with the provisions of the Plan.

     (c) International Stock Awards. With respect to Participants who reside or work outside the United States of America and who are not (and are not expected to be) Covered Employees, the Board may, in its sole discretion, amend the terms of the Plan and/or Stock Awards with respect to such Participants in order to conform such terms with the requirements of local law and/or to make such changes as are necessary or beneficial to the Company, its Affiliates and/or the Participants.

     (d) Delegation to Committee.

          (i) General. The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the

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Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board some or all of the administration of the Plan. The Board or the Committee may delegate to one or more Officers of the Company the authority to grant Stock Awards under this Plan to Participants who are not Officers in accordance with the requirements of the Delaware General Corporation Law and/or other Applicable Law.

          (ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code) and/or (2) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. The Board or the Committee may delegate to one or more Officers of the Company the authority to grant Stock Awards under this Plan to Participants who are not Officers in accordance with the requirements of the Delaware General Corporation Law and/or other Applicable Law.

     (e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

4. Shares Subject to the Plan.

     (a) Shares Reserved for Issuance Under the Plan. Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate seven million, seven hundred sixty-one thousand, nine hundred and fifty-eight (7,761,958) shares of Common Stock (the “Share Reserve”). The Share Reserve shall be reduced by the number of shares of Common Stock: (i) issued, (ii) made subject to the terms of a Stock Award pursuant to Section 3(c), or (iii) to the extent that a distribution pursuant to a Stock Award is made in cash, the Share Reserve shall be reduced by the number of shares of Common Stock bearing a value equal to the amount of the cash distribution as of the time that such amount was determined. The maximum number of shares of Common Stock that may be issued pursuant to Incentive Stock Options shall be seven million,

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seven hundred thousand, five hundred and fifty-two (7,700,552) shares of Common Stock (the “ISO Limit”).

     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason (i) expire, be cancelled or otherwise terminate, in whole or in part, without having been exercised or redeemed in full, (ii) be reacquired by the Company prior to vesting, or (iii) be repurchased at cost by the Company prior to vesting, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan; provided, however, that such shares of Common Stock shall not be available for issuance pursuant to the exercise of Incentive Stock Options.

     (c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares.

     (d) Share Reserve Limitation. Prior to the Listing Date and to the extent then required by Section 260.140.45 of Title 10 of the California Code of Regulations or any successor thereto (“Section 260.140.45”), the total number of shares of Common Stock issuable upon exercise of all outstanding Options and the total number of shares of Common Stock provided for under any stock bonus or similar or other plan or award of the Company shall not exceed thirty percent (30%) (or such higher percentage limitation as may be approved by the stockholders of the Company pursuant to Section 260.140.45) of the then outstanding shares of Common Stock of the Company as calculated in accordance with the conditions and exclusions of Section 260.140.45.

5. Eligibility.

     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors, and Consultants subject, however, to the limitations in Sections 5(c) and (d) hereof.

     (b) Ten Percent Stockholders.

          (i) A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

          (ii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted an Option unless the exercise price of such Option is at least (i) one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower percentage of the Fair Market Value of the Common Stock at the date of grant as is required or permitted by Section 260.140.41 of Title 10 of the California Code of Regulations or any successor thereto at the time of the grant of the Option.

          (iii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted any other form of Stock Award unless the grant complies with the requirements of Section 260.140.42 of Title 10 of the California Code of

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Regulations or any successor thereto at the time of the grant of the Stock Award.

     (c) Section 162(m) Limitation. Subject to the provisions of Section 1l(a) relating to adjustments upon changes in the Common Stock, no Employee shall be eligible to be granted Options and other Stock Awards covering more than five million (5,000,000) shares of Common Stock (with respect to Stock Awards payable in shares) or with a value in excess of five million dollars ($5 million) (with respect to Stock Awards payable in cash) during any fiscal year; provided that in connection with his or her initial service, an Employee may be granted Options and other Stock Awards covering not more than an additional five million (5,000,000) shares of Common Stock (with respect to Stock Awards payable in shares) or with a value in excess of five millions dollars ($5 million) (with respect to Stock Awards payable in cash), which shall not count against the limits first set forth above. Shares subject to Stock Awards that are canceled shall continue to be counted against the limitations set forth in this Section 5(c). The repricing of any Option resulting in a reduction of the exercise price, shall be deemed to be a cancellation of the original Option and the grant of a substitute Option; in the event of such repricing, both the original and the substituted Options shall be counted against the share limitations set forth in this Section 5(c). This Section 5(c) shall not apply prior to such date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.

     (d) Consultants.

          (i) Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or the sale of the Company’s securities to such Consultant is not exempt under Rule 701 of the Securities Act (“Rule 701”) unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act, as well as comply with the securities laws of all other relevant jurisdictions.

          (ii) From and after the Listing Date, a Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (1) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (2) that such grant complies with the securities laws of all other relevant jurisdictions.

6. Option Provisions.

     Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on

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exercise of each type of Option. Options and any shares acquired upon exercise of Options shall be subject to the Applicable Stockholders Agreement that sets forth the rights and obligations of an Optionholder and/or Company stockholder with respect to Options and Common Stock issued upon any exercise of an Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

     (a) Term. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

     (b) Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another stock option in a manner satisfying the provisions of Section 424(a) and Section 409A of the Code.

     (c) Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Nonstatutory Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another stock option in a manner satisfying the provisions of Section 424(a) and Section 409A of the Code.

     (d) Consideration.

          (i) The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by Applicable Law, either (1) in cash or by check at the time the Option is exercised, (2) at the discretion of the Board (at the time of the grant of the Option to the extent required by Applicable Law), (A) by delivery to the Company of other Common Stock (subject to any requirements imposed by the Board in relation thereto), (B) in any other form of legal consideration that may be acceptable to the Board or (C) by reduction of the Company’s liability to the Optionholder, (3) if there is a public market for the shares at such time, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds, or (4) a combination of the above.

          (ii) Unless otherwise specifically provided in the Option Agreement, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired directly or indirectly from the Company shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6)

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months (or such longer or shorter period of time required to avoid a supplemental charge to earnings for financial accounting purposes).

          (iii) Wherever a Participant is permitted to pay the exercise price of an Option and/or taxes relating to the exercise of an Option by delivering Common Stock, the Participant may, subject to procedures satisfactory to the Board, satisfy such delivery requirement by presenting proof of beneficial ownership of such Common Stock, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of shares of Common Stock from the Common Stock acquired by the exercise of the Option. Where necessary to avoid a supplemental charge to earnings for financial accounting purposes, any such withholding for tax purposes shall be made at the statutory minimum rate of withholding.

     (e) Vesting Generally. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may become vested and exercisable (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 6(e) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

     (f) Minimum Vesting Prior to the Listing Date. Notwithstanding the foregoing Section 6(e), to the extent that the following restrictions on vesting are required by Section 260.140.41 (f) of Title 10 of the California Code of Regulations or any successor thereto at the time of the grant of the Option, then:

          (i) Options granted prior to the Listing Date to an Employee who is not an Officer, Director or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of at least twenty percent (20%) per year over five (5) years from the date the Option was granted, subject to reasonable conditions such as continued employment; and

          (ii) Options granted prior to the Listing Date to Officers, Directors or Consultants may be made fully exercisable, subject to reasonable conditions such as continued employment, at any time or during any period established by the Company.

     (g) Termination of Unvested Options. Unless otherwise specified in the Optionholder’s Option Agreement, any Option or portion thereof that is not vested at the time of termination of Continuous Service shall lapse and terminate, and shall not be exercisable by the Optionee or any other Person.

     (h) Termination of Continuous Service. In the event an Optionholder’s Continuous Service is terminated other than by the Company or its Affiliates for Cause and other than as a result of the Optionholder’s death or Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination or as otherwise permitted by the Company) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder’s

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Continuous Service (or such longer or shorter period specified in the Option Agreement or as otherwise required by Applicable Law, which period shall not be less than thirty (30) days for Options granted prior to the Listing Date), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If the Optionholder does not exercise his or her Option within the specified time, the Option shall terminate. Notwithstanding the foregoing, an Optionholder’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the Optionholder’s death or Disability or for Cause) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, or similar requirements of the Applicable Laws of another jurisdiction to which the Option is subject, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option or (ii) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements or similar requirements.

     (i) Disability of Optionholder. In the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder .was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement or as otherwise required by Applicable Law, which period shall not be less than six (6) months for Options granted prior to the Listing Date to the extent required by Applicable Law) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If the Optionholder does not exercise his or her Option within the specified time, the Option shall terminate.

     (j) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death or as otherwise permitted by the Company) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but only within the period ending on the earlier of (1) the date twelve (12) months following the date of death (or such longer or shorter period specified in the Option Agreement or as otherwise required by Applicable Law, which period shall not be less than six (6) months for Options granted prior to the Listing Date to the extent required by Applicable Law) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If the Option is not exercised within the specified time, the Option shall terminate.

     (k) Termination for Cause. Notwithstanding any other provision of the Plan to the contrary, and except as otherwise expressly provided in an Option Agreement, if the Optionholder’s Continuous Service is terminated by the Company for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination of Continuous Service (or on such later date as otherwise required by Applicable Law).

     (l) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior

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to the full vesting of the Option. Any shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. Provided that the “Repurchase Limitation” in Section 10(j) is not violated, the Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a supplemental charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.

     (m) Loss of Tax Favored Status. If a Participant exercises an Incentive Stock Option more than three months after termination of employment (or after such longer period in case of death or Disability as permitted under the Code), such Option shall be treated as a Nonstatutory Stock Option. In addition, in no event shall any member of the Board, the Company, the Initial Investors or any of their respective Affiliates (including their respective employees, officers, directors or agents) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an Incentive Stock Option, nor do any such Persons make any representatives regarding the taxation consequences to any Participant resulting from the grant, vesting or exercise of any Stock Award or from the sale of shares obtained pursuant to any such Stock Award.

7. Provisions of Stock Awards other than Options.

     (a) Other Stock-Based Awards. The Committee, in its sole discretion, may grant or sell an award of a Restricted Stock Purchase Award, Restricted Stock Unit, Performance Share Unit, Performance Share Bonus, Phantom Stock Unit, or other stock-based award that is valued in whole or in part by reference to, or is otherwise based on, the Fair Market Value of the Company’s Common Stock (each, an “Other Stock-Based Award”). Each Other Stock-Based Award shall be subject to a Stock Award Agreement which shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of Other Stock-Based Awards may change from time to time, and the terms and conditions of separate Other Stock-Based Awards need not be identical, but each Other Stock-Based Award shall be subject to the following provisions (either through incorporation of provisions hereof by reference in the applicable Stock Award Agreement or otherwise):

          (i) Purchase Price. Other Stock-Based Awards may be granted in consideration for past services actually rendered to the Company or an Affiliate; notwithstanding the foregoing, to the extent required by Applicable Law, a Participant shall pay the Common Stock’s “par value” solely in cash or by check. The purchase price (if any) under each Other Stock-Based Award shall be such amount as the Board shall determine and designate in the applicable Stock Award Agreement. To the extent required by Applicable Law, the purchase price shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Other Stock-Based Award on the date such award is made or at the time the purchase is consummated, as applicable.

          (ii) Consideration.

               (1) The purchase price (if any) of Common Stock acquired pursuant to Other Stock-Based Awards shall be paid either: (A) in cash or by check, (B) as determined by

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the Board (and to the extent required by Applicable Law, at the time of the grant): (I) by delivery to the Company of other shares of Common Stock (subject to such requirements as may be imposed by the Board), (II) reduction of the Company’s liability to the Participant, or (III) by any other form of consideration permitted by law, (C) if there is a public market for the shares at such time, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds, or (D) by some combination of the foregoing.

               (2) Unless otherwise specifically provided in the Stock Award Agreement, the purchase price of Common Stock acquired pursuant to any Other Stock-Based Award that is paid by delivery to the Company of other Common Stock, which Common Stock was acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a supplemental charge to earnings for financial accounting purposes).

               (3) Whenever a Participant is permitted to pay the exercise price of any Other Stock-Based Award and/or taxes relating to the exercise thereof by delivering Common Stock, the Participant may, subject to procedures satisfactory to the Board, satisfy such delivery requirements by presenting proof of beneficial ownership of such Common Stock, in which case the Company shall treat the Other Stock-Based Award as exercised or redeemed without further payment and shall withhold such number of shares of Common Stock from the Common Stock acquired under the Other Stock-Based Award. When necessary to avoid a supplemental charge to earnings for financial accounting purposes, any such withholding for tax purposes shall be made at the statutory minimum rate of withholding.

          (iii) Vesting. The total number of shares of Common Stock subject to each Other Stock-Based Award may, but need not, vest and/or become redeemable in periodic installments that may, but need not, be equal. The Board shall determine the criteria under which shares of Common Stock under the each Other Stock-Based Award may vest. The criteria may or may not include performance criteria or Continuous Service. Shares of Common Stock acquired under each Other Stock-Based Award may, but need not, be subject to a share repurchase right or similar forfeiture feature in favor of the Company in accordance with a schedule to be determined by the Board.

          (iv) Distributions. The distribution with respect to any Other Stock-Based Award may be made in shares of Common Stock valued at Fair Market Value on the redemption or exercise date, in cash, or partly in shares and partly in cash, as the Board shall in its sole discretion deem appropriate at such time as permitted or required under Applicable Law.

          (v) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous Service terminates, the Company may repurchase or reacquire, and/or the Participant shall forfeit (as applicable), any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination, and in the event of a termination for Cause,

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such vested shares, on such terms and conditions as set forth in the Stock Award Agreement.

          (vi) Transferability. Rights to acquire shares of Common Stock under Other Stock-Based Award shall be transferable by the Participant only as permitted under the Plan and upon such terms and conditions as are set forth in the applicable Stock Award Agreement, as the Board shall determine in its discretion. If the Stock Award Agreement does not provide for transferability, then the Other Stock-Based Award, and the shares subject to Other Stock-Based Award, shall not be transferable except by will or by the laws of descent and distribution.

     (b) Stock Appreciation Rights. The Board also may grant (i) a Stock Appreciation Right independent of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a portion thereof. A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of shares of Common Stock covered by an Option (or such lesser number of shares as the Board may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7(b) (or such additional limitations as may be included in a Stock Award Agreement) and as are required under Section 409A of the Code. Each Stock Appreciation Right agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of Stock Appreciation Right agreements may change from time to time, and the terms and conditions of separate Stock Appreciation Right agreements need not be identical, but each Stock Appreciation Right agreement shall include (through incorporation of provisions thereof by reference in the agreement or otherwise) the substance of each of the following provisions:

          (i) Terms. The exercise price per share of a Stock Appreciation Right shall be an amount determined by the Board but in no event shall such amount be less than the greater of (i) the Fair Market Value of a share on the date the Stock Appreciation Right is granted or, in the case of a Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, the exercise price of the related Option and (ii) the minimum amount permitted by Applicable Law, rules, by-laws or policies of regulatory authorities or stock exchanges. Each Stock Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one share over (B) the exercise price per share, times (ii) the number of shares covered by the Stock Appreciation Right. Each Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in exchange therefore an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one share over (B) the option exercise price per share, times (ii) the number of shares covered by the Option, or portion thereof, which is surrendered. The date a notice of exercise is received by the Company shall be the exercise date. Payment shall be made in shares of Common Stock (any such shares valued at such Fair Market Value), all as shall

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be determined by the Board. Stock Appreciation Rights may be exercised from time to time upon actual receipt by the Company of written notice of exercise stating the number of shares with respect to which the Stock Appreciation Right is being exercised. No fractional shares will be issued in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the Board should so determine, the number of shares will be rounded downward to the next whole share.

          (ii) Limitations. The Board may impose, in its discretion, such conditions upon the exercisability or transferability of Stock Appreciation Rights as it may deem fit.

