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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 28, 1999
TOUCHSTONE SOFTWARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-12969 95-3778226
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification Number)
1538 TURNPIKE STREET
NORTH ANDOVER, MASSACHUSETTS 01845
(Address of principal executive offices) (Zip Code)
978.686.6468
(registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
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Item 5. Other Events.
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As was previously reported on Current Reports on Form 8-K filed on
March 22, 1999 and on Form 8-K/A filed on May 24, 1999, effective as of the
close of business on March 8, 1999, TouchStone Software Corporation (the
"Company") acquired all of the issued and outstanding capital stock of Unicore
Software, Inc., a Massachusetts corporation ("Unicore") pursuant to the terms
and conditions of a definitive Agreement and Plan of Acquisition ("Acquisition
Agreement") dated as of March 5, 1999.
At the closing of the acquisition of Unicore by the Company, the former
shareholders of Unicore, received an aggregate of $1,205,000 in cash. The
balance of the purchase price is to be paid immediately following the 1999
Annual Meeting of the Company's stockholders (the "Annual Meeting"). At the
Annual Meeting, the Company's stockholders will be asked to approve the issuance
of 3,350,000 shares of the authorized but previously unissued shares of the
Company's Common Stock as the balance of the purchase price. In the event that
the stockholders of the Company do not approve the issuance of these 3,350,000
shares of Common Stock, the Acquisition Agreement provides that the balance of
the Unicore purchase price be paid with $3,350,000 in cash.
Approval of the issuance of 3,350,000 shares of the Company's Common
Stock in payment of the balance of the Unicore purchase price is not required by
Delaware law. Consequently, the Company would have the corporate power and
authority to issue and deliver these shares to the former shareholders of
Unicore even if the Company's stockholders declined to approve the issuance
thereof at the Annual Meeting. Under certain circumstances specified in the
Acquisition Agreement, the former shareholders of Unicore would have the right
to insist that the balance of the purchase price be paid through issuance and
delivery of 3,350,000 shares of the Company's Common Stock, rather than in cash,
even if the issuance of these shares is not approved at the Annual Meeting. This
right would arise in the event that the closing price for a share of the
Company's Common Stock on The Nasdaq National Market has exceeded $1.00 at any
time following the effective date of the Acquisition Agreement and the date of
the Annual Meeting.
Should the former shareholders of Unicore exercise their right to
receive shares of the Company's Common Stock in lieu of cash under these
circumstances, the continued listing of the Company's Common Stock on The Nasdaq
National Market could be jeopardized since the shares would be issued without
stockholder approval. In order to resolve this issue, the Acquisition Agreement
was supplemented by a Letter Agreement dated May 28, 1999 providing that, in the
event the stockholders of the Company fail to approve the issuance and delivery
of the 3,350,000 shares of the Company's Common Stock, the former shareholders
of Unicore will not have the right under any circumstances to insist on the
issuance and delivery of such shares but will have only the right to require the
Company to pay them cash equal to the greater of: (a) the dollar amount
determined by multiplying 3,350,000 by the weighted average closing price for a
share of the Company's common stock over the 20-day trading period immediately
preceding the date of the Annual Meeting or (b) the sum of $3,350,000.00.
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Item 7. Financial Statements and Exhibits.
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99.A-1 (1) Agreement and Plan of Acquisition dated March 5, 1999.
99.A-2 Letter Agreement dated May 28, 1999
(1) Incorporated by reference to the correspondingly numbered
exhibit to the Company's Current Report on Form 8-K filed on
March 22, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOUCHSTONE SOFTWARE CORPORATION
May 28, 1999 By: /s/ CALVIN G. LEONG
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Calvin G. Leong
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
99.A-1 (1) Agreement and Plan of Acquisition dated March 5, 1999.
99.A-2 Letter Agreement dated May 28, 1999
(1) Incorporated by reference to the correspondingly numbered exhibit
to the Company's Current Report on Form 8-K filed on March 22,
1999.
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EXHIBIT 99.A-2
May 28, 1999
Board of Directors
TouchStone Software Corporation
2124 Main Street
Huntington Beach, CA 92648
Re: Supplement to Agreement and Plan of Acquisition
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Gentlemen:
As you are aware, NASDAQ has objected to the right of the two former
shareholders of Unicore Software, Inc., a Massachusetts corporation ("Unicore"),
which was acquired by TouchStone Software, Inc., a Delaware corporation
("TouchStone") on March 8, 1999, to receive shares of TouchStone's Common Stock
even if TouchStone's stockholders decline to approve the issuance thereof as
payment of the balance of the Unicore Purchase Price. NASDAQ has indicated that
this provision may violate the corporate governance standards for the continued
listing of TouchStone's Common Stock on The NASDAQ National Market. In order to
resolve this problem, this correspondence sets forth our agreement that the
Agreement and Plan of Acquisition, dated as of March 5, 1999 (the "Acquisition
Agreement"), by and between TouchStone, on the one hand, and Pierre A. Narath
and Jason K. Raza, on the other hand (the "Sellers"), shall be supplemented by
modifying Section 8.5(f) thereof in its entirety and replacing it with the
following:
"(f) In the event that the stockholders of TouchStone fail to approve
at the Annual Meeting the issuance and delivery of the 3,350,000 shares of
TouchStone's Common Stock (the "Shares") as payment of the balance of the
Purchase Price, the Sellers shall have the right to require that TouchStone pay
them cash in the amount which is the greater of: (a) the dollar amount
determined by multiplying the number of Shares by the weighted average closing
price for a share of TouchStone's common stock over the 20-day trading period
immediately preceding the date of the Annual Meeting; or (b) the sum of Three
Million, Three Hundred and Fifty Thousand ($3,350,000.00) Dollars."
The Acquisition Agreement, except to the extent supplemented and modified
as provided above, shall remain in full force and effect. Capitalized terms,
except as otherwise defined in this correspondence, shall have the meanings set
forth in the Acquisition Agreement.
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Please be advised that it has always been our intention to receive Shares,
rather than cash, as the balance of the Unicore Purchase Price, and it continues
to be our hope that the stockholders of TouchStone approve the issuance of the
Shares.
Kindly execute this letter on the line provided below to acknowledge your
agreement to the above supplement to and modification of the Acquisition
Agreement.
This correspondence may be executed in multiple counterparts, each of
which, when taken together, shall constitute one and the same agreement.
Very truly yours,
/s/ PIERRE A. NARATH
_________________________________
Pierre A. Narath
/s/ JASON K. RAZA
_________________________________
Jason K. Raza
AGREED:
TOUCHSTONE SOFTWARE CORPORATION
/s/ CALVIN G. LEONG
By: _________________________________
Name: Calvin G. Leong
Title: Chief Financial Officer
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