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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 3/03/03  Resonate Inc                      DEFM14A     3/03/03    1:195                                    Donnelley R R & S..13/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Merger Materials                         HTML    964K 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.      )

Filed by the Registrant x                Filed by a Party other than the Registrant ¨ 

Check the appropriate box:  

Resonate Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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SPECIAL MEETING OF STOCKHOLDERS

MERGER PROPOSED WITH GTG ACQUISITION CORP.

YOUR VOTE IS VERY IMPORTANT

Dear Resonate Stockholder:

The board of directors of Resonate Inc. has approved a merger combining a subsidiary of GTG Acquisition Corp. and Resonate.

If the merger is completed, you will be entitled to receive between $1.90 and $1.94 in cash, without interest, for each share of Resonate common stock you own. The final price to be paid for each share of our common stock will equal $1.90 plus an additional one cent, if any (up to a maximum of four additional cents), for each $250,000 held by Resonate in cash, cash equivalents, and short-term investments at the closing in excess of $58 million.

We cannot complete the merger until Resonate stockholders adopt the merger agreement and approve the merger. Therefore, Resonate has called a special meeting of its stockholders to obtain their approval. At the special meeting of Resonate stockholders, you will be asked to adopt the merger agreement and approve the merger with GTG. Resonate’s board of directors, based in part on the unanimous recommendation of an independent special committee of the Resonate board of directors, (1) has approved and declared the merger, the merger agreement and the transactions contemplated by the merger agreement advisable, (2) has declared that it is in the best interests of our stockholders that we enter into the merger agreement and complete the merger on the terms and conditions in the merger agreement and (3) recommends that you vote for the adoption of the merger agreement and approval of the merger.

The date, time and place of the special meeting to consider and vote upon the proposal to adopt the merger agreement and approve the merger is as follows:

March 31, 2003

10:00 a.m., local time

Resonate Inc.

385 Moffett Park Drive

Sunnyvale, CA 94089

The notice to stockholders and the proxy statement attached to this letter provide you with information about the special meeting of Resonate stockholders and the proposed merger. We encourage you to read the entire proxy statement and the documents attached as annexes carefully.

Your vote is very important. Whether or not you plan to attend the special meeting, please take the time to vote by completing, signing, dating and returning the enclosed proxy card to us.

The proxy statement is dated March 3, 2003, and is first being mailed to Resonate stockholders on or about March 7, 2003.

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RESONATE INC.

385 MOFFETT PARK DRIVE

SUNNYVALE, CALIFORNIA 94089

(408) 548-5500

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 31, 2003

To the Stockholders of Resonate Inc.:

A special meeting of stockholders of Resonate Inc., a Delaware corporation, will be held on March 31, 2003 at 10:00 a.m., local time, at the offices of Resonate, located at 385 Moffett Park Drive, Sunnyvale, California, 94089 for the following purposes:

Our stockholders of record at the close of business on February 27, 2003, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. At the close of business on the record date, we had outstanding and entitled to vote 27,438,409 shares of common stock.

Your vote is important. The affirmative vote of the holders of a majority of the outstanding shares of our common stock is required to adopt the merger agreement and approve the merger. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy to ensure that your shares will be represented at the special meeting if you are unable to attend. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be counted as a vote for the adoption of the merger agreement and approval of the merger, which will prohibit you from qualifying for dissenters’ or appraisal rights available to you under Section 262 of the Delaware General Corporation Law. If you fail to return your proxy card, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the effect of counting as a vote against the adoption of the merger agreement and approval of the merger.

If your shares are held in the name of your broker, bank or other nominee, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the special meeting.

Resonate’s board of directors, based in part on the unanimous recommendation of the special committee, (1) has approved and declared the merger, the merger agreement and the transactions contemplated by the merger agreement advisable, (2) has declared that it is in the best interests of our stockholders that we enter into the merger agreement and complete the merger on the terms and conditions in the merger agreement and (3) recommends that you vote for the adoption of the merger agreement and approval of the merger.

Sunnyvale, California

March 3, 2003

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 TABLE OF CONTENTS

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 Questions and Answers About the Merger

To review the reasons for the proposed merger in greater detail, see “Merger—Reasons for the Merger and Recommendation of the Special Committee and the Board” beginning on page 22.

The aggregate balance of cash, cash equivalents and short-term investments that will be on hand at the closing is subject to numerous risks and uncertainties and may not provide for any merger consideration in

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If your shares are held in the name of a bank, broker or other fiduciary and you have directed that person to vote your shares, you must contact that person if you want to change your vote.

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The tax consequences to each particular Resonate stockholder will depend on that stockholder’s specific situation. Therefore, you should consult your tax advisor for an understanding of the tax consequences to you that result from the merger.

To review these tax consequences in greater detail, see “Merger—Material United States Federal Income Tax Consequences of the Merger” beginning on page 41.

See “Merger—Financing the Merger” beginning on page 37, and “The Merger Agreement—Termination Fee” beginning on page 49.

Resonate Inc.

385 Moffett Park Drive

Sunnyvale, California 94089

(408) 548-5500

Attn: Secretary

Payment Agent

Mellon Investor Services LLC

85 Challenger Road

Ridgefield Park, NJ 07660

Attn: Corporate Actions

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 Summary

For your convenience, we have provided a brief summary of certain information contained in this proxy statement. This summary highlights selected information from this document and does not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, you should carefully read this entire document, including the documents attached to this proxy statement as annexes. We have included page references parenthetically to direct you to more complete descriptions of the topics presented in the summary.

 Overview

Resonate is furnishing this proxy statement to allow its stockholders to consider and vote on a proposal to adopt the merger agreement with GTG and Res Merger Sub and approve the merger of Res Merger Sub with and into Resonate.

On October 17, 2002, the Resonate board of directors formed an independent special committee of non-management directors to review and evaluate potential strategic transactions and other transactions on behalf of the company.

The special committee, on behalf of the company, negotiated the terms of a merger with Rocket Holdings, LLC, an entity controlled by Mr. Peter Watkins, our Chairman, President and Chief Executive Officer, and Mr. Richard Hornstein, our Chief Financial Officer and General Counsel. On December 21, 2003, Resonate entered into a merger agreement with Rocket Holdings and the parties subsequently amended the merger agreement on January 14, 2003.

Resonate terminated the amended merger agreement with Rocket Holdings and entered into the merger agreement with GTG on January 21, 2003.

 The Parties to the Merger Agreement (Page 11)

Resonate

Resonate is the leading provider of application performance management solutions for business-critical application environments. The flagship Resonate Commander product is the first and only application performance management solution that proactively locates, diagnoses and resolves outages and performance bottlenecks before they impact end-users or the business.

Resonate maintains its principal offices at 385 Moffett Park Drive, Sunnyvale, CA 94089, telephone (650) 548-5500.

GTG Acquisition Corp.

GTG Acquisition Corp. is a Delaware corporation and an affiliate of Gores Technology Group. Gores Technology Group is a privately held international acquisition and management firm that pursues a strategy of acquiring promising high-technology organizations and managing them for growth and profitability. GTG conducts no business other than acting as the sole shareholder of Aprisma Management Technologies, Inc.

GTG maintains its principal offices at 10877 Wilshire Boulevard, Los Angeles, CA 90024, telephone (310) 824-6106.

Res Merger Sub, Inc.

Res Merger Sub, Inc. is a wholly owned subsidiary of GTG. If the merger is completed, Res Merger Sub will be merged with and into Resonate and its separate corporate existence will cease. As a result, Resonate will

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become a wholly owned subsidiary of GTG. Res Merger Sub was incorporated by GTG in Delaware in January 2003 with minimal capitalization and has conducted no business since its incorporation other than executing the merger agreement.

Res Merger Sub maintains its principal offices at 10877 Wilshire Boulevard, Los Angeles, CA 90024, telephone (310) 824-6106.

 Reasons for the Merger (Page 22)

In arriving at its recommendation of the proposed merger to the Resonate board of directors, the special committee considered a number of factors including:

 Recommendation of the Board of Directors (Page 26)

The special committee unanimously recommended the proposed merger to the Resonate board of directors. Based in part on the special committee’s recommendation and the process and substantive considerations of the special committee, the Resonate board of directors determined that the proposed merger with GTG was advisable and in the best interests of Resonate stockholders and approved the merger agreement and the merger. The Resonate board of directors recommends that Resonate stockholders vote for the adoption of the merger agreement and the approval of the merger.

 Liquidation Analysis Prepared by Houlihan Lokey (Page 32)

On December 13, 2002, Houlihan Lokey delivered its Preliminary Analysis to the special committee, a copy of which is attached to this proxy statement as Annex B. On January 21, 2003, Houlihan Lokey delivered its Updated Analysis to the special committee, a copy of which is attached to this proxy statement as Annex C.

The Preliminary Analysis set forth, subject to certain assumptions and qualifications, a pro forma per share liquidation value range of approximately $1.61 to $1.69 per share. The Updated Analysis (subject to and based upon various qualifications and assumptions set forth in such analysis), which reflected updated balance sheet information and the resolution of a lawsuit and included a pro forma estimate of the value of Resonate’s intellectual property assets, set forth a pro forma per share liquidation value range of approximately $1.67 to $1.76.

 Opinion of Financial Advisor (Page 26)

On January 21, 2003, Broadview International delivered its opinion to the special committee. The opinion stated that as of the date of the opinion, the range of $1.90 to $1.94 per share in cash to be received by our stockholders in the merger was fair, from a financial point of view, to them.

The full text of the opinion, which sets forth the assumptions made, matters considered and limitations on the review undertaken by Broadview in connection with its opinion, is attached as Annex D to this proxy statement. Broadview provided its opinion for the information and assistance of the special

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committee in connection with its recommendation of the merger. Broadview’s opinion is not a recommendation as to how you should vote with respect to the merger proposal. We urge you to read the opinion carefully and in its entirety.

 The Special Meeting (Page 8)

The special meeting is scheduled to be held at 10:00 a.m., local time, on March 31, 2003 at Resonate’s offices at 385 Moffett Park Drive, Sunnyvale, California. The purpose of the special meeting is to vote on a proposal to adopt the merger agreement and approve the merger. Only stockholders of record at the close of business on February 27, 2003 are entitled to vote at the special meeting.

 Stockholder Approval; Support Agreements (Page 8)

The affirmative vote of a majority of the shares of Resonate common stock outstanding as of the record date is required to adopt the merger agreement and approve the merger.

As of the close of business on the record date, Resonate’s directors and executive officers (together with their respective affiliates) controlled 13.3% of the 27,438,409 shares of Resonate common stock outstanding and entitled to vote at the special meeting.

In connection with the execution of the initial merger agreement with Rocket Holdings, Messrs. Watkins and Hornstein entered into support agreements that require them to vote for any merger proposal recommended by the Resonate special committee or board of directors, including the merger proposal set forth in this proxy statement. As of the record date, Mr. Watkins controlled 10,000 shares of Resonate common stock and Mr. Hornstein controlled no shares of Resonate common stock. No other director or executive officer of Resonate has entered into a support or other type of voting agreement that would obligate them to vote for the merger proposal.

 The Merger (Page 12)

The merger agreement is attached as Annex A to this proxy statement. We encourage you to read the merger agreement because it is the legal document that governs the merger. If (1) the holders of a majority of the shares of Resonate common stock outstanding as of the record date adopt the merger agreement and approve the merger and (2) all other conditions to the merger are satisfied or waived, Res Merger Sub will be merged with and into Resonate and its separate corporate existence shall cease. As a result, Resonate will become a wholly owned subsidiary of GTG.

 Financing of the Merger (Page 37)

GTG has not secured, and will not secure, any outside financing to acquire all of the outstanding shares of Resonate common stock. Instead, GTG will use Resonate’s cash, cash equivalents and short-term investments on hand at the closing to finance the acquisition.

 What Resonate Stockholders Will Receive (Page 39)

If we complete the merger, each outstanding share of Resonate common stock will be converted into the right to receive between $1.90 and $1.94. The final price to be paid for each share of our common stock will equal $1.90 plus an additional one cent, if any (up to a maximum of four additional cents), for each $250,000 held by Resonate in cash, cash equivalents, and short-term investments at the closing in excess of $58 million. So, if at the closing Resonate holds cash, cash equivalents, and short term investments equal to:

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The aggregate balance of cash, cash equivalents and short-term investments that will be on hand at the closing is subject to numerous risks and uncertainties and may not provide for any merger consideration in excess of $1.90 per share to be paid to you.

 Treatment of Outstanding Resonate Stock Options (Page 40)

Under the merger agreement, GTG will not assume or substitute any of the Resonate stock options currently outstanding under the company’s 1996 Stock Option Plan or 2000 Stock Option Plan (the Plans). Also, consistent with the terms of the Plans, there will be no acceleration of unvested options as a result of the proposed merger except as specifically provided for in an optionee’s option agreement. Instead, each vested option with an exercise price less than the per share merger consideration (which will be between $1.90–$1.94 per share) will be “cashed out” with the consent of the optionee. A “cashed out” optionee would receive an amount of cash equal to the product of: (I) the number of vested shares under the option at closing multiplied by (II) the difference between the per share merger consideration and the per share option exercise price. The Plans will, by their terms, terminate upon the consummation of the merger and all outstanding and unexercised options at the time of the closing will be cancelled.

Subject to any applicable withholding taxes, payment to the “cashed-out” optionees shall be made, without interest, by the payment agent promptly following the date of completion of the merger, and in any event within five business days after the completion of the merger.

 Conditions to the Merger (Page 46)

The completion of the merger depends on the satisfaction or waiver of a number of conditions, including:

The satisfaction of these conditions is subject to numerous risks and uncertainties. If all of the conditions in the merger agreement are not satisfied or waived, the merger will not close, no merger consideration will be paid, and Resonate will be responsible for all fees and expenses incurred by it and up to $225,000 of fees and expenses incurred by GTG.

