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Exhibit 2.2
AMENDMENT NO. 1
DATED AUGUST 1, 1998
TO
REORGANIZATION,
RECAPITALIZATION AND STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 29, 1998
BY AND BETWEEN
THE BLACK & XXXXXX CORPORATION,
TRUE TEMPER SPORTS, INC.
AND
TTSI LLC
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AMENDMENT NO. 1 TO
REORGANIZATION, RECAPITALIZATION AND
STOCK PURCHASE AGREEMENT
This Amendment No. 1 (this "Amendment") to Reorganization,
Recapitalization and Stock Purchase Agreement (together with the Exhibits,
Schedules and Attachments thereto, the "Agreement") is made as of the 1st day of
August 1998, by and among The Black & Xxxxxx Corporation, a Maryland corporation
("Parent"), True Temper Sports, Inc., a Delaware corporation ("TTSI"), and TTSI
LLC, a Delaware limited liability company ("Buyer").
W I T N E S E T H:
WHEREAS, Parent, TTSI and Buyer entered into the Agreement as of June
29, 1998; and
WHEREAS, Parent, TTSI and Buyer desire to amend and clarify certain
terms contained in the Agreement, all as more fully set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, the parties agree as follows:
Section 1. Definitions. Capitalized terms used in but not defined in
this Amendment shall have the meanings specified in the Agreement.
Section 2. Amendment to Recitals. The sixth and seventh "WHEREAS"
clauses contained in the Agreement are hereby amended by deleting those clauses
in their entirety and replacing them with the following:
"WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, Parent desires to cause TTSI, and Buyer
desires to assist TTSI, to redeem a portion of the TTSI Common Stock
then owned by Emhart and a portion of the TTSI Common Stock then owned
by EII with promissory notes to be paid at Closing with the proceeds of
such borrowings;
WHEREAS, following such redemption, Buyer desires to purchase,
buy and acquire from EII and Emhart and Parent desires to cause EII and
Emhart to sell, transfer and convey to Buyer the Acquired Shares, and
Parent and Buyer desire to enter into certain agreements and
arrangements ancillary to such transactions; and"
Section 3. Amendment to ARTICLE II. Sections 2.01 through 2.04 of
ARTICLE II B TRANSACTIONS AND CLOSING of the Agreement are hereby amended by
deleting Section 2.01 through and including Section 2.04 in their entirety and
replacing them with the following:
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"Section 2.01 Reorganization of TTS Business. Upon the terms
and subject to the conditions set forth in this Agreement, the parties
agree that following the execution of this Agreement and prior to
consummation of the transactions contemplated by Sections 2.02 and
2.03, among other things:
(a) TTSI will file an Amended and Restated Certificate of
Incorporation consistent with the terms of this Agreement as agreed to
by Buyer and Parent;
(b) Parent will cause EII to contribute the Contributed Assets
to TTSI, free and clear of all Liens (other than Permitted Liens), and
TTSI will assume and agree to pay, satisfy and discharge all of the
Assumed Liabilities, all as contemplated by the Assignment and
Assumption Agreement;
(c) In exchange for the capital contribution contemplated by
Section 2.01(b), TTSI will issue 1,011.21 shares of TTSI Common Stock
and 368.75 shares of TTSI Preferred Stock to EII, which upon such
issuance shall be duly authorized, fully paid and non-assessable shares
of capital stock of TTSI;
(d) Parent will cause Emhart to sell, transfer and convey to
TTSI the Transferred Intellectual Property, all as contemplated by the
Intellectual Property Assignment Agreements;
(e) In exchange for the transfer of the Transferred
Intellectual Property contemplated by Section 2.01(d), TTSI will issue
6,000 shares of TTSI Common Stock and 881.25 shares of TTSI Preferred
Stock to Emhart, which upon such issuance shall be duly authorized,
fully paid and non-assessable shares of capital stock of TTSI;
(f) Parent (i) will cause TTSI to establish a branch or, at
the expense of TTSI, a subsidiary in each of the United Kingdom,
Australia and Japan and (ii) will cause each of Xxxxxx Fasteners
Limited ("Xxxxxx"), Black & Xxxxxx (Australasia) Pty. Limited ("B&D
Australasia") and Nippon Pop Rivets & Fasteners, Ltd. ("Nippon") to
contribute the assets and liabilities relating exclusively to the TTS
Business operations in the United Kingdom, Australia and Japan,
respectively, to TTSI; and
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(g) In exchange for the contributions contemplated by Section
2.01(f), TTSI will issue and deliver to each of Xxxxxx, B&D Australasia
and Nippon a promissory note with a fixed interest rate equal to 7.5%
per annum payable in full at Closing with principal amounts equal to
(A) $3,860,000, (B) $1,936,024.05 and (C) $406,000, respectively, which
the parties agree is the net book value of the respective Contributed
Assets.
