ACTION PERFORMANCE COMPANIES, INC.
________________________________________
FIRST AMENDMENT
Dated as of MARCH 18, 1998
to
NOTE PURCHASE AGREEMENT
Dated as of JANUARY 2, 1997
________________________________________
Re: $20,000,000 8.05% Senior Notes
Due January 2, 1999
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS
This First Amendment dated as of March 18, 1998 (the or this "First
Amendment") to the Note Agreements each dated as of January 2, 1997 is between
Action Performance Companies, Inc., an Arizona Corporation (the "Company"), and
each of the institutions which is a signature to this First Amendment
(collectively, the "Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
separate and several Note Agreements each dated as of January 2, 1997
(collectively, the "Note Agreements"). The Company has heretofore issued the
$20,000,000 8.05% Senior Notes Due January 2, 1999 (the "Notes") dated January
2, 1997, pursuant to the Note Agreements. The Noteholders are the holders of
100% of the outstanding principal amount of the Notes.
B. The Company and the Noteholders now desire to amend the Note
Agreements in the respects, but only in the respects hereinafter set forth.
C. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Agreements unless herein defined or the context
shall otherwise require.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
Now, therefore, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
ss.3.1 hereof, and in consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1 Section 10.1 of the Note Agreements shall be and is hereby amended
in its entirety to read as follows:
MAINTENANCE OF CONSOLIDATED SENIOR FUNDED
DEBT AND CONSOLIDATED FUNDED DEBT TO
CONSOLIDATED EBITDA.
The company will not permit, at any time:
(a) the ratio of Consolidated Senior Funded Debt to
Consolidated EBITDA to be greater than 2.00 to 1.00;
(b) the ratio of Consolidated Funded Debt to Consolidated
EBITDA to be greater than 4.00 to 1.00.
1.2 Section 10.2 of the Note Agreements shall be and is hereby amended
by substituting the phrase "3.00 to 1.00" for the phrase "5.00 to 1.00" as such
phrase appears in said Section 10.2.
1.3 The following shall be added as a new definition in alphabetical
order to Schedule II of the Note Agreements:
"Senior Funded Debt" means all Funded Debt which is not expressed to be
subordinated in right of payment of any other Funded Debt.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
2.1 To induce the Noteholders to execute and deliver this First
Amendment (which representations shall survive the execution and delivery of
this First Amendment), the Company represents and warrants to the Noteholders
that:
(a) this First Amendment has been duly authorized, executed and
delivered by it and this First Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally;
(b) the Note Agreements, as amended by this First Amendment, constitute
the legal, valid and binding obligations, contracts and agreements of the
Company enforceable against it in accordance with their respective terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally;
(c) the execution, delivery and performance by the Company of this
First Amendment (i) has been duly authorized by all requisite corporate action
and, if required, shareholder action (ii) does not require the consent or
approval of any governmental or regulatory body or agency, and (iii) will not
(A) violate (1) any provision of law, statute, rule or regulation or its
certificate of incorporation or bylaws, (2) any order of any court or any rule,
regulation or order of any other agency or government binding upon it, or (3)
any provisions of any material indenture, agreement or other instrument to which
it is a party or by which its properties or assets are or may be bound,
including, without limitation, the Bank Documents, or (B) result in a breach or
constitute (alone or with due notice or lapse of time or both) a default under
any indenture, agreement or other instrument referred to in clause (iii)(A)(3)
of this ss.2.1(c);
(d) as of the date hereof and after giving effect to this First
Amendment, no default or Event of Default has occurred which is continuing; and
(e) except as disclosed in the Company's Form 10-K for the year ended
September 30, 1997 and the Form 10-Q for the quarter ended December 31, 1997,
copies of which have been provided to the Noteholders, or except as set forth in
updated Schedules attached to this First Amendment, all the representations and
warranties contained in Article 5 of the Note Agreements and the Schedules
thereto are true and correct in all material respects with the same force and
effect as if made by the Company on and as of the date hereof.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.
