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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): December 31, 1998
Xyvision, 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)
000-14747 04-2751102
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(Commission File Number) (I.R.S. Employer Identification No.)
30 New Crossing Road
Reading, MA 01867
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(Address of principal executive offices) (Zip Code)
(781) 756-4400
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(Registrant's telephone number including area code)
Not Applicable
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Former Name or Former Address, if Changed Since Last Report
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Item 5. Other Events.
On December 31, 1998, Xyvision, Inc. (the "Registrant") completed a
corporate restructuring plan (the "Restructuring") pursuant to which, among
other things, substantially all of the assets of the Registrant's publishing
business have been transferred to a newly formed wholly owned subsidiary named
Xyvision Enterprise Solutions, Inc. ("XyEnterprise"), while the majority of its
liabilities, including obligations under its $12.2 million (as amended) line of
credit with Tudor Trust, will remain with the Registrant. The Registrant will
operate its publishing business through XyEnterprise, utilizing the same
management team, employees and assets. In addition, as part of the
Restructuring, Tudor Trust, the largest stockholder and creditor of the
Registrant, converted $1,750,000 of the outstanding indebtedness under the line
of credit into 175,000 shares of a newly designated Series C Preferred Stock of
the Registrant, which is convertible into common stock of the Registrant on a
one for one basis. An additional $5,000,000 of the outstanding indebtedness
under the line of credit will become convertible into shares of Series C
Preferred Stock in June 1999 at the option of Tudor Trust at the conversion
ratio of $10.00 per share. Tudor Trust has also surrendered for cancellation
all of its Common Stock Purchase Warrants, covering an aggregate of 4,956,000
shares of Common Stock of the Registrant at various exercise prices. Tudor
Trust has provided XyEnterprise with a $1,000,000 line of credit, as well as
invested $1,000,000 to purchase 400,000 shares of Series A Preferred Stock of
XyEnterprise.
The Restructuring was completed pursuant to the terms of an Agreement,
dated as of December 22, 1998, by and among the Registrant, XyEnterprise and
Tudor Trust (the "Restructuring Agreement"). The transfer of the Registrant's
publishing business to XyEnterprise was completed pursuant to the terms of a
Contribution and Assumption Agreement, dated as of December 31, 1998, by and
between the Registrant and XyEnterprise.
The foregoing description of the Restructuring Agreement and Contribution
Agreement does not purport to be complete and is qualified in its entirety by
reference to the full text of such agreements which are filed as Exhibits 2.1
and 2.2 to this Current Report on Form 8-K, respectively, and are incorporated
herein by reference. The full text of the Company's press release with respect
to the completion of the Restructuring is filed as Exhibit 99 to this Current
Report on Form 8-K and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
See Exhibit Index attached hereto.
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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.
Date: January 6, 1999 XYVISION, INC.
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(Registrant)
By: /s/ Wendy Darland
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Wendy Darland
Vice President, Chief Financial
Officer, Secretary and Treasurer
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EXHIBIT INDEX
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Exhibit
Number Description
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2.1 Agreement dated as of December 22, 1998, by and among the Registrant,
Xyvision Enterprise Solutions, Inc. and Jeffrey L. Neuman, as trustee of the
Tudor Trust u/d/t December 12, 1997.
2.2 Contribution and Assumption Agreement, dated as of December 31, 1998, by
and between the Registrant and Xyvision Enterprise Solutions, Inc.
99 Press Release, dated January 4, 1999
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EXHIBIT 2.1
AGREEMENT
THIS AGREEMENT (the "Agreement"), made as of the 22nd day of December,
1998, is entered into by Xyvision, Inc., a Delaware corporation ("Xyvision"),
Xyvision Enterprise Solutions, Inc., a Delaware corporation ("XES"), and
Jeffrey L. Neuman, as trustee of the Tudor Trust u/d/t December 12, 1997
("Tudor Trust").