8. Performance Awards.

     Notwithstanding anything to the contrary herein, any Stock Award granted under this Plan may, but need not, be granted in a manner which may be deductible by the Company under Section 162(m) of the Code and, as applicable, compliant with the requirements of Section 409A of the Code (such awards, “Performance-Based Awards”). A Participant’s Performance-Based Award shall be determined based on the attainment of written performance goals approved by the Committee for a performance period established by the Committee, which goals are approved (x) while the outcome for that performance period is substantially uncertain and (y) during such period of time as permitted by Applicable Law. The performance goals, which must be objective, shall be based upon one or more of the following criteria: (i) consolidated earnings before or after taxes (including earnings before one or more of the following: interest, taxes, depreciation and amortization); (ii) net income (before or after taxes); (iii) operating income or profit (net or gross); (iv) earnings per share; (v) book value per share; (vi) return on stockholders’ equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price (including but not limited to growth measures and total shareholder return); (xiii) market share; (xiv) revenues or sales; (xv) costs and/or cost reductions or savings; (xvi) cash flow; (xvii) working capital; (xviii) return on invested capital or assets; (xix) consummations of acquisitions or sales of certain Company assets, subsidiaries or other businesses; (xx) funds from operations; (xxi) pre-tax income; (xxii) customer satisfaction and (xxiii) capital expenditures. The foregoing criteria may relate to the Company, one or more of its Affiliates or one or more of its divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine. In addition, to the degree consistent with Section 162(m) of the Code (or any successor section thereto) and/or Section 409A of the Code, the performance goals may be calculated without regard to extraordinary items. The Committee shall determine whether, with respect to a performance period, the applicable performance goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards will be paid for such performance period until such certification is made by the Committee. The amount of the Performance-Based Award actually paid to a given Participant may be less than the amount determined by the applicable performance goal formula, at the discretion of the Committee. The amount of the Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance

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period; provided, however, that a Participant may, if and to the extent permitted by the Committee and consistent with the provisions of Section 162(m) and/or Section 409A of the Code, elect to defer payment of a Performance-Based Award.

9. Covenants of the Company.

     (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

     (b) Securities Law Compliance. The grant of Stock Awards and the issuance of Common Stock pursuant to Stock Awards shall be subject to compliance with all Applicable Laws with respect to such securities. Stock Awards may not be issued if the issuance of such Stock Awards would constitute a violation of any Applicable Law. In addition, no Stock Award may be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Stock Award be in effect with respect to the shares issuable upon exercise of the Stock Award or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Stock Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act and/or other Applicable Law. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary for the lawful issuance and sale of any Stock Award or share of Common Stock hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such Stock Award or Common Stock.

10. Miscellaneous.

     (a) Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.

     (b) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof shall vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it shall vest.

     (c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for issuance of the Common Stock pursuant to the terms of the applicable Stock Award.

     (d) No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee for any reason or no reason, with or without notice, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

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     (e) Incentive Stock Option $100.000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

     (f) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award or acquiring the Common Stock; (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock; and (iii) to give such other written assurances as the Company may determine are reasonable in order to comply with Applicable Law. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then Applicable Law. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

     (g) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (where withholding in excess of the minimum amount will result in a supplemental charge to earnings for financial accounting purposes); or (iii) delivering to the Company owned and unencumbered shares of Common Stock; provided, however, in the case of the tender of shares, that any such shares have been held by the Participant for not less than six (6) months (or such other period as established from time to time by the Board in order to avoid a supplemental charge to earnings for financial accounting purposes).

     (h) Non-Qualified Deferred Compensation. To the extent applicable and notwithstanding any other provision of this Plan, this Plan and Stock Awards hereunder shall be administered, operated and interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including

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without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that the Board determines that any amounts payable hereunder may be taxable to a Participant under Section 409 A of the Code and related Department of Treasury guidance prior to the payment and/or delivery to such Participant of such amount, the Company may (i) adopt such amendments to the Plan and related Stock Award, and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Board determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Stock Awards hereunder and/or (ii) take such other actions as the Board determines necessary or appropriate to comply with, or exempt the Plan and/or Stock Awards from, the requirements of Section 409A of the Code and related Department of Treasury guidance, including such Department of Treasury guidance and other interpretive materials as may be issued after the Effective Date. The Company and its Affiliates make no guarantees to any person regarding the tax treatment of Stock Awards or payments made under the Plan, and, notwithstanding any agreement or understanding to the contrary, if any Stock Award, payments or other amounts due to a Participant (or his or her beneficiaries, as applicable) results in, or causes in any manner, the application of an accelerated or additional tax, fine or penalty under Section 409A of the Code to be imposed, then the Participant (or his or her beneficiaries, as applicable) shall be solely liable for the payment of, and the Company and its Affiliates shall have no obligation or liability to pay or reimburse (either directly or otherwise) the Participant (or his or her beneficiaries, as applicable) for, any such additional taxes, fines or penalties.

     (i) Information Obligation. Prior to the Listing Date, to the extent required by Section 260.140.46 of Title 10 of the California Code of Regulations and Rule 701 or any respective successor(s) thereto, the Company shall deliver financial statements and any other required disclosure documents to Participants at least annually. Unless otherwise required under Rule 701, this Section 10(i) shall not apply to key Employees whose duties in connection with the Company assure them access to equivalent information.

     (j) Repurchase Limitation. The terms of any repurchase option applicable to the unvested portion of a Stock Award or shares of Common Stock subject to the unvested portion of a Stock Award may be at the original purchase price, the fair market value of the Common Stock at the time of the repurchase, or such other price as determined in good faith by the Board consistent with the terms of the Plan, the Applicable Stockholders Agreement and Applicable Law. Notwithstanding any other provision of this Plan, to the extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of Regulations, or any successor thereto, at the time a Stock Award is made, any repurchase option applicable to a Stock Award or share of Common Stock issued pursuant to a Stock Award granted prior to the Listing Date to a person who is not an Officer, Director or Consultant shall be upon the following terms:

               (i) Repurchase at Fair Market Value. If the repurchase option gives the Company the right to repurchase the shares of Common Stock upon termination of Continuous Service at not less than the Fair Market Value of the shares of Common Stock to be purchased on the date of termination, then the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of Options after such date of

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termination, within ninety (90) days after the date of the exercise) or such longer period as may be agreed to by the Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding “qualified small business stock”).

               (ii) Repurchase at Original Purchase Price. If the repurchase option gives the Company the right to repurchase the shares of Common Stock upon termination of Continuous Service at the original purchase price, then (A) the right to repurchase at the original purchase price shall lapse at the rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years from the date the Stock Award is granted (without respect to the date the Stock Award was exercised or became exercisable) and (B) the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of Options after such date of termination, within ninety (90) days after the date of the exercise) or such longer period as may be agreed to by the Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding “qualified small business stock”).

11. Adjustments to Stock Awards.

     (a) Capitalization Adjustments. Subject to Section 1l(b) and (c), in the event of any change in the outstanding Common Stock subject to the Plan, or subject to or underlying any Stock Award, by reason of any stock dividend, stock split, reverse stock split, reorganization, recapitalization, merger, consolidation, spin-off, combination, exchange of shares of Common Stock or other corporate exchange, or any extraordinary distribution or dividend to stockholders of Common Stock (whether paid in cash or otherwise) or any transaction similar to the foregoing, the Board in its sole discretion and without liability to any person shall make such substitution or adjustment, if any, as it deems in its good faith judgment to be equitable and reasonably necessary to preserve the original terms and conditions of the Plan and/or any outstanding Stock Award, to (i) the type, class(es) and maximum number of securities or other property subject to the Plan pursuant to the Share Reserve, the ISO Limit, and Section 5(c), (ii) the exercise price, base price, redemption price or purchase price applicable to outstanding Stock Awards, (iii) the number of shares of Common Stock subject to outstanding Stock Awards, or (iv) any other affected terms of any outstanding Stock Awards. Any determination, substitution or adjustment made by the Board under this Section 1l(a), shall be final, binding and conclusive on all persons. The conversion of any convertible securities of the Company shall not be treated as a transaction that shall cause the Board to make any determination, substitution or adjustment under this Section 1l(a).

     (b) Adjustments Upon A Change in Control.

          (i) In the event of a Change in Control, any surviving entity or acquiring entity may assume or continue any Stock Awards outstanding under the Plan or may substitute similar stock awards with substantially equivalent economic value (including an award to acquire substantially the same consideration paid to the stockholders in the transaction by which the Change in Control occurs) for those Stock Awards outstanding under the Plan.

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In the event any surviving entity or acquiring entity declines to assume or continue such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the Board in its sole discretion and without liability to any person may (1) provide for the payment of a cash amount in exchange for the cancellation of a Stock Award equal to its fair value (as determined in the good faith determination of the Board) which shall equal the product of (x) the excess, if any, of the Fair Market Value per share of Common Stock subject to such Stock Award at such time over the exercise price, base price or redemption price, if any, times (y) the total number of shares then subject to such Stock Award (including, at the discretion of the Board, any unvested shares subject to such Stock Award), (2) continue the Stock Awards upon such terms as the Board determines in its sole discretion, (3) provide for the issuance of substitute Stock Awards that will substantially preserve the otherwise applicable terms of any affected Stock Awards (including any unrealized value immediately prior to the Change in Control) previously granted hereunder, as determined by the Board in its sole discretion, or (4) notify Participants holding certain Stock Awards that they must exercise or redeem any portion of such Stock Award (including, at the discretion of the Board, any unvested portion of such Stock Award) at or prior to the closing of the transaction by which the Change in Control occurs and that the Stock Awards shall terminate if not so exercised or redeemed at or prior to the closing of the transaction by which the Change in Control occurs. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised or redeemed with respect to the vested portion of the Stock Award (and, at the discretion of the Committee, any unvested portion of such Stock Award) at or prior to the closing of the transaction by which the Change of Control occurs. In all cases, the Committee shall not be obligated to treat all Stock Awards, even those that are of the same type, in the same manner.

          (ii) Notwithstanding the foregoing, in the event of the dissolution or liquidation of the Company, unless the Board determines otherwise, all outstanding Stock Awards will terminate immediately prior to the dissolution or liquidation of the Company.

     (c) Other Written Agreements. A Stock Award held by any Participant whose Continuous Service has not terminated prior to the effective time of a Change in Control may be subject to additional acceleration of vesting and exercisability or other terms and conditions as set forth in the Stock Award Agreement for such Stock Award or as set forth in any other written agreement between the Company or any Affiliate and the Participant. In the event of any conflict between written documents relating to the treatment of a Stock Award held by a Participant, such additional acceleration provisions and other terms and conditions shall be controlling.

12. Limitations on Transfers

     (a) Transferability of Stock Awards. No Stock Award issued under this Plan may be sold, exchanged, transferred (including, without limitation, any transfer to a nominee or agent of a Participant), assigned, pledged, hypothecated or otherwise disposed of unless such sale, exchange,

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transfer or other disposition is (i) permitted under the terms of the Applicable Stockholders Agreement, the Plan and the Stock Award Agreement and (ii) if applicable, is permitted by applying the standard (as in effect at the time of the grant of the Stock Award) set forth in Section 260.140.41(d) of Title 10 of the California Code of Regulations (or any successor thereto). Any unauthorized transfer of a Stock Award shall be void. If a Stock Award Agreement does not provide for transferability, then the Stock Award shall not be transferable except by will or by the laws of descent and distribution and only if such transfer is in compliance with the terms of the Plan, the Applicable Stockholders Agreement and Applicable Law.

     (b) Special Rule Applicable to Incentive Stock Options. Notwithstanding the provisions of Section 12(a), an Incentive Stock Option issued under this Plan shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of an Optionholder only by the Optionholder.

     (c) Designation of a Beneficiary. The Board may establish rules pertaining to the designation by the Participant of a beneficiary who is to receive any shares of Common Stock and/or any cash, or have the right to exercise or redeem that Participant’s Stock Award, in the event of such Participant’s death.

     (d) Limited Transfers for the Benefit of Family Members. Notwithstanding any other provision set forth in this Section 12, the Board, in its sole discretion, may permit a Stock Award issued under this Plan to be assigned or transferred subject to the applicable limitations, if any, set forth in Section 260.140.41(d) and Section 260.140.42(c) of Title 10 of the California Code of Regulations, Rule 701 under the Securities Act and the General Instructions to Form S-8 Registration Statement under the Securities Act or any successor(s) thereto.

     (e) Permitted Transferees. Any Permitted Transferee will be subject to all of the terms and conditions applicable to a person transferring a Stock Award issued under this Plan, including, but not limited to, the terms and conditions set forth in this Plan, the applicable Stock Award Agreement and the Applicable Stockholders Agreement.

     (f) Market Standoff Provision. If required by the Company (or a representative of the underwriter(s)) in connection with the first underwritten registration of the offering of any equity securities of the Company under the Securities Act, or as otherwise required pursuant to the terms of the Applicable Stockholders Agreement, for a specified period of time, the Participant shall not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of the Common Stock acquired by the Participant pursuant to a Stock Award or other securities of the Company held by the Participant, and shall be subject to such other restrictions on transfer to the same extent as the Initial Investors, and further shall execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to such shares until the end of such period.

13. Section 12 of the Exchange Act

     Prior to an Initial Public Offering, in the event that the Company, in its sole discretion, deems it necessary to ensure that the Company does not become subject to the registration

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requirements set forth in Section 12(g) of the Exchange Act, the Company shall be entitled to engage in the following actions (and any additional actions set forth in an individual’s Stock Award Agreement):

     (a) Certain Amendments. It is expressly contemplated that the Board may at any time, and from time to time, amend the Plan and/or any Stock Award issued under the Plan, in any respect the Board deems necessary or advisable in order to ensure that the Company does not become subject to the registration requirements set forth in Section 12(g) of the Exchange Act.

     (b) Suspend Options. The Company may prevent the exercise of Options issued under this Plan, in which case, such Options shall remain outstanding and become exercisable at the time that the Company delivers a notice to affected Participants that such Options are again exercisable, whereupon either (i) such Options shall become exercisable according to their terms, or (ii) if an Option would no longer be exercisable according to its terms but previously was or would have been exercisable under those terms, such Option shall remain exercisable until the 30^th day following the day that the Company delivers the notice described above. Notwithstanding the other provisions of this Section 13(b), no Option shall remain outstanding or exercisable after the expiration date of the Option as set forth in the Stock Award Agreement documenting such Option.

     (c) Require Contribution to a Trust. The Company may require Participants to contribute Stock Awards and any shares of Common Stock issued under this Plan to a trust designated by the Company under the terms and conditions of a trust agreement approved by the Company. The Company shall bear the expenses of maintaining the trust.

14. Stockholders Agreement and Escrow

     (a) Awards Subject to Plan and Stockholders Agreement. All Stock Awards issued hereunder shall be subject to all the terms and conditions of the Plan, the Applicable Stockholders Agreement and the Stock Award Agreement governing the Stock Award. The terms and conditions of each of the Stockholders Agreement and Employee Stockholders Agreement, as the case may be (including but not limited to the restrictions on transfer set forth in Article IV thereof), are incorporated herein by reference into all Stock Awards issued hereunder. As a condition of receiving Stock Awards hereunder, each Participant will be obligated to execute such agreements and documents as the Board may require including, without limitation, the Stockholders Agreement or the Employee Stockholders Agreement.

     (b) Escrow. To ensure that the shares of Common Stock issuable pursuant to Stock Awards are not transferred in contravention of the terms of the Plan and the individual Stock Award Agreements, to ensure that the Common Stock subject to a repurchase option or reacquisition right will be available for repurchase or reacquisition, to ensure enforceability of the rights of any parties relating to the shares of Common Stock as provided for in the Applicable Stockholders Agreement, and to ensure compliance with other provisions of the Plan, the Company may in its sole discretion require Participants to deposit the certificates evidencing the shares of Common Stock issued under this Plan with an escrow agent designated by the Company.

