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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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:

I-many, 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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I-MANY, INC.

399 THORNALL STREET

EDISON, NEW JERSEY

(800) 832-0228

To the Stockholders of I-many, Inc.:

You are cordially invited to attend a special meeting of the stockholders of I-many, Inc., a Delaware corporation (“I-many”), to be held on June 25, 2009, at 10:00 a.m., local time, at our headquarters, 399 Thornall Street, 12^th Floor, Edison, NJ 08837. A notice of the special meeting, a proxy statement and a proxy card are enclosed.

At the special meeting, we will ask you to vote upon adoption of the Agreement and plan of merger, dated as of April 29, 2009, by and among Sapphire (defined below), Sapphire Stripe Acquisition Company and I-many, as amended on May 29, 2009 (the “merger agreement”) which will result in I-many being acquired by LLR Equity Partners III, L.P., a private equity fund (“LLR III”) and to vote upon a proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. As a result of the transaction, you will receive cash for your I-many stock and as a result will cease to be an I-many stockholder. Pursuant to the transaction described in the merger agreement, Sapphire Stripe Acquisition Company, a Delaware corporation and wholly-owned subsidiary of Sapphire Stripe Holdings, Inc., a Delaware corporation that has been formed by LLR III to effect the acquisition (“Sapphire”), will merge with and into I-many (the “merger”). I-many will be the surviving entity in the merger and, as a result of the merger, it will become a wholly-owned subsidiary of Sapphire. As part of this merger, you will be entitled to receive cash for each share of I-many common stock that you own. The exact amount you will receive will be determined according to a formula described in the accompanying proxy statement. We estimate that the cash amount will be approximately $0.49 per share, based on our estimate of the expenses of I-many at the effective time of the merger. However, such amounts are estimates only and are subject to actual expenses at the effective time of the merger as finally determined by the Company and Sapphire as of the closing date of the merger. See the section of the accompanying proxy statement titled “The Merger Agreement—Merger Consideration.”

The board of directors of I-many believes that the proposed merger is advisable and in the best interests of I-many and its stockholders. Therefore, I-many’s board of directors has unanimously adopted the merger agreement and the merger and unanimously recommends that you vote “FOR” the adoption of the merger agreement and, if necessary “FOR” the proposal to adjourn the special meeting to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

In order to complete this merger, the holders of a majority of the outstanding shares of I-many common stock represented in person or by proxy must affirmatively adopt the merger agreement.

The accompanying proxy statement provides you with detailed information about the proposed merger and the merger agreement. We encourage you to read this entire document carefully.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the special meeting, we urge you to vote your shares by signing the enclosed proxy card and returning it in the envelope provided or by faxing it to the attention of Robert G. Schwartz at 732-516-2693, as soon as possible. You may also vote by submitting a proxy by telephone by calling 800-776-9437 in the United States and 1-718-921-8500 from foreign countries or through the Internet at www.voteproxy.com using the control number on your proxy card. Giving your proxy now will not affect your right to vote in person if you wish to attend the special meeting and vote in person. Failure to submit a properly executed proxy by mail, fax, telephone or through the Internet or to vote at the special meeting has the same effect as a vote “AGAINST” the merger agreement and will have no effect on the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

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Your prompt cooperation will be greatly appreciated.

Sincerely,

John A. Rade

President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the transaction described in this proxy statement, passed upon the fairness or merits of the transaction, or passed upon the accuracy or adequacy of the information contained in this document. Any representation to the contrary is unlawful.

The accompanying proxy statement is dated June 2, 2009 and is first being mailed to stockholders on or about June 3, 2009.

The information contained in the accompanying proxy statement speaks only as of its date unless the information specifically indicates that another date applies.

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I-MANY, INC.

399 THORNALL STREET

EDISON, NEW JERSEY

(800) 832-0228

                    ,             

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 25, 2009

To the Stockholders of I-many, Inc.:

I-many, Inc., a Delaware corporation (“I-many”), will hold a special meeting of stockholders at 399 Thornall Street, 12^th Floor, Edison, NJ 08837 at 10:00 a.m., local time, on June 25, 2009, for the following purposes:

Only record holders of common stock at the close of business on May 26, 2009 are entitled to receive notice of and will be entitled to vote at the special meeting, including any adjournments or postponements of the special meeting.

Under Delaware law, if the merger is completed, holders of I-many common stock who do not vote in favor of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery. In order to exercise your rights, you must submit a written demand for an appraisal prior to the stockholder vote on the merger agreement, and comply with other Delaware law procedures explained in the accompanying proxy statement.

Your vote is important and we urge you to complete, sign, date and return your proxy card as promptly as possible by mail or by faxing the card to the attention of Robert G. Schwartz at 732-516-2693, whether or not you expect to attend the special meeting. If you are unable to attend in person and you return your proxy card, your shares will be voted at the special meeting in accordance with your proxy. You may also vote by submitting a proxy by telephone by calling 800-776-9437 in the United States and 1-718-921-8500 from foreign countries or through the Internet at www.voteproxy.com using the control number on your proxy card. If your shares are held in “street name” by your broker or other nominee, only that holder can vote your shares unless you obtain a valid legal proxy from such broker or nominee. You should follow the directions provided by your broker or nominee regarding how to instruct such broker or nominee to vote your shares.

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The merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the merger agreement is attached as Appendix A to the proxy statement.

Edison, New Jersey June 2, 2009		By Order of the Board of Directors,
		John A. Rade
		President and Chief Executive Officer

YOUR VOTE IS IMPORTANT.

Whether or not you plan to attend the special meeting, please sign and date the enclosed proxy card and return it promptly in the envelope provided or by faxing it to the attention of Robert G. Schwartz at 732-516-2693 or submit a proxy by telephone by calling 800-776-9437 in the United States and 1-718-921-8500 from foreign countries or through the Internet at www.voteproxy.com. Giving your proxy now will not affect your right to vote in person if you attend the meeting.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are for your convenience only, and briefly address some commonly asked questions about the proposed merger and the I-many special meeting of stockholders. You should still carefully read this proxy statement in its entirety, including the attached appendices.

The Special Meeting

The Proposed Merger

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We estimate that the amount per share you will be entitled to receive will be approximately $0.49, based on the following assumptions:

However, such amounts are estimates only and are subject to actual expenses at the effective time of the merger as finally determined by the Company and Sapphire as of the closing date of the merger. See “The Merger Agreement—Merger Consideration.” You will not have any ownership interest in I-many after completion of the merger.

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Voting and Proxy Procedures

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If you have instructed a broker to vote your shares, you may revoke your proxy only by following the directions received from your broker to change those instructions.

Revocation of the proxy will not affect any vote previously taken. Attendance at the special meeting will not in itself constitute the revocation of a proxy; you must vote in person at the special meeting to revoke a previously delivered proxy.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents to which I-many refers you in this proxy statement, contain forward-looking statements about I-many’s plans, objectives, expectations and intentions. Forward-looking statements include information concerning possible or assumed future results of operations of I-many, the expected completion and timing of the merger, the anticipated amount of the merger consideration per share of I-many common stock to be received by I-many’s stockholders pursuant to the merger, other information relating to the merger, information relating to I-many’s consideration of strategic alternatives should the merger not be completed in a timely manner or at all, and any other statements about I-many management’s future expectations, beliefs, goals, plans or prospects. You can identify these statements by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “forecast,” “potential,” “contemplate,” “could,” “would,” “may,” “will,” “approximately” and “can” or similar words. You should read statements that contain these words carefully. They discuss I-many’s future expectations or state other forward-looking information, and may involve known and unknown risks over which I-many has no control, including, without limitation:

See “Where You Can Find More Information” on page 56 of this proxy statement. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. In addition, any forward-looking statements in this proxy statement represent I-many’s views only as of the date of this proxy statement and should not be relied upon as representing I-many’s views as of any subsequent date. I-many anticipates that subsequent events and developments will cause its views to change. However, while I-many may elect to update these forward-looking statements publicly at some point in the future, I-many specifically disclaims any obligation to do so, expect as may be required by law, either as a result of new information, future events or otherwise.

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THE SPECIAL MEETING

Date, Time and Place

This proxy statement is accompanied by the Notice of Special Meeting and a proxy card solicited by our board of directors for use at the special meeting of our stockholders to be held on June 25, 2009, at 10:00 a.m., local time, at 399 Thornall Street, 12^th Floor, Edison, NJ 08837.

Matters to be Considered

At the special meeting, you will be asked to consider and vote upon proposals to adopt the merger agreement, to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement and to transact such other matters as may be properly brought before the special meeting or any adjournment or postponement thereof. A copy of the merger agreement is attached to this proxy statement as Appendix A, and the merger agreement is summarized in the section of this proxy statement entitled “The Merger Agreement.”

Recommendation of Our Board of Directors

Our board of directors believes that the terms of the merger agreement and the proposed merger are advisable and in the best interests of I-many and our stockholders. Our board of directors approved the merger agreement and unanimously recommends that you vote FOR the adoption of the merger agreement and FOR the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

In considering the recommendation of our board of directors, you should be aware that our directors and executive officers have interests in the merger that are different from yours. See “Our Directors, Executive Officers and Employees Have Interests in the Merger That Differ from Your Interests.”

Record Date and Quorum

Our board of directors has fixed the close of business on May 26, 2009 as the record date for the special meeting. Accordingly, only our stockholders of record at the close of business on such date will be entitled to notice of and to vote at the special meeting. Brokers or other nominees who hold shares of our common stock in “street name” for customers who are the beneficial owners of those shares may not give a proxy to vote those customers’ shares in the absence of specific instructions from those customers, resulting in broker “non-votes.” On the record date, there were 53,802,300 common shares outstanding, held of record by approximately 275 registered holders.

The presence, in person or by proxy, of the holders of a majority of our outstanding shares of common stock entitled to vote, as of the record date, will constitute a quorum for the conduct of business at the special meeting. Both abstentions and broker “non-votes” will be counted as present for purposes of determining the existence of a quorum. In the event a quorum is not present at the special meeting, we may propose adjournment of the special meeting to solicit additional proxies.

Required Vote

The affirmative vote of the holders of a majority of our outstanding shares of common stock entitled to vote thereon is required to adopt the merger agreement. Abstentions, the failure to submit an executed proxy by mail, fax, telephone or through the Internet or to vote in person at the special meeting, and broker non-votes have the effect of a vote against the merger agreement.

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If there is less than a quorum present at the meeting, the affirmative vote of the holders of a majority of I-many common stock present and entitled to vote at the special meeting is required to approve the adjournment of the special meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. If there is a quorum, approval only requires the affirmative vote of a majority of the shares present and voting. Thus, if there is less than an quorum, an abstention will have the same effect as a vote against the proposal to adjourn the special meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. If there is a quorum, an abstention will have no effect on the outcome of the proposal. A failure to vote at the special meeting or to submit an executed proxy by mail, fax, telephone or through the Internet, or a broker non-vote will have no effect on the outcome of the proposal to adjourn the special meeting to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

You will have one vote for each share of common stock you own on the record date.

Voting and Revocation of Proxies

All shares of our common stock represented by properly executed proxies received prior to or at the special meeting and not revoked will be voted in accordance with the instructions indicated in those proxies. To vote by proxy, a stockholder must fill out, sign and date the proxy card included with this proxy statement and mail the signed proxy in the enclosed return envelope or fax it to the attention of Robert G. Schwartz at 732-516-2693 as soon as possible. Alternatively, stockholders may deliver proxies by telephone at 800-776-9437 in the United States and 1-718-921-8500 from foreign countries or through the Internet at www.voteproxy.com using the control number that appears on the proxy card. If no instructions are indicated, signed and submitted proxies will be voted “FOR” the proposal to adopt the merger agreement. If you abstain from voting, your vote will be counted as a vote “AGAINST” the adoption of the merger agreement and, if less than a quorum is present at the meeting, “AGAINST” the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

If a stockholder has sent a proxy directly to I-many, he or she may revoke it by:

If you have instructed a broker to vote your shares, you may revoke your proxy only by following the directions received from your broker to change those instructions.

