SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
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PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 24, 1996
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VIDEONICS, INC.
(Exact name of Registrant as specified in its charter)
California 0-25036 77-0118151
(State or jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No)
1370 Dell Ave. Campbell, California 95008
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (408) 866-8300
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This report on form 8-K, including all exhibits, contains ____ pages.
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ITEM 2. ACQUISITION OF ASSETS
On May 24, 1996, Videonics Inc., acquired all the assets of KUB
Systems, Inc., a California corporation, for approximately $350,000 in cash at
closing. KUB is a developer and manufacturer of video production equipment for
the broadcast, post production and institutional video production markets. KUB
will operate as a division of Videonics at its current location in Foster City,
California and will continue to market its products under the KUB name in the
near term.
All KUB employees have accepted employment with Videonics. Yeshwant
Kamath, founder and president of KUB Systems, will continue to lead this group
within Videonics. Videonics has used its general working capital funds to
complete this acquisition.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
As it is impracticable to provide KUB's financial statements as of the
date hereof, such financial statements shall be filed with the Commission on or
before August 6, 1996.
The following exhibits are filed as a part of this report.
Exhibits
(2) Asset Purchase Agreement relating to the Acquisition of KUB
Systems, Inc., by Videonics, Inc., dated May 24, 1996.
(99) Press Release dated May 29, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 hereunto duly authorized.
Date: June 4, 1996 Videonics, Inc. (Registrant)
By: /s/ James A. McNeill
James A. McNeill
Vice President of Finance,
Chief Financial Officer and
Assistant Secretary
<PAGE>
List of Exhibits
(2) Asset Purchase Agreement relating to the Acquisition of KUB
Systems, Inc., by Videonics, Inc., dated May 24, 1996.
(99) Press Release dated May 29, 1996.
Exhibit (2)
ASSET PURCHASE AGREEMENT
This Agreement is made and entered into as of May 24, 1996, by and
among Videonics, Inc., a corporation organized and existing under the laws of
the State of California and maintaining its principal place of business at 1370
Dell Avenue, Campbell, CA 95008 ("Videonics"), and KUB Systems, Inc., a
corporation organized and existing under the laws of the State of California and
maintaining its principal place of business at 1181-E Chess Drive, Foster City,
CA 94404 ("KUB").
RECITALS
A. Videonics is in the business of designing and manufacturing
video editing products.
B. KUB is in the business of designing and manufacturing video
editing software based systems.
C. Videonics wishes to acquire all worldwide right, title and
interest in and to all of the tangible and intangible assets
of KUB.
D. KUB wishes to transfer to Videonics all worldwide right, title
and interest in and to such assets.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby
covenant and agree as follows:
1. DEFINITIONS
(a) The "Agreement" shall mean this Agreement.
(b) The "Closing Date" of this Agreement shall be the date on
which the "Closing" occurs as defined in Section 6(a) below.
(c) "Customer" shall mean any individual, firm, partnership,
corporation, proprietorship, association, governmental body or other
organization or entity to whom KUB or its agents has directly or indirectly
leased, sold or otherwise conveyed the right to use the Products prior to the
Closing Date.
(d) "Customer Data" shall mean all of KUB's customer lists,
advertising and marketing know-how and materials, sales tools and advertising
and other data on Customers and potential customers related to the Products.
(e) "Documentation" shall mean all (i) schematics, drawings,
layouts, parts lists, field programmable logic array programming codes, and
other materials related to the design and manufacture of the Products, and (ii)
specifications and documents necessary for the use and maintenance of the
Products to assure performance of the functions they were designed to perform,
including but not limited to, all user manuals, test or other data, test
programs, and other necessary information that is owned, used or held by KUB.
(f) "Intellectual Property" shall mean any and all of the
right, title and interest of KUB in and to: the Marks, the Customer Data, all
worldwide marketing rights, copyrights, copyright registrations, copyright
applications, patent rights (including, without limitation, issued patents,
applications, divisions, continuations and continuations-in-part, reissues,
patents of addition, utility models and inventors' certificates), trade secrets,
inventions, inventors' notes, drawings and designs, and vendor lists and the
goodwill associated with any of the foregoing, relating to the Products or the
Documentation.
