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: June 30, 1999
SCANSOFT, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-27038 94-3156479
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
9 CENTENNIAL DRIVE, PEABODY, MASSACHUSETTS 01960
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(Address of principal executive offices) (Zip Code)
(978) 977-2000
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(Registrant's telephone number,
including area code)
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Item 2. Acquisition or Disposition of Assets
On June 30, 1999, ScanSoft, Inc. (the "Registrant") entered into a
definitive asset purchase agreement (the "Purchase Agreement") and license
agreement (the "License") to acquire and license certain assets and intellectual
property relating to the photo imaging software products business of
MetaCreations which include Kai's Photo Soap 1.0, Kai's Photo Soap 2.0, Kai's
SuperGoo 1.0, Kai's PowerGoo 1.0 and Kai's Power Show 1.1 (the "Products") from
MetaCreations Corporation ("MetaCreations"). The acquisition was closed on
June 30, 1999.
Pursuant to the Purchase Agreement, the Company purchased all of the
inventory, intangibles, books and records, marketing materials and
MetaCreations' website content relating to the Products. The Company paid
MetaCreations $600,000 plus assumed the obligations to fulfill sales orders
relating to the Products, all liabilities under all original equipment
manufacturer and other agreements pertaining to the Products, and up to $950,000
of product return liability relating to Products sold prior to the date of the
Purchase Agreement. In addition, the Purchase Agreement includes contingent
financial performance incentive payments under which the Company will pay
MetaCreations up to $1,000,000, based on the sale of the Products and certain
other technology licensed in the License Agreement.
Under the License Agreement, MetaCreations granted the Company a
non-exclusive, royalty free license to use, reproduce, license, sell and
distribute the intellectual property relating to the Products and other related
software technology. Pursuant to the License Agreement, for a period of two
years, MetaCreations and the Company have agreed that neither will market,
license, reproduce, distribute or sell the intellectual property subject to the
License Agreement in any manner or for any purpose that would compete with
current MetaCreations products or Company products. The Company paid
MetaCreations $400,000 in cash and signed a promissory note in the
principal amount of $1,600,000 for the License. The promissory note accrues
interest at the rate of seven percent (7%) and will be paid in full by
June 30, 2000.
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SIGNATURE
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.
Dated: July 14, 1999
SCANSOFT, INC.
By /s/ Michael K. Tivnan
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Michael K. Tivnan
President and Chief Executive Officer
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