SECOND AMENDMENT TO STOCKHOLDERS RIGHTS AGREEMENT
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SECOND AMENDMENT dated as of February 17, 1998 (this "Amendment") to
Stockholders Rights Agreement dated as of September 22, 1994, as amended by
First Amendment to Stockholders Rights Agreement dated as of February 15, 1995
(collectively, the "Rights Agreement") between XXXX SPORTS CORP., a Delaware
corporation (the "Company"), and XXXXXX TRUST AND SAVINGS BANK, an Illinois
banking corporation (the "Rights Agent").
W I T N E S S E T H :
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WHEREAS, the Board of Directors of the Company, based upon the
recommendation of a Special Committee of its independent directors (the "Special
Committee"), has approved the Agreement and Plan of Recapitalization and Merger
dated as of February 17, 1998 (the "1998 Merger Agreement") between HB
Acquisition Corporation, a Delaware corporation ("Newco"), and the Company,
which provides for the merger (the "Merger") of Newco with and into the Company
upon the terms and subject to the conditions set forth in the 1998 Merger
Agreement;
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WHEREAS, the Board of Directors of the Company, based upon the
recommendation of the Special Committee, deems it advisable and in the best
interests of the Company and of its stockholders to effect the Merger in
accordance with the terms of the 1998 Merger Agreement;
WHEREAS, the execution by Newco of the 1998 Merger Agreement is
conditioned, among other things, upon the authorization and execution of this
Amendment by the Company;
WHEREAS, at the date of this Amendment, the Distribution Date has not
occurred and there is no Acquiring Person or Adverse Person; and
WHEREAS, in compliance with Section 27 of the Rights Agreement, the
Company and the Rights Agent are willing to amend the Rights Agreement as
hereinafter set forth and the Company and the Rights Agent have each executed
and delivered this Amendment immediately prior to the execution and delivery of
the 1998 Merger Agreement.
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NOW, THEREFORE, in consideration of the Rights Agreement and the
premises and mutual agreements herein set forth, the parties hereby agree as
follows:
1. There is hereby added to the Rights Agreement new Sections 1(qq)
through 1(uu) as follows:
(qq) "Newco" shall mean HB Acquisition Corporation, a Delaware
corporation.
(rr) "1998 Merger Agreement" shall mean the Agreement and Plan of
Recapitalization and Merger dated as of February 17, 1998 between Newco and
the Company, as the same may be amended in accordance with the terms
thereof.
(ss) "1998 Exchange Agreement" shall mean the Exchange Agreement
referred to in the fifth "WHEREAS" clause of the 1998 Merger Agreement, as
such Exchange Agreement may be amended in accordance with the terms
thereof.
(tt) "Merger" shall mean the merger of Newco with and into the
Company upon the terms and subject to the conditions set forth in the 1998
Merger Agreement.
(uu) "Permitted Exchange" shall mean a transaction in which (i) Newco
acquires or receives Securities of the Company (including Common Stock,
options to purchase Common Stock and/or phantom stock units issued by the
Company); (ii) the holders of such Securities of the Company acquire or
receive Securities of Newco; and (iii) each share of Common Stock is, for
purposes of such transaction, valued not in excess of the Merger
Consideration (as defined in the 1998 Merger Agreement) exclusive of
indemnification rights limited to an amount necessary to avoid adverse tax
consequences to a holder of Securities of the Company arising from such
transaction.
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2. Section 1(a) of the Rights Agreement is hereby amended by adding
the following sentence at the end thereof:
"Notwithstanding the second preceding sentence, Newco shall not become an
"Acquiring Person" as a result of (i) Newco's execution or delivery of the
1998 Merger Agreement or the public announcement of such execution and
delivery; (ii) if the transactions contemplated by the 1998 Exchange
Agreement would constitute a Permitted Exchange, Newco's execution or
delivery of the 1998 Exchange Agreement or the public announcement or such
execution and delivery; (iii) the consummation of a Permitted Exchange in
accordance with the terms of the 1998 Exchange Agreement; or (iv) the
consummation of the Merger in accordance with the terms of the 1998 Merger
Agreement."
3. Section 3(a) of the Rights Agreement is hereby amended by adding
the following sentence immediately following the first sentence thereof:
"Notwithstanding clause (ii) of the preceding sentence, a Distribution Date
shall not occur as a result of (i) Newco's execution or delivery of the
1998 Merger Agreement or the public announcement of such execution and
delivery; (ii) if the transactions contemplated by the 1998 Exchange
Agreement would constitute a Permitted Exchange, Newco's execution or
delivery of the 1998 Exchange Agreement or the public announcement or such
execution and delivery; (iii) the consummation of a Permitted Exchange in
accordance with the terms of the 1998 Exchange Agreement; or (iv) the
consummation of the Merger in accordance with the terms of the 1998 Merger
Agreement."
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4. Section 7(a) of the Rights Agreement is hereby restated to read as
follows:
"(a) Subject to Section 7(d), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein), in whole or in part, at any time after the Distribution
Date and prior to the earliest of (i) the Close of Business on September
30, 2004 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 (the "Redemption Date"), (iii) the
time at which such Rights are exchanged as provided in Section 24 and (iv)
immediately prior to the Effective Time (as such term is defined in the
1998 Merger Agreement), upon surrender of such Rights Certificate, with the
Form of Election to Purchase and Certification of Status on the reverse
side thereof duly executed, together with such signature guarantees and
other documentation as the Rights Agent may reasonably request, to the
Rights Agent at its principal office, accompanied by payment (as provided
in subsection (c) of this Section 7) of the Exercise Price for each one
one-hundredth of a Preferred Share (or after a Triggering Event, the
securities, cash and other property purchasable in lieu thereof) as to
which the surrendered Rights are then being exercised."
5. This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed with in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
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6. This Amendment may be executed in two or more counterparts, each
of which shall for all purposes be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
7. Any capitalized term used herein without definition shall have the
meaning specified in the Rights Agreement.
8. Except as otherwise expressly set forth herein, this Amendment
shall not by implication or otherwise alter, modify, amend or in any other
manner affect any of the terms, conditions, obligations, covenants or agreements
contained in the Rights Agreement, all of which are hereby ratified and
confirmed in all respects and shall continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the day and year first above written.
XXXX SPORTS CORP.
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
Chairman and Chief
Executive Officer
Attest:
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Trust Administrator
Attest:
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
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