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EXHIBIT 10.9
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Amendment"), dated as
of November 17, 2000, is among True Temper Sports, Inc., a Delaware corporation
(the "Borrower"), the Lenders (as defined below) parties hereto, and Bank One,
NA (formerly known as The First National Bank of Chicago) having its main office
in Chicago, Illinois, as administrative agent (the "Administrative Agent") for
the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the various financial institutions parties
thereto (collectively, the "Lenders"), DLJ Capital Funding, Inc., as the
syndication agent, the Administrative Agent and Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, as lead arranger, are parties to a Credit Agreement,
dated as of September 30, 1998 (as heretofore modified and supplemented and in
effect from time to time, the "Credit Agreement");
WHEREAS, the Borrower desires, and the Lenders are willing, on the
terms and subject to the conditions hereinafter set forth, to amend the Credit
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Amendment" is defined in the preamble.
"Amendment Effective Date" is defined in Subpart 3.1.
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"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Lenders" is defined in the first recital.
SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings ascribed thereto in the Credit Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Agreement" and each other similar
reference contained in the Credit Agreement shall from and after the Amendment
Effective Date refer to the Credit Agreement, as amended hereby.
PART II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment Effective
Date, the Credit Agreement is amended in accordance with this Part II. Except to
the extent amended by this Amendment, the Credit Agreement is and shall continue
to be in full force and effect and is hereby ratified and confirmed in all
respects.
SUBPART 2.1. Amendments to Article I. Article I of the Credit Agreement
("DEFINITIONS AND ACCOUNTING TERMS") is amended as set forth in this Subpart
2.1.
SUBPART 2.1.1. New Definitions. Section 1.1 of the Credit Agreement
("Defined Terms") is hereby amended by inserting the following definitions in
their alphabetically appropriate places:
"Available Amount" means, on any date (the "Availability Date"), an
amount equal to the excess on such date of
(a) the sum of
(i) 50% of Excess Cash Flow for the period
from January 1, 1999 through the most recently ended
Fiscal Quarter of the Borrower (provided, however,
that for purposes of calculating clause (b)(viii) of
the definition of the term "Excess Cash Flow" as used
in this, and only this, clause (a)(i), such clause
(b)(viii) shall be calculated without including the
amount of any Restricted Payments actually made in
cash
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during such period pursuant to clause (d) of Section
7.2.6 of the Credit Agreement),
plus
(ii) the aggregate amount of all voluntary
prepayments of principal of Term Loans made under
clause (a)(i) of Section 3.1.1 during such period,
over
(b) the aggregate amount of Restricted Payments made
pursuant to clause (d) of Section 7.2.6 which constituted
usage of the Available Amount prior to the Availability Date.
"Second Amendment" means that certain Amendment No. 2 to
Credit Agreement, dated as of November 17, 2000, among the Borrower,
the Lenders parties thereto, and the Administrative Agent.
"Second Amendment Effective Date" means the Amendment
Effective Date (as defined in the Second Amendment).
SUBPART 2.1.2. Modified Definitions. (a) The following terms that are
defined in Section 1.1 of the Credit Agreement ("Defined Terms") are hereby
amended in their entirety to read as set forth below:
"Discount Notes" is defined in the first recital, and includes
(a) the Discount Notes and (b) unsecured Debt that refinances Discount
Notes in accordance with clause (ii) of the proviso to Section 5.12 of
the Holdco Guaranty and Pledge Agreement, in each case, as amended,
supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Holdco Discount Note Agreement" means (a) the Securities
Purchase Agreement, dated as of September 30, 1998, between Holdco and
the purchaser party thereto and (b) any agreement entered into in
connection with the issuance of any unsecured Debt that refinances any
Discount Notes in accordance with clause (ii) of the proviso to Section
5.12 of the Holdco Guaranty and Pledge Agreement, in each case, as
amended, supplemented, amended and restated or otherwise modified from
time to time in accordance with the terms hereof.
(b) Clause (b)(viii) of the definition of the term "Excess Cash Flow"
appearing in Section 1.1 of the Credit Agreement ("Defined Terms") is hereby
amended in its entirety to read as follows:
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"(viii) without duplication, (A) Restricted Payments actually
made in cash pursuant to clauses (c)(ii) and (c)(iii) of Section 7.2.6
during such period and (B) the lesser of (1) Restricted Payments
actually made in cash pursuant to clause (d) of Section 7.2.6 (to the
extent, and only to the extent, such Restricted Payments actually made
under such clause (d) would have been permitted to have been made if
the definition of the term Available Amount did not include clause
(a)(ii) therein) during such period and (2) 25% of Excess Cash Flow as
determined without giving effect to this clause (b)(viii)(B);".