(g) The "Marks" shall mean the trademark "KUB" and any other
trade or service marks or names used in connection with the Products, and all
trade or service mark registrations (and any applications therefor) associated
therewith, together with all associated goodwill.
(h) The "Products" shall mean all products and components
thereof previously and/or currently marketed by KUB, all products under
development, and including all optional parts and equipment marketed as a part
of the foregoing.
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(i) "Proprietary Information" shall mean information which
discloses an apparatus, products, methods, processes, circuits, algorithms,
software designs and methodologies, customer lists, marketing data, product
pricing, listings, product plans, procedures and techniques used by KUB in the
development, manufacture, assembly and marketing of the Products, where such
information derives independent economic value, actual or potential, from not
being generally known to and not being readily ascertainable by proper means by
other persons who can obtain economic value from its disclosure or use, and
which is the subject of efforts by KUB that are reasonable under the
circumstances to maintain its secrecy.
(j) The "Purchased Assets" shall mean collectively the
Products, the Documentation, the Customer Data, the Intellectual Property, and
all other assets of KUB except cash.
2. SALE OF PURCHASED ASSETS AND PURCHASE PRICE
(a) In consideration of the payment to KUB by Videonics
pursuant to the provisions of Section 2(d) below, and subject to the provisions
set forth in this Agreement, as of the Closing Date, KUB hereby transfers, sells
and assigns to Videonics, and Videonics hereby purchases from KUB, all worldwide
right, title and interest in and to the Purchased Assets, including without
limitation the worldwide right to manufacture, market, distribute and sell the
Products.
(b) KUB hereby agrees not to use, after the Closing Date, the
Marks or any confusingly similar product name or service mark.
(c) KUB agrees that after the Closing Date KUB shall have no
further right to manufacture or market the Products.
(d) In consideration of KUB's transfer to Videonics of
the Purchased Assets, Videonics agrees to pay KUB as follows:
(i) Lump Sum Payment. At the Closing,
Videonics will pay to KUB (in the form of a cashier's or certified check, or
wire transfer) $350,000.00.
(ii) Payroll. Provided that the Closing occurs
prior to May 24, 1996, Videonics will pay the salaries (as Videonics
employees), for the pay period ending May 31, 1996, of those employees of KUB
who become employees of Videonics, provided that such employees release any
claim they may have to payment by KUB for the same period.
3. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of KUB. As of the
date hereof and as of the Closing Date, KUB represents and warrants to
Videonics as follows:
(i) Due Organization. KUB is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California.
(ii) Power and Authority. KUB has the corporate
power and authority toexecute and deliver this Agreement and each of the
documents contemplated hereby to which KUB is a party, and to perform its
obligations hereunder and thereunder, and theexecution, delivery and
performance of this Agreement and each of the documents contemplated hereby
to which KUB is a party, have been duly and validly authorized and approved
by all necessary and proper corporateaction on the part of KUB. KUB has taken
all other action required by law, its Articles of Incorporation or By-Laws
or any agreement to which it is a party orto which it may be subject in order
to execute and deliver this Agreement and toperform its obligations hereunder.
(iii) Title to Assets. KUB has all worldwide
rights to, and ownership interest in, the Purchased Assets, including all
components and related Intellectual Property transferred with respect to
the Products hereunder, free and clear of all claims, liens and
encumbrances, and KUB further warrants that it has no obligations to
third parties with respect to the Purchased Assets.
(iv) Compliance with Laws. To the best of KUB's
knowledge, KUB is not in violation of any applicable statute, regulation
(including environmental and occupational safety and health laws, foreign
corrupt practices laws and related regulations),ordinance, writ,
injunction, order, judgment, or decree of any government or governmental
agency, foreign or domestic, which relates to the Purchased Assets.
(v) Actions Pending. There are no actions, suits,
investigations or proceedings pending against KUB. To the best knowledge of
KUB, no valid basis for any successful action, suit, investigation or
proceeding of the nature referred to above exists.