15. Amendment and Termination of the Plan and Stock Awards.

     (a) Amendment of the Plan and Stock Awards. The Board at any time, and from time to time, may amend the Plan, subject to the approval of the Company’s stockholders to the extent

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such approval is necessary under Applicable Law or is otherwise desirable as determined in the sole discretion of the Board. The Board at any time, and from time to time, may amend the terms of one or more Stock Awards. It is expressly contemplated that the Board may amend the Plan and Stock Awards in any respect the Board deems necessary or advisable (i) to provide eligible Participants with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and deferred compensation, (ii) to bring the Plan and/or Stock Awards granted under the Plan into compliance with Applicable Law, and/or (iii) to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     (b) Term and Termination of the Plan. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10^th) anniversary of the earlier of the date that the Plan is approved by the stockholders of the Company or the date the Plan is adopted by the Board. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

     (c) No Material Impairment of Rights. Except as otherwise set forth in the Plan, the amendment, suspension or termination of the Plan, and the amendment, termination or cancellation of outstanding Stock Awards, shall not materially impair rights and obligations under any Stock Award except with the written consent of the Participant.

16. Effective Date of Plan

     The Plan shall become effective immediately upon its adoption by the Board, subject to approval by the stockholders of the Company, which approval shall be obtained within twelve (12) months after the date the Plan is adopted by the Board.

17. Choice of Law

     The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

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PLAN HISTORY

September 28, 2006	Board adopts the Plan, with an initial reserve of seven million, seven hundred thousand, five hundred and fifty-two (7,700,552) shares.
October 25, 2006	Board amends and restates the Plan.
November 16, 2006	Board amends and restates the Plan, with a share reserve of seven million, seven hundred sixty-one thousand, nine hundred and fifty-eight (7,761,958) shares.
December 19, 2006	Stockholders entitled to vote approve the amended and restated Plan, with a share reserve of seven million, seven hundred sixty-one thousand, nine hundred and fifty-eight (7,761,958) shares.
November 2, 2007	Board amends and restates the Plan, with a share reserve of seven million, nine hundred sixty-one thousand, nine hundred and fifty-eight (7,961,958) shares.

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EX-10.22

Exhibit 10.22

ACTIVANT GROUP INC.
STOCK OPTION GRANT NOTICE
2006 Stock Incentive Plan

     Activant Group Inc. (“Company”), pursuant to its 2006 Stock Incentive Plan (“Plan”), hereby grants to the “Optionholder” identified below a stock option (the “Option”) to purchase the number of shares (“ Shares”) of the Company’s Common Stock set forth below. This Option is subject to all of the terms and conditions as set forth herein and in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.

Optionholder:

Date of Grant:

Vesting Commencement Date:

Number of Shares Subject to Option:

Exercise Price (Per Share):

Total Exercise Price:

Expiration Date:

Type of Grant:	Nonstatutory Stock Option
Exercise Schedule:	Same as Vesting Schedule.
Vesting Schedule:	-	20% of the Shares vest 12 months after the Vesting Commencement Date
	-	5% of the Shares vest on the last day of each three-month period thereafter over the next 48 months

Method of Payment Upon Exercise: Such methods as are set forth in Section 3 of the attached Option Agreement

Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice, the Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Option Agreement and the Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options previously granted and delivered to Optionholder under the Plan, and (ii) the following agreements only:

Other Agreements: The Option is also subject to the terms of [(1) the Employment Agreement dated as of [       ], between the Optionholder and the Company and (2)] the [Employee] Stockholders Agreement dated as of                      ___, 2006, executed by the stockholders of the Company.

ACTIVANT GROUP INC.		OPTIONHOLDER
By:
	Signature		Signature
Title:		Date:
Date:

Attachments: Option Agreement, 2006 Stock Incentive Plan, and Notice of Exercise

ACTIVANT GROUP INC.
2006 STOCK INCENTIVE PLAN

OPTION AGREEMENT

          Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement, Activant Group Inc. (the “Company”) has granted you a stock option under its 2006 Stock Incentive Plan (the “Plan” ) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not defined in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan. For the avoidance of doubt, the terms and conditions of the Grant Notice are a part of the Option Agreement, unless otherwise specified.

          The details and terms and conditions of this Option Agreement shall govern your Option, notwithstanding any less favorable terms and conditions on the same matter set forth in the Plan:

          1. Vesting.

          (a) Subject to the limitations contained herein, your Option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

          (b) Notwithstanding any provision of this Option Agreement to the contrary, in the event of the consummation of a Change in Control of the Company, the Option shall, to the extent not then vested and not previously cancelled or terminated, accelerate and immediately become fully vested and exercisable.

          2. Number of Shares and Exercise Price. The number of shares of Common Stock subject to your Option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for various adjustments in the Company’s equity capital structure, as provided in the Plan.

          3. Method of Payment.

          (a) Payment of the exercise price is due in full upon exercise of all or any part of your Option. You may elect to make payment of the exercise price in cash or by check. Alternatively, in the Company’s sole discretion at the time your Option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. Notwithstanding the terms of the previous sentence, you may not be permitted to exercise your Option pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board if such exercise would violate the provisions of Section 402 of the Sarbanes-Oxley Act of 2002.

          (b) The Company may permit you to make payment of the exercise price, in whole or in part, in shares of Common Stock having a Fair Market Value equal to the amount of the aggregate exercise price or such portion thereof, as applicable; provided, however, that you must satisfy all such requirements as may be imposed by the Board including without limitation that you have held such shares for not less than six months (or such other period as established from time to time by the Board in order to avoid a supplemental charge to earnings for financial accounting purposes).

          (c) Where you are permitted to pay the exercise price of an Option and/or taxes relating to the exercise of an Option by delivering shares of Common Stock, you may, subject to procedures satisfactory to the Board, satisfy such delivery requirement by presenting proof that you are the Beneficial Owner of such shares of Common Stock, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of shares from the Shares acquired by the exercise of the Option.

          4. Whole Shares. You may exercise your Option only for whole shares of Common Stock.

          5. Securities Law Compliance. Notwithstanding anything to the contrary contained herein, you may not exercise your Option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your Option must also comply with other Applicable Laws governing your Option, and you may not exercise your Option if the Company determines that such exercise would not be in material compliance with Applicable Law.

          6. Term. You may not exercise your Option before the commencement of its term on the Date of Grant or after its term expires. Subject to the provisions of the Plan and this Option Agreement, you may exercise all or any part of the vested portion of the Option at any time prior to the earliest to occur of:

          (a) the date on which your Continuous Service is terminated for Cause;

          (b) three (3) months after the termination of your Continuous Service other than a termination for Cause or by reason of your death or Disability;

          (c) twelve (12) months after the termination of your Continuous Service due to your Disability or death; or

          (d) the Expiration Date.

          (e) Extension if Exercise is Prevented. Notwithstanding the foregoing, if the exercise of your Option is prevented within the applicable time periods set forth in Sections 6(b) or (c) as a result of the operation of Section 5 above, or Section 6(h) or Section 13 of the Plan, your Option shall not expire before the date that is thirty (30) days

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after the date that you are notified by the Company that the Option is again exercisable, but in any event no later than the Expiration Date indicated in your Grant Notice.

          7. Exercise Procedures.

          (a) Subject to Section 5 above and other relevant terms and conditions of the Plan and this Option Agreement, you may exercise the vested portion of your Option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Company’s Chief Financial Officer, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then reasonably require.

          (b) By exercising your Option, you agree that, as a condition to any exercise of your Option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your Option, or (2) other applicable events.

          (c) By exercising your Option, you agree that the Company (or a representative of the underwriter(s)) may, in connection with the first underwritten registration of the offering of any equity securities of the Company under the Securities Act (or any underwritten registration of any securities of the Company prior to that time), or as otherwise required pursuant to the terms of the Applicable Stockholders Agreement, require that for a specified period of time, you not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, or may impose such other restrictions on transfer to the same extent as the Initial Investors. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to your shares of Common Stock until the end of such period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 7(c) and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

          (d) As a condition of any exercise of your Option, you and your spouse, if any, agree that prior to the effectiveness of the first underwritten registration of the Company’s equity securities under the Securities Act, you shall not transfer any or all of the shares of Common Stock purchased upon exercise of your Option unless pursuant to the terms of the Applicable Stockholders Agreement.

          8. Documents Governing Issued Common Stock. Shares of Common Stock that you acquire upon exercise of your Option are subject to the terms of the Plan, the Applicable Stockholders Agreement, the Company’s bylaws, the Company’s certificate of incorporation, any agreement relating to such shares of Common Stock to which you become a party, or any

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other similar document. You should ensure that you understand your rights and obligations as a stockholder of the Company prior to the time that you exercise your Option.

          9. Limitations on Transfer of Options. You may transfer all or any portion of your vested Option to a trust or custodianship, the beneficiaries of which may include only you, your spouse or your lineal descendants (including children by adoption and step children) (an “Eligible Transferee”); provided that such Eligible Transferee shall have executed a transfer agreement in a form determined by the Company to ensure such Eligible Transferee is subject to the same restrictions on that portion of the Option transferred to such Eligible Transferee as if the transfer had not occurred.

          10. Option Not a Service Contract. Your Option is not an employment contract, and nothing in your Option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ or service of the Company or any of its Affiliates, or of the Company or any of its Affiliates to continue your employment. In addition, nothing in your Option shall obligate the Company or any of its Affiliates, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant or otherwise for the Company or any of its Affiliates.

          11. Withholding Obligations.

          (a) At the time you exercise your Option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company and Applicable Law, including, but not limited to, Section 402 of the Sarbanes-Oxley Act of 2002) any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any of its Affiliates, which arise in connection with your Option.

          (b) You may not exercise your Option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied or appropriate arrangements (acceptable to the Company) are made therefor.

          12. Notices. Any notices provided for in your Option or the Plan shall be given in writing and shall be deemed given and effective upon the occurrence of (a) the signing by the recipient of an acknowledgement of receipt form accompanying delivery through the U.S. mail sent by certified mail, return receipt requested, (b) delivery to the recipient’s address by overnight delivery (e.g., FedEx, UPS, or DHL) or other commercial delivery service, or (c) delivery in person or by personal courier.

          13. Option Subject to Applicable Stockholders Agreement and Plan Document. Your Option and any shares of Common Stock acquired upon exercise of your Option are subject to the Applicable Stockholders Agreement. Your Option is also subject to all of the provisions of the Plan, the provisions of which are hereby made a part of your Option, and is further subject to all interpretations, amendments, rules and regulations that may from time to

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time be promulgated and adopted pursuant to the Plan, to the extent not inconsistent with the terms of this Option Agreement.

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NOTICE OF EXERCISE

Activant Group Inc.	Date of Exercise:
c/o Activant Solutions Inc.
7683 Southfront Road
Livermore, CA 94551
Ladies and Gentlemen:

     This constitutes notice under my Option that I elect to purchase the number of Shares for the price set forth below.

Option dated:
Number of Shares as to which Option is exercised:
Certificates to be issued in name of:
Total exercise price:	$
Cash payment delivered herewith:	$

     By this exercise, I agree (i) to execute or provide such additional documents as Activant Group Inc. (the “Company”) may reasonably require pursuant to the terms of this Notice of Exercise and the Company’s 2006 Stock Incentive Plan (the “Plan”) and (ii) to provide for the payment by me to the Company (in the manner designated by the Company) of the Company’s withholding obligation, if any, relating to the exercise of this Option.

     I hereby make the following certifications and representations with respect to the number of shares of Common Stock of the Company listed above (the “Shares”):

     I am aware that my investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. I am able, without impairing my financial condition, to hold the Shares for an indefinite period and to suffer a complete loss of my investment in the Shares.

     I represent and warrant to the Company that I am acquiring and will hold the Shares for investment for my account only, and not with a view to, or for resale in connection with, any “distribution” of the Shares within the meaning of the Securities Act of 1933 (the “Securities Act”) or the similar laws of any state or foreign jurisdiction.

     I understand that the Shares have not been registered under the Securities Act, the Securities Exchange Act of 1934, or under the similar laws of any state or foreign jurisdiction (collectively, “Applicable Securities Laws”) by reason of a specific exemption therefrom and that the Shares must be held indefinitely, unless they are subsequently registered under the Applicable Securities Laws or I obtain an opinion of counsel (in form and substance satisfactory to the Company and its counsel) that registration is not required.

     I acknowledge that the Company is under no obligation to register the Shares under Applicable Securities Laws, except as provided in the Option Agreement or the Applicable Stockholders Agreement (as defined in the Plan).

     I am aware of the adoption of Rule 144 by the Securities and Exchange Commission under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions. These conditions may include (without limitation) that certain current public information about the issuer is available, that the resale occurs only after the holding period required by Rule 144 has been satisfied, that the sale occurs through an unsolicited “broker’s transaction” and that the amount of securities being sold during any three-month period does not exceed specified limitations. I understand that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future.

     I will not sell, transfer or otherwise dispose of the Shares in violation of the Plan, the agreement under which my right to acquire the Shares was granted, the Applicable Stockholders Agreement, Applicable Securities Laws, or the rules promulgated thereunder, including Rule 144 under the Securities Act.

     I acknowledge that I have received and had access to such information as I consider necessary or appropriate for deciding whether to invest in the Shares and that I had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the Shares.

     I acknowledge that the Shares will be subject to certain encumbrances, including, but not limited to, drag along rights in favor of certain stockholders of the Company, repurchase rights in favor of the Company and/or the Initial Investors, limitations on transfer, and other encumbrances set forth in the Applicable Stockholders Agreement, and Option Agreement, or described in the Company’s bylaws or certificate of incorporation in effect at such time as the Company or such other person elects to exercise its right.

     I acknowledge that I am acquiring the Shares subject to all other terms of the Plan, the Applicable Stockholders Agreement, the Stock Option Grant Notice, and the Option Agreement.

     I further agree that if required by the Company (or a representative of the underwriter(s)) in connection with the first underwritten registration of the offering of any equity securities of the Company under the Securities Act (or any underwritten registration of any securities of the Company prior to that time), or as otherwise may be required by the Applicable Stockholders Agreement, for a specified period of time, I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Shares or other securities of the Company held by me, and shall comply with such other restrictions on transfer as provided in the Option Agreement and the Plan. I further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to my Shares until the end of such period.

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     I agree, and as a condition of exercise if I am married I will obtain the agreement of my spouse, that prior to the effectiveness of the first underwritten registration of the Company’s equity securities under the Securities Act, I will not transfer any or all of the Shares unless pursuant to an exception provided in the Plan, the Applicable Stockholders Agreement, or this Option Agreement.

     I agree that as a condition to this exercise, the certificates evidencing the Shares shall remain in the physical custody of the Company or its designee at all times prior to the last to occur of (i) the date on which all contractual restrictions set forth in the Plan, the Applicable Stockholders Agreement, the Company’s Articles of Incorporation and/or bylaws, or in the documents evidencing the Option Agreement lapse, or (ii) the date on which all contractual requirements set forth in the Plan, the Applicable Stockholders Agreement, the Company’s Articles of Incorporation and/or bylaws, or in the documents evidencing the Option Agreement are satisfied. As a condition to this exercise I agree to execute three (3) copies of the Assignment Separate From Certificate (with date and number of Shares blank) substantially in the form attached to this Notice of Exercise as Attachment A, and two (2) copies of the Joint Escrow Instructions substantially in the form attached to this Notice of Exercise as Attachment B, and to deliver the same to the Company, along with such additional documents as the Company may require.

     I further acknowledge that all certificates representing any of the Shares subject to the provisions of my Option shall have endorsed thereon appropriate legends reflecting restrictions applicable to the Shares, including the Applicable Stockholders Agreement and/or Applicable Securities Laws.