(c) Clause (b) of the definition of the term "Fixed Charge Coverage
Ratio" appearing in Section 1.1 of the Credit Agreement ("Defined Terms") is
hereby amended by deleting the period at the end of subclause (iii) thereof and
inserting the following words in lieu thereof:
";
plus
(iv) all Restricted Payments made during all such
Fiscal Quarters pursuant to clause (d) of Section 7.2.6.".
SUBPART 2.2. Amendments to Article VII. Article VII of the Credit
Agreement ("COVENANTS") is hereby amended as set forth in this Subpart 2.2.
SUBPART 2.2.1. Amendment to Clause (o) of Section 7.2.2. Clause (o) of
Section 7.2.2 of the Credit Agreement ("Indebtedness") is hereby amended by
deleting the amount "$10,000,000" set forth therein and inserting the amount
"$20,000,000" in lieu thereof.
SUBPART 2.2.2. Amendment to Section 7.2.4. Clause (d) of Section 7.2.4
of the Credit Agreement ("Financial Covenants") is hereby amended by (a)
deleting the last row of the table set forth in such clause and (b) replacing
the second row of such table to read in its entirety as follows:
"1/1/2000 and thereafter 1.10:1.0.".
SUBPART 2.2.3. Amendment to Clause (n) of Section 7.2.5. Clause (n) of
Section 7.2.5 of the Credit Agreement ("Investments") is hereby amended by
deleting the amounts "$15,000,000" and "$30,000,000" set forth therein and
inserting the amounts "$25,000,000" and "$50,000,000", respectively, in lieu
thereof.
SUBPART 2.2.4. Amendment to Clause (d) of Section 7.2.6. Clause (d) of
Section 7.2.6 of the Credit Agreement ("Restricted Payments, etc.") is hereby
amended by
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(a) deleting the words "the fifth anniversary of the Closing Date"
set forth therein and inserting the words "the Second Amendment Effective Date"
in lieu thereof and (b) deleting the words "25% of Excess Cash Flow for the
period from January 1, 1999 through the most recently ended Fiscal Quarter"
therefrom and inserting in lieu thereof the words "the lesser of (x) $1,250,000
in any Fiscal Quarter of the Borrower and (y) the Available Amount".
SUBPART 2.2.5. Amendment to Clause (a) of Section 7.2.7. Clause (a) of
Section 7.2.7 of the Credit Agreement ("Capital Expenditures") is hereby amended
by deleting the amounts "$6,000,000" and "$15,000,000" set forth therein and
inserting the amounts "$10,000,000" and "$25,000,000", respectively, in lieu
thereof.
SUBPART 2.3. Amendment to Exhibit E ("Form of Compliance Certificate").
Exhibit E ("Form of Compliance Certificate") to the Credit Agreement shall be
deleted therefrom and Exhibit E hereto shall be attached to the Credit Agreement
in lieu thereof.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Effective Date. This Amendment shall become effective as
of the date (the "Amendment Effective Date") when all of the conditions set
forth in this Subpart 3.1 shall have been satisfied.
SUBPART 3.1.1. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendment duly executed by the
Borrower, the Administrative Agent and the Required Lenders (or evidence thereof
satisfactory to the Administrative Agent). The delivery of an executed
counterpart hereof by the Borrower shall constitute a representation and
warranty by the Borrower that, on the Amendment Effective Date, both before and
after giving effect to this Amendment, all statements set forth in clauses (a),
(b) and (c) of Section 5.2.1 of the Credit Agreement, as amended by the
Amendment, are true and correct as of such date, except to the extent that any
such statement expressly relates to an earlier date (in which case such
statement shall be true and correct on and as of such earlier date).
SUBPART 3.1.2. Affirmation and Acknowledgment. The Administrative Agent
shall have received executed counterparts of the Affirmation and Acknowledgment,
dated the Amendment Effective Date, substantially in the form of Annex I hereto,
duly executed and delivered by the parties thereto.
SUBPART 3.1.3. Payment of Fees and Expenses. The Borrower hereby agrees
to pay and reimburse the Administrative Agent for all its reasonable fees and
expenses incurred in connection with the negotiation, preparation, execution and
delivery of this Amendment and
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related documents, including all reasonable fees and disbursements of counsel to
the Administrative Agent.
