FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF RECAPITALIZATION AND MERGER
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FIRST AMENDMENT TO AGREEMENT AND PLAN OF RECAPITALIZATION AND MERGER, dated
as of April 8, 1998 ("First Amendment"), between HB Acquisition Corporation, a
Delaware corporation ("Newco"), and ▇▇▇▇ Sports Corp., a Delaware corporation
(the "Company").
WHEREAS, Newco and the Company have entered into an Agreement and Plan of
Recapitalization and Merger dated as of February 17, 1998 (the "Merger
Agreement") providing, among other things, for a recapitalization of the Company
pursuant to which Newco will be merged with and into the Company;
WHEREAS, each of Newco and the Company desires to amend and supplement the
Merger Agreement in certain respects as described in this First Amendment;
WHEREAS, the Board of Directors of the Company, based upon the
recommendation of a special committee of its independent directors, has approved
and deems it advisable and in the best interests of the Company and its
stockholders that such recapitalization and merger be effected in accordance
with the Merger Agreement, as so amended and supplemented by this First
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Definitions.
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Except as otherwise indicated herein or unless the context requires
otherwise, capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Merger Agreement.
2. Amendment of Section 2.1(a) of the Merger Agreement.
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Section 2.1(a) of the Merger Agreement is hereby amended, supplemented and
restated in its entirety as follows:
"(a) Conversion. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (excluding (i) any
Shares to be canceled pursuant to Section 2.1(b) and (ii) any Dissenting
Shares) shall be converted into the right to receive $10.25 (the "Merger
Consideration"), upon surrender of the certificate representing such Shares
in the manner provided in and otherwise in accordance with Section 2.2. All
such Shares so converted, and the Rights associated therewith, shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and such holder of a certificate representing any
such Shares shall cease to have any rights with respect thereto, except for
the right to receive the Merger Consideration therefor upon surrender of
such certificate in the manner provided in and in accordance with Section
2.2."
3. Amendment of Section 8.1(b) of the Merger Agreement.
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Section 8.1(b) of the Merger Agreement is hereby amended, supplemented and
restated in its entirety as follows:
"(b) by either Newco or the Company if: (i) the Merger has not been
consummated on or prior to August 31, 1998 or such other date, if any, as
Newco and the Company shall agree upon in writing (provided that the right
to terminate this Agreement under this Section 8.1(b)(i) shall not be
available to a party who has been the cause of or resulted in the failure
of the Effective Time to occur on or before such date), or (ii) any
Governmental Entity shall have issued a statute, order, decree or
regulation or taken any other action in each case permanently restraining,
enjoining or otherwise prohibiting the Merger or making the Merger illegal
and such statute, order, decree, regulation or other action shall have
become final and non-appealable."
4. Addition of New Section 9.13 of Merger Agreement.
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Article IX of the Merger Agreement is hereby amended and supplemented to
add a new Section 9.13 which shall read in its entirety as follows:
"SECTION 9.13 Product Liability Verdict. (a) Newco acknowledges
that (i) it has been advised of the entry of a verdict against the Company
in the action ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇ Helmets, Inc. and
▇▇▇▇ Atiyehs Cycles, Civil Action #5349-CV-1994 in the Court of Common
Pleas of Luzerne County, Pennsylvania (the "Wandel Verdict") and (ii)
Newco, the Investors, Newco's counsel and Newco's consultants have been
provided an opportunity to meet with representatives of the Company and the
Company's legal advisors (including trial and appellate counsel in such
action) to discuss and review (1) the Wandel Verdict and (2) any costs or
charges (including defense, appeal, appeal bond, pre-judgment, post-
judgment or other legal or similar costs) incurred or expected to be
incurred by the Company specifically in connection with the Wandel Verdict.
The amendment and supplement to Section 2.1(a) of the Agreement effected
through the First Amendment is intended to address any concerns or rights
of Newco in respect of this Agreement or the transactions contemplated
hereby and any effect on the value of the Company, in each case that arise
out of or relate to the Wandel Verdict.
