-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FZ7vePv5BbZrxnq7y8bfmmYzzFcnmR2iUics+BPfG3kft+ojRVAcy8kPQtiW9Ar9 tHaVPZTV7MCp4IVNmdyBog== 0000912057-01-525596.txt : 20010730 0000912057-01-525596.hdr.sgml : 20010730 ACCESSION NUMBER: 0000912057-01-525596 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010727 GROUP MEMBERS: ANDREW YOUNISS GROUP MEMBERS: JOHAN MAGNUSSON GROUP MEMBERS: MATTHEW KELLEY GROUP MEMBERS: ROCKET SOFTWARE INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GENSYM CORP CENTRAL INDEX KEY: 0001005387 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042932756 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-48011 FILM NUMBER: 1691149 BUSINESS ADDRESS: STREET 1: 52 SECOND AVE CITY: BURLINGTON STATE: MA ZIP: 01803 BUSINESS PHONE: 6175472500 MAIL ADDRESS: STREET 1: 52 SECOND AVE CITY: BURLINGTON STATE: MA ZIP: 01803 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROCKET SOFTWARE INC CENTRAL INDEX KEY: 0001111173 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: TWO APPLE HILL DRIVE CITY: NATICK STATE: MA ZIP: 01760 BUSINESS PHONE: 5086554321 SC 13D 1 a2055268zsc13d.txt SC 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 GENSYM CORPORATION ------------------ (Name of Issuer) COMMON STOCK, PAR VALUE $.01 PER SHARE -------------------------------------- (Title of Class of Securities) 37245R107 -------------- (CUSIP Number) Johan Magnusson Rocket Software, Inc. 2 Apple Hill Drive Natick, MA 01760 508-652-2102 ------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JULY 23, 2001 ------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [x]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13(d)(7) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 37245R107. - ------------------------------------------------------------------------------- 1. Names of Reporting Persons Rocket Software, Inc. I.R.S. Identification Nos. of Above Persons (I.R.S. Identification No. 04-3090800) - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions)(a) [x] (b) [ ] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - ------------------------------------------------------------------------------- 5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant [ ] to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Massachusetts - ------------------------------------------------------------------------------- Number of (7) Sole Voting Power None Shares -------------------------------------------------------------- Beneficially (8) Shared Voting Power 200,000 shares - See Item 5(b) Owned by -------------------------------------------------------------- Each (9) Sole Dispositive Power None Reporting -------------------------------------------------------------- Person With (10) Shared Dispositive Power 200,000 shares - See Item 5(b) - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 200,000 shares - See Item 5(b) by each Reporting Person - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [ ] Certain Shares - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 3.09% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - ------------------------------------------------------------------------------- CUSIP No. 37245R107. - ------------------------------------------------------------------------------- 1. Names of Reporting Persons Andrew Youniss I.R.S. Identification Nos. of Above Persons - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions)(a) [x] (b) [ ] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) AF, PF - ------------------------------------------------------------------------------- 5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant [ ] to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - ------------------------------------------------------------------------------- Number of (7) Sole Voting Power 1,500 shares - See Item 5(b) Shares -------------------------------------------------------------- Beneficially (8) Shared Voting Power 200,000 shares - See Item 5(b) Owned by -------------------------------------------------------------- Each (9) Sole Dispositive Power 1,500 shares - See Item 5(b) Reporting -------------------------------------------------------------- Person With (10) Shared Dispositive Power 200,000 shares - See Item 5(b) - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 201,500 shares - See Item 5(b) by each Reporting Person - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [ ] Certain Shares - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 3.12% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - ------------------------------------------------------------------------------- CUSIP No. 37245R107. - ------------------------------------------------------------------------------- 1. Names of Reporting Persons Johan Magnusson I.R.S. Identification Nos. of Above Persons - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions)(a) [x] (b) [ ] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) AF, PF - ------------------------------------------------------------------------------- 5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant [ ] to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Sweden - ------------------------------------------------------------------------------- Number of (7) Sole Voting Power 335,600 shares - See Item 5(b) Shares -------------------------------------------------------------- Beneficially (8) Shared Voting Power 200,000 shares - See Item 5(b) Owned by -------------------------------------------------------------- Each (9) Sole Dispositive Power 335,600 shares - See Item 5(b) Reporting -------------------------------------------------------------- Person With (10) Shared Dispositive Power 200,000 shares - See Item 5(b) - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 535,600 shares - See Item 5(b) by each Reporting Person - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [ ] Certain Shares - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 8.28% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - ------------------------------------------------------------------------------- CUSIP No. 37245R107. - ------------------------------------------------------------------------------- 1. Names of Reporting Persons Matthew Kelley I.R.S. Identification Nos. of Above Persons - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions)(a) [x] (b) [ ] - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) AF - ------------------------------------------------------------------------------- 5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant [ ] to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization United States - ------------------------------------------------------------------------------- Number of (7) Sole Voting Power None Shares -------------------------------------------------------------- Beneficially (8) Shared Voting Power 200,000 shares - See Item 5(b) Owned by -------------------------------------------------------------- Each (9) Sole Dispositive Power None Reporting -------------------------------------------------------------- Person With (10) Shared Dispositive Power 200,000 shares - See Item 5(b) - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 200,000 shares - See Item 5(b) by each Reporting Person - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [ ] Certain Shares - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 3.09% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - ------------------------------------------------------------------------------- ITEM 1. SECURITY AND ISSUER. The security to which this statement relates is the Common Stock, $.01 par value per share (the "Common Stock") of Gensym Corporation, a Delaware corporation (the "Company"). The address of the Company's principal executive office is 52 Second Avenue, Burlington, MA 01803. ITEM 2. IDENTITY AND BACKGROUND. 1. (a) Rocket Software, Inc. ("Rocket") (b) Two Apple Hill Drive Natick, MA 01760 (c) Not Applicable. (d) No (e) No (f) Not Applicable 2. (a) Andrew Youniss (b) Business Address: Two Apple Hill Drive, Natick, MA 01760. (c) Director, Chief Executive Officer, President, Treasurer, Clerk and 40% stockholder of Rocket. (d) No (e) No (f) United States of America. 3. (a) Johan Magnusson (b) Business Address: Two Apple Hill Drive, Natick, MA 01760 (c) Director, Chief Operating Officer, Vice President and 40% stockholder of Rocket. (d) No (e) No (f) Sweden 4. (a) Matthew Kelley (b) Business Address: Two Apple Hill Drive, Natick, MA 01760. (c) Director, Chief Technology Officer and 20% stockholder of Rocket (d) No (e) No (f) United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Rocket paid the Company an aggregate of $439,537.00 in cash for 200,000 shares of the Common Stock. The funds used by Rocket for purposes of purchasing the foregoing shares were from Rocket's working capital. Mr. Magnusson paid the Company an aggregate of $1,157,663.00 in cash for an aggregate 335,600 shares of the Common Stock. The funds used by Mr. Magnusson for purposes of purchasing the foregoing shares were from his personal funds. Mr. Youniss paid the Company an aggregate of $6000.00 in cash for 1,500 shares of the Common Stock. The funds used by Mr. Youniss for purposes of purchasing the foregoing shares were from his personal funds. ITEM 4. PURPOSE OF TRANSACTION. On July 23, 2001, representatives of Rocket delivered to the Company a non-binding proposal letter proposing a transaction pursuant to which Rocket would acquire the shares of the Company in a merger transaction (the "Proposed Transaction"), a copy of which is attached hereto as EXHIBIT A and is incorporated herein by reference. On July 24, 2001, representatives of Rocket delivered to the Company a non-binding proposal letter supplementing the letter dated July 23, 2001, proposing a transaction pursuant to which Rocket