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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 25, 2000
PHOENIX INTERNATIONAL LTD., INC.
(Exact name of registrant as specified in its charter)
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FLORIDA 0-20937 59-3171810
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
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500 INTERNATIONAL PARKWAY
HEATHROW, FLORIDA 32746
(Address of Principal Executive Offices)
(407) 548-5100
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On October 25, 2000, Phoenix International Ltd., Inc. entered into an
Asset Purchase Agreement with London Bridge Software Holdings plc. and its
indirect wholly owned subsidiary London Bridge Acquisition Company, Inc.
Pursuant to the Agreement, Phoenix has agreed to sell substantially all of its
assets to London Bridge for cash in the amount of $45,462,092, subject to
adjustment based on certain contingencies. In connection with this transaction,
London Bridge has agreed to assume certain specified liabilities of Phoenix and
its subsidiaries. Phoenix will retain all other assets and liabilities. London
Bridge has also agreed to loan up to $10 million to Phoenix for its interim
working capital requirements pursuant to a Loan Agreement among the parties. The
Loan Agreement contains various restrictions and limitations on Phoenix's
ability to borrow funds thereunder.
On the closing date, London Bridge will deposit into escrow an amount
equal to (1) 25% of the purchase price to indemnify London Bridge for certain
liabilities, plus (2) the amount of the then outstanding borrowings under the
Loan Agreement. London Bridge will pay Phoenix the remainder of the purchase
price in cash, less adjustments.
Phoenix currently intends to use the cash received at closing to
satisfy the retained liabilities, and to distribute substantially all of the
remainder to its shareholders . Additionally, Phoenix intends to distribute to
its shareholders any cash proceeds subsequently received by Phoenix upon
expiration of the escrow period on September 30, 2001 after satisfying all
remaining liabilities of the company, together with any remaining net assets of
Phoenix, in connection with the planned liquidation of Phoenix.
Because of the potential reductions in the purchase price, the
uncertainty regarding the cash amount ultimately available to Phoenix from the
escrow, and the uncertainty regarding the value of some of the assets and
liabilities to be retained by Phoenix, the amount of net proceeds ultimately
distributed to Phoenix's shareholders could be substantially less than the
stated purchase price of $45,462,092.
The completion of the transaction is subject to various conditions,
including the approval of the Agreement and the transaction by the holders of at
least 66 2/3% of Phoenix's outstanding common stock, final settlement of the
pending class action litigation against Phoenix and the receipt of all necessary
governmental and regulatory approvals. Additionally, the Agreement may be
terminated by Phoenix or London Bridge if the transaction has not been completed
by March 31, 2001.
London Bridge owns 861,623 shares of Phoenix's common stock, equal to
approximately 9.2% of Phoenix's outstanding common stock. London Bridge
purchased these shares from Phoenix in February 2000. These shares will be voted
in favor of the Agreement and the transaction. Additionally, in connection with
the Agreement, SAFECO Asset Management Company, SAFECO Corporation and Fleming
Asset Management entered into Shareholder Agreements dated October 25, 2000 with
London Bridge pursuant to which they agreed to vote their shares of Phoenix
common stock, which together equal approximately 24.2% of the
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outstanding common stock of Phoenix, in favor of the Agreement and the
transaction and against any competing acquisition proposal or any other sale of
a material amount of assets or securities of Phoenix.
London Bridge and Phoenix also entered into a Reseller Agreement, dated
as of October 25, 2000. Under the Reseller Agreement, Phoenix granted a
non-transferable, non-exclusive license to market and support certain Phoenix
software until the closing of the transaction.
Also on October 25, 2000, Phoenix filed with the Securities and
Exchange Commission an amended Annual Report on Form 10-K for the year ended
December 31, 1999 which, among other things, includes audited restated financial
statements for 1997, 1998 and 1999. Generally, the effect of the restated
financial statements is to defer revenues into future periods and to offset
revenues against development costs in certain instances, resulting in lower
revenues and additional losses during 1997, 1998 and 1999. For related reasons,
Phoenix also amended its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000 and filed its Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000, the filing of which had been delayed pending completion of the
restatement of the 1997, 1998 and 1999 financial statements. Phoenix's auditors
have previously issued unqualified opinions with respect to Phoenix's previously
filed financial statements for 1997, 1998 and 1999.
Additionally, on October 24, 2000, Phoenix entered into an agreement in
principle to settle the consolidated securities class action litigation with a
settlement class comprising shareholders who acquired Phoenix common stock
during the period between May 5, 1997 and August 22, 2000. The settlement of
this action, which was filed on November 23, 1999, provides for Phoenix to pay
$4,225,000 in cash to the putative shareholder class. The settlement is subject
to certain customary conditions, notice to the proposed settlement class and
preliminary and final court approval.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements include all statements that are not statements of historical
fact and relate to the intent, belief, plans or expectations of Phoenix, its
management and its customers. Words like "plans," "intends," "believes,"
"signifies," "estimates," "anticipate," "will," "expect" and words of similar
meaning are intended to identify forward-looking statements. Actual results may
vary significantly from the forward-looking statements. Factors currently known
to Phoenix that could cause actual results to differ materially from those set
forth in such forward-looking statements include the ability of Phoenix to
consummate the transactions contemplated by the Asset Purchase Agreement and
risks that are discussed in detail in Phoenix's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K/A and the Risk
Factors section of Phoenix's
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Registration Statement on Form S-1 (Registration No. 333-31415) as declared
effective by the Securities and Exchange Commission on August 13, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
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Exhibit No. Description
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2.1 Asset Purchase Agreement dated as of October 25, 2000
among Phoenix, London Bridge Software Holdings plc.
and London Bridge Acquisition Company, Inc.
2.2 Loan Agreement dated of October 27, 2000 between
Phoenix and London Bridge Acquisition Company, Inc.
4.1 Form of Shareholder's Agreement dated as of October
25, 2000 between London Bridge Acquisition Company,
Inc. and certain shareholders of Phoenix
individually.
4.2 Amendment to Governance Agreement dated as of October
25, 2000 between London Bridge Software Holdings plc
and Phoenix.
10.1 Reseller Agreement dated as of October 25, 2000,
between London Bridge Software Holdings plc and
Phoenix
99.1 U.S. Press Release dated October 25, 2000
99.2 U.K. Press Release dated October 25, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHOENIX INTERNATIONAL LTD., INC.
(Registrant)
Date: October 27, 2000 By: /s/ Bahram Yusefzadeh
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Chairman of the Board
and Chief Executive Officer
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