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 Termination of the Merger Agreement (Page 48)

GTG and Resonate may jointly terminate the merger agreement at any time before completing the merger. Either GTG or Resonate may terminate the merger agreement if the merger is not completed by April 30, 2003, or in certain other circumstances, including Resonate’s ability to terminate the merger agreement to allow it to accept a superior proposal. The merger agreement provides for a termination fee payable by Resonate to GTG of an amount between $.8 million and $1.6 million in certain circumstances.

 Expenses (Page 37)

Resonate will pay all fees and expenses incurred by the company and the special committee in connection with the merger and up to $225,000 of such costs incurred by GTG. Resonate will pay these costs even if the merger is not consummated.

 Resonate Prohibited from Soliciting Other Offers (Page 45)

Resonate has agreed in the merger agreement not to solicit, initiate or intentionally encourage any third-party proposal to acquire a 10% or greater interest in Resonate or a material portion of its assets or to engage in any such negotiations or discussions. In the event that Resonate receives an unsolicited third-party proposal to acquire a 10% or greater interest in Resonate or a material portion of its assets and the special committee determines in good faith (after consultation with its financial advisor) that such proposal is reasonably likely to lead to a superior proposal as compared to the proposed merger, the special committee may, after giving GTG written notice of its intention to do so, engage in negotiations and discussions with the third party. Resonate has agreed to keep GTG informed of all material terms, conditions, and amendments of any such third-party proposal.

 Interests of Certain Persons in the Merger (Page 34)

You should be aware that members of the Resonate board of directors and Resonate’s executive officers may have interests in the merger that are different from, or are in addition to, the interests of other stockholders that may make them more likely to adopt the merger agreement and approve the merger. These interests include the following:

Immediately prior to entering into this merger agreement and in order to enter into this merger agreement, Resonate terminated an amended merger agreement with Rocket Holdings. Rocket Holdings is an entity controlled by Mr. Watkins, our Chairman, Chief Executive Officer and President, and Mr. Hornstein, our Chief Financial Officer and General Counsel.

In connection with the execution of the initial merger agreement with Rocket Holdings, Messrs. Watkins and Hornstein entered into support agreements that obligate them to vote any shares of our common stock that they own in favor of any merger recommended by the special committee, including the merger with GTG, and pursuant to which they have agreed not to oppose the consummation of any such recommended transaction, including the merger with GTG.

Mr. Watkins and Mr. Hornstein have each entered into change of control and severance agreements that will provide benefits to them upon the consummation of the merger, unless they resign their position prior to that time. Ms. Karen Barnes, our Vice President of Product Development, has also entered into a change of control and severance agreement that could provide benefits to her following the consummation of the merger.

The merger agreement provides that rights to indemnification benefiting Resonate’s directors and officers will survive the merger. In addition, Pacific Credit Corp., an affiliate of GTG and Gores, has agreed to (i) indemnify Resonate for losses arising out of (A) a material breach of the merger agreement by GTG or Res Merger Sub prior to closing and (B) the failure by Resonate as the surviving corporation to perform its indemnification obligations in Section 5.7 of the merger agreement for one year following the closing.

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 Material United States Federal Income Tax Consequences of the Merger (Page 41)

As a stockholder, you will not recognize any income on your share of the merger consideration up to the adjusted tax basis in your Resonate common stock. Instead, the merger consideration you receive will be treated as a non-taxable return of capital that will reduce the adjusted tax basis in your Resonate common stock. You will recognize gain on your share of the merger consideration in excess of your Resonate common stock’s adjusted tax basis. This gain will be treated as gain from the sale or exchange of stock. Any such gain recognized by you from the merger consideration generally will be long-term capital gain if you have held your shares of Resonate common stock for more than one year at the time the merger consideration is paid. The merger consideration will have no direct tax consequences to Resonate or GTG. The tax consequences to you as a stockholder will depend on your specific situation. Therefore, you should consult your own tax advisor for an understanding of the tax consequences to you as a result of the merger.

 Dissenters’ or Appraisal Rights (Page 37)

Stockholders that disagree with the merger and comply with Section 262 of the DGCL will be entitled to dissenters’ or appraisal rights in connection with the merger. To qualify for these rights and receive the “fair value” of your shares of Resonate common stock, you must: (i) hold shares of Resonate common stock as of the date of your demand, (ii) hold shares of Resonate common stock through the effective date of the merger, (iii) deliver written notice to the company of your intention to seek dissenters’ or appraisal rights prior to the vote being taken at the special meeting, (iv) not vote for the approval and adoption of the merger agreement and approval of the merger, and (v) otherwise comply with Section 262 of the DGCL. The “fair value” of your shares of Resonate common stock may be more or less than or equal to the per share merger consideration of between $1.90 to $1.94 per share. A vote against the proposal, either in person or by proxy, at the special meeting will not satisfy the requirement of delivery of written notice to the company of your intention to seek dissenters’ or appraisal rights. An executed proxy that does not indicate how it is to be voted on the proposal will be counted as a vote for the merger proposal, which will prohibit you from seeking to enforce your dissenters’ or appraisal rights.

 Accounting Treatment (Page 39)

The merger will be accounted for under the purchase method of accounting.

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 Market Price and Dividend Data

Our common stock, par value $0.0001 per share, is traded on The Nasdaq National Market under the symbol RSNT. Trading commenced in our common stock on August 3, 2000 following our initial public offering in which we sold 4 million shares of our common stock at $21 per share for aggregate proceeds to Resonate of approximately $78 million. The following table sets forth the range of high and low sales prices for our common stock since our initial public offering.

The following table shows the closing per share sales price of our common stock, as reported on The Nasdaq National Market on January 21, 2003, the last full trading day before the public announcement of the proposed merger with GTG, and on February 28, 2003, the latest practicable trading day before the printing of this proxy statement:

We have never paid a cash dividend on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain any earnings for use in our business. Following the merger, our common stock will not be traded on any public market.

 Cautionary Statement Regarding Forward-Looking Statements

This proxy statement contains certain forward-looking statements and information relating to Resonate that are based on the beliefs of management as well as assumptions made by and information currently available to Resonate. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts, including statements regarding the completion of the merger. When used in this document, the words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “project,” “predict,” “may,” and “should” and similar expressions, are intended to identify forward-looking statements. Such statements reflect the current view of Resonate with respect to future events, including the satisfaction or waiver of the closing conditions to

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the merger, the obtainment of regulatory approvals, the completion of the merger or the aggregate balance of cash, cash equivalents and short-term investments on hand at the closing, and are subject to numerous risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of Resonate to be materially different from any future results, performance or achievements that may be expressed or implied by the forward-looking statements, including, among others:

If one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this proxy statement as anticipated, believed, estimated, expected, planned or intended.

 The Special Meeting

We are furnishing this proxy statement to you as part of the solicitation of proxies by our board of directors for use at the special meeting.

 Date, Time and Place

We will hold the special meeting at 385 Moffett Park Drive, Sunnyvale, California, at 10:00 a.m., local time, on March 31, 2003.

 Purpose of the Special Meeting

At the special meeting, we will ask you to adopt the merger agreement and approve the merger. The Resonate board of directors, based in part on the unanimous recommendation of a special committee comprised entirely of non-management independent directors, (1) has approved and declared the merger, the merger agreement and the transactions contemplated by the merger agreement advisable, (2) has declared that it is in the best interests of our stockholders that we enter into the merger agreement and complete the merger on the terms and conditions in the merger agreement and (3) recommends that you vote for the merger proposal.

 Record Date; Stock Entitled to Vote; Quorum

Only holders of record of our common stock at the close of business on February 27, 2003, are entitled to notice of and to vote at the special meeting. On the record date, 27,438,409 shares of our common stock were issued and outstanding and held by approximately 219 holders of record. A quorum will be present at the special meeting if a majority of the outstanding shares of our common stock entitled to vote as of the record date are represented in person or by proxy. Abstentions and broker non-votes will be counted for the purpose of establishing a quorum for the transaction of all business at the special meeting. In the event that a quorum is not present at the special meeting, the meeting will be adjourned or postponed to solicit additional proxies.

 Vote Required

The adoption of the merger agreement and approval of the merger requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock on the record date. Holders of record of our common stock on the record date are entitled to one vote per share at the special meeting on the merger proposal. If you abstain from voting, or do not vote, either in person or by proxy, or do not instruct the record holder of your shares how to vote, it will have the effect of counting as a vote against the merger proposal.

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 Voting by Our Directors, Executive Officers and Certain Stockholders

At the close of business on the record date, our directors and executive officers were entitled to vote 3,648,844 shares of our common stock, which represented approximately 13.3% of the outstanding shares of our common stock on that date. Pursuant to the terms of support agreements entered into with Mr. Watkins, our Chairman, Chief Executive Officer and President, and Mr. Hornstein, our Chief Financial Officer and General Counsel, each has agreed to vote all of their shares of common stock for the adoption of the merger agreement and approval of the merger. As of the record date, Mr. Watkins controlled 10,000 shares of our common stock and Mr. Hornstein controlled no shares of our common stock.

 Voting of Proxies; Appraisal Rights; Discretionary Authority

All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holders. Properly executed proxies that do not contain voting instructions will be voted for the merger proposal, which will prohibit you from qualifying for dissenters’ or appraisal rights.

If you wish to qualify for your dissenters’ or appraisal rights, you must NOT vote for the merger proposal, must not return a signed proxy card without voting instructions and must follow specific procedures that are described in other sections of this proxy statement.

To vote, please complete, sign, date and return the enclosed proxy, even if you plan on voting in person at the special meeting. Executing a proxy will not in any way affect your right to attend the special meeting and vote in person. If your shares are held in the name of your broker, bank or other nominee, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the special meeting.

Shares affirmatively voted for the adoption of the merger agreement and approval of the merger and properly executed proxies that do not contain voting instructions, will be voted for the merger proposal. If you abstain from voting, do not instruct your broker how to vote, or do not execute a proxy, it will have the effect of counting as a vote against the merger proposal. Brokers who hold shares of our common stock in street name for customers who are the beneficial owners of such shares may not exercise their discretionary voting power as to the merger proposal and may only vote such shares upon specific instructions from those customers.

The persons you name as proxies may propose and vote for one or more adjournments or postponements of the special meeting, including adjournments or postponements to permit further solicitations of proxies. No proxy voted against the merger proposal will be voted in favor of any adjournment or postponement.

We do not expect that any matter other than the merger proposal will be brought before the special meeting. If, however, our board of directors properly presents any other matters, the persons named as proxies will vote in accordance with their judgment as to matters that they believe to be in the best interests of the stockholders.

 Revocability of Proxies

The grant of a proxy does not preclude a stockholder from voting in person at the special meeting. You may revoke your proxy at any time before the shares reflected on your proxy card are voted at the special meeting by:

If you have instructed your broker to vote your shares, you must follow the directions received from your broker to change these instructions.

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 Solicitation of Proxies

All proxy solicitation costs will be borne by us. We have retained Mellon Investor Services LLC to aid in the solicitation of proxies and to verify records relating to the solicitation. Mellon Investor Services LLC will receive a fee of $7,500 and expense reimbursement for items such as mailing, copying, phone calls, faxes, travel and other related out-of-pocket expenses, and we will indemnify Mellon Investor Services LLC against any losses arising out of its proxy solicitation services on our behalf. The extent to which these proxy solicitation efforts will be necessary depends entirely upon how promptly proxies are received. You should send in your proxy by mail without delay. In addition to solicitation by mail, our directors, officers, employees and agents may solicit proxies from stockholders by telephone or other electronic means or in person. We also reimburse brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions.

You should not send your stock certificates with your proxy. A letter of transmittal from the payment agent with instructions for the surrender of Resonate common stock certificates will be mailed to you as soon as practicable after completion of the merger.

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 The Parties to the Merger

 Resonate

We develop and market software solutions for enterprises that wish to guarantee end-user response time and service levels of business-critical applications while cutting operating costs. Our Commander product suite significantly reduces problem resolution time while it simultaneously ensures transaction completion by routing end-users around problems.

Resonate was founded in July 1995 and began substantive operations in April 1996. From April 1996 through the first quarter of 1997, we primarily engaged in research activities, developing our products and building our business infrastructure. We began shipping our first software product, Resonate Central Dispatch, and first generated revenue from software license fees and implementation and consulting fees, in the first quarter of 1997. We released our Resonate Global Dispatch software product in the first quarter of 1998 and our Commander software product in the third quarter of 1999. In the fourth quarter of 2001, we released our Commander product.

We market and sell our software products through our direct sales force and indirect channels. Our indirect channels consist of server systems vendors, independent software vendors, value-added resellers, and system integrators. Our current relationships with these system integrators typically are structured as non-exclusive co-marketing and resale arrangements. In addition, we have entered into a limited number of reseller arrangements in which our products are embedded in the reseller’s products, for which we receive a royalty from the reseller.

Our principal executive offices are located at 385 Moffett Park Drive, Sunnyvale, California 94089, and our telephone number is (408) 548-5500. Additional information regarding Resonate is contained in our filings with the Securities and Exchange Commission. See “Where You Can Find More Information” on page 53.

 The Acquiring Parties

GTG Acquisition Corp., a Delaware corporation and an affiliate of Gores Technology Group, is the sole stockholder of Aprisma Management Technologies, Inc., a provider of IP fault and performance management software solutions. Gores Technology Group is a privately held international acquisition and management firm that pursues a strategy of acquiring promising high-technology organizations and managing them for growth and profitability.

Res Merger Sub, Inc. is a Delaware corporation and a wholly owned subsidiary of GTG Acquisition Corp. Res Merger Sub, Inc. was formed solely for the purpose of effecting the merger and the transactions related to the merger. Res Merger Sub, Inc. has not conducted any business operations except in furtherance of this purpose.

Res Merger Sub and GTG Acquisition Corp. both maintain their principal offices at 10877 Wilshire Boulevard, Los Angeles, CA 90024, and their telephone number is (310) 824-6106.

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 Merger

 Background of the Merger

In March 2002, at the direction of the Resonate board of directors, Broadview International LLC was contacted by Russell Siegelman, a member of the Resonate board of directors, in connection with the possibility of advising the company as to potential strategic alternatives.

