EXHIBIT 10.1

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

FIRST AMENDMENT dated as of September 24, 2004 (this “Amendment”), to the CREDIT
AGREEMENT dated as of March 15, 2004 (the “Credit Agreement’’), among TRUE
TEMPER CORPORATION, a Delaware corporation (“Holdings”), TRUE TEMPER SPORTS,
INC., a Delaware corporation (the “Borrower”), the LENDERS from time to time
parties thereto, CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as Administrative Agent and as Collateral Agent (such terms having the
meanings provided in the Credit Agreement), CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch, as sole bookrunner and sole lead arranger,
ANTARES CAPITAL CORPORATION, as syndication agent, and GOLDMAN SACHS CREDIT
PARTNERS L.P. and MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business
Financial Services Inc., as co-documentation agents.

 

A.    Holdings, the Borrower and the Administrative Agent, among others, are
parties to the Credit Agreement.

 

B.    Holdings and the Borrower have requested that the Lenders agree to amend
certain provisions of the Credit Agreement as set forth in this Amendment.

 

C.    The Lenders whose signatures appear below, constituting at least the
Required Lenders, are willing to amend the Credit Agreement on the terms and
subject to the conditions set forth herein.

 

D.    Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreement, as amended hereby.

 

Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1. Amendment of the Credit Agreement.  The Credit Agreement is hereby
amended, effective as of the First Amendment Effective Date (as defined below),
as follows:

 

(a)   Amendment of Section 1.01.  (i) Section 1.01 is revised by inserting the
following definitions in the appropriate alphabetical order therein:

 

“First Amendment” shall mean the First Amendment to this Agreement dated as of
September 24, 2004, among Holdings, the Borrower and the Lenders parties
thereto.

 

“First Amendment Effective Date” shall mean the date on which the First
Amendment becomes effective.

 

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“Funded Senior Debt” shall mean, as of the last day of any fiscal quarter,
Funded Debt at such date, excluding the Indebtedness represented by the
Subordinated Notes.

 

“Senior Leverage Ratio” shall mean, on the last day of any fiscal quarter, the
ratio of (a) Funded Senior Debt on such date to (b) Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended on and prior to
such date, taken as one accounting period.

 

(ii) The definition of “Applicable Margin” is revised by inserting the following
proviso immediately after the table set forth in such definition:

 

“; provided that, notwithstanding the foregoing, each Applicable Margin set
forth above shall be increased by an additional 0.50% per annum at all times
during the period from and including the First Amendment Effective Date through
and including March 30, 2005 and at any time thereafter until the date on which
the Borrower shall have delivered for any fiscal quarter financial statements
and certificates required by Section 5.04(a) or (b), as applicable, and Section
5.04(c) demonstrating (i) (A) at any time during the period from March 31, 2005
through September 30,2005, that the Leverage Ratio on the last day of such
fiscal quarter is equal to or less than 6.75 to 1.00, or (B) at any time during
the period from October 1, 2005 through December 31, 2005, that the Leverage
Ratio on the last day of such fiscal quarter is equal to or less than 6.50 to
1.00, in which case described in this clause (i) the increase in the Applicable
Margin described above shall be reduced by 0.25% per annum or (ii) at any time
after December 31,2005, that the Borrower is in compliance with the covenant set
forth in Section 6.12, in which case described in this clause (ii) the increase
in the Applicable Margin described above shall no longer be applicable”

 

(iii) The definition of “Permitted Acquisition” is revised by deleting clause
(ii)(B)(x) thereof and replacing it with the following clause:

 

“(x) $5,000,000 or more, then the Senior Leverage Ratio (at any time on or prior
to December 31, 2005) or the Leverage Ratio (at any time after December 31,
2005) would be at least 0.25 to 1.0 less than the maximum Senior Leverage Ratio
or Leverage Ratio, as applicable, then permitted under Section 6.12 at such
time”

 

(b)   Amendment of Section 2.12. Section 2.12(a) is revised by deleting the
reference to “$2,000,000” in the eighth line thereof and replacing it with a
reference to “$500,000”.

 

(c)   Amendment of Section 6.11. Section 6.11 is revised by deleting the table
set forth in such Section in its entirety and replacing it with the Following
table:

 

Period

 

Ratio

 

 

 

 

 

June 30, 2004 through December 31, 2004

 

1.70 to 1.00

 

January 1, 2005 through December 31, 2005

 

1.70 to 1.00

 

January 1, 2006 through December 31, 2006

 

2.15 to 1.00

 

Thereafter

 

2.25 to 1.00

 

 

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(d) Amendment of Section 6.12. Section 6.12 is revised by (i) inserting the
words “After December 31,2005” at the beginning of the first line thereof, (ii)
deleting the table set forth in such Section in its entirety and replacing it
with the following table:

 

Period

 

Ratio

 

 

 

 

 

January 1, 2006 through December 31, 2006

 

5.95 to 1.00

 

January 1, 2007 through December 31, 2007

 

5.50 to 1.00

 

January 1, 2008 through December 31, 2008

 

4.75 to 1.00

 

Thereafter

 

4.50 to 1.00

 

 

and (iii) inserting the following paragraph at the end of such Section:

 

“Permit the Senior Leverage Ratio on the last day of any fiscal quarter during
any period set forth below to be greater than the ratio set forth opposite such
period below:

 

Period

 

Ratio

 

 

 

 

 

September 26, 2004 through March 31, 2005

 

4.00 to 1.00

 

April 1, 2005 through December 31, 2005

 

3.75 to 1.00”

 

 

(e) Amendment or Section 6.13. Section 6.13 is revised by deleting the table set
forth in such Section in its entirety and replacing it with the following table:

 

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Period

 

Ratio

 

 

 

 

 

June 30, 2004 through December 31, 2005

 

1.40 to 1.00

 

Thereafter

 

1.50 to 1.00

 

 

SECTION 2.  Representations and Warranties.  To induce the other parties hereto
to enter into this Amendment, Holdings and the Borrower represent and warrant to
each of the Lenders and the Administrative Agent that, as of the First Amendment
Effective Date:

 

(a)   This Amendment has been duly authorized, executed and delivered by
Holdings and the Borrower and this Amendment and the Credit Agreement, as
amended hereby, constitutes each of Holdings’ and the Borrower’s legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

 

(b)   The representations and warranties set forth in the Credit Agreement and
each other Loan Document are, after giving effect to this Amendment, true and
correct in all material respects on and as of the First Amendment Effective
Date, except to the extent such representations and warranties expressly relate
to an earlier date, in which case they were true and correct in all material
respects as of such earlier date.

 

(c)   No Default or Event of Default has occurred and is continuing.

 

SECTION 3.  Conditions of Effectiveness of this Amendment.  This Amendment shall
become effective on the date (the “First Amendment Effective Date”) on which:

 

(a)   The Administrative Agent shall have received duly executed and delivered
counterparts of this Amendment that, when taken together, bear the signatures of
Holdings, the Borrower and the Required Lenders.

 

(b)   The Borrower shall have paid to the Administrative Agent for the prorata
account of each Lender that has executed and delivered a signature page
(including, without limitation, by way of facsimile to James Cooper at Latham &
Watkins LLP, fax number 212-751-4864) approving this Amendment on or before
Friday, September 24, 2004 a fee in an amount equal to 0.15% of the aggregate
Commitments and outstanding Term Loans of such Lender under the Credit
Agreement.

 

(c)   The Borrower shall have paid to the Administrative Agent all outstanding
fees, costs and expenses owing to the Administrative Agent as of such date.

 

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SECTION 4.  Effect of Amendment.  (a) Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of or otherwise affect the rights and remedies of the Lenders, the
Administrative Agent or the Collateral Agent under the Credit Agreement or any
other Loan Document, and shall not alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other provision of the Credit Agreement or of any other
Loan Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle
Holdings or the Borrower to a consent to, or a waiver, amendment, modification
or other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document in
similar or different circumstances.

 

(b)   On the First Amendment Effective Date, the Credit Agreement shall be
amended as provided herein. The parties hereto acknowledge and agree that (i)
this Amendment and any other Loan Documents executed and delivered in connection
herewith do not constitute a novation, or termination of the “Obligations” (as
defined in the Loan Documents) under the Credit Agreement as in effect prior to
the First Amendment Effective Date; (ii) such “Obligations” are in all respects
continuing (as amended hereby) with only the terms thereof being modified to the
extent provided in this Amendment; and (iii) the Liens and security interests as
granted under the Security Documents securing payment of such “Obligations” are
in all such respects continuing in full force and effect and secure the payments
of the “Obligations”.

 

(c)   This Amendment shall constitute a Loan Document and shall be administered
and construed pursuant to the terms of the Credit Agreement (including, without
limitation, Article IX thereof).

 

SECTION 5.  Counterparts.  This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Delivery
of any executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.

 

SECTION 6.  Applicable Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 7.  Headings.  The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective officers as of the day and year first above
written.

 

 

 

TRUE TEMPER CORPORATION

 

 

 

 

 

/s/ Fred H. Geyer

 

 

By:

Fred H. Geyer

 

Its:

Senior Vice President,
  Chief Financial Officer and Treasurer

 

 

 

 

 

TRUE TEMPER SPORTS, INC.

 

 

 

 

 

/s/ Fred H. Geyer

 

 

By:

Fred H. Geyer

 

Its:

Senior Vice President,
  Chief Financial Officer and Treasurer

 

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SIGNATURE PAGE TO

FIRST AMENDMENT

DATED AS OF SEPTEMBER 24, 2004,

TO THE TRUE TEMPER SPORTS, INC. CREDIT AGREEMENT

DATED AS OF MARCH 15, 2004

 

To approve First Amendment:

 

Name of Institution:

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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