Section 2.02 Recapitalization of TTSI.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, the parties agree that following the execution of this
Agreement and immediately prior to Closing, among other things, Buyer
will use commercially reasonable best efforts to assist TTSI in
obtaining debt financing in an aggregate amount of not less than
$155,000,000, together with a revolving credit facility in the amount
of $20,000,000, in the manner contemplated by the Commitment Letters or
on other terms reasonably acceptable to Buyer, the proceeds of which
will be used to consummate the Redemptions and to pay off the
promissory notes contemplated by Section 2.01(g).
(b) Buyer may elect at its option to pursue an alternative
financing structure, provided that such structure does not result in
any incremental increase in costs to TTSI.
Section 2.03 Closing Transactions.
(a) Redemption of TTSI Shares. On and subject to the terms and
conditions set forth in this Agreement, immediately following the
consummation of the transactions contemplated by Section 2.02 and prior
to the Closing, TTSI shall:
(i) Redeem 5,818.60 shares of the issued and
outstanding TTSI Common Stock owned by Emhart by issuing a
promissory note to Emhart, on terms reasonably satisfactory to
Parent and Buyer, with a principal amount equal to
$112,747,535.88 to be paid at Closing with the proceeds of the
borrowings contemplated by Section 2.02; and
(ii) Redeem 1,274 shares of the issued and
outstanding TTSI Common Stock owned by EII by issuing a
promissory note to EII, on terms reasonably satisfactory to
Parent and Buyer, with a principal amount equal to
$24,686,412.66 to be paid at Closing with the proceeds of the
borrowings contemplated by Section 2.02.
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such that, immediately following the consummation of the transactions
contemplated by this Section 2.03(a), EII will own 737.21 shares of
TTSI Common Stock and 368.75 shares of TTSI Preferred Stock and Emhart
will own 181.40 shares of TTSI Common Stock and 881.25 shares of TTSI
Preferred Stock, which shares, in the aggregate, will constitute 100%
of the issued and outstanding capital stock of TTSI.
(b) Acquisition of Acquired Shares. On and subject to the
terms and conditions set forth in this Agreement, at the Closing:
(i) Parent shall cause (A) EII to sell, transfer and
convey to Buyer and Buyer's Permitted Assignees, free and
clear of all Liens (other than Permitted Liens) an aggregate
of 683.7468 shares of TTSI Common Stock and an aggregate of
293.75 shares of TTSI Preferred Stock and (B) Emhart to sell,
transfer and convey to Buyer and Buyer's Permitted Assignees,
free and clear of all Liens (other than Permitted Liens) an
aggregate of 181.40 shares of TTSI Common Stock and an
aggregate of 881.25 shares of TTSI Preferred Stock; and
(ii) In consideration for the transfer of the
Acquired Shares, Buyer and Buyer=s Permitted Assignees shall
make cash payments (A) to EII equalling $23,824,023.29 in the
aggregate, which constitutes $13,249,023.29 in respect of the
TTSI Common Stock and $10,575,000 in respect of the TTSI
Preferred Stock, by wire transfer of immediately available
funds to an account or accounts of EII designated by Parent at
least two Business Days prior to Closing and (B) to Emhart
equalling $35,240,004.13 in the aggregate, which constitutes
$3,515,004.13 in respect of the TTSI Common Stock and
$31,725,000 in respect of the TTSI Preferred Stock, by wire
transfer of immediately available funds to an account or
accounts of Emhart designated by Parent at least two Business
Days prior to Closing;
such that, immediately following consummation of the transactions
contemplated by this Section 2.03(b), EII will own 53.4632 shares of
TTSI Common Stock representing 5.82% of all the issued and outstanding
shares of TTSI Common Stock and 75 shares of TTSI Preferred Stock
representing 6.0% of all the issued and outstanding shares of TTSI
Preferred Stock and Buyer and Buyer's Permitted Assignees will own, in
the aggregate, 865.1468 shares of TTSI Common Stock representing 94.18%
of all the issued and outstanding shares of TTSI Common Stock and 1175
shares of TTSI Preferred Stock representing 94.0% of all the issued and
outstanding shares of TTSI Preferred Stock.
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(c) Consent and Waiver by Buyer. By execution and delivery of
this Agreement, Buyer hereby consents to and waives any rights in
respect of the redemption of TTSI Common Stock owned by EII or Emhart
contemplated by Section 2.03(a).
(d) Additional Closing Transactions. Upon the terms and
subject to the conditions set forth in this Agreement, the parties
agree that at the Closing, among other things:
(i) Parent or its Affiliates, as the case may be, and
TTSI shall execute and deliver the Services Agreement with
such additions, deletions and changes as may be agreed to by
Buyer and Parent;
(ii) TTSI, Buyer, Buyer's Permitted Assigns and EII
shall execute and deliver a Stockholders' and a Registration
Rights Agreements containing the provisions contemplated by
Attachment XIV;
(iii) TTSI shall pay off the promissory notes issued
to Xxxxxx, B&D Australasia and Nippon pursuant to Section
2.01(g);
(iv) TTSI shall pay off the promissory notes issued
to each of EII and Emhart pursuant to Section 2.03(a).
Section 2.04 Section 338(h)(10) Election; Exchange Consideration.
