AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
This Amendment (this "Amendment") to the Agreement and Plan of Merger,
dated as of March 31, 2000 (the "Original Agreement"), by and among Funco, Inc.,
a Minnesota corporation ("Company), Electronics Boutique Holdings Corp., a
Delaware corporation ("Parent"), and EB Acquisition Corporation, a Minnesota
corporation ("Purchaser"), is made and entered into as of April 20, 2000 by and
among Company, Parent and Purchaser. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Original Agreement.
RECITALS
A. The Board of Directors of Parent, on its own behalf as a party to
the Original Agreement and as the sole shareholder of Purchaser, and the Board
of Directors of Purchaser have approved the increase in the Per Share Amount
pursuant to this Amendment.
B. The Board of Directors of Company (the "Company Board") has
determined that said increase in the Per Share Amount, together with the other
amendments to the Original Agreement set forth in this Amendment, will enable
the Company Board to maintain its recommendation of the Original Agreement, as
amended by this Amendment, the Offer and the Merger and has approved this
Amendment.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth below, the parties agree as follows:
1. All references in the Original Agreement or this Amendment to "this
Agreement" or "the Agreement," and all references in the Original Agreement to
"herein," "hereof" or "hereby" shall be deemed to be references to the Original
Agreement, as amended by this Amendment, and by any future amendments made in
accordance with the terms of the Original Agreement.
2. All references in the Original Agreement to "$17.50," including
without limitation in paragraph B of the Recitals to the Original Agreement, are
hereby changed to "$21.00," such that the Per Share Amount shall be $21.00 per
Share, or such higher price as may be paid in the Offer.
3. The words "on or before April 28, 2000" shall replace and be
substituted for (1) the words "as promptly as practicable (but in any event not
later than eight business days after the public announcement of Purchaser's
intention to commence the Offer)" in Section 1.1(a) of the Original Agreement
and (2) the words "within eight business days after the date of this Agreement"
in Section 6.6(b) of the Original Agreement.
4. The references to "June 30, 2000" in Sections 1.1(b) and 8.1(b) of
the Original Agreement are hereby changed to "July 20, 2000."
5. Section 4.21 of the Original Agreement is hereby amended to add the
following sentence: "The Company Board or the Special Committee has received the
opinion of Xxxxx to the effect that, as of April 20, 2000, the $21.00 Per Share
Amount to be received by the Shareholders
(other than Parent or Purchaser) in the Offer and the Merger is fair to such
Shareholders from a financial point of view.
6. Section 4.24 of the Original Agreement is hereby amended in its
entirety to read as follows:
"Section 4.24 PROXIES. Xxxxx X. Xxxxxx has tendered an irrevocable
proxy to Parent pursuant to the terms of the Shareholder Agreement between
Parent and Xx. Xxxxxx, dated as of March 31, 2000 (the "Shareholder Agreement"),
which irrevocably grants to Parent the right to vote all of Xx. Xxxxxx'x Shares
(but in no event more than 19.9% of all issued and outstanding Company Common
Stock, in the aggregate), to the extent such Shares are not tendered in the
Offer until such Shares are purchased in the Offer, in favor of the Merger."
7. Section 4.25 of the Original Agreement is hereby amended in its
entirety to read as follows:
"Section 4.25 TENDER OF SHARES. Xxxxx X. Xxxxxx has provided to Parent
his written commitment, pursuant to the terms of the Shareholder Agreement, to
tender all Shares owned of record or beneficially owned by him pursuant to the
Offer (but in no event more than 19.9% of all issued and outstanding Company
Common Stock, in the aggregate)."
8. Section 5.7 of the Original Agreement is hereby amended to add the
following sentence: "The Board of Directors of Parent has received the opinion
of Prudential Securities Incorporated to the effect that, as of April 20, 2000,
the Offer and the Merger, at a Per Share Amount of $21.00, are fair to Parent's
shareholders from a financial point of view."
9. Section 6.12(a) of the Original Agreement is hereby amended to
delete the words "after the Effective Time."
10. The proviso in Section 8.1(e) of the Original Agreement is hereby
amended to read as follows: "PROVIDED, HOWEVER, to the extent that any such
representation, warranty, covenant or agreement of Company is qualified as to
materiality, such representation, warranty, covenant or agreement by Company
shall not be deemed to be so qualified for purposes of this subsection."
11. The phrase "Parent on behalf of Parent" contained in the last
sentence of Annex A to the Original Agreement is hereby replaced in its entirety
with the phrase "Parent on behalf of Purchaser".
12. Except as amended by this Amendment and by any future amendments
made in accordance with the terms of the Agreement, the Agreement has not been
amended in any respect and remains in full force and effect. This Amendment
supersedes and replaces any and all previous amendments to the Original
Agreement.
IN WITNESS WHEREOF, the undersigned caused this Amendment to be signed
by their respective duly authorized officers as of the date first written above.
FUNCO, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & Chief Operating
Officer
ELECTRONICS BOUTIQUE HOLDINGS CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President & Chief Executive
Officer
EB ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President & Chief Executive
Officer
