AMENDMENT NO. 1 TO THE
HOLLYWOOD ENTERTAINMENT CORPORATION
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 (the "AMENDMENT") to the HOLLYWOOD ENTERTAINMENT
CORPORATION STOCK PURCHASE AGREEMENT dated as of July 30, 1998 (the "PURCHASE
AGREEMENT"), by and among Hollywood Entertainment Corporation, an Oregon
corporation (the "COMPANY"), and the parties set forth on Exhibit A thereto,
is made as of September 3, 1998. A copy of the Purchase Agreement is
attached hereto as ATTACHMENT 1.
RECITALS
WHEREAS, the Company and the undersigned parties hereto desire to amend
the Purchase Agreement as provided herein;
NOW, THEREFORE, IT IS AGREED THAT:
1. All capitalized terms used herein without definition shall have
the meanings ascribed to them in the Purchase Agreement, other than as set
forth in Section 4 below.
2. Section 1.1 of the Purchase Agreement shall be amended and
restated in its entirety as follows:
"Section 1.1 SALE OF THE STOCK. Subject to the terms and
conditions hereof, at the Closing (as defined below), the Company will issue
and sell to each Purchaser, and each Purchaser will purchase, in the
respective amounts set forth on Exhibit A, an aggregate of 5,000,000 shares
of Common Stock ("Common Stock") and Series A Redeemable Preferred Stock (as
described in Exhibit A to that certain Agreement and Plan of Merger and
Reorganization among the Company, R Acquisition, Inc. and Xxxx.xxx, Inc.
dated as of July 30, 1998, as amended (the "Merger Agreement")) ("Redeemable
Preferred") from the Company (the Common Stock and Redeemable Preferred shall
be referred to, collectively, as the "Stock"), at a purchase price per share
of $13.50 under this Agreement for an aggregate purchase price of
$67,500,000.00."
3. Section 3.2 of the Purchase Agreement shall be amended and
restated in its entirety as follows:
"Section 3.2 VALID ISSUANCE OF STOCK; COMPLIANCE WITH SECURITIES
LAWS. The Stock, when issued and paid for in accordance with this Agreement
will be duly authorized, validly issued, fully paid and non-assessable and
issued in compliance with all applicable federal and state securities laws.
As of the Closing, the Common Stock issuable upon conversion of the
Redeemable Preferred has been duly and validly reserved for issuance and,
upon issuance in accordance with the rights, preferences and privileges
attached to the Redeemable Preferred, will be validly issued, fully paid and
nonassessable."
4. The following shall be added as Section 6.15 of the Purchase
Agreement and all capitalized terms used in this Section 6.15 and not
otherwise defined in this Amendment shall have the meanings ascribed to them
in the Merger Agreement:
"6.15 CONTINUITY OF INTEREST. The parties hereto acknowledge
and agree that the relative amounts of Redeemable Preferred and Common Stock
included as Stock to be purchased hereunder and issued as Merger Consideration
under the Merger Agreement shall be adjusted in accordance with the provisions
of this Section 6.15 (and Section 6.10 of the Merger Agreement) in order to
ensure satisfaction of the continuity of interest requirement for status of
the Merger as a "reorganization" under Section 368(a) of the Code:
(a) If the closing price of the Common Stock on the NNM for
the day preceding the Closing Date under the Merger Agreement (the "Closing
Date Stock Value") is equal to or more than $13.50 per share, then (i) the
number of shares of Common Stock issued under the Merger Agreement will be
increased to 4,000,000, (ii) the number of shares of Common Stock issued
under this Agreement shall be reduced by the amount of the increase under
clause (i), (iii) the number of shares of Redeemable Preferred issued under
the Merger Agreement will be reduced by the amount of the increase under
clause (i) and (iv) a number of shares of Redeemable Preferred equal to the
amount of the increase under clause (i) shall be issued under this Agreement,
on a pro rata basis among the Purchasers.
