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) July 2, 1999
SoftNet Systems, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 1-5270 11-1817252
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
650 Townsend Street, Suite 225, San Francisco, CA 94103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 365-2500
--------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
On July 2, 1999, SoftNet Systems, Inc. (the "Registrant")
entered into a letter agreement with Mediacom LLC ("Mediacom") whereby Mediacom
agreed to use the Registrant's wholly-owned subsidiary, ISP Channel, Inc. ("ISP
Channel") as its exclusive provider of Internet services over Mediacom's cable
infrastructure. Under the terms of the agreement:
o Mediacom must upgrade its cable infrastructure to provide two-way data
transmission, and make available for ISP Channel services all of the
homes passed by its cable systems, of which at least 900,000 shall be
two-way enabled homes.
o Mediacom and ISP Channel will share in revenues related to Internet
services.
o The Registrant will issue to Mediacom 3.5 million shares of common
stock as an inducement to enter into and perform under the ISP Channel
Affiliate Agreement between ISP Channel and Mediacom, which will make
Mediacom the largest shareholder of the Registrant. In the event
Mediacom delivers more than 900,000 two-way enabled homes, the
Registrant will be required to issue to Mediacom additional shares of
common stock.
o The Registrant will expand its Board of Directors from 6 to 7 and fill
the vacancy with a designee of Mediacom. Such designee will stand for
election to the Board of Directors at the next annual meeting of
shareholders of the Registrant. Mediacom has indicated that Mr. Rocco
Commisso, the Chairman and Chief Executive Officer of Mediacom, will
be its designee to the Registrant's Board of Directors.
o The shares of common stock are subject to payment as liquidated
damages in the event Mediacom does not perform under the ISP Channel
Affiliate Agreement.
o The letter agreement is subject to the execution of more definitive
agreements.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits. The following documents are filed as exhibits to this
report:
1. Exhibit 99.1 - Press Release dated July 7, 1999.
<PAGE>
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.
SoftNet Systems, Inc.
(Registrant)
Date: July 20, 1999 By: /s/ Douglas S. Sinclair
---------------------------------
Douglas S. Sinclair
Chief Financial Officer
<PAGE>
SoftNet Systems, Inc.
Exhibit Index
to Form 8-K
Exhibit No. Description
----------- -------------------------------------------
99.1 Press Release dated July 7, 1999
EXHIBIT 99.1
SoftNet and Mediacom Sign Exclusive 10-Year Agreement to Add Over One Million
Homes Passed to ISP Channel
ISP Channel Increases Homes Passed by More Than 50% to Nearly 3 Million;
Cable TV Veteran Rocco B. Commisso to Join SoftNet Board of Directors
July 7, 1999 06:45 AM SAN FRANCISCO and MIDDLETOWN, N.Y., July 7 /PRNewswire/ --
SoftNet Systems, Inc. SOFN and Mediacom LLC ("Mediacom") today announced they
have signed an exclusive agreement to deploy SoftNet's ISP Channel high speed
Internet services throughout Mediacom's cable properties. Including the recently
announced acquisitions of Triax and Zylstra cable systems, Mediacom will deliver
more than one million homes passed to ISP Channel. With nearly three million
committed homes passed, ISP Channel now ranks as the third largest independent
high-speed cable ISP behind @Home and RoadRunner. The agreement, which is
subject to completion of final documents, is for ten years, with a minimum of
five years guaranteed. The terms of the affiliate agreement are similar to
standard ISP Channel revenue sharing arrangements and include a commitment by
Mediacom to upgrade its cable systems to carry two-way high speed Internet
services over a three-year period.
As compensation for Mediacom's upgrade costs, rollout commitments, and for the
exclusive long term rights to deliver cable modem and set-top high speed
Internet access services to Mediacom's customers, SoftNet will issue to Mediacom
3.5 million shares of SoftNet common stock. After the issuance of these shares,
SoftNet will have approximately 25.6 million fully diluted shares and Mediacom
will become the largest shareholder of SoftNet, owning approximately 13.66% of
SoftNet's fully diluted shares. Under the agreement, Rocco B. Commisso, Chairman
and CEO of Mediacom and a recently elected board member of the National Cable
Television Association (NCTA), will become a member of SoftNet's board of
directors and its executive committee.