(b) Notwithstanding anything contained in this Agreement to the
contrary, Newco hereby acknowledges and agrees that the Wandel Verdict
(including any judgments, damages, liabilities, costs, charges,
consequences or implications specifically related thereto or arising in
connection therewith) shall not constitute or be deemed or alleged to
constitute a Material Adverse Change or Material Adverse Effect with
respect to the Company."
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5. Representations and Warranties of the Company.
Without limitation of the Company's representations and warranties
contained in Article III of the Merger Agreement, the Company represents and
warrants to Newco as follows:
(a) The Company has all requisite corporate power and authority to execute
and deliver this First Amendment. The execution, delivery and performance of
this First Amendment by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to approval by the
Company's stockholders of the Merger Agreement, as amended by this First
Amendment, and the Merger. The Special Committee, at a meeting duly called and
held, has by the unanimous vote of all of its members present approved this
First Amendment and determined that it is advisable and in the best interests of
the Company to enter into the Merger. The Board of Directors, at a meeting duly
called and held, pursuant to the recommendation of the Special Committee, by the
vote of all directors present and voting (i) approved this First Amendment and
determined that it is advisable and in the best interests of the Company to
enter into the Merger and (ii) resolved to recommend that the holders of shares
of Company Common Stock approve and adopt the Merger Agreement, as amended by
this First Amendment, and the transactions contemplated thereunder and
hereunder, including the Merger. The Board of Directors of the Company, by a
vote of at least two-thirds of the incumbent directors, has approved the Merger
for purposes of ARTICLE ELEVENTH of the Company's Certificate of Incorporation.
This First Amendment has been duly executed and delivered by the Company and
(assuming the valid authorization, execution and delivery of this First
Amendment by Newco) constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
(b) The Company has received the revised opinion (the "Revised Fairness
Opinion") of NationsBanc ▇▇▇▇▇▇▇▇▇▇ to the effect that, as of April 8, 1998 the
cash consideration to be received by shareholders of the Company (other than CB
Capital Investors, Inc. and ▇▇▇▇ ▇. ▇▇▇▇▇▇) pursuant to the Merger is fair to
such shareholders from a financial point of view. As of the date of this First
Amendment, the Company has been authorized by NationsBanc ▇▇▇▇▇▇▇▇▇▇ to include
the Revised Fairness Opinion in the Proxy Statement. The Revised Fairness
Opinion has not been withdrawn or modified (it being understood that the Company
shall be under no obligation to furnish an update of the Revised Fairness
Opinion dated as of the Effective Time and it being further understood that any
references in the Merger Agreement to the Fairness Opinion shall hereafter be
deemed to refer to the Revised Fairness Opinion).
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6. Representations and Warranties of Newco.
Without limitation of Newco's representations and warranties contained in
Article IV of the Merger Agreement, Newco represents and warrants to the Company
as follows:
Newco has all requisite corporate power and authority to execute and
deliver this First Amendment. The execution, delivery and performance of this
First Amendment by Newco and the consummation by Newco of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Newco. This First Amendment has been duly executed and delivered
by Newco and (assuming the valid authorization, execution and delivery of this
First Amendment by the Company) constitutes the valid and binding obligation of
Newco enforceable against it in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
7. Miscellaneous.
Except as expressly modified hereby, the Merger Agreement remains in full
force and effect. Upon the execution and delivery hereof, the Merger Agreement
shall thereupon be deemed to be amended and supplemented as hereinabove set
forth as fully and with the same effect as if the amendments and supplements
made hereby were originally set forth in the Merger Agreement, and this First
Amendment and the Merger Agreement shall henceforth be read, taken and construed
as one and the same instrument, but such amendments and supplements shall not
operate so as to render invalid or improper any action heretofore taken under
the Merger Agreement.
IN WITNESS WHEREOF, Newco and the Company have caused this First Amendment
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
HB ACQUISITION CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ SPORTS CORP.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇
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