On April 24, 2002, the Resonate board of directors held a meeting at which representatives of Broadview were present to discuss potential strategic alternatives available to the company. Following this discussion, the board of directors concluded that the company should not engage an investment banker to pursue strategic alternatives at that time.

From April 2002 through July 2002, various members of Resonate’s senior management met with numerous potential strategic partners to discuss potential strategic alternatives.

During September 2002, various members of Resonate’s senior management spoke with a number of investment banks as to each bank’s views of Resonate and potential strategic alternatives available to Resonate.

On October 17, 2002, Mr. Peter Watkins, our Chairman, Chief Executive Officer and President, Mr. Richard Hornstein, our Chief Financial Officer and General Counsel, and representatives of Broadview met to have preliminary discussions regarding the availability and related fees of Broadview in advising Resonate as to potential strategic alternatives.

Later on October 17, 2002, the board of directors held a meeting to discuss potential strategic alternatives for Resonate. Prior to this discussion, a member of the board of directors, Mr. Chris Marino, advised the board of directors that he was considering pursuing a potential business combination transaction with the company. Mr. Marino was then excused from the remainder of the meeting. Following the recusal of Mr. Marino, the remaining members of the board of directors, with the advice of Wilson Sonsini Goodrich & Rosati, Professional Corporation, legal counsel to Resonate, believed it was in the best interests of Resonate stockholders that a special committee of non-management directors be formed to review and evaluate potential strategic transactions and other transactions on behalf of the company. The board of directors authorized the creation of the special committee and appointed Messrs. Russell Siegelman, Robert Greene, John McFarlane, and David Murphy, all of the non-management members of the board of directors, as the members of the special committee. Mr. Siegelman was appointed chairman of the special committee. Wilson Sonsini Goodrich & Rosati was retained as legal counsel to the special committee.

On October 21, 2002, the special committee held a meeting to authorize the retention of Broadview as its financial advisor.

On October 24, 2002, Mr. Marino resigned from the board of directors.

On October 24, 2002, an engagement letter was signed between Broadview and the special committee, in which Broadview was retained as the financial advisor to the special committee.

On October 25, 2002, the special committee held a meeting at which representatives of Broadview and Wilson Sonsini Goodrich & Rosati, legal counsel to Resonate and the special committee, were present to review and discuss various strategic alternatives for Resonate including remaining an independent public company, the possibility of acquisitions or mergers with other companies, ceasing operations and distributing its assets through a liquidation or other transactions.

On October 31, 2002, representatives of Broadview met with Mr. Watkins; Mr. Hornstein; Mr. Brad Jung, Resonate’s Senior Director of Product Marketing; and Ms. Jennifer Carr, Resonate’s Director of Business Development; to conduct business diligence on the company.

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From November 1 through December 20, 2002, at the direction of the special committee, representatives of Broadview contacted numerous parties regarding their interest in a potential business combination transaction with Resonate.

From November 4 through November 25, 2002, representatives of Broadview met with Mr. Marino and discussed Mr. Marino’s intention to deliver an indication of interest regarding a potential business combination transaction with the company.

On November 11, 2002, the special committee received an indication of interest from Messrs. Watkins and Hornstein (Watkins/Hornstein), which stated that Watkins/Hornstein was interested in entering into discussions with Resonate regarding a potential business combination transaction at an aggregate purchase price of between $41 and $43 million (which would have resulted in payment to Resonate stockholders of between approximately $1.51 and $1.58 per share). Watkins/Hornstein proposed to finance the acquisition using solely the cash, cash equivalents and short-term investments of Resonate.

On November 12, 2002, the special committee held a meeting at which representatives of Broadview and Wilson Sonsini Goodrich & Rosati were present to review the status of discussions held by Broadview with various strategic parties and discuss the indication of interest received from Watkins/Hornstein.

On November 13, 2002, representatives of Broadview met with Messrs. Watkins and Hornstein to discuss and review the terms and financial assumptions underlying the Watkins/Hornstein indication of interest.

On November 18, 2002, the special committee received a written indication of interest from a private investment fund (Party A), which stated that Party A was interested in entering into discussions with Resonate regarding a potential business combination transaction pursuant to which Resonate stockholders would receive approximately $1.48 per share.

On November 21, 2002, Mr. Marino and Resonate entered into a mutual confidentiality agreement to allow for preliminary due diligence by each party.

On November 21, 2002, the special committee held a meeting at which representatives of Broadview and Wilson Sonsini Goodrich & Rosati were present. Representatives of Broadview updated the special committee on the status of discussions with various potential strategic parties. The special committee discussed the alternatives available to the company including remaining an independent public company, the possibility of acquisitions or mergers with other companies, or ceasing operations and distributing the company’s assets through a liquidation. Representatives of Broadview then reviewed with the special committee Broadview’s preliminary liquidation analysis of the company. The special committee and its advisors discussed the indication of interest received from Watkins/Hornstein and the preliminary interest of Mr. Marino in submitting an indication of interest as to a potential business combination transaction. As an inducement to each of Watkins/Hornstein and Mr. Marino to perform any necessary diligence, deliver a written indication of interest and negotiate the terms of a definitive merger agreement, the special committee approved the reimbursement of up to $20,000 of legal expenses to each party. At the meeting, it was determined that, in light of the indication of interest received from Watkins/Hornstein and the potential interest of Mr. Marino, it was advisable to retain special Delaware counsel for the special committee.

On November 21, 2002, the special committee received a written indication of interest from Mr. Marino, which stated that Mr. Marino was interested in entering into discussions with Resonate regarding a potential business combination transaction at an aggregate purchase price of approximately $45.8 million, pursuant to which Resonate stockholders would receive approximately $1.68 per share. Mr. Marino proposed to finance the acquisition using solely the cash, cash equivalents and short-term investments of Resonate.

On November 25, 2002, the special committee retained Richards, Layton & Finger as special Delaware counsel for the special committee.

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From November 25, 2002 through December 2, 2002, the special committee negotiated the terms of an engagement letter with a specialized investment bank, Houlihan Lokey Howard & Zukin Financial Advisors, Inc. The special committee sought to engage Houlihan Lokey to perform an analysis of the costs and benefits associated with a liquidation of the company.

On November 25, 2002, Houlihan Lokey was asked to prepare a preliminary analysis of the pro forma estimated value of the equity of Resonate, in an orderly liquidation, excluding any estimate of the value of the company’s intellectual property assets (the Preliminary Analysis), to be followed by a subsequent analysis that would include a pro forma estimated value of the company’s intellectual property assets (the Updated Analysis). Both the Preliminary Analysis and the Updated Analysis were to be provided to the special committee. The terms of Houlihan Lokey’s engagement prohibited the delivery of either document to any third party without Houlihan Lokey’s consent.

On November 26, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present. Representatives of Broadview updated the special committee on the status of discussions with various potential strategic parties. The special committee discussed the alternatives available to the company including remaining an independent public company, the possibility of acquisitions or mergers with other companies, or ceasing operations and distributing its assets through a liquidation. Broadview reviewed with the special committee the financial assumptions underlying Mr. Marino’s indication of interest. The special committee discussed the status of the negotiations regarding the engagement of Houlihan Lokey and determined, based on the status of the negotiations, that it was in the best interests of the stockholders to execute the engagement letter in substantially the form provided to the special committee at the meeting.

From November 26 through December 23, 2002, representatives of Wilson Sonsini Goodrich & Rosati and the respective legal counsels of Watkins/Hornstein and Mr. Marino separately negotiated the terms of definitive merger agreements. Neither Watkins/Hornstein nor Mr. Marino were advised of the identity of the other parties negotiating with the company, but each party was made aware of the interest of other parties in the company.

On December 2, 2002, representatives of Broadview spoke with representatives of Party A, who declared that Party A’s indication of interest to acquire the company was not hostile.

On December 4, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to review the current status of negotiations with each of Watkins/Hornstein and Mr. Marino. The special committee gave guidance to counsel regarding its views of the remaining open issues with Watkins/Hornstein and Mr. Marino.

On December 6, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the status of Broadview’s discussions with various potential strategic parties. Representatives of Broadview then reviewed with the special committee the responses of approximately 23 companies contacted by Broadview on Resonate’s behalf and with which a dialogue had occurred regarding a potential business combination transaction with the company.

On December 10, 2002, Resonate’s Ms. Carr and Mr. Jung met with Mr. Marino to discuss diligence issues related to the operations and technology of Resonate.

On December 11, 2002, Resonate’s Ms. Carr and Mr. Jung, met with Mr. Marino to review the operation of Resonate’s current suite of products.

On December 12, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the status of Broadview’s discussions with various potential strategic parties regarding a potential business combination

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transaction with the company. Representatives of Wilson Sonsini Goodrich & Rosati then updated the special committee on the current status of diligence efforts and negotiations with Watkins/Hornstein and Mr. Marino, respectively, as to definitive merger agreements.

On December 13, 2002, Party A and Resonate entered into a mutual confidentiality agreement to allow for preliminary due diligence by each party.

On December 16, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the status of Broadview’s discussions with additional strategic parties regarding a potential business combination transaction with the company and Broadview’s negotiations with Mr. Marino and Watkins/Hornstein regarding each party’s respective position. Representatives of Wilson Sonsini Goodrich & Rosati then updated the special committee on the current status of diligence efforts and negotiations with Watkins/Hornstein and Mr. Marino as to definitive merger agreements. Representatives of Broadview reviewed with the special committee the Preliminary Analysis dated December 13, 2002 prepared by Houlihan Lokey, which (subject to and based upon the various qualifications and assumptions set forth therein) estimated on a pro forma basis a value range for the liquidation of Resonate of between approximately $1.61 and $1.69 per share, assuming the commencement of a liquidation by Resonate as of March 31, 2003. The analysis was not prepared in anticipation of any particular transaction and, among other things, Houlihan Lokey was not asked to and did not compare the equity value of Resonate based on an orderly liquidation to the value attributable to the Resonate equity as a result of any proposed transaction. As stated above, the Preliminary Analysis did not include any estimates of the value of Resonate’s intellectual property assets. The special committee determined, after consultation with its advisors, that any proposal to acquire control of Resonate must surpass, on a per share basis, the high-end of the liquidation analysis figures set forth in the Preliminary Analysis.

Between December 17 and December 18, 2002, each party whose indication of interest contained a price per share less than the low-end of the liquidation value range for the company set forth in the Preliminary Analysis received a copy of the Preliminary Analysis after having executed a general release in favor of Houlihan Lokey as a condition to its consent for the special committee to deliver the Preliminary Analysis to such parties, and each such party was asked by representatives of Broadview to resubmit an indication of interest given the additional information.

On December 18, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to receive an update on Broadview’s discussions with various strategic parties regarding a potential business combination transaction with the company, the status of negotiations with Mr. Marino, Party A, and Watkins/Hornstein, and the estimated timing as to when final proposals would be submitted by the parties. The special committee then discussed with representatives of Wilson Sonsini Goodrich & Rosati the advisability of revising the change of control provisions currently in place with Messrs. Watkins and Hornstein to ensure that the consummation of any transaction with Watkins/Hornstein would not give rise to any payments to Messrs. Watkins and Hornstein under such provisions and to provide appropriate arrangements for their continued employment if their proposal was not selected, or if selected, was subsequently terminated in favor of a superior proposal.

On December 18, 2002, Party A stated that it did not want to be part of a competitive bidding process and withdrew its proposal.

On December 18, 2002, representatives of Broadview informed the remaining interested parties, Mr. Marino and Watkins/Hornstein, that final bids must be submitted to the special committee by no later than 5:00 p.m. pacific standard time on Monday, December 23, 2002.

On December 19, 2002, representatives of Broadview and Ms. Michelle Goodman, Resonate’s Controller, met with Mr. Marino to conduct additional financial due diligence.

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From December 19 through December 22, 2002, representatives of Broadview and Wilson Sonsini Goodrich & Rosati provided Mr. Marino and his representatives with additional legal due diligence materials.

On December 20, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger and Mr. Peter Watkins, in his capacity as Chief Executive Officer, were present to discuss Resonate’s preliminary fourth quarter operating results, which the special committee believed would enable its members to more appropriately evaluate each remaining bidder’s proposal. Following the discussion of the company’s preliminary operating results, Mr. Watkins was excused from the meeting. The special committee then reviewed with representatives of Broadview the status of each remaining bidder’s proposals and reviewed with representatives of Wilson Sonsini Goodrich & Rosati the terms of the respective merger agreements proposed by each bidder.

On December 20, 2002, representatives of Broadview contacted Gores, as well as a number of other financial buyers, regarding such parties’ potential interest in entering into discussions with Resonate regarding a potential business combination transaction.

On December 20, 2002, representatives of Broadview informed Mr. Marino that his current per share proposal of $1.68 was near the high-end of the liquidation value range for the company as set forth in the Preliminary Analysis prepared by Houlihan Lokey, and that the winning proposal must exceed the high-end of the per share liquidation value range for the company set forth in the Preliminary Analysis.

On December 20, 2002, representatives of Broadview spoke with representatives of Watkins/Hornstein regarding their current proposal. Broadview informed Watkins/Hornstein that the winning proposal must exceed the high-end of the per share liquidation value range for the company as set forth in the Preliminary Analysis.

On December 22, 2002, Messrs. Watkins and Hornstein each entered into mutual confidentiality agreements with Resonate regarding the proposed transaction and covering all confidential information previously provided or subsequently provided in connection with the proposed transaction. These confidentiality agreements were in addition to, and not in place of, confidentiality arrangements Messrs. Watkins and Hornstein already had in place with Resonate in connection with their status as company officers.

On December 22, 2002, representatives of Broadview answered certain remaining financial questions from Mr. Marino.

On the morning of December 23, 2002, representatives of Gores contacted Broadview and expressed an interest in entering into discussions with Resonate regarding a potential business combination transaction, pending preliminary diligence on behalf of Gores.

