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EXHIBIT 2.4
AMENDMENT THREE
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT THREE TO AGREEMENT AND PLAN OF MERGER, dated as of October 31,
2000, by and among ON2.COM INC., a corporation organized under the laws of the
State of Delaware (the "Parent"), 8C ACQUISITION CORP., a corporation organized
under the laws of the State of Delaware and a wholly-owned subsidiary of the
Parent ("Acquisition"), EIGHT CYLINDER STUDIOS, INC., a corporation organized
under the laws of the State of California (the "Company"), and certain
shareholders of the Company, each of whom is listed on the signature page hereto
(collectively, the "Principal Shareholders").
WHEREAS, the parties hereto entered into an Agreement and Plan of Merger,
dated as of July 13, 2000, as amended by Amendment One to Agreement and Plan of
Merger, dated as of September 29, 2000 and as amended by Amendment Two to
Agreement and Plan of Merger, dated as of October 26, 2000 (as amended, the
"Merger Agreement"), pursuant to which the Company shall be merged with and into
Acquisition; and
WHEREAS, the parties desire to modify certain terms of the Merger
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and intending to be legally bound thereby, the parties hereto
hereby agree as follows:
1. Capitalized terms used herein without definition shall have the
meanings assigned thereto in the Merger Agreement.
2. Section 7.6 of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"FEES AND EXPENSES. The parties hereto shall bear and pay all of
their own fees, costs and expenses relating to the transactions
contemplated by this Agreement, including, without limitation, the
fees and expenses of their respective counsel, accountants, brokers
and financial advisors. Notwithstanding the foregoing, on the
Closing Date, Parent shall pay (i) reasonable fees and expenses of
the accountant performing the audit described in Section 7.14 hereof
incurred in connection with such audit and (ii) $100,000 of the
total of $154,530.87 in fees and expenses due Brobeck, Phleger &
Harrison LLP ("BPH") from the Company covering work performed by BPH
for the Company from May 1999 through June 30, 2000 (the "Past Due
Invoices"). The remaining balance (i.e., $54,530.87) of the total
amount of the Past Due Invoices together with all fees and expenses
incurred by BPH for work performed for the Company covering the
period commencing on July 1, 2000 and ending on the
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Closing Date (such amounts, together with the $54,530.87 of the Past
Due Invoices, shall be referred to as the "Closing Amounts"), shall
be paid by the Parent to BPH in three equal installments (each of
the three installments consisting of one-third of the total of the
Closing Amounts), the first of which shall be delivered to and
received by BPH on or before December 15, 2000, the second of which
shall be delivered to and received by BPH on or before January 30,
2001 and the third of which shall be delivered to and received by
BPH on or before March 15, 2001, all in accordance with the terms of
a written payment schedule set forth in a letter agreement between
the Parent and BPH, which shall be consistent herewith and
acceptable to BPH, and delivered to BPH on the Closing Date (the
"Payment Schedule"). The Closing Amounts shall not exceed $185,000
in total and Parent shall be unconditionally obligated to pay up to
that maximum amount, as specified by BPH in writing in the form of
an itemized bill or bills delivered to the Company within ten
business days following the Closing Date, provided such amounts
represent fees and expenses duly incurred by BPH in connection with
work actually performed for 8CS. In addition, Parent shall pay, in
the normal course of business, reasonable fees and expenses billed
by BPH in connection with any work performed subsequent to the
Closing Date that relates to post-closing matters, which amounts
shall not exceed $10,000 in total (the "Post-Closing Amounts"),
provided such amounts represent fees and expenses duly incurred by
BPH in connection with work actually performed for 8CS. Parent
shall, in any event, deliver payment to BPH for all unpaid Closing
Amounts and Post-Closing Amounts on or before March 15, 2001."
3. Section 10.1 of the Merger Agreement is hereby amended to delete the
words "October 31, 2000" from the second line of subsection (b)(ii) thereof, and
to insert in their place the words "November 15, 2000."
4. All other provisions of the Merger Agreement shall remain in full
force and effect.
5. This Agreement may be executed in any number of counterparts, each
of which shall be deemed and original, but all of which together shall
constitute one and the same instrument.
6. The parties hereby agree that this Agreement, and the respective
rights, duties and obligations of the parties hereunder, shall be governed by
and construed in accordance with the laws of New York, without giving effect to
principles of conflicts of law thereunder.
7. This Agreement is not intended to create any right, claim or remedy
in favor of any person or entity, other than the parties hereto and their
respective successors (or in the case of the Principal Shareholders, their
respective heirs, administrators, executors and personal representatives) and
permitted assigns.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parent, Acquisition, the Company and the Principal
Shareholders named below have caused this Agreement to be duly executed and
delivered as an instrument under seal as of the date first above written.
ON2.COM INC.
By: /s/ Mark J. Meagher
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Name: Mark J. Meagher
Title: Chief Financial Officer
8C ACQUISITION CORP.
By: /s/ Mark J. Meagher
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Name: Mark J. Meagher
Title: Chief Financial Officer
EIGHT CYLINDER STUDIOS, INC.
By: /s/ Jon Middleton
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Name: Jon Middleton
Title: President
PRINCIPAL SHAREHOLDERS:
/s/ Jonathon Fishman
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Jonathon Fishman
/s/ Jon Middleton
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Jon Middleton
/s/ Chad Nelson
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Chad Nelson