Revocation of the proxy will not affect any vote previously taken. Attendance at the special meeting will not in itself constitute the revocation of a proxy; you must vote in person at the special meeting to revoke a previously delivered proxy.

Solicitation of Proxies

We and Sapphire will split the costs of printing, filing and mailing the proxy statement to our stockholders. In addition to soliciting proxies by mail, we are requesting banks, brokers and other record holders to send proxy materials to the beneficial owners of our common stock requesting authority for the execution of their proxies.

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We and Sapphire will reimburse those record holders for their reasonable out-of-pocket expenses in doing so. In addition to solicitation by mail, certain of our directors, officers and employees may, without receiving any additional compensation, solicit proxies by telephone, electronic mail, fax or in person.

Our board of directors is currently unaware of any other matters that may be presented for action at the special meeting. If other matters do properly come before the special meeting or at any adjournment or postponement of the special meeting, however, the persons named in the proxies will vote on those matters in accordance with their judgment, subject to the applicable rules of the SEC. In addition, the grant of a proxy will confer discretionary authority on the persons named as proxies on the proxy card to vote in accordance with their best judgment on procedural matters incident to the conduct of the special meeting.

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THE MERGER

If the merger agreement is adopted by the stockholders and the other conditions to the merger are satisfied, or waived to the extent permitted, the merger will be completed and become effective at the time a certificate of merger is filed with the Secretary of State of the State of Delaware or any later time as we, Sapphire and Sapphire Stripe Acquisition Company agree and specify in the certificate of merger. In the event that our stockholders adopt the merger agreement, we hope to complete the merger shortly thereafter.

Background of the Merger

Default Risk under the Company’s Convertible Notes

In the fall of 2008, as a result of deteriorating conditions in the world economy, the Company’s results of operations and the market for the Company’s common stock, the Company no longer complied with the continued listing standards of the NASDAQ Capital Market.

As we have previously explained in filings with the SEC, a de-listing of the Company’s common stock from the NASDAQ Capital Market, among other events, would be an event of default under our $17 million principal amount senior convertible notes, which we issued December 31, 2007, which we refer to in this proxy statement as the “Notes”. In the event of such a default, the holders of the Notes would be entitled to declare the entire principal amount and interest due and payable immediately. However, in connection with the signing of the merger agreement, the holders of the Notes agreed to forbear from taking such action pending the consummation of the merger or the termination of the merger agreement under certain circumstances.

NASDAQ Marketplace Rule 5550(b)(2) (formerly Rule 4310(c)(3)(B)), which we refer to in this proxy statement as the “NASDAQ Rule”, requires, as a condition of continued listing on the NASDAQ Capital Market, that the aggregate value of our listed securities equal or exceed $35 million. When we issued the Notes in 2007, the market value for our common stock was greater than $3.00 per share and we had a market capitalization of approximately $160 million. At that time, we did not believe that a NASDAQ listing default was remotely possible and, in any event, we believed that we could repay the Notes when they became due using cash from operations or the proceeds of a refinancing transaction.

Since October 2008, the aggregate value of our securities listed on the NASDAQ Capital Market has remained below the required $35 million. The Company currently does not have sufficient cash and short-term investments to repay the full principal amount of the Notes. In response to these extraordinary challenges, our board of directors has worked since October 2008 to find a solution that maximizes stockholder value and enables the Company to repay or refinance the Notes.

NASDAQ De-Listing Notice and Appeal

On October 6, 2008, the aggregate value of our securities listed on the NASDAQ Capital Market fell below the required $35 million, based on closing market prices, and remained below that level in subsequent days. While NASDAQ offers alternative quantitative standards for continued listing, the Company did not meet them and does not currently meet them.

On October 21, 2008, we received notice from NASDAQ that for the prior ten consecutive business days, the market value of I-many’s listed securities had been below the minimum $35 million requirement set forth in the NASDAQ Rule, and that we had until November 20, 2008 to regain compliance. On October 21, 2008, we engaged Donahoe Advisory Associates LLC to assist us with an appeal.

On November 24, 2008, we received notice that our common stock would be de-listed from the NASDAQ Capital Market for continued non-compliance with the NASDAQ Rule, subject to our right to a hearing before a NASDAQ Listing Qualifications Panel, which we refer to in this proxy statement as the “Panel”. We requested an appeal hearing before the Panel.

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On January 8, 2009, we presented to the Panel our plan for regaining compliance with all applicable requirements for continued listing.

On March 20, 2009, the Panel informed us that our common stock would continue to be listed on the NASDAQ Capital Market through May 26, 2009, subject to certain conditions, but that the common stock would be de-listed after that date if compliance with NASDAQ’s continued listing standards is not regained. The Panel is not authorized to grant an exemption from NASDAQ’s listing standards beyond May 26, 2009 (180 days from the Company’s initial non-compliance). On May 27, 2009, the Panel informed us that our common stock was being de-listed and that it will be suspended from trading effective as of the start of trading on May 29, 2009.

Engagement of a Financial Advisor

At a meeting on October 13, 2008, our board of directors received a report on the Company’s non-compliance with the NASDAQ Rule from management and outside legal counsel. Following a discussion of possible consequences and potential solutions, our board of directors directed management to explore strategic alternatives in three general categories: (i) a negotiated restructuring of the Notes to remove or mitigate the consequences of a NASDAQ de-listing default, (ii) a financing transaction involving equity, debt or a combination thereof that would achieve compliance with the NASDAQ Rule or an alternative continued listing requirement or (iii) an orderly sale of the Company or merger with another company.

At a meeting on October 28, 2008, the audit committee of our board of directors received a report from the Company’s independent accountant, BDO Seidman, LLP, that the possible NASDAQ de-listing default under the Notes could require a “going concern” qualification in BDO Seidman’s 2008 audit report, when such report became due in March 2009. At its meeting later the same day, our board of directors discussed strategic options for the Company to maximize stockholder value. Our board of directors formed a committee consisting of Messrs. Dennedy, Fingerhood and Newkirk, which we refer to in this proxy statement as the “Strategic Options Committee”, with authority to select and retain a financial advisor to the Company. The objectives of the Strategic Options Committee and the financial advisor were to explore and recommend strategic alternatives in the three general categories discussed at our board of director’s October 13, 2008 meeting.

In the following days, the Strategic Options Committee interviewed several candidates for the financial advisor role.

At a meeting on November 7, 2008, our board of directors received the recommendation of the Strategic Options Committee that the Company engage Montgomery & Co., LLC, which we refer to in this proxy statement as “Montgomery”, as the Company’s exclusive financial advisor. Our board of directors authorized this engagement, subject to negotiation of a satisfactory engagement letter. On November 18, 2008, the Strategic Options Committee approved the terms of the Company’s engagement of Montgomery, and we executed an engagement letter with Montgomery. Our full board of directors subsequently ratified this action. In the following weeks, we worked with Montgomery to formulate strategy and prepare marketing materials.

Negotiations with holders of the Notes

Following the January 8, 2009 NASDAQ hearing, Montgomery initiated discussions, and our management then contacted selected holders of Notes, to seek from them a waiver of the NASDAQ listing default clause in the event our appeal to the Panel was not successful. In numerous discussions throughout February, 2009 with holders of the Notes, both in person and by telephone, we consistently encountered firm objections to any modification of Note terms or waivers of a NASDAQ listing default. With the exception of two smaller holders, the holders of our Notes were unwilling to waive the potential default, and none of them would consider such a waiver unless all of them agreed to it. By March, 2009, based on these discussions and the recommendation by Montgomery that a successful negotiation of the Notes was unlikely, we were compelled to conclude that we would not be able to restructure the Notes to remove the risk of full redemption in the event of a NASDAQ listing default. However, in connection with the signing of the merger agreement, the holders of the Notes agreed to forbear from taking such action pending the consummation of the merger or the termination of the merger agreement under certain circumstances.

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The Solicitation Process

On December 17, 2008, after preparing offering materials and a strategic marketing plan and after receiving the authorization of our board of directors, Montgomery launched an outbound outreach effort to a qualified but broad group of potential investors. The targeted group included a wide range of companies and institutions, including potential strategic acquisition partners as well as financial sponsors that would be primarily interested in providing debt or equity financing without acquiring full control of the Company. The Company believed at the time that a financial sponsor or group of them might be able to provide debt or equity financing to replace the Notes or otherwise sufficiently improve the Company’s balance sheet to restore compliance with the NASDAQ Rule.

During the solicitation process and based on third party feedback, the Strategic Options Committee concluded that the Company would not find an investor willing to invest in the Company without acquiring full control.

Between December 17, 2008 and April 29, 2009, the date of the merger agreement, Montgomery:

Since its formation, the Strategic Options Committee has held 33 formal meetings as of June 1, 2009, in most cases with representatives of Montgomery, the Company’s general counsel and management, to review the status of Montgomery’s efforts and to give direction. Our full board of directors has reviewed and discussed reports from Montgomery at eleven meetings as of June 1, 2009, including its meeting on April 28, 2009 to receive Montgomery’s fairness opinion, its meeting on April 29, 2009 to approve the merger agreement and its meeting on May 29, 2009 to consider the proposal from the competing bidder and the higher offer from Sapphire, and to approve the amendment to the merger agreement.

Negotiations with LLR

Prior to the engagement of Montgomery and the outbound marketing efforts in December 2008 that included Montgomery’s outreach to LLR, the Company had no contractual relationship and no material contacts with LLR.

On January 12, 2009, in response to Montgomery’s solicitation of interest, LLR entered into a non-disclosure agreement with the Company and subsequently received written materials about the Company and its financial condition and operations.

On January 30, 2009, members of management met with LLR personnel and their advisors to formally present, among other things, the Company’s business and strategic plan.

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On February 9, 2009, LLR received passcodes to the Company’s electronic data room, enabling LLR to review confidential information including Company contracts, financial reports, projections, employee data and other materials relevant to LLR’s due diligence efforts.

On March 2, 2009, LLR delivered to us a preliminary, nonbinding indication of interest, subject to, among other things, due diligence and negotiation of a mutually acceptable merger agreement, regarding a potential acquisition of the Company. LLR proposed an all-cash purchase price of $25.130 million, which after repayment of the Notes would result in approximately $0.33 per share to our stockholders. The closing market price of our common stock had ranged between $0.16 and $0.23 per share during the five trading days prior to the offer.

On March 3, 2009, Montgomery informed LLR and the other parties that had delivered formal indications of interest that the Company had requested a second round of proposals. Montgomery provided a draft merger agreement prepared by Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Company, and asked that the revised bids include a description of any material modifications to the merger agreement that the bidders would require.

In a series of off-site meetings, office visits, videoconferences and telephone calls between March 1 and April 27, 2009, representatives of LLR met with executives, directors and other employees of the Company to conduct its due diligence. Representatives of LLR and the Company discussed I-many’s financial and operating metrics, financial assumptions, employee relationships, customers and sales pipeline. These sessions included:

On March 31, 2009, LLR delivered its first comments to the Company’s proposed form of merger agreement and offered in writing to purchase the Company for $30 million in cash, which the Strategic Options

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Committee determined after repayment of the Notes and the payment of other expenses related to the transaction would result in the payment of approximately $0.33 per share to our stockholders. On April 2, 2009, our board of directors engaged Potter Anderson & Corroon LLP as special Delaware counsel.