WHEREAS, on December 4, 1998, XES was incorporated under the laws of the
State of Delaware as a wholly owned subsidiary of Xyvision;
WHEREAS, on the date hereof, the Board of Directors of Xyvision approved a
corporate restructuring plan pursuant to which, among other things,
substantially all of the assets and certain liabilities of Xyvision's
publishing business will be contributed to XES (the "Restructuring"), effective
as of December 31, 1998 (the "Effective Date"); and
WHEREAS, the successful completion of the Restructuring is dependent upon
the mutual cooperation of Xyvision, XES and Tudor Trust as set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
agree as follows:
1. First Amendment to Second Amended and Restated Secured Advance
Facility Loan Agreement. On or before the Effective Date, Xyvision and
Tudor Trust each shall execute and deliver the First Amendment to Second
Amended and Restated Secured Advance Facility Loan Agreement (the "Amended
Loan Agreement"), substantially in the form attached hereto as Exhibit A.
2. Conversion of Tudor Trust Debt. On the Effective Date, in accordance
with the terms of the Amended Loan Agreement, Tudor Trust shall convert
$1,750,000 of the principal of the secured indebtedness outstanding
thereunder into an aggregate of 175,000 shares of Series C Convertible
Preferred Stock, $.01 par value per share, of Xyvision having the terms set
forth on Exhibit B attached hereto.
3. Pledge Agreement. On or before the Effective Date, Xyvision and Tudor
Trust each shall execute and deliver the Pledge Agreement, substantially in
the form attached hereto as Exhibit C.
4. Cancellation of Tudor Trust Warrants. On the Effective Date, Tudor
Trust shall deliver to Xyvision for cancellation the Common Stock Purchase
Warrants set forth on Exhibit D hereto.
5. Acquired Debt Agreement. On or before the Effective Date, Xyvision
and Tudor Trust each shall execute and deliver the Acquired Debt Agreement,
substantially in the form attached hereto as Exhibit E.
6. Contribution and Assumption Agreement. On or before the Effective
Date, Xyvision and XES each shall execute and deliver the Contribution and
Assumption Agreement, substantially in the form attached hereto as Exhibit
F.
7. Series A Preferred Stock Purchase Agreement. On the Effective Date,
XES and Tudor Trust each shall execute and deliver the Series A Convertible
Preferred Stock Purchase Agreement, substantially in the form attached
hereto as Exhibit G, for the purchase and sale of an aggregate of 400,000
shares of Series A Convertible Preferred Stock, $.001 par value per share,
of XES having the terms set forth on Exhibit H attached hereto.
8. Secured Advance Facility Loan Agreement. On the Effective Date, XES
and Tudor Trust each shall execute and deliver the Secured Advance Facility
Loan Agreement, and the related documents and agreements referenced therein
and contemplated thereby, substantially in the forms attached hereto as
Exhibit I.
9. Further Assurances. Subject to the provisions hereof, each of the
parties hereto shall make, execute, acknowledge and deliver such other
agreements, documents or instruments and take or cause to be taken such
other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and the Restructuring and to consummate the
transactions contemplated hereby and thereby.
10. Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
11. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without regard to any choice or conflict of law rule or
provision that would result in the application of the domestic substantive
laws of any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
XYVISION, INC.
By: /s/ Kevin J. Duffy
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Name: Kevin J. Duffy
Title: President
XYVISION ENTERPRISE SOLUTIONS, INC.
By: /s/ Wendy Darland
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Name: Wendy Darland
Title: Vice President
/s/ Jeffrey L. Neuman
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Jeffrey L. Neuman, as trustee of
the Tudor Trust u/d/t December 12, 1997
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[Xyvision, Inc. agrees to furnish supplementally to the Securities and Exchange
Commission copies of any of the following omitted exhibits upon request of the
Commission.]