(b) If the Closing Date Stock Value is less than $13.50 per
share, then the number of shares of Common Stock issued under the Merger
Agreement shall be further increased (with corresponding adjustments in the
manner provided under subsection (a) to the number of shares of Common Stock
and Redeemable Preferred issued under the Merger Agreement and this
Agreement) to the extent necessary to cause, if possible, the number of
shares of Common Stock issued under the Merger Agreement multiplied by the
Closing Date Stock Value to equal or exceed 50% of the value of the aggregate
consideration issued under the Merger Agreement (valuing any Redeemable
Preferred issued thereunder at $16.20 per share solely for purposes of this
Section 6.15)."
5. DEFINITION OF STOCK IN SECTION 4.5 OF PURCHASE AGREEMENT. The
term "Stock" as used in Section 4.5 of the Purchase Agreement shall be deemed
to include any Common Stock issuable upon conversion of the Redeemable
Preferred.
6. REMOVAL OF PARTY. CMG@Ventures II, LLC shall be removed from
Exhibit A of the Purchase Agreement and shall have no rights, and shall have
no obligations, under the Purchase Agreement
7. ADDITION OF PARTIES. The parties hereto acknowledge and agree
that, upon execution of a signature page hereto, each of CMG Information
Services, Inc. and Xxxx Xxxxxx shall be added to Exhibit A to the Purchase
Agreement as a Purchaser thereunder and shall have all rights of, and be
subject to all conditions and obligations of, a Purchaser under the Purchase
Agreement, as amended by this Amendment, with respect to the shares of stock
set forth opposite their names on Exhibit A to this Amendment. Without
limiting the foregoing, each of CMG Information Services, Inc. and Xxxx
Xxxxxx represent and warrant that, at and as of the date of
-2-
this Amendment, the representations and warranties set forth in Article IV of
the Purchase Agreement are true and correct with respect to it.
8. EXHIBIT A. Exhibit A of the Purchase Agreement shall be amended
and restated in its entirety as set forth in Exhibit A to this Amendment.
9. EFFECT OF AMENDMENT. Except as amended as set forth above, the
Purchase Agreement shall continue in full force and effect.
10. COUNTERPARTS. This Amendment may be signed in one or more
counterparts, each of which shall be deemed an original and all of which,
taken together, shall be deemed one and the same document.
[Signature Page Follows]
-3-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
HOLLYWOOD ENTERTAINMENT CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
PURCHASER
----------------------------------
EXHIBIT A
SCHEDULE OF PURCHASERS
No. of Shares
Name and Address of Stock to be Price Per Aggregate Purchase Price
of Purchaser Purchased Share
Xxxxx Xxxx 31,794 $13.50 $ 429,219.00
000 00xx Xxxxxx
Xxxxxxx, XX 00000
Bowana Foundation 262,534 13.50 3,544,209.00
Attn: Xxxxx Xxxx
000 00xx Xxxxxx
Xxxxxxx, XX 00000
Pearl Street Trust 852,833 13.50 11,513,245.50
Attn: Xxxxx Xxxx
000 00xx Xxxxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxx 131,267 13.50 1,772,104.50
0000 Xxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
CMG Information Services, Inc. 2,909,918 13.50 39,283,893.00
Attn: Xxxxxx X. Xxxxxxxx III
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Intel Corporation 262,535 13.50 3,544,222.50
Attn: Xxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx, Xxxxxxxx 0
Xxxxx Xxxxx, XX 00000
Vulcan Ventures Incorporated 525,069 13.50 7,088,431.50
Attn: Xxxx Xxxxxxx
000 - 000xx Xxxxxx XX
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxx Xxxxxx 1,850 13.50 24,975.00
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxx X. Xxxxxxxxx 7,400 13.50 99,900.00
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxx Xxxxxx 7,400 13.50 99,900.00
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxxxxx 7,400 13.50 99,900.00
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
TOTALS 5,000,000 $67,500,000.00
