UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
þ
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12
CAM Commerce Solutions, Inc.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o
No fee required.
þ
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
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Title of each class of securities to which transaction applies:
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Common stock, $0.001 par value per share
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(2)
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Aggregate number of securities to which transaction applies:
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4,465,036 shares of common stock, which consists of: (i) 4,140,250 shares of common stock
issued and outstanding as of June 25, 2008; and (ii) 324,786 shares of common stock
underlying outstanding options to purchase shares of common stock with an exercise price of
less than $40.50.
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
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In accordance with Exchange Act Rule 0-11(c)(1) the filing fee was determined by multiplying
0.00003930 by the aggregate merger consideration of $180,833,958
(which is $40.50 per share multiplied by 4,465,036 shares of CAM Commerce Solutions, Inc. common stock
outstanding or issuable upon exercise of vested, in-the-money, and outstanding options as of
June 25, 2008).
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(4)
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Proposed maximum aggregate value of transaction:
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$180,833,958
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(5)
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Total fee paid:
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$7,106.77
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o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting
fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and the date of its filing.
(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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SPECIAL
MEETING OF STOCKHOLDERS
MERGER PROPOSED YOUR VOTE IS VERY IMPORTANT
To Be Held
on ,
2008
Dear Stockholder:
You are cordially invited to attend a special meeting of
stockholders of CAM Commerce Solutions, Inc. (
CAM
Commerce
) to be held
at ,
on 2008,
at
Pacific Time. At the special meeting, you will be asked to
consider and vote upon a proposal to adopt the Agreement and
Plan of Merger, dated as of June 9, 2008 (the
Merger Agreement
), by and among CAM Commerce
Solutions, Inc. (
CAM Commerce
), Vegas Holding
Corp., a Delaware corporation (
Parent
), and
Vegas Merger Sub Inc., a Delaware corporation and wholly-owned
subsidiary of Parent (
Merger Subsidiary
).
Parent and Merger Subsidiary are affiliates of Great Hill
Partners, LLC.
The Merger Agreement contemplates the merger of Merger
Subsidiary with and into CAM Commerce, with CAM Commerce
continuing as the surviving corporation and becoming a
wholly-owned subsidiary of Parent (the
Merger
). Upon completion of the Merger, each
share of our common stock (other than shares held by
stockholders who perfect their appraisal rights in accordance
with Delaware law, and shares held by CAM Commerce, Parent, and
Merger Subsidiary) will be converted into the right to receive
$40.50 in cash, without interest. In addition, each outstanding
option to purchase CAM Commerce common stock that has an
exercise price less than $40.50 will be converted into the right
to receive $40.50 in cash without interest, less the exercise
price of such option and applicable withholding taxes.
Our board of directors has unanimously determined that the
Merger is fair to and in the best interests of CAM Commerce and
its stockholders.
Accordingly, our board of directors has
unanimously approved the Merger Agreement and the Merger, and
unanimously recommends that you vote FOR the
adoption of the Merger Agreement at the special meeting
.
The accompanying Notice of Special Meeting of Stockholders and
proxy statement explain the Merger and provide specific
information concerning the special meeting. We encourage you to
read those materials carefully.
Sincerely,
Geoffrey Knapp
President, Chief Executive Officer and Secretary
The accompanying proxy statement is
dated ,
2008 and is first being mailed to stockholders on or
about ,
2008.
YOUR VOTE IS VERY IMPORTANT
The Merger cannot be completed unless the Merger Agreement is
adopted by the affirmative vote of the holders of a majority of
the outstanding shares of our common stock.
Whether or not
you plan to attend the special meeting in person, please sign
and return the enclosed proxy in the envelope provided or vote
electronically by the Internet or by telephone. If you attend
the special meeting and desire to vote in person, you may do so
even though you have previously taken one of the foregoing
actions. The failure to vote will have the same effect as voting
against the adoption of the Merger Agreement.
If you have any
questions or need assistance voting your shares, please call
MacKenzie Partners, Inc. which is assisting us, toll free at
(800) 322-2885. Banks and brokers can call (212) 929-5500.
CAM
Commerce Solutions, Inc.
17075 Newhope Street, Suite A
Fountain Valley, California 92708
(714) 241-9241
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To Be Held
on ,
2008
To our Stockholders:
Notice is hereby given that a special meeting of stockholders of
CAM Commerce Solutions, Inc., a Delaware corporation
(
CAM Commerce
), will be held
at
on ,
2008,
at
Pacific Time.
We are holding this special meeting for the following purposes:
1.
Adoption of Merger
Agreement
.
To consider and vote upon a
proposal to adopt the Agreement and Plan of Merger, dated as of
June 9, 2008 (the
Merger Agreement
), by
and among CAM Commerce, Vegas Holding Corp., a Delaware
corporation (
Parent
), and Vegas Merger Sub
Inc., a Delaware corporation and wholly-owned subsidiary of
Parent (
Merger Subsidiary
), pursuant to which
Merger Subsidiary will be merged with and into CAM Commerce,
with CAM Commerce continuing as the surviving corporation and
becoming a wholly-owned subsidiary of Parent (the
Merger
).
2.
Adjournment or Postponement of the Special
Meeting
.
If necessary or appropriate, to
approve the postponement or adjournment of the special meeting
to solicit additional proxies in the event that there are not
sufficient votes at the time of the special meeting to approve
the proposal to adopt the Merger Agreement.
3.
Other Matters
.
To transact such
other business as may properly come before the special meeting
or any properly reconvened meeting following any adjournment or
postponement thereof.
On June 9, 2008, our board of directors unanimously
(i) determined that the Merger and the Merger Agreement
were fair to, and in the best interests of, our stockholders and
(ii) approved the Merger Agreement and the transactions
contemplated by the Merger Agreement, including the Merger.
Our board of directors unanimously recommends that you vote
FOR the adoption of the Merger Agreement. In the
event that there are not sufficient votes at the time of the
special meeting to approve the proposal to adopt the Merger
Agreement, then our board of directors unanimously recommends
that you vote FOR the postponement or adjournment of
the special meeting.
Our board of directors has fixed the close of business
on ,
2008, as the record date for the purpose of determining
stockholders entitled to receive notice of, and to vote at, the
special meeting or any adjournment or postponement thereof.
CAM Commerce stockholders who do not vote in favor of adoption
of the Merger Agreement will have the right to seek appraisal of
the fair value of their shares if the Merger is completed, but
only if they perfect their appraisal rights by complying with
all of the required procedures under Section 262 of the
Delaware General Corporation Law. See Appraisal
Rights beginning on page 45 of the accompanying proxy
statement and Annex C to the proxy statement.
It is important that your shares are represented at the special
meeting. Even if you plan to attend the special meeting, we hope
that you will promptly vote and submit your proxy by dating,
signing, and returning the enclosed proxy card. This will not
limit your rights to attend or vote at the special meeting. You
may also vote either by telephone or the Internet. We have
provided instructions on the proxy card for using these
convenient services. If your shares are held of record by a
bank, broker or other agent and you wish to vote at the special
meeting, you must obtain a proxy card issued in your name from
your bank, broker, or other agent.
By Order of the Board of Directors
Geoffrey Knapp
President, Chief Executive Officer and Secretary
Fountain Valley, California
,
2008
SUMMARY
This Summary highlights selected information from this proxy
statement regarding the merger and the merger agreement and may
not contain all of the information that is important to you as a
CAM Commerce stockholder. Accordingly, we encourage you to read
carefully this entire proxy statement, its annexes and the
documents referred to in this proxy statement. See Where
You Can Find More Information. In this proxy statement,
the terms we, us, our, and
CAM Commerce refer to CAM Commerce Solutions, Inc.
We refer to Vegas Holding Corp. as Parent, Vegas
Merger Sub Inc. as Merger Subsidiary, and Great Hill
Partners, LLC as GHP. The merger agreement is
attached to this proxy statement as Annex A and is
incorporated into this proxy statement by reference.
The
Proposed Transaction
The Proposal (page 6).
You are being
asked to vote upon a proposal to adopt the merger agreement that
provides for CAM Commerce to be acquired by a wholly-owned
subsidiary of GHP. You may also be asked to vote upon a proposal
to adjourn the special meeting, if necessary, to solicit
additional proxies in the event that there are not sufficient
votes at the time of the special meeting to approve the proposal
to adopt the merger agreement.
What You Will Receive (page 31).
Upon
completion of the merger, you will receive $40.50 in cash,
without interest, and less any applicable withholding taxes, for
each share of CAM Commerce common stock you own, unless you
properly exercise your appraisal rights. After the merger is
completed, you will have the right to receive the merger
consideration, but you will no longer be or have any rights as a
CAM Commerce stockholder.
On June 9, 2008, the last full trading day prior to the
public announcement of the merger agreement, the closing sale
price of our common stock as reported on The NASDAQ Global
Market was $37.54.
On ,
2008, the last full trading day prior to the date of this proxy
statement, the closing price of our common stock as reported on
The NASDAQ Global Market was $ .
Effect on CAM Commerce Stock Options
(page 32).
At the effective time of the
merger, all of our stock options outstanding and unexercised
immediately prior to the effective time of the merger will be
cancelled and converted into the right to receive $40.50 in
cash, without interest and less the exercise price of such
option and any applicable withholding taxes.
Unanimous Recommendation of the Board of Directors
(page 41).
Our board of directors has
unanimously determined that the merger is fair to and in the
best interests of CAM Commerce and its stockholders, and has
approved the merger agreement and the merger. Our board of
directors recommends that stockholders vote FOR the
adoption of the merger agreement at the special meeting.
Opinion of the Financial Advisor to CAM Commerce Solutions
(page 19).
In connection with the evaluation
of the proposed merger by the board of directors of CAM Commerce
Solutions, CAM Commerce Solutions financial advisor, RBC
Capital Markets Corporation, which we refer to in this proxy
statement as RBC, rendered a written opinion to the board of
directors on June 9, 2008 that, as of such date and subject
to the assumptions, qualifications and limitations set forth in
its opinion, the merger consideration of $40.50 in cash, without
interest, per share of CAM Commerce Solutions common stock was
fair, from a financial point of view, to the CAM Commerce
Solutions stockholders. The full text of RBCs written
opinion, dated June 9, 2008, is attached to this proxy
statement as Annex B. We encourage you to read this opinion
carefully in its entirety for a description of the procedures
followed, assumptions made, matters considered and limitations
on the review taken. RBCs opinion was addressed to the CAM
Commerce Solutions board of directors and does not constitute a
recommendation to any stockholder as to any matters relating to
the merger.
See The Merger Opinion of Our Financial
Advisor, as well as Annex B to this proxy statement.
i
The
Special Meeting
Date, Time, and Place (page 6).
We will
hold the special meeting
at on ,
2008, beginning
at ,
Pacific Time.
Required Vote (page 8).
Under Delaware
law and our charter documents, the holders of a majority of the
outstanding shares of our common stock entitled to vote must be
present, either in person or by proxy, to constitute a quorum at
the special meeting. The vote required to approve the proposal
for adoption of the merger agreement is the affirmative vote of
the holders of a majority of the shares of our common stock
issued and outstanding on the record date for the special
meeting. If it is necessary or appropriate to hold a vote for
the approval of the adjournment or postponement of the special
meeting to solicit additional proxies, the vote required to
approve the proposal is the affirmative vote of a majority of
the votes cast on the proposal.
Who Can Vote (page 6).
You are entitled
to vote at the special meeting if you owned shares of CAM
Commerce common stock at the close of business
on ,
2008, the record date for the special
meeting. shares
of CAM Commerce common stock were outstanding and entitled to be
voted as of the record date.
How You Can Vote (page 6).
If you are a
record holder of our common stock, you may vote in the following
ways:
(1)
Voting by Mail.
If you choose to vote
by mail, simply mark your proxy, date and sign it, and return it
in the postage-paid envelope provided.
(2)
Voting in Person.
You can also vote
by appearing and voting in person at the special meeting.
(3)
Voting by Telephone.
You can vote
your shares by telephone by calling the toll-free telephone
number on your proxy card. Telephone voting is available
24 hours a day.
(4)
Voting by Internet.
You can also vote
via the Internet. The web site for Internet voting is on your
proxy card, and voting is also available 24 hours a day.
You can revoke your proxy at any time before it is voted at the
special meeting by:
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giving written notice of revocation to our Secretary;
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submitting another properly executed proxy by telephone,
Internet, or later-dated written proxy; or
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attending the special meeting and voting by paper ballot in
person.
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If your shares are held through a broker, bank, trustee or other
holder of record, including the trustee or other fiduciary of an
employee benefit plan, you may only vote by completing and
returning the voting instruction form provided by the record
holder or via the Internet or by telephone, if such a service is
provided by the record holder, and you must obtain a proxy,
executed in your favor, from the holder of record to be able to
vote at the special meeting.
The
Merger
The Structure and Effective Time
(page 11).
Upon the terms and subject to the
conditions of the merger agreement, Merger Subsidiary (a
wholly-owned subsidiary of Parent), will merge with and into CAM
Commerce, with CAM Commerce continuing as the surviving
corporation and a wholly-owned subsidiary of Parent.
Material U.S. Federal Income Tax Consequences
(page 27).
In general, your receipt of the
merger consideration will be a taxable transaction for
U.S. federal income tax purposes. For U.S. federal
income tax purposes, holders of common stock will generally
recognize capital gain or loss equal to the difference, if any,
between the amount of cash received pursuant to the merger and
your adjusted tax basis in the shares surrendered. However, the
tax consequences of the merger to you will depend upon your own
particular circumstances. You should consult your tax advisor in
order to fully understand how the merger will affect you.
ii
Governmental and Regulatory Clearances
(page 29).
Under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules thereunder,
which we refer to in this proxy statement as the HSR Act,
certain transactions, including the merger, may not be completed
until a
30-day
waiting period expires or is earlier terminated. We filed a
notification and report form pursuant to the HSR Act with the
Antitrust Division of the Department of Justice and the Federal
Trade Commission on June 16, 2008, and GHP filed a
notification and report form (reporting the acquisition of CAM
Commerce through Parent) on June 16, 2008.
Appraisal Rights (page 45 and
Annex C).
Under Delaware law, holders of
shares of CAM Commerce common stock are entitled to appraisal
rights in connection with the merger, if they follow the
requirements of Delaware law to perfect their appraisal rights.
The
Merger Agreement (page 31 and Annex A)
Conditions to the Merger
(page 39).
Before we can complete the
merger, a number of conditions must be satisfied or waived by
the applicable party. These include the following:
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adoption of the merger agreement by the requisite vote of CAM
Commerce stockholders;
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expiration or early termination of the waiting period under HSR
Act;
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the absence of any injunction or other legal restraint
prohibiting the consummation of the merger;
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the truth in all respects of our representations and warranties
under the merger agreement relating to our organization,
authorization to enter the merger agreement, capitalization and
finders fees and expenses, among others;
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CAM Commerces compliance with its other representations
and warranties under the merger agreement, except as have not
and would not reasonably be expected to have individually, or in
the aggregate, a Material Adverse Effect (as defined in the
Merger Agreement) on CAM Commerce;
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CAM Commerce shall have amended the lease for its Henderson,
Nevada facility to establish the base rent at $1.75 per square
foot per month for the remainder of the term of such lease,
subject to increases for inflation;
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Parent and Merger Subsidiarys compliance with their
representations and warranties under the merger agreement,
except as have not had and would not reasonably be expected to
have a Material Adverse Effect on Parent;
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each partys performance in all material respects of its
obligations, agreements and covenants under the merger agreement;
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since September 30, 2007, the absence of any event,
occurrence or development of any state of circumstances or facts
that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect on CAM
Commerce; and
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the continued effectiveness of the employment agreement entered
into between CAM Commerce and Geoffrey Knapp, CAM
Commerces chief executive officer, on the terms existing
on the date of the merger agreement.
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Termination of the Merger Agreement
(page 42).
The merger agreement may be
terminated at any time prior to the effective time of the
merger, whether before or after CAM Commerce stockholders have
approved it:
(1) by mutual written consent of Parent and CAM Commerce;
(2) by either Parent or CAM Commerce if:
(A) the merger is not consummated by November 30, 2008;
(B) CAM Commerces stockholders do not approve the
merger upon a vote taken at the special meeting; or
iii
(C) any applicable law makes consummation of the merger
illegal or otherwise prohibited or otherwise enjoins CAM
Commerce or Parent from consummating the merger and such
enjoinment shall have become final and unappealable.
(3) by Parent if:
(A) the CAM Commerce board of directors fails to make,
withdraws or modifies its recommendation in favor of adoption of
the merger agreement in a manner adverse to Parent;
(B) CAM Commerce shall have entered into a definitive
agreement with respect to a Superior Proposal (as defined in
The Merger Agreement No Solicitation of
Alternative Transactions by CAM Commerce); and
(C) CAM Commerce breaches any representation, warranty,
covenant or agreement under the merger agreement that would
cause a failure to satisfy a condition to closing and such
breach cannot be cured or is not cured by the earlier of
(i) a date within 30 days after the receipt of written
notice of the breach and (ii) November 30, 2008.
(4) by CAM Commerce if:
(A) subject to our compliance with the no solicitation
covenants in the merger agreement, payment to Parent of a
termination fee of approximately $7.2 million and providing
Parent five days written notice to make an offer at least as
favorable to our stockholders as the Superior Proposal, CAM
Commerce enters into a binding agreement with respect to a
Superior Proposal (as defined in The Merger
Agreement No Solicitation of Alternative
Transactions by CAM Commerce); or
(B) Parent or Merger Subsidiary breaches any
representation, warranty, covenant or agreement under the merger
agreement that would result in a failure to satisfy a condition
to closing, and such breach cannot be cured or is not cured by
the earlier of (i) a date within 30 days after the
receipt of written notice of the breach and
(ii) November 30, 2008.
Termination
Fees if Merger is Not Completed (page 43).
CAM Commerce must pay GHP a termination fee of approximately
$7.2 million, if:
(1) the merger agreement is terminated by CAM Commerce for
the reasons stated in paragraph (4)(A) of The Merger
Agreement Termination of Merger Agreement
above; or
(2) the merger agreement is terminated by Parent for the
reasons stated in paragraphs (3)(A) or (3)(B) of The
Merger Agreement Termination of Merger
Agreement above.
In addition, if the merger agreement is terminated for the
reasons stated in paragraphs (2)(A) or (2)(C) of The
Merger Agreement Termination of Merger
Agreement and prior to such termination CAM Commerce
receives a Takeover Proposal, then (a) CAM Commerce shall
pay the expenses incurred by GHP (not to exceed
$1.5 million) on the date of termination if the merger
agreement is terminated by CAM Commerce, or two business days
after the date of termination if the merger agreement is
terminated by Parent, and (b) if within 12 months
after such termination CAM Commerce enters into a definitive
agreement with respect to such Takeover Proposal, CAM Commerce
shall pay the termination fee on the earlier of the entering
into the definitive agreement or the consummation of such
Takeover Proposal.
Interests
of Officers and Directors in the Merger
(page 26).
Certain of our officers and directors may have interests in the
merger that are different from, or in addition to, yours,
including the following:
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our directors and officers hold stock options which will be
converted into the right to receive $40.50, net of any exercise
price, for each share of common stock represented by these
options upon completion of the merger;
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under the merger agreement, Parent has agreed that the surviving
corporation of the merger will honor all obligations of CAM
Commerce and its subsidiaries for indemnification, advancement
of expenses and exculpation from liabilities for acts or
omissions prior to the effective time of the merger by our
current and former directors and officers as provided in our
organizational documents and any existing indemnification
agreements disclosed to Parent, and the surviving corporation of
the merger will maintain in effect directors and
officers liability insurance on behalf of those directors
and officers for a period of six years after consummation of the
merger; and
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in exchange for his agreement to terminate his current change in
control agreement without the right to receive any payment
thereunder, we have entered into an employment agreement with
Mr. Knapp, which becomes effective upon the closing of the
merger, pursuant to which (1) he will serve as chief
executive officer of CAM Commerce for a two year period
following the consummation of the merger with an initial base
salary of $350,000 and a potential bonus of up to 50% of his
base salary, and the right to participate in any benefit plan
maintained by CAM Commerce, (2) if Mr. Knapp is
terminated without cause and is not offered the role of chairman
of our board of directors, he will receive his base salary for
one year following a termination, and (3) if Mr. Knapp
is offered and accepts the role of chairman of the board of
directors, he will enter into a new employment agreement with
the company providing for, among other things, an annual salary
of $100,000.
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Our board of directors was aware of these interests and
considered them, among other matters, in making its decision to
enter into the merger agreement and recommend its adoption by
CAM Commerce stockholders.
Stockholder
Litigation (page 30).
On June 16, 2008, we were named a defendant in a complaint,
captioned John Levin v. CAM Commerce Solutions, Inc. et
al., filed against us and the individual members of our board of
directors in the court of Chancery of the State of Delaware. The
complaint generally alleges, among other things, that the
proposed merger was the result of an unfair process by which we
and the members of our board of directors breached the fiduciary
duties of care, loyalty, good faith, candor, and independence.
The plaintiffs seek certification of the matter as a class
action and an injunction prohibiting the consummation of the
merger. We believe the claims asserted in the complaint are
without merit and intend to vigorously defend against this
action.
Additional
Information (page 50).
You can find more information about CAM Commerce in the periodic
reports and other information we file with the Securities and
Exchange Commission, which we refer to in this proxy statement
as the SEC. The information is available at the SECs
public reference facilities and at the website maintained by the
SEC at
http://www.sec.gov.
For a more detailed description of the additional information
available, please see the section entitled Where You Can
Find More Information on page 50.
v
TABLE OF
CONTENTS
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1
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4
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6
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6
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6
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6
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6
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7
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8
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8
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8
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9
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9
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9
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10
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10
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10
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10
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11
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11
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11
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16
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19
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25
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25
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25
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26
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27
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29
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30
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30
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31
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31
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31
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31
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32
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32
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34
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36
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38
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38
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38
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39
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vi
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Page
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41
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41
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42
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43
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43
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44
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45
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48
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49
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49
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50
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50
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50
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50
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A-1
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B-1
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C-1
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vii
QUESTIONS
AND ANSWERS ABOUT THE MERGER
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Q:
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What is the proposed transaction?
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A:
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Parent will acquire us by merging Merger Subsidiary, a
wholly-owned subsidiary of Parent, into CAM Commerce, with CAM
Commerce continuing as the surviving corporation in the merger
and becoming a wholly-owned subsidiary of Parent. We will no
longer be a publicly-traded corporation after the merger.
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Q:
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What will I receive for my shares of common stock after the
merger is completed?
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A:
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You will be entitled to receive $40.50 in cash, without
interest, for each share of common stock that you own at the
effective time of the merger.
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Q:
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How does the CAM Commerce board of directors recommend I
vote?
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A:
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Our board of directors recommends that you vote for
approval of the merger agreement and for the
approval of the proposal to postpone or adjourn the special
meeting to solicit additional proxies in the event that there
are not sufficient votes at the time of the special meeting to
approve the proposal to adopt the merger agreement. See
The Merger Reasons for the Merger;
Recommendation of Our Board of Directors. When considering
the recommendation by our board of directors in favor of the
merger, you should be aware that our directors and executive
officers have interests in the merger that are different from,
or in addition to, your interests. See The
Merger Interests of Officers and Directors in the
Merger beginning on page 26.
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Q:
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Are there agreements with any stockholders that provide for
the stockholder to continue holding an equity interest in CAM
Commerce after the merger?
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A:
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No.
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Q:
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Are there any agreements with the executive officers of CAM
Commerce regarding their employment after the merger?
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A:
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Our chief executive officer, Geoff Knapp, and our chief
financial officer, Paul Caceres, are parties to change of
control agreements, entered into on January 1, 1996, and
amended on December 20, 2006, which govern their employment
and right to compensation for termination as part of an
acquisition of CAM Commerce. As a condition to Parent and Merger
Subsidiary entering into the merger agreement, Mr. Knapp
agreed to terminate his existing change of control agreement
without the right to receive any payment thereunder and to enter
into a new employment agreement which will be effective upon the
closing of the merger and replaces his existing change of
control agreement. See The Merger Interests of
Officers and Directors in the Merger beginning on
page 26.
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Q:
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Who can vote at the special meeting?
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A:
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All stockholders of record at the close of business
on ,
2008, the record date for the special meeting, will be entitled
to notice of and to vote at the special meeting. If on that
date, your shares were registered directly in your name with our
transfer agent, American Stock Transfer &
Trust Company, then you are a stockholder of record. As a
stockholder of record, you may vote in person at the special
meeting or vote by proxy.
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If on the record date, your shares were held in an account at a
brokerage firm, bank, dealer, trustee (including the trustee or
other fiduciary of an employed benefit plan) or similar
organization, then you are the beneficial owner of shares held
in street name, and these proxy materials are being
forwarded to you by that organization. The organization holding
your account is considered the stockholder of record for
purposes of voting at the special meeting. As a beneficial
owner, you have the right to direct your broker or other agent
on how to vote the shares in your account. You are also invited
to attend the special meeting. However, since you are not the
stockholder of record, you may not vote your shares in person at
the special meeting unless you request and obtain a valid proxy
from your broker or other agent. See The Special
Meeting beginning on page 6.
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Q:
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Have any stockholders entered into an agreement with Parent
to agree to vote their shares of stock in favor of the
merger?
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A:
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No.
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1
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Q:
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May I attend the special meeting?
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A:
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All stockholders as of the close of business
on ,
2008, the record date for the special meeting, may attend the
special meeting. No cameras, recording equipment, electronic
devices, large bags, briefcases, or packages will be permitted
in the special meeting.
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Q:
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What do I need to do now?
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A:
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We urge you to read this proxy statement, including its annexes,
carefully, and to consider how the merger affects you. If you
are a stockholder of record, then you can ensure that your
shares are voted at the special meeting by taking one of the
following actions:
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indicate your vote on your proxy card and sign and
mail your proxy card in the enclosed return envelope as soon as
possible as instructed in these materials so that your shares
may be represented at the special meeting. The special meeting
will take place at
on ,
2008,
at Pacific
Time.
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using a touch-tone telephone, call toll
free and
follow the instructions. When asked for your voter control
number, enter the number printed just above your name on the
front of the proxy card accompanying this proxy statement. Your
telephone vote is quick, confidential, and immediate. Please
note that all votes cast by telephone must be completed and
submitted prior
to ,
2008 at 11:59 p.m., Pacific Time. Your telephone vote
authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated, and returned the proxy
card. If you vote by telephone, please do not return your proxy
card by mail; or
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visit the Internet voting site
at and
follow the instructions on the screen. When prompted for your
voter control number, enter the number printed just above your
name on the front of the proxy card accompanying this proxy
statement. Your Internet vote is quick, confidential, and
immediate. Please note that all votes cast by Internet must be
completed and submitted prior
to ,
2008 at 11:59 p.m. Pacific Time. Your Internet vote
authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated, and returned the proxy
card. This is a secured web page site. Your software
and/or Internet provider must be enabled to access
this site. Please call your software or Internet provider for
further information if needed. If you vote by Internet, please
do not return your proxy card by mail.
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Q:
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If my shares are held in street name, will my
broker vote my shares for me?
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A:
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Your broker will vote your shares only if you provide
instructions to the record holder on how to vote. You should
instruct the record holder to vote your shares by following the
directions provided to you by the record holder. See The
Special Meeting beginning on page 6.
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Q:
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Will my shares held in street name or another
form of record ownership be combined for voting purposes with
shares I hold of record?
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A:
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No. Because any shares you may hold in street
name will be deemed to be held by a different stockholder
than any shares you hold of record, any shares so held will not
be combined for voting purposes with shares you hold of record.
Similarly, if you own shares in various registered forms, such
as jointly with your spouse, as trustee of a trust or as
custodian for a minor, you will receive, and will need to sign
and return, a separate proxy card (or, in the case of telephonic
or Internet voting, provide appropriate instructions concerning
the separate proxy) for those shares because they are held in a
different form of record ownership. Shares held by a corporation
or business entity must be voted by an authorized officer of the
entity. Shares held in an Individual Retirement Account (IRA)
must be voted under the rules governing the account.
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Q:
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How are votes counted?
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A:
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Votes will be counted by the inspector of election appointed for
the special meeting, who will separately count For
and Against votes, abstentions, and broker non
votes. A broker non vote occurs when a nominee
holding shares for a beneficial owner does not receive
instructions with respect to the proposal to adopt the merger
agreement from the beneficial owner. Because under Delaware law
the adoption of the merger agreement requires the affirmative
vote of holders of a majority of our outstanding shares of
common stock, broker non votes and abstentions will have the
same effect as a vote Against the adoption of
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2
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the merger agreement. Abstentions will also have the same effect
as a vote Against the proposal for the adjournment
or postponement of the special meeting to solicit additional
proxies. Broker non votes and abstentions are counted, however,
as present for the purpose of determining whether a quorum is
present.
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Q:
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How many votes are required to approve the proposals?
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A:
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The votes required to approve the proposals are as follows:
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the adoption of the merger agreement requires the
affirmative vote of the holders of a majority of the shares of
our common stock issued and outstanding on the record date for
the special meeting; and
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if necessary or appropriate, the approval of the
adjournment or postponement of the special meeting to solicit
additional proxies requires the affirmative vote of a majority
of the votes cast on the proposal.
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Q:
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How many votes do I have?
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A:
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You have one vote for each share of our common stock you own as
of ,
2008, the record date for the special meeting.
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Q:
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What happens if I do not vote?
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A:
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Because the vote required for the proposal to adopt the merger
agreement is based on the total number of shares of our common
stock outstanding on the record date, and not just the shares
that are voted, if you do not vote it will have the same effect
as a vote Against the adoption of the merger
agreement. If the merger is completed, whether or not you voted
for the adoption of the merger agreement and approval of the
merger, you will be paid the merger consideration for your
shares of our common stock upon completion of the merger, unless
you properly exercise your appraisal rights. See The
Special Meeting beginning on page 6 and
Appraisal Rights beginning on page 45 and
Annex C hereto.
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Q:
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Can I change my vote after I have mailed my signed proxy
card?
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A:
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Yes. You can change your vote at any time before your proxy is
voted at the special meeting. You can do this in one of three
ways. First, you can attend the special meeting and vote in
person. Your attendance alone will not, however, revoke your
proxy. Second, you can complete and submit a new proxy card.
Third, you can send a written notice to the Secretary of CAM
Commerce stating that you would like to revoke your proxy. If
you have instructed a broker, trustee or other nominee to vote
your common shares, you must follow the directions received from
your broker, trustee or nominee to change those instructions.
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Q:
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Do I have the right to seek appraisal of the fair cash
value of my shares of common stock if the merger is
completed?
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A:
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Yes. If you wish to exercise your appraisal rights, you must not
vote in favor of adoption of the merger agreement and approval
of the merger, and you must strictly follow all of the other
requirements under Section 262 of the Delaware General
Corporation Law, or the DGCL, governing appraisal rights. If you
comply with these requirements, you will have the right to
receive the fair cash value of your common shares,
as determined under the DGCL, instead of the $40.50 per share as
provided in the merger agreement. The amount you will receive if
you exercise your appraisal rights may be equal to, more than or
less than $40.50 per share. See Appraisal Rights
beginning on page 45 and Annex C hereto.
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Q:
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Will I owe taxes as a result of the merger?
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A:
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In general, you will recognize gain or loss for U.S. federal
income tax purposes to the extent of the difference between the
cash you receive and your tax basis in the common shares that
you exchange for cash. The cash you receive also may be subject
to taxes under applicable state, local and other tax laws. See
The Merger Material U.S. Federal Income Tax
Consequences of the Merger beginning on page 27.
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Q:
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When can I expect to receive the merger consideration for my
shares?
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A:
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Once the merger is completed, you will be sent in a separate
mailing a letter of transmittal and other documents to be
delivered to the paying agent in order to receive the merger
consideration. Once you have submitted your properly completed
letter of transmittal, stock certificates, and other required
documents to the paying agent, the paying agent will send you
the merger consideration.
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Q:
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When should I send in my stock certificates?
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A:
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After the special meeting, if you are a stockholder of record,
you will receive a letter of transmittal and other documents to
complete and return to a paying agent designated by Parent. In
order to receive the merger consideration as soon as reasonably
practicable following the completion of the merger, you must
send the paying agent your validly completed letter of
transmittal together with your stock certificates as instructed
in the separate mailing.
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You should NOT send your stock certificates now.
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Q:
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What if I cannot locate my stock certificates?
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A:
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The materials the paying agent will send you after completion of
the merger will include the procedures that you must follow if
you cannot locate your stock certificates. This will include an
affidavit that you will need to sign attesting to the loss of
your certificates. Parent may also require that you provide a
bond in order to cover any potential loss.
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Q:
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Who will bear the cost of the solicitation?
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A:
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We will bear the expense of soliciting proxies for the special
meeting. We have retained MacKenzie Partners, Inc., a proxy
solicitation firm, to solicit proxies in connection with the
special meeting at a cost of approximately
$ plus reimbursement of
out-of-pocket fees and expenses. In addition, we may reimburse
brokers, banks and other custodians, nominees and fiduciaries
representing beneficial owners of shares for their expenses in
forwarding soliciting materials to such beneficial owners.
Proxies may also be solicited by certain of our directors,
officers and employees, personally or by telephone, facsimile or
other means of communication. No additional compensation will be
paid for such services.
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Q:
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What happens if I sell my shares of common stock before the
special meeting?
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A:
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The record date for stockholders entitled to vote at the special
meeting is earlier than the date of the special meeting. If you
transfer your shares of our common stock after the record date
but before the special meeting, you will, unless special
arrangements are made, retain your right to vote at the special
meeting but will transfer the right to receive the merger
consideration to the person to whom you transfer your shares.
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Q:
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When do you expect the merger to be completed?
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A:
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We are working toward completing the merger as quickly as
possible, but we cannot predict the exact timing. We expect to
complete the merger no later than three business days after
obtaining stockholder approval, assuming that all other closing
conditions contained in the merger agreement have been satisfied
or waived at that time. See The Merger
Agreement Conditions to the Merger on
page 39.
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Q:
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Who can help answer my other questions?
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A:
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If you would like additional copies of this proxy statement or a
new proxy card or if you have questions about the merger, you
should contact our chief financial officer, Mr. Paul
Caceres, at CAM Commerce Solutions, Inc., 17075 Newhope Street,
Suite A, Fountain Valley, California 92708. You may also
call our proxy solicitor, MacKenzie Partners, Inc., at
(800) 322-2885,
toll-free, to request a separate copy of these materials. If
your shares are held by a broker, trustee, or other nominee, you
may also call your broker, trustee, or nominee for additional
information. Banks and brokers can call
(212) 929-5500.
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CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements in this proxy statement, and the documents to
which we refer you in this proxy statement, that are not
historical fact constitute forward looking
statements as defined in Section 27A of the
Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended that are based on
our managements beliefs and assumptions and on information
currently available to us. All statements regarding future
events, our future financial performance and results of
operations, our business strategy, our financing plans, our
ability to complete the merger and the anticipated benefits of
the merger are forward-looking statements. Forward-looking
statements can be identified by the use of words such as
believe, expect, anticipate,
intend, plan, estimate,
project, or words of similar meaning or conditional
verbs such as will, should,
could, or may.
4
These statements are only predictions. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Our actual results may
differ materially from those anticipated in these
forward-looking statements. In evaluating these forward-looking
statements, you should specifically consider certain risks and
uncertainties. Those risks include without limitation:
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the satisfaction of the conditions to consummate the merger,
including the adoption of the merger agreement by our
stockholders;
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the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement,
including a termination under circumstances that could require
us to pay an approximate $7.2 million termination fee to
Parent;
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the effect of the announcement of the merger on our customer and
vendor relationships, including the reseller channel, operating
results and business generally;
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the risk that the merger may not be completed in a timely manner
or at all, which may adversely affect our business and the price
of a share of our common stock;
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the potential adverse effect on our business and operations
because of certain covenants we agreed to in the merger
agreement;
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increases in operating costs resulting from the expenses related
to the proposed merger;
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our inability to retain and, if necessary, attract key
employees, particularly in light of the proposed merger;
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the risk that we may be subject to litigation in connection with
the proposed merger;
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risks related to diverting managements attention from
ongoing business operations; and
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other risks detailed in our current filings with the SEC,
including Item 1A. Risk and Uncertainties in
our Annual Report on
Form 10-K
for our fiscal year ended September 30, 2007. Copies of
reports CAM Commerce filed with the SEC are posted on our
website and are available from CAM Commerce without charge. See
Where You Can Find More Information.
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We believe that the assumptions on which our forward-looking
statements are based are reasonable. However, we cannot assure
you that the actual results or developments we anticipate will
be realized or, if realized, that they will have the expected
effects on our business or operations. All subsequent written
and oral forward-looking statements concerning the merger or
other matters addressed in this proxy statement and attributable
to us or any person acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained or
referred to in this section. Forward-looking statements speak
only as of the date of this proxy statement or the date of any
document incorporated by reference in this document. Except as
required by applicable law or regulation, we do not undertake to
release the results of any revisions of these forward-looking
statements to reflect future events or circumstances.
5
THE
SPECIAL MEETING
This proxy statement is being furnished to you in connection
with the solicitation by our board of directors of proxies to be
used at the special meeting to be held
at
at ,
Pacific Time,
on ,
2008 and any adjournments or postponements thereof. This proxy
statement and the accompanying form of proxy card are being
mailed to stockholders on or
about ,
2008.
The
Purpose
The purpose of the special meeting is for our stockholders to
consider and vote upon a proposal to adopt the merger agreement.
A copy of the merger agreement is attached to this proxy
statement as Annex A. In the event that there are not
sufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement, stockholders may
also be asked to vote upon a proposal to postpone or adjourn the
special meeting, if necessary, to solicit additional proxies.
On June 9, 2008, our board of directors unanimously
(i) determined that the merger and the merger agreement
were fair to and in the best interests of our stockholders and
(ii) approved the merger agreement and the transactions
contemplated thereby, including the merger. Our board of
directors recommends that you vote FOR the adoption
of the merger agreement and FOR the approval of the
proposal to postpone or adjourn the special meeting to solicit
additional proxies in the event that there are not sufficient
votes at the time of the special meeting to approve the proposal
to adopt the merger agreement.