On April 15, 2009, a strategic bidder not related to LLR (“Bidder A”) offered to purchase the Company for $32 million in cash, which represented an increase from its initial indication of interest, but its deductions from the purchase price were greater than those of LLR and its offer remained subject to contingencies that were more significant than LLR’s. Bidder A also provided comments to the Company’s draft merger agreement. The Strategic Options Committee determined that after repayment of the Notes and other specified deductions, Bidder A’s proposal would result in between $0.28 and $0.32 per share to our stockholders, depending on certain undefined expenses.

On April 20, 2009, a second strategic bidder not related to LLR or Bidder A (“Bidder B”) offered to purchase the Company for $27.5 million in cash, with deductions from the purchase price that were different from those of LLR and Bidder A, and its offer remained subject to a significant financing contingency and other conditions. Bidder B provided comments to the Company’s draft merger agreement and requested that the Company enter into a period of exclusive negotiations. The Strategic Options Committee determined that, after repayment of the Notes and other specified deductions, Bidder B’s proposal would result in approximately $0.27 per share to our stockholders. The Strategic Options Committee determined that it was not in the best interests of our stockholders to enter into exclusive negotiations with Bidder B at this time.

Following the determination of the Strategic Options Committee, representatives of Montgomery informed Bidder B that its bid was not competitive with other bids previously received by the Company and indicated that it would need to increase its offer in advance of the Company’s Board meeting to remain in the bidding process.

On April 23, 2009, during a regular quarterly meeting of our board of directors, the Company received an improved offer from Bidder B which increased its purchase price to $34.5 million in cash. The Strategic Options Committee determined that, after repayment of the Notes and the payment of specified expenses related to the transaction, Bidder B’s proposal would result in approximately $0.39 per share to our stockholders. At this time, Bidder B had not removed its financing contingency or other conditions, and Bidder B stated that it would require as long as an additional week for due diligence activities before it could sign a merger agreement.

After receiving Bidder B’s improved offer on April 23, 2009, Mr. Dennedy and representatives of Montgomery spoke with representatives of LLR, Bidder A and Bidder B, informing each of them that several competitive proposals had been received in recent days and that the Company wished to receive best and final offers from each of them. The bidders were informed that the Company expected to make a decision early in the following week.

During the evening of April 23, 2009, LLR made a telephone call to Montgomery and raised the value of its offer to $33.3 million in cash, with a reduction of some of its required deductions, and requested a 10-day period of exclusive negotiations. LLR formalized this offer in writing on the morning of April 24, 2009. The Strategic Options Committee determined that after repayment of the Notes and other specified deductions, LLR’s proposal would result in the payment of approximately $0.39 per share to our stockholders. LLR also made concessions on terms then being negotiated in the draft merger agreement and offered the favorable terms on the guarantee by LLR III of Sapphire’s obligations under the merger agreement, which we refer to in this proxy statement as the “Guarantee”, that we had requested. LLR stated that its offer would expire at 6:00 p.m. Eastern time on April 24, 2009, unless the Company agreed to enter into exclusive negotiations. At this time, LLR’s due diligence efforts and the negotiations between the parties on the draft merger agreement were substantially complete.

On April 24, 2009, our board of directors met telephonically and reviewed the terms and conditions of each of the proposals currently received from the bidders and the proposed revisions to the draft merger agreements and noted that LLR’s proposal, in addition to being for the most consideration, was subject to the least risk that

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the transaction would not be consummated. After discussion, our board of directors approved granting LLR a 5-day period to exclusively negotiate a definitive merger agreement, and Montgomery notified LLR of the Company’s decision before LLR’s deadline. The Company signed a five-day exclusivity agreement with LLR on April 25, 2009, which would expire at the close of business on April 29, 2009. Montgomery advised Bidder A and Bidder B that the Company had entered into a period of exclusive negotiations with another party, but declined to identify LLR or to specify the length of the exclusivity period.

During the evening of April 26, 2009, Bidder B delivered an unsolicited, written proposal to purchase the Company for $36.5 million in cash, which the Strategic Options Committee determined would, after repayment of the Notes and other specified deductions, result in the payment of approximately $0.43 per share to our stockholders. However, Bidder B’s proposal remained subject to both a significant financing contingency and continued due diligence (including additional due diligence by its financing source).

As required by the exclusivity agreement in effect between the Company and LLR, on April 28, 2009 we notified LLR, through Montgomery, that we had received Bidder B’s new proposal. We did not identify Bidder B or specify the terms of its offer. We encouraged LLR to improve its offer, both in terms of cash consideration for stockholders and in the resolution of the remaining merger agreement terms still in negotiation.

On April 28, 2009, we received a written proposal from LLR to purchase the Company for $36.0 million in cash, which the Strategic Options Committee determined, after repayment of the Notes and other specified deductions (different from Bidder B’s deductions), would result in approximately $0.43 per share to our stockholders. LLR cautioned, however, that its offer would expire at 2:00 p.m. Eastern time on April 29, 2009, if not accepted by that time. LLR also sent us a draft of the merger agreement. Our board of directors reviewed the offer telephonically and scheduled a meeting on the evening of April 28, 2009 to receive Montgomery’s fairness opinion on LLR’s proposal.

At a telephonic meeting in the evening of April 28, 2009, Montgomery reviewed with our board of directors its financial analysis of the merger consideration and rendered an oral opinion, which was confirmed by delivery of a written opinion on April 29, 2009, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration to be received by holders of our common stock was fair, from a financial point of view, to such holders. Our legal counsel reviewed and discussed with the board of directors the draft of the merger agreement that LLR had sent to us earlier in the day. Our board of directors directed Montgomery and legal counsel to resolve the remaining negotiating points regarding the merger agreement and the Guarantee, along the lines discussed at the meeting.

Our board of directors met telephonically at 1:00 p.m. Eastern time on April 29, 2009 to consider the final terms of the merger agreement. Following extensive discussion, our board of directors determined that it would not be advisable to allow LLR’s offer to expire and that the merger agreement with Sapphire (a) was superior to the proposals from Bidder A and Bidder B, (b) allowed the Company, in the future, to respond to alternative acquisition proposals, under certain circumstances and (c) was advisable and in the best interests of I-many and its stockholders. Following the Strategic Option Committee’s recommendation, our board of directors then unanimously resolved to adopt (and declare the advisability of) the merger agreement with Sapphire and to unanimously recommend to our stockholders that they vote their shares in favor of adopting the merger agreement.

The merger agreement and related Guarantee were signed by the parties later in the afternoon of April 29, 2009. We issued a joint press release with Sapphire announcing the merger after the close of markets the same day.

On May 6, 2009, the Company received an unsolicited offer from Bidder A. Our board of directors subsequently determined that the offer met the criteria described in Section 6.1(a) of the merger agreement and accordingly concluded that failure to engage in negotiations about this unsolicited offer with Bidder A would be inconsistent with its fiduciary duties under applicable law. As a result of this determination, the Strategic Options

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Committee entered into negotiations with Bidder A with respect to its offer and allowed Bidder A to conduct additional due diligence. On May 29, 2009, the Company received an offer for approximately $0.48 per share from Bidder A, in the form of a signed merger agreement and guarantees from certain investors in Bidder A. Following our receipt of this offer on May 29, 2009, which we shared with LLR pursuant to the terms of the merger agreement, we received a signed amendment to the merger agreement from LLR reflecting the terms of the merger described in this proxy statement (including an increase in the merger consideration to an estimated $0.49 per share and an increase in LLR’s expenses which would be subject to reimbursement on termination of the agreement in certain circumstances from $500,000 to $655,500). The board considered the proposal from Bidder A in light of the amendment to the merger agreement delivered by LLR and determined that the proposal from Bidder A did not constitute a Superior Proposal, and as a result, the Board of Directors authorized the Company to enter into the amendment to the merger agreement with LLR.

Our board of directors approved the amendment, and it was signed by I-many, in the evening of May 29, 2009. We issued a joint press release with Sapphire announcing the amendment before the open of markets on June 1, 2009.

Reasons for the Merger; Recommendation of Our Board of Directors

As described above in the section entitled “The Merger—Background of the Merger,” our board of directors unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement at a meeting held on April 29, 2009, and approved the amendment to the merger agreement at a meeting held on May 29, 2009. Our board of directors believes that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, the Company and that the merger consideration is fair to, and in the best interests of, our stockholders. In reaching this conclusion, our board of directors consulted with our management and legal and financial advisors and considered the amount of the merger consideration. In reaching its determinations, our board of directors considered the following material factors and the potential benefits of the merger (which are not listed in any relative order of importance), each of which it believed supported its decision:

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Our board of directors also considered risks or potentially countervailing factors in its deliberations concerning the merger, including but not limited to the following:

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Our board of directors concluded, however, that the risks and countervailing factors associated with the merger were outweighed by the potential benefits of the merger. Further, our board of directors was fully aware of, and considered the possible conflicts of interests of our directors, executive officers and certain employees. See the section entitled “The Merger—Our Directors, Executive Officers and Certain Employees Have Interests in the Merger That Differ from Your Interests” for a description of these possible conflicts of interest. In this regard, our Strategic Options Committee consists entirely of “independent” directors and our board of directors includes six “independent” directors, as that term is used in the applicable NASDAQ listing standards and standards of the SEC.

The above discussion of the material factors considered by our board of directors is not intended to be exhaustive, but does set forth the principal factors considered by it. In view of the wide variety of factors considered in connection with their respective evaluation of the merger and the complexity of these matters, our board of directors found it impracticable, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors they considered or determine that any factor was of particular importance in reaching their determination. Rather, our board of directors viewed its recommendations as being based upon its judgment, in light of the totality of the information presented and considered, of the overall effect of the merger on our stockholders compared to any alternative transaction or remaining an independent public company. In addition, individual members of our board of directors may have given different weight to different factors. The board of directors believes that the proposed merger is advisable and in the best interests of I-many and its stockholders. The board of directors of I-many unanimously recommends that you vote “FOR” the adoption of the merger agreement and “FOR” the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Opinion of Our Financial Advisor

Montgomery & Co., LLC has acted as financial advisor to I-many in connection with the merger. Montgomery is a leading investment bank for growth companies in the technology, healthcare and media sectors. I-many’s board of directors retained Montgomery based upon its qualifications, expertise and reputation and its knowledge of the business and affairs of I-many and the application software and content management industries. On April 28, 2009, Montgomery rendered to I-many’s board of directors its oral opinion, and subsequently confirmed in writing, that, as of that date, and based upon the assumptions made, procedures followed, matters considered and limits on review, in each case set forth in Montgomery’s written opinion, the merger consideration per share expected to be received (after factoring in any deductions provided for in the merger agreement), which management advised Montgomery it believed would equal not less than $0.43 per share, which we refer to in this section of the proxy statement as the “Per Share Consideration”, is fair to the holders of I-many common stockholders from a financial point of view. Because the merger consideration is estimated to be higher than $0.43 per share pursuant to the amendment to the merger agreement signed by the parties on May 29, 2009, management elected not to seek a revised fairness opinion from Montgomery at the time we entered into the amendment.

The full text of the written opinion of Montgomery, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of review undertaken by Montgomery in delivering its opinion, is attached as Appendix B to this proxy statement. Stockholders should read this opinion carefully and in its entirety. The following description of the opinion of Montgomery is only a summary of the written opinion and as such the following description is qualified by reference to the full text of the written opinion and is not a substitute for the written opinion.

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The opinion of Montgomery was directed to the board of directors of I-many in their consideration of the merger, and the board of directors of I-many was permitted to rely on the opinion. The opinion does not constitute a recommendation to the stockholders of I-many as to how they should vote, or take any other action, with respect to the merger. The opinion addresses only the fairness as of the date of the opinion, from a financial point of view, of the Per Share Consideration to the holders of I-many common stock. It does not address the relative merits of the merger and the other business strategies that I-many’s board of directors has considered or may be considering, I-many’s decision to proceed with the merger or any other aspect of the merger. Montgomery also has not expressed any opinion as to (i) the value of any employee agreement or other arrangement entered into in connection with the merger or (ii) any tax or other consequences that might result from the merger.

