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FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (the
"First Amendment") is made and entered into effective as of October 24, 1997,
by and among WHEELS SPORTS GROUP, INC., a North Carolina corporation
("Parent'), HP ACQUISITION COMPANY, a North Carolina corporation ("HPAC"), HIGH
PERFORMANCE SPORTS MARKETING, INC., a North Carolina corporation ("High
Performance"), RANDY C. BAKER and DAVID W. DUPREE (collectively,
"Shareholders").
Statement of Purpose
Parent, HPAC, High Performance and the Shareholders are parties to
that certain Agreement and Plan of Reorganization dated as of October 3, 1997
(the "Agreement") and desire to enter into this First Amendment to amend
certain provisions of the Agreement. All capitalized terms used and not
otherwise defined in this First Amendment have the meanings assigned to them in
the Agreement.
Therefore, the parties hereto agree as follows:
A. Amendments to Agreement. The following amendments to the
Agreement are effective as of the date of this First Amendment:
1. Decrease in Amount of Additional Cash Consideration; Increase in
Amount of Bonus. The following amendments are made to (i) decrease the amount
of the Additional Cash Consideration by $328,000 form $2,000,000 to $1,672,000;
(ii) decrease the amount of the Merger Consideration by $328,000 from
$10,250,000 to $9,922,000; and (iii) increase the amount of the bonus to be
paid to David W. Dupree prior to Closing by $328,000 from $58,000 to $368.000.
(a) The amount of the Merger Consideration (as set forth
in Article 2.6 of the Agreement) is hereby reduced by $9,922,000.
(b) The amount of the Additional Cash Consideration (as
set forth in Article 2.6(d) of the Agreement) is hereby reduced to
$1,672,000.
(c) In Article 3.17, the amount of the bonus to be paid
to David Dupree prior to Closing is hereby increased to $386,000.
(d) In Article 5.7, the amount of the bonus to be paid to
David Dupree prior to Closing is hereby increased to $386,000.
(d) In Article 11.3(a), the amount of the Additional
Cash Consideration to be delivered to Acquirors is hereby reduced to
$1,672,000.
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2. Additional Covenant of Acquirors. The following is hereby
added to the Agreement as Article 6.2:
6.2 GUARANTIES OF SHAREHOLDERS. Acquirors covenant and agree
that they shall use their best efforts promptly after Closing to cause
Shareholders to be relieved and fully released from any personal
obligations either Shareholder may have pursuant to guaranties
executed by either Shareholder in connection with any contractual or
financial commitments of High Performance (other than obligations of
High Performance of Shareholders under this Agreement).
B. Miscellaneous.
1. Ratification of Agreement. Other than as expressly modified
by this First Amendment, all terms of the Agreement are hereby affirmed and
ratified.
2. Counterparts. The First 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 First 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 First Amendment as of the
date first written above.
WHEELS SPORTS GROUP, INC.
By: /s / Howard L. Correll
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Howard L. Correll, CEO
HP ACQUISITION COMPANY
By: /s/ Howard L. Correll
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Howard L. Correll, CEO
HIGH PERFORMANCE SPORTS MARKETING, INC.
By: /s/ Randy C. Baker
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Randy C. Baker, President
/s/ Randy C. Baker
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RANDY C. BAKER
/s/ David W. Dupree
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DAVID W. DUPREE