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EXHIBIT 7
ANNEX B
October 24, 2000
Board of Directors
Continuus Software Corporation
9401 Jeronimo Road
Irvine, CA 92618
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders (other than Telelogic AB and its affiliates) of common
stock of Continuus Software Corporation (the "Company") of the consideration to
be received by holders of common stock in the Transaction described below,
pursuant to an Agreement and Plan of Merger to be dated as of October 24, 2000
(the "Agreement"), among the Company, Telelogic AB ("Purchaser") and Raindrop
Acquisition Corporation ("Acquisition"), a wholly owned subsidiary of Purchaser.
The Agreement provides for the commencement by Purchaser of a tender offer (the
"Tender Offer") to purchase shares of Company common stock outstanding at a
price of $3.46 per share, net to seller in cash (the "Offer Price"), and the
subsequent merger (the "Merger") of Acquisition into the Company in which the
remaining shares of Company common stock will be converted and exchanged for
cash equal to the Offer Price. The Tender Offer and the Merger are collectively
referred to as the "Transaction." The terms and conditions of the Transaction
are more fully set forth in the Agreement.
U.S. Bancorp Piper Jaffray Inc., as a customary part of its investment
banking business, is engaged in the valuation of businesses and their securities
in connection with mergers and acquisitions, underwriting and secondary
distributions of securities, private placements and valuations for estate,
corporate and other purposes. We will receive a fee for providing this opinion.
This opinion fee is not contingent upon the consummation of the Transaction. The
Company has also agreed to indemnify us against certain liabilities in
connection with our services. U.S. Bancorp Piper Jaffray Inc. is entitled to an
additional fee in the event of consummation of the Transaction. In the ordinary
course of our business, we and our affiliates may actively trade securities of
the Company for our own account or the account of our customers and,
accordingly, may at any time hold a long or short position in such securities.
In arriving at our opinion, we have undertaken such review, analyses and
inquiries as we deemed necessary and appropriate under the circumstances. Among
other things, we have reviewed (i) the draft dated October 19, 2000 of the
Agreement, (ii) certain publicly available financial, operating and business
information related to the Company, (iii) certain internal financial information
of the Company prepared for financial planning purposes and furnished by the
management of the Company, (iv) certain publicly available market and securities
data of the Company, and (v) to the extent publicly available, financial terms
of certain acquisition transactions involving companies operating in industries
deemed similar to that in which the Company operates and financial data of
selected public companies deemed comparable to Company. We have had discussions
with members of the management of the Company concerning the financial
condition, current operating results and business outlook for the Company.
We have relied upon and assumed the accuracy, completeness and fairness of
the financial statements and other information provided to us by the Company or
otherwise made available to us, and have not assumed responsibility for the
independent verification of such information. We have relied upon the assurances
of the management of the Company that the information provided to us as set
forth above by the Company has been prepared on a reasonable basis, and, with
respect to financial planning data and other business outlook information,
reflects the best currently available estimates, and that they are not aware of
any information or facts that would make the information provided to us
incomplete or misleading.
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October 24, 2000
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In arriving at our opinion, we have not performed any appraisals or
valuations of any specific assets or liabilities of the Company and have not
been furnished with any such appraisals or valuations. We express no opinion
regarding the liquidation value of any entity. Without limiting the generality
of the foregoing, we have undertaken no independent analysis of any owned or
leased real estate, or any pending or threatened litigation, possible unasserted
claims or other contingent liabilities, to which the Company or its respective
affiliates are a party or may be subject and our opinion makes no assumption
concerning and therefore does not consider the possible assertion of claims,
outcomes or damages arising out of any such matters.
This opinion is necessarily based upon the information available to us and
facts and circumstances as they exist and are subject to evaluation on the date
hereof; events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. We are not expressing any opinion
herein as to the price at which shares of Company common stock have traded or
may trade at any future time. We have not undertaken to reaffirm or revise this
opinion or otherwise comment upon any events occurring after the date hereof and
do not have any obligation to update, revise or reaffirm this opinion.
This opinion is directed to the Board of Directors of the Company and is
not intended to be and does not constitute a recommendation to any stockholder
of the Company regarding whether to tender shares of common stock in the Tender
Offer or how to vote in the Merger. We were not requested to opine as to, and
this opinion does not address, the basic business decision to proceed with or
effect the Transaction. This opinion shall not be published or otherwise used,
nor shall any public references to us be made without our prior written
approval. However, notwithstanding the foregoing, we consent to inclusion of
this opinion in the Schedule 14D-9 relating to the Tender Offer and the proxy or
information statement relating to the Merger, in accordance with the terms of
our engagement by the Company.
Our opinion addresses solely the fairness of the Offer Price to be paid in
the Transaction and does not address any other term or agreement relating to the
Transaction, or the ability of Purchaser to finance or otherwise successfully
consummate the Transaction.
Based upon and subject to the foregoing and based upon such other factors
as we consider relevant, it is our opinion that the Offer Price proposed to be
paid in the Transaction pursuant to the Agreement for the common stock of the
Company is fair, from a financial point of view, to the holders of common stock
of the Company (other than Telelogic AB or its affiliates) as of the date
hereof.
Sincerely,
U.S. BANCORP PIPER JAFFRAY INC.