In connection with its opinion, Montgomery, among other things:

In Montgomery’s review and analysis, and in arriving at its opinion, Montgomery assumed and relied upon the accuracy and completeness of all of the financial and other information provided to it (including information furnished to it orally or otherwise discussed with Montgomery by I-many’s management) or publicly available and neither attempted to verify, nor assumed responsibility for verifying, any of such information. Montgomery relied upon the assurances of I-many’s management that management was not aware of any facts that would make such information inaccurate or misleading. Furthermore, Montgomery did not obtain or make, or assume any responsibility for obtaining or making, any independent evaluation or appraisal of the properties, assets or liabilities (contingent or otherwise) of the Company, nor was it furnished with any such evaluation or appraisal. Montgomery also made the following assumptions:

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The opinion of Montgomery was based on market, economic and other conditions as in effect on, and information made available to Montgomery as of, the date of the opinion. Accordingly, it should be understood that subsequent developments may affect the conclusion expressed in Montgomery’s opinion and Montgomery disclaims any undertaking or obligation to advise any person of any change in any matter affecting its opinion which may come or be brought to its attention after the date of the opinion.

The following represents a brief summary of the material financial analyses performed by Montgomery in connection with providing its opinion to the board of directors of I-many. Some of the summaries of financial analyses performed by Montgomery include information presented in tabular format. In order to fully understand the financial analyses performed by Montgomery, stockholders should read the tables together with the text of each summary. The tables alone do not constitute a complete summary of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Montgomery. No limitations were imposed by the Company’s board of directors with respect to the investigations made or procedures followed by Montgomery in rendering its opinion.

Certain Analyses with respect to Common Stock

No transaction used in the premiums paid or selected transactions analysis below is identical to the merger, and no company used in the comparable company analysis below is identical to I-many. Accordingly, an analysis of the results of these analyses is not mathematical; rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the value of the companies to which I-many and the merger are being compared.

Premiums Paid Analysis.    Montgomery reviewed the consideration paid in 17 merger and acquisition transactions within the high-tech industry involving a public target company, valued at under $100.0 million, based in the United States, and announced since January 1, 2008. Montgomery calculated the premiums paid in these transactions over the applicable stock price of the acquired company (i.e. the amount by which the price that the acquiror paid for the target shares exceeded the market price of such shares) one day, one week, and four weeks prior to the announcement of the applicable acquisition, and calculated the per share value implied by such premiums. After determining the premium values, Montgomery arrived at a range of fully diluted per share values for I-many common stock by using the Treasury Stock Method. The following table summarizes the results of this analysis:

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Each of the implied I-many values set forth above was based on a range of values of the first quartile to the fourth quartile. References to ranges of the first quartile to the fourth quartile mean that the low end of the range is set at the 25th percentile, and the high end at the 75th percentile, of the data points under consideration.

Selected Transactions Analysis.    Based on public and other available information about comparable companies, Montgomery assumed the given enterprise value of I-many and performed a selected transactions analysis of nine relevant transactions. In such analysis, Montgomery calculated a range of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) multiples for selected periods for comparable companies based upon precedent transactions for those companies. The enterprise value of I-many was used to calculate a multiple of revenue for the last twelve months (LTM) and the next twelve months (NTM), and a multiple of NTM EBITDA based on the nine selected acquisitions. Enterprise value was arrived at by taking the equity value, adding debt (including preferred stock and capital leases) and subtracting cash and cash equivalents. After calculating the enterprise value of I-many, Montgomery used the Treasury Stock Method to arrive at a fully diluted share price allocable to the I-many common stock.

Projected 2009 and 2010 information for I-many was based on projections by I-many management. Estimates for the selected transactions were based on Montgomery’s research and other publicly available investment banking research.

The acquisitions reviewed in this analysis were the following:

The following table sets forth the range of multiples for I-many indicated by this analysis:

Each of the implied I-many values set forth above was based on a range of multiples of the first quartile to the fourth quartile of the comparable transactions.

Comparable Company Analysis.    Based on public and other available information about comparable companies, Montgomery multiplied the estimated revenues and EBITDA of I-many for 2009 and 2010 by a range of revenue and EBITDA multiples for 2009 and 2010 derived from companies with comparable businesses. The ranges of revenue and EBITDA multiples for the comparable companies were derived by dividing the enterprise value of each comparable company (based on closing stock prices on April 27, 2009) by the estimated 2009 and 2010 revenue and EBITDA values respectively for each comparable company. After calculating the implied multiple based on the enterprise value of I-many Montgomery arrived at a range of fully diluted per share values for I-many common stock by using the Treasury Stock Method.

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Projected 2009 and 2010 information for I-many was based on projections by I-many management. Projections for the selected comparable companies were based on Montgomery’s research and other publicly available investment banking research. Montgomery believes that the companies listed below in the traditional application software and content management industries have operations similar to that of I-many, but noted that none of these companies has the same management, composition, size or combination of businesses as I-many:

The following table sets forth the range of revenue multiples for I-many indicated by this analysis:

The following table sets forth the range of EBITDA multiples for I-many indicated by this analysis:

Each of the implied I-many values set forth above was based on a range of multiples of the first quartile to the fourth quartile of the comparable companies.

General

The foregoing description is only a summary of certain of the analyses and examinations that Montgomery used to render its opinion. It is not a comprehensive description of all analyses and examinations actually conducted by Montgomery. The preparation of a fairness opinion necessarily is not susceptible to partial analysis or summary description. Montgomery believes that its analyses and the summary set forth above must be considered as a whole and that selecting portions of its analyses and of the factors considered, without considering all analyses and factors, would create an incomplete view of the process underlying the analyses set forth in its presentation to the board of directors of I-many. In addition, Montgomery may have given various analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that this analysis was given greater weight than any other analysis. Accordingly, the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of Montgomery with respect to the actual value of I-many.

In performing its analyses, Montgomery made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of I-many. The analyses performed by Montgomery are not necessarily indicative of actual values or actual future results,

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which may be significantly more or less favorable than those suggested by these analyses. These analyses were prepared solely as part of the analysis performed by Montgomery with respect to the fairness, from a financial point of view as of the date of Montgomery’s opinion, of the Per Share Consideration to be received by stockholders of I-many pursuant to the merger, and were provided to the board of directors of I-many in connection with the delivery of the Montgomery opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities may trade at any time in the future.

As described above, the opinion of Montgomery was among many factors that the board of directors of I-many took into consideration in making its determination to approve, and to recommend that the stockholders approve and adopt the merger agreement and approve the merger.

In connection with Montgomery’s engagement by I-many, except for the inquiries made to certain potential acquirers and investors approved by I-many as discussed in “The Merger—Background of the Merger” above, Montgomery was not authorized to solicit, and did not solicit, third parties regarding alternatives to the merger.

Under its engagement letter dated November 18, 2008, I-many agreed to pay Montgomery a customary fee for its services. I-many agreed to pay Montgomery (i) a fee of $300,000 upon the rendering of a fairness opinion and (ii) an additional fee of approximately $1,433,760 upon consummation of the transaction. The board of directors of I-many was aware of this fee structure and took it into account in considering the Montgomery opinion and in approving the merger. Further, I-many agreed to reimburse Montgomery for its reasonable out-of-pocket expenses and to indemnify Montgomery against specific liabilities that may arise out of Montgomery’s engagement.

Financial Projections

We do not as a matter of course publicly disclose detailed forecasts or internal projections as to future revenues, earnings or financial condition (see the discussion regarding forward-looking statements based on estimates and assumptions under the section of this proxy statement entitled “Special Note Regarding Forward-Looking Statements”). However, we have set forth below a summary of the financial projections as of May 2009 prepared by our senior management.

During the course of the due diligence process, management shared two different sets of financial projections for the Company with potential merger partners. The first projection was based on a continued weak economic environment, realization of only those license opportunities to which we had the highest degree of visibility and no transaction that provided relief from the risk of default that was probable with our Nasdaq listing requirement issue. The second financial projection assumed the same continued weak economic conditions, but improved financial viability that resulted from the execution of a transaction that solved the Company’s Nasdaq listing requirement issues and thereby allowed the Company to realize moderate license sales achievement. The first set of financial projections represented the Company’s budget and operating plan for 2009 and was our expected performance as a stand alone company. This plan is the best estimate of our performance if we were able to continue as a going concern without being able to remedy the Nasdaq delisting issues. The first projection was delivered to our board of directors and approved as the operating plan for 2009 in December 2008.

The financial projections shown below start with the 2009 operating plan as presented to our board of directors and to potential merger partners, and as provided to Montgomery for use in their analyses, and modify it for the actual performance achieved in the first quarter of 2009. During the first quarter of 2009, the Company was able to generate higher than expected bookings and recognized license revenue due primarily to one large license transaction that resulted from the conversion of a term license to a perpetual license. We view this as a significant but not repeatable opportunity. The result is that the projections show a higher revenue, operating income and net income than originally expected in the 2009 plan due to the better than expected results for the first quarter of 2009.

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While management believes that this is the best estimate for the financial performance of the Company on a standalone basis with continued viability issues due to the risk of default on the Notes due to the delisting issue with Nasdaq, there is also a recognition that if the Nasdaq issue or default on the Notes is not corrected or remedied with some type of transaction, the Company would not have been able to continue as a going concern.

This information was also not prepared with a view to complying with the published guidelines of the SEC regarding forecasts, and our management did not prepare the information in accordance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. The projections do not purport to present operations in accordance with GAAP. Neither our independent registered public accounting firm nor any other independent accountants have compiled, examined or performed any procedures with respect to the prospective financial information contained in the projections, nor have they expressed any opinion or given any form of assurance on the financial projections or their achievability. The financial projections, as modified for the actual performance achieved in the first quarter of 2009, included the following estimates of our future financial performance:

The projections in the table above assumed, among other things, that we are able to operate as a going concern through December 31, 2010 by negotiating an agreement for forbearance on the Notes through that date. There is no assurance that we would have been able to do so. Although the above-described projected financial information was prepared in good faith by our management, no assurance can be made regarding future events and, accordingly, such information cannot be considered necessarily predictive of actual future operating results and should not be relied on as such. In the view of our management, the information in this table was prepared on a reasonable basis, reflecting the best currently available estimates and judgments, and reflected, to the best knowledge and belief of our management, our expected course of action and our expected future financial performance. However, these projections were based on numerous variables and assumptions which are inherently uncertain and which may not be within the control of management, including, without limitation, factors related to general economic, regulatory, and competitive conditions. Accordingly, actual results could vary materially from those set forth in such forecasts, projections and estimates. In addition, as discussed above, this information is subjective in many respects and thus susceptible to interpretations and periodic revision based on actual experience and business developments. In light of those facts, this information is neither fact nor any guarantee of future performance and should not be relied upon as being necessarily indicative of actual future results, and you are cautioned not to place undue reliance on this information.

We have not updated or otherwise revised, and do not intend to update or otherwise revise, the projected financial information described above to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, we have not updated or otherwise revised, and do not intend to update or otherwise revise, the projected financial information to reflect changes in general economic or industry conditions or the existence or occurrence of any circumstances or events subsequent to the preparation of such projected financial information. These projections are by their nature forward-looking information, and you should read the section of this proxy statement entitled “Special Note Regarding Forward-Looking Statements” for additional information regarding the risks of unduly relying on such information.