     I agree to seek the consent of my spouse to the extent required by the Company to enforce the foregoing.

Very truly yours,

Attachments:

A. Form of Assignment Separate from Certificate

B. Form of Joint Escrow Instructions

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ATTACHMENT A

FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE

ASSIGNMENT SEPARATE FROM CERTIFICATE

     For Value Received and pursuant to that certain Stock Option Grant Notice and Option Agreement,                                         hereby sells, assigns and transfers unto                                                              (“Assignee”)                                          (                     ) shares of the Common Stock of Activant Group Inc. (“Shares”), standing in the undersigned’s name on the books of said corporation represented by Certificate No.                      herewith, and do hereby irrevocably constitute and appoint                                          as attorney-in-fact to transfer the said stock on the books of the within named issuer with full power of substitution in the premises. This Assignment Separate From Certificate may be used only in accordance with and subject to the terms and conditions of the Option Agreement and the Plan, in connection with the reacquisition or transfer of the Shares issued to the undersigned pursuant to the Option Agreement, and only to the extent that such Shares remain subject to the transferee’s rights to acquire the Shares and other restrictions applicable under the Option Agreement and the Plan.

Date:

Signature:

Print Name:

[Instruction: Please do not fill in any blanks other than the signature line. The purpose of this Assignment is to enable the Company to administer its rights set forth in the Award without requiring additional signatures on your part.]

ATTACHMENT B

FORM OF JOINT ESCROW INSTRUCTIONS

JOINT ESCROW INSTRUCTIONS

[Date]

Attn: General Counsel
Activant Group Inc.
c/o Activant Solutions Inc.
7683 Southfront Road
Livermore, CA 94551

Dear Sir/Madam:

     As Escrow Agent for both Activant Group Inc. (the “Company”), and the undersigned recipient of stock of the Company (“Recipient”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of the “Plan” and “Option Agreement” (as referenced in the Notice of Exercise to which this document is attached), in accordance with the following instructions:

     1. In the event that (i) certain stockholders of the Company exercise their drag-along rights, (ii) the Company exercises its repurchase rights, (iii) the Company exercises its rights to require that the Shares be contributed to a trust as set forth in Section 13(c) of the Plan, or (iv) the Company or any other Person exercises other contractual rights applicable to the Shares and in effect as of the date hereof, the Company or its assignee will give to Recipient and you a written notice specifying that the Shares of stock shall be transferred as described in the Plan, the Recipient’s Option Agreement, or other applicable governing documents. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

     At the closing, you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of Shares being transferred, and (c) to deliver same, together with the certificate evidencing the Shares of stock to be transferred, to the Company or other proper transferee.

     2. In the event that all applicable restrictions lapse, and when certain requirements are satisfied, the Company or its assignee will give to Recipient and you a written notice specifying that the appropriate number of Shares shall be transferred to the Recipient along with any cash or in-kind dividends declared subsequent to the date hereof and which relate to such Shares. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

     At the closing, you are directed to deliver a certificate evidencing the appropriate number of Shares, together with any cash or in-kind dividends declared subsequent to the date hereof and which relate to such Shares, to the Recipient.

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     3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing Shares of stock to be held by you hereunder and any additions and substitutions to said Shares as specified in the Stock Option Grant Notice or the Option Agreement. Recipient does hereby irrevocably constitute and appoint you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and to complete any transaction herein contemplated.

     4. This escrow shall terminate upon the date on which all contractual restrictions or requirements set forth in the Plan or in the documents evidencing the restrictions applicable to the Shares lapse or are satisfied as determined by the Company.

     5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you shall deliver all of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further obligations hereunder.

     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

     7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

     8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

     9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Stock Option Grant Notice or any documents or papers deposited or called for hereunder.

     10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

     11. You shall be entitled to employ such legal counsel, including but not limited to Simpson Thacher & Bartlett LLP, and other experts as you may deem necessary to advise you in connection with your obligations hereunder, and you may rely upon the advice of such counsel, and may pay such counsel reasonable compensation for such advice.

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     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be [Fill in Title of Escrow Agent] of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor or successors as his attorney-in-fact and agent to the full extent of your appointment.

     13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

     14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

     15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail (or upon deposit with another delivery service), with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ written notice to each of the other parties hereto:

Company:	Activant Group Inc.
	c/o Activant Solutions Inc.
	7683 Southfront Road
	Livermore, CA 94551
	Attn:
Recipient:
Escrow Agent:	[Name]
	Activant Group Inc.
	7683 Southfront Road
	Livermore, CA 94551
	Attn: General Counsel

     16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Notice of Exercise.

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     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Option Agreement, the Notice of Exercise and these Joint Escrow Instructions in whole or in part.

	Very truly yours,
	Activant Group Inc.
	By:
	Recipient
	[Participant’s Name]
Escrow Agent:
By:
Name:

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EX-10.23

(Canadian employees)

Exhibit 10.23

ACTIVANT GROUP INC.
STOCK OPTION GRANT NOTICE
2006 Stock Incentive Plan

     Activant Group Inc. (“Company”), pursuant to its 2006 Stock Incentive Plan (“Plan”), hereby grants to the “Optionholder” identified below a stock option (the “Option”) to purchase the number of shares (“ Shares”) of the Company’s Common Stock set forth below. This Option is subject to all of the terms and conditions as set forth herein and in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.

Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):	US $
Total Exercise Price:	US
Expiration Date:

Type of Grant:	Nonstatutory Stock Option
Exercise Schedule:	Same as Vesting Schedule.
Vesting Schedule:	- 20% of the Shares vest 12 months after the Vesting Commencement Date
	- 5% of the Shares vest on the last day of each three-month period thereafter over the next 48 months

Method of Payment Upon Exercise: Such methods as are set forth in Section 3 of the attached Option Agreement

Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice, the Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Option Agreement and the Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options previously granted and delivered to Optionholder under the Plan, and (ii) the following agreements only:

Other Agreements: The Option is also subject to the terms of [(1) the Employment Agreement dated as of [     ], between the Optionholder and the Company and (2)] the [Employee] Stockholders Agreement dated as of                         , 2006, executed by the stockholders of the Company.

ACTIVANT GROUP INC.		OPTIONHOLDER
By:
	Signature		Signature
Title:		Date:
Date:

Attachments: Option Agreement, 2006 Stock Incentive Plan, and Notice of Exercise

(Canadian employees)

ACTIVANT GROUP INC.
2006 STOCK INCENTIVE PLAN

OPTION AGREEMENT

          Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement, Activant Group Inc. (the “Company”) has granted you a stock option under its 2006 Stock Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not defined in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan. For the avoidance of doubt, the terms and conditions of the Grant Notice are a part of the Option Agreement, unless otherwise specified.

          The details and terms and conditions of this Option Agreement shall govern your Option, and shall replace any details and terms and conditions on the same matter set forth in the Plan:

          1. Vesting.

          (a) Subject to the limitations contained herein, your Option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. Notwithstanding any other provision of this Option Agreement or the Plan, in the event of an involuntary termination of Continuous Service, without Cause, the termination of Continuous Service shall be effective (and vesting shall cease) as of the date stated in the relevant notice of termination and, subject to applicable employment standards legislation, will not be extended by any common law notice period or other period of leave.

          (b) Notwithstanding any provision of this Option Agreement to the contrary, in the event of the consummation of a Change in Control of the Company, the Option shall, to the extent not then vested and not previously cancelled or terminated, accelerate and immediately become fully vested and exercisable; provided, however, that paragraph 11(b)(i)(1) of the Plan shall not be applicable with respect to the Option granted herein.

          2. Number of Shares and Exercise Price. The number of shares of Common Stock subject to your Option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for various adjustments in the Company’s equity capital structure, as provided in the Plan.

          3. Method of Payment.

          (a) Payment of the exercise price is due in full upon exercise of all or any part of your Option. You may elect to make payment of the exercise price in cash or by check. Alternatively, in the Company’s sole discretion at the time your Option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of

(Canadian employees)

Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. Notwithstanding the terms of the previous sentence, you may not be permitted to exercise your Option pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board if such exercise would violate the provisions of Section 402 of the Sarbanes-Oxley Act of 2002.

          (b) The Company may permit you to make payment of the exercise price, in whole or in part, in shares of Common Stock having a Fair Market Value equal to the amount of the aggregate exercise price or such portion thereof, as applicable; provided, however, that shares of Common Stock obtained through any Stock Award from the Company of its Affiliates may not be used to make such a payment and provided that you must satisfy all such requirements as may be imposed by the Board including without limitation that you have held such shares for not less than six months (or such other period as established from time to time by the Board in order to avoid a supplemental charge to earnings for financial accounting purposes).

          (c) Where you are permitted to pay the exercise price of an Option and/or taxes relating to the exercise of an Option by delivering shares of Common Stock, you may, subject to procedures satisfactory to the Board, satisfy such delivery requirement by presenting proof that you are the Beneficial Owner of such shares of Common Stock, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of shares from the Shares acquired by the exercise of the Option.

          4. Whole Shares. You may exercise your Option only for whole shares of Common Stock.

          5. Securities Law Compliance. Notwithstanding anything to the contrary contained herein, you may not exercise your Option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your Option must also comply with other Applicable Laws governing your Option, and you may not exercise your Option if the Company determines that such exercise would not be in material compliance with Applicable Law.

          6. Term. You may not exercise your Option before the commencement of its term on the Date of Grant or after its term expires. Subject to the provisions of the Plan and this Option Agreement, you may exercise all or any part of the vested portion of the Option at any time prior to the earliest to occur of:

          (a) the date on which your Continuous Service is terminated for Cause;

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(Canadian employees)

          (b) three (3) months after the termination of your Continuous Service other than a termination for Cause or by reason of your death or Disability, subject to paragraph 1(a), above;

          (c) twelve (12) months after the termination of your Continuous Service due to your Disability or death; or

          (d) the Expiration Date.

          (e) Extension if Exercise is Prevented. Notwithstanding the foregoing, if the exercise of your Option is prevented within the applicable time periods set forth in Sections 6(b) or (c) as a result of the operation of Section 5 above, or Section 6(h) or Section 13 of the Plan, your Option shall not expire before the date that is thirty (30) days after the date that you are notified by the Company that the Option is again exercisable, but in any event no later than the Expiration Date indicated in your Grant Notice.

          7. Exercise Procedures.

          (a) Subject to Section 5 above and other relevant terms and conditions of the Plan and this Option Agreement, you may exercise the vested portion of your Option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Company’s Chief Financial Officer, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then reasonably require.

          (b) By exercising your Option, you agree that, as a condition to any exercise of your Option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your Option, or (2) other applicable events.

          (c) By exercising your Option, you agree that the Company (or a representative of the underwriter(s)) may, in connection with the first underwritten registration of the offering of any equity securities of the Company under the Securities Act (or any underwritten registration of any securities of the Company prior to that time), or as otherwise required pursuant to the terms of the Applicable Stockholders Agreement, require that for a specified period of time, you not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, or may impose such other restrictions on transfer to the same extent as the Initial Investors. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to your shares of Common Stock until the end of such period. The underwriters of the Company’s stock are intended third party

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(Canadian employees)

beneficiaries of this Section 7(c) and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

          (d) As a condition of any exercise of your Option, you and your spouse, if any, agree that prior to the effectiveness of the first underwritten registration of the Company’s equity securities under the Securities Act, you shall not transfer any or all of the shares of Common Stock purchased upon exercise of your Option unless pursuant to the terms of the Applicable Stockholders Agreement.

          8. Documents Governing Issued Common Stock. Shares of Common Stock that you acquire upon exercise of your Option are subject to the terms of the Plan, the Applicable Stockholders Agreement, the Company’s bylaws, the Company’s certificate of incorporation, any agreement relating to such shares of Common Stock to which you become a party, or any other similar document. You should ensure that you understand your rights and obligations as a stockholder of the Company prior to the time that you exercise your Option.

          9. Limitations on Transfer of Options. You may transfer all or any portion of your vested Option to a trust or custodianship, the beneficiaries of which may include only you, your spouse or your lineal descendants (including children by adoption and step children) (an “Eligible Transferee”); provided that such Eligible Transferee shall have executed a transfer agreement in a form determined by the Company to ensure such Eligible Transferee is subject to the same restrictions on that portion of the Option transferred to such Eligible Transferee as if the transfer had not occurred. You should consult a tax advisor before transferring any portion of your vested Option.

          10. Option Not a Service Contract. Your Option is not an employment contract, and nothing in your Option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ or service of the Company or any of its Affiliates, or of the Company or any of its Affiliates to continue your employment. In addition, nothing in your Option shall obligate the Company or any of its Affiliates, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant or otherwise for the Company or any of its Affiliates.

          11. Withholding Obligations.

          (a) At the time you exercise your Option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company and Applicable Law, including, but not limited to, Section 402 of the Sarbanes-Oxley Act of 2002) any sums required to satisfy the federal, state, local and foreign tax (including Canadian federal and provincial income taxes) and tax withholding obligations of the Company or any of its Affiliates, which arise in connection with your Option.

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(Canadian employees)

          (b) You may not exercise your Option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied or appropriate arrangements (acceptable to the Company) are made therefor. You hereby authorize the Company to sell or arrange for the sale of any Shares necessary to meet any applicable tax withholding obligations and/or you undertake to pay the Company and/or any Affiliate all amounts necessary to satisfy any such tax withholding obligations.

          12. Notices. Any notices provided for in your Option or the Plan shall be given in writing and shall be deemed given and effective upon the occurrence of (a) the signing by the recipient of an acknowledgement of receipt form accompanying delivery through the U.S. mail sent by certified mail, return receipt requested, (b) delivery to the recipient’s address by overnight delivery (e.g., FedEx, UPS, or DHL) or other commercial delivery service, or (c) delivery in person or by personal courier.

          13. Option Subject to Applicable Stockholders Agreement and Plan Document. Your Option and any shares of Common Stock acquired upon exercise of your Option are subject to the Applicable Stockholders Agreement. Your Option is also subject to all of the provisions of the Plan, the provisions of which are hereby made a part of your Option, and is further subject to all interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted pursuant to the Plan, to the extent not inconsistent with the terms of this Option Agreement.

          14. Miscellaneous.

          (a) It is the express wish of the parties that this Option Agreement and all documents relating thereto be drafted in the English language. Is est de la volonté expresse des parties que la présente Entente d’option d’achat d’action et tous les documents s’y rapportant sioent rédigés dans la langue anglaise.

          (b) You should consult a tax advisor before exercising this Option or disposing of the Shares acquired thereunder. The Company cannot provide tax advice to you and nothing in this Option Agreement or other communications provided to you may be so construed. You hereby acknowledge and agree that the ultimate liability for any and all tax, social insurance and payroll tax withholding (“Tax-Related Items”) is and remains your responsibility and liability, and that the Company and its Affiliates:

(i)	make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of the Option and the subsequent sale of the Shares acquired pursuant to such exercise; and
(ii)	do not commit to structure the terms of the grant or any aspect of the Option to yield any particular tax result or to reduce or eliminate your liability for Tax-Related Items.

          (c) You acknowledge and agree that you have reviewed your Option in its entirety, have had an opportunity to obtain the advice of counsel and your personal

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(Canadian employees)

tax advisor prior to executing and accepting your Option and fully understand all provisions of your Option.

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(Canadian employees)

NOTICE OF EXERCISE

Activant Group Inc.	Date of Exercise:
c/o Activant Solutions Inc.
7683 Southfront Road
Livermore, CA 94551

Ladies and Gentlemen:

     This constitutes notice under my Option that I elect to purchase the number of Shares for the price set forth below.

Option dated:
Number of Shares as to which Option is exercised:
Certificates to be issued in name of:
Total exercise price:	$
Cash payment delivered herewith:	$

     By this exercise, I agree (i) to execute or provide such additional documents as Activant Group Inc. (the “Company”) may reasonably require pursuant to the terms of this Notice of Exercise and the Company’s 2006 Stock Incentive Plan (the “Plan”) and (ii) to provide for the payment by me to the Company (in the manner designated by the Company) of the Company’s withholding obligation, if any, relating to the exercise of this Option.