3.1 This First Amendment shall not become effective until, and shall
become effective when, each and every one of the following conditions shall have
been satisfied:
(a) executed counterparts of this First Amendment, duly executed by the
Company and the holders of 100% of the outstanding principal of the Notes, shall
have been delivered to the Noteholders;
(b) the Noteholders shall have received a written consent to this First
Amendment duly executed by the Subsidiary Guarantors, which consent shall be in
the form and substance satisfactory to the Noteholders and which shall confirm
the continued effectiveness of each Subsidiary Guaranty;
(c) the Noteholders shall have received evidence satisfactory to them
that the Bank Documents have been amended in a manner substantially consistent
with the terms hereof;
(d) the Noteholders shall have received (i) a copy of the resolutions
of the Board of Directors of the Company authorizing the execution, delivery and
performance by the Company of this First Amendment, certified by its Secretary
or an Assistant Secretary, and (ii) a copy of the resolutions of the Board of
Directors of the Company authorizing execution, delivery and performance by the
Company of the amendment to the Bank Documents certified by its Secretary or an
Assistant Secretary, which resolution shall be satisfactory in form and
substance to the Noteholders;
(e) the representations and warranties of the Company set forth in ss.2
hereof are true and correct on and with respect to the date hereof.
Upon receipt of all the foregoing, this First Amendment shall become
effective.
SECTION 4. PAYMENT OF NOTEHOLDERS' COUNSEL FEES AND EXPENSES.
4.1 The Company agrees to pay upon demand, the reasonable fees and
expenses of Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, counsel to the Noteholders, in
connection with the negotiation, preparation, approval, execution and delivery
of this First Amendment in the event the Noteholders deem it necessary to retain
such counsel prior to this First Amendment becoming effective as provided in
Section 3.
SECTION 5. MISCELLANEOUS.
5.1 This First Amendment shall be construed in connection with and as
part of each of the Note Agreements, and except as modified and expressly
amended by this First Amendment, all terms, conditions and covenants contained
in the Note Agreements and the Notes are hereby ratified and shall be and remain
in full force and effect.
5.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this First Amendment
may refer to the Note Agreements without making specific reference to this First
Amendment but nevertheless all such references shall include this First
Amendment unless the context otherwise requires.
5.3 The descriptive headings of the various Sections or parts of this
First Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
5.4 This First Amendment shall be governed by and construed in
accordance with New York law.
5.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment may be
executed in any number of counterpart constituting an original, but all together
only one agreement.
ACTION PERFORMANCE COMPANIES, INC.
By: /s/ Xxx Xxxxxxxxx
Its: Executive V.P.
Accepted and Agreed to:
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxxxx
Its:
XXXXXXXXX XXXXXXXX LIFE INSURANCE
COMPANY OF AMERICA
By: /s/ Xxxxxxx Xxxxxxx
Its:
FIRST XXXXXXXXX XXXXXXXX LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxxxx
Its:
CONSENT
WHEREAS, Action Performance Companies, Inc. (the "Company") entered into a Note
Purchase Agreement Dated as of January 2, 1997 (the "Note Purchase Agreement")
with certain purchasers (the "Noteholders") listed on Schedule I thereto, and
WHEREAS, the Company is seeking to amend the Note Purchase Agreement as set out
in that certain First Amendment Dated as of March 18, 1998 (the "First
Amendment"), and
WHEREAS, the Noteholders, as a condition to execution and delivery of the First
Amendment, require that the Subsidiary Guarantors consent to such First
Amendment and confirm the continued existence, effectiveness and enforceability
of the Subsidiary Guaranties,
NOW THEREFORE, the undersigned, being all of the Subsidiary Guarantors, have
executed this Consent for the purposes set forth herein.
1. All capitalized terms not otherwise defined shall have the meaning set forth
in the Note Purchase Agreement.
2. Each Subsidiary Guarantor does hereby consent to the First Amendment dated as
of March 18, 1998 to the Note Purchase Agreement.
3. Each Subsidiary Guarantor hereby confirms the continued existence,
effectiveness and enforceability of its respective Subsidiary Guaranty, executed
in connection with and pursuant to the Note Purchase Agreement.
4. Each Subsidiary Guarantor acknowledges that the effectiveness of the First
Amendment will benefit each such Guarantor by making funds available to such
Guarantor through the Company and by enhancing the financial strength of the
consolidated group of which each Guarantor and the Company are members.
5. Each Subsidiary Guarantor acknowledges that the Noteholders are relying on
the continued enforceability of each Subsidiary Guaranty in executing and
delivering the First Amendment.
SPORTS IMAGE, INC. MTL ACQUISITION, INC.
By: /s/ Xxxxxxxxxxx Xxxxxx By: /s/ Xxxxxxxxxxx Xxxxxx
Its Its
CREATIVE MARKETING & AW ACQUISITION CORP.
PROMOTIONS, INC.
By: /s/ Xxxxxxxxxxx Xxxxxx By: /s/ Xxxxxxxxxxx Xxxxxx
Its Its
RYP, INC. IW ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx Xxxxxx By: /s/ Xxxxxxxxxxx Xxxxxx
Its Its