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Our Directors, Executive Officers and Employees Have Interests in the Merger That Differ from Your Interests

When considering the recommendation of our board of directors and in considering how to vote on the adoption of the merger agreement, you should be aware that our directors, executive officers and certain of our employees have interests in the merger which are in addition to, and different from, your interests as stockholders of I-many, and that create potential or actual conflicts of interest. Together, our directors and executive officers control approximately 10.8% of our common stock outstanding as of the record date (excluding options held by such officers and directors). Our board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and recommending that our stockholders vote to adopt the merger agreement. These interests are described below.

One of Our Directors is a Partner of an Investment Fund Which Holds Our Notes and Which Will be Paid in Full From the Proceeds of the Merger

Mark Mitchell, one of our directors, is a partner of Ramius LLC, a private investment management firm. Ramius holds our Notes in the principal amount of $5,873,000, or 34.5% of the aggregate principal amount of our Notes. The principal and accrued interest due under the notes will be paid in full upon the closing of the merger.

Certain Executive Officers and Employees May be Employed by Sapphire Following the Merger

Following the merger, any or all of our employees may continue to be employed by the surviving corporation. However, no employment terms were negotiated in advance of the signing of the merger agreement; and the merger is not conditioned on any such arrangements. Sapphire has not indicated an intention to modify the current terms of employment of our employees, other than proposing that continuing employees will be entitled to receive equity incentive awards in the surviving corporation following the merger.

D&O Liability Insurance and Indemnification

Under the merger agreement, Sapphire has agreed that for a period of six years after the completion of the merger the surviving corporation will maintain our current directors’ and officers’ liability insurance policies, or similar substitute policies (including a “tail” policy); provided that the annual premiums for such insurance would not be in excess of 250% of the current annual premiums paid by I-many for such insurance. In addition, for six years, Sapphire and the surviving corporation will indemnify our directors and executive officers to the fullest extent permitted under the Delaware General Corporation Law (which we refer to in this proxy statement as the “DGCL”), and Sapphire will cause the surviving corporation to maintain indemnification provisions in the surviving corporation’s organizational documents which are not less favorable than in I-many’s current organizational documents. See “The Merger Agreement—Further Actions and Agreements.”

Merger Consideration

Our executive officers and directors will receive the same merger consideration per share as other stockholders for each share of our common stock that they hold, with the exact amount to be determined according to the formula set forth in the merger agreement. See “Security Ownership of Certain Beneficial Owners and Managers” for a summary of the shares of our common stock held by our directors and executive officers.

Current Employment and Severance Arrangements

Other than as noted below, each of John A. Rade, Kevin M. Harris, Lawrence Lindsey, Robert G. Schwartz, Jr., A. Todd Shytle, Melissa Walker and Michael T. Zuckerman has entered into an agreement with us which provides severance benefits equal to (a) six months of his or her base salary and certain medical benefits if his or her employment is terminated by us or if he or she resigns after the conditions of his or her employment are materially reduced, other than for cause and (b) a lump sum payment equal to six months of his or her base salary

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if a change in control of I-many, including the merger, occurs during his or her employment. These lump sum payments are quantified below under “Cash Bonuses.” The medical benefits provided during the severance period (extended to 12 months if employment is terminated within a year after a change of control of the Company, including the merger) are limited to cash reimbursement of the excess cost for the executive to purchase health insurance from us under the Consolidated Omnibus Budget Reconciliation Act of 1985, referred to as COBRA, above the cost the executive would have paid for such insurance as an employee. The salary and medical benefits for employment termination would be paid over time in our normal payroll cycle. In addition, other than as described below for Mr. Rade, upon a change in control of I-many during the executive’s employment, 100% of the executive’s then unvested stock options and, if applicable, restricted stock will vest. The salary and medical benefits, which are subject in each case to the executive’s signing a release of all legal claims against us, are collectively referred to as the “core severance benefits.” The lump sum payment and vesting acceleration upon a change of control are collectively referred to as the “change of control benefits.”

John A. Rade.    Pursuant to an employment agreement entered into with Mr. Rade in January 2007 and amended in March 2009, Mr. Rade is entitled to written notification 90 days in advance of any termination of his employment by us, other than for cause, in addition to the core severance benefits and change of control benefits under the conditions described above, except that the vesting of Mr. Rade’s stock option awards with vesting conditions tied to market stock prices would not automatically accelerate upon the closing of the merger. Provided that Mr. Rade remains on our board of directors or serves as a consultant to the Company after termination of his services as Chief Executive Officer, his stock options would remain exercisable and his stock options (1) granted before February 15, 2006 for his services as a non-employee Director (87,500 shares), (2) granted on February 17, 2006 (250,000 shares) and (3) granted on September 1, 2006, January 2, 2007 and January 15, 2007 with vesting terms tied to company performance (600,000 shares) would continue to vest. Vesting of the remaining option options granted on September 1, 2006 (600,000 shares) would discontinue when Mr. Rade’s service as Chief Executive Officer ends.

Kevin M. Harris.    In March 2009, we entered into a severance agreement with Mr. Harris, which superseded his prior employment agreement. Under this agreement, Mr. Harris is entitled to the core severance benefits and the change of control benefits described above, except that he would be entitled to a total of 12 months of his base salary and certain medical benefits if his employment is terminated by us or if he resigns after the conditions of his employment are materially reduced, other than for cause, and a total of 9 months of his base salary and 12 months of certain medical benefits if this occurs following a change of control of the Company.

Lawrence Lindsey.    In June 2008, we entered into a severance agreement with Mr. Lindsey. Under this agreement, which was amended in March 2009, he is entitled to the core severance benefits and change of control benefits under the conditions described above.

Robert G. Schwartz, Jr.    In February 2007, we entered into a severance agreement with Mr. Schwartz. Under this agreement, which was amended in March 2009, he is entitled to the core severance benefits and change of control benefits under the conditions described above.

A. Todd Shytle.    In December 2006, we entered into a severance agreement with Mr. Shytle. Under this agreement, which was amended in March 2009, he is entitled to the core severance benefits and change of control benefits under the conditions described above.

Melissa Walker.    In July 2008, we entered into a severance agreement with Ms. Walker. Under this agreement, which was amended in March 2009, she is entitled to the core severance benefits and change of control benefits under the conditions described above.

Michael T. Zuckerman.    In March 2007, we entered into a severance agreement with Mr. Zuckerman. Under this agreement, which was amended in March 2009, he is entitled to the core severance benefits and change of control benefits under the conditions described above.

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Cash Bonuses

Pursuant to the severance and employment agreements described above or a separate arrangement, upon the consummation of the merger, the following executive officers and key employees the Company will become entitled to a lump-sum change of control bonus equal to the amounts shown, less deductions for applicable taxes:

Restricted Stock Vesting

Immediately prior to the effective time of the merger, the shares of restricted common stock held by our employees will become fully vested and represent the right to receive the per-share merger consideration. As of the date of this proxy statement, the total number of shares of restricted common stock held by our non-employee directors, executive officers and key employees is as follows:

Options

Some of our directors, executive officers and employees have options to purchase our common stock. All such options will become fully vested immediately prior to the effective time of the merger. The holder of each option with a per share exercise price of less than the amount received in the merger for each share of our common stock (whether or not vested) will be entitled to receive the difference between such amount and the per share exercise price of each option, less any applicable withholding taxes. All other options will be cancelled in the merger. As of the record date, options to purchase 6,930,996 shares were outstanding.

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The following table summarizes the number of shares subject to vested options, the number of shares subject to unvested options and the total number of shares subject to options held by each non-employee director, executive officer and key employee, as of the date of this proxy statement:

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Warrants

Steven L. Fingerhood, a director of the Company, is a manager of ZF Ventures LLC, which beneficially holds a warrant representing the right to purchase an aggregate of 378,788 shares of our common stock at a price per share of $2.11. As required by its terms, at the effective time of the merger, this warrant will represent the right to receive the Black-Scholes value of the remaining unexercised portion. The Company estimates that the Black-Scholes value of the warrant is zero.

Option Grants to Executive Officers and Employees

Following the merger, from time to time, Sapphire may elect to grant to our employees options to purchase stock of the surviving corporation. However, no such grants were negotiated in advance of the signing of the merger agreement.

Continuation of Benefits

Sapphire has agreed to continue to provide our employees with full credit for prior service for purposes of making determinations under any benefit plans. See “The Merger Agreement—Further Actions and Agreements.”

Governmental and Regulatory Approval

In order to consummate the merger, after all of the conditions to the merger have been satisfied and/or waived, a certificate of merger will be filed with the Secretary of State of the State of Delaware. We are not aware of any other federal or state regulatory requirements that must be complied with or approval that must be obtained in connection with the merger agreement.

Material U.S. Federal Income Tax Consequences of the Merger

The following discussion is a summary of the anticipated material U.S. federal income tax consequences to a holder of our common stock whose shares are converted into the right to receive cash in the merger. This summary is based upon provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury regulations and judicial and administrative rulings and decisions all as in effect as of the date hereof. Legislative, judicial or administrative changes may be forthcoming that could alter or modify the statements set forth herein, possibly on a retroactive basis. The summary does not purport to deal with all aspects of U.S. federal income taxation of the merger that may affect particular holders of our common stock in light of their individual circumstances, nor with certain types of holders subject to special treatment under the federal income tax laws, such as holders who acquired their common stock as compensation, are dealers in securities or foreign currency, financial institutions, insurance companies, tax-exempt organizations, brokers, mutual funds or holders who hold their shares of common stock as part of an integrated investment (including a “straddle,” “constructive” sale or “conversion” transaction). In addition, the summary assumes that any of our common stock exchanged in the merger is held as a capital asset.

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As used herein, the term “U.S. holder” means a beneficial owner of shares of our common stock that is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States, (ii) a corporation or other business entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (a) a court within the United States can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of that trust or (b) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a holder of our common stock is a partnership or other entity treated as a partnership for U.S. federal income tax purposes, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Such holders should consult their own tax advisors as to the consequences of the merger to them.

A non-U.S. holder is a holder of common stock that is neither a U.S. holder nor a partnership or an entity treated as a partnership for U.S. federal income tax purposes.

This summary of certain material U.S. federal income tax consequences is for general information only and is not tax advice. Holders of our common stock should consult their own tax advisors with respect to the application of the U.S. federal income tax laws to their particular situations as well as any tax consequences arising under any other U.S. federal tax laws (including U.S. federal estate, gift and alternative minimum tax laws) and under the laws of any state, local, foreign or other taxing jurisdiction.

Tax Treatment of U.S. Holders of our Common Stock

In general, a U.S. holder whose shares of stock are converted into the right to receive cash in the merger will recognize capital gain or loss equal to the difference between (i) the amount of cash received with respect to such shares and (ii) the U.S. holder’s adjusted tax basis in such shares. Such gain or loss generally will be long-term capital gain or loss if the holder held the shares for more than one year at the time of the merger. A holder’s gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) that are exchanged in the merger.

Tax Treatment of non-U.S. Holders of our Common Stock

A non-U.S. holder of our common stock will not be subject to U.S. federal income tax on gain realized on the receipt of cash in exchange for shares in the merger unless (i) such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the merger and certain other conditions are met, in which case the gain will be subject to tax at a rate of 30% (or lower treaty rate); (ii) such gain is effectively connected with the conduct by the non-U.S. holder of a trade or business in the United States and, if certain U.S. income tax treaties apply, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States, in which case the non-U.S. holder will be subject to tax on the gain in the same manner as if the non-U.S. holder were a U.S. holder and, if the non-U.S. holder is a corporation, may be subject to the branch profits tax equal to 30% (or lower treaty rate) of its effectively connected earnings and profits for that taxable year and (iii) I-many is, or has been, a United States real property holding corporation, which we refer to in this proxy statement as a USRPHC, during the shorter of the non-U.S. holder’s holding period or the 5-year period ending on the date of the merger, provided, that as long as our common stock is regularly traded on an established securities market, generally only non-U.S. holders who have held more than 5% of I-many common stock at any time during such five-year or shorter period will be subject to taxation under this rule. We believe that we are not now and have not been within the previous five years, a USRPHC.