     I hereby make the following certifications and representations with respect to the number of shares of Common Stock of the Company listed above (the “Shares”):

     I am aware that my investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. I am able, without impairing my financial condition, to hold the Shares for an indefinite period and to suffer a complete loss of my investment in the Shares.

     I represent and warrant to the Company that I am acquiring and will hold the Shares for investment for my account only, and not with a view to, or for resale in connection with, any “distribution” of the Shares within the meaning of the Securities Act of 1933 (the “Securities Act”) or the similar laws of any state or foreign jurisdiction.

     I understand that the Shares have not been registered under the Securities Act, the Securities Exchange Act of 1934, or under the similar laws of any state or foreign jurisdiction (collectively, “Applicable Securities Laws”) by reason of a specific exemption therefrom and that the Shares must be held indefinitely, unless they are subsequently registered under the

(Canadian employees)

Applicable Securities Laws or I obtain an opinion of counsel (in form and substance satisfactory to the Company and its counsel) that registration is not required.

     I acknowledge that the Company is under no obligation to register the Shares under Applicable Securities Laws, except as provided in the Option Agreement or the Applicable Stockholders Agreement (as defined in the Plan).

     I am aware of the adoption of Rule 144 by the Securities and Exchange Commission under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions. These conditions may include (without limitation) that certain current public information about the issuer is available, that the resale occurs only after the holding period required by Rule 144 has been satisfied, that the sale occurs through an unsolicited “broker’s transaction” and that the amount of securities being sold during any three-month period does not exceed specified limitations. I understand that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future. I further understand that any resale of the Shares will be required to be made in compliance with Applicable Securities Laws of Canada and that I may be required by the Company to obtain an opinion of counsel (in form and substance satisfactory to the Company) that such resale may be made pursuant to an applicable exemption under Applicable Securities Laws of Canada.

     I will not sell, transfer or otherwise dispose of the Shares in violation of the Plan, the agreement under which my right to acquire the Shares was granted, the Applicable Stockholders Agreement, Applicable Securities Laws, or the rules promulgated thereunder, including Rule 144 under the Securities Act.

     I acknowledge that I have received and had access to such information as I consider necessary or appropriate for deciding whether to invest in the Shares and that I had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the Shares. I confirm that I received my Option and I am electing to purchase Shares voluntarily, and that I have not been induced to accept my Option or exercise my Option by expectation of my employment or continued employment with the Company, any Affiliate, or any related entity, within the meaning of Applicable Securities Laws.

     I acknowledge that the Shares will be subject to certain encumbrances, including, but not limited to, drag along rights in favor of certain stockholders of the Company, repurchase rights in favor of the Company and/or the Initial Investors, limitations on transfer, and other encumbrances set forth in the Applicable Stockholders Agreement, and Option Agreement, or described in the Company’s bylaws or certificate of incorporation in effect at such time as the Company or such other person elects to exercise its right.

     I acknowledge that I am acquiring the Shares subject to all other terms of the Plan, the Applicable Stockholders Agreement, the Stock Option Grant Notice, and the Option Agreement.

     I further agree that if required by the Company (or a representative of the underwriter(s)) in connection with the first underwritten registration of the offering of any equity securities of the Company under the Securities Act (or any underwritten registration of any securities of the Company prior to that time), or as otherwise may be required by the Applicable Stockholders Agreement, for a specified period of time, I will not sell, dispose of, transfer, make any short sale

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(Canadian employees)

of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Shares or other securities of the Company held by me, and shall comply with such other restrictions on transfer as provided in the Option Agreement and the Plan. I further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to my Shares until the end of such period.

     I agree, and as a condition of exercise if I am married I will obtain the agreement of my spouse, that prior to the effectiveness of the first underwritten registration of the Company’s equity securities under the Securities Act, I will not transfer any or all of the Shares unless pursuant to an exception provided in the Plan, the Applicable Stockholders Agreement, or this Option Agreement.

     I agree that as a condition to this exercise, the certificates evidencing the Shares shall remain in the physical custody of the Company or its designee at all times prior to the last to occur of (i) the date on which all contractual restrictions set forth in the Plan, the Applicable Stockholders Agreement, the Company’s Articles of Incorporation and/or bylaws, or in the documents evidencing the Option Agreement lapse, or (ii) the date on which all contractual requirements set forth in the Plan, the Applicable Stockholders Agreement, the Company’s Articles of Incorporation and/or bylaws, or in the documents evidencing the Option Agreement are satisfied. As a condition to this exercise I agree to execute three (3) copies of the Assignment Separate From Certificate (with date and number of Shares blank) substantially in the form attached to this Notice of Exercise as Attachment A, and two (2) copies of the Joint Escrow Instructions substantially in the form attached to this Notice of Exercise as Attachment B, and to deliver the same to the Company, along with such additional documents as the Company may require.

     I further acknowledge that all certificates representing any of the Shares subject to the provisions of my Option shall have endorsed thereon appropriate legends reflecting restrictions applicable to the Shares, including the Applicable Stockholders Agreement and/or Applicable Securities Laws.

     I agree to seek the consent of my spouse to the extent required by the Company to enforce the foregoing.

Very truly yours,

Attachments:

A.	Form of Assignment Separate from Certificate
B.	Form of Joint Escrow Instructions

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(Canadian employees)

ATTACHMENT A

FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE

(Canadian employees)

ASSIGNMENT SEPARATE FROM CERTIFICATE

     For Value Received and pursuant to that certain Stock Option Grant Notice and Option Agreement,                      hereby sells, assigns and transfers unto                                  (“Assignee”)                      (                    ) shares of the Common Stock of Activant Group Inc. (“Shares”), standing in the undersigned’s name on the books of said corporation represented by Certificate No.                      herewith, and do hereby irrevocably constitute and appoint                                  as attorney-in-fact to transfer the said stock on the books of the within named issuer with full power of substitution in the premises. This Assignment Separate From Certificate may be used only in accordance with and subject to the terms and conditions of the Option Agreement and the Plan, in connection with the reacquisition or transfer of the Shares issued to the undersigned pursuant to the Option Agreement, and only to the extent that such Shares remain subject to the transferee’s rights to acquire the Shares and other restrictions applicable under the Option Agreement and the Plan.

Date:

Signature:

Print Name: 

[Instruction: Please do not fill in any blanks other than the signature line. The purpose of this Assignment is to enable the Company to administer its rights set forth in the Award without requiring additional signatures on your part.]

(Canadian employees)

ATTACHMENT B

FORM OF JOINT ESCROW INSTRUCTIONS

JOINT ESCROW INSTRUCTIONS

[Date]

Attn: General Counsel
Activant Group Inc.
c/o Activant Solutions Inc.
7683 Southfront Road
Livermore, CA 94551

Dear Sir/Madam:

     As Escrow Agent for both Activant Group Inc. (the “Company”), and the undersigned recipient of stock of the Company (“Recipient”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of the “Plan” and “Option Agreement” (as referenced in the Notice of Exercise to which this document is attached), in accordance with the following instructions:

     1. In the event that (i) certain stockholders of the Company exercise their drag-along rights, (ii) the Company exercises its repurchase rights, (iii) the Company exercises its rights to require that the Shares be contributed to a trust as set forth in Section 13(c) of the Plan, or (iv) the Company or any other Person exercises other contractual rights applicable to the Shares and in effect as of the date hereof, the Company or its assignee will give to Recipient and you a written notice specifying that the Shares of stock shall be transferred as described in the Plan, the Recipient’s Option Agreement, or other applicable governing documents. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

     At the closing, you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of Shares being transferred, and (c) to deliver same, together with the certificate evidencing the Shares of stock to be transferred, to the Company or other proper transferee.

     2. In the event that all applicable restrictions lapse, and when certain requirements are satisfied, the Company or its assignee will give to Recipient and you a written notice specifying that the appropriate number of Shares shall be transferred to the Recipient along with any cash or in-kind dividends declared subsequent to the date hereof and which relate to such Shares. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

     At the closing, you are directed to deliver a certificate evidencing the appropriate number of Shares, together with any cash or in-kind dividends declared subsequent to the date hereof and which relate to such Shares, to the Recipient.

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     3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing Shares of stock to be held by you hereunder and any additions and substitutions to said Shares as specified in the Stock Option Grant Notice or the Option Agreement. Recipient does hereby irrevocably constitute and appoint you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and to complete any transaction herein contemplated.

     4. This escrow shall terminate upon the date on which all contractual restrictions or requirements set forth in the Plan or in the documents evidencing the restrictions applicable to the Shares lapse or are satisfied as determined by the Company.

     5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you shall deliver all of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further obligations hereunder.

     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

     7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

     8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

     9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Stock Option Grant Notice or any documents or papers deposited or called for hereunder.

     10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

     11. You shall be entitled to employ such legal counsel, including but not limited to Simpson Thacher & Bartlett LLP, and other experts as you may deem necessary to advise you in connection with your obligations hereunder, and you may rely upon the advice of such counsel, and may pay such counsel reasonable compensation for such advice.

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     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be [Fill in Title of Escrow Agent] of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor or successors as his attorney-in-fact and agent to the full extent of your appointment.

     13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

     14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

     15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail (or upon deposit with another delivery service), with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ written notice to each of the other parties hereto:

Company:	Activant Group Inc.
	c/o Activant Solutions Inc.
	7683 Southfront Road
	Livermore, CA 94551
	Attn:
Recipient:
Escrow Agent:	[Name]
	Activant Group Inc.
	7683 Southfront Road
	Livermore, CA 94551
	Attn: General Counsel

     16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Notice of Exercise.

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     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Option Agreement, the Notice of Exercise and these Joint Escrow Instructions in whole or in part.

Very truly yours,

Activant Group Inc.

By:

Recipient

[Participant’s Name]

Escrow Agent:

By:

Name:

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EX-10.25

Exhibit 10.25

PURPOSE

Activant Solutions’ Incentive Bonus Plan (“the Plan”) provides incentives to participants to assist the company in achieving its financial goals.

PLAN PERIOD

The Plan Period is consistent with the Company’s fiscal year (October 1 — September 30). Each Plan Period stands alone.

ELIGIBILITY

The Target Incentive Compensation opportunities (“TICs”) and jobs / job levels covered by the Plan are reviewed and approved by the Chief Executive Officer. Employees in approved jobs / levels are eligible to participate in the Plan. To become an active participant in the Plan (“Plan Participant”), candidates must be regular, full-time employees without concurrent participation in another Company incentive plan, be recommended by their management for participation, and be approved by the Senior Vice President of Human Resources. Participation, or changes in participation such as a change in TIC, will take effect with the start of the fiscal quarter immediately following the associated status change.

Example 1 — Date Participation Begins

Employee receives a promotion effective February 1 and because of the promotion is now in an eligible job and job level to participate in the Plan. If approved, the earliest date the employee would become a Plan Participant is April 1 — the beginning of fiscal Q3.

Any participant who has a change in their plan target (including a reduction or removal from the Plan) with an effective date after the beginning of a quarter will have that change impact their IB calculation at the beginning of the next quarter.

Example 2 — Date TIC Change is Effective

Plan Participant has a TIC increase of $2,000 with an effective date of November 1. Plan calculations will not be affected by the change until the quarter that begins January 1.

FINANCIAL COMPONENTS

Company Performance Targets:

•	Quarterly and annual adjusted EBITDA
	Earnings Before Interest, Taxes, Depreciation, and Amortization as defined by Activant’s existing bank loan agreements, referred to in this document as “adjusted EBITDA”.
•	Quarterly and annual revenue growth
	Pre-tax income from the sale of goods and services.

QUARTERLY ACHIEVEMENT AWARDS

For fiscal quarters 1 — 3, a Quarterly Achievement Award may be made, at the Company’s discretion, when minimum performance thresholds for EBITDA and revenue growth have been met. The payment amount

IB Plan Document — FY 2007 — Corporate

will capped at 25% of the participant’s Target Annual Incentive for that quarter and will take year-to-date, as well as quarterly, performance into account.

FINAL PLAN PAYMENT (includes Q4 quarterly award & annual overachievement, if applicable)
After the end of the Plan Period, audited annual financial results are used to determine a participant’s Target Annual Award, including any “overachievement,” given the company’s actual performance for the fiscal year. This Target Annual Award is then compared to the cumulative total of Quarterly Achievement Award payments (if any) made over the Plan Period and if the total of actual year-to-date Quarterly Achievement Award payments is:

less than the Target Annual Award, Plan Participants will receive the difference as a Final Plan Payment.

more than the Target Annual Award, no further payments are made and the Plan is considered closed for the Plan Period.

At its discretion, the Company may choose to split the Final Plan Payment into a Q4 quarterly payment and an Overachievement Plan Payment. The Overachievement Plan Payment will be computed as discussed above, however, the additional quarterly payment will be factored into the actual year-to-date IB payment total for determining the overachievement payment.

Note: Participants removed from the Plan as of Q4 or earlier are ineligible to receive a Final Plan Payment.

See page 3, “Calculation Examples” for an illustration of how the Final Plan Payment is determined.

IMPORTANT NOTES:

EXCEPTIONS TO ANY PLAN PROVISION IN THIS DOCUMENT REQUIRE SPECIFIC APPROVAL BY THE SENIOR VICE
PRESIDENT OF HUMAN RESOURCES.

There is no vested entitlement to any bonus and no allowance will be made for factors beyond the control of Plan Participants that either adversely or favorably affect the Plan’s performance. Bonus payments are made at the sole discretion of the Chief Executive Officer (subject to authorization by the Board of Directors or the Compensation Committee of the Board of Directors). Plan participants are advised not to assume they will receive any payments under the Plan in advance of any such payment; target awards represent “pay-at-risk” and as such should not be prospectively relied on to meet financial commitments. Incentive bonus plans and payment terms, including individual participation and eligibility for payment, may be changed at any time, retroactively or prospectively, with or without prior notice, at the discretion of the Chief Executive Officer and all Company incentive plans require review & approval by the Chief Executive Officer. No statement, expressed or implied, or any other feature of the Plan affects the employment-at-will status of Plan Participants.

IB Plan Document — FY 2007 — Corporate

CALCULATION EXAMPLES

Example 3 — Final Plan Payment Calculation

Participant has a $10,000 Target Annual Incentive and has received a cumulative total of $6,875 in Quarterly Achievement Awards. Annual company performance resulted in revenue greater than $412.1M and achievement of 101% of the adjusted EBITDA target. The Final Plan Payment calculation would be:

Example 4 — Final Plan Payment Calculation, Less Than Full Year Participation

If Participation began Q2, the Target Annual Award is pro-rated to determine the Final Plan Payment:

IB Plan Document — FY 2007 — Corporate

EX-10.26

Exhibit 10.26

PURPOSE

Activant Solutions’ Incentive Bonus Plan (“the Plan”) provides incentives to participants to assist the company in achieving its financial goals.

PLAN PERIOD

The Plan Period is consistent with the company’s fiscal year (October 1 — September 30). Each Plan Period stands alone.

ELIGIBILITY

The Target Incentive Compensation opportunities (“TICs”) and jobs / job levels covered by the Plan are reviewed and approved by the Chief Executive Officer. Employees in approved jobs / levels are eligible to participate in the Plan. To become an active participant in the Plan (“Plan Participant”), candidates must be regular, full-time employees without concurrent participation in another Company incentive plan, be recommended by their management for participation, and be approved by the Senior Vice President of Human Resources. Participation, or changes in participation such as a change in TIC, will take effect with the start of the fiscal quarter immediately following the associated status change.