On December 23, 2002, representatives of Broadview conducted an auction designed to solicit each of Mr. Marino’s and Watkins/Hornstein’s best proposal to acquire the company. Mr. Marino’s opening proposal was a merger transaction in which Resonate stockholders would receive $1.73 in cash per share. Watkins/Hornstein’s opening proposal was a merger transaction in which Resonate stockholders would receive $1.696 in cash per share. Throughout the day, representatives of Broadview negotiated with each party to increase their respective proposals and updated the members of the special committee as to each new proposal. Following three rounds of negotiations with each party, Mr. Marino stated that he was unwilling to exceed the Watkins/Hornstein proposal of $1.79 in cash per share.

On December 23, 2002, the special committee held two meetings. At the first meeting, which was held prior to the termination of the auction process, the special committee met with its legal and financial advisors to review the terms of the merger agreements prepared for each party’s transaction. A representative of Wilson Sonsini Goodrich & Rosati reviewed with the special committee the terms and conditions of each proposed merger agreement in detail and, for the proposed Watkins/Hornstein transaction, the support agreements to be

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signed by Messrs. Watkins and Hornstein. Representatives of Broadview reviewed with the special committee the financial terms of each proposed transaction and the related financial analyses. The special committee discussed the costs and benefits of each party’s proposal with its advisors.

At the second meeting held on December 23, 2002, which was held following the cessation of the auction process, the special committee met with its legal and financial advisors to further discuss the terms of each merger agreement and the support agreements and the final proposals offered by each party. A representative of Wilson Sonsini Goodrich & Rosati reviewed with the special committee the terms and conditions of the proposed definitive merger agreement and support agreements for the proposed Watkins/Hornstein transaction. Representatives of Broadview reviewed with the special committee the financial terms of the Watkins/Hornstein proposal and the related financial analyses. Broadview then rendered its written opinion that, as of December 23, 2002, the consideration to be received in the proposed Watkins/Hornstein transaction was fair, from a financial point of view, to Resonate stockholders. Following this discussion, the special committee resolved to unanimously recommend the Watkins/Hornstein transaction to the Resonate board of directors.

On December 23, 2002, the Resonate board of directors held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the recommendation of the special committee. Based in part upon this recommendation and after reviewing the special committee’s process and procedures and other information deemed relevant by the Resonate board of directors, the Resonate board of directors (excluding Mr. Watkins, who did not participate in any of the deliberations of the board of directors) determined that the proposed merger with Watkins/Hornstein was advisable and in the best interests of Resonate stockholders and approved the merger agreement, the merger and the support agreements. Following this resolution by the Resonate board of directors, all parties executed the definitive merger agreement and the support agreements.

On the morning of December 24, 2002, Resonate issued a public announcement of the transaction with Watkins/Hornstein and Rocket Holdings.

 Certain Events Following the Signing of the Rocket Holdings Merger Agreement

On December 30, 2002, the special committee received two separate indications of interest from outside, third party bidders as to potential business combination transactions with Resonate. The first indication of interest was from Mr. Marino, which stated that Mr. Marino was interested in re-entering into discussions with Resonate regarding a potential business combination transaction in which Resonate stockholders would receive an amount in cash equal to $1.83 per share and otherwise on terms substantially similar to those entered into with Rocket Holdings. The second indication of interest was from Gores, which stated that it was interested in entering into discussions with Resonate regarding a potential business combination transaction in which Resonate stockholders would receive an amount in cash of between $1.90 and $2.00 per share.

On December 31, 2002, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to review the indications of interest received from Mr. Marino and Gores. Representatives of Broadview reviewed with the special committee the proposed terms of each indication of interest, the background of each party, including their respective financial resources and transaction experience, and the likelihood that either proposed business combination would be reasonably capable of being completed. Following the discussions with its legal and financial advisors, the special committee determined in good faith that either proposal would be reasonably likely to lead to a superior proposal and that the special committee should, in accordance with its fiduciary duties, afford access to the company to, and engage in negotiations and discussions with, each party regarding their respective proposals.

From December 31, 2002 through January 8, 2003, representatives of Wilson Sonsini Goodrich & Rosati, Broadview, and Gores negotiated the terms of a mutual confidentiality agreement.

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On January 1, 2003, pursuant to its obligations under the definitive merger agreement with Rocket Holdings, Resonate informed Rocket Holdings of the indications of interest (without disclosing the identity of the parties) received from Mr. Marino and Gores, and of the special committee’s intention to enter into negotiations and discussions with each party regarding their respective indication of interest.

On January 6, 2003, David Murphy resigned from the board of directors and the special committee.

On January 6, 2003, the board of directors held the first of two meetings at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger discussed the implementation of a stockholder rights plan.

From January 6 through January 8, 2003, representatives of Broadview met with representatives of Mr. Marino to review and analyze the financial assumptions underlying Mr. Marino’s revised proposal and his plan of operations for Resonate following the consummation of a transaction.

On January 6, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the status of negotiations with Mr. Marino and Gores. Representatives of Broadview noted for the special committee that negotiations with Gores had not yet commenced as the parties had yet to finalize the terms of a mutual confidentiality agreement.

On January 8, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the proposal from Mr. Marino and the status of negotiations with Gores. Representatives of Broadview reviewed with the special committee the results of their financial analysis regarding Mr. Marino’s proposal and plan of ongoing operations for the company and noted for the special committee that negotiations with Gores had still not yet commenced as the parties had yet to finalize the terms of a mutual confidentiality agreement. Representatives of Wilson Sonsini Goodrich & Rosati and Richards, Layton & Finger then reviewed with the special committee each member’s fiduciary duties, the special committee’s obligations under the terms of the Rocket Holdings merger agreement and the obligations of Messrs. Watkins and Hornstein to support a transaction recommended by the special committee, pursuant to their support agreements. Following these discussions, the special committee (after consultation with Broadview) determined that Mr. Marino’s proposal was more favorable to Resonate stockholders from a financial perspective than the proposed merger with Rocket Holdings, was reasonably capable of being completed and therefore constituted a superior proposal to the proposed Rocket Holdings merger.

On January 8, 2003, the special committee informed Rocket Holdings (without identifying Mr. Marino) that the special committee was providing Rocket Holdings with the required three business days notice, as required by the definitive agreement in place between Resonate and Rocket Holdings, of its determination that Mr. Marino’s proposal constituted a superior proposal to the proposed merger with Rocket Holdings.

On the evening of January 8, 2003, Gores and Resonate entered into a mutual confidentiality agreement to allow for preliminary due diligence by each party, and Gores scheduled a due diligence meeting with Broadview for January 10, 2003.

On January 9, 2003 the board of directors held a second meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the implementation of a stockholder rights plan, and the board of directors adopted the rights plan.

On January 9, 2003, Broadview met with Messrs. Watkins and Hornstein to review and analyze the financial assumptions underlying their plan of operations for Resonate following the consummation of a transaction and to determine if they were interested in modifying Rocket Holdings’ proposal given other parties’ expressions of interest.

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On January 10, 2003, representatives of Gores met with Ms. Karen Barnes, Resonate’s Vice President of Product Development; Mr. Jung; Ms. Goodman; and Ms. Carr to conduct financial and technical diligence on Resonate.

On January 13, 2003, Gores submitted a revised proposal which stated that it was interested in entering into a business combination transaction with the company in which Resonate stockholders would receive cash in the amount of approximately $1.95 per share and Gores would receive a termination fee in an amount between $1.6 million and $2.2 million payable upon the occurrence of certain events.

On January 13, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the terms of the pending Rocket Holdings transaction, Mr. Marino’s proposal, and the revised proposal from Gores. Representatives of Broadview compared and contrasted with the special committee the results of their financial analysis regarding Mr. Marino’s proposal and plan of ongoing operations for the company and their analysis of Rocket Holdings’ plan of operations following the consummation of a transaction. During the meeting, representatives of Broadview informed the special committee that they had recently received that day a counter proposal from Rocket Holdings that provided for Resonate stockholders to receive $1.83 in cash per share, a later termination date of April 30, 2003, a lower minimum cash balance closing condition of $57.5 million, and a requirement that a superior proposal provide at least $0.05 more per share in value to Resonate stockholders than the revised Rocket Holdings proposal. The special committee directed Broadview to contact Rocket Holdings and negotiate the terms of the counter proposal and continue discussions with Gores as to its most recent proposal.

On the evening of January 13, 2003, representatives of Broadview and Rocket Holdings met to negotiate the terms of the counter proposal. Subsequently, the parties agreed, subject to approval of the special committee and the board of directors, to all of the terms of the revised Rocket Holdings proposal except that the additional value requirement of a superior proposal was reduced from $0.05 to $0.03 per share.

From January 13 through January 14, 2003, representatives of Wilson Sonsini Goodrich & Rosati and the legal counsel for Rocket Holdings negotiated the terms of an amendment to the Rocket Holdings definitive merger agreement.

On January 14, 2003, Mr. Siegelman received a letter from a private equity fund (Party B), which contained Party B’s indication of interest to enter into discussions with Resonate regarding a potential business combination transaction in which Resonate stockholders would receive approximately $1.95 per share.

On January 14, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the final counter proposal from Rocket Holdings. A representative of Wilson Sonsini Goodrich & Rosati reviewed with the special committee the terms of the amendment to the merger agreement. Representatives from Broadview reviewed with the special committee the financial terms of the final Rocket Holdings counter proposal and the related financial analyses. Broadview then rendered its written opinion that, as of January 14, 2003, the consideration to be received in the Rocket Holdings transaction, as amended, was fair, from a financial point of view, to Resonate stockholders. The special committee discussed the costs and benefits of the final counter proposal with its advisors. Following this discussion, the special committee resolved to unanimously recommend the Rocket Holdings final counter proposal and the amendment to the merger agreement to the Resonate board of directors. The special committee then discussed with its advisors the indication of interest received from Party B. Representatives of Broadview reviewed with the special committee Party B’s financial resources and transaction history. The special committee noted that the potentially limited financial resources of Party B could impair its ability to operate the business on a going forward basis at Party B’s proposed price. The special committee directed Broadview to analyze the viability, from a financial perspective, as well as the certainty of closure of Party B’s proposed transaction.

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On January 14, 2003, the Resonate board of directors held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the recommendation of the special committee. Based in part upon this recommendation and after reviewing the special committee’s process and procedures and other information deemed relevant by the Resonate board of directors, the Resonate board of directors (excluding Mr. Watkins, who did not participate in any of the deliberations of the board of directors) determined that the final Rocket Holdings counter proposal was advisable and in the best interests of Resonate stockholders and approved the amendment to the merger agreement and the merger. Following this resolution by the Resonate board of directors, all parties executed the amendment to the merger agreement.

On January 14, 2003, representatives of Broadview and Gores discussed Gores’ most recent proposal.

On January 14, 2003, the special committee informed Rocket Holdings of the material terms of the revised proposal it had received from Gores on January 13, 2003.

From January 14, 2003 through January 16, 2003, representatives of Broadview performed preliminary financial diligence and analysis on Party B and Party B’s ability to consummate the proposed transaction.

On the morning of January 15, 2003, Resonate issued a public announcement of the amended terms of the transaction with Rocket Holdings.

On January 15, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the revised proposal from Gores. A representative of Wilson Sonsini Goodrich & Rosati reviewed and discussed with the special committee the terms of Gores’ proposal. Following this review and a discussion by the members of the special committee, the special committee directed its advisors to negotiate with Gores as to price, an extension of the closing date, a reduction in the aggregate cash, cash equivalent and short-term investment balance required at closing, the payment of a termination fee by Resonate and the circumstances under which a termination fee would be payable.

From January 15 through January 16, 2003, representatives of Broadview and Wilson Sonsini Goodrich & Rosati and Gores’ representatives negotiated the terms of Gores’ revised proposal.

On January 16, 2003, Gores delivered a revised proposal to the special committee, the terms of which included a price of between $1.90 to $1.94 in cash per share, a termination fee payable in certain circumstances in an amount between $0.8 million and $1.6 million, the payment by Resonate of the fees and expenses of Gores, which amount may not exceed $225,000, a closing date of April 30, 2003, and a reduction in the aggregate amount of cash, cash equivalents, and short-term investments that Resonate would be required to have at closing from $60 million to $57.5 million.

On January 16, 2003, the special committee held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the revised proposal from Gores received on January 16, 2003 and Broadview’s preliminary diligence regarding Party B. A representative of Broadview reviewed with the special committee Broadview’s financial diligence regarding Party B. Following the discussion, the special committee decided that it was unable to conclude that Party B’s proposal constituted an acquisition proposal as defined in the amended merger agreement currently in place with Rocket Holdings. A representative of Wilson Sonsini Goodrich & Rosati reviewed and discussed with the special committee the terms of Gores’ revised proposal and representatives of Broadview reviewed with the special committee the financial analyses of the revised proposal. Following this review and a discussion by the members of the special committee, the special committee determined that it was in the best interest of Resonate stockholders to inform Rocket Holdings that the revised proposal of Gores constituted a superior proposal under the terms of the amended merger agreement and directed its advisors to finalize the terms of a definitive merger agreement. Gores informed Resonate that GTG Acquisition Corp., an affiliate of Gores and the sole stockholder of Aprisma Management Technologies, Inc., would be the actual party to the merger agreement.

On the evening of January 16, 2003, the special committee provided notice to Rocket Holdings of the material terms of Gores’ revised proposal, that the special committee, after discussions with its advisors,

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determined that the revised proposal constituted a superior proposal (as defined in the amended merger agreement) to the transaction contemplated by the amended merger agreement between Resonate and Rocket Holdings, and that the special committee was providing Rocket Holdings with the required three business days notice prior to terminating the amended merger agreement. The special committee requested that Rocket Holdings waive the requirement that the special committee wait three business days prior to terminating the Rocket Holdings amended merger agreement and entering into a merger agreement with GTG.

From January 16 through January 21, 2003, representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Gores, finalized the terms of a definitive merger agreement and an indemnity agreement with an affiliate of Gores and GTG, which provides for such entity to indemnify Resonate for certain breaches of the definitive merger agreement by GTG or Res Merger Sub, the two Gores entities that were to be parties to the proposed merger.