Backup Withholding

In order to avoid “backup withholding” of federal income tax on payments of cash in exchange for your shares of our common stock pursuant to the merger, you must, unless an exception applies under the applicable

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law and regulations, provide your correct taxpayer identification number, which we refer to in this proxy statement as a TIN, on a Form W-9 (or, in the case of a stockholder that is a nonresident alien individual or foreign entity, on an appropriate IRS Form W-8), certify under penalties of perjury that such number is correct and otherwise comply with the backup withholding rules. A Form W-9 (or a valid substitute) will be included as part of the letter of transmittal to be sent to stockholders by the exchange agent. If the correct TIN and certifications are not provided, a penalty may be imposed on a stockholder by the Internal Revenue Service and the cash payments received by a stockholder in consideration for shares of common stock in the merger may be subject to backup withholding tax at a rate of 28%. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

The tax consequences of the merger may vary depending upon the particular circumstances of each stockholder. You should consult your tax advisor concerning the federal, state, local, foreign or other tax consequences of the merger to you.

Litigation Related to the Merger

As of the date of the printing of this proxy statement, we are aware of no lawsuits that have been filed related to the merger.

Delisting and Deregistration of our Common Stock

If the merger is completed, our common stock will no longer be publicly traded and will be deregistered under the Securities Exchange Act of 1934.

As noted above under “The Merger—Background of the Merger,” we are not in compliance with certain NASDAQ listing standards. Accordingly, NASDAQ informed us on May 27, 2009 that our common stock has been delisted from the NASDAQ Capital Market, and would be suspended from trading effective as of the start of trading on May 29, 2009. I-many has been advised by Pink OTC Markets Inc. that I-many’s stock was immediately eligible for quotation on the Pink Sheet^® electronic over-the-counter securities market effective at the opening of business on May 29, 2009, and will continue to trade under the symbol IMNY. In the future, I-many’s common stock may be quoted on the Over-the-Counter Bulletin Board (the “OTCBB”), an electronic quotation service maintained by the Financial Industry Regulatory Authority (“FINRA”), provided that a market maker in the company’s common stock files the appropriate application with FINRA and FINRA approves the application.

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APPRAISAL RIGHTS

If you do not vote for the adoption of the merger agreement at the special meeting and otherwise comply with the applicable statutory procedures of Section 262 of the DGCL summarized herein, you may be entitled to appraisal rights under Section 262 of the DGCL. In order to exercise and perfect appraisal rights, a record holder of our common stock must follow the steps summarized below properly and in a timely manner.

If you hold your shares in “street name,” you are considered the beneficial owner and not the “record holder” of the stock. Therefore, as the beneficial owner, you cannot exercise appraisal rights unless you act promptly either (i) to cause the record holder to take the required steps necessary to exercise appraisal rights on your behalf or (ii) to obtain a legal proxy from the record holder of the stock appointing you as its legal proxy so you can exercise appraisal rights on its behalf.

Section 262 of the DGCL is reprinted in its entirety as Appendix C to this proxy statement. Set forth below is a summary description of Section 262 of the DGCL. The following summary describes the material aspects of Section 262 of the DGCL, and the law relating to appraisal rights and is qualified in its entirety by reference to Appendix C. All references in Section 262 and this summary to “stockholder” are to the record holder of the shares of our common stock immediately prior to the effective time of the merger as to which appraisal rights are asserted. Failure to comply strictly with the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.

Under the DGCL, holders of our common stock who follow the procedures set forth in Section 262 of the DGCL will be entitled to have their shares appraised by the Delaware Court of Chancery (the “Delaware Court”) and to receive payment in cash of the “fair value” of those shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, as determined by that court.

Under Section 262 of the DGCL, where a merger agreement relating to a proposed merger is to be submitted for adoption at a meeting of stockholders, as in the case of the special meeting, the corporation, not less than 20 days prior to such meeting, must notify each of its stockholders who was a stockholder on the record date with respect to such shares for which appraisal rights are available, that appraisal rights are so available, and must include in each such notice a copy of Section 262 of the DGCL. This proxy statement constitutes such notice to the holders of our common stock and Section 262 of the DGCL is attached to this proxy statement as Appendix C. Any stockholder who wishes to exercise such appraisal rights or who wishes to preserve his right to do so should review the following discussion and Appendix C carefully, because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights under the DGCL.

If you wish to exercise appraisal rights you (a) must not vote for the adoption of the merger agreement and (b) must deliver to I-many, before the vote on the proposal to adopt the merger agreement, a written demand for appraisal of such stockholder’s shares of our common stock. If you sign and return a proxy card or vote by submitting a proxy by telephone, through the Internet or by fax, without expressly directing that your shares of our common stock be voted against the adoption of the merger agreement, you will effectively waive your appraisal rights because such shares represented by the proxy will be voted for the adoption of the merger agreement. Accordingly, if you desire to exercise and perfect appraisal rights with respect to any of your shares of common stock, you must either (i) refrain from executing and returning the enclosed proxy card and from voting in person or by submitting a proxy by telephone, through the Internet or by fax, in favor of the proposal to adopt the merger agreement or (ii) check either the “against” or the “abstain” box next to the proposal on such card or vote in person or by submitting a proxy by telephone, through the Internet or by fax, against the proposal or register in person an abstention with respect thereto. A vote or proxy against the adoption of the merger agreement shall not, in and of itself, constitute a demand for appraisal.

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A demand for appraisal will be sufficient if it reasonably informs I-many of the identity of the stockholder and that such stockholder intends thereby to demand appraisal of such stockholder’s shares of common stock. This written demand for appraisal must be separate from any proxy or vote abstaining from or voting against the adoption of the merger agreement. If you wish to exercise your appraisal rights you must be the record holder of such shares of our common stock on the date the written demand for appraisal is made and you must continue to hold such shares through the effective time of the merger. Accordingly, a stockholder who is the record holder of shares of common stock on the date the written demand for appraisal is made, but who thereafter transfers such shares prior to the effective time of the merger, will lose any right to appraisal in respect of such shares.

Only a holder of record of shares of our common stock is entitled to assert appraisal rights for such shares of our common stock registered in that holder’s name. A demand for appraisal should be executed by or on behalf of the holder of record, fully and correctly, as the holder’s name appears on the stock certificates and must state that such person intends thereby to demand appraisal of his, her or its shares. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand for appraisal should be made in that capacity, and if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including one for two or more joint owners, may execute the demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for such owner or owners.

A record holder such as a broker who holds shares as nominee for several beneficial owners may exercise appraisal rights with respect to the shares of our common stock held for one or more beneficial owners while not exercising such rights with respect to the shares held for other beneficial owners; in such case, the written demand should set forth the number of shares as to which appraisal is sought. Where the number of shares of our common stock is not expressly stated, the demand will be presumed to cover all shares held in the name of the record owner. If you hold your shares in brokerage accounts or other nominee forms and wish to exercise your appraisal rights, you are urged to consult with your broker to determine the appropriate procedures for the making of a demand for appraisal.

All written demands for appraisal of shares must be mailed or delivered to: I-many, Inc., 399 Thornall Street, 12^th Floor, Edison, NJ 08837, Attention: Secretary, or should be delivered to the secretary at the special meeting, prior to the vote on the adoption of the merger agreement.

Within ten days after the effective time of the merger, we will notify each stockholder of the effective time of the merger who properly asserted appraisal rights under Section 262 and has not voted for the adoption of the merger agreement.

Within 120 days after the effective time of the merger, but not thereafter, we or any stockholder who has complied with the statutory requirements summarized above may file a petition in the Delaware Court demanding a determination of the fair value of the shares held by such stockholder. If no such petition is filed, appraisal rights will be lost for all stockholders who had previously demanded appraisal of their shares. We are not under any obligation, and we have no present intention, to file a petition with respect to appraisal of the value of the shares. Accordingly, if you wish to exercise your appraisal rights, you should regard it as your obligation to take all steps necessary to perfect your appraisal rights in the manner prescribed in Section 262 of the DGCL.

Within 120 days after the effective time of the merger, any stockholder who has complied with the provisions of Section 262 of the DGCL will be entitled, upon written request, to receive from us a statement setting forth the aggregate number of shares of our common stock not voted in favor of the adoption of the merger agreement and with respect to which demands for appraisal were received by us, and the number of holders of such shares. Such statement must be mailed within ten days after the written request therefore has been received by us.

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If a petition for an appraisal is timely filed and a copy thereof served upon us, we will then be obligated, within 20 days, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of the stockholders who have demanded appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the Delaware Court, the Delaware Court is empowered to conduct a hearing on such petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court may require the stockholders who demanded appraisal rights of our shares of common stock to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceeding; and if any stockholder fails to comply with such direction, the Delaware Court may dismiss the proceedings as to such stockholder.

After determining which stockholders are entitled to appraisal, the Delaware Court will appraise the shares of our common stock and determine 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, if any, to be paid upon the amount determined to be the fair value. If you are considering seeking appraisal, you should be aware that the fair value of your shares as determined under Section 262 of the DGCL could be more than, the same as or less than the consideration you are entitled to receive pursuant to the merger agreement if you did not seek appraisal of your shares and that investment banking opinions as to the fairness from a financial point of view of the consideration payable in a merger are not necessarily opinions as to fair value under Section 262 of the DGCL. In determining “fair value” of shares, the Delaware Court shall take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court has stated that such factors include “market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which were known or which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation.” In Weinberger, the Delaware Supreme Court stated, among other things, that “proof of value by any techniques or methods generally considered acceptable in the financial community and otherwise admissible in court” should be considered in an appraisal proceeding. In addition, the Delaware Court has decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenter’s exclusive remedy.

The Delaware Court shall direct the payment of the fair value of the shares of our common stock who have perfected appraisal rights, together with interest, if any. The Delaware Court will determine the amount of interest, if any, to be paid on the amounts to be received by persons whose shares of our common stock have been appraised. The costs of the action may be determined by the Delaware Court and taxed upon the parties as the Delaware Court deems equitable. The Delaware Court may also order that all or a portion of the expenses incurred by any stockholder in connection with an appraisal, including without limitation reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, be charged pro rata against the value of all of the shares entitled to appraisal. In the absence of such determination or assessment, each party bears its own expenses.

Any stockholder who has duly demanded and perfected an appraisal in compliance with Section 262 of the DGCL will not, after the effective time of the merger, be entitled to vote his or her shares for any purpose or be entitled to the payment of dividends or other distributions thereon, except dividends or other distributions payable to holders of record of shares of our common stock as of 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 or her demand for appraisal and to accept the cash payment for his or her shares pursuant to the merger agreement. After this period, a stockholder may withdraw his or her demand for appraisal only with our written consent. If no petition for appraisal is filed with the Delaware Court within 120 days after the effective time of the merger, a stockholder’s right to appraisal will cease and he or she will be entitled to receive the cash payment for his or her shares pursuant to the merger agreement, as if he or she had not demanded appraisal of his or her shares. No petition timely filed in the Delaware Court demanding appraisal will be dismissed as to any stockholder without the approval of the Delaware Court, and such approval may be conditioned on such terms as the Delaware Court deems just.

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If you properly demand appraisal of your shares of our common stock under Section 262 and you fail to perfect, or effectively withdraw or lose, your right to appraisal, as provided in the DGCL, your shares will be converted into the right to receive the consideration receivable with respect to such shares in accordance with the merger agreement. You will fail to perfect, or effectively lose or withdraw, your right to appraisal if, among other things, no petition for appraisal is filed within 120 days after the effective time of the merger, or if you deliver to us a written withdrawal of your demand for appraisal. Any such attempt to withdraw an appraisal demand more than 60 days after the effective time of the merger will require our written approval.

