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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): August 10, 1999
REALNETWORKS, INC.
(Exact Name of Registrant as Specified in Charter)
WASHINGTON
(State or Other Jurisdiction of Incorporation)
0-23137
(Commission File Number)
91-1628146
(IRS Employer Identification No.)
2601 ELLIOTT AVENUE, SUITE 1000, SEATTLE, WA 98121
(Address of Principal Executive Offices)
(206) 674-2700
(Registrant's telephone number, including area code)
1111 THIRD AVENUE, SUITE 2900, SEATTLE, WA 98101
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On August 10, 1999, RealNetworks, Inc. ("RealNetworks") acquired all of
the outstanding capital stock of Xing Technology Corporation, a California
corporation ("Xing"), pursuant to an Agreement and Plan of Merger dated as of
April 12, 1999, as amended on July 28, 1999 (the "Merger Agreement"), among
RealNetworks, Xing, XTC Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of RealNetworks ("Xing Acquisition"), and certain shareholders
of Xing. In accordance with the terms of the Merger Agreement, Xing Acquisition
merged with and into Xing, with Xing as the surviving corporation (the
"Merger").
Xing, founded in 1989 and based in San Luis Obispo, California, is a
leading provider of high performance, standards-based digital audio and video
encoding and decoding technology, including MP3 software.
Pursuant to the Merger Agreement, RealNetworks issued an aggregate of
732,280 shares of RealNetworks common stock, par value $0.001 per share
("RealNetworks Common Stock"), and all outstanding options of Xing were replaced
by options to acquire shares of RealNetworks Common Stock pursuant to the
formula set forth below. Such consideration was determined in arm's-length
negotiations between RealNetworks and Xing.
At the effective time of the Merger, each outstanding share of Xing
common stock, no par value ("Xing Common Stock"), including shares of Xing
Common Stock issued upon conversion of outstanding shares of Xing preferred
stock or other residual equity interests, was converted into the right to
receive that number of shares of RealNetworks Common Stock determined (i) by
dividing $50,000,000, subject to certain adjustments set forth in the Merger
Agreement, by the total number of shares of Xing capital stock outstanding
immediately prior to the effective time on a fully diluted basis, assuming the
exercise of all outstanding options, warrants, or other rights to purchase
shares of Xing Common Stock, whether or not exercisable, and the conversion of
all residual equity interests, and (ii) further dividing the quotient obtained
by the average of the per share last daily closing price of the RealNetworks
Common Stock during the ten trading days ending on the trading day immediately
preceding the closing date (the "Average Closing Price").
The calculation of the Average Closing Price was subject to certain
adjustments including an adjustment such that if the Average Closing Price
exceeded $65.00, the Average Closing Price would be deemed to be equal to
$65.00. Similarly, if the Average Closing Price was less than $50.00, the
Average Closing Price would be deemed to be equal to $50.00.
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As a result of the Merger, the Xing shareholders received approximately
1% of the outstanding RealNetworks Common Stock, including the indemnification
shares described below.
In addition, each option to purchase shares of Xing Common Stock
outstanding at the effective time of the Merger was replaced by RealNetworks and
will be treated as an option to purchase that number of shares of RealNetworks
Common Stock equal to the product of the exchange ratio and the number of shares
of Xing Common Stock subject to such option.
The shares of RealNetworks Common Stock issued as a result of the
Merger were issued in reliance on the exemption from the registration
requirements of the Securities Act of 1933, as amended, provided by Section
3(a)(10) thereof.
The Merger will be accounted for as a pooling of interests.
Pursuant to the Merger Agreement, the shareholders of Xing have agreed
to indemnify and hold RealNetworks harmless from losses that RealNetworks or its
affiliates may suffer as a result of (i) any inaccuracy in, or breach of, any
representation or warranty made by Xing in the Merger Agreement or related
agreements; and (ii) any breach by, or failure of Xing to comply with, any
covenant or obligation in the Merger Agreement or related agreements. A total of
73,142 shares of RealNetworks Common Stock issued in connection with the Merger
have been deposited with an escrow agent to secure these indemnification
obligations.
The description of the Merger Agreement herein, which is incorporated
by reference as an exhibit to this Form 8-K, does not purport to be complete and
is qualified in its entirety by the provisions of the Merger Agreement.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits
2.1 Agreement and Plan of Merger by and among RealNetworks, Inc.,
Xing Technology Corporation, XTC Acquisition Corp. and certain
shareholders of Xing dated as of April 12, 1999 (incorporated by
reference to Exhibit 2.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999)
2.2 Amendment No. 1 to Agreement and Plan of Merger dated as of
July 28, 1999
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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.
REALNETWORKS, INC.
By: /s/ Paul Bialek
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Paul Bialek
Senior Vice President - Finance and
Operations and Chief Financial Officer
Date: August 20, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
2.2 Amendment No. 1 to Agreement and Plan of Merger dated as of July
28, 1999
</TABLE>
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EXHIBIT 2.2
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER is dated as of
July 28, 1999 (the "Amendment") by and among RealNetworks, Inc., a Washington
corporation ("RealNetworks"), XTC Acquisition Corp., a Delaware corporation and
the wholly-owned subsidiary of RealNetworks ("Purchaser"), Xing Technology
Corporation, a California corporation (the "Company"), and, Hassan Miah and Dean
Kaplan (collectively, the "Executive Shareholders").
SECTION 1. RECITALS OF FACT.
1.1 RealNetworks, Purchase, the Company and the Executive Shareholders
have entered into an Agreement and Plan of Merger (the "Merger Agreement") dated
as of April 12, 1999. The parties hereto desire to extend the term of the Merger
Agreement as set forth herein. Capitalized terms used herein which are not
otherwise defined shall have the meanings given to such terms in the Merger
Agreement.
SECTION 2. AMENDMENT.
Section 7.1(c) of the Merger Agreement is amended and restated in its
entirety as follows:
"c. By either RealNetworks or the Company if the Closing has not
occurred (other than through the failure of the party seeking to
terminate this Agreement to comply with its obligations under this
Agreement) on or before August 31, 1999 (the "Permitted Termination
Date"), provided however, that the Permitted Termination Date shall
be September 20, 1999 if (i) holders of more than five percent (5%)
of the outstanding shares of Company Common Stock (assuming
conversion of all outstanding shares of Preferred Stock) may, on
August 31, 1999, still perfect dissenters' rights under applicable
law, and (ii) the conditions to Closing set forth in Sections
6.1(a), (b), (c) and (e), 6.2(a), (b) and (d) and 6.3(a), (b), (f),
(g) and (l) would have been met on August 31, 1999 had the Closing
occurred on such date."
SECTION 3. MISCELLANEOUS.
(a) Except as set forth herein, the Merger Agreement shall continue in
full force and effect.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of California without regard to its rules of conflict
of laws.
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(c) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment and caused
the same to be duly delivered on their behalf on the day and year first written
above.
REALNETWORKS, INC.
By:/s/ Paul Bialek
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Title: Sr. Vice President, Finance &
Operations and Chief Financial Officer
XTC ACQUISITION CORP.
By:/s/ Paul Bialek
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Title: Vice President
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XING TECHNOLOGY CORPORATION
By:/s/ Hassan Miah
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Title: Chief Executive Officer
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/s/ Hassan Miah
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Hassan Miah
/s/ Dean Kaplan
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Dean Kaplan
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