On January 17, 2003, Rocket Holdings informed the special committee that, at the special committee’s request, it was waiving the requirement that the special committee wait three business days prior to terminating the amended merger agreement and entering into a merger agreement with another party.

On January 20, 2003, the special committee received a letter from Mr. Marino restating his interest in entering into discussions with Resonate regarding a potential business combination transaction pursuant to which Resonate stockholders would receive $1.86 in cash per share.

On January 21, 2003, the special committee received an indication of interest from a private equity firm (Party C) which stated that Party C was interested in entering into discussions with Resonate regarding a potential business combination transaction in which Resonate stockholders would receive an amount in cash equal to $2.01 per share, subject to the diligence of Party C and the negotiation of a definitive merger agreement, which Party C estimated would take approximately three weeks. Party C also stated that it would finance the proposed transaction with outside financing.

On January 21, 2003, the special committee held two meetings at each of which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present. At the first meeting, the special committee reviewed with its legal and financial advisors the terms of the merger agreement with GTG and the indemnity agreement with an affiliate of Gores and GTG. A representative of Wilson Sonsini Goodrich & Rosati reviewed with the special committee the terms and conditions of the proposed merger agreement and indemnity agreement and noted for the special committee that the proposed GTG merger agreement was substantially identical to the amended merger agreement with Rocket Holdings. Representatives of Broadview reviewed with the special committee the financial terms of the proposed transaction and the related financial analyses. The special committee discussed the costs and benefits of the proposal with its advisors versus the contemplated transaction with Rocket Holdings. The special committee then discussed the indication of interest received from Party C. The special committee requested that Broadview provide Party C with a customary confidentiality agreement regarding the proposed transaction for execution and that Broadview conduct preliminary financial due diligence on Party C as to its available sources of financing for the proposed transaction as well as its record of successfully consummating similar transactions.

At the second meeting, the special committee met to further discuss the terms of the proposed GTG merger agreement and indemnity agreement. A representative of Wilson Sonsini Goodrich & Rosati further reviewed with the special committee the terms and conditions of the proposed definitive merger agreement, including a discussion of the price adjustment mechanism based upon the aggregate closing cash, cash equivalents and short-term investment position of Resonate, the obligation of Resonate to pay a termination fee to GTG in certain circumstances, and the terms and conditions of the indemnity agreement. Representatives of Broadview updated the special committee on the results of Broadview’s financial due diligence on the affiliate of Gores and GTG that would be a party to the indemnity agreement. Representatives of Broadview then reviewed with the special committee the financial terms of the Gores proposal (including the price adjustment and termination fee features) and the related financial analyses. Broadview also discussed the Updated Analysis dated as of January 21, 2003 prepared by Houlihan Lokey, which was delivered to the special committee on the afternoon of January 21, 2003.

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The Updated Analysis reflected updated balance sheet information, the resolution of a lawsuit and included a pro-forma estimate of the value of Resonate’s intellectual property assets. The Updated Analysis (subject to and based upon the various qualifications and assumptions set forth therein) set forth a pro forma per share value range for the liquidation of Resonate of between approximately $1.67 and $1.76. Broadview then rendered its written opinion that, as of January 21, 2003, the consideration to be received in the proposed GTG transaction was fair, from a financial point of view, to Resonate stockholders. Following this discussion, the special committee resolved to unanimously recommend the GTG transaction to the Resonate board of directors.

On the evening of January 21, 2003, the special committee informed Rocket Holdings that the special committee was terminating the Rocket Holdings merger agreement, as amended, and entering into a merger agreement with GTG since GTG’s proposal constituted a superior proposal, as defined in the Rocket Holdings merger agreement, as amended.

On January 21, 2003, the Resonate board of directors held a meeting at which representatives of Broadview, Wilson Sonsini Goodrich & Rosati, and Richards, Layton & Finger were present to discuss the recommendation of the special committee. Based in part upon this recommendation and after reviewing the special committee’s process and procedures and other information deemed relevant by the Resonate board of directors, the Resonate board of directors (excluding Mr. Watkins, who did not participate in any of the deliberations of the board of directors) determined that the proposed merger with GTG was advisable and in the best interests of Resonate stockholders and approved the merger agreement, the indemnity agreement and the merger. Following this resolution by the Resonate board of directors, all parties executed the definitive merger agreement and the indemnity agreement.

On the morning of January 22, 2003, Resonate issued a public announcement of the termination of the transaction with Rocket Holdings and the execution of a merger agreement with GTG.

 Certain Events Following the Signing of the GTG Merger Agreement

After the signing of the merger agreement with GTG on January 21, 2003, the special committee met on three separate occasions from February 3 through February 21, 2003 to discuss other indications of interest that the special committee had received from third parties regarding potential business combination transactions with Resonate. Following discussions with the special committee’s legal and financial advisors at these meetings, the special committee deemed three of these proposals acquisition proposals, as defined in the merger agreement. Two of the parties that had submitted acquisition proposals to the special committee have subsequently withdrawn their respective proposals after performing substantial legal and financial due diligence on Resonate. The special committee did not deem any acquisition proposal that it received subsequent to the execution of the GTG merger agreement a superior proposal, as defined in the merger agreement.

 Reasons for the Merger and Recommendation of the Special Committee and the Board

Reasons for the Merger.    In recommending the merger agreement and the merger to the board of directors, the special committee consulted with Resonate’s management, as well as the special committee’s financial advisor and legal counsel, and considered the short and long-term prospects of Resonate including our strategic business plan, current product offerings and operations, product development efforts, financial position, current securities market conditions and potential for future growth in revenues, sales and earnings.

The special committee considered a number of potentially positive factors in its deliberations, including:

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The special committee also considered a number of potentially negative factors in its deliberations concerning the merger, including:

During its consideration of the merger, the special committee and our board of directors were aware our directors and executive officers, including Messrs. Watkins and Hornstein, have interests in the merger that are different from or in addition to those of our stockholders generally, as described under “The Merger—Interests of Our Directors and Executive Officers in the Merger.”

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 Alternative Strategic Transactions Considered by the Special Committee

In addition to considering the sale of Resonate to GTG, the special committee considered the following alternatives:

Liquidation of Resonate.    The special committee considered whether Resonate’s stockholders would benefit from a liquidation of the company in light of the fact that Resonate’s cash on hand, revenues and profits will likely continue to decline over time. In evaluating the desirability of liquidating the company, each member of the special committee considered the following facts:

The fact that the per share merger consideration exceeds the high end of the liquidation range, and the entire merger consideration is payable upon consummation of the merger, contributed to the special committee determining that the merger was more beneficial to the stockholders than a liquidation.

Cash Tender Offer.    The special committee considered a cash tender offer for all of the shares held by Resonate stockholders. The special committee ultimately rejected this alternative in the belief that the merger would be more efficient and equitable than a transaction involving a tender offer. While the merger will result in an acquisition of 100% of the shares, it is unlikely that a tender offer would yield the same result. It is almost certain that in order to obtain 100% of the shares, Resonate would have had to complete a second-step merger after completion of the cash tender offer. Such a second-step merger would have added time and expense to the transaction without providing a material benefit to Resonate stockholders.

Distribution of Cash as a Dividend.    The special committee also considered distributing a significant portion of the cash held by Resonate to our stockholders as a special dividend, thereby allowing Resonate’s stockholders to retain an equity interest in Resonate. The special committee ultimately rejected this alternative because it believed that this alternative would result in the trading price of the shares declining below levels required for the shares to continue to be quoted on the Nasdaq National Market. This would result in Resonate’s stockholders having a less liquid equity interest, as compared to the equity interest held by stockholders as of the date of this proxy statement. The resulting company would be a very small company with few assets or long-term prospects.

Merger with Rocket Holdings.    The special committee considered whether the stockholders would benefit from terminating the amended merger agreement with Rocket Holdings and entering into the merger agreement with GTG. In evaluating the desirability of terminating the amended merger agreement with Rocket Holdings, the special committee considered the following:

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In light of these factors, the special committee determined that the merger agreement with GTG provided a greater likelihood of providing the highest return to Resonate stockholders than the amended merger agreement with Rocket Holdings.

 Recommendation of Our Special Committee

In light of the factors considered by the special committee in connection with its evaluation of the merger, the special committee did not find it necessary to quantify or otherwise attempt to assign relative importance to the specific factors considered in making its determination, nor did it evaluate whether the factors were of equal importance. However, based upon these factors, the evaluation of all the relevant information and analysis (subject to and based upon the various qualifications and assumptions set forth therein) provided to them by Broadview and Houlihan Lokey and taking into account the existing trading ranges for Resonate common stock, the special committee unanimously recommended the merger agreement and merger to the Resonate board of directors. In considering the factors described above, individual members of the special committee may have given different weights to different factors.

 Recommendation of Our Board of Directors

Mr. Watkins, due to a conflict of interest resulting from his affiliation with Rocket Holdings, recused himself from all of the board of directors’ deliberations and recommendation regarding the merger. As a result of the exclusion of Mr. Watkins, our board of directors consists entirely of the members of the special committee. Based in part on the special committee’s unanimous recommendation and the process and substantive considerations of the special committee, our board of directors (1) approved and declared the merger, the merger agreement and the transactions contemplated by the merger agreement advisable, (2) declared that it is in the best interests of our stockholders that we enter into the merger agreement and complete the merger on the terms and conditions set forth in the merger agreement and (3) recommends that you vote for the merger proposal.

 Opinion of Broadview International

Pursuant to a letter agreement dated as of October 24, 2002, Broadview was engaged to act as financial advisor to the special committee and to render an opinion to the special committee regarding the fairness of the merger consideration, from a financial point of view, to Resonate stockholders. The special committee selected Broadview to act as financial advisor based on Broadview’s reputation and experience in the information technology, communication and media sector. At the meeting of the special committee on January 21, 2003, Broadview delivered its written opinion that, as of January 21, 2003, based upon and subject to various factors and assumptions, the merger consideration was fair, from a financial point of view, to Resonate stockholders.

Broadview’s opinion, which describes the assumptions made, matters considered and limitations on the review undertaken by Broadview, is attached as Annex D to this document. Resonate stockholders are urged to, and should, read the Broadview opinion carefully and in its entirety. The Broadview opinion is directed to the special committee and addresses only the fairness of the merger consideration from a financial point of view to the holders of shares of Resonate common stock as of the date of the opinion. The Broadview opinion does not constitute a recommendation to any holder of Resonate common stock as to how such stockholder should vote on the merger. The summary of the Broadview opinion set forth in this proxy statement, although materially complete, is qualified in its entirety by reference to the full text of such opinion.

In connection with rendering its opinion, Broadview, among other things:

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In rendering its opinion, Broadview relied, without independent verification, on the accuracy and completeness of all the financial and other information, including without limitation the representations and warranties contained in the merger agreement, that was publicly available or furnished to Broadview by Resonate. With respect to the financial projections examined by Broadview, Broadview assumed that they were reasonably prepared and reflected the best available estimates of the management of Resonate as to the future performance of Resonate. In addition, without limiting the assumptions set forth in the Preliminary Analysis regarding the scope of the analysis and review undertaken by Houlihan Lokey, Broadview assumed that the liquidation analysis accurately reflected the range of aggregate asset values that would be available to be distributed to stockholders upon a liquidation of Resonate. Broadview did not make any independent appraisal or valuation of any of Resonate’s assets.

Broadview understood that in assessing the various alternatives available to Resonate, the special committee had retained a third party, Houlihan Lokey, to conduct a liquidation analysis of Resonate. In addition, Broadview was aware of an indemnification agreement that was entered into in connection with the merger, pursuant to which, among other things, Pacific Credit Corp. agreed (i) to indemnify Resonate for losses arising out of (A) a material breach of the merger agreement by GTG or Res Merger Sub prior to closing and (B) the failure by the surviving corporation (as defined in the merger agreement) to perform its indemnification obligations contained in Section 5.7 of the merger agreement for a period of one year following the closing of the merger and (ii) to maintain sufficient net assets with which to perform its indemnification obligations under the indemnification agreement. In addition, Broadview was aware that Resonate had received an acquisition offer from a third party other than GTG. The Broadview opinion addressed the fairness of the merger consideration from a financial point of view to Resonate stockholders, other than GTG and its affiliates, and was not a recommendation as to which alternative available to Resonate should be pursued by the special committee or the board of directors.

For purposes of the opinion, Broadview assumed that neither Resonate nor GTG was involved in any material transaction other than the merger, other publicly announced transactions, and those activities undertaken in the ordinary course of conducting their respective businesses. The opinion is necessarily based upon market, economic, financial and other conditions as they existed and could be evaluated as of January 21, 2003, and any change in such conditions would require a reevaluation of Broadview’s opinion.

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The following is a brief summary of some of the sources of information and valuation methodologies employed by Broadview in rendering Broadview’s opinion. These analyses were orally presented to the special committee at its meeting on January 21, 2003. This summary includes the financial analyses used by Broadview and deemed to be material, but does not purport to be a complete description of analyses performed by Broadview in arriving at its opinion. Broadview did not explicitly assign any relative weights to the various factors or analyses considered. This summary of financial analyses includes information presented in tabular format. In order to fully understand the financial analyses used by Broadview, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.

Resonate Stock Performance Analysis—Broadview compared the recent stock performance of Resonate with that of the NASDAQ Composite and the Resonate Comparable Index. The Resonate Comparable Index is comprised of public companies that Broadview deemed comparable to Resonate. Broadview selected five public company comparables in the Network and Application Management Industry, with Trailing Twelve Month (“TTM”) revenue of less than $50 million, TTM Year-Over-Year Revenue Growth of less than five percent and negative TTM Earnings Before Interest and Taxes (“EBIT”). The Resonate Comparable Index consists of the following companies: Segue Software, Inc.; Radview Software, Ltd.; Marimba, Inc.; InfoVista S.A.; and Keynote Systems, Inc.

Public Company Comparable Analysis—Broadview considered ratios of market capitalization, adjusted for cash and debt when necessary, to selected historical operating and balance sheet results in order to derive multiples placed on a company in a particular market segment. In order to perform this analysis, Broadview compared financial information of Resonate with publicly available information for the companies comprising the Resonate Comparable Index. For this analysis, as well as other analyses, Broadview examined publicly available information.

