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FIRST AMENDMENT TO MERGER AGREEMENT
THIS FIRST AMENDMENT TO MERGER AGREEMENT dated as of March 3,
2000 (this "Amendment") is entered into by and among Video City, Inc.., a
Delaware corporation ("Buyer"), Keystone Merger Corp., a Delaware corporation
("Sub"), and West Coast Entertainment Corporation, a Delaware corporation (the
"Seller"), amending that certain Agreement and Plan of Merger, dated as of
August 1, 1999, by and among Buyer, Sub and Seller (the "Merger Agreement").
Buyer, Sub and Seller are collectively referred to herein as the "Parties." All
capitalized terms used but not defined in this Amendment shall have the meanings
ascribed to them in the Merger Agreement.
RECITALS
WHEREAS, the Parties executed the Merger Agreement dated as of
August 1, 1999 pursuant to which Sub will be merged with and into Seller in
accordance with Delaware General Corporation Law and the terms of the Merger
Agreement; and
WHEREAS, the Parties have agreed to amend the Merger Agreement
pursuant to this Amendment.
NOW, THEREFORE, in consideration of good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Parties hereto agree to amend the Merger Agreement as follows:
AGREEMENT
Section 1. Additional Agreements. Article VI of the Merger
Agreement is hereby amended by the insertion of the following as Section 6.14:
Management Agreement. Pursuant to the authority
granted to Buyer under that certain management agreement dated as of
March 3, 2000 by and among Buyer and Seller (the "Management
Agreement"), Buyer shall use commercially reasonable efforts to effect
the sale, on Seller's behalf, of a sufficient number of Seller's video
retail stores (as determined in Buyer's sole discretion) to raise net
cash proceeds to satisfy up to $20,000,000 of Seller's outstanding
indebtedness to the Lenders (as defined in Section 7.03(d)) .
Section 2. Additional Conditions to Obligations of Buyer and
Sub. Section 7.02 of the Merger Agreement is hereby amended by the insertion of
the following as Section 7.02 (o):
Consent of Lenders. The Lenders (as defined in
Section 7.03(d)) shall have irrevocably consented in writing to the
consummation of the Merger.
Section 3. Outside Date. Section 8.01(b) of the Merger
Agreement is hereby amended to provide that the term "Outside Date" shall mean
August 31, 2000.
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Section 4. Execution in Counterparts. This Amendment may be
executed in any number of counterparts, each of which shall for all purposes be
deemed to be an original and all such counterparts shall together constitute but
one and the same instrument.
Section 5. Ratification and Reaffirmation of the Merger
Agreement. Except as hereby expressly amended, the Merger Agreement shall remain
in full force and effect and is hereby ratified and confirmed.
Section 6. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to any applicable conflicts of law.
Section 7. Interpretation. In the event of any conflict
between the provisions of the Merger Agreement and the provisions of this
Amendment, the provisions of this Amendment shall control.
Section 8. Binding Effect. This Amendment shall inure to the
benefit of and shall be binding upon the Parties and their respective successors
and assigns.
[signatures follow]
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IN WITNESS WHEREOF, the Parties hereto have caused this
Amendment to be executed by their respective officers, attorneys-in-fact or
trustees thereunto duly authorized as of the day and year first above written.
VIDEO CITY, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxx
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
KEYSTONE MERGER CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxx
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
WEST COAST ENTERTAINMENT CORPORATION,
a Delaware corporation
By: /s/ T. Xxxx Xxxxxxxx
Name: T. Xxxx Xxxxxxxx
Title: CEO
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