SUBPART 3.2. Limitation. Except as expressly provided hereby, all of
the representations, warranties, terms, covenants and conditions of the Credit
Agreement and each other Loan Document shall remain unamended and unwaived and
shall continue to be, and shall remain, in full force and effect in accordance
with their respective terms. The amendments, modifications and consents set
forth herein shall be limited precisely as provided for herein, and shall not be
deemed to be a waiver of, amendment of, consent to or modification of any other
term or provision of the Credit Agreement or of any term or provision of any
other Loan Document or other instrument referred to therein or herein, or of any
transaction or further or future action on the part of the Borrower or any other
Person which would require the consent of the Administrative Agent, the Issuer
or any of the Lenders under the Credit Agreement or any such other Loan Document
or instrument.
PART IV
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this Amendment to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment. References in this Amendment to any Article or Section are, unless
otherwise specified, to such Article or Section of the Credit Agreement.
SUBPART 4.2. Loan Document Pursuant to Credit Agreement. This Amendment
is a Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement, as amended
hereby, including Article X thereof.
SUBPART 4.3. Counterparts, etc. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
Agreement.
SUBPART 4.4. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SUBPART 4.5. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers hereunto duly authorized as of the day and
year first above written.
TRUE TEMPER SPORTS, INC.
By:
------------------------
Title:
BANK ONE, NA (formerly
known as The First
National Bank of
Chicago), as
Administrative Agent,
Issuer and as a Lender
By:
------------------------
Title:
SUMMIT BANK, as a Lender
By:
------------------------
Title:
THE PROVIDENT BANK, as a Lender
By:
------------------------
Title:
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
as a Lender
By:
------------------------
Title:
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XXX XXXXXX AMERICAN CAPITAL SENIOR
FLOATING RATE FUND, as a
Lender
By:
------------------------
Title:
KZH HIGHLAND-2 LLC, as a Lender
By:
------------------------
Title:
HIGHLAND LEGACY LIMITED, as
Lender By Highland Capital
Management, L.P.
By:
------------------------
Title:
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ANNEX I
AFFIRMATION AND ACKNOWLEDGMENT
November 17, 2000
The Lenders (as defined below) and
Bank One, N.A. (as successor to
The First National Bank of Chicago),
as Administrative Agent for the Lenders
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
True Temper Sports, Inc.
Gentlemen and Ladies:
This affirmation and acknowledgment is delivered to the Administrative
Agent and the Lenders pursuant to Subpart 3.1.2 of Amendment No. 2 to Credit
Agreement, dated as of the date hereof ("Amendment"), among True Temper Sports,
Inc., a Delaware corporation (the "Borrower"), the financial institutions
parties thereto (collectively, the "Lenders"), DLJ Capital Funding, Inc.
("DLJ"), as syndication agent for the Lenders, The First National Bank of
Chicago ("First Chicago"), as administrative agent (the "Administrative Agent")
for the Lenders and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as Lead
Arranger. Reference is also made to the Credit Agreement, dated as of September
30, 1998 (as amended or otherwise modified through the date hereof, the "Credit
Agreement"), among the Borrower, the Lenders, the Agents and the Arranger.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
By its signature below, the undersigned hereby acknowledges receipt of
the Amendment and the modifications to the Credit Agreement, as contemplated
thereby, which amended Credit Agreement will provide for, among other things,
the increased ability for the Borrower to incur additional Indebtedness and make
Capital Expenditures, Investments and Restricted Payments. The undersigned
hereby reaffirms as of the Amendment Effective Date (as defined in the
Amendment), its covenants and agreements contained in each Loan Document to
which it is a party, including, in each case, as such covenants and agreements
may be modified by the Amendment. The undersigned hereby further certifies that,
as of the date hereof (both before and after giving effect to the effectiveness
of the Amendment), its representations and
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warranties contained in the Loan Documents to which it is a party are true and
correct with the same effect as if made on the date hereof, except to the extent
any thereof refer or pertain solely to a date prior to the date hereof. The
undersigned further confirms that each Loan Document to which it is a party is
and shall continue to be in full force and effect and the same are hereby
ratified and confirmed in all respects, except that upon the occurrence of the
Amendment Effective Date, all references in such Loan Documents to the "Credit
Agreement", "Loan Documents", "thereunder", "thereof", or words of like import
shall mean the Credit Agreement and the Loan Documents, as the case may be, as
in effect, as amended by the Amendment.
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IN WITNESS WHEREOF, the party hereto has executed and delivered this
Affirmation and Acknowledgment as of the date first above written.
TRUE TEMPER CORPORATION
By:
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Title:
-3-