Our board of directors knows of no other matter that will be
presented for consideration at the special meeting. If any other
matter properly comes before the special meeting, or any
postponement or adjournment of the special meeting, the persons
named in the enclosed form of proxy or their substitutes will
vote in accordance with their best judgment on such matters.
Appointment
of Proxy Holders
Our board of directors asks you to appoint Geoff Knapp and Paul
Caceres as your proxy holders to vote your shares at the special
meeting. You make this appointment by completing the enclosed
proxy card using one of the voting methods described below.
If appointed by you, the proxy holders will vote your shares as
you direct on the matters described in this proxy statement. In
the absence of your direction, they will vote your shares as
recommended by our board of directors.
Unless you otherwise indicate on the proxy card, or otherwise,
if voting by telephone or via the Internet, you also authorize
your proxy holders to vote your shares on any matters not known
by our board of directors at the time this proxy statement was
printed and which, under our bylaws, may be properly presented
for action at the special meeting.
Who Can
Vote
Only stockholders who owned shares of our common stock of record
as of the close of business
on ,
2008, the record date for the special meeting, can vote at the
special meeting. As of the close of business on the record date,
we
had shares
of our common stock outstanding. Each holder of common stock is
entitled to one vote for each share held as
of ,
2008.
How You
Can Vote
If you are a record holder of our common stock, you may vote
your shares at the special meeting either by mail, in person, by
telephone or by the Internet as described below. Stockholders
holding shares through a bank, broker, or other agent should
follow the voting instructions on the form of voting instruction
card received from that agent.
6
Voting by Mail
.
You may vote by proxy
by dating, signing, and returning your proxy card in the
enclosed postage paid envelope. Giving a proxy will not affect
your right to vote your shares if you attend the special meeting
and want to vote in person.
Voting in Person
.
You may vote by
attending and voting at the special meeting. However, even if
you plan to attend the special meeting in person, our board of
directors recommends that you vote by mail. Voting your proxy
card by mail will not limit your right to vote at the special
meeting, if you decide to attend in person. If you hold shares
through a bank, broker, trustee, or other agent, you must obtain
a proxy, executed in your favor, from the bank, broker, trustee,
or other agent to be able to vote at the special meeting.
Voting by Telephone
.
Using a touch-tone
telephone, call toll
free and
follow the instructions. When asked for your voter control
number, enter the number printed just above your name on the
front of the proxy card accompanying this proxy statement. Your
telephone vote is quick, confidential, and immediate. Please
note that all votes cast by telephone must be completed and
submitted prior
to ,
2008 at 11:59 p.m., Pacific Time. Your telephone vote
authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated, and returned the proxy
card. If you vote by telephone, please do not return your proxy
card by mail.
Voting by the Internet
.
Visit the
Internet voting site
at and
follow the instructions on the screen. When prompted for your
voter control number, enter the number printed just above your
name on the front of the proxy card accompanying this proxy
statement. Your Internet vote is quick, confidential, and
immediate. Please note that all votes cast by Internet must be
completed and submitted prior
to ,
2008 at 11:59 p.m. Pacific Time. Your Internet vote
authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated, and returned the proxy
card. This is a secured web page site. Your software
and/or
Internet provider must be enabled to access this
site. Please call your software or Internet provider for further
information if needed. If you vote by Internet, please do not
return your proxy card by mail.
If you vote your shares of our common stock by submitting a
proxy, your shares will be voted at the special meeting as you
indicated on your proxy card. If no instructions are indicated
on your signed proxy card, all of your shares of our common
stock will be voted FOR the adoption of the merger
agreement and FOR the approval of the proposal to
postpone or adjourn the special meeting to solicit additional
proxies in the event that there are not sufficient votes at the
time of the special meeting to approve the proposal to adopt the
merger agreement.
If your shares are held by a bank, broker, trustee, or other
agent, you should have received a voting instruction card and
voting instructions with these proxy materials from your bank,
broker, trustee, or other agent rather than from CAM Commerce.
Simply complete and return the voting instruction card to your
bank, broker, trustee, or other agent to ensure that your vote
is counted. Alternatively, if offered by your bank, broker,
trustee, or other agent, you may vote by telephone or over the
Internet as instructed by your bank, broker, trustee, or other
agent. To vote in person at the special meeting, you must obtain
a valid proxy from your bank, broker, trustee, or other agent.
Follow the instructions from your bank, broker, trustee, or
other agent included with these proxy materials, or contact your
bank, broker, trustee, or other agent to request a proxy form.
Revocation
of Proxies
If you are a record holder of shares of our common stock, you
can revoke your proxy at any time before it is voted at the
special meeting by:
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voting in person at the special meeting;
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submitting written notice of revocation to our Secretary prior
to the special meeting; or
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submitting a later dated, properly executed proxy by telephone,
Internet, or in writing.
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7
If your shares are held through a bank, broker, trustee, or
other agent, you must follow instructions received from such
bank, broker, trustee, or other agent which were provided with
this proxy statement in order to change or revoke your proxy or
to vote at the special meeting.
Quorum;
Stock Entitled to Vote; Record Date
The holders of a majority of the outstanding shares of our
common stock on the record date, represented in person or by
proxy, will constitute a quorum for purposes of the special
meeting. A quorum is necessary to hold the special meeting. In
the event that a quorum is not present at the special meeting,
it is expected that the special meeting will be adjourned or
postponed to solicit additional proxies. Any shares of our
common stock held in treasury by CAM Commerce are not considered
to be outstanding for purposes of determining a quorum.
Abstentions and broker non votes will be counted as shares
present and entitled to vote for the purposes of determining a
quorum. Broker non votes result when banks, brokers,
trustees, or other agents are precluded from exercising their
voting discretion with respect to the approval of non routine
matters such as the adoption of the merger agreement and
approval of the merger, and, thus, absent specific instructions
from the beneficial owner of those shares, banks, brokers,
trustees and other agents are not empowered to vote the shares
with respect to the approval of those matters.
The adoption of the merger agreement requires the affirmative
vote of holders representing at least a majority of the
outstanding shares of our common stock
on ,
2008, the record date for the special meeting. Shares that are
present but not voted, either by abstention or non vote,
including broker non votes, will be counted for purposes of
establishing a quorum. Because adoption of the merger agreement
requires the approval of holders representing a majority of the
outstanding shares of our common stock, failure to vote your
shares, including if you hold your shares through a bank,
broker, trustee, or other agent, will have the same effect as a
vote against the adoption of the merger agreement.
The approval of any proposal to postpone or adjourn the special
meeting, if necessary, to solicit additional proxies if there
are not sufficient votes to adopt the merger agreement requires
the affirmative vote of a majority of those shares represented
in person or by proxy voting on such proposal. Abstentions will
have the effect of a vote against this proposal and
broker non votes will have no impact on this proposal. The
persons named as proxies may propose and vote for one or more
postponements or adjournments of the special meeting, including
postponements or adjournments to permit further solicitations of
proxies. Unless specifically indicated, no proxy voted against
adoption of the merger agreement will be voted in favor of any
postponement or adjournment of the special meeting.
Under Delaware law, holders of shares of our common stock are
entitled to appraisal rights in connection with the merger. In
order to exercise appraisal rights, you must comply with all
applicable requirements of Delaware law. See Appraisal
Rights beginning on page 45 and Annex C for
information on the requirements of Delaware law regarding
appraisal rights.
Stock
Ownership of Directors and Executive Officers
As
of ,
2008, the record date for the special meeting, our directors and
executive officers owned, in the
aggregate, shares
of our common stock
and
vested options to purchase our common stock, or collectively
approximately % of the
outstanding shares of our common stock (including vested options
to purchase our common stock owned by our directors and
executive officers). None of our directors or executive offices
have entered into an agreement with Parent with respect to the
voting of their shares of CAM Commerce common stock at the
special meeting.
Solicitation
of Proxies
CAM Commerce is soliciting your proxy. In addition to the
solicitation of proxies by use of the mail, officers and other
employees of CAM Commerce may solicit the return of proxies by
personal interview, telephone,
e-mail,
or
facsimile. We will not pay additional compensation to our
officers and employees for their solicitation efforts. We will
request that brokerage houses and other custodians, nominees,
and fiduciaries forward solicitation materials to the beneficial
owners of stock registered in their names. We will bear all
costs
8
of preparing, assembling, printing, and mailing the notice of
special meeting of stockholders, this proxy statement, the
enclosed proxy card, and any additional materials, as well as
the cost of forwarding solicitation materials to the beneficial
owners of stock and all other costs of solicitation.
We have retained MacKenzie Partners, Inc. to aid in the
solicitation of proxies for the special meeting. MacKenzie
Partners will receive a base fee of $15,000 plus reimbursement
of out-of-pocket fees and expenses.
Assistance
Stockholders who have questions regarding the materials, need
assistance voting their shares, or require additional copies of
the proxy statement or proxy card should contact or call
(toll-free) our proxy solicitor:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
Toll free: (800) 322-2885
Banks and brokers can call (212) 929-5500.
Other
Business
We are not currently aware of any business to be acted upon at
the special meeting other than the matters discussed in this
proxy statement. If other matters do properly come before the
special meeting, we intend that shares of our common stock
represented by properly submitted proxies will be voted by the
persons named as proxies on the proxy card in accordance with
their judgment.
Postponements
and Adjournments
Although it is not expected, the special meeting may be
postponed or adjourned for, among other reasons, the purpose of
soliciting additional proxies to any other time and place if
approved by our stockholders. You should note that the special
meeting could be successively postponed or adjourned to any
date. If the special meeting is postponed or adjourned for the
purpose of soliciting additional proxies, stockholders who have
already sent in their proxies will be able to revoke them at any
time prior to their use. Unless indicated on a proxy card, no
proxy voted against the proposal to adopt the merger agreement
will be voted in favor of any postponements or adjournment of
the special meeting. A determination of stockholders of record
entitled to notice of or to vote at the special meeting shall
apply to any adjournment of the special meeting; provided,
however, that our board of directors may fix a new record date
for the adjourned meeting and provided further that if the
adjournment is for more than thirty days, a notice of the
adjourned meeting shall be given to each stockholder of record
entitled to vote at the special meeting.
9
THE
TRANSACTION PARTICIPANTS
CAM
Commerce Solutions, Inc.
CAM Commerce designs, develops, markets, installs and services
highly integrated retailing and payment processing solutions for
small to medium size traditional and eCommerce businesses based
on CAM Commerces open architecture software. These
integrated solutions include credit and debit card processing,
inventory management, point of sale, accounting, Internet sales,
gift card and customer loyalty programs, and extensive
management reporting. CAM Commerce Solutions, Inc. was
incorporated in California in 1983, and reincorporated in
Delaware in 1987. We maintain our principal executive offices at
17075 Newhope Street, Suite A, Fountain Valley, California
92708. Our telephone number is
(714) 241-9241.
Vegas
Holding Corp.
Parent is a newly formed Delaware corporation. Parent was formed
by Great Hill Partners, LLC, which we refer to in this proxy
statement as GHP, solely for the purpose of effecting the merger
and the transactions related to the merger. Parent is currently
wholly-owned by a fund controlled by GHP and has not engaged in
any business except in anticipation of the merger. GHP is a
private equity firm that manages over $2.5 billion in
capital to finance the expansion, recapitalization or
acquisition of growth companies in a wide range of sectors
within the business and consumer services, media, communications
and software industries. The principal executive offices of
Parent are located at One Liberty Square, 13th Floor,
Boston, Massachusetts 02109.
Vegas
Merger Sub Inc.
Merger Subsidiary is a newly formed Delaware corporation. Merger
Subsidiary was formed by GHP solely for the purpose of
completing the merger and the transactions related to the
merger. Merger Subsidiary is wholly-owned by Parent and has not
engaged in any business except in anticipation of the merger.
The principal executive offices of Merger Subsidiary are located
at One Liberty Square, 13th Floor, Boston, Massachusetts
02109.
10
THE
MERGER
The discussion under the sections of this proxy statement
entitled The Merger and The Merger
Agreement summarizes the material terms of the merger and
the merger agreement. Although we believe that the description
covers the material terms of the merger, this summary may not
contain all of the information that is important to you. We urge
you to carefully read this proxy statement in its entirety, the
merger agreement and the other documents referred to herein for
a complete understanding of the merger agreement and the merger.
The
Merger
We are asking our stockholders to consider and vote on the
adoption of the merger agreement, pursuant to which Merger
Subsidiary will merge with and into CAM Commerce with CAM
Commerce continuing as the surviving corporation. Following
consummation of the merger, CAM Commerce will be a wholly-owned
subsidiary of Parent.
Background
of the Merger
The board of directors and management of CAM Commerce have
continually reviewed CAM Commerces business plans and
strategic opportunities. In assessing alternatives, the board
and management have discussed the markets in which CAM Commerce
competes and the risks and rewards associated with various
growth opportunities. Alternatives considered included the
possibility of pursuing mergers, acquisitions, the sale of stock
(both primary and secondary shares) and various other financing
transactions, and the possible sale of CAM Commerce. In
evaluating these alternatives, the board and management focused
on various factors including, but not limited to, CAM
Commerces ability to execute on its business plan and its
strategic opportunities, CAM Commerces limited shareholder
liquidity, and the impact to stockholder value.
In the fall of 2006, Geoffrey Knapp, CAM Commerces chief
executive officer, was approached by Company A, a strategic
buyer, to discuss a potential acquisition of CAM Commerce. As
part of preliminary discussions with Company A, in early 2007
CAM Commerce executed a confidentiality agreement to evaluate
the possibility of pursuing a potential transaction. Also, in
November 2006, Mr. Knapp was approached by a representative
from Company B, another strategic buyer, to discuss a possible
acquisition of CAM Commerce. However, after preliminary
discussions, Mr. Knapp was informed that Company B did not
desire to move forward with a transaction because it believed
the valuation implied by CAM Commerces stock already
reflected more than the fair value of the business.
At a regularly scheduled meeting held on November 14, 2006,
Mr. Knapp updated the board of directors on the interest
being shown by multiple parties to acquire CAM Commerce. After
extensive discussion on the historical operations of the
business, including the increasing adoption of CAM
Commerces X-Charge system by its customers, and the risks
and uncertainties associated with the business, the board
concluded that in light of the interest CAM Commerce had
received from multiple parties, the timing was appropriate for
CAM Commerce to explore whether additional parties might be
interested in a potential transaction with CAM Commerce. In
connection with the decision to pursue other potential
interested parties, the board of directors discussed the
retention of an investment banking firm to assist CAM Commerce
in its negotiations with Company A and to act as financial
advisor to assist CAM Commerce assess its other potential
strategic alternatives.
On January 11, 2007, Mr. Knapp and Mr. Caceres
met with Company A at CAM Commerces Fountain Valley,
California offices to discuss a potential transaction. On
February 9, 2007, at a regularly scheduled meeting, the
board of directors of CAM Commerce discussed the retention of
RBC to act as its financial advisor and the board of directors
instructed Mr. Knapp to negotiate the terms of an
engagement with RBC. In addition, the board requested management
to retain outside legal counsel with experience in public
company representation to assist the board with exploring
strategic alternatives.
On February 19, 2007, CAM Commerce entered into an
engagement letter with RBC. Following its engagement, RBC
consulted with management to identify parties that might have an
interest in a strategic
11
transaction with CAM Commerce, developed preliminary procedures
and timetables for implementing a strategic transaction and
assisted CAM Commerce management in the preparation of certain
written materials describing CAM Commerce.
In late February, after discussions with several law firms, CAM
Commerce engaged Stradling Yocca Carlson & Rauth, or
SYCR, as its outside legal counsel to assist the board and
management in evaluating strategic alternatives.
On February 23, 2007, CAM Commerce received a non-binding
written indication of interest from Company A which proposed,
among other things, the all-cash acquisition of CAM Commerce at
$30.00 per outstanding common share. In connection with the
indication of interest, Company A sought exclusivity to complete
a transaction. Mr. Knapp reviewed and discussed this
written indication of interest with CAM Commerces board of
directors. The board concluded that because the initial
indication of interest was conditioned upon satisfactory
completion of certain due diligence regarding CAM
Commerces Retail Systems business, it was not willing to
grant exclusivity to Company A at that time. The board
determined that it would permit continued discussions with
Company A, without granting exclusivity, in order to address
these due diligence questions. RBC informed Company A that CAM
Commerce was not prepared to grant exclusivity, but CAM Commerce
was interested in continuing discussions regarding a potential
transaction. Company A agreed to continue its due diligence in
an effort to eliminate certain due diligence conditions included
in its indication of interest.
On February 27, 2007, RBC met with Mr. Knapp to
formulate a list of parties to contact to assess interest in a
potential transaction with CAM Commerce. It was agreed that the
list should include both strategic buyers as well as private
equity firms to increase the likelihood of a competitive bidding
process and thereby maximize value to CAM Commerces
stockholders. RBC and Mr. Knapp assembled a list of
nineteen parties, consisting primarily of strategic buyers but
also several private equity firms. From February 28 until late
March, RBC contacted these parties to gauge their interest in
pursuing a potential transaction with CAM Commerce.
On February 28, 2007, RBC held a teleconference with
Company A to discuss its indication of interest, schedule an
in-person meeting with CAM Commerce management and identify what
additional due diligence needed to be conducted. As a result of
this teleconference, a meeting was scheduled for March 7,
2007.
On March 7, 2007, representatives of Company A met with CAM
Commerce and representatives of RBC at CAM Commerces
office in Henderson, Nevada to conduct due diligence. Following
this meeting, Company A confirmed that it intended to continue
to conduct its due diligence to evaluate a potential transaction.
On March 13, 2007, CAM Commerces board of directors
held a special meeting. Representatives of RBC and
representatives of SYCR also attended via teleconference. As
part of this meeting, SYCR led a discussion relating to the
fiduciary duties of the board of directors under Delaware law in
connection with the evaluation of the preliminary offer.
Representatives of RBC provided the board of directors with an
update as to the status of communications with the nineteen
parties who were contacted to assess their interest in a
potential transaction. Of the nineteen parties contacted, only
three parties had expressed potential interest in pursuing
discussions to explore a transaction with CAM Commerce. One of
the parties, Company C, a strategic buyer, which had indicated
that it was not interested in pursuing a transaction at that
time, did indicate that it might re-evaluate a potential
transaction in the future. The representatives of RBC answered
questions from the board of directors regarding the process and
discussed next steps in the process.
From March 7, 2007 until March 16, 2007, Company A
continued its due diligence efforts. On March 16, 2007,
Company A notified CAM Commerce that it had concerns whether it
could successfully integrate CAM Commerces Retail Systems
business with its other businesses and therefore was no longer
interested in pursuing a potential transaction with CAM
Commerce. In light of these concerns, as well as the recent
increase in the trading price of CAM Commerces stock,
discussions with Company A terminated.
On March 28, 2007, the board of directors held a special
meeting via teleconference with representatives of RBC in
attendance. RBC provided the board of directors with an update
as to the status of communications with potential buyers. Of the
three parties that had initially indicated they might have
interest in evaluating a
12
potential transaction with CAM Commerce, none had confirmed that
they would pursue due diligence. Following the March 28,
2007 special meeting of the board, two of the three parties
notified RBC that they were not interested in pursuing a
transaction with CAM Commerce. The third party held a meeting
with Mr. Knapp and a representative from RBC on
June 20, 2007, but subsequently indicated that they would
not be interested in pursuing a transaction with CAM Commerce.
RBC noted to the board that a commonly cited reason given by
parties declining to pursue a transaction with CAM Commerce was
that they believed that the valuation implied by CAM
Commerces trading price exceeded their valuation of our
business.
On May 4, 2007, Mr. Knapp was contacted by GHP, which
expressed an interest in learning more about CAM Commerce. On
May 30, 2007, a representative of RBC met with
representatives of GHP, and provided GHP with an overview of CAM
Commerce based on publicly available information.
On June 20, 2007, Mr. Knapp and a representative of
RBC met with Company D, a strategic buyer, to discuss a possible
transaction. A representative from Company D later informed
Mr. Knapp that it was unwilling to move forward with a
transaction primarily because it believed the valuation implied
by CAM Commerces trading price exceeded its valuation of
our business.
During June and July, representatives of GHP and RBC had
discussions regarding a possible transaction. On August 1,
2007, CAM Commerce executed a non-disclosure agreement with GHP
in order to permit more detailed discussions regarding a
potential transaction, but did not provide exclusivity to GHP.
On August 2, 2007, representatives of GHP, Mr. Knapp
and a representative of RBC met at CAM Commerces
Henderson, Nevada facility to discuss the possibility of a
potential transaction and various financial and business due
diligence requests. CAM Commerce and RBC provided answers to
various business and financial due diligence requests from GHP
throughout August.
During August 2007, in the course of a meeting with a third
party on other matters, RBC explored the potential interest of
that third party in acquiring a company with the characteristics
of CAM Commerce (which RBC did not identify). This third party
did not express an interest, either at the meeting or
thereafter, in pursuing such an acquisition.
On August 22, 2007, after several weeks of due diligence,
GHP verbally indicated to RBC that it would be prepared to
pursue a transaction at a price in the range of $36.00 to $37.00
per share. CAM Commerce and RBC continued due diligence with GHP
based on this verbal indication of interest.
On September 19, 2007, representatives of GHP,
Mr. Knapp, Mr. Caceres and representatives of RBC met
at CAM Commerces Henderson, Nevada facility to discuss
additional financial and business due diligence requests. On
September 24, 2007, Mr. Knapp, Mr. Caceres,
representatives of RBC and GHP had a follow up conference call
to discuss certain business and financial due diligence requests.
On October 1, 2007, CAM Commerce received a non-binding
written proposal from GHP pursuant to which GHP proposed
purchasing all of the outstanding stock of CAM Commerce at
$37.00 per share. This price represented a premium of 3.1% to
CAM Commerces closing stock price on October 1, 2007
of $35.88 per share. On October 2, 2007, the board of
directors held a special meeting to discuss the GHP proposal.
Representatives of RBC and SYCR also attended. RBC presented to
the board an overview of the process with third party bidders to
date and its financial analysis of the GHP offer. The board
discussed the merits of the proposal at length, including the
fairness of the purchase price based on a comparable company and
precedent transaction analysis which indicated the implied value
of CAM Commerce at GHPs offer price was well above the
mean and median for other comparable companies. However, it was
noted that the trading price of CAM Commerces common stock
had significantly increased from the time GHP first indicated a
suggested price range for a transaction and that the closing
price on that day was $38.00 per share, or $1.00 more than the
proposed purchase price. RBC was instructed to inform GHP that
CAM Commerce was not interested in pursuing a transaction that
was not at a premium to CAM Commerces trading price. GHP
responded that it was not interested in pursuing a transaction
at a higher price given its concern regarding valuation.
From October 2, 2007 through early February 2008, RBC
contacted an additional seventeen strategic buyers and private
equity firms that had been discussed with Mr. Knapp and
that might have an interest in
13
pursuing a potential transaction with CAM Commerce. Six of the
parties executed non-disclosure agreements and received
confidential information about CAM Commerce, but no management
meetings or indications of interest resulted from these
discussions. RBC noted that a commonly cited reason by a number
of these parties as to why they did not want to move forward
with a transaction was that the valuation implied by CAM
Commerces trading price exceeded their valuation of CAM
Commerce. During this time, GHP and Mr. Knapp continued to
have discussions regarding a possible transaction and GHP
requested additional financial diligence materials. However, GHP
was unwilling to provide a formal indication of interest during
this period.
On January 3, 2008, discussions between Mr. Knapp and
Company C were reinitiated to determine whether Company C would
have an interest in pursuing a potential transaction. Company C
informed CAM Commerce that it would need to analyze and discuss
the merits of potential transaction with its internal team prior
to initiating formal due diligence and pursuing a potential
transaction. In mid-January, Company C confirmed that it was
interested in pursuing a potential transaction. From mid-January
through mid-March, Company C conducted due diligence with
respect to CAM Commerces business.
Also, in January 2008, Mr. Knapp, with RBCs
permission, had informal discussions with a representative of
another investment bank with extensive experience in CAM
Commerces industry regarding potential acquirers of CAM
Commerce. This representative believed CAM Commerces
trading price represented a robust valuation for its business
and that it would be difficult to obtain a significant premium
from a third party acquirer, whether strategic or financial.
On March 18, 2008, Company C submitted a non-binding
indication of interest providing for the purchase of all of the
outstanding stock of CAM Commerce in the range of $37.50 to
$40.00 per share. This indication of interest included a request
for exclusivity through June 10, 2008 to finalize its due
diligence and negotiate a definitive agreement. The board,
Mr. Knapp and RBC held various discussions regarding this
proposal. Mr. Knapp informed representatives from Company C
that CAM Commerce would not accept its indication of interest
because the lower end of the price range was inadequate and that
CAM Commerce was not interested in pursuing a transaction at
less than $40.00 per share.
On March 19, 2008, Company C submitted a revised
non-binding indication of interest at a price of $40.00 per
share. The board of directors held a special meeting to discuss
Company Cs indication of interest. Representatives of RBC
and SYCR were also in attendance. The board reviewed the terms
of the proposed transaction and risks associated with entering
into an exclusivity agreement. However, it was noted that RBC
had approached a large number of potential acquirers, including
both private equity firms and strategic acquirers, in the past
and that a common reason for these parties not wanting to pursue
a transaction with CAM Commerce, was that they believed the
valuation implied by CAM Commerces stock price exceeded
their valuation of Cam Commerces business. The board
instructed management to enter into an exclusivity agreement
with Company C on the basis of the revised non-binding
indication of interest.
On March 25, 2008, CAM Commerce formally re-engaged RBC as
its financial advisor in view of the expiration of the one-year
term of RBCs initial engagement.
On March 26 and March 27, 2008, CAM Commerce, RBC, Company
C and Company Cs financial advisor held meetings at CAM
Commerces headquarters in Fountain Valley, California and
in Henderson, Nevada, respectively. These meetings allowed
Company C to conduct management meetings, view the facilities
and perform various
on-site
due
diligence. In the weeks following the in-person meetings,
detailed due diligence continued.
On April 16, 2008, Mr. Knapp met with a representative
from Company C in Las Vegas, Nevada. The representative from
Company C indicated that they were prepared to move forward with
the proposed transaction at the agreed upon price, but with
certain new conditions. These conditions were viewed by
management and the board as potentially compromising CAM
Commerces ability to successfully close a transaction
following a public announcement of entering into a definitive
merger agreement. The parties continued to negotiate, but
ultimately were not able to reach a resolution on these issues.
14
On April 19, 2008, Company C and CAM Commerce agreed to
discontinue their negotiations regarding a potential transaction
and Company C, at CAM Commerces request, released CAM
Commerce from its restrictions under the exclusivity agreement.
Shortly thereafter, CAM Commerce and GHP renewed their
discussions regarding the interest for, and the feasibility of,
a potential transaction. Mr. Knapp informed GHP that CAM
Commerce would only be interested in pursuing a transaction on
the following conditions: (a) a price of at least $41.00
per share in cash; (b) no financing contingency; and
(c) no exclusivity period for negotiations.
On April 23, 2008, GHP was granted access to CAM
Commerces virtual dataroom and began performing detailed
due diligence.
On April 29, 2008, representatives from GHP met with
Mr. Knapp and a representative from RBC. GHP confirmed that
it was prepared to move ahead negotiating a transaction at a
price of $41.00 per share without a financing contingency and
without the benefit of exclusivity, subject to successful
completion of its business and legal due diligence review.
On May 7, 2008, CAM Commerce received a draft merger
agreement from GHP.
Throughout May and early June, representatives of CAM Commerce
produced documents in response to various due diligence requests
from advisors to GHP, including Kirkland & Ellis LLP,
or K&E,, PricewaterhouseCoopers LLP, and other technical
consultants. Representatives from GHP met with management in
Lake Las Vegas, Nevada, near CAM Commerces Henderson,
Nevada facility on May 20, 2008 to conduct in-person due
diligence discussions. Also during this time, the parties
exchanged numerous drafts of the merger agreement to reflect
proposed changes from CAM Commerce.
On two occasions in late May and early June 2008, Mr. Knapp
approached a representative from Company C to gauge its interest
in pursuing a transaction for a per share price in excess of
$41.00. On each occasion, Mr. Knapp was told that Company C
did not want to move forward with a transaction at a price in
that range because of valuation concerns.
On May 30, 2008, the board of directors met telephonically
to discuss the status of the negotiations with GHP. A
representative of SYCR also attended. A representative of SYCR
summarized the material terms of the merger agreement, including
the per share purchase price of $41.00 in cash, the guarantee of
GHP to satisfy Parents obligations under the merger
agreement, GHPs representation that it has the financial
capacity to perform these obligations, the lack of a financing
condition to close the merger and the ability of CAM Commerce to
seek specific performance of Parents obligations.
Mr. Knapp also discussed with the board that GHP informed
him that as a condition to signing the merger agreement, GHP
wanted to discuss the terms of an agreement for
Mr. Knapps post merger employment with CAM Commerce,
although no terms had been discussed or proposed by either
party. After discussion and the boards satisfaction that
the material terms of the merger agreement were agreed upon,
Mr. Knapp was authorized by the board to discuss a post
merger employment arrangement with GHP.
On May 31, 2008 and June 1, 2008, Mr. Knapp and
GHP had several telephone discussions regarding the terms of
Mr. Knapps possible employment arrangement following
the merger. In particular, GHP believed that the severance
payments that could become due to Mr. Knapp under his
existing change of control agreement were significant and would
not be appropriate following the merger. After numerous
conversations throughout the two day period, Mr. Knapp and
GHP agreed in principle to an agreement providing for
Mr. Knapp to continue as chief executive officer of CAM
Commerce after the merger for which he would receive a base
salary of $350,000, be eligible to earn an annual bonus of up to
50% of his base salary and would receive twelve months severance
if his employment terminated in certain circumstances, terms not
as favorable on the whole as the terms of his existing
arrangement. It was also agreed that Mr. Knapps
existing change of control agreement would be terminated
effective upon the closing of the merger without Mr. Knapp
receiving any payments thereunder.
During the week of June 2, 2008, GHP and its advisors
continued to conduct a due diligence review of CAM Commerce. In
addition, SYCR and K&E discussed additional modifications
to the merger agreement.
15
On June 8, 2008, GHP contacted Mr. Knapp to inform him
that as a result of GHPs due diligence investigations, GHP
would move forward with a transaction with a purchase price of
$40.00 per share. After additional discussions between
Mr. Knapp and GHP regarding the basis of the proposed
change in purchase price, Mr. Knapp discussed the proposal
with members of the board individually. Mr. Knapp then
informed GHP that CAM Commerce would be willing to proceed with
a transaction at purchase price of $40.50 per share. After
additional deliberations, GHP informed Mr. Knapp that GHP
would accept his proposal of $40.50 per share.
On June 9, 2008, the board of directors convened a meeting
to consider whether the terms of the merger agreement and
transactions contemplated thereby, including the merger, were
advisable, fair to, and in the best interests of, CAM Commerce
stockholders and whether to recommend that the board approve and
adopt the merger and the merger agreement and the transactions
contemplated thereby. A representative of SYCR reviewed with the
board the significant terms of the merger agreement and the
boards fiduciary duties under Delaware law.
Representatives of RBC reviewed RBCs financial analysis
and rendered its oral opinion to the board of directors, which
opinion was subsequently confirmed in writing, that as of
June 9, 2008, based upon and subject to the various
factors, assumptions, procedures, limitations and qualifications
set forth in such written opinion, the consideration of $40.50
for each outstanding share of CAM Commerce common stock to be
received by stockholders of CAM Commerce pursuant to the merger
agreement was fair from a financial point of view to such
stockholders (the full text of that opinion, which sets forth
the assumptions made, procedures followed, matters considered
and limitations on the review undertaken by RBC in connection
with its opinion, is attached as Annex B to this proxy
statement and should be read in its entirety in conjunction with
the information contained in The Merger
Opinion of Our Financial Advisor).
The board noted that although the premium being paid for CAM
Commerce stock in the merger was within the range of comparable
transactions, the premium was below the mean and median of these
transactions. However, the board also considered that CAM
Commerces purchase price implied enterprise value to
revenue and enterprise value to EBITDA multiples which were
higher than the average multiples for similarly situated
publicly-traded companies and for other comparable merger
transactions and that numerous potential acquirers indicated
that they believed the valuation implied by CAM Commerces
trading price exceeded their valuation of CAM Commerces
business. After deliberation, the board of directors concluded
that the merger and the other transactions contemplated by the
merger agreement were advisable, fair to, and in the best
interests of, CAM Commerce stockholders, and that the executive
officers were authorized and directed to finalize the terms of
the merger agreement and submit the merger agreement and the
transactions contemplated thereby to CAM Commerce stockholders
for their approval.
On the same day, the merger agreement was executed by CAM
Commerce, Vegas Holding Corp. and Vegas Merger Sub Inc. and an
employment agreement was executed by CAM Commerce and
Mr. Knapp. On June 10, 2008, a joint press release
announcing the merger was issued by CAM Commerce and GHP.
Reasons
for the Merger; Recommendation of Our Board of
Directors
The board of directors of CAM Commerce has determined that each
of the merger agreement and the merger is fair to, and in the
best interests of, our stockholders. In reaching its conclusion,
the board of directors considered the following material
factors, among others:
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the fact that the merger consideration is all cash, which
provides liquidity and certainty of value to CAM Commerce
stockholders;
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the likelihood that the merger would be consummated, in light of
the absence of any financing contingency to complete the merger,
the guarantee of GHP to perform Parents obligations under
the merger agreement, and the likelihood of obtaining required
regulatory approvals;
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the financial and other terms and conditions of the merger
agreement, including the representations and warranties of the
parties, the covenants of the parties and the conditions to the
closing of the proposed merger, and the fact they were the
product of an arms-length negotiation between the parties;
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16
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the right of our board of directors, in the event it were to
receive any unsolicited bona fide third party acquisition
proposal or proposals that our board of directors reasonably
believes will lead to a Superior Proposal (as defined in
The Merger Agreement No Solicitation of
Alternative Transactions by CAM Commerce) prior to
the stockholder meeting to approve the merger, to consider and
enter into negotiations of any such proposals, subject to
complying with certain requirements including that our board of
directors must determine in good faith, after considering the
advice of outside legal counsel, that the failure to take such
action would reasonably be expected to result in a breach of its
fiduciary duties under applicable law;
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our boards belief that the merger is more favorable to our
stockholders than other alternatives available to us, including
the alternative of continuing as an independent public company;
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the risks and uncertainties associated with our business that
could negatively impact our operating results and trading price,
including, among others:
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the potential for decreasing gross margins that could be caused
by a variety of factors such as increased competition from
larger companies with greater resources than we have;
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the decline in operating results of our Retail Systems business
and the high level of investment required to increase revenue in
that business;
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our ability to sustain our historical growth rates as we get
larger and further penetrate the market; and
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additional costs of continuing to operate as a public company,
including costs associated with complying with Section 404
of the Sarbanes-Oxley Act of 2002, as amended, and the premiums
payable by us as a result of our intention to obtain directors
and officers insurance in the near future;
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the merger is the result of an active process in which we,
directly or indirectly through RBC, had contact with 38 third
parties, including private equity firms and companies in the
software or services sector, that we believed may be interested
in pursuing a possible transaction;
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the fact that the per share consideration of $40.50 represented
a premium of 9.1% to the closing price on June 6, 2008 and
a premium of 11.8% to the closing price of our stock one week
prior to June 6, 2008;
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while certain recent merger and acquisition transactions have
been observed to have higher premiums paid than those noted
above, the board of directors noted that: (i) the premiums
paid were within the range of those observed in other recent
merger and acquisition transactions; and (ii) prior to the
announcement of the proposed transaction, the enterprise value
to revenue and enterprise value to EBITDA multiples implied by
our stocks recent trading prices, were above the mean and
median multiples of similarly situated publicly-traded companies;
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despite discussions with dozens of third parties regarding a
possible transaction, the majority of those parties expressed no
interest in pursuing a transaction with CAM Commerce and the
remainder indicated that they would not be willing to pursue a
transaction at the valuations implied;
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risks associated with our stock, including the disproportionate
impact of our trading volume on our trading price and the
possibility that sales of a large number of shares of our stock
would cause a significant decrease in the trading price of our
stock and decrease the value of our stockholders
investment in us;
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the financial analysis reviewed and discussed with the board of
directors by representatives of RBC as well as the oral opinion
of RBC, to the board of directors on June 9, 2008 (which
was subsequently confirmed in writing by delivery of RBCs
written opinion dated the same date) with respect to the
fairness from a financial point of view of the merger
consideration to be received by our stockholders (RBCs
written opinion dated June 9, 2008, which included certain
assumptions, qualifications and limitations, is attached to this
proxy statement as Annex B and stockholders are urged to
read the
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17
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opinion in its entirety as well as the discussion of RBCs
analyses set forth in Opinion of Our Financial
Advisor beginning on page 19);
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the termination provisions of the merger agreement,
(a) which entitle our board of directors to terminate the
merger agreement to enter into an agreement for a Superior
Proposal (as discussed in the section entitled The Merger
Agreement No Solicitation of Alternative
Transactions by CAM Commerce) with a third party, subject
to the payment by CAM Commerce of an approximately
$7.2 million termination fee and certain other conditions,
which in the aggregate represents 4.0% of the total merger
consideration, after taking into consideration the amount being
paid to CAM Commerces option holders, which the board
considered within a range of termination fess that is customary
for transactions of this type and size and is not expected to
preclude a third party from making an acquisition proposal;
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the fact that the merger agreement provides the opportunity for
our stockholders, who believe that the terms of the merger are
not fair, to pursue appraisal rights under the DGCL; and
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that the merger agreement and merger will be required to be
approved by holders of at least a majority of our outstanding
shares of our common stock.