would provide a short term secured loan to the Company, a copy of which is attached hereto as EXHIBIT B and is incorporated herein by reference. On July 25, 2001, representatives of Rocket delivered to the Company a non-binding proposal letter supplementing the letter dated July 23, 2001 and superceding the letter dated July 24, 2001, a copy of which is attached hereto as which is attached hereto as EXHIBIT C and is incorporated herein by reference. Rocket and the other members of the Reporting Group may at any time, and from time to time, (a) acquire additional securities of the Company, or dispose of such securities the disposition of securities of the Company; (b) propose an extraordinary corporate transaction similar to the Proposed Transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries, or a sale or transfer of a material amount of assets of the Company or any of its subsidiaries. One likely result of the foregoing would be to cause the securities of the Company to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, and to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act of 1934, as amended (the "Exchange Act"). Further, in connection with the foregoing, Rocket and the other members of the Reporting Group may proposed interim financing arrangements (including, but not limited to, one or more short term secured loans to the Company) which have the effect of changing the Company's charter, bylaws or instruments corresponding thereto, or may propose other actions which may impede the acquisition of control of the Company by any person. In connection with any of the foregoing or otherwise, Rocket and the other members of the Reporting Group may propose changes to the Company's structure, including, but not limited to, changes in the present board of directors or management of the Company or other actions similar to those listed above or those enumerated in Item 4 of Schedule 13D promulgated under the Exchange Act. Except as provided for herein (including the attached Exhibits), Rocket does not have any present plan or proposal to effect any further substantial changes to the business, organization, form or control of the Company. Each of Rocket and the other reporting persons reserves the right to dispose of all or some of the shares of Common Stock beneficially owned or held by it or him or may acquire additional shares depending upon price and market conditions and the evaluation of alternative investments. ITEM 5. INTEREST IN SECURITIES OF ISSUER. (a) Based upon the 6,466,970 shares of Common Stock outstanding as of May 7, 2001 as such information was provided by the Company: (i) Rocket is the record holder and beneficial owner of an aggregate of 200,000 shares of the Common Stock, which comprise 3.10% of that class of securities. (ii) Andrew Youniss, (A) as a 40% stockholder of Rocket, may be an indirect beneficial owner of 200,000 shares of the Common Stock held of record by Rocket, and (B) is the direct beneficial owner of an additional 1,500 shares of Common Stock, representing in the aggregate approximately 3.10% of the number of shares of Common Stock currently outstanding. (iii) Johan Magnusson, (A) as a 40% stockholder of Rocket, may be an indirect beneficial owner of 200,000 shares of the Common Stock held of record by Rocket, and (B) is the direct beneficial owner of an additional 335,600 shares of Common Stock, representing in the aggregate approximately 8.28% of the number of shares of Common Stock currently outstanding. (iv) Matthew Kelley, as a 20% stockholder of Rocket, may be an indirect beneficial owner of 200,000 shares of the Common Stock held of record by Rocket, representing approximately 3.10% of the number of shares of Common Stock currently outstanding. (b) Rocket, Andrew Youniss, Johan Magnusson and Matthew Kelley, by virtue of their indirect beneficial ownership interest in the 200,000 shares of the Common Stock held by Rocket and their respective relationships as directors and/or executive officers of Rocket, exercise shared voting and dispositive power with respect to such shares. Mr. Youniss holds sole voting and dispositive power with respect to the 1,500 shares of Common Stock beneficially owned by him, and each of Rocket, Mr. Magnusson and Mr. Kelley expressly disclaims beneficial ownership of such shares. Mr. Magnusson holds sole voting and dispositive power with respect to the 335,600 shares of Common Stock beneficially owned by him, and each of Rocket, Mr. Youniss and Mr. Kelley expressly disclaims beneficial ownership of such shares. (c) Other than as set forth below, there have been no transactions in the Common Stock during the past sixty (60) days by Rocket, Andrew Youniss, Johan Magnusson or Matthew Kelley. Johan Magnusson made the following purchases of common stock of the Company during the past sixty (60) days:
- ------------------------------------------------------------------------------------------------------------- Date Number of Shares Price Per Share Total Price - ------------------------------------------------------------------------------------------------------------- May 25, 2001 1,000 $.75 $750.00 - ------------------------------------------------------------------------------------------------------------- May 30, 2001 3,000 $.736 $2,208.00 - ------------------------------------------------------------------------------------------------------------- June 1, 2001 2,000 $.75 $1,500.00 - ------------------------------------------------------------------------------------------------------------- June 4, 2001 3,000 $.75 $2,250.00 - ------------------------------------------------------------------------------------------------------------- June 8, 2001 1,000 $.75 $750.00 - ------------------------------------------------------------------------------------------------------------- June 11, 2001 5,000 $.754 $3,770.00 - ------------------------------------------------------------------------------------------------------------- June 18, 2001 1,000 $.75 $750.00 - ------------------------------------------------------------------------------------------------------------- June 20, 2001 3,300 $.764 $2,521.20 - ------------------------------------------------------------------------------------------------------------- June 21, 2001 4,300 $.75 $3,225.00 - ------------------------------------------------------------------------------------------------------------- June 22, 2001 4,700 $.75 $3,525.00 - ------------------------------------------------------------------------------------------------------------- June 25, 2001 9,000 $.75 $6,750.00 - ------------------------------------------------------------------------------------------------------------- June 26, 2001 4,000 $.76 $3,040.00 - -------------------------------------------------------------------------------------------------------------
(d) Not Applicable. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Johan Magnusson and Andrew Youniss are each directors and 40% stockholders of Rocket. Matthew Kelley is a director and 20% stockholder of Rocket. Rocket has delivered to the Company a non-binding proposal letter proposing a transaction pursuant to which Rocket would acquire the shares of the Company, a copy of which is attached hereto as EXHIBIT A and is incorporated herein by reference. The proposal letter has been supplemented by proposal letters dated July 24, 2001 and July 25, 2001, which are attached hereto as Exhibit B and Exhibit C, respectively, and each of which are incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following documents are filed as exhibits to this statement: EXHIBIT A Proposal Letter dated July 23, 2001 from Rocket Software, Inc. to the Company. EXHIBIT B Supplement Proposal Letter dated July 24, 2001 to Proposal Letter dated July 23, 2001 from Rocket Software, Inc. to the Company. EXHIBIT C Supplement Proposal Letter dated July 25, 2001 to Proposal Letter Proposal Letter dated July 23, 2001 from Rocket Software, Inc. to the Company. SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. ROCKET SOFTWARE, INC. July 27, 2001 By: /s/ Andrew Youniss --------------------------- -------------------------- (Date) Andrew Youniss, President July 27, 2001 /s/ Andrew Youniss --------------------------- -------------------------- (Date) Andrew Youniss July 27, 2001 /s/ Johan Magnusson --------------------------- -------------------------- (Date) Johan Magnusson July 27, 2001 /s/ Matthew Kelley --------------------------- -------------------------- (Date) Matthew Kelley EX-99.A 2 a2055268zex-99_a.txt EXHIBIT 99(A) July 23, 2001 Patrick Courtin, Chairman of the Board, Chief Executive Officer and President Gensym Corporation 52 Second Avenue Burlington, MA, 01581 Dear Mr. Courtin: As discussed briefly on the telephone today, Rocket Software, Inc. proposes to negotiate a business combination with Gensym, as result of which Rocket (or its designee) will own all of the outstanding capital stock of Gensym. We intend that the acquisition be governed by a mutually acceptable merger agreement and other definitive agreements to be negotiated between Rocket (or its designee) and Gensym. The merger agreement will provide, among other things: o Gensym will call a special meeting of its shareholders, at which Gensym will recommend to its shareholders that they approve a merger between Gensym and a subsidiary of Rocket. In the merger, shareholders (other than Rocket) will be paid $.80 per share in cash. The source of the funds for this will be Rocket's working capital. There will be no financing contingency. As a result of the merger, Gensym will become a subsidiary of Rocket. o The merger agreement will contain customary terms and conditions, including among other things, representations, warranties, conditions and covenants applicable to Gensym regarding the