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(vi) Proprietary Rights. To the best of KUB's
knowledge, as of the Closing Date, KUB's manufacture, marketing or use of the
Products, Documentation and Intellectual Property does not infringe upon any
patent, copyright, trade secret or other proprietary right held by any third
party.
(vii) Product Versions. Ownership of all rights to
the Products, including all current and prior versions, are hereby
transferred from KUB to Videonics, as of the Closing Date.
(viii) Work in Progress. All work in progress
relating to modifications and enhancements of the Products and corrections to
the Documentation are hereby transferred from KUB to Videonics as of the Closing
Date.
(ix) Employees. To the best of KUB's knowledge KUB
is in compliance with all applicable laws and regulations respecting
employment and employment practices, and terms and conditions of employment and
wages and hours, violation of which would have a material adverse effect upon
the value of the Purchased Assets to Videonics.
(x) No Other Assets. Upon transfer of the Purchased
Assets to Videonics, KUB will have no assets other than the payment made to KUB
pursuant hereto, the cash balances in its bank accounts, and the rights of KUB
under this Agreement.
(xi) Conduct of Business. From the date hereof until
the Closing Date, KUB has conducted its business in the ordinary course
and has not entered into any contract or commitment, incurred any liability
or taken any other action related to the Purchased Assets where such contract,
commitment, liability or action was not in the ordinary course of business.
(b) Representations and Warranties of Videonics. As
of the date hereof and as of the Closing Date, Videonics represents and warrant
to KUB as follows:
(i) Due Organization. Videonics is a corporation
duly organized and validly existing and in good standing under the laws of the
State of California.
(ii) Power and Authority. Videonics has the
corporate power and authority to execute and deliver this Agreement, and each
of the documents contemplated hereby to which Videonics is a party, and to
perform its obligations hereunder and thereunder, and the execution, delivery
and performance of this Agreement and each of the documents contemplated
hereby to which Videonics is a party, have been duly and validly authorized by
all necessary and proper corporate action on the part of Videonics, and
Videonics has taken all other action required by law, its Articles of
Incorporation or By-Laws or any agreement to which it is a party or to which it
may be subject in order to execute and deliver this Agreement and to
perform its obligations hereunder.
4. CONDITIONS TO OBLIGATIONS OF VIDEONICS
The obligation of Videonics to consummate the transactions
contemplated by this Agreement shall be subject to the reasonable satisfaction,
or to the waiver by Videonics in writing, on or before the Closing Date, of the
following conditions, all of which are for the sole benefit of Videonics:
(a) Representations and Warranties True. The
representations and warranties of KUB contained in this Agreement shall be true
in all material respects on the Closing Date.
(b) Performance of Covenants. KUB shall have performed and
complied in all material respects with each and every covenant, agreement and
condition required by this Agreement to be performed or complied with by KUB
prior to or on the Closing Date.
(c) Release of Security Interest. The security interest in the
Purchased Assets granted to Credit Managers Association of California pursuant
to a Security Agreement dated as of February 26, 1996 shall have been canceled.
5. CONDITIONS TO OBLIGATIONS OF KUB
The obligations of KUB to consummate the transactions
contemplated by this Agreement shall be subject to the reasonable satisfaction,
or to the waiver by KUB in writing, on or before the Closing Date, of the
following conditions, all of which are for the sole benefit of KUB:
(a) Representations and Warranties True. The
representations and warranties of Videonics contained in this Agreement shall
be true in all material respects on the Closing Date.
(b) Performance of Covenants. Videonics shall have performed
and complied in all material respects with each and every covenant, agreement
and condition required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
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6. EXECUTION AND CLOSING
(a) Time, Date and Place of Closing. The purchase and sale
contemplated by this Agreement shall be consummated on or before May 24, 1996 at
the offices of Wise & Shepard, 3030 Hansen Way, Suite 100, Palo Alto, CA 94304
at such time as the parties may mutually agree or at such other time, date or
place as the parties may mutually agree; provided, however, Videonics in its
discretion may postpone the Closing Date for up to 90 days in the event that KUB
has not performed the conditions to obligations of Videonics set forth in
Section 4 above by May 24, 1996.