Example 1 — Date Participation Begins

Employee receives a promotion effective February 1 and because of the promotion is now in an eligible job and job level to participate in the Plan. If approved, the earliest date the employee would become a Plan Participant is April 1 — the beginning of fiscal Q3.

Any participant who has a change in their plan target (including a reduction or removal from the Plan) with an effective date after the beginning of a quarter will have that change impact their IB calculation at the beginning of the next quarter.

Example 2 — Date TIC Change is Effective

Plan Participant has a TIC increase of $2,000 with an effective date of November 1. Plan calculations will not be affected by the change until the quarter that begins January 1.

FINANCIAL COMPONENTS

Company Performance Targets:

•	Quarterly and annual adjusted EBITDA
	Earnings Before Interest, Taxes, Depreciation, and Amortization as defined by Activant’s existing bank loan agreements, referred to in this document as “adjusted EBITDA”.
•	Quarterly and annual revenue growth
	Pre-tax income from the sale of goods and services.

Business Unit Performance Targets— See Appendix For More Details

• Business Unit quarterly and annual adjusted EBITDA

• Business unit adjusted EBITDA, less corporate marketing, CIS allocation, general & administrative, and any data center allocation costs, and referred to as Business Unit Plan Contribution

• Business Unit quarterly and annual revenue growth

• Pre-tax income from the sale of goods and services.

Page 1 IB Plan Document — FY 2007 — BUSINESS UNIT — v020707.doc

QUARTERLY ACHIEVEMENT AWARDS

For fiscal quarters 1 — 3, a Quarterly Achievement Award payment may be made, at the Company’s discretion, when minimum performance thresholds for EBITDA and revenue growth have been met for either the Company (“Corporate Component”) or the Business Unit (“Business Unit Component”). After considering both quarterly and year-to-date performance, the Corporate and Business Unit Components are calculated and combined in proportions specific to the participant’s Business Unit, fiscal quarter, and Plan Period (specified in Appendix 3); each component is proportionally capped to a combined maximum quarterly payment of 25% of the participant’s Target Annual Award.

FINAL PLAN PAYMENT (includes Q4 quarterly & annual overachievement, if applicable)
After the end of the Plan Period, audited annual financial results are used to determine a participant’s Target Annual Award, including any “Overachievement,” given the Company’s and the Business Unit’s actual performance for the fiscal year. This Target Annual Award is then compared to the cumulative total of Quarterly Achievement Awards made over the Plan Period and if the total of actual year-to-date Quarterly Achievement Award payments is:

less than the Target Annual Award, Plan Participants will receive the difference as a Final Plan Payment.

more than the Target Annual Award, no further payments are made and the Plan is considered closed for the Plan Period.

At its discretion, the Company may choose to split the Final Plan Payment into a Q4 Quarterly Achievement Award Payment and an Overachievement Plan Payment. The Overachievement Plan Payment will be computed as discussed above, however, the additional quarterly payment will be factored into the actual year-to-date IB payment total for determining the overachievement payment. Note: Participants removed from the Plan as of Q4 or earlier are ineligible to receive a Final Plan Payment.

Example 3 — Final Plan Payment Calculation, Less Than Full Year Participation

If Participation began Q2, the Target Annual Award is pro-rated to determine the Final Plan Payment.:

IMPORTANT NOTES: EXCEPTIONS TO ANY PLAN PROVISION IN THIS DOCUMENT REQUIRE SPECIFIC APPROVAL BY THE SENIOR VICE PRESIDENT OF HUMAN RESOURCES. There is no vested entitlement to any bonus and no allowance will be made for factors beyond the control of Plan Participants that either adversely or favorably affect the Plan’s performance. Bonus payments are made at the sole discretion of the Chief Executive Officer (subject to authorization by the Board of Directors or the Compensation Committee of the Board of Directors). Plan participants are advised not to assume they will receive any payments under the Plan in advance of any such payment; target awards represent “pay-at-risk” and as such should not be prospectively relied on to meet financial commitments. Incentive bonus plans and payment terms, including individual participation and eligibility for payment, may be changed at any time, retroactively or prospectively, with or without prior notice, at the discretion of the Chief Executive Officer and all Company incentive plans require review & approval by the Chief Executive Officer. No statement, expressed or implied, or any other feature of the Plan affects the employment-at-will status of Plan Participants.

Page 2 IB Plan Document — FY 2007 — BUSINESS UNIT — V020707.doc

EX-10.27

Exhibit 10.27

Activant
Executive Severance Plan

Amended and Restated
Effective as of November 1, 2007

Table of Contents

			Page
Article I — Definitions and Construction
1.1	Definitions			1
	(1)	Base Pay		1
	(2)	Board		1
	(3)	Cause		1
	(4)	COBRA		2
	(5)	Company		2
	(6)	Effective Date		2
	(7)	Eligible Employee		2
	(8)	Employer		2
	(9)	ERISA		2
	(10)	Participant		2
	(11)	Participating Entity		2
	(12)	Plan		2
	(13)	Plan Administrator		2
	(14)	Qualified Termination		2
	(15)	Severance Pay		2
	(16)	Severance Benefit		3
	(17)	Target Incentive Bonus		3
1.2	Number and Gender			3
1.3	Headings			3
Article II — Participation
2.1		Eligibility		3
2.2		Commencement of Participation		3
2.3		Termination of Participation		3
2.4		Resumption of Participation		3
Article III — Severance Benefits
3.1		Eligibility for Severance Benefit		4
3.2		Severance Benefit		4
3.3		Offset for Other Severance Payments		5
3.4		Release and Full Settlement		5
Article IV — Benefit Claims Procedure
4.1		Benefit Claims Procedure		5
4.2		Review of Denied or Modified Claims		6
4.3		Exhaustion of Administrative Remedies		7

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		Page
Article V — Funding of Plan
5.1	Funding of Plan		8
5.2	No Participant Contributions		8
Article VI — Administration of Plan
6.1	Plan Administrator		8
6.2	Right to Delegate		8
6.3	Discretion to Interpret Plan		8
6.4	Powers and Duties		8
6.5	Expenses		9
6.6	Indemnification		9
Article VII — Amendment and Termination
7.1	Right to Amend Plan		9
7.2	Right to Terminate Plan		10
7.3	Effect of Amendment or Termination		10
Article VIII Miscellaneous Provisions
8.1	No Guarantee of Employment		10
8.2	Payments to Minors, and Incompetents		10
8.3	No Vested Right to Benefits		11
8.4	Nonalienation of Benefits		11
8.5	Unknown Whereabouts		11
8.6	Other Participating Entities		11
8.7	Jurisdiction		12
8.8	Severability		12
8.9	Notice and Filing		12
8.10	Plan Year		12
8.11	Incorrect Information, Fraud, Concealment, or Error		12
8.12	Withholding of Taxes and Other Deductions		12

Appendix A (Specifically Designated Plan Participants)

ii

Activant Executive Severance Plan

WITNESSETH:

     WHEREAS, Activant Solutions Inc. (the “Company”) wishes to provide severance benefits to certain of its employees upon the occurrence of certain involuntary terminations of employment;

     NOW, THEREFORE, the Activant Executive Severance Plan which was originally adopted, effective January 1, 2005 is hereby amended and restated in its entirety as set forth in this document, effective as of November 1, 2007:

I.

Definitions and Construction

     1.1 Definitions. Where the following capitalized words and phrases appear in the Plan, each has the respective meaning set forth below, unless the context clearly indicates to the contrary.

          (1) Base Pay: The actual base rate of compensation paid by the Employer to such Participant, including, as applicable, all wages, salaries, fees, and other amounts received in cash or in kind, and including amounts to which such Participant could have received in cash had he not elected to contribute to an employee benefit plan maintained by the Employer, but excluding commissions, bonuses, added premiums, allowables, employee benefits, deferred compensation, perquisites provided by the Employer, or other supplemental or incentive compensation, and determined as of the date of such Participant’s Qualified Termination

          (2) Board: The Board of Directors of the Company.

          (3) Cause: Either (a) “cause” as defined in the Participant’s employment agreement or (b) in the absence of such an agreement or such a definition, a determination by the Plan Administrator that the Participant (i) has engaged in personal dishonesty, willful violation of any law, rule, or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty involving personal profit, (ii) is unable to satisfactorily perform or has failed to satisfactorily perform Participant’s duties and responsibilities for the Employer or any Employer affiliate, (iii) has been convicted of, or plead nolo contendere to, any felony or a crime involving moral turpitude, (iv) has engaged in negligence or willful misconduct in the performance of his or her duties, including but not limited to willfully refusing without proper legal reason to perform Participant’s duties and responsibilities, (v) has materially breached any corporate policy or code of conduct established by the Employer or any Employer affiliate as such policies or codes may be adopted from time to time, (vi) has violated the terms of any confidentiality, nondisclosure, intellectual property, non-solicitation, non-competition, proprietary information and inventions, or any other agreement between Participant and the Employer related to Participant’s employment, or (vii) has engaged in conduct that is likely to have a deleterious effect on the Employer or any Employer affiliate or its legitimate business interests, including but not limited to its goodwill and public image.

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          (4) COBRA: The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

          (5) Company: Activant Solutions Inc.

          (6) Effective Date: The effective date of this amended and restated Plan is November 1, 2007.

          (7) Eligible Employee: Each employee of the Employer who is (i) either a Senior Vice President, Executive Vice President or Vice President (each as designated by the Employer) of the Employer, or (ii) another senior executive level employee of the Employer who is specifically designated as an Eligible Employee by and in the discretion of the Plan Administrator and listed on Appendix A, as it may be amended from time to time (hereinafter referred to as “Specially Designated Participant”), except that “Eligible Employee” does not include the Chief Executive Officer of the Company.

          (8) Employer: The Company and each Participating Entity.

          (9) ERISA: The Employee Retirement Income Security Act of 1974, as amended.

          (10) Participant: Each Eligible Employee who is participating in the Plan in accordance with Article II.

          (11) Participating Entity: Each subsidiary or affiliate of the Company that has been designated as a participating entity pursuant to Section 8.6.

          (12) Plan: This Activant Executive Severance Plan, as amended from time to time.

          (13) Plan Administrator: The Chief Executive Officer of the Company.

          (14) Qualified Termination: An involuntary termination of a Participant’s employment with the Employer, which is wholly initiated by the Employer and (i) is not a termination for Cause; (ii) is not a termination of employment as a result of such Participant’s death or disability; or (iii) is not a termination of employment with the Employer occurring as a result of or in connection with the sale or other divestiture of the Employer or the sale or other divestiture by the Employer of a division, subsidiary, assets, or other entity or business segment if such Participant continues employment, or is offered continued employment, with the acquirer of the Employer or such division, subsidiary, assets, or other entity or business segment within 30 days of such sale or divestiture and the terms of such continued employment (or offer of continued employment) do not require either (A) employment at a job site over 50 miles from such Participant’s job site immediately prior to such sale or divestiture or (B) a reduction of over 10% in the Base Pay immediately prior to such sale or divestiture.

          (15) Severance Pay: The amount of Base Pay and Target Incentive Bonus payable to a Participant as a Severance Benefit in accordance with Article III.

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          (16) Severance Benefit: A benefit payable under the Plan in accordance with Article III.

          (17) Target Incentive Bonus: The annualized target incentive bonus payable by the Employer to such Participant under the terms of the Employer’s incentive bonus program, as such program may be amended from time to time, in effect as of the date of such Participant’s Qualified Termination.

     1.2 Number and Gender. Wherever appropriate herein, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular. The masculine gender, where appearing in the Plan, will be deemed to include the feminine gender.

     1.3 Headings. The headings of Articles and Sections herein are included solely for convenience, and, if there is any conflict between such headings and the text of the Plan, the text will control. All references to Articles, Sections, Subsections, and Clauses are to this document unless otherwise indicated.

II.

Participation

     2.1 Eligibility. Each Eligible Employee (and only such individual) is eligible to become a Participant in the Plan.

     2.2 Commencement of Participation. Each Eligible Employee who is employed on the Effective Date will become a Participant on the Effective Date. Each other Eligible Employee will become a Participant on the date he or she becomes an Eligible Employee. Any-Eligible Employee whose eligibility is based on being named a Specially Designated Participant by the Plan Administrator, will become a Participant only upon such designation by the Plan Administrator.

     2.3 Termination of Participation. An Eligible Employee who has become a Participant will cease to be a Participant as of the earliest to occur of (1) the date such Participant is no longer an Eligible Employee, (2) with respect to Specially Designated Participants, the termination of participation date designated by the Plan Administrator in his discretion and communicated to affected individual prior to the effective date of termination of participation, or (3) the effective date of termination of the Plan.

     2.4 Resumption of Participation. An individual who ceases to be a Participant in accordance with Clause (1) or (2) of Section 2.3 will again become a Participant upon (and only upon) his or her again becoming an Eligible Employee and, if required, being named by the Plan Administrator as a Specially Designated Participant.

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III.

Severance Benefits

     3.1 Eligibility for Severance Benefit. Subject to the remaining Sections of this Article, a Participant will be eligible to receive a Severance Benefit if (and only if) such Participant’s employment with the Employer is terminated while he is a Participant and such termination is a Qualified Termination.

     3.2 Severance Benefit.

          3.2.1 Subject to Subsections 3.2.2 and 3.2.3, Section 3.3, and Section 3.4, a Participant who becomes eligible under Section 3.1 will be entitled to receive a “Severance Benefit” as follows:

          A. Senior Vice Presidents/Executive Vice Presidents.

          With respect to each Participant whose job position is designated by the Employer as a Senior Vice President or Executive Vice President, immediately prior to his Qualified Termination, his Severance Benefit will consist of (i) Severance Pay equal to nine (9) months of such Participant’s Base Pay and Target Incentive Bonus (as in effect on the date of the Participant’s Qualified Termination); and (ii) nine (9) months of COBRA premiums, assuming eligibility for and timely election of COBRA.

          B. Vice Presidents and Specifically Designated Participants.

          With respect to Vice Presidents and Specifically Designated Participants, Severance Benefits will consist of (i) Severance Pay equal to six (6) months of such Participant’s Base Pay and Target Incentive Bonus (as in effect on the date of the Participant’s Qualified Termination); and (ii) six (6) months of COBRA premiums, assuming eligibility for and timely election of COBRA.

          3.2.2 All Severance Pay benefits are subject to applicable withholdings and shall be paid as soon as administratively feasible after the receipt of an executed release and the expiration of any applicable rescission period, as required under Section 3.4, either in a single lump sum or in accordance with the Employer’s normal payroll procedures for the period of Severance Pay, as determined by the Plan Administrator in its sole discretion. Participants will be notified whether Severance Pay will be paid in a lump sum or in accordance with the Employer’s normal payroll procedures.

          3.2.3 This Plan is intended to meet the short term deferral exception and/or be a separation pay plan due to an involuntary separation from service under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1 (b)(9)(iii) and therefore exempt from Code Section 409A. Plan provisions to the contrary notwithstanding, in no event will Severance Pay (in excess of any amount that constitutes a short term deferral under Code Section 409A) payable under the Plan to a Participant, exceed the lesser of (i) twice the annual rate of compensation of such Participant for the calendar year immediately preceding the calendar year during which his Qualified Termination occurred (adjusted for any increase during that year that was expected to continue indefinitely if the Participant had not had a Qualified Termination) or (ii) the maximum amount

4

that may be taken into account under a qualified plan pursuant to Code Section 401(a)(17) for the year in which the Participant has a Qualified Termination. In no event will Severance Pay be paid, later then the last day of the second calendar year following the year of the Participant’s Qualified Termination.

     3.3 Offset for Other Severance Payments. The amount of the Severance Benefit determined in Section 3.2 for any Participant upon a Qualified Termination will be offset and reduced in any manner deemed appropriate by the Plan Administrator for any and all amounts paid or payable to such Participant on account of the same termination of employment under (1) any employment agreement or individual severance agreement to which the Participant is a party or (2) any applicable law.

