10.	SUBSEQUENT EVENT

Summary of Merger Agreement

On October 7, 2019, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with IFS Americas, Inc. (“Parent”) and IFS Amber, Inc. (“Merger Sub”), a wholly owned subsidiary of Parent. Subject to the terms and conditions of the Agreement, Merger Sub will merge with the Company and then become a subsidiary of Parent (“the Merger”). It is expected for the merger to close before the end of calendar year 2019.

The transaction will result in the acquisition of all outstanding shares of the Company by Parent for cash. Each outstanding share of common stock, par value $0.01 per share, excluding shares held in treasury, will be purchased for $12.00 per share. Furthermore, each option to purchase shares of the Company common stock immediately prior to the effective time of the transaction, whether vested or unvested, will be cancelled and converted into the right to receive an amount in cash equal to the product of the total number of shares of common stock subject to the option, multiplied by the excess, if any, of the merger consideration, $12.00, over the applicable exercise price of each option.

The Merger Agreement contains various representations, warranties and covenants by the Company, Parent and Merger Sub. The Merger Agreement requires the Company to call and hold a special stockholders meeting and requires the board of directors of the Company to recommend that the Company’s stockholders approve the Merger Agreement and the merger.

The Merger Agreement requires the Company and Parent to use reasonable best efforts to take all reasonable actions necessary under applicable law to consummate the transactions contemplated by the Merger Agreement.

The Merger Agreement contains certain termination rights for each of the Company and Parent, including the right of each party to terminate the Merger Agreement if the merger has not been consummated by the end of January 31, 2020.

The Merger Agreement provides for a payment by the Company to Parent a termination fee in the amount of $2,569,746 in the case of a termination of the Merger Agreement under certain circumstances described in the Merger Agreement. Parent shall pay a termination fee of $2,936,852 to the Company in the event the Merger Agreement is terminated by Parent subject to certain conditions contained in the Merger Agreement.

The Company board of directors has unanimously determined that the transactions contemplated by the Merger Agreement are fair to, and in the best interest of, the Company and its stockholders, and has unanimously recommended that the Company board of directors approve the Merger Agreement and the transactions contemplated therein. The obligations of the parties to consummate the merger are subject to customary closing conditions.

Closing Compensation Agreement

Following the Company’s agreement upon the terms of the proposed merger with Parent and in consideration of Mr. Etskovitz’s role as the Chief Financial Officer of the Company and the importance of his participation in the due diligence and closing of the proposed transaction, the Company entered into an agreement with him on September 17, 2019, pursuant to which he will be entitled to a bonus of $100,000 (less applicable withholding taxes) on the condition that he remain employed by the Company in good standing through the closing of the merger and perform any additional duties related to the proposed merger (“Closing Compensation Agreement”). If Mr. Etskovitz voluntarily resigns his employment or is terminated for cause before the closing of the merger, he will forfeit the entire amount of the bonus. If the merger is not consummated for any reason, he will be entitled to receive a bonus equal to $50,000 (less applicable withholding taxes) if he remains employed in good standing with the Company through such event.

Conversion of Preferred Stock

Effective November 12, 2019, Zack Bergreen, the Chairman and Chief Executive Officer of Astea International Inc., converted to common stock, par value $0.1 per share of the Company (“Common Stock”), all of the 826,446 outstanding shares of the Series A Convertible Preferred Stock, par value $0.01 per share, and all of the 797,448 outstanding shares of the Series B Convertible Preferred Stock, par value $0.01 per share, of the Company that he held as of such date (the “Convertible Preferred Stock”). The Convertible Preferred Stock was convertible on a 1 for 1 basis, resulting in the issuance of 1,623,894 shares of Common Stock to Mr. Bergreen. Following the conversion, Mr. Bergreen beneficially owns 2,992,287 shares of Common Stock, or approximately 54.3% of the outstanding Common Stock. As described in the Company’s Current Report on Form 8-K filed on October 8, 2019, conversion of the Convertible Preferred Stock was required by the Voting Agreement among IFS Americas, Inc., a Delaware corporation (“Parent”), Mr. Bergreen and the limited partnership that he controls, in connection with the Agreement and Plan of Merger dated October 7, 2019 among the Company, Parent and a subsidiary of Parent.

Date, Time, Location and Record Date of Special Meeting of Stockholders

The Company’s Board of Directors has fixed the date, time, location and record date for the special meeting of the stockholders of the Company to consider and vote upon the adoption of the Merger Agreement, which provides for the merger of IFS Amber, Inc., subsidiary of Parent, with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent. The Board of Directors determined that the special meeting of the Company’s stockholders will be held on Monday, December 9, 2019 at 11:00 a.m. (local time), at the Company’s headquarters at 240 Gibraltar Road, Horsham, Pennsylvania 19044. The Board of Directors also established the close of business on November 12, 2019 as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the special meeting and any adjournment or postponement thereof.