(b) Deliveries by KUB. Subject to the terms and conditions
hereof, at the Closing KUB will deliver or cause to be delivered to Videonics in
California other instruments of transfer in form and substance satisfactory to
Videonics and its counsel and sufficient to convey to Videonics all of KUB's
right, title and interest in and to all of the Purchased Assets.
(c) Deliveries by Videonics. Subject to the terms and
conditions hereof, at the Closing Videonics will deliver to KUB a cashier's or
certified check, or wire transfer in the amount of $350,000.00.
(d) Further Assurances. KUB and Videonics agree that at or
after the Closing, upon the request of the other, each shall from time to time
execute and deliver to the other all such instruments and documents or further
assurances as shall be necessary to vest in Videonics title to and possession of
the Purchased Assets, and shall provide or otherwise make available to each
other all such documents, instruments, agreements and other information and take
such further actions as shall be necessary to consummate the transactions
contemplated hereby.
(e) Sales Taxes. Videonics agrees to pay any sales,
transfer or other taxes arising from the sale of the Purchased Assets.
(f) Press Release. Videonics, at its sole discretion, shall
issue a press release announcing the purchase of the Purchased Assets. No press
release regarding the transaction contemplated hereby shall be made by KUB
without the prior written consent of Videonics.
7. NO BROKERS.
KUB and Videonics mutually represent and warrant to each other
that they have not negotiated with any broker or finder in connection with this
Agreement or the subject matter hereof. Each party agrees that should any claim
be made against the other party for any broker's commission or finder's fee by
reason of the acts of such party, the party upon whose acts such claim is
adjudicated shall hold the other party free and harmless from and against all
liability and expenses in connection therewith.
8. MARKETING OF THE PRODUCTS
KUB hereby agrees that, as a consequence of this Agreement,
KUB will have no right to manufacture, market or sell the Products.
9. CONFIDENTIALITY
Videonics and KUB recognize and acknowledge that all papers,
documents, reports, abstracts, or summaries thereof and any and all information
relevant and pertaining to the Products, and the sales calls, marketing efforts
and prospect lists of KUB are valuable, special and unique assets. The parties
agree not to make or permit to be made any copies, abstracts or summaries of
these documents, including computer programs and program documentation in any
form, except in pursuit of their activities hereunder. KUB agrees to forever
hold and maintain as confidential and proprietary all Proprietary Information
relating to the Purchased Assets unless and until any such information is public
information or otherwise freely made available to the public without a
confidentiality agreement. The parties hereto further agree to keep confidential
and not to disclose to others, except as required hereunder or by law, any
matter or thing pertaining to the business of the other that is ascertained
through their association under this Agreement, the disclosure of which would be
contrary to the proprietary interests of any of the parties hereto. The parties
hereto agree that the provisions of the foregoing sentence of this Section 9
shall survive, whether or not the other provisions hereof remain in full force
and effect, until mutually rescinded by the parties, provided that no rescission
of the obligations of the foregoing sentence of this Section 9 shall be
effective unless in writing and signed by the party against whom it is sought to
be enforced.
10. GOVERNING LAW
The validity, construction and performance of this Agreement
shall be governed by the substantive laws of the State of California. In the
event that any provision of this Agreement or the application of such provision
shall be held by a court of competent jurisdiction to be contrary to law, the
remaining provisions of this Agreement shall remain in full force and effect.
<PAGE>
11. PROPRIETARY AGREEMENT
This Agreement shall be considered a confidential and a
proprietary document. Except as otherwise herein provided, the parties hereto
agree that neither this Agreement nor any specific provisions hereof shall be
revealed or disclosed by it without the prior written consent of the other
parties, except to the parties' own agents, personnel with a need to know, or
except as required to allow either party to comply with any reporting
obligations such party may have under federal securities laws or other
applicable law.
