AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT ("AMENDMENT") to the AGREEMENT AND PLAN OF MERGER (the
"MERGER AGREEMENT") dated as of October 9, 1998, among Yahoo! Inc., a California
corporation ("ACQUIROR"), YO Acquisition Corporation., a Delaware corporation
and a wholly owned subsidiary of Acquiror ("SUB"), and Yoyodyne Entertainment,
Inc., a Delaware corporation ("TARGET"), is made as of this 19th day of October,
1998 , by and among Acquiror, Sub and Target.
RECITAL
A. Acquiror, Sub and Target desire to amend the Merger Agreement as
provided herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. AMENDMENTS TO MERGER AGREEMENT.
a. Section 2.2 of the Merger Agreement is amended and restated in its
entirety as follows:
"Section 2.2 ESCROW AGREEMENT. At the Effective Time or such later
time as determined in accordance with Section 2.3(b), Acquiror will, on behalf
of the holders of Target Common Stock, Target Preferred Stock, Target Options
and Target Warrants, deposit in escrow certificates representing 23,445 shares
of Acquiror Common Stock. Such shares shall be held in escrow on behalf of the
persons who are the holders of Target Common Stock or Target Preferred Stock in
the Merger immediately prior to the Effective Time (the "FORMER TARGET
STOCKHOLDERS"), in accordance with the portion of Total Consideration Shares
allocable to each such Former Target Stockholder based upon the Exchange Ratios
("PRO RATA PORTION"). Such shares (collectively, the "ESCROW SHARES") shall be
held and applied pursuant to the provisions of an escrow agreement (the "ESCROW
AGREEMENT") to be executed pursuant to Section 7.6."
b. Section 3.2(a) of the Merger Agreement is amended and restated in its
entirety as follows:
"(a) The authorized capital stock of Target consists of 8,950,000
shares of Target Common Stock, 50,000 shares of Class B Common Stock, $0.01
par value per share ("TARGET CLASS B COMMON STOCK"), and 2,000,000 shares of
Preferred Stock, of which 1,500,000 shares are designated as Series A
Cumulative Convertible Preferred Stock. As of the date of this Agreement,
there are (i) 4,241,883 shares of Target Common Stock issued and outstanding,
all of which are validly issued, fully paid and nonassessable and none of
which are
subject to repurchase rights, (ii) no shares of Target Class B Common Stock
issued or outstanding, (iii) 1,276,958.332 shares of Series A Preferred Stock
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, and each share of which is convertible into 1.2 shares of Target
Common Stock, (iii) warrants to purchase up to 632,610.671 shares of Target
Common Stock (collectively, the "TARGET WARRANTS"); (iv) 1,532,349.998 shares
of Target Common Stock reserved for future issuance upon conversion of the
Target Preferred Stock; (v) 806,952 shares of Target Common Stock reserved for
future issuance pursuant to Target Options granted and outstanding under the
Target Option Plan; and (vi) 193,048 shares of Target Common Stock reserved for
issuance upon exercise of options available to be granted in the future under
the Target Option Plan. The issued and outstanding shares of Target Common Stock
and of Target Preferred Stock are held of record by the shareholders of Target
as set forth and identified in the shareholder list attached as Schedule 3.2(a)
to the Target Disclosure Schedule. The issued and outstanding Target Options
are held of record by the option holders as set forth and identified in the
option holder list provided to Acquiror or its representatives. The issued and
outstanding Target Warrants are held of record by the warrantholders as set
forth and identified in the warrantholder list provided to Acquiror or its
representatives. All shares of Target Common Stock and Target Preferred Stock
subject to issuance as specified above, upon issuance on the terms and
conditions (including payment) specified in the instruments pursuant to which
they are issuable, shall be duly authorized, validly issued, fully paid and
nonassessable. All shares of Target Common Stock subject to issuance upon the
exercise of Target Options and Target Warrants, upon issuance on the terms and
conditions (including payment) specified in the instrument pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. All outstanding shares of Target Common Stock, Target Preferred
Stock and outstanding Target Options and Target Warrants (collectively "TARGET
SECURITIES") were issued in compliance with applicable federal and state
securities laws. Except as set forth in the Target Disclosure Schedule, there
are no obligations, contingent or otherwise, of Target to repurchase, redeem or
otherwise acquire any shares of Target Common Stock or Target Preferred Stock or
make any investment (in the form of a loan, capital contribution or otherwise)
in any other entity. An updated Schedule 3.2(a) reflecting changes permitted by
this Agreement in the capitalization of Target between the date hereof and the
Effective Time shall be delivered by Target to Acquiror on the Closing Date."
c. Section 6.6(b) of the Merger Agreement is amended and restated in its
entirety as follows:
"(b) REQUIRED REGISTRATION. No later than the thirtieth day
following the Effective Time, Acquiror shall prepare and file with the
Commission a registration statement on Form S-3 (or such successor or other
appropriate form) under the Securities Act with respect to the Registrable
Shares (the "REGISTRATION STATEMENT") and shall effect all such
registrations, qualifications and compliances (including, without limitation,
obtaining appropriate qualifications under applicable state securities or
"blue sky" laws and compliance with any other applicable governmental
requirements or regulations) as any selling Holder may reasonably request and
that would permit or facilitate the sale of all Registrable Shares (provided
however that Acquiror shall not be required in connection therewith to
qualify to do business or to file a general consent to service of process in
any such state or jurisdiction), and in each case
par
Acquiror will use its best efforts to cause such Registration Statement and all
other such registrations, qualifications and compliances to become effective as
soon as practicable thereafter."
d. The Target Disclosure Schedule is amended and restated in its entirety
as set forth in ANNEX A attached hereto.
2. EFFECT ON MERGER AGREEMENT. Except as otherwise specifically provided
herein, the Merger Agreement shall not be amended but shall remain in full force
and effect.
3. GOVERNING LAW. This Amendment shall be governed and construed in
accordance with the laws of the State of California without regard to any
applicable conflicts of law.
4. COUNTERPARTS. This Amendment may be signed in one or more counterparts,
each of which shall be an original but all of which, taken together, shall
constitute one and the same instrument.
[Signature Page Follows]
The parties hereto have caused this Amendment to be executed as of the date
written above by their respective officers thereunto duly authorized.
YAHOO! INC.
By: /s/ Gary Valenzuela
Name: Gary Valenzuela
Title: Chief Financial Officer
YO ACQUISITION CORPORATION
By: /s/ Gary Valenzuela
Name: Gary Valenzuela
Title: Chief Operating Officer
YOYODYNE ENTERTAINMENT, INC.
By: /s/ Terrence A. Kaliner
Name: Terrence A. Kaliner
Title: Vice President-Finance, CFO, Secretary/Treasurer