AMENDMENT NO. 2 TO THE
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AMENDMENT NO. 2 (this "AMENDMENT") to the AGREEMENT AND PLAN OF
MERGER AND REORGANIZATION, dated as of July 30, 1998, among HOLLYWOOD
ENTERTAINMENT CORPORATION, a corporation organized and existing under the
laws of the State of Oregon ("PARENT"), R ACQUISITION, INC., a corporation
organized and existing under the laws of the State of Delaware and a direct
wholly owned subsidiary of Parent ("MERGER SUB"), and XXXX.XXX, INC., a
corporation organized and existing under the laws of the State of Delaware
(the "COMPANY"), as amended September 3, 1998 (the "MERGER AGREEMENT,"
capitalized terms used but not otherwise defined herein are used herein as
therein defined), is made as of this 14th day of September, 1998 , by and
among Parent, Merger Sub and the Company.
W I T N E S S E T H:
WHEREAS, Parent, Merger Sub and the Company desire to amend the Merger
Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreement set forth herein, 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
hereby agree as follows:
SECTION 1. AMENDMENTS TO MERGER AGREEMENT. The Merger Agreement is
hereby amended as follows:
(a) Section 1.01 of the Merger Agreement is hereby amended by
inserting the following sentence in Section 1.01 after the sentence
beginning with "`NNM'" and before the sentence beginning with "`OTHER
TRANSACTION'":
""OREGON CORPORATION ACT" shall mean the Business Corporation Act
of the State of Oregon."
(b) Section 2.01 of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
"SECTION 2.01 THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
Business Corporation Act and the Oregon Corporation Act, at the
Effective Time, the Company shall be merged with and into Parent. As
a result of the Merger, the separate corporate existence of the
Company shall cease and Parent shall continue as the surviving
corporation of the Merger (the "Surviving Corporation")."
(c) Section 2.03 of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
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"SECTION 2.03 EFFECTIVE TIME. At the time of the Closing, the
parties shall cause the Merger to be consummated by filing (i) a
certificate of merger (the "Certificate of Merger") with the Secretary
of State of the State of Delaware in such form as required by, and
executed in accordance with, the relevant provisions of, the Business
Corporation Act and (ii) an articles of merger (the "Articles of
Merger") with the Secretary of State of Oregon in such form as
required by, and executed in accordance with, relevant provisions of
the Oregon Corporation Act (the date and time of the later of such
filings, or such later time as may be agreed to by the parties hereto
and specified in the Certificates of Merger and the Articles of
Merger, being the "Effective Time")."
(d) Section 2.04 of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
"SECTION 2.04 EFFECT OF THE MERGER. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions
of the Business Corporation Act and the Oregon Corporation Act.
Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Company and
Parent shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Parent shall become the
debts, liabilities and duties of the Surviving Corporation."
(e) Section 2.05 of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
"SECTION 2.05 CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS
AND OFFICERS OF SURVIVING CORPORATION. Unless otherwise agreed by the
Company and Parent prior to the Effective Time, at the Effective Time:
(a) the articles of incorporation and bylaws of Parent, as
in effect immediately prior to the Effective Time, shall be the
articles of incorporation and bylaws of the Surviving Corporation
until thereafter amended as provided by Law and such articles of
incorporation or bylaws;
(b) the officers of Parent immediately prior to the
Effective Time shall be the initial officers of the Surviving
Corporation until their successors are elected or appointed and
qualified or until their resignation or removal; and
(c) the directors of Parent immediately prior to the
Effective Time shall be the initial directors of the Surviving
Corporation until their successors are elected or appointed and
qualified or until their resignation or removal; provided that
Parent shall comply with Section 7.07."
(f) Section 3.01(a) is hereby amended and restated in its
entirety as follows:
"(a) CAPITAL STOCK OF PARENT. Each issued and outstanding
share of Parent Common Stock shall remain issued and outstanding and
each shares of Parent Common Stock held in treasury of Parent shall
remain in treasury.
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(g) Sections 3.01(c)(i), and 3.02(e) of the Merger Agreement
are hereby amended by deleting the dollar amount "$29,849,500" and
inserting in lieu thereof the dollar amount "$29,805,125."
(h) Sections 3.01(c)(ii), 3.02(f), 3.06(a) and 3.06(b) of
the Merger Agreement are hereby amended by deleting the numeral
".537608239" and inserting in lieu thereof the numeral "0.536704588."
(i) Article VI of the Merger Agreement is hereby amended by
adding the following Section 6.13 immediately following Section 6.12
thereof:
"SECTION 6.13 ACCOUNTING OF MERGER. The parties stipulate that
the value of goodwill and going concern value is not less than 50% of
the total value of the Company's assets. The parties further
stipulate that the value of inventory, copyrights, and other property
the sale of which would produce ordinary income to the Company or its
founder is not more than 15% of the net worth of the Company (as
defined in Section 341(e)(7) of the Code). The parties agree that
they will report the Merger for financial accounting purposes
consistent with such valuations."
(j) Section 7.03 of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
"SECTION 7.03 DIRECTORS' AND OFFICERS' INDEMNIFICATION. From
and after the Effective Time, Parent shall indemnify and hold harmless
each present and former director and officer of the Company (the
"Surviving Indemnified Parties"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out
of or pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent that the Company would have been
permitted under Delaware law and its charter documents (each as in
effect on the date hereof) to indemnify such Surviving Indemnified
Parties."
SECTION 2. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Parent and Merger Sub that: (i) the
Company has all necessary corporate power and authority to execute and
deliver this Amendment, to perform its obligations under the Merger
Agreement as amended hereby and to consummate the transactions contemplated
hereby; (ii) the execution and delivery of this Amendment by the Company and
the consummation by the Company of the transactions contemplated by the
Merger Agreement as amended hereby have been duly and validly authorized by
all necessary corporate action; (iii) this Amendment has been duly executed
and delivered by the Company and, assuming the due authorization, execution
and delivery by Parent and Merger Sub, constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
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(b) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Parent and Merger Sub hereby jointly and severally represent and warrant to
the Company that: (i) Parent and Merger Sub have all necessary corporate
power and authority to execute and deliver this Amendment, to perform their
respective obligations under the Merger Agreement as amended hereby and to
consummate the transactions contemplated hereby; (ii) the execution and
delivery of this Amendment by Parent and Merger Sub and the consummation by
Parent and Merger Sub of the transactions contemplated by the Merger
Agreement as amended hereby have been duly and validly authorized by all
necessary corporate action; (iii) this Amendment has been duly executed and
delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes the legal, valid and
binding obligation of Parent and Merger Sub, enforceable against Parent and
Merger Sub in accordance with its terms.
SECTION 3. 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.
SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
(WITHOUT REFERENCE TO CONTRACT OF LAW PRINCIPLES OTHER THAN THOSE DIRECTING
DELAWARE LAW).
SECTION 5. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
HOLLYWOOD ENTERTAINMENT CORPORATION
By:
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Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and
General Counsel
R ACQUISITION, INC.
By:
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Name: Xxxxxx X. Xxxxx
Title: Secretary
XXXX.XXX, INC.
By:
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Name: Xxxxx Xxxxxxxxxx
Title: Chief Executive Officer
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