business, operations, assets and liabilities (direct and contingent) and condition (financial and other) of Gensym and its subsidiaries, and terms and provisions relating to such other matters as Rocket may request; and the closing under the merger agreement will be subject to necessary third party and governmental consents and filings. o The closing must occur before October 31, 2001. o At closing, Gensym must have cash and cash equivalents in an amount to be negotiated and satisfy a working capital test to be negotiated; must have incurred no indebtedness for borrowed money (except as contemplated below); and must not have experienced, in Rocket's judgment, any adverse change in its business, operations, assets and liabilities (direct and contingent), condition (financial and other) or prospects of Gensym and its subsidiaries; o Prior to closing, Rocket (or its designee) and Gensym must have entered employment, non-competition and non-disclosure agreements with the management and technical employees of Gensym satisfactory to Buyer. Gensym will authorize Rocket to negotiate and enter such agreements. In connection with the proposed merger and prior to its consummation, Rocket further proposes to provide a loan to Gensym in an amount to be determined based upon Gensym's projected needs. The proceeds of the loan will be available to pay off any outstanding indebtedness of Gensym to Silicon Valley Bank and for general working capital purposes. The loan will be secured by a lien on all the assets of Gensym, will mature on October 31, 2001 and will bear interest at an annual rate approximately equal to the effective rate of interest applicable to draws provided for under the existing credit agreement between Gensym and Silicon Valley Bank, which we understand to be $24%. This letter sets forth Rocket's proposal regarding a potential loan and merger transactions, and does not create or give rise to any binding obligation on the part of any party. This letter does not describe all matters upon which agreement must be reached in order for the loan or merger transaction contemplated hereby to be consummated. The transactions are subject to the satisfactory completion of customary due diligence, to the successful negotiation and execution of definitive loan and merger documents, and to conditions customary in transactions of these types. We will coordinate all our due diligence activities with you and conduct such inquiries with appropriate discretion and sensitivity to your business relationships. We are prepared to conduct this due diligence promptly. As you can appreciate, moving promptly on this offer will benefit both Rocket and Gensym. We hope the negotiation of a satisfactory arrangement can be accomplished in a relatively short period of time. We reserve the right to discontinue negotiations and withdraw the above proposal at any time, and in any event if not acted on by you by July 31, 2001. Very truly yours, Rocket Software, Inc Johan Magnusson, Chief Operating Officer EX-99.(B) 3 a2055268zex-99_b.txt EXHIBIT 99(B) July 24, 2001 BY TELECOPY - ----------- Patrick Courtin, Chairman of the Board, Chief Executive Officer and President Gensym Corporation 52 Second Avenue Burlington, MA, 01581 Dear Mr. Courtin: This letter supplements the letter, dated July 23, 2001 (the "Original Proposal Letter"), from Rocket Software, Inc. to Gensym Corporation. We understand that Gensym wishes to understand better the proposed loan transaction that Rocket is prepared to consider entering into with Gensym and its subsidiaries in connection with negotiations of a proposed merger transaction described in the Original Proposal Letter and supplemented hereby. The proposed loan transaction that Rocket is prepared to consider would include the following terms and provisions: Borrowers: Gensym and its subsidiaries. - --------- Principal Amount: To be determined and based upon Gensym's reasonable - ---------------- needs, and to be advanced from time to time in accordance with those needs. Rocket preliminarily contemplates that the aggregate principal amount of the loan will be up to $1,000,000. Interest Rate: At the rate of 24% per year. - ------------- Maturity: October 31, 2001. - -------- Debt Service: No payments of principal or interest to be due before - ------------ maturity (whether at the stated maturity of the loan or by acceleration or otherwise). All payments to be made by bank wire transfer in immediately available funds. 