Item 1.01.
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Entry into a Material Definitive Agreement.
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On February 8,
2008, NetManage, Inc., a Delaware corporation (NetManage) and Rocket Software, Inc., a Delaware corporation (Rocket), entered into Amendment No. 2 (the Amendment) to that certain Agreement and Plan of Merger
(the Merger Agreement) among NetManage, Rocket and Eastern Software, Inc., a Delaware corporation and wholly-owned subsidiary of Rocket. Pursuant to Section 5.3(g) of the Agreement, Rocket had the right to terminate the Agreement on or
prior to February 8, 2008 if it had not obtained an agreement for financing from Wells Fargo Foothill, Inc on terms acceptable to Rocket, in its sole discretion. Pursuant to the Amendment, NetManage and Rocket agreed to extend the date by which
Rocket must terminate the Agreement or waive these conditions to February 29, 2008.
The Amendment to also provides NetManage with the latitude, until
three days following the date that Rocket notifies NetManage that it is waiving the financing closing condition set forth in Section 5.3(g) of the Merger Agreement (the Financing Contingency Release Date), to take certain actions
that were previously prohibited or limited under the terms of the original Merger Agreement. These actions include the ability to freely solicit or consider proposals from other potential acquirors of NetManage and the ability to take actions that
are outside of the ordinary course of NetManages business, such as issuing additional shares of stock, acquiring other entities, making capital expenditures and entering into material contracts. Under the terms of the Amendment, Rocket will
have the right to terminate the Merger Agreement if NetManage takes any of these actions that are outside of its ordinary course of business. In addition, the termination rights of Rocket and NetManage have been amended to provide NetManage with the
right to terminate the Merger Agreement at any time prior to the Financing Contingency Release Date and to provide Rocket with the right to terminate the Merger Agreement at any time prior to the Financing Contingency Release Date if concludes that
it will not be able to waive the closing condition set forth in Section 5.3(g). The Amendment also eliminated any obligation by NetManage to pay a termination fee or reimburse Rockets expenses except for an obligation by NetManage to
reimburse Rockets expenses up to $2.0 million in connection with a termination by NetManage under certain conditions following the Financing Contingency Release Date.
The transaction is expected to close in March of 2008. The proposed transaction is subject to approval of NetManages stockholders and other customary conditions to closing. Either party will also have a right to
terminate the Merger Agreement if the transaction is not closed on or prior to March 31, 2008.
The foregoing summary is not intended to be complete
and is qualified in its entirety by the full text of the Merger Agreement and the Amendment. A copy of the Merger Agreement is attached as Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on
December 17, 2008. A copy of the Amendment No.1 to the Merger Agreement is attached as Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 21, 2008. A copy of the Amendment is attached
as Exhibit 2.1 to this Current Report on Form 8-K.
Cautionary Statement
The Merger Agreement and the amendments thereto have been included as exhibits to Current Reports on Form 8-K filed by us to provide investors with information regarding its terms. Except for their status as legal documents governing the
contractual rights among the parties thereto in relation to the Merger and the other transactions contemplated thereby, the Merger Agreement and the amendments thereto are not intended to be a source of factual, business or operational information
about NetManage, Rocket or their respective businesses.
The representations and warranties contained in the Merger Agreement are not necessarily accurate
or complete as made and may be subject to exceptions set forth in the disclosure schedules provided in accordance with the Merger Agreement. Such representations, warranties and covenants have been negotiated by NetManage and Rocket for the purpose
of allocating contractual risk between the parties, including where the parties do not have complete knowledge of all the facts, and not for the purpose of establishing matters as facts. The representations and warranties may also be subject to a
contractual standard of materiality different from those generally applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and any stockholder of NetManage or any potential investor should not rely on the
representations, warranties and covenants therein or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their affiliates.
Additional Information
Important Additional Information Regarding the Merger has been filed with the SEC:
In connection with the proposed Merger, NetManage has filed a proxy statement and other documents with the Securities and Exchange Commission (the
SEC). INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT NETMANAGE AND THE PROPOSED MERGER. A definitive proxy statement will be sent to stockholders of NetManage seeking
their approval of the transaction. Investors and stockholders may obtain a free copy of the proxy statement and other documents filed by NetManage with the SEC at the SECs website at http://www.sec.gov. The definitive proxy statement and other
relevant documents may also be obtained free of charge on NetManages website at
www.netmanage.com
or by directing a request to NetManage, Inc., 20883 Stevens Creek Blvd., Cupertino, California 95014, Attention: Investor
Relations.
NetManage and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of
NetManage in connection with the proposed Merger. Information about NetManage and its directors and executive officers and their ownership of NetManages common stock is set forth in the proxy statement for NetManages 2007 Annual Meeting
of Stockholders, which was filed with the SEC on June 4, 2007. Stockholders and investors may obtain additional information regarding the interests of NetManage and its directors and executive officers in the Merger, which may be different than
those of NetManages stockholders generally, by reading the proxy statement and other relevant documents regarding the Merger, which will be filed with the SEC.