INTERCOMPANY SUBORDINATION AGREEMENT
Exhibit
99.9
INTERCOMPANY SUBORDINATION AGREEMENT
AMENDED
AND RESTATED SUBORDINATION AGREEMENT, dated as of June 20, 2006, by and among GOLFSMITH
INTERNATIONAL, INC., GOLFSMITH INTERNATIONAL HOLDINGS, INC., GOLFSMITH GP HOLDINGS, INC., GOLFSMITH
HOLDINGS, L.P., GOLFSMITH INTERNATIONAL, L.P. (“L.P.”), GOLFSMITH GP, L.L.C., GOLFSMITH DELAWARE,
L.L.C., GOLFSMITH CANADA, L.L.C., GOLFSMITH EUROPE, L.L.C., GOLFSMITH USA, L.L.C. (“USA”),
GOLFSMITH NU, L.L.C. (“NU”), XXX XXXXXXXX GOLF SHOP. (“Sherwood”)] and GOLFSMITH LICENSING, L.L.C.,
and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as Agent for
Lenders.
RECITALS:
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement dated as of the date hereof
by and among each Grantor as a Credit Party (with L.P., NU, USA and Sherwood as Borrowers), Agent
and Lenders (including all annexes, exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified, the “Credit Agreement”) the Lenders have
agreed to make available to Borrowers, upon terms and conditions thereof, the Revolving Loans and
Letters of Credit provided for in the Credit Agreement.
WHEREAS, Agent and Lenders have required, as one of the conditions to making available the
Revolving Loans and Letters of Credit, that the payment of the Subordinated Debt (as hereinafter
defined) be subordinated to the payment of the Senior Debt.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agree
as follows:
| 1. | Defined Terms. |
| (a) | “Debtor” shall mean any Credit Party that may, from time to time, owe any Subordinated Debt. | ||
| (b) | “Subordinated Debt” shall mean and include the principal of, interest on, and all other amounts owing in connection with any and all obligations and liabilities of any Debtor to any other Debtor, whether or not such Subordinated Debt is evidenced by a note, instrument or other document.. | ||
| (c) | “Subordinated Debt Holder” a Debtor to whom any other Debtor owes any amount, of every kind and description, direct or indirect, absolute or contingent, now existing or hereafter arising. | ||
| (d) | “Senior Debt” shall mean the Obligations. |
All capitalized terms used but not otherwise defined herein have the meanings given to them in the
Credit Agreement or in Annex A thereto.
2. Subordination. The Subordinated Debt is and shall be subordinated in right of payment
to the Senior Debt as provided in this Section 2. Each Debtor and each Subordinated Debt
Holder agrees and covenants, expressly for the benefit of the present and future holders of the
Senior Debt, that the payment of the principal and interest of the Subordinated Debt, and all other
obligations of any Debtor to pay money to any Subordinated Debt Holder in connection with the
Subordinated Debt, are expressly subordinated in right of payment to the prior payment in full of
all outstanding Senior Debt. After the occurrence and during the continuance of any Event of
Default (as such term is defined in the Credit Agreement), and except as provided below in
Section 3, no Debtor shall pay, and no Subordinated Debt Holder shall be entitled to
receive or demand (and each Subordinated Debt Holder hereby agrees not to receive or demand), any
amount in respect of the principal and interest of any Subordinated Debt until the outstanding
Senior Debt then due shall have been paid in full in cash and the Credit Agreement shall have
terminated. The prohibition against any Subordinated Debt Holder receiving any payment from any
Debtor in respect of the Subordinated Debt set forth in this Section 2 shall occur
immediately and automatically upon the occurrence of any Event of Default, without requirement of
any notice by Agent or any other Lender to any Debtor or any Subordinated Debt Holder. Any amount
paid to a Subordinated Debt Holder in connection with the Subordinated Debt in contravention of the
provisions of this Section 2 shall be held by such Subordinated Debt Holder in trust for
the holder or holders of the Senior Debt and, as soon as practicable following receipt thereof by
such Subordinated Debt Holder, shall be remitted to the holder or holders of the Senior Debt for
application to the Senior Debt. Each Subordinated Debt Holder shall not, and each Subordinated
Debt Holder hereby agrees not to, commence any action or proceeding against any Debtor to recover
all or any part of the Subordinated Debt or commence or join with any creditor (other than the
holder of the Senior Debt) in bringing any proceedings against any Debtor under any liquidation,
dissolution, winding up of any such Debtor and/or its assets, conservatorship, bankruptcy,
reorganization, rearrangement, debtor’s relief, or other insolvency law now or hereafter existing,
unless and until the Senior Debt shall be indefeasibly paid in full and the Credit Agreement shall
have terminated. The provisions of this Section 2 are, and are intended to be, solely for
the purpose of defining the relative rights of Debtors, Subordinated Debt Holders and the holder or
holders of the Senior Debt. The subordination as to payment and standstill as to remedies provided
for in this Section 2 is not intended and shall not be construed to impair, as among any
Debtor, any such Debtor’s creditors (other than the holder or holders of the Senior Debt and
Subordinated Debt Holder) (i) the absolute and unconditional obligation of such Debtor to make
payments due in connection with the Subordinated Debt or (ii) the rights and remedies available to
a Subordinated Debt Holder in connection with the Subordinated Debt, under applicable law, and
under any other agreement between such Subordinated Debt Holder and any such Debtor.
3. Bankruptcy of Maker. In the event of (i) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding
relating to any Debtor, (ii) any liquidation, dissolution or other winding up of any Debtor and/or
its assets, by operation of law or otherwise, or (iii) any assignment for the benefit of creditors
or any other marshalling of assets and liabilities of any Debtor, then the holder or holders of the
Senior Debt shall be entitled to receive payment in full in cash of all amounts due or to become
due on or in respect of all Senior Debt, or provision shall be made for such payment in cash,
before any Subordinated Debt Holder shall be entitled to receive any payment on account of any
portion of the Subordinated Debt. Any such payment or distribution in any such proceeding, whether
in cash, securities or other property which would, but for the provisions hereof, be payable or
deliverable in respect of the Subordinated Debt, shall be paid or delivered directly to Agent or
its representatives, until amounts owing upon the Senior Debt shall have been paid in full in cash
and the Credit Agreement irrevocably terminated.
Executed and delivered this 20 day of June 2006.
| GOLFSMITH INTERNATIONAL, L.P. | ||||||
| By Golfsmith GP, L.L.C., as General Partner | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH NU, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH USA, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH INTERNATIONAL, INC. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer, CFO and Senior Vice-President | ||||||
| GOLFSMITH INTERNATIONAL HOLDINGS, INC. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer, CFO and Senior Vice-President | ||||||
| GOLFSMITH GP HOLDINGS, INC. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH HOLDINGS, L.P. | ||||||
| By Golfsmith GP Holdings, Inc., as General Partner | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH GP, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH DELAWARE, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH CANADA, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH EUROPE, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GOLFSMITH LICENSING, L.L.C. | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| XXX XXXXXXXX GOLF SHOP | ||||||
| By | s/ Xxxxxxxx Xxxxx | |||||
| Title: Treasurer | ||||||
| GENERAL ELECTRIC CAPITAL CORPORATION, | ||||||
| as Agent | ||||||
| By | s/ Xxxxxx Xxxxxxxx | |||||
| Name: | ||||||
Its Duly Authorized Signatory |
||||||
