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EXHIBIT 2.5.3
FOURTH AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS FOURTH AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (the "Fourth
Amendment") is made and entered into effective as of April 22, 1998, by and
among WHEELS SPORTS GROUP, INC., a North Carolina corporation ("Parent"), High
Performance Sports Marketing, Inc., a North Carolina corporation (formerly HP
ACQUISITION COMPANY) ("HPAC"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇") (▇▇▇▇▇ and ▇▇▇▇▇▇ are hereinafter the "Shareholders"), ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("RED"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("TJP"), and
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("WCP") (▇▇▇▇▇▇▇, RED, TJP and WCP are hereinafter the
"Obligors").
Statement of Purpose
Parent, HPAC, HIGH PERFORMANCE SPORTS MARKETING, INC., a North Carolina
corporation ("High Performance") and the Shareholders are parties to that
certain Agreement and Plan of Reorganization dated as of October 3, 1997 and as
amended on October 24, 1997, November 26, 1997 and December 17, 1998 (as
amended, the "Agreement"). Parent is unable to make the Cash Payment on or
prior to April 30, 1998, and Parent and Obligors desire under the Pledge
Agreements to release certain rights and modify other rights.
Therefore, the parties hereto agree to enter into this Fourth Amendment to
amend certain provisions of the Agreement as follows:
A. Amendments to Agreement. The following amendments to the Agreement are
effective as of the date of this Fourth Amendment:
1. Defined Terms. All capitalized terms used and not otherwise defined in
this Fourth Amendment have the meaning assigned to them in the Agreement. The
following terms as used in this Fourth Amendment and as used in the Pledge
Agreement, as amended on the same date hereof (the "First Amendment to Pledge
Agreement"), hereby shall have the meanings set forth below:
"Closing Date" means the date on which the merger between Parent and a
wholly owned subsidiary of RCC contemplated by the Merger Agreement is
consummated.
"Escrowed Funds" means the $3,300,000.00 deposited with Credit Agricole
Indosuez (the "Bank") as escrow agent pursuant to the Financing Documents, of
which $500,000 is being paid in partial satisfaction of the Cash Payment as of
the date hereof, and $2,750,000 with interest accrued to date and additional
interest through the date on which such funds are paid to Shareholders shall be
released in satisfaction of the unpaid portion of the Cash Payment, on the
terms and conditions set forth in the Financing Documents.
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"Financing Documents" means the Credit Agreement among Parent and the
Bank, as agent, dated December 31, 1997, the Escrow Agreement by and between
Parent and the Bank dated December 31, 1997 and such other documents executed
pursuant to the Credit Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
December 4, 1997 among Parent, RCC and WSG Acquisition, Inc., as the same may
be amended from time to time.
2. Modification of Cash Payment Provisions. Subject to the terms herein,
Section 2.6(b) is deleted in its entirety and replaced with the following:
(b)
(i) Notwithstanding any prior provision to the contrary, Parent has
paid a new extension payment of $250,000 to the Shareholders.
(ii) As of the date hereof, the Bank has released $500,000 of the
Escrowed Funds to the Shareholders in partial satisfaction of the Cash Payment.
(iii) Parent shall be obligated to pay the Cash Payment of $2,750,000,
plus interest accrued to date and additional interest through the date of
payment at no less than the federal funds rate in effect from time to time,
(hereinafter the "Remaining Cash Payment"), and an additional extension fee of
$200,000 for the modifications contained in this Fourth Amendment (the
"Extension Fee") and all direct, unreimbursed and documents out-of-pocket
Shareholder Expenses reasonably incurred by the Shareholders (the "Shareholder
Expenses") to the Shareholders in full satisfaction of the Remaining Cash
Payment, Extension Fee and Shareholder Expenses, upon the occurrence of the
earliest of (x) the various dates at which the Escrowed Amount may be released
by the Bank pursuant to the Financing Documents, (y) on the eleventh (11th)
business day following the termination of the Merger Agreement, for whatever
reason, by Parent, RCC or otherwise, or (z) October 31, 1998.
3. Notice of Termination of the Proposed Acquisition of Parent by RCC.
Parent shall immediately notify Shareholders upon the termination of the Merger
Agreement, for whatever reason, by Parent, RCC or otherwise.
4. Pledge of Parent, Shares as Security. Each Obligor shall
simultaneously, with the execution of this Fourth Amendment, execute a First
Amendment to Pledge Agreement amending the existing Pledge Agreement, to secure
the timely payment of the Remaining Cash Payment and Shareholder Expenses in
the event that the transactions contemplated by Merger Agreement do not close
by October 31, 1998 or in the event the Merger Agreement is terminated.
Shareholders agree to exercise their remedies under the Pledge Agreement as
amended by the First Amendment to Pledge Agreement for any failure of Parent or
Obligors to satisfy their obligations under the
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Agreement, prior to pursuing any other remedies available to them; provided
that if the Pledge Agreement terminates in accordance with its terms,
Shareholders may not exercise any remedies under the Pledge Agreement prior to
pursuing other remedies, and; provided further that upon the consummation of
the transaction contemplated by the Merger Agreement, the Pledge Agreement
shall be automatically terminated and the Shareholders agree not to exercise
their rights under the Pledge Agreement for the failure of the Company to pay
the Shareholders Expenses or for any other reason, but reserve the right to
pursue any and all other remedies against the Company to make such payment of
the Shareholder Expenses and Extension Fee in full. In the event legal action
is required to collect such payment, the Company agrees to pay to the
Shareholders all reasonable costs and expenses, including attorneys fees,
incurred by the Shareholders in securing payments of the Shareholder Expenses
of the Extension Fee.
B. Miscellaneous.
1. Ratification of Agreement. Other than as modified by this Fourth
Amendment, all terms of the Agreement are hereby affirmed and ratified.
2. Counterparts. This Fourth Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3. Governing Law. This Fourth Amendment shall be governed by the laws of
the State of North Carolina applicable to agreements made and to be performed
entirely within North Carolina.
The parties have executed and delivered this Fourth Amendment as of the
date first written above.
WHEELS SPORTS GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Interim CEO
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HIGH PERFORMANCE SPORTS MARKETING, INC.
(formerly HP ACQUISITION COMPANY)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its:
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SHAREHOLDERS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
OBLIGORS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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