(a) The parties agree to make an election under
Section 338(h)(10) of the Code (and any corresponding
elections under any applicable state, local, or foreign tax
law) with respect to the sale of the Acquired Shares by EII to
Buyer.
(b) The consideration to be paid to Parent and its
Affiliates in connection with the Contemplated Transaction
(the "Exchange Consideration") shall consist of the following:
(i) the aggregate amounts paid by TTSI to
pay off the promissory notes issued to redeem shares
of TTSI Common Stock and TTSI Preferred Stock
pursuant to Section 2.03(a);
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(ii) the aggregate amount paid by Buyer to
EII and Emhart in exchange for the Acquired Shares
pursuant to Section 2.03(b);
(iii) the aggregate amounts payable to
Xxxxxx, B&D Australasia and Nippon pursuant to the
promissory notes to be delivered in accordance with
Section 2.01(g) (as so adjusted and together with the
amount contemplated by Section 2.04(b)(i) and
2.04(b)(ii) above, the "Adjusted Purchase Price");
and
(iv) the assumption by TTSI of the Assumed
Liabilities in accordance with the Transaction
Documents.
(c) The Exchange Consideration and each Annual Thiokol Payment
shall be allocated to and among the respective Contributed Assets and
Transferred Intellectual Property as set forth in Attachment IX to this
Agreement. Parent, TTSI and Buyer agree that the allocation of the
Exchange Consideration has been negotiated by them and is consistent
with the value of the Contributed Assets and the principles of Section
1060 of the Code and the regulations promulgated by the Internal
Revenue Service thereunder. Parent, TTSI and Buyer agree that they
shall use the allocation of the Exchange Consideration reflected in
Attachment IX to this Agreement in any Tax Returns or other reports
that deal with the Contemplated Transactions and are filed with any Tax
Authority and shall promptly prepare and timely file such reports and
information as may be required to report the allocation contemplated by
this Section 2.04(c)."
Section 4. Limited Amendment. Except as amended by this Amendment and
as the context may otherwise require to give effect to the intent and purposes
of this Amendment, the Agreement shall remain in full force and effect without
any other amendments or modifications.
Section 5. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
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if to Parent (or TTSI prior to Closing):
c/o The Black & Xxxxxx Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President and
Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
The Black & Xxxxxx Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President and
General Counsel
Telecopy: (000) 000-0000
and
Miles & Stockbridge P.C.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
if to Buyer (or TTSI after Closing):
TTSI LLC
c/o Cornerstone Equity Investors, LLC
000 0xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxx Xxxxx
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx, Esquire
Telecopy: (000) 000-0000
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify by notice to the other parties. Each such notice,
request or other communication shall be effective (i) if given by telecopy, when
such telecopy is transmitted to the telecopy number specified in this Section 5
and evidence of receipt is received or (ii) if given by any other means, upon
delivery or refusal of delivery at the address specified in this Section 5.
Section 6. Amendments; Waivers. Subject to the provisions of Section
9.04 of the Agreement, any provision of this Amendment may be amended or waived
prior to the Closing Date if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Parent and Buyer, or in the
case of a waiver, by the party against whom the waiver is to be effective.
Section 7. Successors and Assigns. The provisions of this Amendment
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other party, provided the Buyer may assign its or
TTSI's rights hereunder to an agent for the financing sources in connection with
the Contemplated Transactions, as collateral security for TTSI's obligations,
and Buyer may assign its rights to purchase Acquired Shares to Permitted
Assignees.
Section 8. Entire Agreement. The Transaction Documents and any other
agreements contemplated thereby (including, to the extent contemplated herein,
the Confidentiality Agreement) as amended by this Amendment constitute the
entire agreement among the parties with respect to the subject matter of such
documents and supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the subject matter
thereof.
Section 9. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Amendment or the Contemplated Transactions shall be brought in the
United States District Court for the District of Delaware (or, if subject matter
jurisdiction is unavailable, any of the state courts of the State of Delaware),
and each of the parties hereby consents to the exclusive jurisdiction of such
court (and of the appropriate appellate court) in any such suit, action or
proceeding and waives any objection to venue laid therein. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the State of Delaware. Without limiting the foregoing,
Parent, TTSI and
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Buyer agree that service of process upon such party at the address referred to
in Section 4 together with written notice of such service to such party, shall
be deemed effective service of process upon such party.
Section 10. Severability. Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of the this Amendment or affecting the
validity or enforceability of such provision in any other jurisdiction. To the
extent any provision of this Amendment is determined to be prohibited or
unenforceable in any jurisdiction Parent and Buyer agree to use reasonable
commercial efforts, and agree to cause the other Seller Companies and TTSI, as
the case may be, to use reasonable commercial efforts, to substitute one or more
valid, legal and enforceable provisions that, insofar as practicable implement
the purposes and intent of the prohibited or unenforceable provision.
Section 11. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly
executed by their respective authorized officers on the day and year first above
written.
THE BLACK & XXXXXX CORPORATION
By:__________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Controller
TRUE TEMPER SPORTS, INC.
By:_______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
TTSI LLC
By:________________________________
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
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