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): October 29, 2002
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SEACHANGE INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-21393 04-3197974
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(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification No.)
124 Acton Street, Maynard, MA 01754
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (978) 897-0100
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No change since last report
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(Former Name or Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On October 29, 2002, SeaChange International, Inc. ("SeaChange")
entered into a Subscription and Shareholders Agreement (the "Agreement") with ON
Demand Group Limited, a company incorporated in England and Wales ("ODG")
pursuant to which SeaChange subscribed for 600,000 newly issued ordinary shares
of ODG (the "Investment Shares") for an aggregate subscription price of
(pound)1.5 million, which is approximately equal to USD $2,337,750 as of October
29, 2002 (the "Investment").
Pursuant to the terms of the Agreement, William C. Styslinger, III,
President, Chief Executive Officer, Chairman of the Board and Director of
SeaChange and William L. Fiedler, Chief Financial Officer, Treasurer, Secretary
and Vice President, Finance and Administration of SeaChange, will each become a
member of the board of directors of ODG. In addition, the Agreement and the ODG
articles of association also contain protective provisions for the benefit of
SeaChange, including, but not limited to, veto rights over significant corporate
decisions of ODG, pre-emptive rights with respect to future sales and issuances
of ODG capital stock and the right to participate in sales of the capital stock
of ODG's management to third parties.
ODG also agreed in a business development agreement with SeaChange for
a minimum period of five years to exclusively purchase and to market and promote
SeaChange's video-on-demand systems and software worldwide in connection with
furnishing video-on-demand services to ODG's customers.
In addition to the (pound)1.5 million investment paid by SeaChange in
consideration of the Investment Shares, SeaChange agreed to acquire, in two
tranches, additional ordinary shares and preference shares of ODG from ODG and
certain of its pre-existing shareholders for an additional aggregate purchase
price of up to (pound)8.5 million (approximately USD $13,247,250 as of October
29, 2002), subject to ODG's satisfaction of conditions set forth in the
Agreement.
In tranche one, SeaChange would subscribe for an additional 200,000
newly issued ordinary shares of ODG for an aggregate subscription price of
(pound)0.5 million, and would purchase an additional 400,000 ordinary shares of
ODG from certain pre-existing shareholders of ODG for an aggregate purchase
price of (pound)1.0 million, subject to ODG's satisfaction of the conditions set
forth in the Agreement for this investment tranche, including the execution of
an agreement by ODG with a major European cable operator for the supply of
video-on-demand products and services to the customers of such European cable
operator on or prior to December 31, 2002 (the "Tranche 1 Investment").
In tranche two, SeaChange would subscribe for an additional 309,350
newly issued ordinary shares of ODG for an aggregate subscription price of
(pound)773,375, and 6,226,625 preference shares of ODG for an aggregate
subscription price of (pound)6,226,625, subject to ODG's satisfaction of the
conditions set forth in the Agreement for this investment tranche, including the
satisfaction of all of the conditions for the Tranche 1 Investment and the
execution of content provision agreements by ODG with at least three studios
providing for the supply of content for video-on-demand service on or prior to
December 31, 2003 (the "Tranche 2 Investment").
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Prior to the consummation of the Tranche 2 Investment, ODG and its
pre-existing shareholders have the right to repurchase all of the shares
acquired by SeaChange for the same consideration paid by SeaChange to acquire
such shares, plus an additional (pound)50,000, if either the Tranche 1
Investment has not been consummated on or prior to December 31, 2002 by reason
only of SeaChange not approving the form and substance of documentation
necessary to satisfy the conditions to the Tranche 1 Investment, or the
conditions to the Tranche 2 Investment have not been satisfied or waived on or
prior to December 31, 2003.
The terms of the Investment, the Tranche 1 Investment and the Tranche 2
Investment, including the subscription price of the Investment Shares and the
price of the shares which are proposed for purchase or subscription in the
Tranche 1 Investment and the Tranche 2 Investment, are the result of arm's
length negotiations between the representatives of SeaChange and ODG.
The source of the funds used by SeaChange to acquire the Investment
Shares is SeaChange's working capital. SeaChange's purchase of the Investment
Shares is being accounted for under the equity method of accounting.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial information required by Item 7(a) of Form 8-K
with regard to the Investment will be filed by SeaChange as
soon as practicable, but in any event not later than 60 days
after the date this current report on Form 8-K is required to
be filed with the Securities and Exchange Commission, as
permitted by Item 7(a)(4) of Form 8-K.
(b) Pro Forma Financial Information.
The financial information required by Item 7(b) of Form 8-K
with regard to the Investment will be filed by SeaChange as
soon as practicable, but in any event not later than 60 days
after the date this current report on Form 8-K is required to
be filed with the Securities and Exchange Commission, as
permitted by Item 7(b)(2) and Item 7(a)(4) of Form 8-K.
(c) Exhibits.
2.1 Subscription and Shareholders Agreement, dated as of
October 29, 2002, by and between SeaChange, ON
Demand Group Limited and the other parties thereto.
2.2 Articles of Association of ON Demand Group Limited,
as adopted by special resolution passed on October
28, 2002.
99.1 Press Release dated November 4, 2002.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
SeaChange has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEACHANGE INTERNATIONAL, INC.
By: /s/ William L. Fiedler
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William L. Fiedler
Chief Financial Officer, Treasurer, Secretary
and Vice President, Finance and Administration
Dated: November 13, 2002
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Subscription and Shareholders Agreement, dated as of October 29,
2002, by and between SeaChange, ON Demand Group Limited and the
other parties thereto.
2.2 Articles of Association of ON Demand Group Limited, as adopted by
special resolution passed on October 28, 2002.
99.1 Press Release dated November 4, 2002.
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