EXHIBIT 10.1
CONFIDENTIAL TREATMENT
[***] Indicates that text has been omitted which
is the subject of a confidential treatment request. This text
has been separately filed with the SEC.
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this
“ Agreement ”) is entered into as of
March 16, 2009 among TRUE TEMPER CORPORATION, a Delaware
corporation (“ Holdings ”), TRUE TEMPER
SPORTS, INC., a Delaware corporation (the “
Borrower ”), TRUE TEMPER SPORTS-PRC HOLDINGS,
INC., a Delaware corporation, EL CAJON EQUIPMENT CORPORATION, a
Delaware corporation (together with Holdings, the Borrower, True
Temper Sports-PRC, Inc., the “ Loan Parties
”), CREDIT SUISSE, as administrative agent and collateral
agent (in such capacities, the “ Agent
”), and the LENDERS (collectively, the “
Lenders ”) from time to time party to that
certain AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March
27, 2006 (amending and restating that certain Credit Agreement
dated as of March 15, 2004) (as otherwise amended, restated,
supplemented, waived or otherwise modified from time to time, the
“ First Lien Credit Agreement ”).
All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the First Lien Credit
Agreement.
RECITALS
A.
Holdings, the Borrower, the Agent
and the Lenders have entered into the First Lien Credit
Agreement.
B.
An Event of Default has occurred (or
shall occur) under (i) Section 7.01(b) of the First Lien Credit
Agreement as a result of the Loan Parties’ failure to repay
any principal of any Revolving Loan or the reimbursement with
respect any L/C Disbursement, (ii) Section 7.01(d) of the First
Lien Credit Agreement as a result of the Loan Parties’
failure to satisfy (a) Section 6.11 of the First Lien Credit
Agreement, (b) Section 6.12 of the First Lien Credit Agreement, or
(c) Section 6.13 of the First Lien Credit Agreement, in each case,
with respect to any quarterly period ending on or before the
occurrence of a Forbearance Termination Event, (iii) Section
7.01(e) of the First Lien Credit Agreement as a result of the Loan
Parties’ failure to deliver (a) an “unqualified”
opinion of its accountants pursuant to Section 5.04(a) of the First
Lien Credit Agreement, (b) a certificate of a Financial Officer
pursuant to Section 5.04(c)(iii) of the First Lien Credit
Agreement, or (c) a budget pursuant to Section 5.04(d) of the First
Lien Credit Agreement, and (iv) Sections 7.01(e) and (f) of the
First Lien Credit Agreement as a result of the Loan Parties’
failure to pay (a) any amounts due under the Second Lien Credit
Agreement or the Subordinated Notes and (b) obligations under or in
respect of F/X hedge agreements, in each case, pursuant to Section
5.03 of the First Lien Credit Agreement (collectively, the “
Specified Defaults ”).
C.
The Loan Parties have requested that
the Agent and the Lenders agree to forbear for the period of time
set forth below from exercising their rights and remedies arising
solely in connection with the Specified Defaults.
CONFIDENTIAL TREATMENT
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is the subject of a confidential treatment request. This text
has been separately filed with the SEC.
D.
The Agent and the Lenders have
agreed to do so, but only pursuant to the terms and conditions set
forth herein.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
A.
Estoppel, Acknowledgement and
Reaffirmation .
Each Loan Party hereby acknowledges and agrees that (i) the
Specified Defaults currently exist (or may occur) and have not
previously been waived by the Agent or the Lenders, (ii) the
Borrower is indebted and liable to the Lenders in the aggregate
principal amount of approximately $17,000,000 in respect of the
Revolving Loans, $2,150,000 in respect of outstanding Letters of
Credit, and in the aggregate principal amount of approximately
$84,732,790 in respect of the Term Loans, plus interest, fees,
expenses (including but not limited to attorneys’ and
financial advisors’ fees that are reimbursable under the
First Lien Credit Agreement), charges and all other obligations
incurred in connection therewith as provided in the First Lien
Credit Agreement, and (iii) such amounts outstanding under the
First Lien Credit Agreement constitute valid and subsisting
obligations of the Borrower to the Agent and the Lenders that are
not subject to any credits, offsets, defenses, claims,
counterclaims or adjustments of any kind. The Loan Parties
hereby (i) acknowledge and affirm their obligations under the
respective Loan Documents to which they are party, (ii) acknowledge
and affirm the liens created and granted by the Loan Parties in the
Loan Documents and (iii) agree that this Agreement shall in no
manner adversely affect or impair such liens.
B.
Forbearance
. Subject to the terms and
conditions set forth herein, the Agent and the Lenders hereby agree
that, during the Forbearance Period (as defined below), the Agent
and the Lenders shall forbear from exercising any and all of the
rights or remedies available to them under the Loan Documents or
applicable law as a result of the Specified Defaults, but only to
the extent that such rights or remedies arise exclusively as a
result of the existence or continuation of the Specified Defaults;
provided , however , that the Agent and the Lenders
shall be free to exercise any or all of their rights and remedies
arising on account of the Specified Defaults at any time upon or
after the occurrence of a Forbearance Termination Event (as defined
below); provided further , that except as expressly set
forth in this Agreement, this Agreement shall not operate as a
waiver, amendment or modification of any Loan Document.
C.
Forbearance Termination
Events . In order
to preserve the economic interests of the Lenders, nothing set
forth herein or contemplated hereby is intended to constitute an
agreement by the Agent or the Lenders to forbear from exercising
any of the rights or remedies arising from the Specified Defaults
available to them under the Loan Documents or under applicable law
(all of which rights and remedies are hereby expressly reserved by
the Agent and the Lenders) upon or after the occurrence of a
Forbearance Termination Event. As used herein, a “
Forbearance Termination Event ” shall mean the
occurrence of any of the following: (i) any failure by any
Loan Party to comply with any of the material terms of this
Agreement, (ii) any Default or Event of Default under the First
Lien Credit Agreement or any other Loan Document other than the
Specified Defaults, (iii) the commencement of any lawsuit or
proceeding, or the
CONFIDENTIAL TREATMENT
[***] Indicates that text has been omitted which
is the subject of a confidential treatment request. This text
has been separately filed with the SEC.
exercise of any remedies with respect to the
Collateral, by any of the lenders or the administrative or
collateral agent under the Second Lien Credit Agreement, dated as
of January 22, 2007, among Holdings, Borrower, the lender parties
thereto and Credit Suisse, as administrative agent (as amended,
restated, supplemented, waived or otherwise modified from time to
time, the “ Second Lien Credit Agreement
”), (iv) the commencement of any lawsuit or proceeding by a
holder or holders or on behalf of the holders of the Subordinated
Notes against any of the Loan Parties to receive payments in
connection with such Notes, (v) any payment shall be made by any
Loan Party or any subsidiary of any of them (a) in cash in respect
of any Indebtedness pursuant to the Second Lien Credit Agreement,
other than with respect to reimbursement of out-of-pocket costs and
expenses of the administrative agent under the Second Lien Credit
Agreement, (b) in respect of any Indebtedness pursuant to the
Subordinated Notes, (c) to the Sponsor or any Sponsor Related
Parties, whether in respect of dividends or management fees or for
any other purpose; provided , that the Loan Parties can make
payments to the Sponsor or any Sponsor Related Parties for the
reimbursement for expenses up to $5,000 in the aggregate during the
Forbearance Period, (d) to members of any Loan Party’s
management of an extraordinary nature, including, without
limitation, bonuses or other forms of additional cash compensation,
or (e) in respect of obligations under or in respect of any F/X
hedge agreement, upon and following the termination of any such F/X
hedge agreement, or (vi) midnight on June 16, 2009. The
period from the date hereof to (but excluding) the date that a
Forbearance Termination Event occurs shall be referred to as the
“ Forbearance Period ”.
D.
Conditions Precedent
to