Dr. Lawrence B. Brilliant, Chairman and CEO of SoftNet, said, "Our agreement
with Mediacom is the largest cable affiliation in ISP Channel's history. Our new
partnership with a top-ten MSO gives SoftNet cable industry sponsorship and the
direct involvement of Mediacom's CEO, Rocco Commisso, one of the most respected
senior executives in the cable industry. Mr. Commisso's demonstrated track
record in aggressively upgrading Mediacom's broadband networks and delivering
enhanced services to its customers in smaller cable markets is very important to
us. I personally look forward to working with Mr. Commisso. I welcome his cable
industry leadership and believe that his experience and reputation will
significantly contribute to our campaign to attract additional cable affiliates,
large and small, to ISP Channel."
Brilliant continued, "This is a great moment for all of SoftNet's shareholders,
affiliates and employees. The addition of Mediacom's over one million homes
passed and existing cable modem customers represent approximately a 50% increase
in our homes passed numbers and brings our cable modem subscriber count to
nearly 5,000. Over the term of this agreement, we expect to see cable modem
penetration rates reach 20% to 30%, giving the ISP Channel as many as 300,000
additional cable modem subscribers.
Rocco B. Commisso, Chairman and CEO of Mediacom, said, "Over the past year we
have extensively evaluated our options for accelerating the delivery of
high-speed cable modem service to our customers. As the leading MSO focused on
providing cable television service to smaller communities, Mediacom was courted
by all of the top high-speed cable Internet companies. Based on the markets we
serve and the rapid deployment schedule our customers expect, partnering with
the ISP Channel was by far the superior choice for our company.
"The ISP Channel has the technical resources, financial stability and industry
experience to help Mediacom fulfill its commitment of closing the 'digital
divide' that has developed across America between the major cities and smaller
towns and communities. Their top-notch management team, led by Larry Brilliant
and Ian Aaron, share our view that the introduction of high-speed Internet
access in the smaller markets should not trail behind San Francisco and New
York. The ISP Channel understands the needs of the smaller systems better than
any company we have seen. I will work closely with SoftNet's senior management
to ensure that the ISP Channel will become the provider of choice for quality
high-speed Internet service to small-town America."
<PAGE>
About SoftNet Systems, Inc. and ISP Channel
SoftNet Systems, Inc. is a leading high-speed broadband Internet access and
content services company focused on partnering with small to mid-sized cable
operators. Through its ISP Channel, the company provides a complete turnkey
Internet service to partnering cable affiliates, similar to @Home.
ISP Channel's services to partnering cable affiliates include cable head-end
equipment and integration, Internet backbone connectivity, and technical support
and customer care twenty-four hours a day, seven days a week. ISP Channel offers
its customers high speed Internet access at speeds up to 500 KB per second when
downloading files, graphics, audio and video. Additional ISP Channel services
include e-mail, personal web pages, news groups, and full multi-media
capabilities. ISP Channel also provides access to Microsoft(R) Internet Explorer
and Netscape(R) Navigator browsers.
Through SoftNet's Intellicom subsidiary, the company markets a satellite-based
VSAT commercial Internet link. SoftNet's unique cost-saving technology
infrastructure includes Intellicom VSAT satellite links to the company's network
operations center (NOC), which replace more expensive terrestrial
telecommunications data lines.
SoftNet's NOC is located in Silicon Valley, while its corporate headquarters is
located in San Francisco. For further information about SoftNet and its
services, please visit http://www.softnet.com , http://www.ispchannel.com or
call 415-365-2500.
About Mediacom
Mediacom, with headquarters in Middletown, N.Y., is one of the fastest growing
cable television companies in the U.S. Upon completion of the Zylstra and Triax
acquisitions scheduled for the fourth quarter 1999, Mediacom's broadband network
will pass over one million homes and serve 725,000 cable television and Internet
customers in 20 states. These transactions will establish Mediacom as the
leading operator focused on providing cable television service to
non-metropolitan markets and will position Mediacom among the top 10 independent
cable television companies in the United States. More information about Mediacom
can be obtained by visiting its Web site at: www.mediacomllc.com .
###
Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: Except for historical information, the matters discussed in this news
release that may be considered forward-looking statements may be subject to
certain risks and uncertainties that could cause the actual results to differ
materially from those projected, including uncertainties and other risks
detailed from time to time in the Company's Securities and Exchange Commission
filings.
SOURCE SoftNet Systems, Inc.