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Our board of directors was aware of and also considered the
following potentially adverse factors associated with the
merger, among others:
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that the proposed merger will be a taxable transaction for our
stockholders;
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that if the merger is not completed, we may be adversely
affected due to potential disruptions in our operations and
reductions in our perceived acquisition value;
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the potential disruptions to customer, supplier or other
commercial relationships important to us as a result of the
announcement of the merger;
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the possibility that the merger will not be consummated and the
potential negative effect of the public announcement of the
merger on our sales, operating results and stock price and our
ability to retain key management, sales and marketing and
technical personnel;
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the conditions to Parents obligation to complete the
merger and the right of Parent to terminate the merger agreement
under certain circumstances;
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the restrictions on our ability to solicit or engage in
discussions or negotiations regarding alternative business
combination transactions, subject to specified exceptions, and
the requirement that we pay a termination fee in order to accept
a Superior Proposal, which may discourage a competing proposal
to acquire us that may be more beneficial to our stockholders;
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the restrictions on the conduct of our business prior to the
completion of the merger, requiring us to conduct our business
in the ordinary course, subject to specific limitations, which
may delay or prevent us from undertaking business opportunities
that may arise in the interim;
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the risk of diverting managements focus and resources from
other strategic opportunities and from operational matters while
working to consummate the merger, and the possibility of other
management and employee disruption associated with the merger,
including the possible loss of key management, technical or
other personnel; and
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the interests that certain of our directors and executive
officers may have with respect to the merger, in addition to
their interests as stockholders of CAM Commerce generally, as
described in The Merger Interests of Officers
and Directors in the Merger.
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Our board of directors concluded that these potentially negative
factors were substantially outweighed by the opportunity
presented by the merger for our stockholders to monetize their
CAM Commerce investment for $40.50 per share in cash within a
relatively short period of time if the merger conditions were
satisfied, which the board of directors believed would maximize
the value of our stockholders shares.
18
The preceding discussion of the information and factors
considered by our board of directors is not, and is not intended
to be, exhaustive. In view of the large number of factors
considered by our board of directors in connection with the
evaluation of the merger agreement and the merger and the
complexity of these matters, our board of directors did not
consider it practicable to, nor did it attempt to, quantify,
rank or otherwise assign relative weights to the specific
factors considered in reaching a decision, nor did our board of
directors evaluate whether these factors were of equal
importance. In addition, each director may have given different
weight to the various factors. In evaluating the merger
agreement and the merger, our board of directors consulted with
our management and our legal and financial advisors with respect
to the terms of the merger.
Our board of directors has unanimously determined that the
merger agreement and the merger are fair to, and in the best
interests of, our stockholders, have approved the merger
agreement and have authorized the transactions contemplated by
the merger agreement, including the merger, subject to approval
by our stockholders.
Our board of directors unanimously
recommends that you vote FOR adoption of the merger
agreement.
Opinion
of Our Financial Advisor
On June 9, 2008, as financial advisor to CAM Commerce, RBC
rendered its written opinion to the CAM Commerce board of
directors that, as of that date and subject to the assumptions,
qualifications and limitations set forth in its opinion, the per
share merger consideration of $40.50 in cash (without interest)
specified in the merger agreement was fair, from a financial
point of view, to the CAM Commerce stockholders. The full text
of RBCs opinion is attached to this proxy statement as
Annex B. RBCs opinion was approved by the RBC
M&A Fairness Opinion Committee.
This summary of
RBCs opinion is qualified in its entirety by reference to
the full text of the opinion. CAM Commerces stockholders
are urged to read the RBC opinion carefully and in its
entirety.
RBCs opinion was provided for the information and
assistance of the board of directors in connection with its
consideration of the merger. RBCs opinion did not address
CAM Commerces underlying business decision to engage in
the merger or the relative merits of the merger compared to any
alternative business strategy or transaction in which CAM
Commerce might engage. RBCs opinion and its analysis
reviewed with the board of directors were only two of many
factors taken into consideration by the board of directors in
making its determination to approve the merger.
RBCs
opinion does not constitute a recommendation to the CAM Commerce
stockholders as to how they should vote with respect to the
merger.
RBCs opinion addressed solely the fairness of the per
share merger consideration, from a financial point of view, to
the CAM Commerce stockholders and did not address other terms or
arrangements of the merger or the merger agreement, including,
without limitation, the financial or other terms of any other
agreement contemplated by, or to be entered into in connection
with, the merger agreement. Further, in rendering its opinion,
RBC expressed no opinion about the fairness of the amount or
nature of the compensation to any of CAM Commerces
officers, directors, or employees, or any class of such persons,
relative to the compensation to CAM Commerces stockholders.
In rendering its opinion, RBC assumed and relied upon the
accuracy and completeness of all information that was publicly
available to RBC and all of the financial, legal, tax,
operating, and other information provided to or discussed with
it by CAM Commerce, including, without limitation, the financial
statements and related notes thereto of CAM Commerce. RBC did
not assume responsibility for independently verifying, and did
not independently verify, this information. RBC assumed that the
financial projections and forecasts for the 2008 calendar year
of CAM Commerce prepared by the management of CAM Commerce and
reviewed by RBC were reasonably prepared reflecting the best
currently available estimates and good faith judgments of the
future financial performance of CAM Commerce as a standalone
entity. RBC expressed no opinion as to the financial projections
and forecasts for the 2008 calendar year or the assumptions on
which it was based. RBC did not assume any responsibility to
perform, and did not perform, an independent evaluation or
appraisal of any of the assets or liabilities of CAM Commerce,
and RBC was not furnished with any such valuations or
appraisals. In addition, RBC did not assume any obligation to
conduct, and did not conduct, any
19
physical inspection of the property or facilities of CAM
Commerce. Additionally, RBC was not asked to, and did not
consider, the possible effects of any litigation or other claims
affecting CAM Commerce.
In rendering its opinion, RBC assumed that all conditions to the
consummation of the merger would be satisfied without waiver and
that the executed version of the merger agreement would not
differ, in any respect material to its opinion, from the latest
draft RBC reviewed.
RBCs opinion spoke only as of the date it was rendered,
was based on the conditions as they existed and information with
which RBC was supplied as of such date, and was without regard
to any market, economic, financial, legal or other circumstances
or event of any kind or nature which may exist or occur after
such date. RBC has not undertaken to reaffirm or revise its
opinion or otherwise comment on events occurring after the date
of its opinion and does not have an obligation to update, revise
or reaffirm its opinion. Unless otherwise noted, all analyses
were performed based on market information available as of
June 6, 2008, the last trading day preceding the
finalization of RBCs analysis.
In connection with its review of the merger and the preparation
of its opinion, RBC undertook the review and inquiries it deemed
necessary and appropriate under the circumstances, including:
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reviewing the financial terms of the draft merger agreement
dated June 9, 2008;
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reviewing and analyzing certain publicly available financial and
other data with respect to CAM Commerce and certain other
relevant historical operating data relating to CAM Commerce made
available to RBC from published sources and from the internal
records of CAM Commerce;
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reviewing financial projections and forecasts of CAM Commerce
prepared by the management of CAM Commerce for the 2008 calendar
year;
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conducting discussions with members of the senior management of
CAM Commerce with respect to the business prospects and
financial outlook of CAM Commerce as a standalone entity;
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reviewing the reported prices and trading activity for the
common stock of CAM Commerce; and
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performing such other studies and analyses as RBC deemed
appropriate.
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In arriving at its opinion, in addition to reviewing the matters
listed above, RBC performed the following analyses:
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RBC compared the financial metrics of selected precedent
transactions with the financial metrics implied by the per share
merger consideration;
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RBC compared selected market valuation metrics of CAM Commerce
and other comparable publicly-traded companies with the
financial metrics implied by the per share merger
consideration; and
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RBC compared the premiums paid in selected precedent
transactions with the premiums implied by the per share merger
consideration.
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In connection with the rendering of its opinion to the CAM
Commerce board of directors, RBC reviewed with the board of
directors the analyses listed above and other information
material to the opinion. In presenting its opinion to the CAM
Commerce board of directors, RBC noted that it did not perform a
discounted cash flow analysis as CAM Commerce does not prepare
sufficiently long term financial projections in the course of
its business to prepare such an analysis. Set forth below is a
summary of the analyses used by RBC, including information
presented in tabular format. To fully understand the summary of
the analyses used by RBC, the tables must be read together with
the text of each summary. The tables alone do not constitute a
complete description of the analysis.
Precedent Transaction Analysis.
RBC compared
enterprise value (EV)-to-actual last twelve-months
(LTM) revenue and EV-to-LTM earnings before
interest, taxes, depreciation and amortization
(EBITDA) multiples relating to the merger with
corresponding multiples in selected publicly-announced precedent
merger and acquisition transactions in the payment processing
and point-of-sale (POS) retail technology
industries. In selecting precedent transactions, RBC considered
comparable transactions announced since January 1, 2006
20
in which the transaction values were greater than
$25 million. Based on these criteria, the following
seventeen transactions were analyzed:
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Acquiror
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Target
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Payment Processing
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Intuit, Inc.
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Electronic Clearing House, Inc.
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Fiserv, Inc.
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CheckFree Corp.
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Fidelity National Information Services, Inc.
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eFunds Corp.
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CyberSource Corp.
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Authorize. Net Holdings, Inc.
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Thomas H. Lee Partners, L.P. and Fidelity National Financial,
Inc.
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Ceridian Corp.
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Kohlberg Kravis Roberts & Co.
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First Data Corp.
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CheckFree Corp.
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Corillian Corp.
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CheckFree Corp.
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Carreker Corp.
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Intuit, Inc.
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Digital Insight Corp.
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The Carlyle Group and Providence Equity Partners
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Open Solutions, Inc.
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VeriFone Holdings, Inc.
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Lipman Electronic Engineering Ltd.
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Sage Group plc
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Verus Financial Management, Inc.
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POS Retail Technology
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Epicor Software Corp.
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NSB Retail Systems plc
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Radiant Systems, Inc.
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Quest Retail Technology Pty., Ltd.
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Agilysys, Inc.
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InfoGenesis
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Torex Retail plc
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Savista Corp.
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Oracle Corp.
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360 Commerce, Inc.
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For the purpose of calculating the multiples, multiples of LTM
revenue and LTM EBITDA were derived from the actual revenue, and
adjusted EBITDA (adjusted to exclude non-cash and one-time
charges) of the target companies in the last twelve months prior
to the announcement of the transaction. Financial data regarding
the precedent transactions was taken from filings with the SEC,
press releases, Bloomberg, Dealogic and other publicly-available
sources.
The following table compares the implied transaction multiples
for the merger with the corresponding mean and median multiples
for the selected precedent transactions:
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CAM Commerce Solutions
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Precedent Transactions
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(As Implied by the per Share
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Min.
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Mean
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Median
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Max.
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Merger Consideration)
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EV as a multiple of:
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LTM Revenue
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1.5
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x
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3.5
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x
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3.5
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x
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5.4
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x
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4.2
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x
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LTM EBITDA
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10.1
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x
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17.6
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x
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14.7
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x
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54.3
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x
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17.8
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x
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RBC noted that CAM Commerces multiples for LTM revenue and
LTM EBITDA implied by the per share merger consideration were
within the range of observed transactions and were above both
the mean and median multiples found in the selected precedent
transactions analyzed. RBC noted that one data point distorted
the mean EV-to-LTM EBITDA figure due to the target having a
depressed LTM EBITDA figure and, when this transaction was
excluded, the mean EV-to-LTM EBITDA multiple was similar to the
median multiple. RBC then compared CAM Commerces
EV-to-EBITDA multiple implied by the per share merger
consideration against this adjusted mean figure.
Comparable Company Analysis.
RBC prepared a
comparable company analysis of CAM Commerces implied
transaction multiples relative to a group of publicly-traded
companies that RBC deemed for purposes of its analysis to be
comparable to CAM Commerce. In selecting publicly-traded
companies, RBC considered comparable companies focused primarily
in the payment/data processing and POS retail-focused software
industries. In this analysis, RBC compared the EV of CAM
Commerce implied by the per share merger consideration,
expressed as a multiple of CAM Commerces actual calendar
year 2007 revenue and EBITDA, and projected calendar year 2008
revenue and EBITDA, to the respective mean and median multiples
of calendar year 2007 and projected calendar year 2008
EV-to-revenue and to EV-to-EBITDA of the comparable
21
companies implied by the public trading prices of their common
stock. RBC also compared the multiples implied by the per share
merger consideration, expressed as multiples of actual calendar
year 2007 fully-diluted earnings per share (EPS) and
projected calendar year 2008 EPS, to the EPS multiples of the
comparable companies implied by the public trading prices of
their common stock. Projected revenue, EBITDA and EPS for
calendar year 2008 were based on estimates from CAM Commerce
Management in the case of CAM Commerce and, in the case of the
comparable companies, on Wall Street research, IBES, Fact Set
and ThomsonOne Analytics consensus estimates. RBC defined EV as
equity value plus total debt, preferred stock and minority
interest less cash, cash equivalents and marketable securities.
For the purposes of its Comparable Company Analysis, RBC
reviewed the relevant metrics of the following publicly-traded
companies (with their metrics adjusted as applicable, in two
cases, to reflect recently-completed or pending acquisitions):
Payment/Data Processing
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ACI Worldwide, Inc;
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Alliance Data Systems Corporation;
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Global Payments, Inc.;
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Heartland Payment Systems, Inc.; and
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Total System Services, Inc.
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POS Retail-Focused Software
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Epicor Software Corporation;
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JDA Software Group, Inc.;
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MICROS Systems, Inc;
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Radiant Systems, Inc.; and
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Retalix, Ltd.
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The following table presents, as of June 6, 2008, CAM
Commerces implied EV-to-revenue,
EV-to-EBITDA
and price-to-EPS multiples, and the corresponding multiples for
the comparable companies, for the periods reviewed by RBC in
connection with its analysis:
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CAM Commerce Solutions
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Comparable Companies
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(As Implied by the per Share
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Min.
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Mean
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Median
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Max.
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Merger Consideration)
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EV as a multiple of:
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2007A Revenue
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0.8
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x
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2.0
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x
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1.8
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x
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3.0
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x
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4.4
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x
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2008E Revenue
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0.6
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x
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1.9
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x
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1.6
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x
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3.2
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x
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3.6
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x
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EV as a multiple of:
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2007A EBITDA
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7.5
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x
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13.6
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x
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12.6
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x
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27.7
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x
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18.8
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x
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2008E EBITDA
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7.1
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x
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10.6
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x
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10.5
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x
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15.6
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x
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16.2
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x
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Share price as a multiple of:
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2007A EPS
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9.5
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x
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22.4
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x
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21.1
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x
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44.8
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x
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31.7
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x
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2008E EPS
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9.0
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x
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19.2
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x
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19.8
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x
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31.0
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x
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26.7
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x
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RBC noted that: (1) CAM Commerces multiples implied
by the per share merger consideration for the calendar year 2007
and the projected calendar year 2008 EV-to-revenue were above
the observed range of multiples and were above the mean and
median multiples of the comparable companies analyzed;
(2) CAM Commerces EV-to-EBITDA multiple implied by
the merger consideration for the calendar year 2007 was within
the observed range of multiples and above the mean and median
multiples of the comparable companies analyzed, and its implied
EV-to-EBITDA multiple for the projected calendar year 2008 was
above the
22
observed range of multiples and above the mean and median
multiples of the comparable companies analyzed; and (3) CAM
Commerces multiples implied by the merger consideration
for the calendar year 2007 and the projected calendar year 2008
earnings per share were within the range of observed multiples
and were above the mean and median multiples of the comparable
companies analyzed. For the purpose of the analyses contained
herein, share price-to-EPS multiples less than zero were deemed
not meaningful.
Premiums Paid Analysis (Premiums to
Price).
RBC compared the premiums implied by the
per share merger consideration to the premiums paid in selected
precedent publicly-announced merger and acquisition transactions
in the software and financial technology industries (this was a
different and broader group of transactions than those selected
for the Precedent Transaction Analysis discussed above). In
selecting precedent transactions, RBC considered comparable
transactions announced since January 1, 2006 with public
targets in which the transaction values were between
$10 million and $300 million, which totaled
thirty-seven transactions. RBC performed this analysis taking
into account the trading prices of CAM Commerces common
stock during periods it considered relevant ending on
June 6, 2008, the last trading day prior to RBC finalizing
its analysis with respect to the fairness of the per share
merger consideration, from a financial point of view, to the CAM
Commerce stockholders. RBC compared (x) the premiums
implied by dividing the per share merger consideration by CAM
Commerces spot stock price one day, one week
and one month prior to June 6, 2008 to (y) the spot
price premiums for the same periods for the targets in the
selected precedent transactions. The following table summarizes
this analysis:
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Spot Premiums Paid Analysis
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CAM Commerce Solutions
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Precedent Transactions
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(As Implied by the per Share
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Min.
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Mean
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Median
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Max.
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Merger Consideration)
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Spot Premium
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1 Day
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(2.1
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)%
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29.0
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%
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23.5
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%
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119.9
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%
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9.1
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%
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1 Week
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2.2
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%
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30.5
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%
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24.4
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%
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79.9
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%
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11.8
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%
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1 Month
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(8.0
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)%
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32.3
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%
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28.9
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%
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89.9
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%
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8.0
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%
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RBC noted that during the measuring period ending June 6,
2008, the spot one day, one week and one month premiums implied
by the per share merger consideration as of June 6, 2008
were within the observed range but below both the mean and
median of the selected precedent transactions premiums analyzed.
RBC noted that these figures needed to be viewed in the context
of the trading multiples of CAM Commerce, which were generally
above the trading multiples of its peer group. RBC also noted
that the limited trading volume can skew these spot premium data
points, and noted that the premium to the stock price
1-year
prior, on June 6, 2007, was 46.7%.
Overview of Analyses; Other Considerations.
In
reaching its opinion, RBC did not assign any particular weight
to any one analysis or the results yielded by that analysis.
Rather, having reviewed these results in the aggregate, RBC
exercised its professional judgment in determining that, based
on the aggregate of the analyses used and the results they
yielded, the per share merger consideration was fair, from a
financial point of view, to the CAM Commerce stockholders. RBC
believed that it was inappropriate to, and therefore did not,
rely solely on the quantitative results of the analyses and,
accordingly, also made qualitative judgments concerning
differences between the characteristics of CAM Commerce and the
merger and the data selected for use in its analyses, as further
discussed below.
No single company or transaction used in the above analyses as a
comparison is identical to CAM Commerce or the merger, and an
evaluation of the results of those analyses is not entirely
mathematical. Rather, the analyses involve complex
considerations and judgments concerning financial and operating
characteristics and other factors that could affect the
acquisition, public trading or other values of the companies,
businesses, or transactions analyzed. The analyses were prepared
solely for purposes of RBC providing an opinion as to the
fairness of the per share merger consideration, from a financial
point of view, to the CAM Commerce stockholders and do not
purport to be appraisals or necessarily reflect the prices at
which businesses or securities actually may be sold, which are
inherently subject to uncertainty.
23
The opinion of RBC as to the fairness to the CAM Commerce
stockholders, from a financial point of view, of the per share
merger consideration was necessarily based upon market,
economic, and other conditions that existed as of the date of
its opinion and on information available to RBC as of that date.
The preparation of a fairness opinion is a complex process that
involves the application of subjective business judgment in
determining the most appropriate and relevant methods of
financial analysis and the application of those methods to the
particular circumstances. Several analytical methodologies were
used by RBC and no one method of analysis should be regarded as
critical to the overall conclusion reached. Each analytical
technique has inherent strengths and weaknesses, and the nature
of the available information may further affect the value of
particular techniques. The overall conclusions of RBC were based
on all the analyses and factors presented herein taken as a
whole and also on application of RBCs own experience and
judgment. Such conclusions may involve significant elements of
subjective judgment and qualitative analysis. RBC therefore
believes that its analyses must be considered as a whole and
that selecting portions of the analyses and of the factors
considered, without considering all factors and analyses, could
create an incomplete or misleading view of the processes
underlying its opinion.
In connection with its analyses, RBC made, and was provided by
CAM Commerces management with, numerous assumptions with
respect to industry performance, general business and economic
conditions and other matters, many of which are beyond CAM
Commerces control. Analyses based upon forecasts of future
results are not necessarily indicative of actual future results,
which may be significantly more or less favorable than suggested
by these analyses. Because these analyses are inherently subject
to uncertainty, being based upon numerous factors or events
beyond the control of CAM Commerce or its advisors, none of CAM
Commerce, RBC or any other person assumes responsibility if
future results or actual values are materially different from
these forecasts or assumptions.
CAM Commerce selected RBC to render its opinion based on
RBCs experience in mergers and acquisitions and in
securities valuation generally. CAM Commerce, in selecting RBC
as its financial advisor with respect to the merger, and the CAM
Commerce board of directors in receiving and taking into
consideration RBCs opinion dated June 9, 2008, were
aware of the fact that, under an engagement agreement entered
into between CAM Commerce and RBC on February 9, 2007 and
providing for a term of one year, RBC had rendered financial
advisory services to CAM Commerce in connection with a possible
transaction or series of transactions involving CAM Commerce,
including participation in the process of evaluating potential
strategic transactions described under The
Merger Background of the Merger. RBC was
re-engaged to provide financial advisory services under an
engagement agreement dated March 25, 2008 which
incorporated, but in certain respects amended, the provisions of
the prior engagement agreement. CAM Commerce determined that
RBCs prior services did not preclude, but rather they
supported, the re-engagement of RBC as financial advisor with
respect to the merger.
RBC is an internationally recognized investment banking firm and
is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions,
corporate restructurings, underwritings, secondary distributions
of listed and unlisted securities, private placements, and
valuations for corporate and other purposes. In the ordinary
course of business, RBC may act as a market maker and broker in
the publicly-traded securities of CAM Commerce and receive
customary compensation, and may also actively trade securities
of CAM Commerce for its own account and the accounts of its
customers, and, accordingly, RBC and its affiliates, may hold a
long or short position in such securities.
Under its March 25, 2008 re-engagement agreement with CAM
Commerce, RBC became entitled to receive a fee of $350,000 upon
the delivery of its June 9, 2008 opinion to the CAM
Commerce board of directors regarding the fairness to the CAM
Commerces stockholders, from a financial point of view, of
the per share merger consideration, without regard to whether
RBCs opinion was accepted or the merger is consummated. In
addition, if the merger is consummated, RBC will become entitled
to a further fee, based on the formula set forth in its
engagement agreement (which is based on a formula tied to
Aggregate Transaction Value, as defined in the
March 25, 2008 re-engagement agreement) of approximately
$2.25 million. Further, in the event that the merger is not
completed and CAM Commerce consummates at any time thereafter,
pursuant to a definitive agreement, letter of intent or other
evidence of commitment entered into during the
24
term of RBCs engagement or during the period following
such term until and including February 19, 2009, another
Transaction, RBC would be entitled to receive a
specified Transaction fee based on the Aggregate
Transaction Value of such other Transaction, all as
specified in its March 25, 2008 re-engagement agreement. In
addition, whether or not the merger closes, or any other
Transaction occurs, CAM Commerce has also agreed to reimburse
RBC for its reasonable out-of-pocket expenses and to indemnify
it against liability that may arise out of services performed by
RBC as financial advisor, including without limitation,
liabilities arising under the federal securities laws. The terms
of the engagement letter were negotiated at arms-length
between CAM Commerce and RBC and the board of directors were
aware of this fee arrangement at the time of its approval of the
merger agreement. RBC has not received any fees from CAM
Commerce or GHP in the prior two years except as described
above, will not receive any fees from GHP relating to the merger
and does not have any agreement or understanding with CAM
Commerce or GHP regarding any other services to be performed now
or in the future, other than pursuant to its engagement
described above.
Delisting
and Deregistration of Our Common Stock
Following the merger, shares of CAM Commerce common stock will
no longer be traded on the Nasdaq Global Market or any
other public market and will be deregistered under the
Securities Exchange Act of 1934, as amended, or the Exchange
Act, as of the effective time of the merger.
CAM
Commerce After the Merger
After the effective time of the merger, we will cease to be an
independent public company and will instead be a privately-held
wholly-owned subsidiary of Parent. After the effective time of
the merger, pursuant to the merger agreement, the directors of
Merger Subsidiary immediately prior to the effective time of the
merger will become the directors of CAM Commerce, and the
officers of CAM Commerce immediately prior to the effective time
of the merger will continue to be the officers of CAM Commerce,
in each case until the earlier of their resignation or removal
or until their respective successors are duly elected or
appointed and qualified, as the case may be. Pursuant to his new
agreement with the company, Mr. Knapp will continue as the
chief executive officer of CAM Commerce following the
consummation of the merger.
Conduct
of Our Business if the Merger is Not Completed
In the event that the merger is not approved by our stockholders
or if the merger is not completed for any other reason, our
stockholders would not receive any merger consideration for
their shares of our common stock. Instead, we would remain an
independent public company, our common stock would continue to
be listed and traded on the Nasdaq Global Market and our
stockholders would continue to be subject to the same risks and
opportunities as they currently are with respect to their
ownership of our common stock. If the merger is not completed,
there can be no assurance as to the effect of these risks and
opportunities on the future value of our shares, including the
risk that the market price of our common stock may decline to
the extent that the current market price of our stock reflects a
market assumption that the merger will be completed. From time
to time, our board of directors would evaluate and review our
business operations, properties, dividend policy and
capitalization, and, among other things, make such changes as
are deemed appropriate. In addition, our board of directors
might seek to identify strategic alternatives to maximize
stockholder value. If the merger is not approved by our
stockholders or if the merger is not consummated for any other
reason, we cannot guarantee that any other transaction
acceptable to us would be offered or that our business,
prospects or results of operations would not be adversely
impacted.
Pursuant to the merger agreement, under certain circumstances,
we are permitted to terminate the merger agreement to enter into
a Superior Proposal. See The Merger Agreement
Termination of Merger Agreement.
Under certain circumstances, if the merger is not completed, we
may be obligated to pay GHP a termination fee or reimburse GHP
for its out of pocket expenses. See The Merger
Agreement Termination Fee and The Merger
Agreement Fees and Expenses.
25
Interests
of Officers and Directors in the Merger
In considering the recommendation of our board of directors in
favor of the merger, our stockholders should be aware that
certain of our officers and directors have interests in the
merger that are different from or in addition to the interests
of our stockholders in general. The members of our board of
directors were aware of such interests when deciding to approve
and recommend the merger agreement and the merger. See The
Merger Reasons for the Merger; Recommendation of Our
Board of Directors. Our stockholders should take these
interests into account in deciding whether to vote
FOR adoption of the merger agreement.
Stock Options.
Pursuant to the terms of our
equity compensation plans, at the effective time of the merger,
all of our stock options outstanding and unexercised immediately
prior to the effective time of the merger will be converted into
the right to receive $40.50 in cash, without interest, less the
exercise price of such option and any applicable withholding
taxes.
Our executive officers and non-employee directors have been
granted options from time to time in the past in consideration
for their services to CAM Commerce. Based on the number and
exercise prices of options held by our executive officers and
non-employee directors on June 15, 2008, our officers and
non-employee directors will receive the following amounts,
before any applicable withholding taxes, in settlement of their
respective options if the merger is completed:
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Payment Net of per
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|
Name
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|
Shares
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|
|
Share Exercise Price
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Non-employee directors
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Donald Clark
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|
25,600
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|
$
|
770,254.00
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|
David Frosh
|
|
|
22,500
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|
|
$
|
655,275.00
|
|
Walter Straub
|
|
|
52,500
|
|
|
$
|
1,730,325.00
|
|
Executive officers
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|
|
|
|
|
|
|
|
Geoff Knapp
|
|
|
50,000
|
|
|
$
|
1,756,250.00
|
|
Paul Caceres
|
|
|
35,000
|
|
|
$
|
1,258,580.00
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|
Indemnification of Directors and Officers;
Insurance.
The merger agreement provides that,
for a period of six years after the merger, unless otherwise
required by applicable law, Parent will cause the certificate of
incorporation and by-laws (or equivalent organizational
documents) of the surviving corporation in the merger to contain
provisions no less favorable with respect to the exculpation
from personal liability and indemnification of, and advancement
of expenses to, directors, officers, employees and agents than
are set forth in the certificate of incorporation or by-laws of
CAM Commerce as in effect on the date of the merger agreement.
The merger agreement further provides that the Parent will, or
will cause the surviving corporation in the merger to, obtain,
maintain and fully pay for irrevocable tail
insurance policies naming our officers and directors as direct
beneficiaries with a claims period of at least six years after
the closing of the merger in an amount and scope customary for
companies similar in size and nature of operations to CAM
Commerce with respect to matters existing or occurring at or
prior to the closing of the merger.
Change-of-Control
and Employment Arrangements
Messrs. Knapp and Caceres each have change of control
agreements with us that provide for the payment of certain
benefits in the event their employment is terminated
Without Cause or they resign for Good
Reason (each as defined in the agreement) at any time
after an acquisition of CAM Commerce.
Under Mr. Knapps change of control agreement, which
is being terminated at the closing of the merger, if
Mr. Knapp was terminated immediately after the merger
without cause or for good reason, he would have been entitled to
receive a lump sum payment equal to approximately $1,700,000, in
addition to any possible
gross-up
payments, based on his current compensation.
26
As a condition to Parent and Merger Subsidiary entering into the
merger agreement, Mr. Knapp agreed to terminate his change
of control agreement and his current employment agreement and to
enter into a new employment agreement with CAM Commerce that
will become effective upon consummation of the merger.
The new employment agreement provides that Mr. Knapp will
be employed as CAM Commerces chief executive officer
following the merger. The agreement has a term of twenty-four
months unless earlier terminated by us or Mr. Knapp.
Mr. Knapp will receive a base salary of $350,000 per annum
and will be eligible to receive an annual bonus of up to 50% of
his salary based upon achievement of performance targets
established by the board of directors. The agreement also
provides that Mr. Knapp will be entitled to participate in
our employee benefit plans and shall be entitled to six weeks
vacation per year in accordance with the companys
policies, but will not otherwise be entitled to any other fringe
benefits, including benefits to which Mr. Knapp was
entitled to receive prior to the merger.
If Mr. Knapp is terminated without cause or the board of
directors appoints a new chief executive officer of the company
and Mr. Knapp is not concurrently elected as chairman of
the board of directors, Mr. Knapp will be entitled to
continue to receive his base salary for one year following
termination, as special severance payments. If Mr. Knapp is
elected as chairman of the board upon his removal as chief
executive officer, he will enter into a new employment agreement
providing for, among other things, an annual salary of $100,000.
In addition, the agreement provides that Mr. Knapp will not
directly or indirectly own an interest in or render services to
any business that competes with CAM Commerce or its affiliates
for a period of two years after his termination.
The change of control agreement with Mr. Caceres, which was
entered into on January 1, 1996, and amended on
December 20, 2006, becomes effective immediately after the
merger, which constitutes a change of control of CAM Commerce
for purposes of the agreement, and supersedes and replaces his
current employment agreement. The agreement has an initial term
of one year, and thereafter automatically renews for successive
one year terms until the earlier of (i) termination of
Mr. Caceres employment pursuant to the terms of the
agreement or (ii) the first of the month coinciding with or
next following Mr. Caceres
60
th
birthday
in 2020. The agreement requires Mr. Caceres position,
duties, title, authority and responsibilities to be at least
commensurate with those held prior to any change of control. If
after a change of control Mr. Caceres is terminated without
cause or resigns for good reason, he will be entitled to the
following:
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|
|
a lump sum payment equal to 299% of the aggregate amount of his
base salary and annual bonus paid to Mr. Caceres in the
fiscal year ended prior to year of termination;
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|
|
the continuation of participation in our benefit plans,
including medical, disability and life insurance, and fringe
benefits, for eighteen months following termination; and
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|
|
gross up payments in order to eliminate, to the extent possible,
the effect of the excise tax on such payments that might be
imposed by Sections 280G and 4999 of the Internal Revenue
Code to the extent possible.
|
If Mr. Caceres was terminated immediately after the merger
without cause or for good reason, he would be entitled to
receive a lump sum payment equal to $1,076,000, in addition to
any possible
gross-up
payments, based on his current compensation. Although there is
no agreement with GHP providing for his continued employment, it
is anticipated that Mr. Caceres will continue to be
employed by CAM Commerce following the merger under the terms of
his change of control agreement.
Material
U.S. Federal Income Tax Consequences of the Merger
General.
The following is a summary of certain
anticipated material U.S. federal income tax consequences
of the merger to our stockholders. This summary is based upon
provisions of the Internal Revenue Code of 1986, as amended, or
the Code, applicable U.S. Treasury Regulations, judicial
authority and administrative rulings and practice, all as in
effect as of the date hereof, and all of which are subject to
change. Any such change, which may or may not be retroactive,
could alter the tax consequences to the stockholders as
described herein. It is assumed, for purposes of this summary,
that the shares of our common
27
stock are held as capital assets within the meaning of
Section 1221 of the Code by a U.S. person.
For U.S. federal income tax purposes, a
U.S. person is:
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a U.S. citizen or resident alien as determined under the
Code;
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|
a corporation (or entity treated as a corporation for
U.S. federal income tax purposes) that is organized under
the laws of the U.S., any state or the District of Columbia;
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|
an estate, the income of which is subject to U.S. federal
income taxation regardless of its source; or
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|
a trust, if (i) a court within the U.S. is able to
exercise primary supervision over its administration and at
least one U.S. person is authorized to control all of its
substantial decisions or (ii) it has a valid election in
effect under applicable U.S. treasury regulations to be
treated as a U.S. person for federal income tax purposes.
|
This discussion may not address all aspects of U.S. federal
income taxation that may be relevant to a particular stockholder
in light of that stockholders particular circumstances, or
to those stockholders that may be subject to special treatment
under the U.S. federal income tax laws (including for
example, certain insurance companies, tax exempt organizations,
financial institutions, U.S. expatriates, traders in
securities who elect the market-to-market method of accounting,
persons that are not U.S. persons, dealers or brokers in
securities or currencies, persons that have a functional
currency other than the U.S. dollar, pass through entities
(e.g., partnerships) and investors in such entities,
stockholders who own or at any time held, directly, indirectly
or through attribution, 10% or more of our outstanding capital
stock, or stockholders who hold shares of our common stock as
part of a hedging, straddle, conversion,
constructive sale or other integrated transaction, who are
subject to the alternative minimum tax or who acquired their
shares of our common stock through the exercise of director or
employee stock options or other compensation arrangements).
No ruling has been or will be sought from the Internal Revenue
Service, or the IRS, as to the U.S. federal income tax
consequences of the merger, and the following summary is not
binding on the IRS or the courts. This summary does not address
the tax consequences of the merger under state, local, and
foreign laws or under U.S. federal tax law other than
U.S. federal income tax law. There can be no assurance that
the IRS will not challenge one or more of the tax consequences
described herein.
Consequences of the Merger to Our
Stockholders.
The receipt of cash in exchange for
shares of our common stock pursuant to the merger will be a
taxable transaction for U.S. federal income tax purposes.
In general, a stockholder who surrenders shares of our common
stock in exchange for cash pursuant to the merger will recognize
gain or loss for U.S. federal income tax purposes equal to
the difference, if any, between the amount of cash received
(inclusive of any cash withheld for tax purposes) and such
stockholders adjusted basis in the shares surrendered.
Gain or loss will generally be calculated separately for each
block of shares surrendered in the merger (i.e., shares acquired
at the same cost in a single transaction). Such gain or loss
will generally be capital gain or loss, and will generally be
long term capital gain or loss provided that a stockholder has
held such shares for more than one year as of the closing date
of the merger. In the case of stockholders who are individuals,
long term capital gain is currently eligible for reduced rates
of U.S. federal income tax.
U.S. federal tax laws significantly limit the deductibility
of capital losses for U.S. federal income tax purposes. For
instance, corporate taxpayers can deduct capital losses only to
the extent of capital gains and for individual taxpayers,
capital losses are similarly deductible up to the extent of
capital gains, but may be further deductible up to a maximum of
$3,000 in any one taxable year. Carryovers of unused capital
losses to other taxable years may be permitted in certain
circumstances
Appraisal Rights.
A stockholder who perfects
appraisal rights will generally recognize gain or loss for
U.S. federal income tax purposes equal to the difference,
if any, between the amount of cash received (inclusive of any
cash withheld for tax purposes) and such stockholders
adjusted basis in such shares. Gain or loss will generally be
calculated separately for each block of shares (i.e., shares
acquired at the same cost in a single transaction). Such gain or
loss will generally be capital gain or loss, and will generally
be long term capital gain or loss provided that the shares have
been held for more than one year prior to the
28
disposition of the shares. Limitations apply to the use of
capital losses as described above. Interest, if any, awarded in
an appraisal proceeding by a court would generally be included
in such stockholders income as ordinary income for
U.S. federal income tax purposes.
Backup Withholding Tax.
Generally, under the
U.S. federal income tax backup withholding rules, a
stockholder or other payee that exchanges shares of our common
stock for cash may be subject to backup withholding at a rate of
28%, unless the stockholder or other payee (i) provides a
taxpayer identification number, or TIN (i.e., a social security
number, in the case of individuals, or an employer
identification number, in the case of other stockholders), and
certifies under penalties of perjury that (A) such TIN is
correct, (B) such stockholder is not subject to backup
withholding and (C) such stockholder is a U.S. person
or (ii) establishes a basis for exemption from backup
withholding. Some stockholders (including, among others, all
corporations) are not subject to these backup withholding
requirements. Each of our stockholders and, if applicable, each
other payee should complete and sign the substitute
Form W-9
included as part of the letter of transmittal and return it to
the paying agent in order to provide information and
certification necessary to avoid backup withholding, unless an
exemption applies and is otherwise established in a manner
satisfactory to the paying agent. Backup withholding is not an
additional tax. Any amount withheld under the backup withholding
tax rules from a payment to a stockholder will be allowed as a
refund or credit against such stockholders
U.S. federal income tax liability, provided that the
required procedures are followed in a timely manner.
THE FOREGOING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX
CONSEQUENCES IS NOT TAX ADVICE. IN ADDITION, THE DISCUSSION DOES
NOT ADDRESS TAX CONSEQUENCES WHICH MAY VARY WITH, OR ARE
CONTINGENT ON, YOUR INDIVIDUAL CIRCUMSTANCES. MOREOVER, THE
DISCUSSION DOES NOT ADDRESS ANY NON-INCOME TAX OR ANY FOREIGN,
STATE, OR LOCAL TAX CONSEQUENCES OF THE MERGER. ACCORDINGLY, YOU
ARE STRONGLY URGED TO CONSULT WITH YOUR TAX ADVISOR TO DETERMINE
THE PARTICULAR U.S. FEDERAL, STATE, LOCAL OR FOREIGN INCOME OR
OTHER TAX CONSEQUENCES TO YOU OF THE MERGER.
