AMENDMENT NO. 2
Dated as of September 30, 1998
to
REORGANIZATION,
RECAPITALIZATION AND STOCK PURCHASE AGREEMENT
Dated as of June 29, 1998
By and Between
THE BLACK & XXXXXX CORPORATION,
TRUE TEMPER CORPORATION
(FORMERLY TRUE TEMPER SPORTS, INC.)
AND
TRUE TEMPER SPORTS, LLC
(FORMERLY TTSI LLC)
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AMENDMENT NO. 2 to
REORGANIZATION, RECAPITALIZATION AND
STOCK PURCHASE AGREEMENT
This Amendment No. 2 (this "Amendment") to Reorganization,
Recapitalization and Stock Purchase Agreement (together with the Exhibits,
Schedules and Attachments thereto, as amended by Amendment No. 1 thereto dated
as of August 1, 1998, the "Agreement") is made as of the 30th day of September
1998, by and among The Black & Xxxxxx Corporation, a Maryland corporation
("Parent"), True Temper Corporation, a Delaware corporation ("TTSI", formerly
known as True Temper Sports, Inc.), and True Temper Sports, LLC, a Delaware
limited liability company ("Buyer", formerly known as TTSI LLC).
W I T N E S E T H:
WHEREAS, Parent, TTSI and Buyer entered into the Reorganization,
Recapitalization and Stock Purchase Agreement as of June 29, 1998, and Amendment
No. 1 thereto as of August 1, 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 Section 2.01.
(a) Section 2.01(c) is amended by deleting the number "368.75"
and inserting in lieu thereof "3,687,500".
(b) Section 2.01(e) is amended by deleting Section 2.01(e) in
its entirety and inserting in its place and stead the following:
(c) In exchange for the transfer of the Transferred
Intellectual Property contemplated by Section 2.01(d), TTSI will issue to Emhart
4,709.82 shares of TTSI Common Stock, 8,812,500 shares of TTSI Preferred Stock,
which shares of TTSI Common Stock and TTSI Preferred Stock shall upon such
issuance be duly authorized, fully paid and non-assessable shares of capital
Stock of TTSI, and $25,000,000 aggregate initial principal amount of senior
increasing rate notes of TTSI pursuant to a Securities Purchase Agreement in the
form attached hereto as Exhibit A, which senior increasing
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rate notes shall include warrants to purchase shares of TTSI Common Stock under
certain circumstances;
Section 3. Amendment to Section 2.03.
(a) Section 2.03(a)(i) is amended by deleting the number
"5,818.60" and inserting in lieu thereof "4,528.42", and is further amended by
deleting the amount "$112,747,535.88" and inserting in lieu thereof
"$87,747,535.88".
(b) Section 2.03(b)(i) is amended by deleting the number
"293.75" and inserting in lieu thereof "2,937,500", and is further amended by
deleting the number "881.25" and inserting in lieu thereof "8,812,500".
(c) The last unnumbered clause of Section 2.03(b) is amended
by deleting the number "75" and inserting in lieu thereof "750,000", and is
further amended by deleting the number "1175" and inserting in lieu thereof
"11,175,000".
Section 4. Stock Split. At the request of the Buyer, TTSI has effected
a 10,000 to 1 split of the TTSI Common Stock by means of a stock dividend (the
"Stock Split") immediately upon the completion of the redemption described in
Section 2.03(a) of the Agreement. The parties agree that the numbers of shares
of TTSI Common Stock set forth in the Agreement are before giving effect to the
Stock Split and, with respect to all transactions occurring after the Stock
Split, all such numbers of shares of TTSI Common Stock shall be adjusted to
reflect the Stock Split
Section 5. Amendment to Section D.07(d). Section D.07(d) is hereby
amended by deleting the phrase "an interest rate of 5.75%" at the end of the
second sentence and inserting in its place and stead "the actuarial assumptions
used by the PBGC pursuant to Section 1.414(l)-1(b)(5)(ii) of the U.S. Department
of Labor Regulations, provided that to the extent that the total of the Transfer
Amount under this Section D.07(d) plus the Transfer Amount under Section D.08(d)
is more than $40,000 less than the amount of the total of such Transfer Amounts
had they been determined using an interest rate of 5.75%, an amount equal to
such deficit in excess of $40,000 shall be added to the Transfer Amount under
this Section D.07(d)".
