Exhibit 10.18
Transition and Severance Agreement
Greg Petersen (“Petersen”) and LONE STAR MERGER CORP. (“Company”) agree as
follows for terms of employment to be effective immediately, without any further
action required by either party, upon the closing of the merger transaction
between ACTIVANT SOLUTIONS HOLDINGS and Lone Star Merger Corp.

     
Title:
  Executive Vice President & Chief Financial Officer (title may be changed
simply to ‘Executive Vice President’ upon hiring of successor CFO)
 
   
Reporting to:
  President & CEO
 
   
Responsibilities:
  May be reduced by the CEO / Board with consent of Petersen not to be
unreasonably withheld. No responsibilities will be added nor will Petersen be
required to serve on any Boards, or Committees, without Petersen’s consent.
 
   
Location:
  Duties will be carried out from the Company’s Las Cimas facility in Austin,
but certain travel may be required in accordance with reasonable demands
considering Petersen’s responsibilities as an Executive Vice President of the
Company. In no event will Petersen be asked to move.
 
   
Term of Employment:
  Company shall employ Petersen commencing at the close of the merger
transaction referenced above and ending on January 5, 2007. In the event that
the merger referenced above is not consummated, this Transition and Severance
Agreement shall be void ab initio.
 
   
Annual Base Salary:
  $290,000 paid to Petersen in accordance with Company’s generally applicable
payroll practices.

 

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Incentive Bonus:
  Petersen shall be paid bonuses reflecting a $210,000 annualized target for
fiscal year 2006 and a $52,500 target for the 1st quarter of FY 2007 ending on
December 31, 2006, each to be calculated and paid in accordance with the same
formula or methodology applied to other senior executives (those having the rank
of senior vice president and above), provided in the case of the FY 2006 bonus
paid not later than December 31, 2006 and in the case of the 1st Quarter 2007
bonus paid not later than February 15, 2007. Company shall establish a formula
and methodology for the 1st quarter of FY 2007 similar in type and attainability
as for FY 2006; if Company does not do so the bonus for the 1st quarter of FY
2007 will be fixed at $52,500.
 
   
Lump Sum Severance Payment:
  On January 5, 2007, company will pay $500,000 in a lump sum; and will provide
12 months of company paid COBRA benefits.
 
   
Interest in Company:
  Petersen will be paid for the interests Petersen has in Company (whether
stock, option, restricted stock or other) in accordance with the agreements and
other documents governing the merger transaction referenced above or other
applicable agreements and documents.
 
   
Early Termination:
  By Petersen: If Petersen voluntary terminates employment prior to January 5,
2007 the Company will not pay the Lump Sum Severance Payment. He will be
eligible for his base salary and bonuses up to the date of voluntary termination
on the same basis as other senior executives, as defined above, when they
voluntary terminate. Death or “disability” (as defined under Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended) will not be considered
termination and all payments specified herein will be paid to Petersen or to
Petersen’s estate or representative, as appropriate, in the event of death or
disability on or before January 5, 2007.
 
   
 
  By the Company: If the Company chooses to terminate Petersen prior to
January 5, 2007 other than for Cause, Company will pay (i) a lump sum equal to
the January severance payment plus the

 

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  remaining base salary through January 5, 2007 in a lump sum within 5 days of
termination, plus (ii) if the termination is prior to September 30, 2006,
Petersen will be paid a full FY 2006 bonus as if he had been employed for the
full FY 2006, and if the termination is after September 30, 2006, Petersen will
be paid a full FY 2006 bonus plus a pro rata bonus for the 1st quarter of FY
2007.
 
   
 
  “Cause” is defined as any of the following:

  1.   Conviction of a felony or a crime involving moral turpitude;     2.  
Violation of any non-competition or on-solicitation agreement, or material
violation of any confidentiality agreement;     3.   Material dishonesty or
fraud in performing responsibilities hereunder; and/or     4.   Gross negligence
in performing responsibilities hereunder.

     
Benefits:
  Petersen will continue to participate in the company’s standard benefit
programs at the same level, including accruing vacation at the rate of four
weeks per year.
 
   
D&O Coverage:
  Company will provide at its expense extended (“tail”) coverage for Petersen
for the same term as provided to other officers or directors but in any event
not less than 6 years from the closing of the merger transaction referenced
above
 
   
Release/Restrictive Covenants:
  The payment of the Early Termination Benefits described above and the Lump Sum
Severance Payment shall be subject to Petersen’s execution of an effective
release in the form attached hereto. Petersen acknowledges that the restrictive
covenants provided for in the Employee Confidentiality, Non-disclosure,
Intellectual Property, Non-solicitation and Non-competition Agreement dated
September 13, 2001 between Petersen and the Company will continue for 2 years
from January 5, 2007.

 

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          AGREED:    
 
        /s/ Greg Petersen           Greg Petersen    
 
        Lone Star Merger Corp    
 
       
By:
  /s/ C Andrew Ballard    
 
       
 
  Name: C Andrew Ballard    
 
  Title: Vice President