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Exhibit A First Amendment to Second Amended and Restated Secured Advance Facility Agreement
Exhibit B Certificate of Designations of Series C Convertible Preferred Stock of the Registrant
Exhibit C Pledge Agreement
Exhibit D Common Stock Purchase Warrants Held by Tudor Trust
Exhibit E Acquired Debt Agreement
Exhibit F Contribution and Assumption Agreement
Exhibit G XyEnterprise Series A Convertible Preferred Stock Purchase Agreement
Exhibit H Certificate of Designations of Series A Convertible Preferred stock of XyEnterprise
Exhibit I XyEnterprise Secured Advance Facility Loan Agreement
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EXHIBIT 2.2
CONTRIBUTION AND ASSUMPTION AGREEMENT
This Contribution and Assumption Agreement is made as of December 31, 1998
by and between Xyvision, Inc., a Delaware corporation ("Xyvision"), and
Xyvision Enterprise Solutions, Inc., a Delaware corporation ("XES").
WITNESSETH:
WHEREAS, Xyvision is currently the sole stockholder of XES;
WHEREAS, Xyvision has agreed to contribute, transfer, assign and deliver
to XES, and XES has agreed to accept from Xyvision, all of Xyvision's rights,
title and interest in and to all of Xyvision's assets, except for those
described on Schedule A attached hereto (the "Assets"); and
WHEREAS, XES has agreed to assume all of Xyvision's duties, obligations
and responsibilities with respect to the liabilities described on Schedule B
attached hereto (the "Assumed Liabilities");
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
I. Transfer of Assets.
A. Xyvision hereby contributes, transfers, assigns and delivers to XES, its
successors and assigns, to have and to hold forever, and XES hereby accepts
from Xyvision, all of Xyvision's rights, title and interest in and to all of
the Assets, effective as of December 31, 1998 (the "Effective Date").
B. Xyvision represents and warrants to XES that Xyvision is the lawful owner
of all of the Assets to be contributed, transferred and assigned to XES
hereby; that such Assets are free from all encumbrances; and that Xyvision has
the full legal right, power and authority to transfer the same as aforesaid.
C. Xyvision hereby covenants and agrees that on and after the Effective Date
it will, at the request of XES, execute and deliver such other instruments and
take such other action as XES reasonably may require more effectively to
contribute, transfer and assign to, and vest in, XES, its successors and
assigns, or to put XES, its successors and assigns in possession of, any or
all of the Assets hereby contributed, transferred and assigned, or intended so
to be.
II. Assumption of Liabilities.
A. XES hereby assumes all of Xyvision's duties, obligations and
responsibilities with respect to the Assumed Liabilities, effective as of
the Effective Date, it being expressly understood that XES shall in no event
be deemed to assume or be liable in any manner for any of Xyvision's duties,
obligations and responsibilities with respect to Xyvision's outstanding (i)
6% Convertible Subordinated Debentures Due 2002, (ii) 15% Promissory Notes,
(iii) 4% Promissory Notes, or (iv) indebtedness to Tudor Trust under that
certain Second Amended and Restated Secured Advance Facility Loan Agreement,
dated as of July 1, 1998, as amended.
B. Nothing herein shall be deemed to deprive XES of any defenses, set-offs
or counterclaims which Xyvision may have had or which XES shall have with
respect to any of the Assumed Liabilities (the "Defenses and Claims").
Xyvision hereby contributes, transfers and assigns to XES all Defenses and
Claims, effective as of the Effective Date, and agrees to cooperate with XES
to maintain, secure, perfect and enforce such Defenses and Claims.
III. Power of Attorney.
A. Xyvision does hereby irrevocably constitute and appoint XES, its
successors and assigns, as its true and lawful attorney, with full power of
substitution, in its name, or otherwise, and on behalf of Xyvision, or for
its own use, on and after the Effective Date, to claim, demand, collect and
receive at any time and from time to time any and all Assets hereby
contributed, transferred and assigned, or intended so to be, and to
prosecute the same at law or in equity, to settle or compromise the same,
and, upon discharge thereof, to complete, execute and deliver any and all
necessary instruments of satisfaction and release.