The following table presents, as of January 21, 2003, the median multiples and the range of multiples for the Resonate Comparable Index of total market capitalization (defined as equity market capitalization plus total debt minus cash and cash equivalents) divided by selected operating metrics:

The following table presents, as of January 21, 2003, the median implied per share values and the range of implied per share values of Resonate, calculated by using the multiples shown above and the appropriate Resonate operating or balance sheet metric:

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No company utilized in the public company comparables analysis as a comparison is identical to Resonate. In evaluating the comparables, Broadview made numerous assumptions with respect to Network and Application Management Industry performance and general economic conditions, many of which are beyond the control of Resonate. Mathematical analysis, such as determining the median, average, or range, is not in itself a meaningful method of using comparable company data.

Transaction Premiums Paid Analysis—Broadview considered the premiums paid above a seller’s share price in order to determine the additional value strategic and financial acquirers, when compared to public stockholders, are willing to pay for companies in a particular market segment. In order to perform this analysis, Broadview reviewed a number of transactions involving software vendors from January 1, 2001 to January 21, 2003 with equity consideration between $10 million and $100 million. Transactions were selected from Broadview’s proprietary database of published and confidential merger and acquisition transactions in the information technology, communication and media industries.

The software transactions used were the acquisition of:

Credit Management Solutions, Inc. by The First American Corporation

Wasatch Interactive Learning Corporation by PLATO Learning, Inc.

Telemate.net Software, Inc. by Verso Technologies, Inc.

Starbase Corporation by Borland Software Corporation

INTERLINQ Software Corporation by John H. Harland Company (Harland Financial Solutions, Inc.)

eshare communications, Inc. by divine, inc.

Liquent, Inc. by Information Holdings, Inc.

Eprise Corporation by divine, inc.

NetGenesis Corp. by SPSS Inc.

NetSpeak Corporation by Adir Technologies, Inc.

Applied Terravision Systems, Inc. by COGNICASE Inc.

Exigent International, Inc. by Harris Corporation

Fourth Shift Corporation by AremisSoft Corporation

Extensity, Inc. by Geac Computer Corporation, Ltd.

SignalSoft Corporation by Openwave Systems Inc.

Ecometry Corporation by SG Merger Corporation

Micrografx, Inc. by Corel Corporation

Ezenet Corp. by COGNICASE Inc.

Prophet 21, Inc. by Thoma Cressey Equity Partners, Inc. and LLR Partners, Inc.

Centrinity, Inc. by Open Text Corporation

Mediaplex, Inc. by ValueClick, Inc.

eXcelon Corporation by Progress Software Corporation

SoftQuad Software, Ltd. by Corel Corporation

Vicinity Corporation by Microsoft Corporation

TCSI Corporation by Rocket Software, Inc.

AvantGo, Inc. by Sybase, Inc.

Accelio Corporation by Adobe Systems Incorporated

InfoInterActive Inc. by AOL Time Warner Inc.

Crosskeys Systems Corporation by Orchestream Holdings plc

MessageMedia, Inc. by DoubleClick, Inc.

MGI Software Corporation by Roxio, Inc.

Eagle Point Software Corporation by JB Acquisitions LLC

Alysis Technologies, Inc. by Pitney Bowes, Inc.

Prime Response, Inc. by Chordiant Software, Inc.

Momentum Business Applications, Inc. by PeopleSoft, Inc.

Dynamic Healthcare Technologies, Inc. by Cerner Corporation

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Open Market, Inc. by divine, inc.

FrontStep, Inc. by Mapics, Inc.

Delano Technology Corporation by divine, inc.

CuseeMe Networks, Inc. by First Virtual Communications, Inc.

MedPlus, Inc. by Quest Diagnostics Incorporated

Broadbase Software, Inc. by Kana Communications, Inc.

The following table presents, as of January 21, 2003, the median premium and the range of premiums for these transactions calculated by dividing

The following table presents the median implied value and the range of implied values of Resonate’s stock, calculated by using the premiums shown above and Resonate’s share price 20 trading days prior to January 21, 2003:

No transaction utilized as a comparable in the transaction premiums paid analysis is identical to the Merger. In evaluating the comparables, Broadview made numerous assumptions with respect to software industry performance and general economic conditions, many of which are beyond the control of Resonate. Mathematical analysis, such as determining the average, median, or range is not in itself a meaningful method of using comparable transaction data.

Present Value of Future Potential Share Price Analysis—Broadview calculated the present value of the future potential share price of shares of Resonate common stock using management revenue estimates for the twelve month periods ending December 31, 2003 and December 31, 2004. The implied share price calculated using the median Total Market Capitalization to Last Reported Twelve Months Revenue ratio for Resonate public company comparables applied to management estimates and discounted based on the Capital Asset Pricing Model using the median capital-structure adjusted beta for the public company comparables is not meaningful (“NM”) for the projected 12/31/03 TTM Revenue and NM for the projected 12/31/04 TTM Revenue.

The analysis implies the following medians and ranges for per share value:

Liquidation Analysis—Broadview considered the per share liquidation value if Resonate were to commence a liquidation on March 31, 2003. Broadview relied upon the aggregate value of the company’s assets set forth in the Preliminary Analysis, which was prepared for the special committee by Houlihan Lokey, as of December 13, 2002. Utilizing the endpoints of the range of the aggregate liquidation values as set forth in the

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Preliminary Analysis, Broadview derived a cash per fully diluted share range of values that would be distributed to Resonate stockholders in the event of liquidation. Based on the aggregate liquidation values set forth in the Preliminary Analysis and Broadview’s own estimate of the fully diluted shares outstanding (which differed by approximately 100,000 shares from Houlihan Lokey’s estimate of fully diluted shares outstanding due to differing outstanding share calculation methodologies), if Resonate entered into a liquidation on March 31, 2003, Broadview calculated that the per share liquidation range would be between $1.60 and $1.68 on a pro forma basis.

Consideration of the Discounted Cash Flow Analysis—Although discounted cash flow is a commonly used valuation methodology, Broadview did not employ such an analysis for the purposes of valuing Resonate. Discounted cash flow analysis is most appropriate for companies that exhibit relatively steady or somewhat predictable streams of future cash flow. Given the uncertainty in estimating both the future cash flows and sustainable long-term growth rate for Resonate, and given that Resonate is currently generating negative free cash flow, Broadview considered a discounted cash flow analysis inappropriate for valuing Resonate.

Evaluation of the Market for the Company—In evaluating the fairness of the merger Consideration, Broadview solicited interest from a broad set of prospective strategic and financial buyers of Resonate, and evaluated the available opportunities for selling Resonate to those prospective buyers. In Broadview’s view, the fair market value of a company is best established by the price that a willing buyer would pay to a willing seller in a comprehensive competitive selling process. In undertaking this effort, Broadview undertook a comprehensive competitive selling process in its attempt to maximize value for stockholders. Broadview approached:

Strategic Buyers:    Broadview marketed Resonate to an extensive set of potential buyers that participate in the systems and network management software markets. These potential buyers provided negative feedback about the strategic and financial value of the business, citing, among other reasons, Resonate’s poor financial performance, minimal level of market penetration with its flagship Commander Solutions product, and product overlap with the potential buyers’ own products.

Financial Buyers:    Broadview marketed Resonate to a range of financial buyers that had previously expressed interest in evaluating acquisitions of public software companies. There were a limited number of interested parties in the business.

In spite of the comprehensive sales process, Broadview recognized there may have been a potential buyer it did not contact. Consequently, the terms of the merger agreement relating to the ability of an alternative buyer to make a superior offer and complete a transaction were important to the comprehensiveness of a competitive process. The merger agreement provided for the special committee to entertain discussions with any prospective buyer that submitted a higher, qualified offer.

In connection with the review of the merger by the Resonate board, Broadview performed a variety of financial and comparative analyses. The summary set forth above does not purport to be a complete description of the analyses performed by Broadview in connection with the merger.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. In arriving at its opinion, Broadview considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered by it. Furthermore, Broadview believes that selecting any portion of its analyses, without considering all analyses, would create an incomplete view of the process underlying its opinion.

In performing its analyses, Broadview made numerous assumptions with respect to industry performance and general business and economic conditions and other matters, many of which are beyond the control of Resonate. The analyses performed by Broadview are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses. The merger consideration pursuant to the merger agreement and other terms of the merger agreement were determined

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through arm’s length negotiations and a competitive bidding process, and were approved by the special committee. Broadview provided advice to the special committee during such negotiations; however, Broadview did not recommend any specific consideration to the special committee. In addition, Broadview’s opinion and presentation to the special committee was one of many factors taken into consideration by the special committee in making its decision to approve the merger. Consequently, the Broadview analyses as described above should not be viewed as determinative of the opinion of the special committee with respect to the value of Resonate or of whether the special committee would have been willing to agree to a different consideration.

Upon consummation of the merger, Resonate will be obligated to pay Broadview a transaction fee of 1.25% of the total consideration in excess of $20,000,000 received by Resonate shareholders, subject to a minimum transaction fee of $750,000. Resonate has already paid Broadview retainer fees of $150,000 and fairness opinion fees of $650,000. $700,000 of the retainer fees and fairness opinion fees will be credited against the transaction fee payable by Resonate upon completion of the merger. In addition, Resonate has agreed to indemnify Broadview and its affiliates against certain liabilities and expenses related to their engagement, including liabilities under the federal securities laws. The terms of the fee arrangement with Broadview, which Resonate and Broadview believe are customary in transactions of this nature, were negotiated at arm’s length between Resonate and Broadview, and the Resonate Board was aware of the nature of the fee arrangement, including the fact that a significant portion of the fees payable to Broadview is contingent upon completion of the merger.

 Liquidation Analysis of Houlihan Lokey

Pursuant to a letter agreement dated as of November 25, 2002, the special committee retained Houlihan Lokey to prepare an analysis of the estimated value of the equity of Resonate Inc. in an orderly liquidation. On December 13, 2002, Houlihan Lokey delivered its Preliminary Analysis, which excluded any estimate of the value of the company’s intellectual property assets, and which estimated that (subject to and based upon the various qualifications and assumptions set forth therein) the value of the equity of Resonate ranged from approximately $1.61 to $1.69 per share. On January 21, 2003, Houlihan Lokey delivered its Updated Analysis which included an estimate of the value of the company’s intellectual property assets, and which estimated that (subject to and based upon the various qualifications and assumptions set forth therein) the value of the equity of Resonate ranged from approximately $1.67 to 1.76 per share. The special committee retained Houlihan Lokey based upon Houlihan Lokey’s experience in the valuation of businesses and their expertise in connection with mergers, acquisitions, recapitalizations and similar transactions. Houlihan Lokey is a nationally recognized investment banking firm that is engaged in providing financial advisory services in connection with mergers and acquisitions, leveraged buyouts, and business valuations for a variety of regulatory and planning purposes, recapitalizations, financial restructurings, and private placements of debt and equity securities.

Houlihan Lokey’s Preliminary Analysis and Updated Analysis, which describe the assumptions made, matters considered and limitations on the review undertaken by Houlihan Lokey, are attached as Annexes B and C, respectively, to this document. Resonate stockholders are urged to, and should, read the Preliminary Analysis and Updated Analysis carefully and in their entirety. The Preliminary Analysis and Updated Analysis were directed solely to the special committee and do not constitute a recommendation to any holder of Resonate common stock as to how such stockholder should vote on the merger. The analysis, estimates and conclusions set forth in the Preliminary Analysis and Updated Analysis were not intended by Houlihan Lokey, and should not be construed, to be investment advice in any manner whatsoever. Furthermore, no opinion, counsel or interpretation was intended in matters that require legal, accounting, tax or other appropriate professional advice. The Preliminary Analysis and Updated Analysis assumed that such opinions, counsel or interpretations have been or will be obtained by the special committee and the company from the appropriate professional sources. The summaries of the Preliminary Analysis and Updated Analysis set forth in this proxy statement are qualified in their entirety by reference to the full text of such analyses.

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In preparing the Preliminary Analysis and Updated Analysis, Houlihan Lokey reviewed Resonate’s specific asset classes including: (i) cash and cash equivalents; (ii) accounts receivable; (iii) prepaid expenses and other current assets; and (iv) fixed assets. Based on discussions with and information provided by Resonate management, Houlihan Lokey adjusted the values of these asset classes to estimate the realizable cash value of each. Houlihan Lokey also valued, with respect to the Updated Analysis only, the company’s intellectual property (“IP”). Houlihan Lokey relied primarily on the market approach in valuing Resonate’s IP in liquidation. Furthermore, Houlihan Lokey reviewed a number of transactions in which intellectual property was sold in the context of a liquidation, dissolution or distressed sale. Houlihan Lokey also compared the specific circumstances of Resonate and its IP, including a consideration of the foregoing and other factors, with the specific transactions analyzed. Based upon its analyses, Houlihan Lokey estimated the value of the company’s assets, assuming an orderly liquidation, to be in the range of approximately $65.5 million to $66.9 million, or $2.38 to $2.43 per share, as of January 21, 2003.

In performing its Preliminary and Updated Analysis, Houlihan Lokey reviewed Resonate’s specific liability classes, including: (i) accounts payable; (ii) accrued payroll and related expenses; (iii) income tax payable; (iv) accrued other liabilities; and (v) deferred revenue. Based on discussions with and information provided by Resonate management, Houlihan Lokey adjusted, in connection with the Updated Analysis, the values of these liability classes to estimate the realizable claim against the company. Houlihan Lokey also estimated the total wind-down costs by analyzing company-provided information including: (i) operating cash burn rate; (ii) legal costs covered by D&O insurance; (iii) anticipated employee severance costs; (iv) employee transition salaries; (v) lease obligations; (vi) incremental D&O insurance; (vii) legal, audit and other professional fees; and (viii) additional contingencies. Based upon its analyses, Houlihan Lokey estimated the value of the company’s liabilities and liquidation expenses, assuming an orderly liquidation, to be in the range of approximately $18.7 million to $17.4 million, or $0.68 to $0.63 per share, as of January 21, 2003.

