UNITED STATES
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) October 25, 2005
Neoware Systems, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-21240 23-2705700
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(Commission File Number) (IRS Employer Identification No.)
400 Feheley Drive, King of Prussia, Pennsylvania 19406
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(Address of Principal Executive Offices) (Zip Code)
(610) 277-8300
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(Registrant's Telephone Number, Including Area Code)
________________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
On October 25, 2005, Neoware Systems, Inc. (the "Company") entered into an
Agreement and Plan of Merger ("Merger Agreement") with Maxspeed Corporation
("Maxspeed") that provides for the merger of a wholly owned subsidiary of the
Company with and into Maxspeed, with Maxspeed surviving as a wholly owned
subsidiary of the Company. Maxspeed, a provider of customized thin client
solutions, is headquartered in Palo Alto, California, and has research,
development and sales offices in Beijing and Shanghai, China. The Merger
Agreement contained customary representations, warranties, covenants and
indemnifications. As part of the transaction, the Company will also enter into
noncompetition agreements with two of Maxspeed's shareholders. The consideration
paid by the Company was $24,000,000 in cash, subject to adjustment based on
Maxspeed's cash and net working capital at closing, of which $1,400,000 is being
held back to fund restructuring costs and $4,800,000 is being held in an escrow
account for up to two years for indemnification claims. Maxspeed is required to
provide a minimum of $9,000,000 of cash and $3,700,000 of net working capital
excluding cash as of closing, with dollar-for-dollar downward adjustments in the
consideration if these requirements are not satisfied. The common shareholders
are also eligible to receive a potential cash earnout of up to $4,000,000, based
on defined revenues. The consideration will be paid with cash on hand. The
amount and type of consideration was determined on the basis of arm's length
negotiations between the Company and Maxspeed. Neither the Company nor any of
its affiliates has any material relationship to Maxspeed or any of the
shareholders of Maxspeed other than in respect of the Merger Agreement and the
transactions contemplated thereby.
The Company announced the signing of the Merger Agreement in a press release on
October 26, 2005, a copy of which is attached hereto as Exhibit 99.1.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby are qualified in their entirety by reference to the Merger
Agreement which will be filed separately with the Securities and Exchange
Commission.
(c) Exhibits. The following documents are filed as exhibits to this report.
99.1 Press Release dated October 26, 2005.
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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.
Dated: October 31, 2005 Neoware Systems, Inc.
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(Registrant)
/s/ Keith D. Schneck
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Keith D. Schneck
Executive Vice President and
Chief Financial Officer