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B. XES hereby covenants and agrees with Xyvision that on and after the
Effective Date it will defend Xyvision against the lawful claims and
demands of all persons arising any time and from time to time with respect
to any and all Assets hereby contributed, transferred and assigned, or
intended so to be. Xyvision does hereby irrevocably constitute and appoint
XES, its successors and assigns, as its true and lawful attorney, with full
power of substitution, in its name, or otherwise, and on behalf of
Xyvision, on and after the Effective Date, to defend against such claims
and demands, including, without limitation, to settle or compromise such
claims and demands on such terms as XES may consider appropriate.
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IN WITNESS WHEREOF, the parties have caused this Contribution and
Assumption Agreement to be duly executed as of the day and year first above
written.
XYVISION, INC.
/s/ Kevin J. Duffy
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Name: Kevin J. Duffy
Title: President
XYVISION ENTERPRISE SOLUTIONS, INC.
/s/ Wendy Darland
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Name: Wendy Darland
Title: Vice President
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[Xyvision, Inc. agrees to furnish supplementally to the Securities and Exchange
Commission copies of any of the following omitted schedules upon request of the
Commission.]
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Schedule A Assets Retained by Xyvision
Schedule B Liabilities Assumed by XES
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EXHIBIT 99
XYVISION COMPLETES CORPORATE RESTRUCTURING
READING, Mass.--Jan. 4, 1999--Xyvision, Inc. (OTCBB:XYVI) today announced
that it has completed its previously announced corporate restructuring plan
pursuant to which substantially all of the assets of Xyvision's publishing
business have been transferred to a newly formed wholly owned subsidiary named
Xyvision Enterprise Solutions, Inc. (XyEnterprise), while the majority of its
liabilities, including obligations under its $12.2 million (as amended) line of
credit with Tudor Trust, will remain with Xyvision. The Company will operate
its publishing business through XyEnterprise, utilizing the same management
team, employees and assets.
Pursuant to the restructuring, which was completed on December 31, 1998,
Tudor Trust, the largest stockholder and creditor of Xyvision, converted
$1,750,000 of the outstanding indebtedness under the line of credit into
175,000 shares of a newly designated Series C Preferred Stock of Xyvision
(which are convertible into 1,750,000 shares of Xyvision Common Stock). An
additional $5,000,000 of the outstanding indebtedness under the line of credit
will become convertible into shares of Series C Preferred Stock in June 1999 at
the option of Tudor Trust at the conversion ratio of $10.00 per share. The
interest rate on the convertible portion of the line of credit has been reduced
from 8% to 6%. In addition, Tudor Trust has released its liens on the assets of
Xyvision that were transferred to XyEnterprise, while taking a security
interest in the stock of XyEnterprise held by Xyvision. Tudor Trust has also
waived all defaults under its existing line of credit with Xyvision. Repayment
of obligations under the line of credit will be due on March 31, 2000.
Tudor Trust has surrendered for cancellation all of its Common Stock
Purchase Warrants, covering an aggregate of 4,956,000 shares of Common Stock at
various exercise prices. Independently of Xyvision, Tudor has made an offer to
certain holders of Xyvision's outstanding 6% Convertible Subordinated
Debentures, 15% Promissory Notes and 4% Promissory Notes to purchase such
securities at 10% of their face amount. Tudor Trust has agreed to reduce
Xyvision's liability with respect to such securities to the purchase price paid
by Tudor Trust.
Tudor Trust has provided XyEnterprise with a $1,000,000 line of credit, as
well as invested $1,000,000 to purchase 400,000 shares of series A Preferred
Stock of XyEnterprise.
This transaction is the culmination of a restructuring plan aimed at
reducing Xyvision's debt and refocusing on the Company's core publishing
activities, which plan has also included a September transaction in which the
Company sold essentially all of the assets of its Contex pre-press business to
Barco Graphics.
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