In estimating the value of Resonate in an orderly liquidation, Houlihan Lokey subtracted the value of the liabilities and wind-down costs from the adjusted values of the company’s tangible and intangible assets. In its analyses, Houlihan Lokey assumed that approximately $3 million would be held in escrow for three years to cover any unforeseen liabilities, and that this $3 million would be subsequently returned to the stockholders at the end of three years. Ultimately, the Updated Analysis resulted in an equity value range of approximately $45.8 million to $48.4 million, or $1.67 to $1.76 per share.

Houlihan Lokey relied upon and assumed, without independent verification, that the financial and other information provided to it was reasonably prepared and reflected the best currently available information concerning the assets, liabilities and other aspects of the company, and that there was no material change in the assets, financial condition, business or prospects of the company since the date of the most recent information made available to it. Houlihan Lokey did not independently verify the accuracy or completeness of the information supplied to it with respect to Resonate and did not and does not assume responsibility for the accuracy or completeness of such information. The Preliminary Analysis and Updated Analysis were based on business, general economic, market and other conditions that reasonably could be evaluated by Houlihan Lokey as of the date of the Preliminary Analysis and Updated Analysis, respectively. Subsequent events that could affect the estimates set forth therein include adverse changes in industry performance or market conditions and changes to the business, financial condition and results of operations of the company. Houlihan Lokey is under no obligation to update, revise or reaffirm either the Preliminary Analysis or the Updated Analysis.

Except as disclosed in either the Preliminary Analysis or the Updated Analysis, Houlihan Lokey assumed that the company has no material contingent assets or liabilities, no unusual obligations or substantial commitments other than those incurred in the ordinary course of business, and no pending or threatened litigation that would have a material effect on the company. The Preliminary Analysis and Updated Analysis assumed that the company would continue operations for 18 months after commencing liquidation and would reach settlements with remaining customers at the end of that period. At the request of the special committee, Houlihan Lokey assumed that the company would effect the liquidation via a liquidating trust. Houlihan Lokey also

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assumed that the company would be required to withhold a certain amount of cash from any initial liquidating distribution sufficient to satisfy its known liabilities, including customer obligations, and that at the end of three years, any remaining cash would be available to be distributed to stockholders. The analysis also assumed that no income tax liability would be incurred by the company in connection with the liquidation process.

Houlihan Lokey was not requested to consider, and Houlihan Lokey expressed no opinion as to, any of the following: (a) the underlying business decision of the company to proceed with a possible liquidation; or (b) the relative merits of a liquidation as compared to any alternative business strategies that might exist for Resonate or the effect of any other alternative in which Resonate might engage. Houlihan Lokey did not make an independent evaluation, appraisal or valuation of any assets or liabilities of Resonate, nor was Houlihan Lokey furnished with any such evaluations, appraisals or valuations. Houlihan Lokey made numerous assumptions with respect to industry performance, general business and other conditions and matters, many of which are beyond the company’s control and are not susceptible to accurate prediction.

The company paid Houlihan Lokey a fee of $150,000 for its preparation of the Preliminary Analysis and the Updated Analysis, plus reasonable out-of-pocket expenses that may be incurred by Houlihan Lokey in connection therewith. No portion of the fee is contingent upon the consummation of the merger or the conclusions reached in the Preliminary Analysis or the Updated Analysis.

 Interests of Our Directors and Executive Officers in the Merger

In considering the recommendation of our board of directors (upon the recommendation of the special committee) in favor of adopting the merger agreement and approving the merger, you should be aware that a number of our executive officers and directors have interests in the merger that are different from, or in addition to, your interests. These interests are described below, to the extent material, and except as described below such persons have, to our knowledge, no material interest in the merger that differ from your interests generally. Our board of directors was aware of, and considered the interests of, our directors and executive officers in approving the merger agreement and the merger.

Merger Agreement with Rocket Holdings.    On December 23, 2003, Resonate entered into a merger agreement, which was subsequently amended on January 14, 2003, with Rocket Holdings, LLC. Rocket Holdings is an entity controlled by Mr. Watkins, our Chairman, Chief Executive Officer and President, and Mr. Hornstein, our Chief Financial Officer and General Counsel. Resonate terminated the amended merger agreement with Rocket Holdings and Rocket Sub in order to enter into the merger agreement with GTG. Although Resonate did not pay a termination fee to Rocket Holdings or either of Messrs. Watkins or Hornstein, Resonate was obligated to pay, and paid, the out-of-pocket fees and expenses incurred by Rocket Holdings and Messrs. Watkins and Hornstein in connection with the terminated transaction. Because of Messrs. Watkins and Hornstein’s involvement and interest in the acquisition of Resonate, they both have a direct conflict of interest in connection with the merger with GTG.

Options.    Options to purchase our common stock held by our executive officers and directors, like other options, will be cancelled upon the completion of the merger. Option holders will receive a cash payment for their vested options that have exercise prices less than the per share amount being paid by GTG equal to the excess of the $1.90 to $1.94 per share merger consideration over the per share option exercise price, multiplied by the number of shares of common stock subject to the option that are vested as of the effective time of the merger. Options held by our executive officers, as well as certain options held by our directors, will receive accelerated vesting in connection with the merger subject to, in the case of our executive officers, the conditions set forth under “Severance Agreements with Executive Officers.”

Support Agreements.    Messrs. Watkins and Hornstein entered into support agreements with us in connection with the signing of the now terminated amended merger agreement among Resonate and Rocket Holdings, an entity controlled by Messrs. Watkins and Hornstein. These support agreements require

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Messrs. Watkins and Hornstein to vote the shares of our common stock that they each beneficially own or will beneficially own in the future (i) upon the recommendation of the special committee, in favor of the adoption of any reorganization agreement for a superior proposal (which the proposed transaction with GTG is), approval of the transactions provided for therein and any other proposal that is reasonably deemed necessary by us in connection with such reorganization agreement, and (ii) against approval of any proposal upon which the special committee issues an unfavorable recommendation to our stockholders. Messrs. Watkins and Hornstein agreed not to: (i) question or challenge our right to enter into a reorganization agreement for a superior proposal, (ii) question or challenge our right to terminate the Rocket Holdings merger agreement with entities controlled by Messrs. Watkins and Hornstein or (iii) oppose, impede or otherwise hinder the consummation of a superior transaction. Messrs. Watkins and Hornstein also delivered an irrevocable proxy with respect to the shares of our common stock that they beneficially own or will beneficially own in the future. The form of support agreement is attached as Annex F to this proxy statement.

Severance Agreements with Executive Officers.

On January 9, 2002, we entered into a severance agreement with Karen Barnes, our Vice President of Product Development, that provides for a lump sum payment, within 30 days of her termination and less applicable withholding amounts, equal to six months of her base salary, as well as accelerated vesting of the greater of 50% of the total shares granted to her in each option grant or 18 additional months with respect to unvested options for each option grant, in the event her employment is terminated without cause or is terminated by her as a result of an involuntary termination within 13 months after a change in control of our company (including the merger with GTG’s acquisition subsidiary).

On December 23, 2002, we entered in to a severance and change of control agreement with Mr. Watkins that superseded and replaced all previous severance and change of control benefits to which Mr. Watkins may have been entitled. The severance and change of control agreement provides that if:

Mr. Watkins would then be entitled to the following benefits:

In order to receive these benefits from us, Mr. Watkins must:

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On December 23, 2002, we entered in to a severance and change of control agreement with Mr. Hornstein, that superseded and replaced all previous severance and change of control benefits to which Mr. Hornstein may have been entitled. The severance and change of control agreement provides that if:

Mr. Hornstein would then be entitled to the following benefits:

In order to receive these benefits from us, Mr. Hornstein must:

Indemnification and Insurance.    The merger agreement provides that all rights of indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the merger that exist in favor of our directors or officers as provided in our certificate of incorporation or bylaws, and any of our existing indemnification agreements in effect as of the date of the merger agreement, will be assumed by the surviving corporation in the merger, and will continue in full force and effect in accordance with their terms. GTG has agreed to, and to cause the surviving corporation to, fulfill and honor in all respects those obligations. The merger agreement further provides that after the merger, GTG will cause the surviving corporation to maintain in effect for six years directors’ and officers’ liability insurance on terms no less favorable to the insured parties than those of our present directors’ and officers’ liability insurance policy covering those persons who were, as of immediately prior to the effective time of the merger, covered by our directors’ and officers’ liability insurance policy; provided, however, that the annual cost of such insurance shall not exceed 250% of the current policy’s annual premium.

Pacific Credit Corp., an affiliate of Gores and GTG, has agreed to (i) indemnify Resonate for losses arising out of (A) a material breach of the merger agreement by GTG or Res Merger Sub prior to closing and (B) the failure by Resonate as the surviving corporation to perform its indemnification obligations in Section 5.7 of the merger agreement for one year following the closing and (ii) to maintain sufficient assets with which to perform its obligations under the indemnification agreement. The indemnification agreement between Pacific Credit Corp. and Resonate is attached as Annex G to this proxy statement.

 Litigation Challenging the Merger

Resonate and certain of its officers and directors have been named as defendants in four putative class action complaints filed in Delaware Court of Chancery and California Superior Court on behalf of Resonate’s stockholders in connection with the proposed merger with Rocket Holdings as announced December 24, 2002. The class actions are captioned: Maroko v. Siegelman, et al., Civil Action No. 20100-NC (Del. Ch.) (filed

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December 27, 2002); Roza v. Resonate, Inc., et al., C.A. No. 20107-NC (Del. Ch.) (filed January 3, 2003); Hiser v. Watkins, et al., C.A. No. 20109 (Del. Ch.) (filed January 7, 2003) (the Delaware Actions) and Henning v. Resonate, Inc., et al., Case No. CV813727 (Ca. Super Ct.) (filed December 30, 2002). The complaints purport to allege claims for breach of fiduciary duty against the defendants and seek injunctive relief, including enjoining consummation of the proposed merger with Rocket Holdings, and other relief, including damages in an unspecified amount.

The Rocket Holdings merger agreement announced December 24, 2002, and subsequently amended, has since been terminated. The Delaware Actions have been consolidated. Defendants have not answered or otherwise responded to the operative complaint. Proceedings in the Henning action have been stayed pending resolution of the Delaware Actions. Although the Delaware Actions are in the preliminary stages and it is too soon to predict with any certainty the outcome of the proceedings described above, based on its current understanding of the facts, Resonate believes that it has meritorious defenses to these lawsuits and intends to defend the litigation vigorously.

 Financing the Merger

The total amount of consideration necessary for GTG and Res Merger Sub to complete the merger and to pay certain fees, costs and expenses related to the merger is approximately $55.90 million, which includes the following uses:

The entire amount of the consideration will come from Resonate’s cash and cash equivalents and short-term investments on hand at the closing of the merger. GTG does not expect to use funds from any other sources in connection with the closing of the merger.

 Appraisal Rights

The discussion below is not a complete summary regarding your appraisal rights under Delaware law and is qualified in its entirety by reference to the text of the relevant provisions of Delaware law, which are attached to this proxy statement as Annex E. Stockholders intending to exercise appraisal rights should carefully review Annex E. Failure to follow precisely any of the statutory procedures set forth in Annex E may result in a termination or waiver of these rights.

If the merger is completed, dissenting holders of our common stock who follow the procedures specified in Section 262 of the Delaware General Corporate Law within the appropriate time periods will be entitled to have their shares of our common stock appraised and receive the “fair value” of such shares in cash as determined by the Delaware Court of Chancery in lieu of the consideration that such stockholder would otherwise be entitled to receive under the merger agreement.

The following is a brief summary of Section 262, which explains the procedures for dissenting from the merger and demanding statutory appraisal rights. Failure to follow the procedures described in Section 262 precisely could result in the loss of appraisal rights. This proxy statement constitutes notice to holders of our common stock concerning the availability of appraisal rights under Section 262. A stockholder of record wishing to assert appraisal rights must hold the shares of stock on the date of making a demand for appraisal rights with respect to such shares and must continuously hold such shares through the effective time of the merger.

Stockholders who desire to exercise their appraisal rights must satisfy all of the conditions of Section 262. A written demand for appraisal of shares must be filed with Resonate before the vote is taken at the special meeting

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on March 31, 2003. This written demand for appraisal of shares must be in addition to and separate from a vote against the merger. Stockholders electing to exercise their appraisal rights must not vote “for” the adoption of the merger agreement. Also, because a submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. Any proxy or vote against the adoption of the merger agreement will not constitute a demand for appraisal within the meaning of Section 262.

A demand for appraisal must be executed by or for the stockholder of record, fully and correctly, as such stockholder’s name appears on the share certificate. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, this demand must be executed by or for the fiduciary. If the shares are owned by or for more than one person, as in a joint tenancy or tenancy in common, such demand must be executed by or for all joint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record. However, the agent must identify the record owner and expressly disclose the fact that, in exercising the demand, he is acting as agent for the record owner. A person having a beneficial interest in our common stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below in a timely manner to perfect whatever appraisal rights the beneficial owners may have.

A stockholder of ours who elects to exercise appraisal rights should mail or deliver his, her or its written demand to: Resonate Inc., 385 Moffett Park Drive, Sunnyvale, California 94089; Attention: Secretary. The written demand for appraisal should specify the stockholder’s name and mailing address, and that the stockholder is thereby demanding appraisal of his or her Resonate common stock. Within ten days after the effective time of the merger, we must provide notice of the effective time of the merger to all of our stockholders who have complied with Section 262 and have not voted for the merger.

Within 120 days after the effective time of the merger (but not thereafter), any stockholder who has satisfied the requirements of Section 262 may deliver to us a written demand for a statement listing the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Resonate, as the surviving corporation in the merger, must mail such written statement to the stockholder within 10 days after the stockholders’ request is received by Resonate or within 10 days after the latest date for delivery of a demand for appraisal under Section 262, whichever is later.