2 Use of Proceeds: To pay off any outstanding indebtedness of Gensym to - --------------- Silicon Valley Bank and for general working capital purposes. Security: First mortgage and first priority perfected security - -------- interest in all tangible and intangible property, real, personal and other, now existing or hereafter acquired or created, of Gensym and its subsidiaries. Closing Date: As soon as practicable. - ------------ Events of Default: To be negotiated. - ----------------- Other Terms and Conditions: The loan documents would contain, affirmative and - ---------- negative covenants (including but not limited to (i) restrictions on incurrence of indebtedness for money borrowed, (ii) restrictions on investments, (iii) restrictions on dispositions of assets outside the ordinary course, (iv) restrictions on dividends and redemptions and other restricted payments, (v) restrictions on liens and encumbrances, (vi) informational requirements, (vii) customary "housekeeping" covenants, (viii) restrictions on mergers, consolidations, acquisitions and dispositions of assets, (ix) restrictions on sales and leasebacks, (x) restrictions on transactions with affiliates, and (xi) indemnification provisions) events of default and remedies, and Gensym and its subsidiaries would make representations and warranties, all as is customary for transactions of this type or as negotiated by the parties in this particular transaction. Rocket would require appropriate opinions of counsel in form and substance satisfactory to Rocket. Rocket would have full and continuing access to any material it deems necessary to monitor its loans to the Company. The closing of the loan transaction would be subject to necessary third party and governmental consents and filings. No brokers, finders, "break up", investment brokers or like fees would be payable to any person in connection with this transaction. All reasonable out-of-pocket expenses incurred by Rocket in connection with the loan transaction under consideration, including legal expenses (up to a maximum of $25,000), would be payable by Gensym at closing. Additionally, Rocket would expect that the outstanding principal and accrued interest on the loan transaction would be deducted from the aggregate merger consideration (which, which on a per share basis, is $.80 per share of Gensym common stock) that Rocket otherwise would pay in the proposed merger transaction described in the Original Proposal Letter. 3 This letter, together with the Original Proposal Letter, sets forth Rocket's proposal regarding potential loan and merger transactions. Neither this letter nor the Original Proposal Letter creates or gives rise to any binding obligation on the part of any party. Neither this letter nor the Original Proposal Letter describes all matters upon which agreement must be reached in order for the loan or merger transaction contemplated by the Original Proposal Letter, as supplemented hereby, to be consummated. The transactions are subject to the satisfactory completion of customary due diligence, to the successful negotiation and execution of definitive loan and merger documents, and to conditions customary in transactions of these types. Please understand, however, that the loan transaction will not be contingent or conditioned upon the merger transaction or the negotiation or execution of definitive merger documents, and that Rocket contemplates that due diligence for the loan transaction would necessarily have to be abbreviated in accordance with the circumstances of Gensym. We will coordinate all our due diligence activities with you and conduct such inquiries with appropriate discretion and sensitivity to your business relationships. We appreciate this opportunity to supplement for you the proposals set forth in the Original Proposal Letter. We believe that the negotiation of satisfactory documents can be accomplished in a relatively short period of time. We reserve the right to discontinue negotiations and withdraw the above proposals at any time, and in any event if not acted on by you by July 31, 2001. Very truly yours, Rocket Software, Inc Johan Magnusson, Chief Operating Officer EX-99.(C) 4 a2055268zex-99_c.txt EXHIBIT 99(C) July 25, 2001 BY TELECOPY - ----------- Patrick Courtin, Chairman of the Board, Chief Executive Officer and President Gensym Corporation 52 Second Avenue Burlington, MA, 01581 Dear Mr. Courtin: This letter supplements the letter, dated July 23, 2001 (the "Original Proposal Letter"), from Rocket Software, Inc. to Gensym Corporation and supersedes the letter, dated July 24, 2001, from Rocket to Gensym. We understand that Gensym wishes to understand better the proposed loan transaction that Rocket is prepared to consider entering into with Gensym and its subsidiaries in connection with negotiations of a proposed merger transaction described in the Original Proposal Letter and supplemented hereby. The proposed loan transaction that Rocket is prepared to consider would include the following terms and provisions: Borrowers: Gensym and its subsidiaries. - --------- Principal Amount: To be determined and based upon Gensym's reasonable - ---------------- needs, and to be advanced from time to time in accordance with those needs. Rocket preliminarily contemplates that the aggregate principal amount of the loan will be up to $1,250,000. Interest Rate: At the rate of 24% per year. - ------------- Maturity: October 31, 2001. - -------- Debt Service: No payments of principal or interest to be due before - ------------ maturity (whether at the stated maturity of the loan or by acceleration or otherwise). Prepayments of principal and interest by Gensym at any time, in whole or in part and without any prepayment fee or penalty, to be permitted. All payments to be made by bank wire transfer in immediately available funds. 