12. EXPENSES
Each of the parties hereto will pay its own expenses incurred
in connection with this Agreement or any transaction contemplated by this
Agreement.
13. HEADINGS
The headings of the Sections of this Agreement are inserted
for convenience only and shall not constitute a part hereof.
14. INTEGRATION
This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and may not be modified
or amended except by a writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
VIDEONICS, INC. KUB SYSTEMS, INC.
By: /s/ J. A. McNeill By: /s/ B.Y. Kamath
J.A. McNeill B.Y. Kamath
(Printed Name) (Printed Name)
V.P. Finance, CFO President
(Printed Title) (Printed Title)
5/20/96 0045590.02
Exhibit (99)
Press Release
VIDEONICS ACQUIRES KUB SYSTEMS
Videonics Continues Expansion Into
Open Systems and Broadcast Markets
CAMPBELL, CALIF. -- May 29, 1996 -- Videonics Inc., (NASDAQ:VDNX) announced
today that it has acquired all of the assets of KUB Systems, Foster City,
California, a developer and manufacturer of advanced digital video production
equipment for the broadcast, post-production, and institutional video production
markets.
Michael D'Addio, Videonics' chief executive officer, commented, "This is a very
exciting acquisition. KUB's advanced technology and Videonics' skills in making
affordable video production solutions will significantly expand the market for
digital video effects products in the future. The current KUB product line, as
well as our planned collaboration for the next generation of products, fit very
well with the Videonics broadcast market strategy."
He added, "In addition to advanced technology, KUB brings Videonics an
experienced team of innovative broadcast video experts." KUB President Dr.
Yeshwant Kamath was a co-founder and president of Abekas Systems and previously
held engineering positions for Ampex Corporation. He holds three patents in
digital video design. Dan Beaulier, KUB's Vice President of Engineering, is also
a veteran of Ampex and Abekas and was principal designer for a variety of
advanced video products.
Kamath said, "We are thrilled to join forces with Videonics. There is a strong
synergy between the two companies. Both companies are innovators and have
applied advanced digital and software technology in new ways to create
practical, usable tools for video production. The future looks very exciting."
KUB Systems manufactures two computer-based animation and video compositing
systems, Zydeco (R) and Calypso (R). The products combine Macintosh-based
software and special-purpose real-time video hardware to simplify the creative
process for animating video elements and combining them with effects in 3D
space. Zydeco and Calypso are all-in-one systems which use a proprietary method
to provide state-of-the-art real-time special effects to video productions. The
products work with industry standard production systems and can incorporate
elements from Adobe Photoshop, Adobe Illustrator, and other applications.
Videonics has become a leader in video editing and post-production equipment
through both internal product development and select outside acquisitions. Last
year, Videonics acquired Nova Systems of Canton, Connecticut, a leading
developer and manufacturer of video frame synchronizers, digital time base
correctors and video signal processing equipment used for video and audio post
production in the broadcast, cable, video presentation, and video conferencing
markets. At approximately the same time, Videonics also acquired a desk top
video software producer, Abbate Video of Millis, Massachusetts.
Videonics is a leading designer and manufacturer of affordable, high-quality,
digital video post-production equipment. The company's products color, edit and
mix raw video footage, as well as add special effects and titles, resulting in
professional quality video production. Videonics' equipment is used throughout
the world by videographers, as well as business, industry, educational
institutions and videophiles. The company has its headquarters in Campbell,
Calif. Its stock is traded on the NASDAQ National Market System under the symbol
VDNX. Further information on Videonics may be obtained from the company's SEC
filings, or by contacting the company directly.
"Calypso" and "Zydeco" are trademarks of KUB Systems. "Adobe Photoshop" and
"Adobe Illustrator" are trademarks of Adobe Systems.
# # #
HOW TO CONTACT VIDEONICS:
Main Phone number: 408-866-8300
Fax: 408-866-4859
Product and Dealer Information: 800-338-3348
Product Support: 408-370-9963
E-mail: info(at)videonics.com
Internet World Wide Web: http://www.videonics.com/
CompuServe: GO VIDEONICS, CompuServe ID 76702,466
