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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 1996
ASTEA INTERNATIONAL INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-26330 23-2119058
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(Commission File Number) (IRS Employer Identification No.)
100 HIGHPOINT DRIVE, CHALFONT, PENNSYLVANIA 18914
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 822-8888
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(Former name or former address, if changed since last report)
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SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT ON FORM 8-K
DATE OF REPORT, JUNE 28, 1996
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Astea International Inc. ("ASTEA") has entered into a Share Purchase
Agreement (the "AGREEMENT"), dated as of June 20, 1996, among Astea and Per
Edstrom, Orjan Grinndal, and Henrik Lindberg, the sole shareholders (the "ABALON
PRINCIPALS") of Abalon AB, a Swedish company, and its affiliated entities
("ABALON"), pursuant to which Astea acquired (the "ACQUISITION") Abalon through
the acquisition from the Abalon Principals of all of the outstanding shares of
Abalon.
Under the terms of the Agreement, which closed on June 28, 1996, the
Abalon Principals will receive consideration valued at $14,550,000 (the
"PURCHASE PRICE"), payable as follows: (i) $8,550,000 in cash, and (ii) 233,236
shares (the "SHARES") of Common Stock of Astea (the "COMMON STOCK"), valued at
$6,000,000. The calculation of the Shares was based on the average of closing
prices of the Common Stock on the Nasdaq National Market for the twenty trading
days ending on the last trading day prior to the closing date of June 28, 1996.
The parties intend that the transaction be accounted for as a purchase of
in-process research and development. It was structured under purchase accounting
rules as an acquisition of stock directly from the Abalon Principals.
The Shares issued to the Abalon Principals contain shelf registration
rights; however, the Shares are also subject to transfer restrictions for a
period of 2-1/2 years. A total of 15% of the Shares will be released from these
transfer restrictions on December 31, 1996, 19% on April 30, 1997, 19% on
September 30, 1997, 15% on December 31, 1997, 16% on June 30, 1998, and 16% on
December 31, 1998.
The Agreement also contains an escrow arrangement providing that Shares
equaling fifteen percent (15%) of the Purchase Price, or 84,840 Shares (the
"ESCROW SHARES"), are to be deducted from the aggregate of 233,236 Shares issued
to the Abalon Principals under the Agreement and held in escrow by an escrow
agent, selected by Astea, to secure certain indemnification obligations of the
Abalon Principals under the Agreement. In the event that Astea has
indemnification claims against the Abalon Principals, it shall first recover
such claims directly from the Escrow Shares, and second, from the remaining
Shares received by the Abalon Principals, or the proceeds from any sale of such
Shares by the Abalon Principals. One-half of the Escrow Shares are available for
release after April 30, 1997, and the balance are available for release after
September 30, 1997 (except as to claims for indemnification arising as of each
such date).
In connection with the Acquisition, Astea and Abalon have entered into
three-year employment agreements with each of the Abalon Principals. Each Abalon
Principal will be paid an annual salary of $70,000 per year during the term of
the employment agreement, and each is eligible to receive a bonus based on
certain revenue and profitability milestones of the Abalon
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SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT ON FORM 8-K
DATE OF REPORT, JUNE 28, 1996
business in the 1996 calendar year. The Abalon Principals have also agreed to
certain noncompetition provisions extending until the later of two years
following termination of employment with Astea or four years from the closing of
the Acquisition, pursuant to which, among other things, the Abalon Principals
are prohibited from competing with Astea, Abalon or their affiliated entities
with respect to the business of providing sales force automation and customer
interaction software applications and related professional and consulting
services.
Each of the Abalon Principals also received stock options to purchase
35,000 shares of Common Stock at an exercise price of $24.50 per share. These
options vest in three equal annual installments commencing one year after the
closing of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Audited financial statements of Abalon are currently in
preparation. Since it is impracticable for the Registrant to provide complete
financial statements of Abalon's business together with this filing, such
statements will be provided as soon as they have been made available to
Registrant. In no event will the Registrant provide Abalon's financial
statements later than September 11, 1996, even if it becomes necessary to file
unaudited statements.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information of the Registrant combined
with Abalon is currently in preparation. Since it is impracticable for the
Registrant to provide complete pro forma financial information of the combined
business together with this filing, such information will be provided as soon as
it is made available to the Registrant. In no event will Registrant provide
pro forma financial information later than September 11, 1996.
(c) Exhibits.
7.01 - Share Purchase Agreement, dated as of June 20,
1996, among Astea International Inc., Per Edstrom,
Orjan Grinndal, and Henrik Lindberg.
7.02 - Escrow Agreement, dated as of June 28, 1996, among
Astea International Inc., Abalon AB, Midlantic Bank,
N.A., Per Edstrom, Orjan Grinndal, and Henrik
Lindberg, and Per Edstrom, as representative.
7.03 - Registration Rights Agreement, dated as of June 28,
1996, among Astea International Inc., Per Edstrom,
Orjan Grinndal and Henrik Lindberg.
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SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT ON FORM 8-K
DATE OF REPORT, JUNE 28, 1996
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this Current Report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
ASTEA INTERNATIONAL INC.
By: /s/ Leonard W. von Vital
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Leonard W. von Vital
Vice President, Chief Financial Officer
Date: July 12, 1996
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SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT ON FORM 8-K
DATE OF REPORT, JUNE 28, 1996
INDEX TO EXHIBITS
Exhibit Number Description
7.01 Share Purchase Agreement, dated as of June 20, 1996, among
Astea International Inc., Per Edstrom, Orjan Grinndal, and
Henrik Lindberg.
7.02 Escrow Agreement, dated as of June 28, 1996, among
Astea International Inc., Abalon AB, Midlantic Bank,
N.A., Per Edstrom, Orjan Grinndal, and Henrik
Lindberg, and Per Edstrom, as representative.
7.03 Registration Rights Agreement, dated as of June 28, 1996,
among Astea International Inc., Per Edstrom, Orjan Grinndal
and Henrik Lindberg.