Section 6. Amendment to Section D.08(d). Section D.08(d) is hereby
amended by deleting the phrase "an interest rate of 5.75%" at the end of the
second sentence and inserting in its place and stead "the actuarial assumptions
used by the PBGC pursuant to Section 1.414(l)-1(b)(5)(ii) of the U.S.
Department of Labor Regulations".
Section 7. Amendment to Article III of Exhibit D. Article III of the
Exhibit D of the Agreement is amended by deleting Sections D.13 and D.14 and
substituting therefore the following:
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D.13. Parent agrees, subject to Applicable Law, to cause its
appropriate Affiliate to continue to employ the Non U.S. Transferred
Employees for a temporary period (the "Transition Period") ending on
the earlier of (i) the date Buyer or TTSI elects to employ the Non
U.S. Transferred Employees, or (ii) the close of business on September
30, 1999. Although the Non U.S. Transferred Employees will remain
employed by Parent or its Affiliate during the Transition Period, such
persons will be working on the business of the Buyer or TTSI, and will
report to and be subject to the control and supervision of Buyer and
TTSI. Parent agrees that neither Parent nor any of its Affiliates
will, without a consent of Buyer or TTSI (which consent will not be
unreasonably withheld) alter any terms and conditions of or terminate
the employment of any Non U.S. Transferred Employee during the
Transition Period. Buyer and/or TTSI shall reimburse Parent or its
designated Affiliate within seven days of receipt of an invoice for
any fees, costs, taxes or expenses reasonably and properly incurred by
Parent or its Affiliate, as a result of employing and of providing and
administering benefits to the Non U.S. Transferred Employees and their
dependants and beneficiaries during the Transition Period.
D. 14. Notwithstanding any contrary provision of the Transaction
Documents, effective upon the close of the Transition Period, the
employment of all Non U.S. Transferred Employees shall be transferred
to Buyer or TTSI such that the employment of such person shall be
considered continuous employment under Applicable Law. Buyer and TTSI
shall ensure that such employment shall be on the same terms and
conditions as those under which such persons are employed immediately
prior to the close of the Transition Period. Buyer and TTSI shall
assume any obligations under any agreement or Applicable Law relating
to the terms and conditions of employment of any Non U.S. Transferred
Employees, and Buyer and TTSI shall be responsible for any liability
or obligations arising out of or pertaining to the termination
employment of, hiring of or failure or refusal to hire any Non U.S.
Transferred Employees on or after the close of the Transition Period.
In addition to the indemnification provisions otherwise provided in
the Transaction Documents, Buyer and TTSI agree to indemnify Parent
and its Affiliates and their respective directors, officers, employees
and agents against, and agree to hold them harmless from, any and all
Damages arising out of or pertaining to the employment of the Non U.S.
Transferred Employees during the Transition Period or by Buyer or TTSI
thereafter, any actions or omission taken or made by any Non U.S.
Transferred Employee during the Transition Period and thereafter, and
the termination of employment of, hiring of or failure to or refusal
to hire, any
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Non U. S. Transferred Employee on or after the close of the Transition
Period.
Section 8. 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 9. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
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
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Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxx Xxxxx
Telecopy: (000) 000-0000
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 7
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 7.
Section 10. 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 11. 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 12. 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 13. 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
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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
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 14. 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 15. 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:/s/XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and General
Counsel
TRUE TEMPER CORPORATION
By:/s/XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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TRUE TEMPER SPORTS, LLC
By:/s/XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