     3.4 Release and Full Settlement. As a condition to the receipt of any Severance Benefit hereunder and notwithstanding any provision of the Plan to the contrary, a Participant will be required to execute a release in the form established by the Plan Administrator releasing the Plan, the Plan Administrator, the Plan fiduciaries, the Employer’s employee benefit plans, the Employer, the Employer’s affiliates, and their shareholders, partners, officers, directors, employees, and agents from any and all claims and from any and all causes of action of any kind or character, including, but not limited to, all claims or causes of action arising out of or in connection with such Participant’s employment with the Employer, the termination of such employment, or any actions or omissions occurring during such employment. The performance of the Employer’s and the Plan’s obligations hereunder and the receipt by such Participant of any benefits provided hereunder will constitute full settlement of all such claims and causes of action.

IV.

Benefit Claims Procedure

     4.1 Benefit Claims Procedure.

          4.1.1 Any Participant who is determined by the Plan Administrator to be entitled to a Severance Benefit under the Plan is not required to file a claim for benefits. In the event an individual (1) does not receive a benefit but believes he or she is entitled to one or (2) receives a benefit but believes he or she is entitled to a greater amount, such individual or his or her representative (the “Claimant”) may file with the Plan Administrator a written claim for such benefit, which claim must be filed within 60 days of either the date upon which such individual received a benefit that he or she felt was insufficient or, if later, the date upon which occurred the event that such individual believes entitled him or her to a benefit. In connection with the submission of such claim, the Claimant may examine the Plan and any other relevant documents relating to the claim and may submit written comments relative to the claim to the Plan Administrator coincident with the filing of the claim, and the Plan Administrator may require additional information to be furnished in connection with such claim. If a Claimant fails to timely file a claim for benefits in accordance with this Subsection, such individual loses his or her right to make a claim under the Plan.

          4.1.2 If (and only if) a Claimant timely files a claim in accordance with Subsection 4.1.1, the Plan Administrator will grant, modify, or deny such claim. If such claim is granted, the Claimant will be given the benefit so claimed. In any case in which a claim for Plan

5

benefits is denied or modified, the Plan Administrator will furnish written notice to the Claimant within 90 days after such claim is filed with the Plan Administrator; provided, however, that if the need for additional information relating to such claim necessitates an extension of the 90-day period, the Claimant will be informed in writing prior to the end of the initial 90-day period of the need for an extension of time, and written notice of the disposition of such claim will be provided to the Claimant within 180 days after the date the claim is filed with the Plan Administrator. The extension notice will indicate the special circumstances requiring the extension of time and the date by which a decision will be made. If the extension is due to the Claimant’s failure to submit information necessary to review the claim, the notice of extension will afford the Claimant 45 days to provide the required information, and the Plan Administrator’s deadline to provide notice of disposition of the claim will be tolled from the date the Plan Administrator sends the notice of extension to the earlier of (1) the date the Plan Administrator receives the requested information or (2) the expiration of the 45-day period afforded to the Claimant to provide the requested information. If the Claimant fails to provide the requested information by the expiration of such 45-day period, the benefit determination will be made without regard to the requested information.

          4.1.3 The notice of a claim’s disposition provided to the Claimant will contain the following:

               (1) The specific reason or reasons for the denial or modification;

               (2) Specific reference to pertinent Plan provisions on which the denial or modification is based;

               (3) A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and

               (4) An explanation of how the Claimant may perfect the claim and obtain a full and fair review of such denial or modification pursuant to Section 4.2, including the time limits applicable to such review and a statement of the Claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse determination on review.

     4.2 Review of Denied or Modified Claims.

          4.2.1 In the event a claim for benefits is denied or modified, if the Claimant desires to have such denial or modification reviewed, he or she must, within 60 days following receipt of the notice of such denial or modification, submit a written request for a review to the Plan Administrator. A Claimant will be provided, upon request and free of charge, access to and copies of all documents, records, and other information relevant to the claim for benefits, which consist of: (1) documents, records, or other information relied upon for the benefit determination, (2) documents, records, or other information submitted, considered or generated without regard to whether such document, record, or other information was relied upon in making the benefit determination, and (3) documents, records, or other information that demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with governing Plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly-situated individuals. A Claimant will be entitled to submit written comments, documents, records, and other information relating to the claim for benefits. The review will take into account all comments, documents, records, and other information submitted by the Claimant relating to the

6

claim, without regard to whether such information was submitted or considered in the initial benefit determination.

          4.2.2 Within 60 days following such request for a review, the Plan Administrator will, after providing a full and fair review, render his final decision in writing to the Claimant. The written decision will:

               (1) State specific reasons for such decision;

               (2) Provide specific reference to the specific Plan provisions on which the decision is based;

               (3) Inform the Claimant that he or she is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the claim for benefits, which consist of: (i) documents, records, or other information relied upon for the benefit determination, (ii) documents, records, or other information submitted, considered, or generated without regard to whether such document, record, or other information was relied upon in making the benefit determination, and (iii) documents, records, or other information that demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with governing Plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly-situated individuals; and

               (4) Inform the Claimant of his or her right to bring an action under section 502(a) of ERISA. If special circumstances require an extension of such 60-day period, the Plan Administrator’s decision will be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If such an extension of time for review is required, written notice of the extension will be furnished to the Claimant prior to the commencement of the extension period, indicating the special circumstances requiring an extension of time and the date by which the determination will be made. If the extension is required due to the Claimant’s failure to submit information necessary to review the claim, the extension notice will afford the Claimant 45 days to provide the required information, and the Plan Administrator’s deadline to provide notice of the benefit determination on review will be tolled from the date the Plan Administrator sends the notice of extension to the earlier of (1) the date the Plan Administrator receives the requested information or (2) the expiration of the 45-day period afforded to the Claimant to provide the requested information. If the Claimant fails to provide the requested information by the expiration of such 45-day period, the benefit determination will be made without regard to the requested information. The decision on review by the Plan Administrator will be binding and conclusive upon all persons.

          4.3 Exhaustion of Administrative Remedies. Completion of the claims procedures described in this Article is a condition precedent to the commencement of any legal or equitable action in connection with a claim for benefits under the Plan by any employee or former employee of the Employer or any of its affiliates or by any other person or entity claiming rights individually or through any employee or former employee of the Employer or any of its affiliates in connection with the Plan.

7

V.

Funding of Plan

     5.1 Funding of Plan. The Plan will be unfunded, and benefits provided hereunder will be paid from the general assets of the Employer.

     5.2 No Participant Contributions. The entire cost of the Plan will be paid by the Employer, and no contributions will be required of, or permitted by, Participants.

VI.

Administration of Plan

     6.1 Plan Administrator. The general administration of the Plan will be vested in the Plan Administrator. For purposes of ERISA, the Plan Administrator will be the “administrator” and the “named fiduciary” with respect to the general administration of the Plan.

     6.2 Right to Delegate. The Plan Administrator may from time to time allocate to one or more of the Employer’s officers, employees, directors, or agents, and may delegate to any person or organization, any of his respective powers, duties, and responsibilities with respect to the operation and administration of the Plan, including, without limitation, the administration of claims, the authority to authorize payment of benefits, the review of denied or modified claims, and the discretion to decide matters of fact and to interpret Plan provisions. In addition, the Plan Administrator may employ persons to render advice with regard to any fiduciary responsibility held hereunder and may authorize any person to whom any of his fiduciary responsibilities have been delegated to employ persons to render such advice. Upon such designation and acceptance, the Plan Administrator will have no liability for the acts or omissions of any such designee as long as the Plan Administrator did not violate his fiduciary responsibility, if any, in making or continuing such designation. All allocations and delegations of fiduciary responsibility will be terminable upon such notice as the Plan Administrator in his discretion deems reasonable and prudent under the circumstances.

     6.3 Discretion to Interpret Plan. The Plan Administrator has absolute discretion to construe and interpret any and all provisions of the Plan and to decide all matters of fact in determining eligibility and granting or denying benefit claims, including, but not limited to, the discretion to resolve ambiguities, inconsistencies, or omissions conclusively. The decisions of the Plan Administrator will be binding and conclusive upon all persons.

     6.4 Powers and Duties. In addition to the power described in Section 6.3 and all other powers specifically granted under the Plan, the Plan Administrator has all powers necessary or proper to administer the Plan and to discharge his duties under the Plan, including. but not limited to, the following powers:

          (1) To make and enforce such rules, regulations, and procedures as he may deem necessary or proper for the orderly and efficient administration of the Plan;

8

          (2) In his discretion, to interpret and decide all matters of fact in granting or denying benefits under the Plan, his interpretation and decision thereof to be final and conclusive on all persons claiming benefits under the Plan;

          (3) In his discretion, to decide all questions concerning the Plan and the eligibility of any person to participate in the Plan, his decision thereof to be final and conclusive on all persons;

          (4) In his discretion, to make a determination as to the right of any person to a benefit under the Plan (including, without limitation, to determine whether and when there has been a termination of a Participant’s employment and the cause of such termination), his decision thereof to be final and conclusive on all persons:

          (5) In his discretion, to determine the amount, form, and conditions of any Severance Benefit under the Plan, and to authorize or deny the payment of benefits under the Plan, his decision thereof to be final and conclusive on all persons;

          (6) To prepare and distribute information explaining the Plan;

          (7) To obtain from the Employer and employees of the Employer such information as is necessary for the proper administration of the Plan; and

          (8) To sue or cause suit to be brought in the name of the Plan.

     6.5 Expenses. Reasonable expenses incident to the administration of the Plan, including, without limitation, the compensation of legal counsel, advisors, and other technical or clerical assistance as may be required, the payment of any bond or security, and any other expenses incidental to the operation of the Plan, that the Plan Administrator determines are proper will be paid by the Employer. Expenses of the Plan may be prorated among the Company. Participating Entities, and affiliates as determined by the Plan Administrator.

     6.6 Indemnification. The Company will indemnify and hold harmless the Plan Administrator, each employee of the Employer and its affiliates, and each member of the Board against any and all expenses and liabilities arising out of such individual’s Plan administrative functions or fiduciary responsibilities, including, without limitation, any expenses and liabilities that are caused by or result from an act or omission constituting the negligence of such individual in the performance of such functions or responsibilities, but excluding expenses and liabilities arising out of such individual’s own gross negligence or willful misconduct. Expenses against which such person will be indemnified hereunder include, without limitation, the amounts of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.

VII.

Amendment and Termination

     7.1 Right to Amend Plan. Notwithstanding any contrary provision(s) of any other communication, either oral or written, made by the Employer, the Plan Administrator, or any other individual or entity to employees of the Employer or to any other individual or entity, the Company, by action of the Board or the Compensation Committee of the Board, reserves the absolute and unconditional right to amend the Plan from time to time on behalf of the Company and each Participating Entity, including, but not limited to, the right to reduce or eliminate

9

benefits provided pursuant to the provisions of the Plan as such provisions currently exist or may hereafter exist; provided, however, that no amendment will be made that would reduce the amount of any Severance Benefit for any Participant if such Participant has incurred a Qualified Termination and has been determined by the Plan Administrator to be entitled to such Severance Benefit under the Plan on or prior to the effective date of such amendment, except to the extent such Severance Benefit could be reduced under the terms of the Plan prior to such amendment. All amendments to the Plan must be in writing, signed by an authorized officer of the Company, and adopted by the Board or the Compensation Committee of the Board, which action may be prior to the effective date of the amendment or subsequent to the effective date of the amendment by ratification. Any oral statements or representations made by the Employer, the Plan Administrator, or any other individual or entity that alter, modify, amend, or are inconsistent with the written terms of the Plan will be invalid and unenforceable and may not be relied upon by any employee of the Employer or by any other individual or entity.

     7.2 Right to Terminate Plan. Notwithstanding any contrary provision(s) of any other communication, either oral or written, made by the Employer, the Plan Administrator, or any other individual or entity to employees of the Employer or to any other individual or entity, the Company, by action of the Board or the Compensation Committee of the Board, reserves the absolute and unconditional right to terminate the Plan, in whole or in part, on behalf of itself and each Participating Entity with respect to some or all of the employees of the Employer; provided, however, that no termination will reduce the amount of any Severance Benefit for any Participant if such Participant has incurred a Qualified Termination and has been determined by the Plan Administrator to be entitled to such Severance Benefit under the Plan on or prior to the effective date of such termination, except to the extent such Severance Benefit could be reduced under the terms of the Plan prior to such termination.

     7.3 Effect of Amendment or Termination. In the event of an amendment or termination of the Plan as provided under this Article, each Participant will have no further rights hereunder, and the Employer will have no further obligations hereunder, except as otherwise specifically provided under the terms of the Plan as so amended or terminated.

VIII.

Miscellaneous Provisions

     8.1 No Guarantee of Employment. Neither the Plan nor any provisions contained in the Plan will be construed to be a contract between the Employer and any employee of the Employer or to be consideration for, or an inducement of. the employment of any individual by the Employer. Nothing contained in the Plan grants any individual the right to be retained in the service of the Employer or limits in any way the right of the Employer to discharge or to terminate the service of any employee at any time, without regard to the effect such discharge or termination may have on any rights under the Plan.

     8.2 Payments to Minors and Incompetents. If a Participant entitled to receive any benefits under the Plan is a minor, is determined by the Plan Administrator in his sole discretion to be incompetent, or is adjudged by a court of competent jurisdiction to be legally incapable of giving valid receipt and discharge for benefits provided under the Plan, the Plan Administrator may pay such benefits to the duly appointed guardian or conservator of such person or to any

10

third party who is determined in the discretion of the Plan Administrator to be eligible to receive any benefit under the Plan for the account of such Participant. Such payment will operate as a full discharge of all liabilities and obligations of the Employer, the Plan Administrator, and each fiduciary under the Plan with respect to such benefits.

     8.3 No Vested Right Benefits. No employee of the Employer or any affiliate of the Employer or person claiming through such employee will have any right to, or interest in, any benefits provided under the Plan upon termination of his or her employment, retirement, termination of Plan participation (if applicable), or otherwise, except as specifically provided under the Plan.

     8.4 Nonalienation of Benefits. Except as the Plan Administrator may otherwise permit by rule or regulation, (1) no interest in or benefit payable under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any action by a Participant to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same will be void and of no effect, and (2) no interest in or benefit payable under the Plan will be in any way subject to any legal or equitable process, including, but not limited to, garnishment, attachment, levy, seizure, or the lien of any person. This provision will be construed to provide each Participant, or other person claiming any interest or benefit in the Plan through a Participant, with the maximum protection against alienation, encumbrance, and any legal and equitable process, including, but not limited to, attachment, garnishment, levy, seizure, or other lien, afforded his interest in the Plan (and the benefits provided thereunder) by law and any applicable regulations.

     8.5 Unknown Whereabouts. It will be the affirmative duty of each Eligible Employee and each Participant to inform the Plan Administrator of, and to keep on file with the Plan Administrator, his or her current mailing address. If an Eligible Employee or a Participant fails to inform the Plan Administrator of his or her current mailing address, neither the Plan Administrator nor the Employer will be responsible for any late payment or loss of benefits or for failure of any notice to be provided or provided timely under the terms of the Plan to such individual.

     8.6 Other Participating Entities. The Plan Administrator may designate any affiliate of the Company that is eligible by law to participate in the Plan as a Participating Entity by written instrument delivered to such designated affiliate and to the Secretary of the Company, Such written instrument will specify the effective date of such designated participation, may incorporate specific provisions relating to the operation of the Plan that apply to the designated Participating Entity only, and will become, as to such designated Participating Entity and its employees, a part of the Plan. Each designated Participating Entity will be conclusively presumed to have consented to its designation and to have agreed to be bound by the terms of the Plan and any and all current and future amendments thereto upon its submission of information to the Company or the Plan Administrator required by the terms of, or with respect to, the Plan; provided, however, that the terms of the Plan may be modified so as to increase the obligations of a Participating Entity only with the consent of such Participating Entity, which consent will be conclusively presumed to have been given by such Participating Entity upon its submission of any information to the Company or the Plan Administrator required by the terms of, or with respect to, the Plan after receiving notice of such modification. Except as modified by the Plan Administrator in such written instrument, the provisions of the Plan will apply separately and

11

equally to each Participating Entity and its employees in the same manner as is expressly provided for the Company and its employees, except that the power to amend or termination the Plan will be exercised by the Company, by action of the Board or the Compensation Committee of the Board, alone. Transfer of employment among the Company and Participating Entities will not be considered a termination of employment hereunder. Any Participating Entity may, by appropriate action of its board of directors or noncorporate counterpart and prior written notice to the Secretary of the Company and the Plan Administrator, terminate its participation in the Plan. Moreover, the Plan Administrator, by prior written notice to the Participating Entity and to the Secretary of the Company, may terminate a Participating Entity’s Plan participation at any time.

     8.7 Jurisdiction. Except to the extent that ERISA or any other federal law applies to the Plan and preempts state law, the Plan will be construed, enforced, and administered according to the laws of the state of Texas, excluding any conflict-of-law rule or principle that might refer to the laws of another state.

     8.8 Severability. In case any provision of the Plan is held to be illegal, invalid, or unenforceable for any reason, such illegal, invalid, or unenforceable provision will not affect the remaining provisions of the Plan, but the Plan will be construed and enforced as if such illegal, invalid, or unenforceable provision had not been included therein.

     8.9 Notice and Filing. Any notice, administrative form, or other communication required to be provided to, delivered to, or filed under the terms of the Plan will include provision to, delivery to, or filing with any person or entity designated in writing by the intended recipient to be an agent for the disbursement and receipt of administrative forms and communications. Except as otherwise provided herein, where such provision, delivery, or filing is required, such provision, delivery, or filing will be deemed to have occurred only (1) upon actual receipt of such notice, administrative form, or other communication by the intended recipient or designated agent or (2) on the third business day after mailing by certified mail, return receipt requested.

     8.10 Plan Year. The Plan will operate on a “plan year” consisting of the 12- consecutive- month period commencing on January 1 of each year.

     8.11 Incorrect Information, Fraud, Concealment, or Error. Any contrary provisions of the Plan notwithstanding, in the event the Plan, a Plan fiduciary, or the Employer pays a benefit, incurs a liability for failure to so pay a benefit, or makes any overpayment or erroneous payment to any individual or entity because of a human or systems error or because of incorrect information provided by, correct information failed to be provided by, or fraud, misrepresentation, or concealment of any relevant fact (determined in the sole opinion of the Plan Administrator) by any Participant or other individual, the Plan Administrator will be entitled to recover in any manner deemed necessary or appropriate for such recovery (in the sole opinion of the Plan Administrator) from such Participant or other individual such benefit paid or the amount of such liability incurred and any and all expenses incidental to or necessary for such recovery. Human or systems error or omission will not affect in any way the amount of a benefit to which such Participant is otherwise entitled under the terms of the Plan.

     8.12 Withholding of Taxes and Other Deductions. All payments made under the Plan are subject to (1) all federal, state, city, and other taxes and applicable withholding as may

12

be required pursuant to any law or governmental regulation or ruling and (2) all other deductions for any amounts owed to the Employer, to the extent permissible under applicable law.

     Executed this 5th day of November 2007.

Activant Solutions Inc.

By:/s/ Beth A. Taylor                                                         

Printed Name: Beth Taylor

Printed Title: SVP of HR

13

Appendix A

Specifically Designated Plan Participants
As of                                         ]

Participant Name Title

14

EX-12.1

Exhibit 12.1

RATIO OF EARNINGS TO FIXED CHARGES

			Period from			Period from
	Year Ended		October 1,			Inception to					Year Ended
	September		2005 to May			September					September
(in thousands)	30, 2005		2, 2006			30, 2006		Combined			30, 2007
Pretax Income	$	18,928	$	(67,757	)	$	5,105	$	(62,652	)	$	14,910
Plus: Fixed charges and other financing costs		26,855		76,543			20,587		97,130			49,901
Earnings	$	45,783	$	8,786		$	25,692	$	34,478		$	64,811
Fixed charges:
Interest expense	$	25,728	$	33,000		$	20,340	$	53,340		$	48,398
Interest expense in rental expense		1,127		878			247		1,125			1,503
		26,855		33,878			20,587		54,465			49,901
Less: Write-off of deferred finance charges		—		15,994			—		15,994			—
Less: Debt premiums		—		26,671			—		26,671			—
Net fixed charges	$	26,855	$	76,543		$	20,587	$	97,130		$	49,901
Ratio		1.7		0.3			1.2		0.6			1.3

EX-14.1

Exhibit 14.1

Activant Solutions Inc. (the “Company”)

Code of Ethics for Senior Financial Management

Statement of Purpose; Guiding Principles: Covered Employees

     This Code of Ethics (the “Code”) is applicable to the Company’s Chief Executive Officer, the Chief Financial Officer, the Vice President of Finance and the Controller (the “Covered Officers”). In adopting this Code the Company recognizes the vital importance of conducting business in full compliance with all applicable laws and with integrity and honesty.

     The purpose of this Code is to deter wrongdoing and to promote:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and business or professional relationships;

• full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the U.S. Securities and Exchange Commission (“SEC”) and in other public communications;

• compliance with all other applicable governmental laws, rules and regulations;

• prompt internal reporting of violations of this Code pursuant to the appropriate persons; and

• accountability for adherence to this Code.

     In furtherance of this purpose and these principles, each Covered Officer is expected to maintain the highest ethical standards when conducting business on behalf of, and in personal relationships that may affect the business or affairs of, the Company.

Implementing Policies and Procedures

     In furtherance of the purpose and principles stated above, the Covered Officers must adhere to the following set of implementing policies and procedures:

     (1) Avoidance and Handling of Conflict of Interest Situations.

     The Covered Officers shall act and perform their duties ethically and honestly. Honest conduct refers to conduct that is free from fraud or deception. Ethical conduct refers to conduct that conforms to accepted professional standards of conduct, including the unbiased handling of actual or apparent conflicts of interest between personal and professional relationships.

     A conflict of interest occurs when the private interest of an employee interferes, or appears to interfere, with the interests of the Company. Conflicts of interest can arise

1

when an employee takes an action or has an interest that may make it difficult for the employee to render objective decisions on behalf of the Company or to perform the employee’s duties effectively. Accordingly, a Covered Officer:

• is not permitted to compete, either directly or indirectly, with or against the Company;

• should avoid making any personal investment, acquiring any personal financial interest or entering into any association that interferes, or appears to interfere, with his or her independent exercise of judgment in the Company’s best interests; or

• take or otherwise appropriate for his or her personal benefit or the benefit of any other person or enterprise (other than the Company) any business opportunity or potential opportunity in any line of business in which the Company engages or is considering engaging.

     Conflicts of interest also arise when an employee, or a member of the employee’s family, receives improper personal benefits, including loans or guarantees of obligations or acquisitions of interests in transactions involving the Company or its clients or suppliers, as a result of the employee’s position with the Company. While not every situation that may give rise to a conflict of interest can be enumerated, a Covered Officer must treat as a potential conflict of interest any situation in which he or she, or any person with whom he or she has a close personal or familial relationship:

• solicits or accepts a gift or other personal, unearned benefit as a result of his or her position with the Company (other than non-monetary items of nominal intrinsic value);

• has any financial interest in any competitor, customer, supplier or other party dealing with the Company (other than ownership of publicly traded securities of such a company having in the aggregate a value of no more than $100,000);

• has a consulting, managerial or employment relationship in any capacity with a competitor, customer, supplier or other party dealing with the Company, including the provision of voluntary services; or

• acquires property or rights in which the Covered Officer knows or should know that the Company is likely to have an interest.

     Conflicts of interests are generally prohibited as a matter of the Company’s corporate policy, unless they have been approved by the Company. Any Covered Officer who becomes aware of an actual or potential conflict, or who has a question about whether a conflict exists, should bring it to the attention of the audit committee of the Company’s Board of Directors (the “Audit Committee”) or the Company’s general counsel (the “General Counsel”) promptly.

2

     (2) Full, Fair and Timely Disclosure; Adequacy of Disclosure Controls

     The Covered Officers are responsible for ensuring that the Company’s periodic reports, financial statements and other public communications contain disclosures that are full, fair, accurate, timely and understandable. In that regard, the Covered Officers shall take such action as is reasonably appropriate to:

• establish and maintain effective disclosure controls and procedures and internal control over financial reporting;

• ensure that the Company’s periodic reports are timely filed with the Securities and Exchange Commission and comply with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

• ensure that information contained in the Company’s periodic reports and financial statements fairly presents in all material respects the financial condition and results of operations of the Company.

     The Covered Officers shall not knowingly:

• make, or permit or direct another to make, materially false or misleading entries in the Company’s financial statements or records;

• fail to correct materially false and misleading financial statements or records;

• sign, or permit another to sign, a document containing materially false and misleading information; or

• falsely respond, or fail to respond, to specific inquiries of the Company’s independent auditor or outside legal counsel.

     The Covered Officers shall promptly bring to the attention of the General Counsel or the Audit Committee any credible information of which he or she is aware concerning:

• significant deficiencies or material weaknesses in the design or operation of the Company’s system (a) of internal accounting controls that could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) for collecting, assessing and reporting to the public in a timely manner other information required to be disclosed by SEC requirements;

• any fraud, whether or not material, that involves management or other employees who have a role in the Company’s financial reporting, disclosures or internal controls or which otherwise could affect the accuracy and timeliness of its financial reporting; or

3

• any changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and materials weaknesses.

     (3) Compliance with Laws.

     Consistent with the Company’s policy to comply with all applicable laws, rules and regulations, it is the personal responsibility of each Covered Officer to adhere to the standards and restrictions imposed by those laws, rules and regulations, including, but not limited to, those relating to accounting and auditing matters. Any Covered Officer who is unsure as to whether a situation violates any applicable law, rule, regulation or Company policy should discuss the situation with the General Counsel.

     (4) Compliance with, and Administration of, this Code.

     The Covered Officers shall take all appropriate steps to stop any known violations of this Code or the Company’s Code of Business Conduct and Ethics by any employee or director of the Company. To that end, the Covered Officers shall promptly bring to the attention of the General Counsel or the Audit Committee any credible information he or she may receive or become aware of indicating:

• that any violation of this Code or the Company’s Code of Business Conduct and Ethics has occurred or is imminent,

• that any violation of the U.S. federal securities laws or any rule or regulation thereunder by the Company or any employee, director or other agent of the Company has occurred or is imminent, or

• that any violation by the Company or any employee, director or other agent of the Company of any other law, rule or regulation applicable to the Company has occurred or is imminent.

     Covered Officers are encouraged to use the Company’s whistleblower procedures to report any such violations.

     The General Counsel will promptly notify the Audit Committee of any report he or she has received of such a violation. Where it is impracticable or contrary to the Company’s best interest to make a report under this Code to the person regularly designated to receive such report under this Code, the report may instead be made to the Company’s chief executive officer and/or the Chairman of the Audit Committee.

     The General Counsel will notify the Disclosure Committee of any issue regarding the adequacy of the Company’s public disclosures and the Company’s internal controls and procedures raised by information reported by a Covered Officer as provided by this Code and will advise the Disclosure Committee of any waiver from, or amendments to this Code, for the purposes of ensuring prompt disclosure regarding any such waiver or amendment, and for consideration of any supplement or modification of the Company’s disclosure controls or procedures.

4

     (5) Accountability.

     The principles and responsibilities set forth in the Code are important to the Company and must be taken seriously. Each Covered Officer has a duty to ensure that his or her actions adhere to the requirements of the Code. Any violation of the Code may result in disciplinary action, including termination of employment with the Company, and, if warranted, legal proceedings against the violating party.

     The Audit Committee shall be responsible for determining whether or not a violation of this Code has occurred or may occur, after appropriate investigation, and shall make recommendations to the Company’s Board of Directors on the appropriate responsive action to be taken.

     (6) Waivers.

     Only the Company’s Board of Directors or Audit Committee may grant waivers from compliance with this Code. In addition, as a result of the Company’s commitment to keep its policies and procedures current, the Code may be modified from time to time. Any amendment or waiver of any provision of the Code must be approved in writing by the Company’s Board of Directors and promptly disclosed pursuant to applicable laws and regulations.

     (7) Miscellaneous.

     It is the Company’s policy that any employee who in good faith brings information regarding a violation (or potential violation) of this Code to the attention of any of his or her supervisors, the General Counsel, or the Audit Committee (or any other director or officer) shall not be disadvantaged or discriminated against in any term or condition of his or her employment (including the opportunity for promotion) by reason of the employee taking such action. Moreover, it is the Company’s policy to protect against any such disadvantage or discrimination those supervisors, officers and directors who in good faith take appropriate action in response to any concerns or complaints received by them, including undertaking any investigation or reporting the matter to another authority within the Company.

     The Code sets forth the fundamental principles and policies that govern the Covered Officers with respect to their conduct of the Company’s affairs. It is not intended to, and does not, create any rights in any employee, customer, supplier, competitor, stockholder or any other person or entity. The Code is intended solely for the internal use by the Company and does not in any way constitute an admission, by or on behalf of the Company, as to any fact, circumstance or legal conclusion.

5

EX-21.1

Exhibit 21.1

Subsidiaries of Activant Solutions Inc.

Subsidiary	Jurisdiction
Activant Silk Solutions Inc.	Canada
Activant Solutions Canada Limited	Canada
Activant Solutions France SARL	France
Activant Solutions Espana SL	Spain
Activant Solutions Ireland Ltd.	Ireland
Activant Solutions UK, Ltd.	United Kingdom
Activant Wholesale Distribution Solutions Inc.	New Jersey
Greenland Holding Corp.	Delaware
HM Coop LLC	Delaware
Internet Auto Parts, Inc.	Delaware
Prelude Systems, Inc.	Texas
Speedware Europe Limited	United Kingdom
Speedware Group Canada, Ltd.	Canada
Speedware LTEE. / LTD.	Canada
Speedware Solutions Mexico, S.A. de C.V.	Mexico
Speedware USA Inc.	New York
Tridex Data Service, Ltd.	United Kingdom
Tridex Leasing Ltd.	United Kingdom

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Pervez Qureshi, President and Chief Executive Officer of Activant Solutions Inc., certify that:

1.	I have reviewed this annual report on Form 10-K of Activant Solutions Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 21, 2007

/s/ PERVEZ QURESHI Pervez Qureshi

President & CEO

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Kathleen M. Crusco, Senior Vice President and Chief Financial Officer of Activant Solutions Inc., certify that:

1.	I have reviewed this annual report on Form 10-K of Activant Solutions Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 21, 2007

/s/ KATHLEEN M. CRUSCO  

Kathleen M. Crusco 

Senior Vice President and Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

I, Pervez Qureshi, President and Chief Executive Officer of Activant Solutions Inc. (the “Company”), do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that, to the best of my knowledge:

• the Annual Report on Form 10-K of the Company for the fiscal year ended September 30, 2007 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Activant Solutions Inc. and will be retained by Activant Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

By:
/s/ PERVEZ QURESHI	12/21/07
Pervez Qureshi	Date
President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

I, Kathleen M. Crusco, Senior Vice President and Chief Financial Officer of Activant Solutions Inc. (the “Company”), do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that, to the best of my knowledge:

• the Annual Report on Form 10-K of the Company for the fiscal year ended September 30, 2007 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Activant Solutions Inc. and will be retained by Activant Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

By:
/s/ KATHLEEN M. CRUSCO	12/21/07
Kathleen M. Crusco	Date
Senior Vice President
and Chief Financial Officer