Governmental
and Regulatory Clearances
Transactions such as the merger are subject to review by the
United States Department of Justice and the United States
Federal Trade Commission to determine whether they comply with
applicable antitrust laws. Under the provisions of the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the HSR Act),
the merger may not be completed until the expiration or
termination of a
thirty-day
waiting period following the filing of notification reports with
the Department of Justice and the Federal Trade Commission by
GHP and CAM Commerce. CAM Commerce and GHP (on behalf of Parent)
filed a notification report form with the Department of Justice
and the Federal Trade Commission under the HSR Act on
June 16, 2008, and GHP filed a notification and report form
(reporting the acquisition of CAM Commerce through Parent) on
June 16, 2008.
Pre-merger filings and governmental approvals may also be
required in certain foreign jurisdictions. The merger agreement
provides that each party to the merger agreement will make all
filings and give all notices required to be made and given in
connection with the merger, including under applicable antitrust
laws.
The Department of Justice and the Federal Trade Commission
frequently scrutinize the legality under the antitrust laws of
transactions such as the merger. At any time before or after the
merger, either the Department of Justice or the Federal Trade
Commission could take action under the antitrust laws as it
deems necessary or desirable in the public interest, including
by seeking to enjoin the merger or by seeking the divestiture of
substantial assets of Parent or its affiliates and CAM Commerce.
Private parties and state attorneys general may also bring
actions under the antitrust laws under certain circumstances.
While the parties believe that the proposed merger does not
violate the antitrust laws, there can be no assurance that a
challenge to the merger on antitrust grounds will not be made
or, if a challenge is made, of the result.
29
Stockholder
Litigation
On June 16, 2008,
we were named a defendant in a
complaint, captioned John Levin v. CAM Commerce Solutions,
Inc. et al., filed against us and the individual members of our
board of directors in the court of Chancery of the State of
Delaware. The complaint generally alleges, among other things,
that the proposed merger was the result of an unfair process by
which we and the members of our board of directors breached the
fiduciary duties of care, loyalty, good faith, candor, and
independence. The plaintiffs seek certification of the matter as
a class action and an injunction prohibiting the consummation of
the merger. We believe the claims asserted in the complaint are
without merit and intend to vigorously defend against this
action.
Accounting
Treatment
The merger will be accounted for as a purchase
transaction for financial accounting purposes.
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THE
MERGER AGREEMENT
This section of the proxy statement summarizes the material
terms and conditions of the merger agreement, but is not
intended to be an exhaustive discussion of the merger agreement.
The rights and obligations of the parties are governed by the
express terms and conditions of the merger agreement and not the
summary set forth in this section or any other information
contained in this proxy statement. We urge you to read the
merger agreement carefully and in its entirety. The complete
text of the merger agreement is attached as Annex A to this
proxy statement and is incorporated herein by reference.
The description of the merger agreement in this proxy
statement has been included to provide you with information
regarding its terms. The merger agreement contains
representations and warranties made by and to the parties
thereto as of specific dates. The statements embodied in those
representations and warranties were made for purposes of that
contract between the parties and are subject to qualifications
and limitations agreed by the parties in connection with
negotiating the terms of that contract. In addition, certain
representations and warranties were made as of a specified date
and may be subject to a contractual standard of materiality
different from those generally applicable to stockholders, or
may have been used for the purpose of allocating risk between
the parties rather than establishing matters as facts.
The
Merger
The merger agreement provides for the merger of Merger
Subsidiary, a wholly-owned subsidiary of Parent, with and into
CAM Commerce upon the terms and subject to the conditions of the
merger agreement. As the surviving corporation, CAM Commerce
will survive the merger and continue to exist as a wholly-owned
subsidiary of Parent. The surviving corporation in the merger is
referred to in this proxy statement as the surviving
corporation. The merger will become effective at the time of the
filing of the certificate of merger with the Secretary of State
of the State of Delaware, or at such later time as may be
specified in such certificate of merger. We intend to complete
the merger as promptly as practicable subject to receipt of
approval of the CAM Commerce stockholders of the adoption of the
merger agreement and all requisite regulatory clearances and
satisfaction of the other closing conditions. See The
Merger Governmental and Regulatory Clearances,
The Merger Agreement Additional Covenants and
Agreements and The Merger Agreement
Conditions to the Merger.
Merger
Consideration
At the effective time of the merger, each outstanding share of
CAM Commerce common stock, other than shares held by
stockholders who exercise their appraisal rights, and shares
held by CAM Commerce, Parent, or Merger Subsidiary, will be
converted into the right to receive $40.50 in cash, without
interest and less any applicable tax withholding, and shares
held by stockholders exercising their appraisal rights will
thereafter represent only the right to payment of the fair
market value of such dissenting shares in accordance with
Section 262 of the DGCL. See Appraisal Rights.
Upon completion of the merger, no shares of CAM Commerce common
stock outstanding prior to the effective time of the merger will
remain outstanding and all such shares will automatically be
canceled and will cease to exist.
Payment
Procedures
The merger agreement provides that prior to the closing date of
the merger, Parent will select a bank or trust company
reasonably satisfactory to CAM Commerce to act as paying agent
in connection with the merger and will deposit with the paying
agent cash in an amount equal to the aggregate merger
consideration payable to CAM Commerce stockholders and option
holders at or immediately following the effective time of the
merger.
The merger agreement provides that as soon as practicable
following the effective time of the merger (in any event no more
than three business days thereafter) and, subject to receipt of
the necessary stockholder records from our transfer agent, the
paying agent will mail to the record holders of CAM Commerce
common stock immediately prior to the effective time of the
merger a letter of transmittal and instructions for use in
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surrendering stock certificates and transferring uncertificated
shares in exchange for the merger consideration. No stockholder
should surrender any certificates or transfer any uncertificated
shares until the stockholder receives the letter of transmittal
and other materials for such surrender or transfer. Upon
surrender of a stock certificate for exchange to the paying
agent together with a duly executed letter of transmittal, or,
in the case of a book-entry transfer of uncertificated shares,
receipt by the paying agent of such other documents as may be
reasonably requested by the paying agent, the holder of such
shares of CAM Commerce common stock will be entitled to receive
the merger consideration, without any interest thereon and less
any applicable tax withholding. Any stock certificate so
surrendered or uncertificated share so transferred will be
canceled.
If any cash is to be paid to a person other than the record
holder of shares of CAM Commerce common stock, payment may be
made with respect to such shares if (i) the stock
certificate representing such shares is properly endorsed or
otherwise in proper form for transfer or (ii) in the case
of uncertificated shares, such shares are properly transferred,
and the transferee either pays to the paying agent any
applicable transfer or other taxes relating to such transfer, or
establishes to the satisfaction of CAM Commerce that such tax
has been paid or is not required to be paid.
If your stock certificate has been lost, stolen, defaced or
destroyed, the paying agent will pay to you the applicable
merger consideration if:
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You make an appropriate affidavit certifying such certificate
has been lost, stolen or destroyed; and
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You deliver a bond, in such amount as the surviving corporation
may direct, as indemnity against any claim that may be made with
respect to that certificate against the surviving corporation.
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Do not send your certificates now. You should send your
certificates only pursuant to instructions set forth in the
letters of transmittal to be mailed to stockholders after the
completion of the merger. In all cases, the merger consideration
will be paid only in accordance with the procedures set forth in
the merger agreement and such letters of transmittal.
The merger agreement provides that twelve months after the
effective time of the merger, upon demand by Parent, the paying
agent will deliver to the surviving corporation any funds made
available to the paying agent that remain unclaimed by the
former CAM Commerce stockholders. Any CAM Commerce stockholders
who have not exchanged their CAM Commerce shares for the merger
consideration in compliance with the above described procedures
shall thereafter look only to the surviving corporation for
payment of the merger consideration to which they are entitled,
without any interest thereon.
The cash paid to you upon conversion of your CAM Commerce common
stock will be paid in full satisfaction of all rights relating
to the shares of CAM Commerce common stock
Effect on
CAM Commerce Stock Options
The merger agreement provides that at or immediately prior to
the effective time of the merger, each option to purchase CAM
Commerce common stock that is outstanding, whether or not vested
or exercisable, shall be cancelled, and CAM Commerce shall pay
each holder of any such option at or promptly after the
effective time of the merger, subject to applicable withholding
requirements, a cash payment determined by multiplying
(i) the excess of the merger consideration in cash per
share over the exercise price of such option by (ii) the
number of shares of CAM Commerce common stock such holder could
have purchased (assuming full vesting of all options) had such
holder exercised such option in full immediately prior to the
effective time of the merger. All outstanding CAM Commerce
options will become vested immediately prior to the consummation
of the merger.
Representations
and Warranties
The merger agreement contains representations and warranties of
each party to the agreement. The representations and warranties
in the merger agreement are complicated and not easily
summarized. You are urged to read carefully and in their
entirety the sections of the merger agreement entitled
Representations and Warranties of the Company (CAM
Commerce) and Representations and Warranties of
Parent and Sub
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(Merger Subsidiary) in Articles IV and V,
respectively, of the merger agreement attached as Annex A
to this proxy statement. The assertions embodied in the
representations and warranties made by CAM Commerce are
qualified by information and statements made in a confidential
disclosure schedule that CAM Commerce provided to Parent in
connection with the signing of the merger agreement. While CAM
Commerce does not believe that such disclosure schedule contains
information that applicable securities laws require it to
publicly disclose (other than information that has already been
so disclosed or is disclosed in this proxy statement), the
disclosure schedule does contain information that modifies,
qualifies and creates exceptions to the representations and
warranties set forth in the merger agreement. Accordingly, you
should not rely on the representations and warranties in the
merger agreement as characterizations of the actual state of
facts, since such representations and warranties were made by
the parties to the merger agreement to and solely for the
benefit of each other, and they are modified in important part
by the underlying disclosure schedule. The disclosure schedule
contains information that has been included in CAM
Commerces general prior public disclosures, as well as
additional nonpublic information. Moreover, information
concerning the subject matter of the representations and
warranties may have changed since the date of the merger
agreement, which subsequent information may or may not be fully
reflected in CAM Commerces public disclosures or in this
proxy statement. In addition, certain representations and
warranties were made as of a specified date, may be subject to a
contractual standard of materiality different from those
generally applicable to stockholders or may have been used for
the purpose of allocating risk between the parties rather than
establishing matters as facts.
The merger agreement contains representations and warranties of
CAM Commerce as to, among other things:
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the accuracy of its certificate of incorporation and bylaws in
the form provided to Parent;
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its due organization, valid existence, good standing,
qualification, and power and authority to operate its business,
including the possession of all applicable permits, licenses and
other governmental authorizations or approvals applicable to the
operation of such businesses;
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the absence of subsidiaries or other equity ownership;
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its corporate power and authority to enter into the merger
agreement and to carry out its obligations under the merger
agreement;
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authorization, execution, delivery and enforceability of the
merger agreement;
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the absence of (i) conflicts with or violations of its
organizational documents, (ii) any violation of applicable
law, (iii) the violation, breach or default of the
agreements. instruments or other obligations to which it is a
party or is bound, in each case arising from entering into the
merger agreement, completing the merger or complying with the
provisions contained in the merger agreement, or
(iv) required consents and approvals of third parties,
including governmental entities, relating to the merger;
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its capitalization and obligations with respect to capital stock;
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its SEC filings and the financial statements contained in such
filings and the accuracy of the information in those documents
and the absence of certain undisclosed liabilities;
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the effectiveness of disclosure controls and procedures as
required by the securities laws reasonably designed and
maintained to ensure that all information (both financial and
non-financial) required to be disclosed in the reports that CAM
Commerce files or submits to the SEC under the Exchange Act are
summarized, reviewed by management and reported within the time
periods required by the SEC;
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its internal controls over financial reporting;
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correctness of information supplied by CAM Commerce for
inclusion in this proxy statement;
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since September 30, 2007, the absence of certain changes or
events;
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the absence of any undisclosed material liabilities;
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compliance with applicable laws;
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the absence of lawsuits or legal proceedings or judgments or
other court orders against it;
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absence of undisclosed brokers and finders fees with
respect to the merger;
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receipt of an opinion from our financial advisor as to the
fairness of the per share consideration, from a financial point
of view, to the CAM Commerce stockholders;
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tax matters;
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employee benefit plans and other employment and labor related
matters;
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environmental matters;
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material contracts and the absence of breaches of material
contracts;
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intellectual property matters;
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the real and personal property owned or leased by CAM Commerce;
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the absence of interested party transactions; and
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applicability of anti-takeover statues and charter provisions.
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The merger agreement also contains representations and
warranties of Parent and Merger Subsidiary as to, among other
things:
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organization, good standing and qualification;
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corporate power and authority to enter into the merger agreement
and to carry out their obligations under the merger agreement;
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authorization, execution, delivery and enforceability of the
merger agreement;
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the absence of (i) conflicts with or violations of its
organizational documents, (ii) any violation of applicable
law, (iii)the violation, breach or default of the agreements,
instruments or other obligations to which it is a party or is
bound, in each case arising from entering into the merger
agreement, completing the merger or complying with the
provisions contained in the merger agreement, or
(iv) required consents and approvals of third parties,
including governmental entities, relating to the merger;
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absence of legal proceedings and governmental orders relating to
the merger;
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accuracy of the information supplied by Parent for inclusion in
this proxy statement;
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capitalization and interim operations of Merger Subsidiary;
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absence of written contracts between Parent or Merger Subsidiary
or any of their affiliates, on the one hand, and any executive
office of CAM Commerce, on the other hand, relating to the
operations of the surviving corporation after the effective time;
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absence of undisclosed brokers and finders fees with
respect to the merger;
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neither Parent and Merger Subsidiary are a party to a voting
trust or other agreement with respect to the voting of the
capital stock of CAM Commerce; and
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that since January 1, 2005, neither Parent nor Merger
Subsidiary has owned any shares of CAM Commerce common stock.
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Conduct
of CAM Commerces Business Pending the Merger
CAM Commerce has agreed in the merger agreement that, prior to
the effective time, CAM Commerce will conduct its business in
the ordinary course as currently conducted.
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In addition, CAM Commerce has agreed that, except as otherwise
contemplated by the merger agreement (including the confidential
disclosure schedule that CAM Commerce provided to Parent in
connection with the signing of the merger agreement), CAM
Commerce will not take any of the following specific actions
without the prior written consent of Parent:
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amend its Certificate of Incorporation, By-laws, or other
similar organizational documents (whether by merger,
consolidation, or otherwise) or form any subsidiary;
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split, combine, or reclassify any shares of its capital stock,
or declare, set aside, or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof)
in respect of its capital stock, or redeem, repurchase, or
otherwise acquire or offer to redeem, repurchase, or otherwise
acquire any of its securities;
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issue, grant, deliver, sell, pledge or otherwise encumber or
dispose of any shares of its capital stock or other equity
interests, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire,
any of its shares of capital stock, equity interests, voting
securities or convertible securities, other than the issuance of
shares of its common stock pursuant to options outstanding as of
June 9, 2008;
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merge or consolidate with another entity
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acquire, any entity, business or assets having a purchase price
in excess of $100,000 individually or $500,000 in the aggregate;
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make or agree to make any new capital expenditure, other than
(i) capital expenditures approved by our board of directors
prior to June 9, 2008 and previously disclosed to Parent,
or (ii) in an aggregate amount not to exceed $500,000;
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sell, lease, license, encumber by lien or otherwise, or
otherwise dispose of, or agree to sell, lease, license, encumber
or otherwise dispose of, assets having a current value in excess
of $500,000 in the aggregate;
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enter into, amend or otherwise modify in any material respect
any of CAM Commerces material contracts;
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incur any indebtedness, other than customary trade payables
incurred in the ordinary course of business;
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enter into any contract, agreement or arrangement that prohibits
CAM Commerce from incurring indebtedness or from subjecting to a
lien any of our material assets or property;
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make or change any tax election, change any annual tax
accounting period, adopt or change any method of tax accounting,
amend any tax returns or file claims for tax refunds, enter into
any closing agreement or other agreement with a taxing
authority, settle any tax claim, audit or assessment, surrender
any right to claim a tax refund, offset or other reduction in
tax liability, or consent to any extension or waiver of the
limitations period applicable to any tax claim or assessment;
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pledge, encumber or otherwise subject to a lien any material
asset or property or any material portion of CAM Commerces
assets or properties;
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settle or compromise any pending or threatened suit, action or
claim, other than settlements or compromises requiring payments
of no more than $100,000 individually and $500,000 in the
aggregate;
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pay, discharge or satisfy any material claims, liabilities or
obligations other than (i) the payment, discharge or
satisfaction in the ordinary course of business of liabilities
reflected or reserved against in the our financial statements
(or as contemplated by the notes thereto), in all cases not more
than $100,000 individually and $500,000 in the aggregate and
(ii) payment of taxes as they become due and payment of
trade payables incurred in the ordinary course of business;
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authorize, recommend, propose or announce an intention to adopt
a plan of complete or partial liquidation or dissolution;
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allow any of CAM Commerces material intellectual property
to lapse or expire;
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implement any layoff of employees that would implicate the
Worker Adjustment and Retraining Notification Act of 1988, as
amended;
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increase the salary or wages payable or to become payable to its
directors, executive officers or employees, other than salary
increases for employees in the ordinary course of business and
consistent with past practice which in any event shall not
result in an aggregate increase in salary for all employees in
excess of $150,000;
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enter into or amend in any material respect any employment or
severance agreement that would require payments in excess of
$50,000;
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establish, adopt, enter into or amend in any material respect,
or make any new grants or awards of stock based compensation or
other benefits under, any benefit plan, any bonus, profit
sharing, thrift, stock option, restricted stock, pension,
retirement, deferred compensation, or other arrangement for the
benefit of, any director, executive officer or employee, except,
in each case, as may be required by the terms of any such
existing plan, agreement, policy or arrangement or to comply
with applicable law;
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except as may be required by generally accepted accounting
principles or as a result of a change in law, make any material
change in its method of accounting; or
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agree, resolve or commit to do any of the foregoing.
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No
Solicitation of Alternative Transactions by CAM
Commerce
The merger agreement provides that CAM Commerce shall not give
permission or authorize, and CAM Commerce shall use its
reasonable best efforts to cause its officers, directors,
employees, agents, advisors and other representatives, not to:
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solicit, initiate, or take any action to facilitate or encourage
the submission of any Takeover Proposal (as defined below);
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enter into or participate in any discussions or negotiations
with, furnish any non-public information relating to CAM
Commerce, or to otherwise cooperate in any way with, or
knowingly assist, participate in, facilitate or encourage any
effort by any third party that is seeking to make, or has made,
a Takeover Proposal;
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fail to make, withdraw, or modify in a manner adverse to Parent
the recommendation of our board of directors, or recommend a
Takeover Proposal or take any action or make any statement
inconsistent with the recommendation of our board of directors
to consummate the merger (any such action, an Adverse
Recommendation Change); or
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enter into any agreement in principle, letter of intent, term
sheet, or other similar instrument relating to a Takeover
Proposal.
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Notwithstanding the foregoing, if the board of directors, or a
committee thereof, determines in good faith, after considering
advice from its financial advisor and outside legal counsel,
that the failure to take any such action would reasonably be
expected to result in a breach of its fiduciary duties under
applicable law, then the board of directors, or a committee
thereof, may directly or indirectly through its representatives:
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engage in negotiations or discussions with any third party that,
subject to compliance with the restrictions set forth above, has
made a bona fide Takeover Proposal that the board of directors,
or committee thereof, reasonably believes will lead to a
Superior Proposal (as defined below);
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furnish to such third party nonpublic information relating to
CAM Commerce pursuant to a confidentiality agreement with terms
no less favorable to CAM Commerce than those contained in the
confidentiality agreement entered into between CAM Commerce and
Parent;
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following receipt of a Superior Proposal that has not been
withdrawn, subject to compliance with the restrictions set forth
above, make an Adverse Recommendation Change; or
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subject to the satisfaction of certain conditions, terminate the
merger agreement. For additional information on termination of
the merger agreement see The Merger
Termination of the Merger Agreement.
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Each case applies if, and only if, CAM Commerce has delivered to
Parent a prior written notice advising Parent that we intend to
take such action. We shall continue to advise Parent after
taking any such action. In addition, CAM Commerce shall notify
Parent promptly (but in no event later than 48 hours) after
receipt by CAM Commerce (or any of its advisors) of any Takeover
Proposal, any indication that a third party is considering
making a Takeover Proposal or of any request for information
relating to CAM Commerce or for access to the business,
properties, assets, books or records of CAM Commerce by any
third party that may be considering making, or has made, a
Takeover Proposal. Such notice shall be made orally and in
writing and shall identify the third party making, and the terms
and conditions of, any such Takeover Proposal, indication or
request.
CAM Commerce shall keep Parent informed, as promptly as
practicable, of the status and details of any such Takeover
Proposal, indication or request. CAM Commerce shall continue to
keep Parent reasonably informed of the status and material terms
of any such Takeover Proposal, indication or request, including
any material amendments or proposed amendments as to price or
other material terms.
CAM Commerce shall, and shall cause its representatives to
immediately cease and terminate any and all existing activities,
discussions, or negotiations with any third party conducted
prior to the date of the merger agreement with respect to a
Takeover Proposal. CAM Commerce shall also promptly request that
each third party that has executed a confidentiality agreement
January 1, 2007, in connection with its consideration of
any Takeover Proposal, to return or destroy all confidential
information previously furnished to such person by or on behalf
of CAM Commerce.
Under the merger agreement, a Takeover Proposal
means, other than the transactions contemplated by the merger
agreement, any bona fide offer or proposal from a third party
relating to:
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any direct or indirect acquisition or purchase of 20% or more of
the assets of CAM Commerce or 20% or more of the voting power of
the shares of CAM Commerce capital stock then outstanding,
including any tender offer or exchange offer that, if
consummated, would result in any person (other than Parent and
its affiliates) beneficially owning shares of capital stock with
20% or more of the voting power of the shares of capital stock
then outstanding, or
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any merger, consolidation, business combination,
recapitalization, reorganization, liquidation, dissolution or
similar transaction involving CAM Commerce pursuant to which any
person or the stockholders of any person would own 20% or more
of any class of equity securities of CAM Commerce or of any
resulting parent company of CAM Commerce.
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A Superior Proposal means a bona fide proposal or
offer from any person (other than Parent and its affiliates)
relating to any direct or indirect acquisition or purchase, for
consideration consisting of cash
and/or
securities, of 50% or more of the consolidated assets of CAM
Commerce or more than 50% of the voting power of the shares of
CAM Commerce capital stock then outstanding, including by means
of any tender or exchange offer that if consummated would result
in any person (other than Parent and its affiliates)
beneficially owning shares of CAM Commerce capital stock with
more than 50% of the voting power of the shares of CAM Commerce
capital stock then outstanding and, in each case, that is on
terms that the board of directors determines in its good faith
judgment, after consultation with its financial advisor and its
outside counsel, (i) is reasonably expected to be
consummated in accordance with its terms, taking into account
all legal, financial and regulatory aspects of the proposal and
the person making the proposal, and (ii) if
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consummated, would result in a transaction more favorable to the
stockholders of CAM Commerce from a financial point of view than
the transaction contemplated by the merger agreement
Indemnification
of Directors and Officers
Parent will cause the surviving corporation, and the surviving
corporation agrees, to do the following:
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after the effective time of the merger, subject to any
limitation imposed under applicable law, honor and fulfill in
all respects all obligations of CAM Commerce in respect of
rights to indemnification, advancement of expenses and
exculpation from liabilities for acts or omissions occurring at
or prior to the effective time of the merger now existing in
favor of the current or former directors or officers of CAM
Commerce as provided in its certificate of incorporation or
by-laws and any indemnification or other agreements of CAM
Commerce as in effect on June 9, 2008 and disclosed in the
confidential disclosure schedule provided to Parent in
connection with the signing of the merger agreement;
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for six years following the effective time of the merger, cause
the certificate of incorporation and by-laws (or equivalent
organizational documents) of the surviving corporation to
contain provisions with respect to indemnification, advancement
of expenses and exculpation that are at least as favorable as
the indemnification, advancement of expenses and exculpation
provisions contained in the certificate of incorporation and
bylaws of CAM Commerce as of June 9, 2008, and will not
repeal, amend or modify in any manner such provisions except as
required by applicable law; and
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obtain, maintain and fully pay for irrevocable tail
insurance policies naming CAM Commerces officers and
directors as direct beneficiaries with a claims period of at
least six years from the closing date of the transactions
contemplated by the merger agreement in an amount and scope
customary for companies similar in size and nature of operations
as CAM Commerce with respect to matter existing or occurring at
or prior to the closing date of the transactions contemplated by
the merger agreement.
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Employee
Benefits
From and after the effective time of the merger, Parent will, or
will cause the surviving corporation to, recognize the prior
service with CAM Commerce of each employee of CAM Commerce as of
the effective time of the merger in connection with all employee
benefit plans, programs or policies of Parent or its affiliates
(other than equity based or nonqualified deferred compensation
plan or arrangement) in which such employees are eligible to
participate following the effective time of the merger for
purposes of eligibility, and, for vacation and severance
policies, levels of benefits. From and after the effective time
of the merger, Parent will use commercially reasonable efforts,
or will cause the surviving corporation to use commercially
reasonable efforts, to cause any pre-existing conditions or
limitations and eligibility waiting periods (to the extent that
such waiting periods would be inapplicable, taking into account
service with the CAM Commerce) under any group health plans of
Parent or its affiliates to be waived with respect to such
employees and their eligible dependents. Following the effective
time of the Merger and for a period of six months thereafter,
CAM Commerce employees will be provided with, at a minimum
(i) base salary and cash bonus opportunities which are no
less than the base salary and cash bonus opportunities provided
by the CAM Commerce immediately prior to the effective time of
the merger and (ii) retirement and welfare benefits and
perquisites (excluding equity compensation opportunities) that
are no less favorable in the aggregate than those provided by
CAM Commerce as of June 9, 2008.
Additional
Covenants and Agreements
Reasonable
Best Efforts
The merger agreement provides that CAM Commerce, Parent and
Merger Subsidiary will use their reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under
applicable law to consummate the transactions contemplated by
the merger agreement, including obtaining any consent,
authorization, order or approval of, or any exemption by,
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any governmental entity or other public or private third party
necessary to consummate the transactions contemplated by the
merger agreement.
Antitrust
Filing
The merger agreement provides that each of Parent and CAM
Commerce shall make an appropriate filing of a Notification and
Report Form pursuant to the HSR Act with respect to the
transactions contemplated by the merger agreement as promptly as
practicable after the date of the merger agreement and to supply
as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR
Act and to take all other actions necessary to cause the
expiration or termination of the applicable waiting periods
under the HSR Act as soon as practicable. Parent is responsible
for all applicable fees associated with the filing of the
Notification and Report Form.
Public
Statements
Pursuant to the merger agreement, Parent and CAM Commerce have
agreed to consult with each other before issuing any press
release or otherwise making any public statements with respect
to the transactions contemplated by the merger agreement and not
to issue any press release or make any public statement prior to
consulting the other party, except as may be required by
applicable law or by obligations pursuant to the listing
agreement with the Nasdaq Global Market.
Financing
The merger agreement provides that CAM Commerce shall provide to
Parent and Merger Subsidiary, and shall use its commercially
reasonable efforts to cause the officers, employees and advisors
of CAM Commerce to provide Parent and Merger Subsidiary all
cooperation reasonably requested by Parent that is necessary in
connection with obtaining debt financing for the transactions
contemplated by the merger agreement.
Stockholder
Litigation
The merger agreement provides that, subject to certain
limitations, CAM Commerce shall give Parent the opportunity to
participate in, but not control, the defense or settlement of
any stockholder litigation against CAM Commerce or its directors
relating to the transactions contemplated by the merger
agreement. In addition, CAM Commerce shall not enter into a
settlement of any such shareholder litigation without
Parents prior written consent, which consent may not be
unreasonably withheld.
Access
and Investigation
CAM Commerce has agreed in the merger agreement to
(a) provide Parent and its representatives with reasonable
access to our offices, properties, personnel and books and
records, and (b) furnish Parent and its representatives
such financial and operating data and other information as such
persons may reasonably request.
Conditions
to the Merger
Conditions
to the Obligations of Each Party
The merger agreement provides that the obligations of CAM
Commerce, Parent, and Merger Subsidiary to consummate the merger
are subject to the following conditions:
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the merger agreement and the merger shall have been approved by
a majority of the holders of CAM Commerce common stock;
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no decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any governmental entity
preventing, restraining or enjoining the consummation of the
merger shall be in effect; and
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any applicable waiting period under the HSR Act applicable to
the merger shall have expired or been terminated.
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Conditions
to Obligations of Parent and Merger Subsidiary to Complete the
Merger
The merger agreement provides that the obligations of Parent and
Merger Subsidiary to consummate the merger are subject to the
following conditions:
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we must have performed in all material respects all of our
obligations, covenants and agreements under the merger agreement
required to be performed by us at or prior to the closing date;
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each of our representations and warranties contained in
Sections 4.1, 4.3, 4.4, 4.7(a), 4.14 and 4.22 of the merger
agreement (relating to organization, authorization to enter into
the merger agreement, capitalization, state takeover statutes
and brokers fees and expenses, among others) shall be true
and correct as of the closing date as if made on the closing
date (except for those representations and warranties which
address matters only as of an earlier date, which shall have
been true and correct as of such earlier date);
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all of our other representations and warranties contained in the
merger agreement (disregarding any exception relating to
materiality or a Material Adverse Effect) shall be true and
correct as of the closing date as if made on the closing date
(except for those representations and warranties which address
matters only as of an earlier date, which shall have been true
and correct as of such earlier date), except for such failures
to be true and correct which have not had and would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on CAM Commerce;
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an authorized officer of CAM Commerce will have delivered a
certificate confirming the accuracy of our representations and
warranties;
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since September 30, 2007, the absence of any event,
occurrence or development or any state of circumstances or facts
that, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect on CAM
Commerce;
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Parent shall have received the resignations of all of the
directors of CAM Commerce, effective as of the closing of the
transactions contemplated by the Merger Agreement;
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CAM Commerce shall have amended the lease for its Henderson,
Nevada facility to establish the base rent at $1.75 per square
foot per month for the remainder of the term of such lease,
subject to increases for inflation; and
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the employment agreement by and between CAM Commerce and its
chief executive officer dated as of June 9, 2008, shall not
have been amended, altered or repealed and shall be effective as
of the closing of the transactions contemplated by the merger
agreement.
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Conditions
to Obligations of CAM Commerce to Complete the
Merger
The merger agreement also provides that our obligation to
complete the merger is subject to the following conditions:
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each of Parent and Merger Subsidiary must have performed in all
material respects all of its obligations, covenants and
agreements under the merger agreement;
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each of Parents and Merger Subsidiarys
representations and warranties contained in Sections 5.1,
5.2, 5.6 and 5.7 of the merger agreement (relating to
organization, authorization to enter into the merger agreement,
capitalization, interim operations and brokers fees and
expenses, among other things) shall be true and correct as of
the closing date as if made on the closing date (except for
those representations and warranties which address matters only
as of an earlier date, which shall have been true and correct as
of such earlier date);
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all of Parents and Merger Subsidiarys other
representations and warranties contained in the merger agreement
(disregarding any exception relating to materiality or a
Material Adverse Effect) shall be true and correct as of the
closing date as if made on the closing date (except for those
representations and warranties which address matters only as of
an earlier date, which shall have been true and correct as of
such earlier date), except for such failures to be true and
correct which have not had and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect on Parent;
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an authorized officer of Parent will have delivered a
certificate confirming the accuracy of Parents and Merger
Subsidiarys representations and warranties.
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The merger agreement provides that a Material Adverse
Effect with respect to CAM Commerce and Parent means any
change, effect or circumstance, either individually or in the
aggregate, that is materially adverse to the business,
properties, assets, financial condition or results of operations
of CAM Commerce taken as a whole, or Parent and its Subsidiaries
taken as a whole, as the case may be; provided, however, that to
the extent any change, effect or circumstance is caused by or
results from any of the following, it shall not be taken into
account in determining whether there has been a Material Adverse
Effect with respect to the CAM Commerce or Parent, as the case
may be:
(A) the entry into or the announcement of the execution of
the merger agreement, actions contemplated by the merger
agreement or the performance of obligations under the merger
agreement;
(B) any changes or effects arising out of or resulting from
any legal claims or other proceedings made by any of CAM
Commerces stockholders arising out of or related to this
merger agreement, the merger or any other transactions
contemplated thereby;
(C) changes affecting the United States economy generally;
(D) any failure by CAM Commerce to meet published revenue
or earnings projections, in and of itself (as opposed to the
facts underlying such failure);
(E) any change, in and of itself (as opposed to the facts
underlying such change), in the market price or trading volume
of the equity securities of CAM Commerce on or after
June 9, 2008;
(F) the suspension of trading in securities generally in
and of itself (as opposed to the facts causing such suspension
of trading) on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq Global Market;
(G) any change in any applicable law, rule or regulation or
GAAP or interpretation thereof after June 9, 2008;
(H) events, effects or circumstances to the extent
specifically disclosed in a partys disclosure schedules as
of June 9, 2008 (provided such disclosures are materially
correct);
(I) any action taken or omitted to be taken by the CAM
Commerce with Parents or Merger Subsidiarys express
written consent; and
(J) the commencement, occurrence or continuation of any
war, armed hostilities or acts of terrorism involving or
affecting the United States of America or any part thereof.
GHP
Guarantee
GHP has guaranteed all of Parents and Merger
Subsidiarys obligations under the merger agreement,
including the payment of the merger consideration. GHP has
represented in the merger agreement that it has, and will have
at the closing of the transactions contemplated by the merger
agreement, sufficient funds to satisfy its obligations.
Recommendation
to Our Stockholders
We have agreed, through our board of directors, to recommend to
our stockholders that they approve the merger agreement.
However, our board of directors may withdraw or modify its
approval of the merger
41
agreement, the merger, or the other transactions contemplated by
the merger agreement and its recommendation that our
stockholders adopt the merger agreement and approve the merger
if:
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we receive a bona fide unsolicited written Takeover Proposal
that our board of directors determines in good faith is a
Superior Proposal (see The Merger Agreement No
Solicitation of Alternative Transactions by CAM Commerce);
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CAM Commerce and our respective representatives comply with the
restrictions described in The Merger
Agreement No Solicitation of Alternative Transactions
by CAM Commerce in connection with such Takeover Proposal;
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we comply with our obligations to (i) promptly notify
Parent within 48 hours, orally and in writing, of receipt
of such Takeover Proposal, indication that a third party is
considering making a Takeover Proposal or of any request for
information or for access to the business, properties, assets,
books or records concerning CAM Commerce, (ii) keep Parent
reasonably informed regarding the status and material terms of
such Takeover Proposal, including any material or proposed
amendments and (iii) provide Parent with any non-public
information concerning CAM Commerce provided to any other party
that was not previously provided to Parent;
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we provide notice to Parent at least five calendar days in
advance of our board of directors intent to withdraw or
modify its recommendation, which notice shall attach the most
recent draft of any agreement with respect to, and specify the
conditions of, any such Superior Proposal, and we comply with
our requirements to negotiate with Parent in good faith (to the
extent Parent desires to negotiate) to make such adjustments in
the terms and conditions of the merger agreement so that such
Takeover Proposal ceases to constitute a Superior
Proposal; and
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our board of directors determines in good faith, after
considering advice from outside legal counsel, that the failure
to take such action would reasonably be expected to result in a
breach of its fiduciary duties under applicable law.
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Termination
of Merger Agreement
The merger agreement may be terminated at any time prior to the
effective time of the merger:
(1) by mutual written consent of Parent and CAM Commerce;
(2) by either Parent or CAM Commerce if:
(A) the merger is not consummated by November 30, 2008
(provided that the right to terminate shall not be available to
any party whose breach of any provision of the merger agreement
results in the failure of the merger to be consummated by such
time);
(B) any governmental entity of competent jurisdiction shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by the merger agreement and such order
shall have become final and non-appealable (provided that the
right to terminate shall not be available to any party who has
not used its reasonable best efforts to cause such order to be
lifted; or
(C) CAM Commerces stockholders do not approve the
merger upon a vote taken at the special meeting.
(3) by Parent if:
(A) an Adverse Recommendation Change shall have occurred
(see The Merger Agreement No Solicitation of
Alternative Transactions by CAM Commerce);
(B) CAM Commerce shall have entered into a definitive
agreement with respect to a Superior Proposal (as defined in
The Merger Agreement No Solicitation of
Alternative Transactions by CAM Commerce); or
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(C) CAM Commerce breaches any representation, warranty,
covenant or agreement under the merger agreement that would
cause a failure to satisfy a condition to closing, and such
breach cannot be cured or is not cured within the earlier of
(i) 30 days after receipt of written notice thereof
from Parent and (ii) November 30, 2008.
(4) by CAM Commerce if:
(A) CAM Commerce enters, or decides to enter, into a
binding agreement with respect to a Superior Proposal (as
defined in The Merger Agreement No
Solicitation of Alternative Transactions by CAM Commerce)
in compliance with the non-solicitation provision of the merger
agreement, and simultaneously with such termination, CAM
Commerce pays Parent a termination fee of approximately
$7.2 million; provided, that CAM Commerce (A) has
notified Parent, in writing and at least five calendar days
prior to such termination, of its intention to terminate the
merger agreement and to enter into a binding written agreement
concerning a Takeover Proposal that constitutes a Superior
Proposal, attaching the most current version of such agreement,
and (B) Parent has not made, within five calendar days of
receipt of such written notification, an offer that is at least
as favorable to the stockholders of CAM Commerce as such
Superior Proposal, it being understood that CAM Commerce shall
not enter into any such binding agreement during such five
calendar day period; it being further understood and agreed that
any material amendment to any Takeover Proposal will be deemed
to be a new Takeover Proposal for purposes of re-starting the
five calendar day clock;
(B) Parent or Merger Subsidiary breaches any
representation, warranty, covenant or agreement under the merger
agreement, such that such breach would result in a failure to
satisfy the closing conditions related to Parents
representations, warranties, and covenants, and such breach
cannot be within thirty days after receipt of written notice
thereof from CAM Commerce;
Termination
Fee
CAM Commerce must pay Parent a termination fee of approximately
$7.2 million, if:
(1) the merger agreement is terminated by CAM Commerce for
the reasons stated in paragraph (4)(A) of The Merger
Agreement Termination of Merger Agreement
above; or
(2) the merger agreement is terminated by Parent for the
reasons stated in paragraphs (3)(A) or (3)(B) of
The Merger Agreement Termination of Merger
Agreement above.
