SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 27, 1998
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CAYENNE SOFTWARE, INC.
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(Exact name of registrant as specified in its charter)
Massachusetts 0-19682 04-2784044
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14 Crosby Drive, Bedford, MA 01730
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (781) 280-0505
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ITEM 5. OTHER EVENTS
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On August 27, 1998, Cayenne Software, Inc. ("Cayenne") entered into an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of August 27,
1998, by and among Cayenne, Sterling Software, Inc. ("Sterling Software") and
Sterling Software (Southern), Inc. ("Merger Sub"). Under the Merger Agreement,
Sterling Software will purchase Cayenne in a cash transaction with a total value
of approximately $11.4 million, $3.4 million of which will be paid to Cayenne's
Series D Convertible Preferred Stockholders, with the remaining $8 million of
the consideration being payable to common stockholders, subject to reduction as
described in the next sentence. Payments to holders of common stock are subject
to reduction by the amount of any interim financing provided to Cayenne based on
Sterling Software's credit support (as described in the next paragraph) prior to
completion of the transaction. The Merger Agreement provides that, upon the
terms and subject to the conditions specified therein, effective on the closing,
Cayenne will be merged with and into Merger Sub, the separate corporate
existence of Cayenne will cease, and Merger Sub will continue as the surviving
corporation in the merger and as a wholly-owned subsidiary of Sterling Software.
In its June 30, 1998 Quarterly Report on Form 10-Q, Cayenne reported a
default under its bank credit agreement and the possibility that it would be
unable to continue as a going concern. In consideration of Cayenne's financial
condition and liquidity concerns, Sterling Software has agreed to provide credit
support to Cayenne, allowing Cayenne to borrow up to $3 million for working
capital purposes under its bank credit agreement as interim financing prior to
closing. Although Sterling Software has only committed to provide credit
support for $3 million of interim financing, such amount is subject to possible
increase at Sterling Software's option and any such increase would similarly
reduce the amount payable to Cayenne's common stockholders. The amount of
interim financing required by Cayenne will be influenced by a variety of factors
(some of which are beyond Cayenne's control), including the length of time
necessary to close the transaction. It is currently anticipated that the
transaction will close in October 1998. Assuming that no more than $3 million
of interim financing is required, consideration to common stockholders will be
between $0.375 and $0.234 per share.
The merger is subject to certain conditions, including receipt of
regulatory approval under the Hart-Scott-Rodino Antitrust Improvement Act, the
vote of two-thirds of holders of each class of Cayenne's capital stock at a
special meeting of the stockholders and other customary conditions.
Copies of the Merger Agreement, certain ancillary documents (including an
Option Agreement, pursuant to which Cayenne has granted Sterling Software an
option to purchase up to 19.9% of Cayenne's outstanding common stock, and a
Stockholders Agreement, pursuant to which each of Cayenne's preferred
stockholders has agreed to vote to approve the Merger Agreement and granted
Sterling Software an option to purchase the shares of Cayenne's capital stock
held thereby) and certain documents pertaining to the interim credit
arrangements referred to herein are filed as exhibits to this Current Report on
Form 8-K and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cayenne Software, Inc.
Dated: August 28, 1998 By: /s/ Frederick H. Phillips
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Frederick H. Phillips
Vice President, Finance and Administration,
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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EXHIBITS
TO
CURRENT REPORT ON FORM 8-K
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CAYENNE SOFTWARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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EXHIBIT INDEX
EXHIBIT
NO.
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2.3 Agreement and Plan of Merger by and among Cayenne, Sterling
Software and Sterling Software (Southern), Inc. dated as of
August 27, 1998
10.29 Stock Option Agreement between Cayenne and Sterling Software dated
as of August 27, 1998
10.30 Stockholder Agreement among the holders of Class D Convertible
Preferred Stock and Sterling Software dated as of August 27, 1998
10.31 Forbearance Agreement by and among Cayenne, Silicon Valley Bank, and
certain wholly owned subsidiaries of Cayenne dated as of August 27,
1998
10.32 Form of Promissory Note of Cayenne payable to the order of Silicon
Valley Bank