Within 120 days after the effective time of the merger (but not thereafter), either Resonate or any stockholder who has complied with the required conditions of Section 262 and who is otherwise entitled to appraisal rights may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the Resonate shares of stockholders entitled to appraisal rights. Resonate has no present intention to file such a petition if demand for appraisal is made.

Upon the filing of any petition by a stockholder in accordance with Section 262, service of a copy must be made upon Resonate, which must, within 20 days after service, file in the office of the Register in Chancery in which the petition was filed, a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by Resonate. If a petition is filed by us, the petition must be accompanied by the verified list. The Register in Chancery, if so ordered by the court, will give notice of the time and place fixed for the hearing of such petition by registered or certified mail to us and to the stockholders shown on the list at the addresses therein stated, and notice will also be given by publishing a notice at least one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware, or such publication as the court deems advisable. The forms of the notices by mail and by publication must be approved by the court, and we must bear the costs thereof. The Delaware Court of Chancery may require the stockholders who have demanded an appraisal for their shares (and who hold stock represented by certificates) to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal

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proceedings and the Delaware Court of Chancery may dismiss the proceedings as to any stockholder that fails to comply with such direction.

If a petition for an appraisal is filed in a timely fashion, after a hearing on the petition, the court will determine which stockholders are entitled to appraisal rights and will appraise the shares owned by these stockholders, determining the fair value of such shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest to be paid, if any, upon the amount determined to be the fair value.

Our stockholders considering seeking appraisal of their shares should note that the fair value of their shares determined under Section 262 could be more, the same or less than the consideration they would receive pursuant to the merger agreement if they did not seek appraisal of their shares. The costs of the appraisal proceeding may be determined by the court and taxed against the parties as the court deems equitable under the circumstances. Upon application of a dissenting stockholder, the court may order that all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all shares entitled to appraisal. In the absence of a determination or assessment, each party bears his, her or its own expenses. The exchange of shares for cash pursuant to the exercise of appraisal rights will be a taxable transaction for United States federal income tax purposes and possibly state, local and foreign income tax purposes as well.

Any stockholder who has duly demanded appraisal in compliance with Section 262 will not, after the effective time of the merger, be entitled to vote for any purpose the shares subject to demand or to receive payment of dividends or other distributions on such shares, except for dividends or distributions payable to stockholders of record at a date prior to the effective time of the merger.

At any time within 60 days after the effective time of the merger, any stockholder will have the right to withdraw his demand for appraisal and to accept the terms offered in the merger agreement. After this period, a stockholder may withdraw his demand for appraisal and receive payment for his shares as provided in the merger agreement only with our consent. If no petition for appraisal is filed with the court within 120 days after the effective time of the merger, stockholders’ rights to appraisal (if available) will cease. Inasmuch as we have no obligation to file such a petition, any stockholder who desires a petition to be filed is advised to file it on a timely basis. No petition timely filed in the court demanding appraisal may be dismissed as to any stockholder without the approval of the court, which approval may be conditioned upon such terms as the court deems just.

Failure by any Resonate stockholder to comply fully with the procedures described above and set forth in Annex E to this proxy statement may result in termination of such stockholder’s appraisal rights.

 Accounting Treatment

The merger will be accounted for as a purchase transaction for financial accounting purposes.

 Merger Consideration

Upon completion of the merger, each outstanding share of our common stock, other than (1) shares owned by GTG or any of its direct or indirect subsidiaries, (2) shares owned by us or any of our direct or indirect subsidiaries, and (3) shares held by stockholders who perfect their appraisal rights, will be converted into the right to receive between $1.90 and $1.94 in cash, without interest. Shares owned by GTG or any of its direct or indirect subsidiaries and shares owned by us or any of our direct or indirect subsidiaries will be cancelled immediately prior to the merger.

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 Conversion of Shares; Procedures for Surrender of Certificates

Your right to receive between $1.90 and $1.94 per share in cash, without interest, will occur automatically upon completion of the merger. Promptly after the merger, but in no event later than five business days thereafter, Mellon Investor Services LLC, the payment agent, will send to you a letter of transmittal. The letter of transmittal will contain instructions for obtaining the cash merger consideration in exchange for your certificates representing shares of our common stock. You should not return your stock certificates with the enclosed proxy.

Upon surrender of a stock certificate representing shares of our common stock, together with a duly completed and validly executed letter of transmittal, and any other documents that may be reasonably required by the payment agent, you will be entitled to receive from the payment agent between $1.90 and $1.94 in cash for each share represented by the stock certificate. The final per share price in excess of $1.90, if any, will be based upon Resonate’s aggregate cash, cash equivalents, and short-term investments on hand at the closing of the transaction in excess of $58 million. The aggregate balance of cash, cash equivalents and short-term investments that will be on hand at the closing is subject to numerous risks and uncertainties and our aggregate balance may not provide for any merger consideration in excess of $1.90 per share to be paid to our stockholders.

In the event of a transfer of ownership of common stock that is not registered in our records, the merger consideration for shares of our common stock may be paid to a person other than the person in whose name the surrendered certificate is registered if:

The merger consideration paid to you upon conversion of your shares of our common stock will be issued in full satisfaction of all rights relating to the shares of our common stock.

If your stock certificate has been lost, stolen or destroyed, the payment agent will deliver to you the merger consideration for the shares represented by that certificate if:

 Effect on Stock Options

Stock Options.    Upon completion of the merger, each outstanding option to purchase our common stock with an exercise price less than the per share merger consideration (which will be between $1.90 to $1.94 per share) will, with the consent of the optionee, be cancelled and the holder of that option will be entitled to receive a one-time cash payment equal to the number of vested shares of our common stock subject to the option, multiplied by the difference between the per share merger consideration and the per share exercise price of the option. Each outstanding option to purchase our common stock with an exercise price equal to or greater than the $1.90 to $1.94 per share merger consideration will be cancelled without payment.

Our outstanding option plans will terminate upon consummation of the merger.

Subject to any applicable withholding taxes, the payment to each optionee for cashing out such holder’s option shall be made, without interest, by the payment agent promptly following the date of completion of the merger, and in any event within five business days after the completion of the merger.

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 Effective Time of the Merger

The merger will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such later time as is agreed upon by GTG and Resonate and specified in the certificate of merger. The filing of the certificate of merger will occur as soon as practicable on or after the closing date, which will not be later than the second business day after satisfaction or waiver of the conditions to the merger described in the merger agreement.

Subject to the terms and conditions of the merger agreement and in accordance with Delaware law, at the effective time of the merger, Res Merger Sub, Inc., a wholly owned subsidiary of GTG and a party to the merger agreement, will merge with and into Resonate. Resonate will survive the merger as a wholly owned subsidiary of GTG.

 Delisting and Deregistration of Our Common Stock

If the merger is completed, our common stock will be delisted from The Nasdaq National Market and will be deregistered under the Securities Exchange Act of 1934.

 Material United States Federal Income Tax Consequences of the Merger

The following is a summary of certain United States federal income tax consequences of the merger to our stockholders who exchange their Resonate common stock for the merger consideration in the merger. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, applicable current and proposed United States Treasury Regulations, judicial authority and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis, at any time. This discussion does not address all aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances, or to a Resonate stockholder subject to special treatment under the United States federal income tax laws. In addition, the discussion does not address any aspect of foreign, state or local taxation or estate and gift taxation that may be applicable to you.

The receipt of cash in exchange for shares of our common stock in the merger or pursuant to the exercise of appraisal rights will be a taxable transaction for federal income tax purposes. In general, you will recognize gain or loss for federal income tax purposes equal to the difference between the amount of cash received in exchange for the Resonate shares and your adjusted tax basis in such shares. Assuming the shares constitute capital assets in the hands of the stockholder, such gain or loss will be capital gain or loss and will be a long-term capital gain or loss if you have held the shares for more than one year at the time of the merger. Gain or loss will be calculated separately for each block, with a “block” consisting of shares acquired at the same cost in a single transaction.

Certain non-corporate stockholders may be subject to backup withholding at a 30% rate on cash payments received in exchange for Resonate shares in the merger or received upon the exercise of appraisal rights. Backup withholding generally will apply only if you fail to furnish a correct social security number or other taxpayer identification number, or otherwise fails to comply with applicable backup withholding rules and certification requirements. Corporations generally are exempt from backup withholding. Each non-corporate stockholder should complete and sign the substitute Form W-9 that will be part of the letter of transmittal to be returned to the paying agent in order to provide the information and certification necessary to avoid backup withholding, unless an applicable exemption exists and is otherwise proved in a manner satisfactory to the paying agent.

The foregoing discussion may not be applicable to certain types of stockholders, including stockholders who acquired Resonate shares pursuant to the exercise of employee stock options or otherwise as compensation, individuals who are not citizens or residents of the United States and foreign corporations.

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The federal income tax discussion set forth above is included for general information only and is based upon present law. Our stockholders are urged to consult their tax advisors with respect to the specific tax consequences of the merger to them, including the application and effect of the alternative minimum tax and state, local and foreign tax laws.

 Regulatory Matters

United States Antitrust.    Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules that have been promulgated under the HSR Act, acquisitions of a sufficient size may not be consummated unless information has been furnished to the Antitrust Division of the U.S. Department of Justice and to the Federal Trade Commission and applicable waiting period requirements have been satisfied or early termination of the waiting period has been granted.

The merger of Resonate into a GTG subsidiary and the conversion of shares of Resonate’s common stock into rights to receive the merger consideration is subject to the provisions of the HSR Act. Under the HSR Act, the transaction cannot be consummated until the expiration or early termination of the waiting period following the filing of a Hart-Scott-Rodino Notification and Report Forms by GTG and us. Neither GTG nor Resonate have yet filed the required notification and report forms.

The Antitrust Division of the Department of Justice or the Federal Trade Commission may challenge the merger on antitrust grounds either before or after expiration of the waiting period. Accordingly, at any time before or after the completion of the merger, either the Antitrust Division of the Department of Justice or the Federal Trade Commission could take action under the antitrust laws as it deems necessary or desirable in the public interest, or another person could take action under the antitrust laws, including seeking to enjoin the merger. Additionally, at any time before or after the completion of the merger, notwithstanding that the applicable waiting period has expired or ended, any state could take action under the antitrust laws as it deems necessary or desirable in the public interest. We cannot be sure that a challenge to the merger will not be made or that, if a challenge is made, that we will prevail.

General.    Except as described above, we are not aware of any license or other regulatory permit that appears to be material to our business that might be adversely affected by the merger or of any approval or other action by any federal or state governmental, administrative or regulatory authority or agency that would be required prior to the merger. Should any such approval or other action be required, it is our present intention to seek such approval or action. We do not currently intend, however, to delay the merger pending the outcome of any such action or the receipt of any such approval. There can be no assurance that any such approval or other action, if needed, would be obtained without substantial effort or that adverse consequences might not result to our business, or that certain parts of our business might not have to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval or other action or in the event that such approval was not obtained or such other action was not taken.

 Resonate Employee Stock Purchase Plan

Pursuant to the terms of the merger agreement, any purchase periods currently in progress under our 2000 Employee Stock Purchase Plan (the ESPP) will be shortened by setting a new exercise date and any offering periods then in progress shall end on the new exercise date. The new exercise date occur immediately prior to the completion of the merger. On this new exercise date, options granted to participants pursuant to our ESPP shall automatically be exercised and paid for by using the participant’s payroll deductions at a purchase price of the lesser of 85% of the fair market value of our common stock (i) on the first day of the offering period or (ii) on the new exercise date. Participants may withdraw from the ESPP any time prior to the new exercise date and any accumulated payroll deductions will be returned to the participant without interest. The ESPP will terminate upon completion of the merger.

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 The Merger Agreement

The following description summarizes the material provisions of the merger agreement and is qualified in its entirety by reference to the complete text of the merger agreement. The merger agreement included in this proxy statement as Annex A contains the complete terms of the agreement, and you should read it carefully and in its entirety.

 Certificate of Incorporation; Name

The certificate of incorporation of the surviving corporation shall be the certificate of incorporation of Res Merger Sub, Inc., as in effect immediately prior to the effective time of the merger, except that all references in such certificate to Res Merger Sub, Inc. shall be changed to refer to Resonate Inc. and except as to those sections regarding indemnification, which shall be identical to those relevant sections in our certificate of incorporation as in effect at the effective time of the merger.

The name of the surviving corporation shall be Resonate Inc.

 Bylaws

The bylaws of the surviving corporation shall be the bylaws of Res Merger Sub, as in effect immediately prior to the effective time of the merger, except that all references in such bylaws to Res Merger Sub shall be changed to refer to Resonate Inc.

 Directors and Officers

The directors of Res Merger Sub at the effective time of the merger shall be the initial directors of the surviving corporation.

The officers of Res Merger Sub at the effective time of the merger shall be the initial officers of the surviving corporation.

 Representations and Warranties

The merger agreement contains customary representations and warranties of Resonate and GTG and its acquisition subsidiary as to, among other things:

In addition, the merger agreement contains representations and warranties by Resonate as to, among other things:

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In addition, the merger agreement contains a representation and warranty by GTG and its acquisition subsidiary as to, among other things, GTG’s subsidiary being formed solely for the purpose of engaging in the transactions contemplated in the merger agreement.

 Conduct of Business Prior to the Merger

We have agreed that, unless GTG otherwise consents in writing, which consent is not to be unreasonably withheld, during the period from the date of the merger agreement until the earlier of the effective time of the merger and the termination of the merger agreement, we will conduct our operations according to our ordinary and usual course of business consistent with past practice, use commercially reasonable efforts to preserve intact our current business organizations and continue to take commercially reasonable actions necessary to preserve our intellectual property. In addition, we have agreed that, subject to certain exceptions, neither we nor any of our subsidiaries may, without GTG’s prior written consent:

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You are urged to read carefully in its entirety the section of the merger agreement titled “Covenants—Operation of Business” in Annex A included in this proxy statement.

 No Solicitation of Proposals

We have agreed to certain limitations on our ability to take action with respect to other acquisition proposals. Notwithstanding these limitations, we may respond to a superior proposal. Under the merger agreement:

Except as set forth below, we have agreed not to: