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On2 Settlement Proposals Involving Merger With Google
As more fully described in a Form 8-K being filed today by On2 as disclosed in the registration statement on Form S-4
By: Yeshim Deniz
Oct. 26, 2009 01:00 PM
On2 Technologies, Inc. (NYSE Amex: ONT) today reported a proposed settlement, subject to court approval, to resolve litigation involving five purported class action complaints, four filed in the Court of Chancery of the State of Delaware, which have been consolidated into a single action (the "Delaware Action"), and another filed in the Supreme Court of the State of New York, County of Queens (the "New York Action") that were brought in connection with the proposed acquisition of On2 by Google (the "merger").
As more fully described in a Form 8-K being filed today by On2 and as disclosed in the registration statement on Form S-4, as amended (the "Registration Statement"), which Google intends to file with the Securities and Exchange Commission (the "SEC") on or about October 26, 2009, On2 and the On2 board of directors and the plaintiffs to each of the Delaware Action and the New York Action entered into a memorandum of understanding ("MOU") on October 23, 2009 contemplating the settlement of all claims in each of the Delaware Action and the New York Action.
Under the MOU, the plaintiffs, on behalf of themselves and the putative class of plaintiffs, agreed to settle all the aforementioned litigation and release the named defendants in the actions (including Google, which is not participating in the settlement) and their affiliates from, among other things, claims related to the merger.
Pursuant to the terms of the MOU, On2 agreed to provide additional supplemental disclosures that are reflected in the proxy statement/prospectus, which forms a part of the Registration Statement. The settlement is contingent upon, among other things, further definitive documentation, approval of the settlement and the dismissal with prejudice of the actions by, respectively, the Delaware Court of Chancery and the Supreme Court of the State of New York.
Although On2, the On2 directors and Google believe that the Delaware Action and the New York Action are entirely without merit and that they have valid defenses to all claims, On2 and the On2 directors have entered into the MOU in order to minimize the costs associated with this litigation. On2 and the On2 directors said that the proposed settlement is not in any way an admission of any wrongdoing or liability in connection with plaintiffs' allegations and maintain that the On2 directors diligently and scrupulously complied with their fiduciary and other legal duties.
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