2 Use of Proceeds: To pay off any outstanding indebtedness of Gensym tor - --------------- Silicon Valley Bank and for general working capital purposes. Security: First mortgage and first priority perfected security - -------- interest in all tangible and intangible property, real, personal and other, now existing or hereafter acquired or created, of Gensym and its subsidiaries. Closing Date: As soon as practicable. - ------------ Events of Default: To be negotiated. - ----------------- Other Terms and Conditions: The loan documents would contain, affirmative and - ---------- negative covenants (including but not limited to (i) restrictions on incurrence of indebtedness for money borrowed, (ii) restrictions on investments, (iii) restrictions on dispositions of assets outside the ordinary course, (iv) restrictions on dividends and redemptions and other restricted payments, (v) restrictions on liens and encumbrances, (vi) informational requirements, (vii) customary "housekeeping" covenants, (viii) restrictions on mergers, consolidations, acquisitions and dispositions of assets, (ix) restrictions on sales and leasebacks, (x) restrictions on transactions with affiliates, and (xi) indemnification provisions) events of default and remedies, and Gensym and its subsidiaries would make representations and warranties, all as is customary for transactions of this type or as negotiated by the parties in this particular transaction. Rocket would require appropriate opinions of counsel in form and substance satisfactory to Rocket. Rocket would have full and continuing access to any material it deems necessary to monitor its loans to the Company. The closing of the loan transaction would be subject to necessary third party and governmental consents and filings. No brokers, finders, "break up", investment brokers or like fees would be payable to any person in connection with this transaction. All reasonable out-of-pocket expenses incurred by Rocket in connection with the loan transaction under consideration, including legal expenses (up to a maximum of $25,000), would be payable by Gensym at closing. Additionally, Rocket would expect that the outstanding principal and accrued interest on the loan transaction would be deducted from the aggregate merger consideration (which, 3 which on a per share basis, is $.80 per share of Gensym common stock) that Rocket otherwise would pay in the proposed merger transaction described in the Original Proposal Letter. This letter, together with the Original Proposal Letter, sets forth Rocket's proposal regarding potential loan and merger transactions. This letter supersedes the letter, dated July 24, 2001, from Rocket to Gensym. Neither this letter nor the Original Proposal Letter creates or gives rise to any binding obligation on the part of any party. Neither this letter nor the Original Proposal Letter describes all matters upon which agreement must be reached in order for the loan or merger transaction contemplated by the Original Proposal Letter, as supplemented hereby, to be consummated. The transactions are subject to the satisfactory completion of customary due diligence, to the successful negotiation and execution of definitive loan and merger documents, and to conditions customary in transactions of these types. Please understand, however, that the loan transaction will not be contingent or conditioned upon the merger transaction or the negotiation or execution of definitive merger documents, and that Rocket contemplates that due diligence for the loan transaction would necessarily have to be abbreviated in accordance with the circumstances of Gensym. We will coordinate all our due diligence activities with you and conduct such inquiries with appropriate discretion and sensitivity to your business relationships. We appreciate this opportunity to supplement for you the proposals set forth in the Original Proposal Letter. We believe that the negotiation of satisfactory documents can be accomplished in a relatively short period of time. We reserve the right to discontinue negotiations and withdraw the above proposals at any time, and in any event if not acted on by you by July 31, 2001. Very truly yours, ROCKET SOFTWARE, INC By: ------------------------------------- Johan Magnusson, Chief Operating Officer Accepted as of the date first above written: GENSYM CORPORATION By: ----------------------------------------- Name: Title: Dated: July __, 2001 -----END PRIVACY-ENHANCED MESSAGE-----