If you desire to exercise your appraisal rights, you must not vote for the adoption of the merger agreement and must strictly comply with the procedures set forth in Section 262 of the DGCL.

Failure to take any required step in connection with the exercise of appraisal rights will result in the termination or waiver of such rights.

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THE MERGER AGREEMENT

The Merger Agreement

The following summary of the material terms of the merger agreement is qualified in its entirety by reference to the complete text of the merger agreement, including the amendment to the merger agreement signed on May 29, 2009, which are incorporated by reference herein and attached hereto as Appendix A. Our stockholders are urged to read the full text of the merger agreement in its entirety.

The Merger

Under the terms of the merger agreement, Sapphire Stripe Acquisition Corporation, a wholly owned subsidiary of Sapphire, will merge with and into I-many, with I-many continuing as the surviving corporation of the merger. As a result of the merger, the separate corporate existence of Sapphire Stripe Acquisition Company will cease, and I-many will become a wholly owned subsidiary of Sapphire. We sometimes refer to I-many after the merger as the surviving corporation.

Effective Time

The closing of the merger will occur no later than the second business day following the satisfaction or waiver of all of the closing conditions set forth in the merger agreement or at such other date as the parties may agree in writing. The merger will become effective upon the filing of a certificate of merger with the Delaware Secretary of State (or such later time as may be agreed in writing by each of the parties hereto and specified in the certificate of merger). We intend to complete the merger as promptly as practicable, subject to receipt of stockholder approval and all requisite regulatory approvals. Although we expect to complete the merger during the second or third quarter of 2009, we cannot specify when, or assure you that, we and Sapphire will satisfy or waive all conditions to the merger.

Merger Consideration

At the effective time of the merger, each issued and outstanding share of our common stock, other than treasury shares, any shares owned by one of our wholly-owned subsidiaries, any shares held by Sapphire or one of its wholly owned subsidiaries, and shares held by stockholders who have demanded and not effectively withdrawn or lost appraisal rights, will be canceled and automatically converted into the right to receive the amount described below in cash, without interest and less applicable withholding taxes. Treasury shares and any shares of our capital stock held by one of our wholly-owned subsidiaries, by Sapphire or by one of its wholly-owned subsidiaries, will be automatically canceled and extinguished without any conversion of such shares and no consideration will be paid for such shares. Shares held by our stockholders who perfect their appraisal rights will be converted into the right to receive such consideration as may be determined under the DGCL. The per share merger consideration will be equitably adjusted in the event of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares or similar event with respect to our common stock that occurs prior to the effective time of the merger.

The amount in cash that a stockholder will be entitled to receive for each share of common stock will be calculated as follows:

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Based on our estimates of the values of the formula components, the merger consideration will be approximately $0.49 per share. The actual merger consideration per share will be determined based on the actual value of the formula components at the effective date of the merger as finally determined by the Company and Sapphire as of the closing date of the merger. If the estimated expenses incurred by I-many in connection with the merger agreement increase from $2,400,000 to $2,600,000, the merger consideration will be approximately $0.48 per share.

Payment Procedures

Sapphire and I-many have designated American Stock Transfer & Trust Company to serve as exchange agent for the payment of the merger consideration to our stockholders. At or prior to the effective time, Sapphire will deposit, or cause to be deposited, cash with the exchange agent in order to permit the payment of the merger consideration. Within five days after the effective time, the exchange agent will mail to each holder of record of our common stock that was issued and outstanding immediately prior to the effective time of the merger a letter of transmittal and instructions for use in effecting the surrender of the certificates that represent shares of our common stock in exchange for the merger consideration. If any of your certificates representing common stock have been lost, stolen or destroyed, you will be entitled to obtain the merger consideration after you make an affidavit of that fact and, if required by the surviving corporation, in its reasonable judgment, post a bond, in such reasonable amount as Sapphire may direct, as indemnity against any claim made against it with respect to such certificates and the payment of any fee charged by the exchange agent for such service. Until surrendered, each stock certificate will be deemed at all times after the effective time to represent only the right to receive upon surrender the merger consideration into which the shares of our common stock previously represented by such certificate have been converted. No interest will be paid or will accrue on the cash payable upon the surrender of any certificate.

Sapphire is entitled to cause the exchange agent to deliver to it any funds that have not been distributed within one year after the effective time of the merger. After that date, holders of certificates who have not complied with the instructions to exchange their certificates will be entitled to look only to Sapphire for payment of the applicable merger consideration.

You should not send your I-many stock certificates to the exchange agent until you have received transmittal materials from the exchange agent. Do not return your I-many stock certificates with the enclosed proxy.

Appraisal Rights

Shares of our common stock issued and outstanding immediately prior to the effective time of the merger that are held by any holder who has demanded and not effectively withdrawn or lost appraisal rights to such shares will not be converted into the right to receive the merger consideration. Instead such holder will only be

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entitled to payment of the appraised value of such shares in accordance with the DGCL. At the effective time of the merger, all such shares will automatically be cancelled and will cease to exist or be outstanding, and each holder will cease to have any rights with respect to the shares, except for rights granted under Section 262 of the DGCL. In the event a holder withdraws or loses (through failure to perfect or otherwise) the right to appraisal under the DGCL, then the rights of such holder will be deemed to have been converted at the effective time of the merger into the right to receive the merger consideration described above. We are required to serve prompt notice to Sapphire of any demands for appraisal that we receive, and Sapphire has the right to participate, at its own expense, in all negotiations and proceedings with respect to demands for appraisal under the DGCL. We may not, without Sapphire’s prior written consent or as otherwise required under the DGCL, make any payment with respect to, or settle or offer to settle, any demands for appraisal.

These rights in general are discussed more fully under the section of this proxy statement entitled “Appraisal Rights.”

Treatment of I-many Stock Options, Restricted Stock, Stock Purchase Plan and Warrants

Stock Options.    In connection with the merger, the holder of each option to purchase shares of our common stock with a per share exercise price of less than the amount received in the merger for each share of our common stock (whether or not vested) will be entitled to receive the difference between such amount and the per share exercise price of each option, less any applicable withholding taxes. All other options will be cancelled in the merger.

Restricted Stock.    At the effective time of the merger, any shares of our common stock subject to vesting or lapse restrictions will become free of such restrictions, and will represent the right to receive the same merger consideration per share as any other share of our common stock.

Stock Purchase Plan.    We have agreed to cancel our employee stock purchase plan immediately prior to the effective time of the merger and we will refund to each participant in the purchase plan all payroll deductions made pursuant to the purchase plan.

Warrants.    As of the date of this proxy statement, there are twenty outstanding warrants to purchase shares of our common stock. One warrant, issued in August 2001, represents the right to purchase 4,546 shares of our common stock at a price per share of $13.20, and the remaining warrants, originally issued in November 2006, represent the rights to purchase an aggregate of 1,052,580 shares of our common stock at a price per share of $2.11. As required by the terms of the warrants, at the effective time of the merger, each outstanding warrant shall represent the right to receive (upon payment of the exercise price of the warrant) the amount, without interest, per share of our common stock underlying such warrant received by holders of our common stock in connection with the merger. Based on certain assumptions set forth elsewhere in this proxy statement, we believe holders of our common stock will receive approximately $0.49 per share of our common stock in connection with the merger. Accordingly, based on the exercise price of each of the outstanding warrants, we believe that no warrants will entitle the holders thereof to payment on account of the merger.

Representations and Warranties

In the merger agreement, we made representations and warranties to Sapphire and Sapphire Stripe Acquisition Company relating to the following:

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In the merger agreement, Sapphire and Sapphire Stripe Acquisition Company made representations and warranties to us, including those relating to the following:

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Definition of Company Material Adverse Effect

Several of the representations and warranties made by us in the merger agreement and certain conditions to Sapphire’s performance of its obligations under the merger agreement are qualified by reference to whether the item in question would have a “Material Adverse Effect” on us. The merger agreement provides that a “Company Material Adverse Effect” means any material change, fact, event, circumstance, occurrence or development, individually or in the aggregate, with respect to, or material adverse effect on, the business, financial condition or results of operations of the Company and its subsidiaries taken as a whole; provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred a Company Material Adverse Effect: (i) changes that are the result of economic factors affecting the national, regional or world economy or acts of war or terrorism (except to the extent the occurrence of such changes or events disproportionately affects the Company), (ii) changes that are the result of factors generally affecting the industries or markets in which the Company operates (except to the extent the occurrence of such changes disproportionately affects the Company), (iii) any adverse change, effect or circumstance arising out of or resulting from actions contemplated by the parties in connection with the merger agreement or the pendency or announcement of the transactions contemplated by the merger agreement, including without limitation actions of competitors, any delays or cancellations of orders for products or services, losses of employees or any impact on relationships, contractual or otherwise, with customers, suppliers, lenders, creditors, venture partners or employees, (iv) changes in law, rules or regulations or generally accepted accounting principles or the interpretation thereof, (v) any action contemplated by the parties in connection with the merger agreement or at the request of Sapphire, (vi) any fees or expenses incurred in connection with the transactions contemplated by the merger agreement, (vii) any failure by the Company to meet any published securities analyst estimates of revenues or earnings for any period ending on or after the date of the merger agreement and prior to the closing of the merger (provided that the underlying causes of such failures shall be excluded), (viii) any stockholder litigation arising from or relating to the merger, (ix) a rejection by the NASDAQ Listing Qualifications Hearings Department of the Company’s appeal of the NASDAQ Stock Market’s de-listing order dated November 24, 2008 or the subsequent delisting or suspension from trading of the Company’s stock, (x) the occurrence of an Event of Default (as defined therein) under the Notes and/or the acceleration of the Notes by any holder thereof (but not including the attachment or seizure of Company assets by any holder thereof pursuant to its rights or remedies with respect thereto), (xi) a decline in the price of our common stock, (xii) any litigation arising from or relating to the transactions contemplated by the merger agreement and (xiii) any natural disaster or other act of God.

Covenants Relating to the Conduct of Our Business

During the period between the date of the merger agreement and the effective time of the merger, we have agreed with Sapphire, except as expressly contemplated by the merger agreement or the schedules thereto or as Sapphire may otherwise consent in writing, that we will use commercially reasonable efforts to (i) conduct our business in the ordinary course of business, (ii) maintain and preserve our and our subsidiaries’ business organization, assets and properties and (iii) preserve our business relationships with customers, strategic partners, suppliers, distributors and others with whom we have business dealings, including paying of accounts payable in a timely manner consistent with past practice.

In addition, we have agreed with Sapphire that we will not, and will not permit our subsidiaries to, do any of the following without the prior written consent of Sapphire:

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No Solicitation

We have agreed that we will not, and we will instruct our officers, directors, employees, subsidiaries, and specified other representatives not to, directly or indirectly:

We are obligated to promptly advise Sapphire if any acquisition proposal is received and of the material terms and conditions of any such acquisition proposal. We also agreed to immediately cease all discussions or negotiations with any parties that were ongoing prior to the execution of the merger agreement with respect to any other acquisition proposal.

However, we may furnish information to, enter into discussions or negotiations with, and release from any standstill agreement, a person who has made an alternative acquisition proposal not resulting from a breach of our non-solicit obligation only if our board of directors has:

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In addition, our board of directors has agreed not to change its recommendation to the Company’s stockholders in favor of the merger unless the board of directors has determined in good faith (after consultation with our external legal counsel) that such action is necessary to comply with its fiduciary duties under applicable law. Our board of directors has further agreed not to adopt, approve or recommend any alternative acquisition proposal, unless the board of directors has determined in good faith (after consultation with our external legal counsel and our financial advisor) that:

An “acquisition proposal” means any inquiry, proposal or offer received by the Company after the execution of the merger agreement from any person or certain groups of persons relating to any direct or indirect acquisition of 25% or more of the assets of the Company and its subsidiaries, taken as a whole, or 25% or more of any class or series of equity securities of the Company or any of its subsidiaries, any tender offer or exchange offer that if consummated would result in any person or certain groups of persons beneficially owning 25% or more of any class or series of equity securities of the Company or any of its subsidiaries, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction of the sale or other transfer or all or substantially all of its assets involving the Company or any of its subsidiaries, other than the merger contemplated by the merger agreement.