In addition, if the merger agreement is terminated for the
reasons stated in paragraphs (2)(A) or (2)(C) of The
Merger Agreement Termination of Merger
Agreement and prior to such termination CAM Commerce
receives a Takeover Proposal, then (a) CAM Commerce shall
pay the expenses incurred by Parent (not to exceed
$1.5 million) on the date of termination if the merger
agreement is terminated by CAM Commerce, or two business days
after the date of termination if the merger agreement is
terminated by Parent, and (b) if within 12 months
after such termination CAM Commerce enters into a definitive
agreement with respect to such Takeover Proposal, CAM Commerce
shall pay the termination fee on the earlier of the entering
into the definitive agreement or the consummation of such
Takeover Proposal.
Amendment
and Waiver of the Merger Agreement
Amendment
Any provision of the merger agreement may be amended if such
amendment is executed in writing by each of CAM Commerce, Parent
and Merger Subsidiary; provided, however, that after the merger
agreement has been adopted by CAM Commerces stockholders,
there shall be no amendment that by law requires the further
approval of the stockholders without obtaining such further
approval.
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Waiver
Any provisions of the merger agreement may be waived if such
waiver is executed in writing by the party against whom the
waiver is to be effective.
Fees and
Expenses
Whether or not the merger is completed, in general, all fees and
expenses incurred in connection with the merger agreement and
the merger will be paid by the party incurring those fees and
expenses, provided that Parent will pay the fees and expenses
incurred in connection with filings required pursuant to the HSR
Act. In addition, pursuant to the merger agreement, we must pay
Parent a termination fee of approximately $7.2 million and
reimburse it for its expenses, not to exceed $1,500,000, if the
merger agreement is terminated under specified circumstances.
See The Merger Agreement Termination Fee
above.
44
APPRAISAL
RIGHTS
Under Section 262 of the DGCL, any holder of CAM Commerce
common stock who does not wish to accept the $40.50 per share
merger consideration may dissent from the merger and elect to
exercise appraisal rights and have the fair value of their
shares of CAM Commerce common stock judicially determined and
paid in cash, together with a fair rate of interest, if any. The
valuation will exclude any element of value arising from the
accomplishment or expectation of the merger. Even if the merger
is approved by the holders of the requisite number of shares of
our common stock, you are entitled to exercise appraisal rights
and obtain payment of the fair value for your
shares, exclusive of any element of value arising from the
expectation or accomplishment of the merger.
The following summary of the provisions of Section 262 of
the DGCL is not a complete statement of the law pertaining to
appraisal rights under the DGCL, and is qualified in its
entirety by reference to the full text of Section 262 of
the DGCL, a copy of which is attached to this proxy statement as
Annex C. If you wish to exercise appraisal rights or wish
to preserve your right to do so, you should carefully review
Section 262 of the DGCL and are urged to consult legal
counsel.
All references in Section 262 of the DGCL and in this
summary to a stockholder are to the record holder of
shares of CAM Commerce common stock as to which appraisal rights
are asserted. A person having a beneficial interest in shares of
CAM Commerce common stock held of record in the name of another
person, such as a broker or nominee, must act promptly to cause
the record holder to follow properly the steps summarized below
and in a timely manner to perfect appraisal rights.
Under Section 262 of the DGCL, when a merger is submitted
for approval at a meeting of stockholders, as in the case of the
merger agreement, not less than twenty days prior to the special
meeting, CAM Commerce must notify each of its stockholders that
appraisal rights are available and include in the notice a copy
of Section 262 of the DGCL. This proxy statement
constitutes the notice, and we attach the applicable statutory
provisions to this proxy statement as Annex C.
In order to exercise your appraisal rights effectively, you must
satisfy each of the following primary requirements:
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you must hold your shares of CAM Commerce common stock as of the
date you make your demand for appraisal rights and continue to
hold your shares of CAM Commerce common stock through the
effective time of the merger;
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you must deliver to CAM Commerce a written notice of your demand
for appraisal of your shares of CAM Commerce common stock prior
to the taking of the vote at CAM Commerces special meeting;
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you must not have voted in favor of adoption of the merger
agreement; if you vote by proxy and wish to exercise appraisal
rights, you must vote against the adoption of the merger
agreement or mark your proxy card to indicate that you abstain
from voting on the adoption of the merger agreement; and
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you must file a petition in the Delaware Court of Chancery
demanding a determination of the fair value of the shares within
120 days after the effective time of the merger.
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If you fail strictly to comply with any of the above
requirements or otherwise fail strictly to comply with the
requirements of Section 262 of the DGCL, you will have no
appraisal rights with respect to your shares. You will receive
no further notices from us regarding your appraisal rights.
Neither voting (in person or by proxy) against, abstaining from
voting on or failing to vote on the proposal to adopt the merger
agreement will constitute a written demand for appraisal within
the meaning of Section 262 of the DGCL. The written demand
for appraisal must be in addition to and separate from any proxy
or vote.
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The address for purposes of making an appraisal demand is:
Secretary
CAM Commerce Solutions, Inc.
17075 Newhope Street, Suite A
Fountain Valley, California 92708
Only a holder of record of shares of CAM Commerce common stock,
or a person duly authorized and explicitly purporting to act on
his or her behalf, is entitled to assert an appraisal right for
the shares of CAM Commerce common stock registered in his or her
name. Beneficial owners who are not record holders and who wish
to exercise appraisal rights are advised to consult with the
appropriate record holders promptly as to the timely exercise of
appraisal rights. A record holder, such as a broker, who holds
shares of CAM Commerce common stock as a nominee for others, may
exercise appraisal rights with respect to the shares of CAM
Commerce common stock held for one or more beneficial owners,
while not exercising such rights for other beneficial owners. In
such a case, the written demand should set forth the number of
shares as to which the demand is made. Where no shares of CAM
Commerce common stock are expressly mentioned, the demand will
be presumed to cover all shares of CAM Commerce common stock
held in the name of such record holder.
A demand for the appraisal of shares of CAM Commerce common
stock owned of record by two or more joint holders must identify
and be signed by all of the holders. A demand for appraisal
signed by trustees, executors, administrators, guardians,
attorneys in fact, officers of corporations or others acting in
a fiduciary or representative capacity must so identify the
persons signing the demand.
An appraisal demand may be withdrawn by a former stockholder
within sixty days after the effective time of the merger by
delivery of a written withdrawal to Parent, or thereafter only
with written approval of Parent. Upon withdrawal of an appraisal
demand, the former stockholder must accept the terms of the
merger and will be entitled to receive the $40.50 cash payment
per share referred to above, without interest and less any
applicable withholding taxes. As used in this paragraph and
throughout the remainder of this section, references to Parent
mean the corporation that survives the merger.
Within ten days after the completion of the merger, Parent must
give written notice of the effective time of the merger to each
of CAM Commerces former stockholders who did not vote in
favor of the merger agreement and who made a written demand for
appraisal in accordance with Section 262 of the DGCL.
Within 120 days after the effective time of the merger, but
not later, either Parent or any dissenting stockholder who has
complied with the requirements of Section 262 of the DGCL
may file a petition in the Delaware Court of Chancery demanding
a determination of the value of the shares of CAM Commerce
common stock held by all stockholders demanding appraisal of
their shares. Parent is under no obligation to, and has no
present intent to, file a petition for appraisal, and
stockholders seeking to exercise appraisal rights should not
assume that Parent will file a petition or that it will initiate
any negotiations with respect to the fair value of the shares.
Stockholders who desire to have their shares appraised should
initiate any petitions necessary for the perfection of their
appraisal rights within the time periods and in the manner
prescribed in Section 262 of the DGCL. A stockholder who
timely files a petition for appraisal with the Delaware Court of
Chancery must serve a copy upon Parent, which in turn shall file
a duly verified list containing the names and addresses of all
stockholders who have demanded payment for their shares and with
whom agreements as to value have not been reached, with the
Delaware Register in Chancery within 20 days of such
service. If the Delaware Court of Chancery so orders, the
Delaware Register in Chancery will then give notice of the time
and place for the hearing of the petition by mail to both Parent
and stockholders on the list. Such notice will also be given by
one or more publications at least one week before the hearing,
in a generally-circulated newspaper in City of Wilmington,
Delaware, or whichever publication the Delaware Court of
Chancery chooses.
Within 120 days after the effective time of the merger, any
stockholder who has complied with the provisions of
Section 262 of the DGCL up to that point may receive from
the surviving corporation, upon written request, a statement
setting forth the aggregate number of shares not voted in favor
of the merger agreement and with respect to which we have
received demands for appraisal, and the aggregate number of
holders of those shares. The surviving corporation must mail
this statement to the stockholder within 10 days
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of receipt of the request or within 10 days after
expiration of the period for delivery of demands for appraisals
under Section 262 of the DGCL, whichever is later.
If a hearing on the petition is held, the Delaware Court of
Chancery is empowered to determine which dissenting stockholders
are entitled to an appraisal of their shares. The Delaware Court
may require dissenting stockholders who hold stock represented
by certificates to submit their certificates representing shares
for notation thereon of the pendency of the appraisal
proceedings, and the Delaware Court of Chancery is empowered to
dismiss the proceedings as to any dissenting stockholder who
does not comply with this request. Accordingly, dissenting
stockholders are cautioned to retain their share certificates,
pending resolution of the appraisal proceedings.
After determination of the dissenting stockholders entitled to
an appraisal, the Delaware Court of Chancery will appraise the
shares held by such dissenting stockholders at their fair value
as of the effective time of the merger, exclusive of any value
arising from accomplishment or expectation of the merger, along
with a fair rate of interest, if any, to be paid upon the amount
determined to be the fair value.
In determining fair value, the Delaware Court of Chancery will
take into account all relevant factors. In
Weinberger v.
UOP, Inc.
, the Delaware Supreme Court stated that
proof of value by any techniques or methods which are
generally considered acceptable in the financial community and
otherwise admissible in court should be considered and
construed Section 262 of the DGCL to mean that
elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the
date of the merger and not the product of speculation, may be
considered.
Stockholders should be aware that the fair value of their shares
as determined under Section 262 of the DGCL could be
greater than, the same as, or less than the $40.50 merger
consideration. Stockholders should also be aware that investment
banking opinions as to the fairness from a financial point of
view of the consideration payable in a merger are not opinions
as to fair value under Section 262 of the DGCL.
The Delaware Court of Chancery may also, on application,
(i) assess costs among the parties as the Delaware Court of
Chancery deems equitable and (ii) order all or a portion of
the expenses incurred by any dissenting stockholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorneys fees and fees and
expenses of experts, to be charged pro rata against the value of
all shares entitled to appraisal. Determinations by the Delaware
courts are subject to appellate review by the Delaware Supreme
Court.
The Delaware Court of Chancery will direct payment of the fair
value and interest, if any, by Parent to the stockholders
entitled thereto. Payments will be made to stockholders in the
case of holders of uncertificated stock, and in the case of
holders of shares represented by certificates upon the surrender
of such certificates to us.
No appraisal proceedings in the Delaware Court of Chancery shall
be dismissed as to any dissenting stockholder without the
approval of the Delaware Court of Chancery, and this approval
may be conditioned upon terms which the Delaware Court of
Chancery deems just.
From and after the effective time of the merger, former holders
of CAM Commerce common stock, whether or not they have demanded
appraisal rights, are not entitled to vote their shares for any
purpose and are not entitled to receive payment of dividends or
other distributions on the shares (except dividends or other
distributions payable to stockholders of record at a date which
is prior to the effective date of the merger).
Failure to follow the steps required by Section 262 of the
DGCL for perfecting appraisal rights may result in the loss of
appraisal rights, in which event you will be entitled to receive
the consideration with respect to your dissenting shares in
accordance with the merger agreement.
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SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information as of June 15, 2008
regarding the beneficial ownership of our common stock by:
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any person (or group of affiliated persons) who was known by us
to own more than 5% of our voting securities;
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each of our directors;
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each of our named executive officers; and
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all current directors and executive officers as a group.
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Applicable percentage ownership in the following table is based
on 4,140,250 shares of our common stock outstanding as of
June 15, 2008.
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Number of Shares of
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Percentage of
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Common Stock
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Common Stock
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Name and Address of Beneficial Owner(1)
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Beneficially Owned(2)
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Beneficially Owned
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5% Stockholders:
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Kenneth L. Templeton(3)
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636,411
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15.4
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%
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Bares Capital Management, Inc.(4)
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421,320
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10.2
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%
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Directors and Named Executive Officers:
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Geoff Knapp(5)
|
|
|
466,949
|
|
|
|
11.1
|
%
|
Walt Straub(6)
|
|
|
116,400
|
|
|
|
2.8
|
%
|
David Frosh(7)
|
|
|
22,500
|
|
|
|
*
|
|
Donald A. Clark(8)
|
|
|
25,600
|
|
|
|
*
|
|
Paul Caceres(9)
|
|
|
35,000
|
|
|
|
*
|
|
All executive officers and directors as a group(10)
|
|
|
666,449
|
|
|
|
15.4
|
%
|
|
|
|
*
|
|
Represents beneficial ownership of less than 1%.
|
|
(1)
|
|
Unless otherwise indicated, the business address of each holder
is:
c/o CAM
Commerce Solutions, Inc., 17075 Newhope Street, Suite A,
Fountain Valley, California 92708.
|
|
(2)
|
|
Except as otherwise noted, the beneficial owners enjoy sole
voting and investment powers with respect to the shares
indicated, subject to community property laws where applicable.
Includes shares which the party or group has the right to
acquire by the exercise of stock options which are currently
exercisable.
|
|
(3)
|
|
Based on a Schedule 13D/A filed with the SEC on
August 20, 2007 and Forms 4 filed with the SEC on
August 31, 2007 and January 16, 2008. The principal
business office for Mr. Templeton is
3311 S. Rainbow Blvd., Las Vegas, Nevada 89146.
|
|
(4)
|
|
Based on a Schedule 13G/A filed with the SEC on
June 10, 2008. The principal business office for Bares
Capital Management, Inc. is 221 W. 6th Street,
Suite 1225, Austin, Texas 78701.
|
|
(5)
|
|
Includes 50,000 shares issuable pursuant to options
exercisable within 60 days of June 15, 2008.
|
|
(6)
|
|
Includes 52,500 shares issuable pursuant to options
exercisable within 60 days of June 15, 2008.
|
|
(7)
|
|
Represents shares issuable pursuant to options exercisable
within 60 days of June 15, 2008.
|
|
(8)
|
|
Represents shares issuable pursuant to options exercisable
within 60 days of June 15, 2008.
|
|
(9)
|
|
Represents shares issuable pursuant to options exercisable
within 60 days of June 15, 2008.
|
|
(10)
|
|
Includes 185,600 shares issuable pursuant to options
exercisable within 60 days of June 15, 2008.
|
48
MARKET
PRICES AND DIVIDEND INFORMATION
Our common stock is quoted on the Nasdaq Global Market or its
predecessor under the symbol CADA. The following
table sets forth the high and low sales prices for our common
stock for the calendar quarters indicated, as reported on the
Nasdaq Global Market or its predecessor.
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Fiscal Year Ended September 30, 2006
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
21.40
|
|
|
$
|
16.22
|
|
Second Quarter
|
|
$
|
24.99
|
|
|
$
|
20.13
|
|
Third Quarter
|
|
$
|
24.90
|
|
|
$
|
21.20
|
|
Fourth Quarter
|
|
$
|
22.19
|
|
|
$
|
19.16
|
|
Fiscal Year Ended September 30, 2007
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
26.30
|
|
|
$
|
20.03
|
|
Second Quarter
|
|
$
|
27.44
|
|
|
$
|
23.50
|
|
Third Quarter
|
|
$
|
28.65
|
|
|
$
|
21.32
|
|
Fourth Quarter
|
|
$
|
40.00
|
|
|
$
|
27.85
|
|
Fiscal Year Ending September 30, 2008
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
45.25
|
|
|
$
|
34.00
|
|
Second Quarter
|
|
$
|
42.38
|
|
|
$
|
33.13
|
|
Third Quarter
(through 2008)
|
|
|
|
|
|
|
|
|
On June 9, 2008, the last full trading day prior to the
public announcement of the merger agreement, the closing sale
price of our common stock as reported on the Nasdaq Global
Market was $37.54.
On ,
the last full trading day prior to the date of this proxy
statement, the closing price of our common stock as reported on
the Nasdaq Global Market was $ .
Stockholders are encouraged to obtain current market
quotations for our common stock.
Following the merger, there will be no further market for shares
of our common stock and our shares of common stock will be
delisted from the Nasdaq Global Market and deregistered under
the Exchange Act.
In August 2005, the board of directors approved a new dividend
policy, which pays stockholders a variable dividend based on the
quarterly results. The merger agreement provides that, with the
exception of the dividend to be paid on July 14, 2008 to
shareholders of record on July 3, 2008, we may not pay any
cash dividends during the pre closing period without prior
written consent of Parent. Thus, we do not anticipate paying
cash dividends in the foreseeable future.
However, should the merger not occur, we anticipate returning to
our previous dividend payment schedule, as long as our business
and the market supports such payments.
PROPOSAL 2
ADJOURNMENT OR POSTPONEMENT OF THE SPECIAL MEETING
If we fail to receive a sufficient number of votes to adopt the
merger agreement, we may propose to adjourn or postpone the
special meeting for the purpose of soliciting additional proxies
to adopt the merger agreement. We currently do not intend to
propose adjournment or postponement of our special meeting if
there are sufficient votes to adopt the merger agreement.
Approval of the proposal to adjourn or postpone our special
meeting for the purpose of soliciting additional proxies
requires the affirmative vote of a majority of the votes cast at
the special meeting by holders of shares of our common stock
present or represented by proxy and voting on the proposal.
Our board of directors recommends that you vote
FOR the proposal to adjourn or postpone the special
meeting to solicit additional proxies if there are insufficient
votes at the time of the special meeting to adopt the merger
agreement.
49
OTHER
MATTERS
Our board of directors currently knows of no other business that
will be presented for consideration at the special meeting.
Nevertheless, should any business other than that set forth in
the notice of special meeting of stockholders properly come
before the special meeting, the enclosed proxy confers
discretionary authority to vote with respect to such matters,
including matters that our board of directors does not know, a
reasonable time before proxy solicitation, are to be presented
at the special meeting. If any of these matters are presented at
the special meeting, then the proxy agents named in the enclosed
proxy card will vote in accordance with their judgment.
STOCKHOLDER
PROPOSALS
If the merger is consummated, there will be no public
stockholders of CAM Commerce and no public participation in any
future meetings of stockholders of CAM Commerce. If the merger
is not consummated, however, CAM Commerce will hold its 2008
annual meeting of stockholders. If such meeting is held,
stockholder proposals that are intended to be included in CAM
Commerces 2008 annual proxy statement for presentation at
CAM Commerces 2008 annual meeting of stockholders needed
to be received by no later than December 24, 2007 to be
considered for inclusion in the proxy statement and form of
proxy relating to that meeting.
Even if CAM Commerce receives a proposal from a qualified
stockholder in a timely manner, it will not guarantee that
proposals inclusion in CAM Commerces proxy materials
or its presentation at the 2008 annual meeting because there are
other requirements in the proxy rules that a proposal must meet
in order to be included and presented.
Under
Rule 14a-4
promulgated under the Exchange Act we will be allowed to use our
discretionary voting authority under proxies solicited by us to
vote on any proposal that is raised at the 2008 annual meeting,
without any discussion of the matter in the proxy statement.
Since we did not receive any stockholder proposals for our 2008
annual meeting
before ,
we will be able to use our discretionary voting authority at the
2008 annual meeting.
HOUSEHOLDING
OF PROXY MATERIAL
The SEC has adopted rules that permit companies and
intermediaries (e.g., brokers) to satisfy the delivery
requirements for proxy statements with respect to two or more
stockholders sharing the same address by delivering a single
proxy statement addressed to those stockholders. This process,
which is commonly referred to as householding,
potentially means extra convenience for stockholders and cost
savings for companies. Each stockholder who participates in
householding will continue to receive a separate proxy card.
A number of brokers with account holders who are our
stockholders will be householding our proxy
materials. A single proxy statement report will be delivered to
multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders.
Once you have received notice from your broker that they will be
householding communications to your address,
householding will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you
no longer wish to participate in householding and
would prefer to receive a separate proxy statement, please
notify your broker, and direct a written request to Investor
Relations, CAM Commerce Solutions, Inc.,
17075 Newhope Street, Suite A,
Fountain Valley, California 92708,
(714) 241-9241.
If any stockholders in your household wish to receive a separate
copy of this proxy statement, please contact us, and we will
provide such additional copies. Stockholders who currently
receive multiple copies of the proxy statement at their address
and would like to request householding of their
communications should contact their broker.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended. We file reports,
proxy statements and other information with the SEC. You may
read and copy these reports,
50
proxy statements and other information at the SECs Public
Reference Section at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
The SEC also maintains an Internet website, located at
www.sec.gov, that contains reports, proxy statements and other
information regarding companies and individuals that file
electronically with the SEC. Our SEC filings are also available
at the office of the Nasdaq Stock Market. For further
information on obtaining copies of our public filings at the
Nasdaq Stock Market, you should call
(212) 656-5060.
The information contained in this proxy statement speaks only as
of the date indicated on the cover of this proxy statement
unless the information specifically indicates that another date
applies.
The proxy statement does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities, or the
solicitation of a proxy, in any jurisdiction to or from any
person to whom it is not lawful to make any offer or
solicitation in that jurisdiction. The delivery of this proxy
statement should not create an implication that there has been
no change in our affairs since the date of this proxy statement
or that the information herein is correct as of any later date.
Our stockholders should not send in their CAM Commerce stock
certificates until they receive the transmittal materials from
the payment agent. Our stockholders of record who have further
questions about their share certificates or the exchange of our
common stock for cash should contact the payment agent.
Stockholders should not rely on information other than that
contained in this proxy statement. We have not authorized anyone
to provide information that is different from that contained in
this proxy statement. This proxy statement is
dated ,
2008. No assumption should be made that the information
contained in this proxy statement is accurate as of any date
other than that date (or any earlier date if so indicated in
this proxy statement), and the mailing of this proxy statement
will not create any implication to the contrary.
If you have questions about the special meeting or the merger
after reading this proxy, or if you would like additional copies
of this proxy statement or the proxy card, you should contact
CAM Commerce Solutions, Inc., 17075 Newhope Street,
Suite A, Fountain Valley, California 92708, Attention:
Secretary. You may also call our proxy solicitor, MacKenzie
Partners, Inc. toll free at (800) 322-2885 (bankers and brokers
may call (212) 929-5500).
Whether or not you intend to be present at the special meeting,
we urge you to submit your signed proxy promptly.
51
ANNEX A
MERGER
AGREEMENT
AGREEMENT AND PLAN OF MERGER
AMONG
VEGAS HOLDING CORP.,
VEGAS MERGER SUB INC.
AND
CAM COMMERCE SOLUTIONS, INC.
DATED AS OF JUNE 9, 2008
A-1
TABLE OF
CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
ARTICLE I
|
|
DEFINITIONS; INTERPRETATION
|
|
|
A-4
|
|
Section 1.1
|
|
Definitions
|
|
|
A-4
|
|
Section 1.2
|
|
Interpretation
|
|
|
A-9
|
|
|
|
|
|
|
|
|
ARTICLE II
|
|
THE MERGER
|
|
|
A-9
|
|
Section 2.1
|
|
The Merger
|
|
|
A-9
|
|
Section 2.2
|
|
Closing
|
|
|
A-9
|
|
Section 2.3
|
|
Effective Time
|
|
|
A-9
|
|
Section 2.4
|
|
Effects of the Merger
|
|
|
A-10
|
|
Section 2.5
|
|
Certificate of Incorporation and By-laws; Officers and Directors
|
|
|
A-10
|
|
|
|
|
|
|
|
|
ARTICLE III
|
|
EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT
CORPORATIONS; SURRENDER OF CERTIFICATES
|
|
|
A-10
|
|
Section 3.1
|
|
Effect on Stock
|
|
|
A-10
|
|
Section 3.2
|
|
Surrender of Certificates
|
|
|
A-11
|
|
|
|
|
|
|
|
|
ARTICLE IV
|
|
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
A-12
|
|
Section 4.1
|
|
Organization
|
|
|
A-13
|
|
Section 4.2
|
|
Subsidiaries
|
|
|
A-13
|
|
Section 4.3
|
|
Capital Structure
|
|
|
A-13
|
|
Section 4.4
|
|
Authority
|
|
|
A-14
|
|
Section 4.5
|
|
Consents and Approvals; No Violations
|
|
|
A-14
|
|
Section 4.6
|
|
SEC Documents and Other Reports
|
|
|
A-14
|
|
Section 4.7
|
|
Absence of Changes
|
|
|
A-15
|
|
Section 4.8
|
|
Information Supplied
|
|
|
A-15
|
|
Section 4.9
|
|
Compliance with Laws
|
|
|
A-15
|
|
Section 4.10
|
|
Tax Matters
|
|
|
A-16
|
|
Section 4.11
|
|
Liabilities
|
|
|
A-17
|
|
Section 4.12
|
|
Litigation
|
|
|
A-17
|
|
Section 4.13
|
|
Benefit Plans
|
|
|
A-17
|
|
Section 4.14
|
|
State Takeover Statutes
|
|
|
A-18
|
|
Section 4.15
|
|
Intellectual Property
|
|
|
A-18
|
|
Section 4.16
|
|
Material Contracts
|
|
|
A-20
|
|
Section 4.17
|
|
Labor and Employment
|
|
|
A-20
|
|
Section 4.18
|
|
Real Estate
|
|
|
A-20
|
|
Section 4.19
|
|
Environmental Matters
|
|
|
A-21
|
|
Section 4.20
|
|
Affiliate Transactions
|
|
|
A-21
|
|
Section 4.21
|
|
Opinions of Financial Advisors
|
|
|
A-21
|
|
Section 4.22
|
|
Brokers
|
|
|
A-21
|
|
|
|
|
|
|
|
|
ARTICLE V
|
|
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
|
|
|
A-21
|
|
Section 5.1
|
|
Organization
|
|
|
A-21
|
|
Section 5.2
|
|
Authority
|
|
|
A-21
|
|
Section 5.3
|
|
Consents and Approvals; No Violations
|
|
|
A-22
|
|
Section 5.4
|
|
Information Supplied
|
|
|
A-22
|
|
Section 5.5
|
|
Litigation
|
|
|
A-22
|
|
Section 5.6
|
|
Capitalization and Interim Operations of Sub
|
|
|
A-22
|
|
Section 5.7
|
|
Brokers
|
|
|
A-22
|
|
A-2
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
Section 5.8
|
|
Lack of Ownership of Company Common Stock
|
|
|
A-23
|
|
Section 5.9
|
|
Management Arrangements
|
|
|
A-23
|
|
|
|
|
|
|
|
|
ARTICLE VI
|
|
COVENANTS RELATING TO CONDUCT OF BUSINESS
|
|
|
A-23
|
|
Section 6.1
|
|
Conduct of Business by the Company Pending the Merger
|
|
|
A-23
|
|
Section 6.2
|
|
No Solicitation
|
|
|
A-25
|
|
|
|
|
|
|
|
|
ARTICLE VII
|
|
ADDITIONAL AGREEMENTS
|
|
|
A-27
|
|
Section 7.1
|
|
Treatment of Stock-Based Awards
|
|
|
A-27
|
|
Section 7.2
|
|
Stockholder Approval; Preparation of Proxy Statement
|
|
|
A-27
|
|
Section 7.3
|
|
Access to Information
|
|
|
A-28
|
|
Section 7.4
|
|
Fees and Expenses
|
|
|
A-28
|
|
Section 7.5
|
|
Public Announcements
|
|
|
A-29
|
|
Section 7.6
|
|
Transfer Taxes
|
|
|
A-29
|
|
Section 7.7
|
|
State Takeover Laws
|
|
|
A-29
|
|
Section 7.8
|
|
Indemnification; Directors and Officers Insurance
|
|
|
A-29
|
|
Section 7.9
|
|
Reasonable Best Efforts
|
|
|
A-30
|
|
Section 7.10
|
|
Antitrust Filing
|
|
|
A-30
|
|
Section 7.11
|
|
Financing
|
|
|
A-31
|
|
Section 7.12
|
|
Notification of Certain Matters
|
|
|
A-31
|
|
Section 7.13
|
|
Stockholder Litigation
|
|
|
A-31
|
|
Section 7.14
|
|
Employee Benefits
|
|
|
A-31
|
|
|
|
|
|
|
|
|
ARTICLE VIII
|
|
CONDITIONS PRECEDENT
|
|
|
A-32
|
|
Section 8.1
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
A-32
|
|
Section 8.2
|
|
Conditions to the Obligations of the Company to Effect the Merger
|
|
|
A-32
|
|
Section 8.3
|
|
Conditions to the Obligations of Parent and Sub to Effect the
Merger
|
|
|
A-32
|
|
|
|
|
|
|
|
|
ARTICLE IX
|
|
TERMINATION AND AMENDMENT
|
|
|
A-33
|
|
Section 9.1
|
|
Termination
|
|
|
A-33
|
|
Section 9.2
|
|
Effect of Termination
|
|
|
A-34
|
|
Section 9.3
|
|
Amendment
|
|
|
A-34
|
|
Section 9.4
|
|
Extension; Waiver
|
|
|
A-34
|
|
|
|
|
|
|
|
|
ARTICLE X
|
|
GENERAL PROVISIONS
|
|
|
A-35
|
|
Section 10.1
|
|
Non-Survival of Representations and Warranties and Agreements
|
|
|
A-35
|
|
Section 10.2
|
|
Notices
|
|
|
A-35
|
|
Section 10.3
|
|
Counterparts
|
|
|
A-35
|
|
Section 10.4
|
|
Entire Agreement; No Third-Party Beneficiaries
|
|
|
A-35
|
|
Section 10.5
|
|
Governing Law; Venue; Waiver of Jury Trial
|
|
|
A-36
|
|
Section 10.6
|
|
Assignment
|
|
|
A-36
|
|
Section 10.7
|
|
Severability
|
|
|
A-37
|
|
Section 10.8
|
|
Enforcement of this Agreement
|
|
|
A-37
|
|
Section 10.9
|
|
Obligations of Subsidiaries
|
|
|
A-37
|
|
Section 10.10
|
|
Construction
|
|
|
A-37
|
|
Section 10.11
|
|
GHEP Guarantee
|
|
|
A-37
|
|
A-3
AGREEMENT
AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
, dated as of June 9,
2008 (this
Agreement
), among Vegas Holding
Corp., a Delaware corporation (
Parent
), Vegas
Merger Sub Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (
Sub
), and CAM Commerce
Solutions, Inc., a Delaware corporation (the
Company
) (Sub and the Company being
hereinafter collectively referred to as the
Constituent
Corporations
). Except as otherwise set forth herein,
capitalized (and certain other) terms used herein shall have the
meanings set forth in
Section 1.1
.
W I T N E
S S E T H:
WHEREAS, the respective boards of directors of Parent, Sub and
the Company have each approved the merger of Sub with and into
the Company (the
Merger
), upon the terms and
subject to the conditions set forth in this Agreement, whereby
each issued and outstanding share of common stock, par value
$0.001 per share, of the Company (the
Company Common
Stock
or the
Shares
), other than
Dissenting Shares (as defined herein) and Shares owned directly
or indirectly by Parent or the Company, will be converted into
the right to receive the Merger Consideration (as defined
herein);
WHEREAS, the respective boards of directors of the Constituent
Corporations have each determined that this Agreement and the
Merger are advisable and in the best interests of each
corporation and their respective stockholders and recommended
that their respective stockholders approve this
Agreement; and
WHEREAS, each of Parent, Sub and the Company desires to make
certain representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be
legally bound hereby, each of Parent, Sub and the Company hereby
agrees as follows:
ARTICLE I
DEFINITIONS;
INTERPRETATION
Section
1.1
Definitions
.
As used in this Agreement, the following terms have the meanings
specified or referred to in this
Section 1.1
and
shall be equally applicable to both the singular and plural
forms.
Acquisition Agreement
has the meaning set
forth in
Section 6.2(c)
.
Adjustment
has the meaning set forth in
Section 3.1(e)
.
Adverse Recommendation Change
has the meaning
set forth in
Section 6.2(c)
.
Affiliate
means, with respect to any Person,
any other Person that, at the time of determination, directly or
indirectly through one or more intermediaries, Controls, is
Controlled by or is under Common Control with such Person.
Aggregate Merger Consideration
means the
product of the Merger Consideration and the number of Shares
issued and outstanding immediately prior to the Effective Time
(excluding any Dissenting Shares and Shares to be cancelled
pursuant to
Section 3.1(b)
).
Agreement
has the meaning set forth in the
introductory paragraph of this Agreement.
Benefit Plan
means each employee
benefit plan (as such term is defined in Section 3(3)
of ERISA) and each other benefit or compensation plan, program,
agreement or arrangement maintained, sponsored or contributed or
required to be contributed to by the Company or with respect to
which the Company has or could have any material obligation or
liability.
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Business Day
means any day ending at
11:59 p.m. (Eastern Time) other than a Saturday or Sunday
or a day on which banks are required or authorized by law to
close in the City of New York.
Certificate
has the meaning set forth in
Section 3.1(c)
.
Certificate of Merger
has the meaning set
forth in
Section 2.3
.
Closing
has the meaning set forth in
Section 2.2
.
Closing Date
has the meaning set forth in
Section 2.2
.
Code
means the United States Internal Revenue
Code of 1986.
Company
has the meaning set forth in the
introductory paragraph of this Agreement.
Company Board
means the Board of Directors of
the Company.
Company Common Stock
has the meaning set
forth in the first recital of this Agreement.
Company Employees
has the meaning set forth
in
Section 7.14(a)
.
Company Employment Agreement
has the meaning
set forth in
Section 4.13(b)
.
Company Financial Statements
has the meaning
set forth in
Section 4.6(a)
.
Company Leased Real Property
means all
leasehold or subleasehold estates and other rights to use or
occupy any land, buildings, structures, improvements, fixtures,
or other interest in real property of the Company.
Company Leases
means all leases, subleases,
licenses, concessions and other agreements (written or oral),
including all amendments, extensions, renewals, guaranties, and
other agreements with respect thereto, pursuant to which the
Company holds all or any portion of any Company Leased Real
Property.
Company Letter
means the letter from the
Company to Parent dated the date hereof, which letter relates to
this Agreement and is designated therein as the Company Letter.
Company Material Contract
has the meaning set
forth in
Section 4.16
.
Company Permits
has the meaning set forth in
Section 4.9
.
Company Recommendation
has the meaning set
forth in
Section 7.2(a)
.
Company Representatives
has the meaning set
forth in
Section 6.2(a)
.
Company Requisite Vote
has the meaning set
forth in
Section 4.4(c)
.
Company SEC Documents
has the meaning set
forth in
Section 4.6(a)
.
Company Source Code
has the meaning set forth
in
Section 4.15(g)
.
Company Stockholder Approval
has the meaning
set forth in
Section 7.2(a)
.
Company Stock Incentive Plans
means the
Companys 1993 Stock Option Plan and 2000 Stock Plan.
Company Stock Options
has the meaning set
forth in
Section 4.3(b)(ii)
.
Company Termination Fee
means $7,233,358.32.
Confidentiality Agreement
has the meaning set
forth in
Section 7.3
.
Constituent Corporations
has the meaning set
forth in the introductory paragraph of this Agreement.
Control
means, as to any Person, the power to
direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities,
by contract or otherwise. The terms Controlled by,
under Common Control with and
Controlling have correlative meanings.
DGCL
means the Delaware General Corporation
Law.
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Dissenting Shares
has the meaning set forth
in
Section 3.1(d)
.
Dissenting Stockholder
has the meaning set
forth in
Section 3.1(d)
.
Effective Time
has the meaning set forth in
Section 2.3
.
Environmental Law
means any applicable
statute, law, common law, ordinance, regulation, rule, judgment,
decree, or order of any Governmental Entity relating to any
matter of pollution, protection of the environment or
environmental regulation or control or regarding Hazardous
Substances or workplace health and safety.
Environmental Permits
means any permit,
approval, authorization, license, variance or permission
required from a Governmental Entity under any applicable
Environmental Laws.
ERISA
means the Employee Retirement Income
Security Act of 1974.
Exchange Act
means the Securities Exchange
Act of 1934.
Exchange Fund
has the meaning set forth in
Section 3.2(a)
.
Expenses
means the actual out-of-pocket fees
and expenses incurred or paid by or on behalf of Parent in
connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement, including all fees
and expenses of law firms, commercial banks, investment banking
firms, accountants, experts and consultants to Parent.
GAAP
means United States generally accepted
accounting principles.
GHEP
means Great Hill Equity Partners III,
L.P.
Governmental Entity
means any federal, state,
local or foreign government or any court, tribunal,
administrative agency or commission or other governmental or
other regulatory authority or agency, domestic, foreign or
supranational, any stock exchange or any self-regulating entity
supervising, organizing and supporting any stock exchange.
Great Hill LLC
has the meaning set forth in
Section 7.4(b)
.
group
, when referring to a group of Persons,
has the meaning set forth in Section 13(d)(3) of the
Exchange Act.
Hazardous Substance
means any material
defined or regulated as toxic, dangerous, radioactive or
hazardous, including any petroleum and petroleum products, under
any applicable Environmental Law or any material that may serve
as the basis for liability under Environmental Law.
HSR Act
means the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
Indemnified Person
has the meaning set forth
in
Section 7.8(a)
.
Intellectual Property
means all trademarks,
service marks, trade names, trade dress, corporate names, logos
and slogans, domain names and other source identifiers, internet
web sites including all goodwill, translations, adaptations,
derivations and combinations associated with the foregoing,
copyrights and copyrightable works, software and computer
programs (including source code, executable code, data,
databases and documentation), mask works and other semiconductor
chip rights, and similar rights, and registrations and
applications to register or renew the registration of any of the
foregoing, patents and patent applications, inventions (whether
or not patentable and whether or not reduced to practice),
invention disclosures, technology, discoveries, improvements,
methods and processes, trade secrets, confidential information,
know-how and all other intellectual property rights.
IRS
means the United States Internal Revenue
Service.
Knowledge
means the actual knowledge of the
executive officers of the Company set forth in Section 1.1
of the Company Letter or the officers of Parent set forth in
Section 1.1 of the Parent Letter, as the case may be.
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Liens
means any pledges, claims, liens,
charges, encumbrances, licenses, defects of title, restrictions
on transfer, options to purchase or lease or otherwise acquire
any interest, and security interests of any kind or nature
whatsoever, except in the case of securities, for limitations on
transfer imposed by federal or state securities laws.
Material Adverse Change
or
Material
Adverse Effect
means, when used in connection with the
Company or Parent, as the case may be, any change, effect or
circumstance, either individually or in the aggregate, that is
materially adverse to the business, properties, assets,
financial condition or results of operations of the Company
taken as a whole, or Parent and its Subsidiaries taken as a
whole, as the case may be;
provided
,
however
, that
to the extent any change, effect or circumstance is caused by or
results from any of the following, it shall not be taken into
account in determining whether there has been a Material
Adverse Change or Material Adverse Effect with
respect to the Company or Parent, as the case may be:
(i) the entry into or the announcement of the execution of
this Agreement, actions contemplated by this Agreement or the
performance of obligations under this Agreement, (ii) any
changes or effects arising out of or resulting from any legal
claims or other proceedings made by any of the Companys
stockholders arising out of or related to this Agreement, the
Merger or any other transactions contemplated hereby
(iii) changes affecting the United States economy
generally, (iv) any failure by the Company to meet
published revenue or earnings projections, in and of itself (as
opposed to the facts underlying such failure), (v) any
change, in and of itself (as opposed to the facts underlying
such change), in the market price or trading volume of the
equity securities of the Company on or after the date hereof,
(vi) the suspension of trading in securities generally in
and of itself (as opposed to the facts causing such suspension
of trading) on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq Global Market, (vii) any change in
any applicable law, rule or regulation or GAAP or interpretation
thereof after the date hereof, (viii) events, effects or
circumstances to the extent specifically disclosed in a
partys disclosure schedules as of the date of this
Agreement (provided such disclosures are materially correct),
(ix) any action taken or omitted to be taken by the Company
with Parents or Subs express written consent, and
(x) the commencement, occurrence or continuation of any
war, armed hostilities or acts of terrorism involving or
affecting the United States of America or any part thereof.
Merger
has the meaning set forth in the first
recital of this Agreement.
Merger Consideration
has the meaning set
forth in
Section 3.1(c)
.
Notice Period
has the meaning set forth in
Section 6.2(d)
.
Parent
has the meaning set forth in the
introductory paragraph of this Agreement.
Parent Letter
means the letter from Parent to
the Company dated the date hereof, which letter relates to this
Agreement and is designated therein as the Parent Letter.
Paying Agent
has the meaning set forth in
Section 3.2(a)
.
Permitted Liens
means (i) Liens for
Taxes or governmental assessments, charges or claims not yet due
and payable or which are being contested in good faith, and for
which adequate reserves or other appropriate provisions have
been established in financial statements in accordance with
GAAP, (ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other similar
Persons and other Liens imposed by applicable law incurred in
the ordinary course of business which are either for sums not
yet delinquent, or being contested in good faith, and
(iii) defects and irregularities of title and encumbrances
that do not materially impair the use thereof for the purposes
for which they are held.
Person
means an individual, corporation,
partnership, limited partnership, limited liability partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity (including any
person as defined in Section 13(d)(3) of the Exchange Act).
principal executive officer
has the meaning
set forth in
Section 4.6(b)
.
principal financial officer
has the meaning
set forth in
Section 4.6(b)
.
Proxy Statement
has the meaning set forth in
Section 4.8
.
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Qualifying Confidentiality Agreement
means an
executed agreement with provisions requiring any Person
receiving nonpublic information with respect to the Company to
keep such information confidential, which provisions to keep
such information confidential are no less restrictive in the
aggregate to such Person than the Confidentiality Agreement is
to Parent, its Affiliates, and their respective personnel and
representatives,
provided
that no such confidentiality
agreement shall conflict with any rights of Parent or Sub or
obligations of the Company under this Agreement.
RBC
has the meaning set forth in
Section 4.21
.
Sarbanes-Oxley Act
means the Sarbanes-Oxley
Act of 2002.
SEC
means the Securities and Exchange
Commission.
Securities Act
means the Securities Act of
1933.
Shares
has the meaning set forth in the first
recital of this Agreement.
Software
means any and all (i) computer
programs, libraries and middleware, including any and all
software implementations of algorithms, models and
methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data
and collections of data, whether machine readable or otherwise,
(iii) descriptions, flow-charts and other work product used
to design, plan, organize and develop any of the foregoing and
(iv) all programmer and user documentation, including user
manuals and training materials, relating to any of the foregoing.
Software Product
means any Software, or any
portion or version thereof, that has been or is leased, licensed
or sold, or currently proposed to be leased, licensed or sold,
by the Company to any Person as of the Effective Time including
Retail Star, Retail ICE, Star Accounting, iStar, X-Change,
Profits, CAM-32, MicroBiz and WorkPro Software Products.
Stockholders Meeting
has the meaning set
forth in
Section 7.2(a)
.
Sub
has the meaning set forth in the
introductory paragraph of this Agreement.
Subsidiary
of any Person means another
Person, of which at least a majority of the securities or
ownership interests having by their terms ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions is owned or controlled directly or
indirectly by such first Person
and/or
by
one or more of its Subsidiaries.
Superior Proposal
means a bona fide proposal
or offer from any Person (other than Parent and its Affiliates)
relating to any direct or indirect acquisition or purchase, for
consideration consisting of cash
and/or
securities, of 50% or more of the consolidated assets of the
Company or more than 50% of the voting power of the Shares then
outstanding, including by means of any tender or exchange offer
that if consummated would result in any Person (other than
Parent and its Affiliates) beneficially owning Shares with more
than 50% of the voting power of the Shares then outstanding and,
in each case, that is on terms that the Company Board determines
in its good faith judgment (after consultation with its
financial advisor and its outside counsel) (i) is
reasonably expected to be consummated in accordance with its
terms, taking into account all legal, financial and regulatory
aspects of the proposal and the Person making the proposal, and
(ii) if consummated, would result in a transaction more
favorable to the stockholders of the Company from a financial
point of view than the transaction contemplated by this
Agreement (after taking into account any revisions to the terms
of the transaction contemplated by this Agreement agreed to by
Parent pursuant to
Section 6.2(d)
).
Surviving Corporation
has the meaning set
forth in
Section 2.1
.
Takeover Proposal
means any bona fide
proposal or offer from any Person (other than Parent and its
Affiliates) relating to (i) any direct or indirect
acquisition or purchase of 20% or more of the assets of the
Company or 20% or more of the voting power of the Shares then
outstanding, including any tender offer or exchange offer that,
if consummated, would result in any Person (other than Parent
and its Affiliates) beneficially owning Shares with 20% or more
of the voting power of the Shares then outstanding, or
(ii) any
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merger, consolidation, business combination, recapitalization,
reorganization, liquidation, dissolution or similar transaction
involving the Company pursuant to which any Person or the
stockholders of any Person would own 20% or more of any class of
equity securities of the Company or of any resulting parent
company of the Company, in each case other than the transactions
contemplated by this Agreement.
Tax
and
Taxes
means any
federal, state, local or foreign net income, estimated, gross
income, gross receipts, windfall profit, severance, property,
production, sales, use, license, excise, stamp, franchise,
employment, payroll, withholding, social security (or similar,
including FICA), alternative or add-on minimum or any other tax,
custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any
Governmental Entity.
Tax Return
means any return, declaration,
report or similar statement filed or required to be filed with
respect to any Tax including any information return, claim for
refund, amended return or declaration of estimated Tax and any
attachments or supplements to any of the foregoing.
Termination Date
has the meaning set forth in
Section 9.1(b)(i)
.
Transfer Taxes
has the meaning set forth in
Section 7.6
.
Section
1.2
Interpretation
. For
purposes of this Agreement, (i) the words
include, includes and
including shall be deemed to be followed by the
words without limitation, (ii) the word
or is not exclusive and (iii) the words
herein, hereof, hereby,
hereto and hereunder refer to this
Agreement as a whole. Unless the context otherwise requires, a
reference herein: (i) to an Article or Section means an
Article and Section of this Agreement, (ii) to an
agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the
provisions thereof and by this Agreement, (iii) to a
statute means such statute as amended from time to time and
includes any successor legislation thereto and any rules or
regulations promulgated thereunder and (iv) all references
to dollars or $ or any similar reference
or designation contained therein means United States dollars.
Titles to Articles and headings of Sections are inserted for
convenience of reference only and shall not be deemed a part of
or to affect the meaning or interpretation of this Agreement.
ARTICLE II
THE MERGER
Section
2.1
The
Merger
. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the DGCL, Sub shall be merged with and into the Company at the
Effective Time, pursuant to which the separate corporate
existence of Sub shall cease and the Company shall continue as
the surviving corporation (the
Surviving
Corporation
) and shall succeed to and assume all the
rights and obligations of Sub and the Company in accordance with
the DGCL.
Section
2.2
Closing
. The
closing of the Merger (the
Closing
) will take
place at 10:00 a.m. (Central Time) on a date mutually
agreed to by Parent and the Company, which shall be no later
than the third Business Day after satisfaction or waiver of the
conditions set forth in
Article VIII
(other than
those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those
conditions), at the offices of Kirkland & Ellis LLP,
200 East Randolph Drive, Chicago, Illinois 60601, unless another
date, time or place is agreed to in writing by the parties
hereto. The date on which the Closing actually occurs is
referred to as the
Closing Date
.
Section
2.3
Effective
Time
. The Merger shall become effective upon
the filing of a certificate of merger (the
Certificate
of Merger
), executed in accordance with the relevant
provisions of the DGCL with the Secretary of State of the State
of Delaware, or at such later time as Sub and the Company shall
agree and is specified in the Certificate of Merger. When used
in this Agreement, the term
Effective Time
shall mean the later of the date and time at which the
Certificate of Merger is duly filed with the Secretary of State
of the State of Delaware or such later time established by the
Certificate of Merger. The filing of the Certificate of Merger
shall be made as soon as practicable after the satisfaction or
waiver of the conditions to the Merger set
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forth in
Article VIII
(but in no event on a date
prior to the Closing Date unless otherwise agreed to by the
Company and Sub).
Section
2.4
Effects
of the Merger
. The Merger shall have the
effects set forth in the DGCL and this Agreement.
Section
2.5
Certificate
of Incorporation and By-laws; Officers and Directors
.
(a) The certificate of incorporation of the Company shall
be amended and restated as a result of the Merger so as to read
in its entirety as set forth in
Exhibit A
hereto
and, as so amended and restated, shall be the certificate of
incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The by-laws of the Company, as in effect immediately
prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter changed or amended as
provided by the certificate of incorporation or by-laws of the
Surviving Corporation or by applicable law.
(c) The parties hereto shall take all actions necessary so
that the directors of Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, until
the earliest of their death, resignation or removal or until
their respective successors are duly elected or appointed and
qualified, as the case may be.
(d) The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving
Corporation until the earliest of their death, resignation or
removal or until their respective successors are duly elected or
appointed and qualified, as the case may be.
ARTICLE III
EFFECT OF
THE MERGER ON THE STOCK OF THE
CONSTITUENT
CORPORATIONS; SURRENDER OF CERTIFICATES
Section
3.1
Effect
on Stock
. As of the Effective Time, by virtue
of the Merger and the DGCL and without any action on the part of
any of Parent, Sub, the Company or the holders of any securities
of the Constituent Corporations:
(a)
Capital Stock of Sub
. Each
issued and outstanding share of capital stock of Sub shall be
converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
(b)
Treasury Stock and Parent Owned
Stock
. Each Share that is owned by the
Company and held in its treasury and each Share that is owned by
Parent, Sub or any other wholly-owned Subsidiary of Parent shall
automatically be cancelled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
(c)
Conversion of Shares
. Subject
to
Section 3.1(d)
and except as otherwise agreed to
by the Company and a holder of Shares, each Share issued and
outstanding immediately prior to the Effective Time (other than
Shares to be cancelled in accordance with
Section 3.1(b)
and Dissenting Shares), shall be cancelled and be converted into
the right to receive in cash, without interest, $40.50 per Share
(the
Merger Consideration
). As of the
Effective Time, each such Share shall be converted into the
right to receive the Merger Consideration and cancelled in
accordance with this
Section 3.1(c)
, and when so
cancelled, shall no longer be outstanding and shall
automatically cease to exist, and each holder of a certificate
representing any such Shares (a
Certificate
)
shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration for each such Share,
without interest.
(d)
Shares of Dissenting
Stockholders
. Any issued and outstanding
Shares held by a Person (a
Dissenting
Stockholder
) who has not voted in favor of approval of
this Agreement and objects to the Merger and complies with all
the provisions of the DGCL concerning the right of holders of
Shares to dissent from the Merger and obtain payment for their
Shares (
Dissenting Shares
) shall not be
converted
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into the right to receive the Merger Consideration as described
in
Section 3.1(c)
, but shall be converted into the right
to receive such consideration as may be determined to be due to
such Dissenting Stockholder pursuant to the procedures set forth
in Section 262 of the DGCL. If such Dissenting Stockholder
withdraws its demand for payment or fails to perfect or
otherwise loses its right of payment, in any case pursuant to
the DGCL, its Shares shall be deemed to be converted as of the
Effective Time into the right to receive the Merger
Consideration for each such Share, without interest. The Company
shall give Parent prompt notice of any demands for payment of
Dissenting Shares received by the Company. The Company shall
not, without the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such
demands.
(e)
Adjustment
. If, between the
date of this Agreement and the Effective Time, there is a
recapitalization, reclassification, stock split, stock dividend,
subdivision, combination or exchange of shares with respect to,
or rights issued in respect of, the Shares (each, an
Adjustment
), the Merger Consideration shall
be adjusted accordingly, without duplication, to provide the
holders of Shares with the same economic effect as contemplated
by this Agreement prior to such Adjustment.
Section
3.2
Surrender
of Certificates
.
(a)
Paying Agent
. Prior to the
Effective Time, Parent shall designate a bank or trust company
that shall be reasonably satisfactory to the Company to act as
paying agent in the Merger (the
Paying
Agent
), and, as of the Effective Time, Parent shall
deposit, or cause the Surviving Corporation to deposit, with the
Paying Agent a cash amount in immediately available funds equal
to the Aggregate Merger Consideration (the
Exchange
Fund
). Funds made available to the Paying Agent shall
be invested by the Paying Agent as directed by Sub or, after the
Effective Time, the Surviving Corporation;
provided
,
however
, that such investments shall only be in
obligations of or guaranteed by the United States of America, in
commercial paper obligations receiving the highest rating from
Moodys Investors Service, Inc. or Standard &
Poors Corporation or a combination of the foregoing and,
in any such case, no such instrument shall have a maturity
exceeding three months (it being understood that any and all
interest or income earned on funds made available to the Paying
Agent pursuant to this Agreement shall be remitted to Parent).
To the extent that there are losses with respect to such
investments, or the Exchange Fund diminishes for other reasons
below the level required to make prompt cash payment of the
Aggregate Merger Consideration as contemplated hereby, Parent
shall promptly replace or restore the cash in the Exchange Fund
lost through such investments or other events so as to ensure
that the Exchange Fund is at all times maintained at a level
sufficient to make such cash payments.
(b)
Exchange Procedure
. As soon as
practicable after the Effective Time (and in any event within
three Business Days thereof), the Surviving Corporation or
Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of
the Certificates (or the making of affidavits of loss in lieu
thereof) to the Paying Agent and shall be in a form and have
such other customary provisions as Parent and the Company may
reasonably agree) and (ii) instructions for use in
effecting the surrender of the Certificates (or affidavits of
loss in lieu thereof) in exchange for the Merger Consideration
as provided in
Section 3.1
. Upon surrender of a
Certificate (or an affidavit of loss in lieu thereof) for
cancellation to the Paying Agent, together with such letter of
transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent pursuant to such
instructions, the holder of such Certificate shall be entitled
to receive promptly in exchange therefor the amount of cash,
without interest, into which the Shares theretofore represented
by such Certificate shall have been converted pursuant to
Section 3.1
, and the Certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of
ownership of Shares that is not registered in the transfer
records of the Company, payment may be made to a Person other
than the Person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the Person
requesting such payment shall pay any transfer or other Taxes
required by reason of the payment to a Person other than the
registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such Tax has been
paid or is not applicable. Until surrendered as contemplated by
this
Section 3.2
, each Certificate shall be deemed
at any time after the Effective Time to represent only the right
to receive upon such surrender the amount of cash, without
interest,
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into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to
Section 3.1
. No interest will be paid or will accrue
on the cash payable upon the surrender of any Certificate (or an
affidavit of loss in lieu thereof). Each of Parent, the Paying
Agent or the Surviving Corporation shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the payment of
such consideration under the Code (and the rules and regulations
promulgated thereunder) or under any provision of state, local
or foreign Tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in
respect of which such deduction and withholding was made. As
promptly as practicable after the Effective Time, the Paying
Agent will mail to each holder of Shares represented by
book-entry on the records of the Company or the Companys
transfer agent, on behalf of the Company, other than Dissenting
Shares, a check in the amount of the Merger Consideration with
respect to each such Share so held.
(c)
No Further Ownership Rights in
Shares
. All Merger Consideration paid upon the
surrender of Certificates (or affidavits of loss in lieu
thereof) in accordance with the terms of this
Article III
shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares theretofore represented by such
Certificates. At the Effective Time, (i) holders of Shares
shall cease to have any rights as stockholders of the Company,
(ii) the stock transfer books of the Company shall be
closed and (iii) there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the
Paying Agent for any reason, they shall be cancelled and
exchanged as provided in this
Article III
.
(d)
Termination of Exchange Fund
. Any
portion of the Exchange Fund that remains undistributed to the
holders of Shares for twelve months after the Effective Time
shall be delivered to the Surviving Corporation, upon demand,
and any holders of Shares (other than Shares to be cancelled in
accordance with
Section 3.1(b)
and Dissenting
Shares) who have not theretofore complied with this
Article III
and the instructions set forth in the
letter of transmittal mailed to such holders after the Effective
Time shall thereafter look only to the Surviving Corporation
(subject to abandoned property, escheat or other similar laws)
for payment of the Merger Consideration to which they are
entitled, without interest.
(e)
No Liability
. None of Parent, Sub,
the Company, the Surviving Corporation or the Paying Agent shall
be liable to any Person in respect of any Merger Consideration
delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f)
Lost, Stolen or Destroyed
Certificates
. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving
Corporation, the posting by such Person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the cash
payment into which the Shares represented by such Certificate
shall have been converted pursuant to
Section 3.1
.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except (i) as set forth in the corresponding section of the
Company Letter, it being understood that matters disclosed
pursuant to one section of the Company Letter shall be deemed
disclosed with respect to any other section of the Company
Letter where it is reasonably apparent that the matters so
disclosed are applicable to such other section, (ii) as
disclosed in the Company SEC Documents filed with or furnished
to the SEC prior to the date hereof (without regard to
(1) any exhibits thereto, (2) any items included
therein that are incorporated by reference to Company SEC
Documents which are not available electronically at the SEC
website located at www.sec.gov and (3) disclosures in the
Risk Factors section or other sections of such
filings to the extent that they are forward-looking in nature
(it being understood, however, that such exclusions
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shall not apply to any disclosure expressly made in the Company
Letter) or (iii) as expressly contemplated or expressly
permitted under this Agreement or any agreement contemplated
hereby, the Company hereby represents and warrants to Parent and
Sub as follows:
Section
4.1
Organization
.
The
Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as now
being conducted, except where the failure to be in good standing
has not had and would not reasonably be expected to have a
Material Adverse Effect on the Company. The Company is duly
qualified or licensed to do business and in good standing in
each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification
or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing
has not had and would not reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially
delay the consummation of the Merger. The Company has made
available to Parent complete and correct copies of the
certificate of incorporation and by-laws of the Company as
amended through the date hereof.
Section
4.2
Subsidiaries
.
The
Company does not own, directly or indirectly, any capital stock
or other ownership interest in any Person, except for the
passive ownership of marketable securities, the ownership of
which is not material to the business of the Company.
Section
4.3
Capital
Structure
.
(a) The authorized shares of the Company consists of
12,000,000 shares of Company Common Stock.
(b) At the close of business on June 9, 2008:
(i) 4,140,250 shares of Company Common Stock were
issued and outstanding, all of which were validly issued, fully
paid and nonassessable and free of statutory and contractual
preemptive rights; and
(ii) 324,786 shares of Company Common Stock were
reserved for issuance pursuant to outstanding options to
purchase Company Common Stock granted under the Company Stock
Incentive Plans (collectively, the
Company Stock
Options
).
(c) The Company Letter sets forth a correct and complete
list as of the close of business on June 9, 2008 of
(i) each outstanding Company Stock Option and
(ii) whether it is exercisable. No Company Stock Option
provides for the deferral of compensation within the meaning of
Treas. Reg. §1.409A-1(b)(5)(i)(A).
(d) Since the close of business on June 9, 2008, the
Company has not issued or reserved for issuance any shares of
Company Common Stock other than upon the exercise of Company
Stock Options. Since June 9, 2008, there have been no
changes to the information set forth in Section 4.3 of the
Company Letter, except as a result of the exercise or settlement
of any Company Stock Options.
(e) Except as set forth in
Section 4.3(b)
, as
of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements,
undertakings or contractual rights the value of which are based
on the value of the capital stock or other voting securities of
the Company of any kind to which the Company is a party or by
which it is bound obligating the Company to issue, deliver or
sell or create, or cause to be issued, delivered or sold or
created, additional shares of capital stock or other voting
securities of the Company or obligating the Company to issue,
grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement, undertaking or
contractual right. To the Knowledge of the Company, there are no
voting trusts, proxies, stockholder rights plans or other
arrangements relating to the issuance, sale, voting, transfer,
ownership or other rights with respect to any shares of capital
stock of the Company.
(f) Except pursuant to the terms of the Company Stock
Incentive Plans, there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock or equity interests of the
Company.
(g) There are no outstanding bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the
right to vote) on any matter on which the Companys
stockholders may vote.
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Section
4.4
Authority
.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to
approval of this Agreement by the Company Requisite Vote, to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company and
the consummation by the Company of the Merger and the other
transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company,
subject to approval of this Agreement by the Company Requisite
Vote. This Agreement has been duly executed and delivered by the
Company and (assuming the valid authorization, execution and
delivery of this Agreement by Parent and Sub) constitutes the
legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that
such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting or relating to the enforcement of creditors
rights generally and (ii) is subject to general principles
of equity (regardless of whether considered in a proceeding in
equity or at law).
(b) The Company Board, at a meeting duly called and held,
subject to the terms and conditions set forth elsewhere in this
Agreement, has (i) approved and declared this Agreement,
the Merger and the other transactions contemplated hereby
advisable and in the best interests of the Companys
stockholders and (ii) resolved to recommend to the
stockholders of the Company that they approve this Agreement,
and has not subsequently rescinded or modified such approval or
resolution in any way, subject to the right of the Company Board
to withdraw or modify its recommendation in accordance with the
terms of this Agreement.
(c) The affirmative vote of the holders of a majority of
the shares of Company Common Stock outstanding and entitled to
vote at the Stockholders Meeting approving this Agreement (the
Company Requisite Vote
) is the only vote of
the holders of any class or series of the Companys shares
of capital stock necessary to approve this Agreement, the Merger
and the transactions contemplated hereby.
Section
4.5
Consents
and Approvals; No Violations
.
Except for
filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the
Exchange Act, the HSR Act, the DGCL, state takeover laws and
foreign and supranational laws relating to antitrust and
anticompetition clearances, neither the execution, delivery or
performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated
hereby will (i) result in any breach of any provision of
the certificate of incorporation or by-laws of the Company,
(ii) require any filing with, or the obtaining of any
permit, authorization, consent or approval of, any Governmental
Entity, (iii) result in a breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give
rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions
of any material note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which
the Company is a party or by which it or any of its properties
or assets are bound or (iv) violate any law, order, writ,
injunction, judgment, decree, statute, rule or regulation
applicable to the Company, or any of its properties or assets.
Section
4.6
SEC
Documents and Other Reports
.
(a) The Company has filed with the SEC all forms, reports,
statements, schedules and other documents required to be filed
by it since September 30, 2005 under the Securities Act or
the Exchange Act (the
Company SEC Documents
).
As of their respective filing dates (or, if amended prior to the
date of this Agreement, as of the respective filing date of such
amendment), the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, each as in effect on the date
so filed, and at the time filed with the SEC (or, if amended, or
superseded by another Company SEC Document, prior to the date of
this Agreement, as of the respective filing date of such
amendment or Company SEC Document), none of the Company SEC
Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC
Documents (if amended prior to the date of this Agreement, as
amended) (the
Company Financial Statements
)
complied as of their respective dates as to form in all material
respects with the then applicable accounting requirements and
the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except in
the case
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of the unaudited statements, as permitted by
Form 10-Q
under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the
notes thereto) and fairly present in all material respects the
consolidated financial position of the Company as of the dates
thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments
described therein).
(b) The Company is in compliance in all material respects
with the provisions of the Sarbanes-Oxley Act by which the
Company is required to comply. Each of the principal executive
officer of the Company and the principal financial officer of
the Company has made all certifications required by
Rule 13a-14
or
15d-14
under the Exchange Act or Sections 302 and 906 of the
Sarbanes-Oxley Act, as applicable, with respect to the Company
SEC Documents, and the statements contained in such
certifications were true and accurate as of the date they were
made. For purposes of this Agreement,
principal
executive officer
and
principal financial
officer
have the meanings given to such terms in the
Sarbanes-Oxley Act.
(c) The Company maintains internal control over financial
reporting as required by
Rule 13a-15
under the Exchange Act and this system of internal control over
financial reporting is sufficient to provide reasonable
assurance (i) that transactions are recorded as necessary
to permit preparation of financial statements in conformity with
GAAP, (ii) that receipts and expenditures are executed only
in accordance with the authorization of management and
(iii) regarding prevention or timely detection of the
unauthorized acquisition, use or disposition of the
Companys assets that could materially affect the
Companys financial statements.
(d) The Company maintains disclosure controls and
procedures (as defined in
Rules 13a-15(e)
and
15d-15(e)
under the Exchange Act) as required by
Rule 13a-15
under the Exchange Act and such disclosure controls and
procedures are designed to ensure that (i) material
information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and
forms of the SEC and (ii) all such information is
accumulated and communicated to the Companys management as
appropriate to allow timely decisions regarding disclosure and
to make the certifications of the principal executive officer
and principal financial officer of the Company required under
the Exchange Act with respect to such reports.
Section
4.7
Absence
of Changes
.
Since September 30, 2007,
the Company has conducted its business in all material respects
in the ordinary course consistent with past practice, and there
has not been (a) any change or event that has had or would
reasonably be expected to have a Material Adverse Change with
respect to the Company, (b) any declaration, setting aside
or payment of any dividend or other distribution with respect to
its capital stock or other equity interest or any redemption,
purchase or other acquisition of any of its capital stock or
other equity interest, (c) any split, combination or
reclassification of any of its capital stock or other equity
interest or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or other equity
interest, (d) any material change in accounting methods,
principles or practices used by the Company affecting its
assets, liabilities or business, except insofar as may have been
required by a change in GAAP, or (e) any amendments or
changes in the certificate of incorporation or by-laws of the
Company.
Section
4.8
Information
Supplied
.
None of the information supplied or
to be supplied by the Company for inclusion in the proxy
statement relating to the Stockholders Meeting (together with
any amendments or supplements thereto, the
Proxy
Statement
) will, at the time the Proxy Statement is
first mailed to the Companys stockholders or at the time
of the Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are
made, not misleading, except that no representation or warranty
is made by the Company with respect to statements made therein
based on information supplied by Parent or Sub or any of their
representatives in writing specifically for inclusion therein.
The Proxy Statement shall comply as to form in all material
respects with the requirements of the Exchange Act.
Section
4.9
Compliance
with Laws
.
To the Knowledge of the Company,
the Company is not, and since January 1, 2005 has not been,
in material violation of any law, ordinance or regulation of any
Governmental
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Entity. The Company has in effect all federal, state, local and
foreign governmental licenses, authorizations, consents, permits
and approvals necessary for it to own, lease or operate its
properties and assets and to carry on its business as now
conducted, except where the failure to have such license,
authorization, consent, permit or approval would not result in a
Material Adverse Effect on the Company (collectively,
Company Permits
), and no material default has
occurred under any such Company Permit.
Section
4.10
Tax
Matters
.
(a) The Company has timely filed or caused to be filed
(after taking into account all applicable extensions) all Tax
Returns required to be filed by it, and such Tax Returns are
true, correct and complete in all material respects. The Company
has paid or caused to be paid all Taxes due and payable whether
or not shown as due on any Tax Returns. No deficiencies for any
Taxes have been asserted in writing, proposed in writing or
assessed in writing against the Company that have not been paid
or otherwise settled.
(b) There are no audits, examinations or other proceedings
relating to any Taxes of the Company by any taxing authority in
progress or threatened in writing, and to the Knowledge of the
Company, no such audit, examination or other proceeding is
otherwise threatened or pending. The Company is not a party to
any litigation or pending litigation or administrative
proceeding relating to Taxes.
(c) The Company has not distributed the stock of any
corporation, or has had its stock distributed by another Person,
in a transaction within the past three years that was purported
or intended to be governed in whole or in part by
Section 355 or Section 361 of the Code.
(d) Except as set forth on Section 4.10 of the Company
Letter, no benefit under any Benefit Plan, including, without
limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested,
funded or payable by reason of any transaction contemplated
under this Agreement (either alone or in combination with any
other event) and no Benefit Plan provides for any additional
amounts to be paid with respect to any Tax imposed under
Section 4999 of the Code. The Company has not incurred any
obligation to make (or possibly make) any payments that
(A) will be non-deductible under, or would otherwise
constitute a parachute payment within the meaning
of, Section 280G of the Code without regard to the
exceptions set forth in Section 280G(b)(4) of the Code (or
any corresponding provision of state, local or foreign income
Tax law) or (B) are or may be subject to the imposition of
an excise tax under Section 4999 of the Code. To the Knowledge
of the Company, the deduction of any amounts paid with respect
to any calendar year will not be disallowed under
Section 162(m) of the Code.
(e) Each deferred compensation arrangement subject to the
provisions of Section 409A of the Code and with respect to
which the Company is a service recipient (within the
meaning of Section 409A of the Code) is in compliance with
the applicable provisions of Section 409A of the Code and
the Company has not been required to withhold any Taxes due as a
result of a failure to comply with Section 409A of the Code.
(f) The Company has not engaged in a listed
transaction as defined in Treasury Regulation
Section 1.6011-4(b)(2).
(g) The Company is not a party to or bound by any tax
indemnity agreement or any agreement providing for the
allocation or sharing of Taxes with any Person other than the
Company under which the Company would reasonably be expected to
have liability for Taxes after the Closing. The Company has not
been a member of any affiliated group (as defined in
Section 1504(a) of the Code or any similar provision of
state, local or foreign law) or any combined, consolidated or
unitary group (other than a group the common parent of which was
the Company), and the Company does not have any liability for
the Taxes of any other Person as a successor, a transferee, by
contract, under Treasury
Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law), or
otherwise.
(h) The Company has not waived any statutory period of
limitations for the assessment of any Tax or agreed to any
extension of time with respect to a Tax assessment or
deficiency, nor is any request to so waive or extend outstanding.
(i) There are no Liens for Taxes (other than Taxes not yet
due and payable) upon any of the assets of the Company. All
Taxes that the Company is obligated to withhold from amounts
owing to any employee, creditor
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or third party have been fully paid or properly accrued and all
Forms W-2
and 1099 (or other applicable forms) with respect thereto have
been properly completed and timely filed.
(j) The unpaid Taxes of the Company (A) did not, as of
the latest balance sheet reflected in the Company Financial
Statements exceed the reserve for Taxes set forth on the face of
such balance sheet (rather than in any notes thereto) and
(B) do not exceed that reserve as adjusted for the passage
of time through the Closing Date in accordance with the past
custom and practice of the Company in filing their Tax Returns.
Since the date of the most recent Company Financial Statements,
the Company has not incurred any liability for Taxes outside the
ordinary course of business.
(k) To the Knowledge of the Company, no claim has been made
by any authority in a jurisdiction where the Company does not
file Tax Returns that the Company is or may be subject to
taxation by that jurisdiction.
Section
4.11
Liabilities
.
The
Company does not have any material liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise)
required by GAAP to be set forth on a consolidated balance sheet
of the Company or in the notes thereto, other than liabilities
and obligations (a) set forth in the Companys
consolidated balance sheet for the quarter ended March 31,
2008 included in the Company SEC Documents that would be
required to be reflected on a balance sheet or in notes thereto
prepared in accordance with GAAP, (b) incurred in the
ordinary course of business since September 30, 2007 (none
of which is a liability for breach of contract, breach of
warranty, tort or infringement or a claim or lawsuit), or
(c) incurred in connection with the Merger or any other
transaction or agreement contemplated by this Agreement.
Section
4.12
Litigation
.
There
is no suit, action, proceeding or investigation pending or, to
the Knowledge of the Company, threatened against the Company
that seeks injunctive or other equitable relief or would
reasonably be expected to result in a Material Adverse Effect on
the Company or that would reasonably be expected to materially,
adversely affect the ability of the Company to consummate, or
would materially delay, the Merger or the transactions
contemplated hereby. The Company is not subject to any
outstanding material judgment, order, writ, injunction or
decree, including any such judgment, order, writ, injunction or
decree that would materially, adversely affect the ability of
the Company to consummate, or materially delay, the Merger or
the transactions contemplated hereby.
Section
4.13
Benefit
Plans
.
(a) Set forth in Section 4.13(a) of the Company Letter
is a list of each Benefit Plan. With respect to each Benefit
Plan, the Company has provided to Parent a true and correct copy
of the plan and trust documents, annual reports (IRS
Form 5500, with applicable attachments), IRS determination
letters, and all other material documentation pursuant to which
the Benefit Plan is maintained, funded and administered.
(b) Set forth in Section 4.13(b) of the Company Letter
is a list of each employment, severance, change of control or
termination agreement between the Company and any current or
former officer, director or employee of the Company (each listed
agreement, a
Company Employment Agreement
)
under which the Company has any continuing obligation.
(c) Each Benefit Plan has been maintained, funded and
administered in all material respects in compliance with its
terms and the applicable requirements of the Code and ERISA and
any other applicable laws. With respect to each Benefit Plan,
all payments, premiums, contributions, reimbursements or
accruals for all periods ending prior to or as of the Effective
Time shall have been made or properly accrued on the
Companys latest balance sheet reflected in the Company
Financial Statements. The Company does not have any current or
potential liability or obligation as a consequence of at any
time being treated as a single employer under Section 414
of the Code or Section 4001(b) of ERISA with any other
Person. The Company has not at any time during the six-year
period preceding the date hereof maintained, contributed to or
incurred any liability under any multiemployer plan
(as defined in Section 3(37) of ERISA) or any
employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to Title IV of
ERISA or Section 412 of the Code, and the Company does not
have any current or potential obligation or liability under
Title IV of ERISA or Section 412 of the Code.
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(d) There are no pending or, to the Knowledge of the
Company, threatened disputes, arbitrations, claims, suits,
audits, investigations, proceedings, hearings or grievances
involving a Benefit Plan (other than routine claims for benefits
payable under any such Benefit Plan). There has been no
non-exempt prohibited transaction (as defined in
Section 4975 of the Code or Section 406 of ERISA) or breach
of fiduciary duty (as determined under ERISA) in connection with
or with respect to any Benefit Plan.
(e) Each Benefit Plan that is intended to meet the
requirements of a qualified plan under
Section 401(a) of the Code has received a favorable
determination letter from the IRS and nothing has occurred that
would reasonably be expected to adversely affect the
qualification of such Benefit Plan. The Company does not have
any liability or obligation under any plan or agreement to
provide welfare or welfare-type benefits after termination of
employment or service to any employee or dependent or any other
Person other than as required by Section 4980B of the Code.
The Company has complied and is in compliance in all material
respects with the requirements of Section 4980B of the Code.
(f) Except as set forth on Section 4.13(f) of the
Company Letter, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (either alone or in conjunction with any other
event) constitute an event under a Benefit Plan or Company
Employment Agreement that will or may result in, cause the
accelerated vesting, funding or delivery of, or increase the
amount or value of, any payment or benefit to any Person.
Section
4.14
State
Takeover Statutes
.
The action of the Company
Board in approving the Merger, this Agreement and the other
transactions contemplated hereby is sufficient to render the
provisions of Section 203 of the DGCL inapplicable to the
consummation of the Merger and the execution, delivery and
performance of this Agreement. To the Knowledge of the Company,
no other control share acquisition, fair
price, moratorium or other antitakeover laws
enacted under U.S. state or federal laws apply to this
Agreement or any of the transactions contemplated hereby.
Section
4.15
Intellectual
Property
.
(a) Section 4.15(a) of the Company Letter sets forth a
list of all Software Products and, for each Software Product,
indicates any third party component bundled with, incorporated
into or linked (dynamically or statically) with such Software
Product that is necessary to develop, compile or operate such
Software Product.
(b) Section 4.15(b) of the Company Letter sets forth a
list of all of the following that are owned by the Company:
(i) patents and patent applications; (ii) registered
and material unregistered trademarks, service marks, trade
names, logos and Internet domain names and applications for
registration of any of the foregoing; (iii) registered and
material unregistered copyrights and applications for
registrations of any of the foregoing, and (iv) Software
other than Software Products.
(c) Section 4.15(c) of the Company Letter sets forth a
list of all of the following contracts: (i) license(s)
governing use of each third party component set forth in
Section 4.15(a) of the Company Letter; (ii) all other
Software agreements in which the Company is a licensee of
Software (other than licenses to unmodified, mass-marketed
Software applications with a total fee of less than $500,000 in
the aggregate for any such license or group of related
licenses); (iii) all agreements in which the Company is a
licensor of Intellectual Property, other than customer
agreements with end users of the Software Products entered into
in the ordinary course of business, and (iv) all other
material agreements relating to the Companys rights in or
use of Intellectual Property.
(d) Except as set forth in Section 4.15(d) of the
Company Letter, (i) no loss or expiration of any of the
Intellectual Property used in the conduct of the Companys
business is threatened, pending or, to the Knowledge of the
Company, reasonably foreseeable (and not as a result of any act
or omission by the Company, including, without limitation, a
failure by Company to pay any required maintenance fees);
(ii) to the Knowledge of the Company, all of the
Intellectual Property owned by the Company is valid and
enforceable and none of the such Intellectual Property has been
misused; and (iii) the Company has taken steps reasonable
under the circumstances to maintain and protect all of the
Intellectual Property used in the conduct of the Companys
business. The Company owns and possesses all right, title and
interest in and to or is validly licensed or otherwise has the
right to use, all material Intellectual Property used in the
conduct of
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the Companys business taken as a whole as currently
conducted, free and clear of all Liens or any other restrictions
or limitations regarding use or disclosure and other than
pursuant to the contracts set forth in Section 4.15(c) of
the Company Letter.
(e) To the extent that any of the Companys material
Intellectual Property has been developed, created or enhanced
independently or jointly by any Person other than the Company
and for which the Company provided compensation for such
development, creation or enhancement, the Company has a written
contract with such Person with respect thereto, the Company
thereby has obtained a valid and enforceable assignment
sufficient to transfer ownership of, and is the exclusive owner
of, all such Intellectual Property therein (including the right
to seek future and unrecovered past damages with respect to
third party infringers) and such contract includes appropriate
representations, and warranties or indemnities from such third
party relating to title to such Intellectual Property. Without
limiting the foregoing, the Company has entered into valid and
enforceable written agreements with all of its current and
former contractors and employees, to the extent that any of the
foregoing have developed, created or modified material
Intellectual Property used by the Company, including in the
Software Products, or had access to the Companys material
confidential information, (i) assigning ownership to the
Company all Intellectual Property created, developed or modified
by (A) such employees within the scope of their employment
and related to the business or (B) such contractors engaged
by the Company and used in or related to the business of the
Company; and (ii) requiring such employees and contractors
to maintain the confidentiality of all such information.
(f) Neither this Agreement nor the transactions
contemplated by this Agreement, will result in or purport to
result, in any of the following: (i) the Company granting
to any third party any ownership, right, or option, to or with
respect to any Intellectual Property owned by, or licensed to,
the Company, (ii) the Company being bound by, or subject
to, any non-compete or other material restriction on the
operation or scope of its business or (iii) the Company
being obligated to pay any royalties or other material amounts,
or offer any discounts, to any third party in excess of those
payable by, or required to be offered by, it. Except as set
forth in Section 4.15(f) of the Company Letter, no claims
are pending as of the date hereof, nor have any claims been made
within the past two years, that allege that the operation of the
business of the Company has infringed, misappropriated or
otherwise adversely affected, or is infringing, misappropriating
or otherwise adversely affecting, the Intellectual Property
rights of any Person and the Company has not within the past two
years received any unsolicited offers to license Intellectual
Property from any Person. To the Knowledge of the Company, the
Company has not infringed, misappropriated or otherwise
adversely affected the Intellectual Property rights of any
Person. To the Knowledge of the Company, no Person is
infringing, misappropriating or otherwise adversely affecting
the Intellectual Property rights of the Company. Immediately
after the Effective Time, the Intellectual Property owned,
licensed or used by the Company Group will be owned by or
available for use by the Company on terms and conditions
identical to those that were available to the Company prior to
the Effective Time. The Intellectual Property used in the
conduct of Companys business shall be sufficient for the
operation of the business after the Effective Time in the same
manner in which the business was operated immediately prior to
the Effective Time.
(g) None of the source code contained in any Software
Product and material to the conduct of the business of the
Company (collectively,
Company Source Code
),
has been disclosed by the Company, except to its employees or
advisers or pursuant to non-disclosure agreements, or, to the
Knowledge of the Company, by any other Person except as
authorized by the Company under a non-disclosure agreement,
(ii) the Company has not provided or licensed, or has any
duty or obligation (whether present, contingent, or otherwise)
to provide or license, Company Source Code to any escrow agent
or other third party, and (iii) no event has occurred, and
no circumstance or condition exists, that (with or without
notice or lapse of time) will, or would reasonably be expected
to, result in the provision, license, or disclosure of any
Company Source Code to any third party.
(h) No Software Product is subject to any obligation or
condition under any open source license such as the
GNU Public License, Lesser GNU Public License, or Mozilla Public
License that (i) could require or condition the use or
distribution of any Software contained in any Software Product
on the disclosure, licensing, or distribution of any source code
for any portion of the Companys Intellectual Property, or
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(ii) could otherwise impose any limitation, restriction, or
condition on the right or ability of the Company to use or
distribute any Software contained in the Software Products.
Section
4.16
Material
Contracts
.
The Company is not a party to or
bound by any contract, agreement or other instrument
(a) that is a material contract (as such term
is defined in Item 601(b)(10) of
Regulation S-K
promulgated by the SEC), (b) that limits or restricts the
Company from engaging in any line of business or in any
geographic area, (c) that is a loan and credit agreement,
note, debenture, bond, indenture and other similar contract
pursuant to which any indebtedness of the Company, in each case
in excess of $250,000, is outstanding or may be incurred (other
than trade payables incurred in the ordinary course of
business), (d) that by its terms calls for aggregate
payments by the Company of more than $250,000 over the remaining
term of such contract, except for any such contract that may be
canceled without any material penalty or other liability to the
Company upon notice of 90 days or less, (e) for the
acquisition or disposition by the Company of properties or
assets for, in each case, aggregate consideration of more than
$250,000, except for acquisitions of supplies and acquisitions
and dispositions of inventory in the ordinary course of business
or (f) pursuant to which the Company licenses or has a
right to use the Intellectual Property of a third party (where
such intellectual property is material to the Company), or
pursuant to which the Company licenses any material Intellectual
Property to a third party (other than customer agreements with
end users of the Software Products entered into in the ordinary
course of business). Each contract of the type described in the
first sentence of this
Section 4.16
is referred to
herein as a
Company Material Contract
. The
Company has made available or provided to Parent complete and
correct copies of each Company Material Contract. The Company
does not have Knowledge of, and has not received notice of, any
default under (or any condition which with the passage of time
or the giving of notice would cause such a default under) any
Company Material Contract to which it is a party or by which it
or any of its assets is bound, except for such defaults that,
individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect on the
Company.
Section
4.17
Labor
and Employment
.
To the Knowledge of the
Company, the Company is in material compliance with applicable
labor and employment laws regarding their employees including
the National Labor Relations Act of 1935, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans With Disabilities Act of
1990, the Family and Medical Leave Act of 1993, the Fair Labor
Standards Act of 1938, the Illegal Immigration Enforcement Act
of 2006 and comparable state, provincial and local laws, except
where the failure to be in compliance has not had and would not
reasonably be expected to have a Material Adverse Effect on the
Company.
Section
4.18
Real
Estate
.
(a) The Company Leased Real Property is sufficient for the
operation of the business of the Company as currently conducted
in all material respects.
(b) To the Knowledge of the Company, (i) the Company
has the right to access, use and occupy the Company Leased Real
Property for the full term of the Company Lease relating
thereto, subject in each case to the terms of the applicable
Company Lease, (ii) the Company has made available to
Parent a true and correct copy of each such Company Lease, and
(iii) with respect to each of the Company Leases,
(A) each such Company Lease is in full force and effect,
(B) the Companys possession and quiet enjoyment of
the Company Leased Real Property with respect to such Company
Lease has not been disturbed, and to the Knowledge of the
Company, there are no material disputes with respect to such
Company Lease, (C) no security deposit or portion thereof
deposited with respect to any Company Lease has been applied in
respect of a breach or default under such Company Lease which
has not been redeposited in full, and (D) the Company does
not owe, nor will it owe in the future, any brokerage
commissions or finders fees with respect to such Company
Lease. To the Knowledge of the Company, there is no material
default by the Company under any Company Lease and no event has
occurred or circumstances exist which, with the delivery of
notice, the passage of time or both, would constitute such a
material breach or default, or permit the termination,
modification or acceleration of any rent under any Company Lease.
(c) The Company does not own a freehold estate in any real
property.
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(d) Section 4.18 of the Company Letter sets forth a
complete list of all Company Leased Real Property.
Section
4.19
Environmental
Matters
.
To the Knowledge of the Company, the
Company has for the past five (5) years been and is in
material compliance with all applicable Environmental Laws and
Environmental Permits. The Company has not treated, stored,
arranged for or permitted the disposal of, handled, released,
exposed any Person to, or transported any Hazardous Substance or
owned or operated any property or facility contaminated by any
Hazardous Substance so as would reasonably be expected to give
rise to liability under Environmental Law that would reasonably
be expected to result in a Material Adverse Effect on the
Company, and, to the Knowledge of the Company, no property
currently or formerly owned or leased by the Company has been
the subject of any investigation by any Governmental Entity or
of any third party demand alleging the presence of any Hazardous
Substances that would require remediation pursuant to any
Environmental Law. The Company has not received any written
notice, demand, letter, claim or request for information
alleging that the Company may be in violation of or subject to
liability under any Environmental Law. The Company is not
subject to any written order, decree, injunction or indemnity
with any Governmental Entity or any third Person relating to any
liability under any Environmental Law or relating to any
contamination of any property by Hazardous Substances. The
Company has not assumed, undertaken, provided an indemnity with
respect to, or otherwise become subject to, any liability of any
other Person relating to Environmental Laws. The Company has
made available to Parent all environmental audits, assessments,
and reports and all other material environmental, health, or
safety documents that are in its possession or under its
reasonable control.
Section
4.20
Affiliate
Transactions
.
Except pursuant to any
employment or separation agreement with any officer of the
Company, there are no transactions of the type that would be
required to be disclosed by the Company under Item 404 of
Regulation S-K
promulgated by the SEC.
Section
4.21
Opinions
of Financial Advisors
.
The Company Board has
received the opinion of RBC Capital Markets
(
RBC
) to the effect that, as of the date of
such opinion and based upon and subject to the assumptions,
qualifications and limitations set forth therein, the Merger
Consideration is fair, from a financial point of view, to the
stockholders of the Company.
Section
4.22
Brokers
.
No
broker, investment banker, financial advisor or other Person,
other than RBC, the fees and expenses of which will be paid by
the Company, is entitled to any brokers, finders,
financial advisors or other similar fee or commission in
connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
ARTICLE V
REPRESENTATIONS
AND WARRANTIES OF PARENT AND SUB
Except (i) as set forth in the corresponding section of the
Parent Letter, it being understood that matters disclosed
pursuant to one section of the Parent Letter shall be deemed
disclosed with respect to any other section of the Parent Letter
where it is reasonably apparent that the matters so disclosed
are applicable to such other section, or (ii) as expressly
contemplated or expressly permitted under this Agreement or any
agreement contemplated hereby, each of Parent and Sub, jointly
and severally, hereby represents and warrants to the Company as
follows:
Section
5.1
Organization
.
Each
of Parent and Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted,
except where the failure to be in good standing would not
reasonably be expected to have a Material Adverse Effect on
Parent.
Section
5.2
Authority
.
Each
of Parent and Sub has the requisite corporate power and
authority to execute and deliver this Agreement and to
consummate the Merger and the other transactions contemplated
hereby. The execution, delivery and performance of this
Agreement by Parent and Sub and the consummation by each of
Parent and Sub of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of Parent and Sub. This
Agreement has been
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duly executed and delivered by each of Parent and Sub and
(assuming the valid authorization, execution and delivery of
this Agreement by the Company) constitutes the valid and binding
obligation of each of Parent and Sub enforceable against each of
them in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting or relating to the enforcement of creditors
rights generally and (ii) is subject to general principles
of equity (regardless of whether considered in a proceeding in
equity or at law).
Section
5.3
Consents
and Approvals; No Violations
.
Except for
filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the
Exchange Act, the HSR Act, the DGCL, state takeover laws and
foreign and supranational laws relating to antitrust and
anticompetition clearances, neither the execution, delivery or
performance of this Agreement by Parent and Sub nor the
consummation by Parent and Sub of the transactions contemplated
hereby will (i) result in any breach of any provision of
the respective certificates of incorporation or by-laws of
Parent or Sub, (ii) require any filing with, or the
obtaining of any permit, authorization, consent or approval of,
any Governmental Entity, (iii) result in a breach of, or
constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, lease, contract, agreement or other instrument or
obligation to which Parent or any of its Subsidiaries is a party
or by which any of them or any of their properties or assets are
bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets except in the
case of clauses (ii), (iii) and (iv) of this
Section 5.3
for any such conflicts, breaches,
defaults, terminations, accelerations, voidances, violations or
Liens, that, individually or in the aggregate, are not
reasonably likely to result in a Material Adverse Effect.
Section
5.4
Information
Supplied
.
None of the information supplied or
to be supplied by Parent or Sub or any of their representatives
in writing specifically for inclusion in the Proxy Statement, at
the time the Proxy Statement is first mailed to the
Companys stockholders or at the time of the Stockholders
Meeting, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by
Parent or Sub in connection with any of the foregoing with
respect to statements made in the Proxy Statement based on
information supplied by the Company or any of its
representatives specifically for inclusion therein.
Section
5.5
Litigation
.
As
of the date of this Agreement, there is no suit, action,
proceeding or investigation pending against Parent, Sub or any
of their Subsidiaries that would reasonably be expected to have
a Material Adverse Effect on Parent or prevent or materially
delay the consummation of the Merger. None of Parent, Sub or any
of their Subsidiaries is subject to any outstanding judgment,
order, writ, injunction or decree that, individually or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect on Parent or prevent or materially delay the
consummation of the Merger.
Section
5.6
Capitalization
and Interim Operations of Sub
.
The authorized
capital stock of Sub consists solely of 1,000 shares of
common stock, par value $0.01 per share, all of which are
validly issued and outstanding. All of the issued and
outstanding shares of capital stock of Sub (a) are, and as
of the Effective Time will be, owned by Parent or a direct or
indirect wholly-owned Subsidiary of Parent and (b) have
been, and as of the Effective Time will be, duly authorized and
validly issued and are, and as of the Effective Time will be,
fully paid and nonassessable and free of preemptive or other
similar rights. Sub has no outstanding option, warrant, right or
other agreement pursuant to which any Person (other than Parent)
may acquire any equity security of Sub. Sub has not conducted
any business prior to the date hereof and has no, and prior to
the Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its
formation or contemplated by this Agreement.
Section
5.7
Brokers
.
No
broker, investment banker, financial advisor or other Person is
entitled to any brokers, finders, financial
advisors or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
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Section
5.8
Lack
of Ownership of Company Common Stock
.
Neither
Parent nor any of its Subsidiaries beneficially owns or, since
January 1, 2005, has beneficially owned, directly or
indirectly, any shares of Company Common Stock or other
securities convertible into, exchangeable into or exercisable
for shares of Company Common Stock. As of the date hereof, there
are no voting trusts or other agreements or understandings to
which Parent or any of its Subsidiaries is a party with respect
to the voting of the capital stock or other equity interest of
the Company or any of its Subsidiaries.
Section
5.9
Management
Arrangements
.
Except as contemplated in this
Agreement, there are no written contracts or agreements between
Parent or Sub or any of their Affiliates, on the one hand, and
any executive officer of the Company, on the other hand,
relating to the operations of the Company after the Effective
Time.
ARTICLE VI
COVENANTS
RELATING TO CONDUCT OF BUSINESS
Section
6.1
Conduct
of Business by the Company Pending the
Merger
.
Except as (x) required by
applicable law or by a Governmental Entity of competent
jurisdiction, (y) expressly contemplated by this Agreement
(including as permitted or required by
Section 7.9
)
or (z) set forth in Section 6.1 of the Company Letter,
during the period from the date of this Agreement until the
Effective Time, the Company shall, in all material respects,
carry on its business in the ordinary course as currently
conducted. Without limiting the generality of the foregoing,
during such period, the Company shall not undertake any of the
actions described in subsections (a)(i), (b), (c), (d), (h),
(p) and (r) below, and except as (x) required by
applicable law or by a Governmental Entity of competent
jurisdiction, (y) expressly contemplated by this Agreement
(including as permitted or required by
Section 7.9
)
or (z) set forth in Section 6.1 of the Company Letter,
the Company shall not without the prior written consent of
Parent (which consent shall not be unreasonably withheld or
delayed):
(a) (i) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital
stock, (ii) adjust, split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of its capital stock or (iii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any other
securities convertible into or exchangeable or exercisable for
any shares of its capital stock;
(b) issue, grant, deliver, sell, pledge or otherwise
encumber or dispose of any shares of its capital stock or other
equity interests, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire,
any such shares, equity interests, voting securities or
convertible securities, other than the issuance of shares of
Company Common Stock pursuant to Company Awards outstanding as
of the date of this Agreement;
(c) amend its certificate of incorporation or by-laws;
(d) merge or consolidate with any other Person, except for
acquisitions and dispositions permitted by clauses (e) and
(f) below, respectively, effected by means of a merger or
consolidation involving the Company;
(e) other than capital expenditures permitted by
Section
6.1(f)
and purchases of inventory, raw materials and
supplies in the ordinary course of business, acquire (by merger,
consolidation, purchase of stock or otherwise), or agree to so
acquire, any entity, business or assets having a purchase price
in excess of $100,000 individually or $500,000 in the aggregate;
(f) make or agree to make any new capital expenditure,
other than capital expenditures (i) approved by the Company
Board prior to the date hereof as previously disclosed to Parent
or within the Companys capital budget for fiscal 2008
previously made available to Parent or (ii) to the extent
not covered in clause (i), in an aggregate amount not to exceed
$500,000;
(g) sell, lease (as landlord), license (as licensor),
encumber by Lien or otherwise, or otherwise dispose of (by
merger, consolidation, sale of stock or assets or otherwise), or
agree to sell, lease (as landlord), license (as
A-23
licensor), encumber or otherwise dispose of, assets having a
current value in excess of $500,000 in the aggregate;
(h) incur any indebtedness, other than customary trade
payables incurred in the ordinary course of business;
(i) except in the ordinary course of business and upon
terms not materially adverse to the Company with respect to such
Company Material Contract, or as required under the terms of a
Company Material Contract, enter into, amend or otherwise modify
in any material respect any Company Material Contract;
(j) enter into any contract, agreement or arrangement that
prohibits the incurrence of indebtedness by the Company or
prohibits the Company from subjecting to a Lien any material
asset or property of the Company;
(k) make, change or rescind any material Tax election or
change a material method of Tax accounting, amend any material
Tax Return, fail to pay any Tax when it becomes due and payable,
or settle or compromise any material federal, state, local,
provincial or foreign Tax liability, audit, claim or assessment,
or enter into any material closing agreement related to Taxes,
or knowingly surrender any right to claim any material Tax
refund;
(l) pledge, encumber or otherwise subject to a Lien (other
than a Permitted Lien) any material asset or property of the
Company or any material portion of the Companys assets or
properties;
(m) settle or compromise any pending or threatened suit,
action or claim, other than settlements or compromises requiring
payments by the Company of no more than $100,000 individually
and $500,000 in the aggregate;
(n) pay, discharge or satisfy any material claims,
liabilities or obligations other than (x) the payment,
discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the Company
Financial Statements (or as contemplated by the notes thereto),
in all cases not more than $100,000 individually and $500,000 in
the aggregate and (y) payment of Taxes as they become due
and payment of trade payables incurred in the ordinary course of
business;
(o) (w) change its material (A) Tax accounting
policies, practices, or (B) annual accounting period,
(x) make, change or rescind any Tax elections,
(y) settle or compromise any material audit, claim,
assessment, examination or litigation with respect to Taxes,
except, in each case, as may be required by GAAP, or
(z) file any material amended Tax Return, enter into any
closing agreement with respect to material Taxes, or surrender
any right to claim a material refund of Taxes;
(p) authorize, recommend, propose or announce an intention
to adopt a plan of complete or partial liquidation or
dissolution of the Company;
(q) allow to lapse or abandon any material Intellectual
Property;
(r) implement any layoff of employees that would implicate
the Worker Adjustment and Retraining Notification Act of 1988,
as amended;
(s) (i) increase the salary or wages payable or to
become payable to its directors, executive officers or
employees, other than salary increases for employees in the
ordinary course of business and consistent with past practice
which in any event shall not result in an aggregate increase in
salary for all employees in excess of $150,000; (ii) enter
into or amend in any material respect any employment or
severance agreement that would require payments in excess of
$50,000; or (iii) establish, adopt, enter into or amend in
any material respect, or make any new grants or awards of stock
based compensation or other benefits under, any Benefit Plan,
any bonus, profit sharing, thrift, stock option, restricted
stock, pension, retirement, deferred compensation, or other
arrangement for the benefit of, any director, executive officer
or employee, except, in each case, as may be required by the
terms of any such existing plan, agreement, policy or
arrangement or to comply with applicable law;
(t) except as may be required by GAAP or as a result of a
change in law, make any material change in its method of
accounting; or
A-24
(u) enter into any contract or agreement to do any of the
foregoing.
Section
6.2
No
Solicitation
.
(a) Except as permitted by this
Section 6.2
from and after the date hereof, the Company shall not, and the
Company shall not give permission or authorize, and the Company
shall use its reasonable best efforts to cause its officers,
directors, employees, agents, advisors and other representatives
(such Persons, collectively, the
Company
Representatives
) not to (i) solicit, initiate,
knowingly facilitate or knowingly encourage (including by way of
furnishing non-public information) any inquiries regarding, or
the making of any proposal or offer that constitutes, or could
reasonably be expected to result in, a Takeover Proposal,
(ii) enter into, participate, continue or otherwise engage
in discussions or negotiations with respect to any inquiries
regarding, or the making of, a Takeover Proposal, or
(iii) approve any letter of intent, agreement in principle,
acquisition agreement or similar agreement relating to a
Takeover Proposal. Subject to and not in limitation of the
Companys rights under paragraphs (b) and (d) of
this
Section 6.2
, if the Company becomes aware of a
violation of any standstill or confidentiality agreement that
the Company has entered into since January 1, 2007 in
connection with such Persons (other than Parent and Sub)
consideration of a possible acquisition of the Company, the
Company agrees to use its reasonable best efforts to enforce the
terms of such standstill or confidentiality agreement. The
Company will request that each Person who has executed a
confidentiality agreement since January 1, 2007 with the
Company or its Affiliates in connection with that Persons
consideration of the possible acquisition of the Company return
or destroy all non public information furnished to that Person
by or on behalf of the Company, to the extent such
confidentiality agreement provides for the return or destruction
of such information.
(b) Notwithstanding anything to the contrary contained in
Section 6.2(a)
, if, at any time prior to (but not after)
obtaining the Company Stockholder Approval for the transactions
contemplated by this Agreement, the Company or any of the
Company Representatives receives a written Takeover Proposal by
any Person or group of Persons that was not initiated or
solicited in violation of
Section 6.2(a)
,
(A) the Company and Company Representatives may contact
such Person or group of Persons to clarify the terms and
conditions thereof and (B) if the Company Board (or any
committee thereof) determines in good faith, after consultation
with its financial advisor and its outside counsel, that
(1) failure to take the following actions would reasonably
be expected to be inconsistent with its fiduciary duties under
applicable law and (2) the Takeover Proposal either
constitutes a Superior Proposal or is reasonably likely to lead
to a Superior Proposal, the Company and Company Representatives
may (x) furnish, pursuant to a Qualifying Confidentiality
Agreement, information (including non-public information) with
respect to the Company to the Person or group of Persons who has
made such Takeover Proposal and (y) participate in
discussions and negotiations regarding such Takeover Proposal.
The Company shall promptly advise Parent orally and in writing
of the receipt by the Company of any Takeover Proposal, or of
any request made to the Company for information or inquiry that
could reasonably be expected to result in any Takeover Proposal
(in each case within 48 hours of receipt thereof), and the
Company shall provide to Parent (within such 48 hour time
frame), at the Companys option, either (i) a copy of
any such Takeover Proposal made in writing provided to the
Company or (ii) a written summary of the material terms of
such Takeover Proposal and the name of the Person(s) that made
the Takeover Proposal. The Company shall keep Parent informed on
a prompt basis of any material change to the terms and
conditions of any such Takeover Proposal. The Company agrees
that it will not enter into any confidentiality agreement with
any Person subsequent to the date hereof which prohibits the
Company from providing such information to Parent. The Company
shall promptly notify Parent upon determination by the Company
Board that a Takeover Proposal is a Superior Proposal.
(c) Except as set forth in
Section 6.2(d)
and
(e)
below, neither the Company Board nor any committee
thereof shall (i) withdraw or modify, or propose publicly
to withdraw or modify in a manner adverse to Parent, the Company
Recommendation; (ii) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal (any of
the actions referred to in the foregoing clauses (i) and
(ii), whether taken by the Company Board (or any committee
thereof), an
Adverse Recommendation Change
);
or (iii) allow the Company to enter into any letter of
intent, acquisition agreement or any similar agreement or
understanding (other than a Qualifying Confidentiality
Agreement) to implement a Takeover Proposal (each, an
Acquisition Agreement
).
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(d) Notwithstanding
Section 6.2(c)
, at any time
prior to (but not after) obtaining the Company Stockholder
Approval, if the Company has received a Superior Proposal (after
giving effect to the terms of any revised offer by Parent
pursuant to this
Section 6.2(d)
) which was not
solicited in violation of
Section 6.2(a)
, the
Company Board may (x) in connection with such Superior
Proposal, make an Adverse Recommendation Change or
(y) after complying with all of the provisions of
Section 7.4
, terminate this Agreement (and, subject
to the proviso below, concurrently with or after such
termination, if it so chooses, cause the Company to enter into
an Acquisition Agreement with respect to any Superior Proposal),
if and only if in each such case the Company Board has
determined in good faith, after consultation with outside
counsel, the failure to take such action would be reasonably
likely to be inconsistent with the directors fiduciary
obligations to the Companys stockholders under applicable
law,
provided
that the Company shall not be entitled to
make an Adverse Recommendation Change pursuant to
clause (x) or exercise its right to terminate this
Agreement pursuant to clause (y) above unless:
(1) the Company shall have provided prior written notice to
Parent at least five (5) calendar days in advance (the
Notice Period
) of its intention to take such
action, which notice shall attach the most recent draft of any
agreement with respect to, and specify the terms and conditions
of, any such Superior Proposal and any material modifications to
any of the foregoing, and
(2) during the Notice Period, the Company shall, and shall
cause its financial advisors and outside counsel to, negotiate
with Parent in good faith (to the extent Parent desires to
negotiate) to make such adjustments in the terms and conditions
of this Agreement so that such Takeover Proposal ceases to
constitute (in the judgment of the Company Board, after
consultation with its financial advisor and outside counsel) a
Superior Proposal.
If during the Notice Period any revisions are made to the
Superior Proposal and the Company Board in its good faith
judgment determines such revisions are material (it being
understood that any change in the purchase price in such
Superior Proposal shall be deemed a material revision), the
Company shall deliver a new written notice to Parent and shall
comply with the requirements of this
Section 6.2(d)
with respect to such new written notice.
(e) Notwithstanding
Section 6.2(c)
, at any time
prior to the Company Stockholder Approval, the Company Board
may, other than in response to a Takeover Proposal and only in
response to facts, circumstances or events first arising after
the date of this Agreement, make an Adverse Recommendation
Change if the Company Board has determined in good faith, after
consultation with outside counsel, that the failure of the
Company Board to make such Adverse Recommendation Change would
be reasonably likely to be inconsistent with the directors
fiduciary obligations to the Companys stockholders under
applicable law.
(f) Nothing contained in this Agreement shall prohibit the
Company or the Company Board (or any committee thereof) from
(i) informing any Person of the existence of the provisions
contained in this
Section 6.2
, (ii) complying
with
Rules 14a-9,
14d-9
or
14e-2
promulgated under the Exchange Act or (iii) making any
disclosure to the Companys stockholders if, in the case of
this clause (iii), in the good faith judgment of the Company
Board (or any committee thereof), after consultation with
outside counsel, the failure to do so would be reasonably likely
to constitute a breach of the directors fiduciary
obligations to the Companys stockholders under applicable
law;
provided
,
however
, that neither the Company
nor the Company Board (or any committee thereof) shall be
permitted to recommend that the Company stockholders tender any
securities in connection with any tender or exchange offer (or
otherwise approve, endorse or recommend any Takeover Proposal),
unless in each case, in connection therewith, the Company Board
(or any committee thereof) effects an Adverse Recommendation
Change in accordance with the terms of this Agreement.
A-26
ARTICLE VII
ADDITIONAL
AGREEMENTS
Section
7.1
Treatment
of Stock-Based Awards
.
(a) The Company shall use commercially reasonable efforts
to ensure that, at the Effective Time, each Company Stock Option
then outstanding, whether or not then exercisable, shall be
cancelled by the Company in consideration for which the holder
thereof shall thereupon be entitled to receive promptly after
the Effective Time, a cash payment in respect of such
cancellation from the Surviving Corporation in an amount (if
any) equal to (i) the product of (x) the number of
shares of Company Common Stock subject to such Company Stock
Option, whether or not then exercisable and (y) the excess,
if any, of the Merger Consideration over the exercise price per
share of Company Common Stock subject to such Company Stock
Option, minus (ii) all applicable federal, state, local and
foreign Taxes required to be withheld by the Surviving
Corporation. The Company shall take all necessary actions
(including obtaining any required consents) to ensure that, at
the Effective Time, any Company Stock Option that is not
cancelled by the Company at or prior to the Effective Time and
which is not exercised by the holder thereof prior to the
Effective Time shall automatically terminate for no
consideration as of the Effective Time in accordance with the
terms of the grant agreement or Company Stock Incentive Plan
pursuant to which such Company Stock Option was issued.
(b) The Company Board (or committee thereof) shall, prior
to the Effective Time, take all such actions as may be necessary
pursuant to Rule
16b-3(d)
and
Rule 16b-3(e)
to exempt the conversion to cash of all Shares, Company Stock
Options and other derivative securities with respect to Shares
held by officers and directors of the Company who are subject to
the reporting requirements of Section 16(a) of the Exchange
Act. The Company shall provide to counsel to Parent copies of
the resolutions to be adopted by the Company Board to implement
the foregoing.
(c) Each of the Parent, the Paying Agent, and the Surviving
Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this
Section 7.1
to any holder of Company Stock Options,
that it is required to deduct and withhold with respect to the
payment of such consideration under the Code (and the rules and
regulations promulgated thereunder) or under any provision of
state, local or foreign Tax law. To the extent that amounts are
so withheld such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of
such Company Stock Option in respect of which such deduction and
withholding was made.
Section
7.2
Stockholder
Approval; Preparation of Proxy Statement
.
(a) The Company shall, as soon as practicable after the
Proxy Statement is cleared by the SEC for mailing to the
Companys stockholders, duly call, give notice of, convene
and hold a meeting of its stockholders (the
Stockholders Meeting
) as soon as practicable
(but in any case no later than 45 days) following mailing
of the final Proxy Statement for the purpose of obtaining the
approval of this Agreement by the Company Requisite Vote (the
Company Stockholder Approval
). The Company
shall, through the Company Board (but subject to the right of
the Company Board to make an Adverse Recommendation Change as
set forth in
Section 6.2
), recommend to its stockholders
in the Proxy Statement that the Company Stockholder Approval be
given (the
Company Recommendation
).
(b) The Company shall, in consultation with Parent, prepare
and file a preliminary Proxy Statement with the SEC as soon as
practicable (but in any case no later than 15 Business Days)
following the date hereof and shall use its reasonable efforts
to respond promptly to any comments of the SEC or its staff and
cause the Proxy Statement to be cleared by the SEC, and, to the
extent permitted by law and subject to this
Section 7.2(b)
, to cause the Proxy Statement to be
mailed to the Companys stockholders as promptly as
practicable after responding to all such comments to the
satisfaction of the staff. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments
or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all
correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on
the other hand, with respect to the Proxy Statement or the
transactions contemplated by this Agreement. If at any time
prior to the Stockholders Meeting there shall occur any event
A-27
that should be set forth in an amendment or supplement to the
Proxy Statement, the Company shall promptly prepare and mail to
its stockholders such an amendment or supplement, in each case
to the extent required by applicable law. Parent shall cooperate
with the Company in the preparation of the Proxy Statement or
any amendment or supplement thereto. Prior to filing or mailing
the Proxy Statement or making any other required filing with the
SEC (including any amendment or supplement) or responding to any
comments of the SEC with respect thereto, the Company shall
provide Parent with a reasonable opportunity to review and
comment on such document or response. The Company shall use its
reasonable best efforts to cause the Proxy Statement to comply
as to form in all material respects with the applicable
requirements of the Exchange Act.
(c) The Company agrees to advise Parent as promptly as
reasonably practicable if at any time prior to the Stockholders
Meeting information provided by it in the Proxy Statement is or
becomes incorrect or incomplete in any material respect. The
Company will as promptly as reasonably practicable furnish such
supplemental information as may be necessary in order to cause
the Proxy Statement to comply with applicable law after the
mailing thereof to the stockholders of the Company.
Section
7.3
Access
to Information
.
Upon reasonable notice and
subject to the terms of the Confidentiality Agreement, dated
August 1, 2007, between the Company and GHEP, as the same
may be amended, supplemented or modified (the
Confidentiality Agreement
), the Company shall
afford to Parent and to the officers, employees, accountants,
counsel and other representatives of Parent reasonable access,
during normal business hours during the period prior to the
Effective Time, to all their respective properties, books,
contracts, commitments, personnel and records (including Tax
records), customers and suppliers, and during such period, the
Company shall make available to Parent (a) a copy of each
report, schedule, registration statement and other document
filed or received by it during such period pursuant to the
requirements of the federal or state securities laws or the
federal Tax laws and (b) all other information concerning
its business, properties and personnel as Parent may reasonably
request;
provided
,
however
, that such access and
information shall only be provided to the extent that such
access or the provision of such information would not violate
applicable law; or (ii) to disclose any attorney-client
privileged information of the Company. All requests for
information made pursuant to this
Section 7.3
shall
be directed to the Chief Financial Officer of the Company or
such Person as may be designated by such officer. In no event
shall the Company be required to supply to Parent, or
Parents officers, employees, accountants, counsel or other
representatives, any information relating to indications of
interest from, or discussions with, any other potential
acquirors of the Company, except to the extent necessary for use
in the Proxy Statement or as required by
Section 6.2
. In the event of a
termination of this Agreement for any reason, Parent shall, in
accordance with the terms of the Confidentiality Agreement,
return or destroy, or cause to be returned or destroyed, all
nonpublic information so obtained from the Company and any
copies made of such documents for Parent.
Section 7.4
Fees and Expenses
.
(a) Except as provided below in this
Section 7.4
and in
Section 7.10
, all
fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated hereby shall be paid
by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) The Company shall pay, or cause to be paid, by wire
transfer of immediately available funds, to Great Hill Partners,
LLC, a Delaware limited liability company (
Great Hill
LLC
), (x) the Company Termination Fee and
(y) the Expenses up to a maximum amount not to exceed
$1,500,000, under the circumstances and at the times set forth
as follows:
(i) if Parent terminates this Agreement under
Section
9.1(d)
, the Company shall pay the Company Termination Fee no
later than two Business Days after such termination;
(ii) if the Company terminates this Agreement under
Section 9.1(e)
, the Company shall pay the Company
Termination Fee prior to and as a condition to the effectiveness
of such termination; and
(iii) if the Company or Parent terminates this Agreement
under
Sections 9.1(b)(i)
or
9.1(b)(iii)
and
after the date of this Agreement and prior to such termination
any Person or group of Persons shall have made a Takeover
Proposal, then (A) the Company shall pay the Expenses on
the date of such termination if this Agreement is terminated by
the Company or within two Business Days after such termination
if
A-28
this Agreement is terminated by Parent and (B) if within
twelve (12) months after such termination, the Company
shall enter into a definitive agreement in respect of a Takeover
Proposal (with all percentages in the definition of Takeover
Proposal changed to 50%) or a Takeover Proposal (with all
percentages in the definition of Takeover Proposal changed to
50%) shall be consummated, the Company shall pay the Company
Termination Fee and the Expenses incurred through the date of
termination of this Agreement, concurrently with the earlier of
the entering into of such definitive agreement or the
consummation of such Takeover Proposal.
(c) In the event that the Company shall fail to pay the
Company Termination Fee
and/or
Expenses when due, such fees
and/or
Expenses shall accrue interest for the period commencing on the
date such fees
and/or
Expenses, as the case may be, became past due, at a rate equal
to the rate of interest publicly announced by Citibank, in the
City of New York from time to time during such period, as such
banks Prime Lending Rate. In addition, if the Company
shall fail to pay the Company Termination Fee
and/or
Expenses, as the case may be, when due, the Company shall also
pay to Great Hill LLC all of GHEPs and Parents costs
and expenses (including attorneys fees) in connection with
efforts to collect such fee
and/or
Expenses, as the case may be.
Section
7.5
Public
Announcements
.
The initial press release
issued by Parent and the Company concerning this Agreement and
the transactions contemplated hereby shall be a joint press
release and thereafter Parent and the Company shall consult with
each other before issuing any press release or otherwise making
any public statements with respect to the transactions
contemplated by this Agreement and shall not issue any such
press release or make any such public statement prior to such
consultation, except as may be required by applicable law or by
obligations pursuant to the listing agreement with the Nasdaq
Global Market.
Section
7.6
Transfer
Taxes
.
The Company and Parent shall cooperate
in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any
real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp Taxes, and transfer, recording,
registration and other fees and any similar Taxes that become
payable in connection with the transactions contemplated by this
Agreement (together with any related interest, penalties or
additions to Tax,
Transfer Taxes
). All
Transfer Taxes shall be paid by the Company and expressly shall
not be a liability of any holder of Shares.
Section
7.7
State
Takeover Laws
.
If any fair price,
moratorium or control share acquisition
statute or other similar antitakeover statute or regulation
enacted under state laws in the United States shall become
applicable to the transactions contemplated hereby, Parent and
the Company and their respective boards of directors shall use
reasonable efforts to grant such approvals and take such actions
as are necessary so that the transactions contemplated hereby
may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of
any such statute or regulation on the transactions contemplated
hereby.
Section
7.8
Indemnification;
Directors and Officers Insurance
.
(a) For a period of six years after the Effective Time,
unless otherwise required by applicable law, Parent shall cause
the certificate of incorporation and by-laws (or equivalent
organizational documents) of the Surviving Corporation to
contain provisions no less favorable with respect to the
exculpation from personal liability and indemnification of, and
advancement of expenses to, directors, officers, employees and
agents than are set forth in the certificate of incorporation or
by-laws of the Company as in effect on the date hereof;
provided
,
however
, that if any claim or claims are
asserted against any individual entitled to the protections of
such provisions within such six-year period, such provisions
shall not be modified in a manner adverse to such individual
until the final disposition of any such claims. Parent shall
cause the Surviving Corporation to indemnify, and advance
expenses to, each present and former director, officer,
employee, agent or employee benefit plan fiduciary (an
Indemnified Person
) of the Company (including
rights relating to advancement of expenses and indemnification
rights to which such persons are entitled because they are
serving as a director, officer, agent or employee of another
entity at the request of the Company) in respect of actions,
omissions or events through the Effective Time to the fullest
extent provided in the certificate of incorporation or by-laws
of the Company , any indemnification agreement set forth on
Section 7.8 of the Company Letter or under applicable laws,
in each case, as in effect on the date of this Agreement;
provided
,
however
, that any determination
required to be made with respect to whether an Indemnified
Persons conduct complies with the
A-29
standards set forth under the applicable law, the certificate of
incorporation or by-laws of the Company, or any such agreement,
as the case may be, shall be made by independent legal counsel
jointly selected by such Indemnified Person and Parent. Without
limiting the generality of the preceding sentence, if any
Indemnified Person becomes involved in any actual or threatened
action, suit, claim, proceeding or investigation covered by this
Section 7.8
after the Effective Time, Parent shall, or
shall cause the Company to, to the fullest extent permitted by
law, promptly advance to such Indemnified Person his or her
legal or other expenses (including the cost of any investigation
and preparation incurred in connection therewith), subject to
the providing by such Indemnified Person of an undertaking to
reimburse all amounts so advanced in the event of a
non-appealable determination of a court of competent
jurisdiction that such Indemnified Person is not entitled
thereto under the DGCL or other applicable law with respect to
such proceeding. Notwithstanding anything to the contrary set
forth in this
Section 7.8(a)
, neither Parent nor the
Surviving Corporation (i) shall be liable for any
settlement entered into by an Indemnified Person without
Parents prior written consent (which consent shall not be
unreasonably withheld or delayed), and (ii) shall have any
obligation hereunder to any Indemnified Person to the extent
that a court of competent jurisdiction shall determine in a
final and non-appealable order that such indemnification is
prohibited by applicable law. Any Indemnified Person wishing to
claim indemnification under this
Section 7.8(a)
, upon
learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent and the Surviving
Corporation of such claim and the relevant facts and
circumstances with respect thereto; provided, however, that the
failure to provide such notice shall not affect the obligations
of Parent and the Surviving Corporation except to the extent
such failure to notify materially prejudices their ability to
defend such claim, action, suit, proceeding or investigation.
(b) At the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, obtain, maintain and fully pay for
irrevocable tail insurance policies naming the
Companys officers and directors as direct beneficiaries
with a claims period of at least six years from the Closing Date
in an amount and scope customary for companies similar in size
and nature of operations to the Company with respect to matters
existing or occurring at or prior to the Closing Date.
(c) The provisions of this
Section 7.8
are
intended to be for the benefit of, and shall be enforceable by,
each Indemnified Person, his or her heirs, executors or similar
representatives, shall be binding on all successors and assigns
of Parent, the Company and the Surviving Corporation and shall
not be amended in a manner that is materially adverse to the
Indemnified Persons (including their successors, assigns and
heirs) without the consent of the Indemnified Person (including
the successors, assigns and heirs) affected thereby. This
Section 7.8
shall survive the consummation of the
Merger at the Effective Time.
Section
7.9
Reasonable
Best Efforts
.
Subject to the terms and
conditions of this Agreement, including
Sections 6.2
and
7.2
, each of the Company, Parent and Sub agrees to
use its reasonable best efforts to effect the consummation of
the Merger as soon as practicable after the date hereof. Subject
to the terms and conditions of this Agreement, without limiting
the foregoing, (a) each of the Company, Parent and Sub
agrees to use its reasonable best efforts to take, or cause to
be taken, all actions necessary to comply promptly with all
legal requirements that may be imposed on itself with respect to
the Merger and shall promptly cooperate with and furnish
information to each other in connection with any such
requirements imposed upon any of them or any of their
Subsidiaries in connection with the Merger and (b) each of
the Company, Parent and Sub shall, and shall cause its
Subsidiaries to, use its or their reasonable best efforts to
obtain (and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third
Person required to be obtained or made by Parent, Sub, the
Company or any of their Subsidiaries in connection with the
Merger or the taking of any action contemplated thereby or by
this Agreement.
Section
7.10
Antitrust
Filing
.
Each of Parent and the Company shall
make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional
information and documentary material that may be requested
pursuant to the HSR Act and to take all other actions necessary
to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable. The Parent
shall pay the applicable filing fees associated with such filing.
A-30
Section
7.11
Financing
.
Prior
to the Closing, the Company shall provide to Parent and Sub, and
shall use its commercially reasonable efforts to cause the
officers, employees and advisors, including legal and
accounting, of the Company to provide to Parent and Sub all
cooperation reasonably requested by Parent that is necessary in
connection with obtaining debt financing for the transactions
contemplated by this Agreement; provided that, the Company shall
not be obligated to cause its officers and employees to devote
more than the equivalent of three full business days of time per
employee to such activities. Notwithstanding the foregoing, each
of Parent and Sub acknowledges and agrees that the receipt of
financing is not a condition to their obligation to effect the
Merger under
Article VIII
hereof.
Section
7.12
Notification
of Certain Matters
.
Subject to applicable
laws and the instructions of any applicable Governmental Entity,
each of the Company and Parent shall keep the other apprised of
the status of matters relating to completion of the transactions
contemplated hereby, including promptly furnishing the other
with copies of notices or other communications received by
Parent or the Company, as the case may be, from any third Person
or any Governmental Entity with respect to the Merger and the
other transactions contemplated by this Agreement.
Section
7.13
Stockholder
Litigation
.
Subject to a customary joint
defense agreement, the Company shall give Parent the opportunity
to participate in, but not control, the defense or settlement of
any stockholder litigation against the Company
and/or
its
directors relating to the transactions contemplated by this
Agreement; provided, however, nothing herein shall require
either party to take any action that its outside counsel
reasonably concludes would jeopardize the work product privilege
or the attorney-client privilege. The Company shall not enter
into any settlement of such litigation without Parents
prior written consent (such consent not to be unreasonably
withheld or delayed).
Section
7.14
Employee
Benefits
.
(a) From and after the Effective Time, Parent will, or will
cause the Surviving Corporation to, recognize the prior service
with the Company of each employee of the Company as of the
Effective Time (the
Company Employees
) to the
extent recognized under an analogous Benefit Plan as of the
Effective Time in connection with all employee benefit plans,
programs or policies of Parent or its Affiliates (other than any
equity-based or nonqualified deferred compensation plan or
arrangement) in which Company Employees are eligible to
participate following the Effective Time, for purposes of
eligibility, and, solely for vacation and severance policies,
levels of benefits. In the plan year in which the Effective Time
occurs, Parent will, or will cause the Surviving Corporation to,
cause any pre-existing conditions or limitations and eligibility
waiting periods (to the extent that such waiting periods would
be inapplicable, taking into account service with the Company)
under any group health plans of Parent or its Affiliates to be
waived with respect to Company Employees and their eligible
dependents to the extent waived or satisfied under an analogous
Benefit Plan as of the Effective Time. Following the Effective
Time, the Company Employees will for no less than 6 months
be provided with, at a minimum (i) base salary and cash
bonus opportunities which are no less than the base salary and
cash bonus opportunities provided by the Company immediately
prior to the Effective Time and (ii) retirement and welfare
benefits and perquisites (excluding equity compensation
opportunities) that are no less favorable in the aggregate than
those provided by the Company as of the date hereof pursuant to
the Benefit Plans.
(b) Nothing in this
Section 7.14
or any other
provision of this Agreement shall create any third party
beneficiary right in any Person other than the parties hereto,
including any Company Employee or other current or former
employee of the Company, any participant in any Benefit Plan or
Company Employment Agreement or any dependent or beneficiary
thereof, or any right to employment or continued employment or
to a particular term or condition of employment with the
Company, Parent, the Surviving Corporation or any of their
respective Affiliates. Nothing in this
Section 7.14
or any other provision of this Agreement (i) shall be
construed to establish, amend, or modify any Benefit Plan or
Company Employment Agreement or any other benefit or
compensation plan, program, agreement or arrangement, or
(ii) shall limit the ability of Parent or any of its
Affiliates (including, following the Closing, the Surviving
Corporation) to amend, modify or terminate any benefit or
compensation plan, program, agreement or arrangement at any time
assumed, established, sponsored or maintained by any of them.
A-31
ARTICLE VIII
CONDITIONS
PRECEDENT
Section
8.1
Conditions
to Each Partys Obligation to Effect the
Merger
. The respective obligations of each
party to effect the Merger shall be subject to the satisfaction
or waiver in writing (where permitted) as of the Effective Time
of the following conditions:
(a)
Company Stockholder Approval
. The
Company Stockholder Approval shall have been obtained.
(b)
No Injunction or Restraint
. No
decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any Governmental Entity of
competent jurisdiction preventing, restraining or enjoining the
consummation of the Merger shall be in effect.
(c)
HSR Act
. Any waiting period (and any
extension thereof) under the HSR Act applicable to the Merger
shall have expired or been terminated.
Section
8.2
Conditions
to the Obligations of the Company to Effect the
Merger
. The obligation of the Company to
effect the Merger shall be subject to the satisfaction or waiver
in writing (where permitted) as of the Effective Time of the
following additional conditions:
(a)
Accuracy of Representations and
Warranties
. The representations and warranties of
Parent and Sub set forth in
Section 5.1
(Organization),
in
Section 5.2
(Authority), in
Section 5.6
(Capitalization and Interim Operations of Sub) and in
Section
5.7
(Brokers), shall be true and correct in all material
respects as of the Effective Time as though made on and as of
such date and time (except to the extent that any such
representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be
true and correct as of such earlier date). The representations
and warranties of Parent and Sub contained in this Agreement
(other than those listed in the preceding sentence) shall be
true and correct in all respects (without giving effect to any
limitation as to materiality or Material
Adverse Effect set forth therein) as of the Effective Time
as though made on and as of such date and time (except to the
extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation
and warranty shall be true and correct as of such earlier date),
except where the failure of such representations and warranties
to be true and correct (without giving effect to any limitation
as to materiality or Material Adverse
Effect set forth therein) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on Parent. The Company shall have received a certificate
signed on behalf of Parent and Sub by a duly authorized officer
of Parent as to the effect of the preceding two sentences.
(b)
Performance of Obligations
. Parent
and Sub shall have performed in all material respects all
obligations and complied in all material respects with all
agreements and covenants of Parent and Sub to be performed and
complied with by them under this Agreement prior to Closing. The
Company shall have received a certificate signed on behalf of
Parent and Sub by a duly authorized officer of Parent as to the
effect of the preceding sentence.
Section
8.3
Conditions
to the Obligations of Parent and Sub to Effect the
Merger
. The obligations of Parent and Sub to
effect the Merger shall be subject to the satisfaction or waiver
in writing (where permitted) as of the Closing and as of the
Effective Time of the following additional conditions:
(a)
Accuracy of Representations and
Warranties
. The representations and warranties of
the Company set forth in the first sentence of
Section 4.1
(Organization), in
Section 4.3
(Capital Structure), in
Section 4.4
(Authority), in
Section 4.7(a)
,
in
Section 4.14
(State Takeover Statutes) and in
Section 4.22
(Brokers) shall be true and correct in
all respects as of the Effective Time as though made on and as
of such date and time (except to the extent that any such
representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be
true and correct as of such earlier date). The representations
and warranties of the Company contained in this Agreement (other
than those listed in the preceding sentence) shall be true and
correct in all respects (without giving effect to any limitation
as to materiality or Material Adverse
Effect set forth therein) as of the Effective Time as
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though made on and as of such date and time (except to the
extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation
and warranty shall be true and correct as of such earlier date),
except where the failure of such representations and warranties
to be true and correct (without giving effect to any limitation
as to materiality or Material Adverse
Effect set forth therein), individually or in the
aggregate, has not had and would not reasonably be expected to
have a Material Adverse Effect on the Company. Parent shall have
received a certificate signed on behalf of the Company by a duly
authorized officer of the Company as to the effect of the
preceding two sentences.
(b)
Performance of Obligations
. The
Company shall have performed in all material respects all
obligations and complied in all material respects with all
agreements and covenants of the Company to be performed and
complied with by it under this Agreement prior to Closing.
Parent shall have received a certificate signed on behalf of the
Company by a duly authorized officer of the Company as to the
effect of the preceding sentence.
(c)
No Material Adverse Effect
. Since
September 30, 2007, there has been no change, effect or
circumstance, either individually or in the aggregate, that has
had or would reasonably be expected to have, a Material Adverse
Effect on the Company.
(d)
Resignations
. Except as otherwise
specified in writing by Parent to the Company, Parent shall have
received the resignations of all of the directors of the
Company, effective as of the Effective Time.
(e)
Henderson, Nevada Lease
. The Company
shall have entered into an amendment to that certain Standard
Industrial/Commercial Single-Tenant
Lease-Net,
dated December 19, 2006, by and between Geoffrey D. Knapp
and Johanna L. Knapp, as landlord, and the Company, as tenant,
which shall be effective as of the Effective Time, pursuant to
which the Base Rent (as defined in such lease) is modified to be
equal to $1.75 per square foot for the remainder of the term of
such lease (it being understood that the Base Rent shall
nevertheless continue to be subject to CPI increases in
accordance with the terms of such lease in effect as of the date
hereof).
(f)
Employment Agreement
. The Employment
Agreement by and between the Company and Geoffrey D. Knapp,
dated as of the date hereof, shall not have been amended,
altered or repealed and shall be effective as of the Effective
Time in accordance with the terms of such agreement existing as
of the date hereof.
ARTICLE IX
TERMINATION
AND AMENDMENT
Section
9.1
Termination
.
This
Agreement may be terminated at any time prior to the Effective
Time, whether before or after the Company Stockholder Approval
is obtained:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or
before November 30, 2008 (such date, as it may be extended
pursuant to the provisions hereof, the
Termination
Date
);
provided
,
however
, that a
partys right to terminate this Agreement pursuant to this
Section 9.1(b)(i)
shall not be available if such
partys breach of this Agreement has been the cause of, or
resulted in, the failure of the Merger to occur on or before the
Termination Date;
(ii) if any Governmental Entity of competent jurisdiction
shall have issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated by this Agreement and
such order, decree or ruling or other action shall have become
final and non-appealable;
provided
,
however
, that
the right to terminate this Agreement pursuant to this
Section 9.1(b)(ii)
shall not be available to any
party who has not used its reasonable best efforts to cause such
order to be lifted; or
A-33
(iii) if the Company Stockholder Approval shall not have
been obtained upon a vote taken thereon at the Stockholders
Meeting or any adjournment or postponement thereof;
(c) by Parent if the Company shall have breached any
representation, warranty, covenant, obligation or other
agreement contained in this Agreement that (i) would result
in the failure of a condition set forth in
Section 8.3(a)
or
8.3(b)
to be satisfied and
(ii) cannot be or has not been cured prior to the earlier
to occur of (x) 30 days after the giving of written
notice to the Company of such breach and Parents intention
to terminate this Agreement pursuant to this
Section 9.1(c)
or (y) the Termination Date;
(d) by Parent if (i) the Company Board (or any
committee thereof) shall have made an Adverse Recommendation
Change, (ii) the Company Board (or any committee thereof)
shall have resolved to make an Adverse Recommendation Change (it
being understood and agreed that Parent shall not be entitled to
terminate this Agreement pursuant to this clause (ii) prior
to the expiration of the Notice Period with respect to any such
resolution made pursuant to
Section 6.2(d)
that
gives Parent a right to receive a notice of the intent to effect
an Adverse Recommendation Change), (iii) the Company fails
to include the Company Recommendation in the Proxy Statement or
(iv) the Company shall have entered into a definitive
agreement for a Superior Proposal;
(e) by the Company pursuant to clause (y) of
Section 6.2(d)
; or
(f) by the Company if Parent or Sub shall have breached any
of their respective representations, warranties, covenants,
obligations or other agreements contained in this Agreement that
(x) would result in the failure of a condition set forth in
Section 8.2(a)
or
8.2(b)
to be satisfied and
(y) cannot be or has not been cured prior to the earlier to
occur of (1) 30 days after the giving of written
notice to Parent or Sub, as applicable, of such breach and the
Companys intention to terminate this Agreement pursuant to
this
Section 9.1(f)(i)
or (2) the Termination Date.
Section
9.2
Effect
of Termination
.
In the event of a termination
of this Agreement by either the Company or Parent as provided in
Section 9.1
, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part
of Parent, Sub or the Company or their respective officers,
directors, stockholders or Affiliates except with respect to
Section 4.22
,
Section 5.7
,
Section 7.4
, this
Section 9.2
and
Article X
and the last sentence of
Section 7.3
;
provided
that, nothing herein
shall relieve any party from liability for losses or damages
resulting from willful breach, which shall include, without
limitation, either partys failure to effect the Merger
upon satisfaction of the conditions set forth in
Article VIII
, prior to such termination of any of
such partys representations, warranties, covenants or
other agreements set forth herein that would reasonably be
expected to cause any of the conditions set forth in
Article VIII
not to be satisfied.
Section
9.3
Amendment
.
This
Agreement may be amended by the parties hereto at any time
before or after obtaining the Company Stockholder Approval, but
if the Company Stockholder Approval shall have been obtained,
thereafter no amendment shall be made that by law requires
further approval by the Companys stockholders without
obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties hereto.
Section
9.4
Extension;
Waiver
. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their
respective boards of directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in such other parties
representations and warranties contained herein or in any
document delivered pursuant hereto or (iii) waive
compliance by such other parties with any of the agreements or
conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such
party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
A-34
ARTICLE X
GENERAL
PROVISIONS
Section
10.1
Non-Survival
of Representations and Warranties and
Agreements
.
None of the representations and
warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
This
Section 10.1
shall not limit any covenant or
agreement of the parties that by its terms contemplates
performance after the Effective Time.
Section
10.2
Notices
.
All
notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or
at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
Vegas Holding Corp.
c/o Great
Hill Equity Partners III, L.P.
One Liberty Square, 13th Floor
Boston, Massachusetts 02109
Attn: Matthew T. Vettel
Facsimile:
(617) 790-9401
with a copy to:
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Jeffrey Seifman, P.C.
Michael D. Paley
Facsimile:
(312) 861-2200
(b) if to the Company, to:
CAM Commerce Solutions, Inc.
17075 Newhope Street, Suite A
Fountain Valley, CA 92708
Attn: Chief Financial Officer
Facsimile:
(714) 439-1123
with a copy to:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Michael Hedge, Esq.
Facsimile:
(949) 725-4100
Section
10.3
Counterparts
.
This
Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
Section
10.4
Entire
Agreement; No Third-Party
Beneficiaries
.
Except for the Confidentiality
Agreement, this Agreement (together with the Company Letter and
the Parent Letter) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NONE
OF PARENT, SUB OR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS
OR WARRANTIES MADE BY ITSELF OR
A-35
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND
LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHERS REPRESENTATIVES OF ANY
DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR
MORE OF THE FOREGOING. Parent, Sub and the Company hereby agree
that their respective representations and warranties set forth
herein are solely for the benefit of the other parties hereto,
in accordance with and subject to the terms of this Agreement,
and that this Agreement, except for the provisions of
Section 7.8
, is not intended to, and does not,
confer upon any Person other than the parties hereto any rights
or remedies hereunder, including the right to rely upon the
accuracy or completeness of the representations and warranties
set forth herein.
Section
10.5
Governing
Law; Venue; Waiver of Jury Trial
.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(b) The parties hereby irrevocably submit to the
jurisdiction of any Delaware chancery or federal court located
in the City of Wilmington (unless such court shall lack subject
matter jurisdiction, in which case, in any state or federal
court located in Delaware) solely in respect of the
interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby, and
hereby waive, and agree not to assert, as a defense in any
action, suit or proceeding for the interpretation or enforcement
hereof or of any such document, that it is not subject thereto
or that such action, suit or proceeding may not be brought or is
not maintainable in said court or that the venue thereof may not
be appropriate or that this Agreement or any such document may
not be enforced in or by such court, and the parties hereto
irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such court. The
parties hereby consent to and grant any such court jurisdiction
over the person of such parties and agree that mailing of
process or other papers in connection with any such action or
proceeding in the manner provided in
Section 10.2
or
in such other manner as may be permitted by applicable law shall
be valid and sufficient service thereof.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.5(c)
.
Section
10.6
Assignment
.
Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior
written consent of the other parties; provided that Parent shall
have the right to assign all or any portion of its rights and
obligations under this Agreement to (i) an Affiliate of
Parent that is controlled by Great Hill LLC (including any such
Affiliate which may be organized subsequent to the date hereof),
(ii) from and after the Effective Time, in connection with
a merger or consolidation involving Parent or other disposition
of all or substantially all of the assets of Parent or the
Company, or (iii) from and after the Effective Time, to any
lender providing financing to Parent or the Company or any of
their Affiliates, for collateral security purposes, and any such
lender may exercise all of the rights and remedies of Parent
hereunder, provided that no such assignment shall in any manner
limit or impair Parents obligations hereunder
A-36
or release Parent from its obligations hereunder. Subject to the
preceding sentence, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
Section
10.7
Severability
. If
any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so
long as the economic and legal substance of the transactions
contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner
in order that the transactions contemplated by this Agreement
may be consummated as originally contemplated to the fullest
extent possible.
Section
10.8
Enforcement
of this Agreement
.
The parties hereto agree
that irreparable damage would occur if any of the provisions of
this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, such remedy
being in addition to any other remedy to which any party is
entitled at law or in equity. In any legal action or other
proceeding brought to enforce the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys
fees and any other costs incurred in that proceeding in addition
to any other relief to which it is entitled.
Section
10.9
Obligations
of Subsidiaries
.
Whenever this Agreement
requires any Subsidiary of Parent (including Sub) to take any
action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause such Subsidiary to
take such action.
Section
10.10
Construction
.
The
parties have participated jointly in negotiation and drafting
this Agreement. In the event that an ambiguity or a question of
intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any
provision of this Agreement.
Section
10.11
GHEP
Guarantee
.
(a) GHEP hereby guarantees, as primary obligor and not as
surety, the due and punctual payment and performance by the
Parent and Sub (and any permitted assignee thereof) of all of
their obligations to the Company pursuant to the terms of this
Agreement and any other agreement, document or certificate
contemplated by or delivered pursuant to this Agreement,
including the payment of any damages recoverable as a result of
a breach hereof or thereof.
(b) GHEP hereby represents and warrants to the Company that
(a) it has all power and authority to execute, deliver and
perform its obligations under this
Section 10.11
;
(b) the execution, delivery and performance of this
Agreement by GHEP has been duly and validly authorized and
approved by all necessary partnership action, and no other
proceedings or actions on the part of GHEP are necessary
therefor; (c) this Agreement has been duly and validly
executed and delivered by it and constitutes a valid and legally
binding obligation of it, enforceable against GHEP in accordance
with its terms; and (d) GHEP has, and will have at Closing,
sufficient funds immediately available to pay and perform all of
its obligations under this
Section 10.11
.
[Signatures
on following page]
A-37
IN WITNESS WHEREOF,
the undersigned have caused this
Agreement to be signed by their respective officers thereunto
duly authorized all as of the date first written above.
VEGAS HOLDING CORP.
Title: President
VEGAS MERGER SUB INC.
Title:President
CAM COMMERCE SOLUTIONS, INC.
Title: CEO
Solely with respect to Section 10.11 of
the Agreement:
GREAT HILL EQUITY PARTNERS III, L.P.
By: Great Hill Partners GP III, LP
Its: General Partner
By: GHP III, LLC
Its: General Partner
Title: Manager
Signature page
to
Merger Agreement
A-38
ANNEX B
OPINION
OF RBC CAPITAL MARKETS
CONFIDENTIAL
June 9, 2008
The Board of Directors
CAM Commerce Solutions, Inc.
17075 Newhope Street, Suite A
Fountain Valley, CA 92708
Members of the Board:
You have requested our opinion as to the fairness, from a
financial point of view, to the holders (the
Stockholders) of the common stock, par value $0.001
per share (Company Common Stock), of CAM Commerce
Solutions, Inc., a Delaware corporation (the
Company), of the Merger Consideration (as defined
below) provided for under the terms of the proposed Agreement
and Plan of Merger (the Agreement) by and among
Vegas Holding Corp., a Delaware corporation
(Parent), Vegas Merger Sub Inc., a wholly owned
Delaware subsidiary of Parent (Sub) and the Company.
The Agreement will include a guaranty from Great Hill Equity
Partners III, L.P. of the obligations of Parent and Sub under
the Agreement. Capitalized terms used herein shall have the
meanings used in the Agreement unless otherwise defined herein.
The Agreement provides, among other things, that Sub will merge
with and into the Company (the Merger) and, at the
Effective Time, each share of Company Common Stock (a
Share) issued and outstanding immediately prior to
the Effective Time (other than any Shares owned by the Company
and held in its treasury and any shares owned by, Parent, Sub or
any wholly-owned Subsidiary of Parent, all of which will be
cancelled for no consideration, and other than Dissenting
Shares) will be converted into the right to receive $40.50 in
cash without interest (the Merger Consideration) and
each issued and outstanding share of capital stock of Sub will
be converted into one fully-paid Share. The Merger Agreement
also provides, among other things that, the Company will use
commercially reasonable efforts to ensure that, at the Effective
Time, each Company Stock Option (whether or not then
exercisable) will be cancelled in consideration for a cash
payment from the Company equal to the product of the number of
Shares for which such Company Stock Option is exercisable and
the excess (if any) of the Merger Consideration over the per
Share exercise price of such Company Stock Option (less
applicable Tax withholdings). The terms and conditions of the
Merger are set forth more fully in the Agreement.
RBC Capital Markets Corporation (RBC), as part of
its investment banking services, is regularly engaged in the
valuation of businesses and their securities in connection with
mergers and acquisitions, corporate restructurings,
underwritings, secondary distributions of listed and unlisted
securities, private placements, and valuations for corporate and
other purposes.
We are acting as financial advisor to the Company in connection
with the Merger and we will receive a fee for our services upon
delivery of this opinion, which is not contingent upon the
consummation of the Merger. In addition, for our services as
financial advisor to the Company in connection with the Merger,
if the Merger is consummated we will receive an additional
larger fee. Further, in the event that the Merger is not
completed and the Company consummates at any time thereafter,
pursuant to a definitive agreement, letter of intent or other
evidence of commitment entered into during the term of
RBCs engagement or during the period following such term
until and including February 19, 2009, another
Transaction we will be entitled to a specified
Transaction fee based on the Aggregate Transaction
Value of such other Transaction (all as
specified in our engagement agreement with the Company dated
March 13, 2008). In addition, the Company
B-1
has agreed to indemnify us for certain liabilities that may
arise out of our engagement. In the ordinary course of business,
RBC may act as a market maker and broker in the publicly traded
securities of the Company and receive customary compensation,
and may also actively trade securities of the Company for our
own account and the accounts of our customers, and, accordingly,
RBC and its affiliates may hold a long or short position in such
securities.
For the purposes of rendering our opinion, we have undertaken
such review and inquiries as we deemed necessary or appropriate
under the circumstances, including the following: (i) we
reviewed the financial terms of the draft Agreement dated
June 9, 2008 (the Agreement); (ii) we
reviewed and analyzed certain publicly available financial and
other data with respect to the Company and certain other
relevant historical operating data relating to the Company made
available to us from published sources and from the internal
records of the Company; (iii) we conducted discussions with
members of the senior management of the Company with respect to
the business prospects and financial outlook of the Company as a
standalone entity; (iv) we reviewed the reported prices and
trading activity for Company Common Stock; and (v) we
performed other studies and analyses as we deemed appropriate.
In arriving at our opinion, we performed the following analyses
in addition to the review, inquiries, and analyses referred to
in the preceding paragraph: (i) we compared the financial
metrics of selected precedent transactions with the financial
metrics implied by the Merger Consideration; (ii) we
compared selected market valuation metrics of the Company and
other comparable publicly traded companies with the financial
metrics implied by the Merger Consideration; and (iii) we
compared the premiums paid in selected precedent transactions
with the premium implied by the Merger Consideration.
Several analytical methodologies have been employed and no one
method of analysis should be regarded as critical to the overall
conclusion we have reached. Each analytical technique has
inherent strengths and weaknesses, and the nature of the
available information may further affect the value of particular
techniques. The overall conclusions we have reached are based on
all the analysis and factors presented, taken as a whole, and
also on application of our own experience and judgment. Such
conclusions may involve significant elements of subjective
judgment and qualitative analysis. We therefore give no opinion
as to the value or merit standing alone of any one or more parts
of the analyses.
In rendering our opinion, we have assumed and relied upon the
accuracy and completeness of all the information that was
publicly available to us and all of the financial, legal, tax,
operating and other information provided to or discussed with us
by the Company (including, without limitation, the financial
statements and related notes thereto of the Company), and have
not assumed responsibility for independently verifying and have
not independently verified such information. We have assumed
that all projections and forecasts provided to us by the Company
were reasonably prepared on bases reflecting the best currently
available estimates and good faith judgments of the future
financial performance of the Company, as a standalone entity. We
express no opinion as to such projections and forecasts or the
assumptions upon which they were based.
In rendering our opinion, we have not assumed any responsibility
to perform, and have not performed, an independent evaluation or
appraisal of any of the assets or liabilities of the Company,
and we have not been furnished with any such valuations or
appraisals. We have not assumed any obligation to conduct, and
have not conducted, any physical inspection of the property or
facilities of the Company. We have not investigated, and make no
assumption regarding, any litigation or other claims affecting
the Company.
We have assumed, in all respects material to our analysis, that
all conditions to the consummation of the Merger will be
satisfied without waiver thereof. We have further assumed that
the executed version of the Agreement will not differ, in any
respect material to our opinion, from the Agreement.
Our opinion speaks only as of the date hereof, is based on the
conditions as they exist and information which we have been
supplied as of the date hereof, and is without regard to any
market, economic, financial, legal, or other circumstances or
event of any kind or nature which may exist or occur after such
date. We have not undertaken to reaffirm or revise this opinion
or otherwise comment upon events occurring after the date hereof
and do not have an obligation to update, revise or reaffirm this
opinion.
B-2
The opinion expressed herein is provided for the information and
assistance of the Company Board in connection with the Merger.
We express no opinion and make no recommendation to any
Stockholder as to how such Stockholder should vote with respect
to the Merger. All advice and opinions (written and oral)
rendered by RBC are intended for the use and benefit of the
Company Board. Such advice or opinions may not be reproduced,
summarized, excerpted from or referred to in any public document
or given to any other person without the prior written consent
of RBC. If required by applicable law, such opinion may be
included in any disclosure document filed by the Company with
the SEC with respect to the Merger;
provided however
,
that such opinion must be reproduced in full and that any
description of or reference to RBC be in a form reasonably
acceptable to RBC and its counsel. RBC shall have no
responsibility for the form or content of any such disclosure
document, other than the opinion itself.
Our opinion does not address the merits of the underlying
decision by the Company to engage in the Merger or the relative
merits of the Merger compared to any alternative business
strategy or transaction in which the Company might engage.
Our opinion addresses solely the fairness of the Merger
Consideration, from a financial point of view, to the
Stockholders. Our opinion does not in any way address other
terms or arrangements of the Merger or the Agreement, including,
without limitation, the financial or other terms of any other
agreement contemplated by, or to be entered into in connection
with, the Agreement. Further, in rendering our opinion we
express no opinion about the fairness of the amount or nature of
the compensation to any of the Companys officers,
directors or employees, or class of such persons, relative to
the compensation to be public Stockholders.
Our opinion has been approved by RBCs M&A Fairness
Opinion Committee.
Based on our experience as investment bankers and subject to the
foregoing, including the various assumptions and limitations set
forth herein, it is our opinion that, as of the date hereof, the
Merger Consideration is fair, from a financial point of view, to
the Stockholders.
Very truly yours,
RBC CAPITAL MARKETS CORPORATION
B-3
ANNEX C
SECTION 262
OF THE DELAWARE GENERAL CORPORATION LAW
§ 262. Appraisal rights.
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 257, § 258,
§ 263, or § 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or (ii) held of
record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did
not require for its approval the vote of the stockholders of the
surviving corporation as provided in subsection (f) of
§ 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or designated as
a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.
or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
C-1
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this
section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or
(c) hereof that appraisal rights are available for any or
all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholders
shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for
appraisal of such stockholders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholders
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of
such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228 or § 253 of this title, then either a
constituent corporation before the effective date of the merger
or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders
of any class or series of stock of such constituent corporation
who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holders shares. If
such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second
notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded
appraisal of such holders shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
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(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw
such stockholders demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within
120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon
written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and
with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10 days
after such stockholders written request for such a
statement is received by the surviving or resulting corporation
or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d)
hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware, or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an
appraisal, the Court shall appraise the shares, determining
their fair value exclusive of any element of value arising from
the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account
all relevant factors. In determining the fair rate of interest,
the Court may consider all relevant factors, including the rate
of interest which the surviving or resulting corporation would
have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the
appraisal proceeding, the Court may, in its discretion, permit
discovery or other pretrial proceedings and may proceed to trial
upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and
who has submitted such stockholders certificates of stock
to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Interest may be simple or compound, as the Court may direct.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other
C-3
decrees in the Court of Chancery may be enforced, whether such
surviving or resulting corporation be a corporation of this
State or of any state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
C-4
INSTRUCTIONS FOR VOTING YOUR PROXY
This proxy covers all CAM Commerce Solutions, Inc. shares you own of record, if the registrations
are identical.
THERE ARE THREE WAYS TO VOTE YOUR PROXY
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TELEPHONE VOTING
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INTERNET VOTING
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VOTING BY MAIL
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This method of voting
is available for
residents of the U.S.
and Canada. On a
touch tone telephone,
call TOLL FREE
1-800-___, 24
hours a day, 7 days a
week. You will be
asked to enter
ONLY
the CONTROL NUMBER
shown below. Have
your proxy card
ready, and then
follow the
prerecorded
instructions. Your
vote will be
confirmed and cast as
you directed.
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Visit the Internet
voting website at
http://___.
Enter the COMPANY
NUMBER and CONTROL
NUMBER shown below
and follow the
instructions on your
screen. You will
incur only your usual
Internet charges.
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Simply mark, sign and
date your proxy card
and return it in the
postage-paid
envelope. If you are
voting by telephone
or the Internet,
please do not mail
your proxy card.
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COMPANY NUMBER
CONTROL NUMBER
DETACH PROXY CARD HERE
Please Vote, Sign, Date and Return
Promptly in the Enclosed Envelope.
Votes must be Indicated (x) in Black or Blue Ink.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND FOR PROPOSAL 2
AND OTHERWISE IN THE DISCRETION OF THE PROXIES.
Our Board of Directors recommends a vote FOR Proposal 1 and FOR Proposal 2.
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1. To consider and vote upon a
proposal to adopt the Agreement
and Plan of Merger, dated as of
June 9, 2008 (the Merger
Agreement), by and among CAM
Commerce Solutions, Inc. (CAM
Commerce), Vegas Holding Corp.
(Parent) and Vegas Merger Sub,
Inc., a wholly-owned subsidiary
of Parent (Merger Subsidiary),
pursuant to which Merger
Subsidiary will be merged with
and into CAM Commerce, with CAM
Commerce being the surviving
corporation.
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2. If necessary or appropriate,
to approve the postponement or
adjournment of the special
meeting to solicit additional
proxies in the event that there
are not sufficient votes at the
time of the special meeting to
approve the proposal to adopt
the Merger Agreement.
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FOR
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AGAINST
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ABSTAIN
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FOR
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AGAINST
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ABSTAIN
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In their discretion, the proxies are authorized to vote upon such business as may properly come
before the meeting, or any adjournments or postponements. No proxy marked against Proposal 1 will
be voted in favor of adjournment or postponement of the special meeting for the purpose of allowing
additional time to secure additional proxies in favor of adoption of the Merger Agreement.
Please date and sign exactly as your name appears hereon. When shares are held by joint tenants,
both must sign. When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by authorized person.
SIGNATURE(S)
IMPORTANT: Please sign exactly as your name(s) appear(s). When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
PROXY
CAM
Commerce Solutions, Inc.
This
Proxy is Solicited on Behalf of the Board of Directors
for use at the Special Meeting on , 2008
The undersigned revokes all previous proxies, acknowledges receipt of the Notice of the Special
Meeting of Stockholders to be held ___, 2008, and the Proxy Statement dated ___,
2008 and hereby appoints Geoff Knapp and Paul Caceres, and each of them, each with the power to
appoint his substitute and hereby authorizes them, as attorneys-in-fact and proxies of the
undersigned, to represent and to vote as designated on the reverse side hereof, all of the shares
of common stock of CAM Commerce that the undersigned is entitled to vote at the Special Meeting of
Stockholders to be held ___, 2008, or any adjournment or postponement thereof with all of the
powers that the undersigned would possess if personally present, upon and in respect of the matters
described on the reverse side hereof and in accordance with the instructions described on the
reverse side hereof, with discretionary authority as to any and all other matters that may properly
come before the meeting.
When properly executed, this proxy will be voted in the manner directed by the undersigned
stockholder(s). IF THIS CARD IS RETURNED WITHOUT VOTING INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1 AND PROPOSAL 2, AS SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT.
(Continued and to be signed on the reverse side)
CAM Commerce Solutions, Inc.
17075 Newhope Street, Suite A
Fountain Valley, California 92708
Cam Commerce Solutions (MM) (NASDAQ:CADA)
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