A “superior proposal” means any bona fide written proposal made by a third party to acquire over 50% of the equity securities or consolidated total assets of the Company and its subsidiaries, pursuant to a tender or exchange offer, a merger, a consolidation, a business combination, a recapitalization, a liquidation, a dissolution, a sale of its assets or other similar transaction, (i) on terms which our board of directors determines in its good faith judgment to be more favorable to the holders of the Company’s common stock than the transactions contemplated by the merger agreement (after consultation with its financial advisor), taking into account all the terms and conditions of such proposal and the merger agreement and (ii) that our board of directors determines in its good faith judgment is highly likely of being completed on the terms proposed, taking into account all financial, regulatory, legal and other aspects of such proposal.

Conditions to the Closing of the Merger

Our and Sapphire’s obligations to consummate the merger are subject to the satisfaction of each of the following conditions:

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In addition, the obligations of Sapphire to consummate the merger are subject to the satisfaction of each of the following additional conditions:

In addition, our obligations to consummate the merger are subject to the satisfaction of each of the following additional conditions:

Termination

The merger agreement may be terminated at any time prior to the effective time of the merger, upon our mutual agreement with Sapphire, even if our stockholders have adopted the merger agreement at the special meeting.

In addition, we and Sapphire each have separate rights to terminate the merger agreement without the agreement of the other party if, among other things:

The merger agreement may also be terminated by Sapphire if:

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Additionally, we may terminate the merger agreement if:

Termination Fee; Expenses

Except as provided below or for the adjustment to the merger consideration provided above, under the merger agreement, each of the parties will bear all fees and expenses it incurs in connection with the merger and the merger agreement. In addition, we will split the expenses related to the printing, filing and mailing of this proxy statement with Sapphire.

We must pay to Sapphire a termination fee of $1,350,000 if the merger agreement is terminated pursuant to its terms by Sapphire, in connection with its termination rights in the event of a failure by our board of directors to recommend the merger to our stockholders or to call and hold the stockholder meeting, or if the merger agreement is terminated by us because our board of directors approves or recommends to stockholders a superior proposal (as defined in the merger agreement). In addition, we must pay the termination fee to Sapphire if an acquisition proposal (as defined in the merger agreement) other than the merger has been publicly announced prior to, and remains outstanding at the time of, the termination of the merger agreement pursuant to its terms, and such termination is:

We must pay to Sapphire up to $665,000 as reimbursement for expenses incurred in relation to the transactions contemplated by the merger agreement, if the merger agreement is terminated pursuant to its terms:

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Sapphire must pay us up to $500,000 as reimbursement for expenses incurred in relation to the transactions contemplated by the merger agreement, if the merger agreement is terminated pursuant to its terms:

Further Actions and Agreements

Company Stockholders’ Meeting.    We have agreed to call and hold a stockholders’ meeting as promptly as practicable after the execution of the merger agreement for the purpose of voting upon the adoption of the merger agreement. We have agreed to take all reasonable and lawful action to solicit from our stockholders proxies, and to take all other action necessary or advisable to secure the vote of our stockholders, in favor of the adoption of the merger agreement.

Access to Information.    We have agreed to afford Sapphire and its representatives with reasonable access to our properties, books, personnel, records and other information as Sapphire may reasonably request prior to the closing of the merger.

Directors’ and Officers’ Indemnification and Insurance.    Sapphire will cause the surviving corporation to maintain indemnification provisions in the surviving corporation’s certificate of incorporation and by-laws which are not less favorable than in I-many’s current certificate of incorporation and by-laws. For a period of six years following the effective time of the merger, Sapphire and the surviving corporation shall, to the fullest extent permitted by the Delaware General Corporate Law, indemnify and hold harmless, each of our and our subsidiaries’ present and former directors or officers against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact of such service. Sapphire has an obligation to maintain our directors’ and officers’ liability insurance, or similar substitute policies (including a “tail” policy) after the effective time of the merger for a period of six years; provided that Sapphire shall not be required to pay premiums for such insurance in excess of 250% of the current annual premiums paid by us for such insurance.

Further Action, Consents and Filings.    The merger agreement obligates Sapphire and us to use commercially reasonable efforts to (i) take, or cause to be taken, all action and do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the merger, (ii) obtain from governmental entities or third parties any consents, licenses, permits, waivers, approvals, authorizations or orders required to be obtained or made by Sapphire or us or any respective subsidiaries in connection with the consummation of the merger, (iii) make all necessary filings, and thereafter make any other submissions, with respect to the merger agreement, the merger and the other transactions contemplated by the merger agreement that are required under securities, antitrust or other applicable laws and (iv) execute and deliver any additional instruments necessary to consummate the merger.

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Public Announcements.    We and Sapphire have agreed to consult with the other before issuing any press release or otherwise making any public statements with respect to the merger agreement or the merger.

Employee Benefits.    All our employees shall receive full credit for prior service with us or our subsidiaries for purposes of eligibility, vesting and determination of benefit levels under Sapphire’s employee benefit plans following the merger.

Amendment and Waiver

Amendment.    The merger agreement may be amended by the parties thereto by action taken by or on behalf of our or their respective boards of directors at any time prior to the effective time, provided that after adoption by our stockholders of the merger agreement is obtained, no amendment of the merger agreement will be made which would require further approval by our stockholders unless so approved by our stockholders.

Waiver.    At any time prior to the effective time, any party to the merger agreement may (a) extend the time for the performance of any obligation or other act of any other party thereto, (b) waive any inaccuracy in the representations and warranties contained therein or in any document delivered pursuant thereto and (c) waive compliance with any agreement or condition contained therein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.

Guarantee

Concurrently with the signing of the merger agreement, LLR III executed a guarantee agreement by which it agreed to fully guarantee the obligations of Sapphire under the merger agreement. Stockholders should read the complete text of the Guarantee, the form of which is incorporated by reference herein and attached hereto as Exhibit A to the merger agreement, which is attached hereto as Appendix A.

Agreements with Noteholders

In connection with the merger agreement, each holder of our senior convertible notes entered into an agreement, which we refer to in this proxy statement as a “Note Agreement”, whereby such holder (i) elected to require us to redeem its note(s) in full for cash at the closing of the transactions contemplated by the merger agreement and (ii) agreed to forebear from taking certain actions under its note(s) in connection with the possible delisting of our common stock from the NASDAQ Capital Market, prior to the closing of the transactions contemplated by the merger agreement, or such other date as specified in the applicable Note Agreement. Stockholders should read the complete text of each form of Note Agreement, both of which are attached as exhibits to our Current Report on Form 8-K/A filed with the SEC on April 30, 2009.

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MARKET PRICE DATA AND DIVIDENDS

Our common stock is quoted on the NASDAQ Capital Market under the symbol “IMNY.” The following table sets forth the high and low closing sales prices per share of our common stock, as reported by the NASDAQ Capital Market, for the quarters indicated:

On April 29, 2009, the last full trading day before the public announcement of the execution of the merger agreement, the closing sales price per share was $0.32. On May 28, 2009, the most recent practicable trading day prior to the date of the printing of this proxy statement, the closing sales price per share was $0.40. On May 27, 2009, NASDAQ informed us that our stock was delisted from the Nasdaq Capital Market, and would be suspended from trading as of the start of trading on May 29, 2009. I-many has been advised by Pink OTC Markets Inc. that I-many’s stock was immediately eligible for quotation on the Pink Sheet^® electronic over-the-counter securities market effective at the opening of business on May 29, 2009, and will continue to trade under the symbol IMNY. In the future, I-many’s common stock may be quoted on the Over-the-Counter Bulletin Board (the “OTCBB”), an electronic quotation service maintained by the Financial Industry Regulatory Authority (“FINRA”), provided that a market maker in the company’s common stock files the appropriate application with FINRA and FINRA approves the application. You should obtain current market price quotations for our common stock in connection with voting your shares.

To date we have not declared or paid any dividends on our common stock. We are restricted by the merger agreement from declaring dividends. We do not intend to declare any dividends in the foreseeable future.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning beneficial ownership of our outstanding common stock as of March 31, 2009 by:

Information with respect to “beneficial ownership” shown in the table below is based on information supplied by the respective beneficial owners. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. For purposes of calculating the percentage beneficially owned by a particular beneficial owner, the shares of common stock deemed outstanding include 53,843,938 shares outstanding as of March 31, 2009 plus all common stock issuable on exercise of vested options (whether or not in-the-money) within 60 days of that date, which we refer to as presently exercisable options, common stock issuable on exercise of warrants (whether or not in-the-money) and common stock issuable upon conversion of convertible debt (whether or not in-the-money), in each case held by the beneficial owner. Presently exercisable options, warrants and convertible debt are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the mailing address of each beneficial owner is c/o I-many, Inc., 399 Thornall Street, 12^th Floor, Edison, NJ 08837.

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OTHER MATTERS

Other Business for the Special Meeting

As of the date of this proxy statement, we do not expect that any matter other than the proposal to adopt the merger agreement and approve the merger (or to approve the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement) will be brought before the special meeting. If, however, such a matter is properly presented at the special meeting or any adjournment of the special meeting, the persons appointed as proxies will have discretionary authority to vote the shares represented by duly executed proxies in accordance with their discretion and judgment.

Proposals for Annual Meeting of Stockholders

Due to the contemplated consummation of the merger, we do not currently expect to hold a 2009 annual meeting of stockholders because, following the merger, we will not be a publicly held company. However, if the merger is not consummated for any reason, we will promptly schedule an annual meeting of stockholders. The deadline of December 16, 2008, for submitting stockholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, for inclusion in the company’s proxy materials for its 2009 annual meeting has passed. In addition, if the merger is not consummated and a stockholder wishes to present a proposal at the 2009 annual meeting, that is not included in the company’s proxy materials, such stockholder must give written notice, with such content as is specified in our by-laws, to the Secretary of the company at I-many, Inc., 399 Thornall Street, 12th Floor, Edison, NJ 08837. The Secretary must receive such notice not less than 60 days nor more than 90 days prior to the 2009 annual meeting; provided that, in the event that less than 70 days’ notice or prior public disclosure of the date of the 2009 annual meeting is given or made, notice by the stockholder must be received not later than the close of business on the 10th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever occurs first. However, if the merger is not consummated and the 2009 annual meeting date has been changed by more than 30 days from the date of the 2008 annual meeting, a stockholder will have a reasonable time before the company begins to print and mail its proxy materials to submit stockholder proposals for inclusion in the company’s proxy materials.

Householding of Proxy Statement

As permitted by the Securities Exchange Act of 1934, as amended, only one copy of this proxy statement is being delivered to stockholders residing at the same address, unless I-many stockholders have notified I-many of their desire to receive multiple copies of the proxy statement. This is known as householding.

I-many will promptly deliver, upon oral or written request, a separate copy of this proxy statement to any stockholder residing at a shared address to which only one copy was mailed. Requests for additional copies of this proxy statement, or requests to receive multiple or single copies of proxy statements at a shared address in the future, should be directed to: I-many, Inc., Attention: Secretary, 399 Thornall St., 12^th Floor, Edison, NJ 08837, tel: (800) 832-0228.

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WHERE YOU CAN FIND MORE INFORMATION