-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JWw79fh26rmM4x0G3+tPfN115KvCdiYwmy2HpzLmQmeny3f+feoKnb50e4UmQKwT 3YimJGSE5mcwJ9yo/9ImxQ== 0000012355-98-000031.txt : 19981019 0000012355-98-000031.hdr.sgml : 19981019 ACCESSION NUMBER: 0000012355-98-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19981015 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981015 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK & DECKER CORP CENTRAL INDEX KEY: 0000012355 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 520248090 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-03593 FILM NUMBER: 98726438 BUSINESS ADDRESS: STREET 1: 701 E JOPPA RD CITY: TOWSON STATE: MD ZIP: 21286 BUSINESS PHONE: 4107163900 MAIL ADDRESS: STREET 1: 701 EAST JOPPA ROAD STREET 2: MAIL STOP TW 290 CITY: TOWSON STATE: MD ZIP: 21286 FORMER COMPANY: FORMER CONFORMED NAME: BLACK & DECKER MANUFACTURING CO DATE OF NAME CHANGE: 19850206 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) September 30, 1998 ------------------- THE BLACK & DECKER CORPORATION (Exact name of registrant as specified in its charter) Maryland 1-1553 52-0248090 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number) Towson, Maryland 21286 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 410-716-3900 Not Applicable (Former name or former address, if changed since last report) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On September 30, 1998, the Corporation announced that it had completed the recapitalization of its recreational products business, True Temper Sports, with an affiliate of Cornerstone Equity Investors, LLC. In connection with the transaction, the Corporation received $177.7 million in cash and a senior increasing rate discount note in an initial accreted amount of $25.0 million. The note received by the Corporation bears interest at a variable rate. In addition, the Corporation retained approximately 6% of the preferred and common stock of the recapitalized company, now known as True Temper Corporation, valued at approximately $4.0 million. On September 22, 1998, the Corporation announced that it had closed on the sale of its glass container-making and inspection equipment business, Emhart Glass, to Bucher Holding A.G. of Switzerland. In connection with the sale, the Corporation received cash of $178.7 million. On June 26, 1998, the Corporation closed on the sale to Windmere-Durable Holdings, Inc. of its household products business (other than certain assets associated with the Corporation's cleaning and lighting products, such as the Dustbuster, SnakeLight, ScumBuster, and FloorBuster products) in the United States, Canada, Mexico, Central America, the Caribbean and South America (excluding Brazil) for $315.0 million. The Corporation received gross proceeds of $288.0 million at closing and $27.0 million were held in escrow pending transfer of assets associated with the household products business in Mexico. The $27.0 million held in escrow were received by the Corporation in July 1998 in connection with the transfer of these Mexican assets. During the six months ended June 28, 1998, the Corporation also completed the sale of its household products business in Australia, the proceeds from which were immaterial. The recapitalization of True Temper Sports, together with the sales of Emhart Glass and the household products business (other than certain assets associated with the Corporation's cleaning and lighting products) in North America, Central America, the Caribbean, and South America (excluding Brazil), are collectively referred to herein as the "Divested Businesses". The Corporation estimates that taxes and other selling expenses, together with payments on certain retained liabilities, will reduce the gross proceeds, yielding aggregate net cash proceeds from the sales of the Divested Businesses of approximately $525 million. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The pro forma financial information required by Item 7(b) of Form 8-K is included herein. 3 THE BLACK & DECKER CORPORATION PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following unaudited pro forma consolidated balance sheet as of June 28, 1998, and unaudited pro forma consolidated statement of earnings for the year ended December 31, 1997, and the six months ended June 28, 1998, have been prepared by the Corporation to give effect to the sales of the Divested Businesses. The unaudited pro forma consolidated statement of earnings for the year ended December 31, 1997, was prepared using the Corporation's audited statement of earnings for the year ended December 31, 1997, and assumes that the sales of the Divested Businesses took place on January 1, 1997. The unaudited pro forma consolidated statement of earnings for the six months ended June 28, 1998, was prepared using the Corporation's unaudited statement of earnings for the six months ended June 28, 1998, and assumes that the sales of the Divested Businesses took place on January 1, 1997. The unaudited pro forma consolidated balance sheet as of June 28, 1998, was prepared from the unaudited consolidated balance sheet of the Corporation as of June 28, 1998, and assumes that the sales of the Divested Businesses took place as of June 28, 1998. These pro forma financial statements have been prepared for comparative purposes only and do not purport to be indicative of the results of operations or the financial condition which would actually have resulted had the sales of the Divested Businesses been made on the dates or for the periods indicated or which may result in the future. Further, these pro forma financial statements have been prepared using information available as of the date of this filing. As a result, certain amounts included herein are preliminary in nature and, therefore, will be subject to adjustment in the future. The actual financial statements of the Corporation will reflect the sales of the Divested Businesses only from the respective actual sales dates forward. 4 Pro Forma Consolidated Statement of Earnings (Unaudited) The Black & Decker Corporation Year ended December 31, 1997 (Dollars in Millions Except Per Share Amounts)
Less: Divested Pro Forma Pro Forma As Reported Businesses Adjustments As Adjusted --------------- --------------- --------------- --------------- Sales $ 4,940.5 $ 725.8 $ 4,214.7 Cost of goods sold 3,169.2 503.3 2,665.9 Selling, general and administrative expenses 1,282.0 166.1 1,115.9 --------------- --------------- --------------- Operating Income 489.3 56.4 432.9 Interest expense (net of interest income) 124.6 $ (35.4)(a) 89.2 Other expense 15.2 1.2 14.0 --------------- --------------- --------------- --------------- Earnings Before Income Taxes 349.5 55.2 35.4 329.7 Income taxes 122.3 22.9 12.4 (c) 111.8 --------------- --------------- --------------- --------------- Net Earnings $ 227.2 $ 32.3 $ 23.0 $ 217.9 =============== =============== =============== =============== Net Earnings Per Common Share--Basic $ 2.40 $ 2.30 =============== =============== Shares Used in Computing Basic Earnings Per Share (in Millions) 94.6 94.6 =============== =============== Net Earnings Per Common Share--Assuming Dilution $ 2.35 $ 2.26 =============== =============== Shares Used in Computing Diluted Earnings Per Share (in Millions) 96.5 96.5 =============== =============== See notes to unaudited pro forma consolidated financial statements.
5 Pro Forma Consolidated Statement of Earnings (Unaudited) The Black & Decker Corporation and Subsidiaries Six Months Ended June 28, 1998 (Dollars in Millions Except Per Share Amounts)
Less: Divested Pro Forma Pro Forma As Reported Businesses Adjustments As Adjusted -------------- -------------- -------------- -------------- Sales $ 2,178.0 $ 265.2 $ 1,912.8 Cost of goods sold 1,430.2 187.8 1,242.4 Selling, general and administrative expenses 565.4 63.3 502.1 Write-off of goodwill 900.0 40.0 860.0 Restructuring and exit costs 140.0 17.1 122.9 Gain (loss) on sale of businesses 36.5 49.2 (12.7) -------------- -------------- -------------- Operating Income (Loss) (821.1) 6.2 (827.3) Interest expense (net of interest income) 58.2 0.2 $ (16.4)(b) 41.6 Other expense 2.4 0.9 1.5 -------------- -------------- -------------- -------------- Earnings (Loss) Before Income Taxes (881.7) 5.1 16.4 (870.4) Income taxes 31.3 34.8 5.8 (c) 2.3 -------------- -------------- -------------- -------------- Net Earnings (Loss) $ (913.0) $ (29.7) $ 10.6 $ (872.7) ============== ============== ============== ============== Net Earnings (Loss) Per Common Share--Basic $ (9.65) $ (9.23) ============== ============== Shares Used in Computing Basic Earnings Per Share (in Millions) 94.6 94.6 ============== ============== Net Earnings (Loss) Per Common Share--Assuming Dilution $ (9.65) $ (9.23)(d) ============== ============== Shares Used in Computing Diluted Earnings Per Share (in Millions) 94.6 94.6 ============== ============== See notes to unaudited pro forma consolidated financial statements.
6 Notes to Unaudited Pro Forma Consolidated Statement of Earnings Less: Divested Businesses To eliminate the results of Divested Businesses--True Temper Sports, Emhart Glass, and the household products business (excluding certain assets associated with the Corporation's cleaning and lighting products) in North America, Central America, the Caribbean, and South America (excluding Brazil). The results of the Divested Businesses eliminated do not reflect charges for certain Corporate overhead expenses historically allocated by the Corporation to these businesses. For the year ended December 31, 1997, and the six months ended June 28, 1998, such charges were approximately $11.7 million and $4.5 million, respectively. While the Corporation is taking action to realign its Corporate overhead structure in light of the sale of the Divested Businesses, such actions are prospective in nature and projected savings resulting from these actions are not reflected in the pro forma consolidated results. The results of the household products business (excluding certain assets associated with the Corporation's cleaning and lighting products) in North America, Central America, the Caribbean, and South America (excluding Brazil) included in the results of the Divested Businesses eliminated from the Corporation's historical results to arrive at the pro forma consolidated results are based upon certain assumptions and allocations. The household products businesses sold were jointly operated with the cleaning and lighting products businesses retained by the Corporation. Further, the Corporation's divested household products businesses in Central America, the Caribbean, and Latin America (excluding Brazil) were operated jointly with the Corporation's power tools and accessories businesses. Accordingly, the results of the household products businesses, included in the results of the Divested Businesses, were determined using certain assumptions and allocations that the Corporation believes are reasonable under the circumstances. Pro Forma Adjustments For purposes of the pro forma statement of earnings, it was assumed that the net cash proceeds from the Divestitures of $525 million were used to reduce indebtedness. The effect of a 1/8% change in the Corporation's weighted average borrowing rate would impact the pro forma reduction of net interest expense by $.7 million and $.4 million for the year ended December 31, 1997, and the six months ended June 28, 1998, respectively. For pro forma purposes, no interest income was assumed recognized on the note received by the Corporation in connection with the recapitalization of True Temper Sports. Such note, however, is interest bearing, with interest being added to the accreted amount of the note and not paid in cash. 7 (a) To reflect a pro forma reduction in net interest expense of $35.4 million based upon the Corporation's weighted average borrowing rate for the year ended December 31, 1997, of 6.74%. (b) To reflect a pro forma reduction in net interest expense of $16.4 million based upon the Corporation's weighted average borrowing rate for the six-month period ended June 28, 1998, of 6.42%. (c) To reflect income taxes on entries (a) and (b) at the federal statutory rate. (d) Excluding the after-tax effect of the restructuring charge, the goodwill write-off, and the impairment loss on sale of businesses, pro forma net earnings for the six months ended June 28, 1998, would have been $85.1 million. Because the Corporation had a net loss on a pro forma basis for the six months ended June 28, 1998, the calculation of pro forma earnings per share on a diluted basis excludes the impact of stock options since their inclusion would be anti-dilutive--that is, decrease the per-share pro forma loss. For comparative purposes, the Corporation believes that the dilutive effect of stock options should be considered when evaluating the Corporation's pro forma performance, if the effects of the restructuring charge, goodwill write-off and impairment loss on sale of businesses were excluded. If the dilutive effect of stock options were considered, pro forma net earnings, excluding the after-tax effect of the restructuring charge, the goodwill write-off, and the impairment loss on sale of businesses, would have been $.88 per share on this diluted basis. 8 Pro Forma Consolidated Balance Sheet (Unaudited) The Black & Decker Corporation and Subsidiaries June 28, 1998 (Millions of Dollars)
Less: Divested Pro Forma Pro Forma As Reported Businesses Adjustments As Adjusted ---------------- ---------------- ---------------- ---------------- Assets Cash and cash equivalents $ 204.1 $ 3.7 $ 200.4 Trade receivables 815.7 43.9 771.8 Inventories 765.0 59.5 705.5 Other current assets 205.1 7.2 $ (27.0) 170.9 ---------------- ---------------- ---------------- ---------------- Total Current Assets 1,989.9 114.3 (27.0) 1,848.6 ---------------- ---------------- ---------------- ---------------- Property, Plant, and Equipment 781.3 49.4 731.9 Goodwill 935.7 160.7 775.0 Other Assets 510.7 5.4 29.0 534.3 ---------------- ---------------- ---------------- ---------------- $ 4,217.6 $ 329.8 $ 2.0 $ 3,889.8 ================ ================ ================ ================ Liabilities and Stockholders' Equity Short-term borrowings $ 89.1 $ 0.7 $ (88.4) $ - Current maturities of long-term debt 60.6 0.2 (60.4) - Trade accounts payable 355.3 19.8 335.5 Other accrued liabilities 822.3 66.4 755.9 ---------------- ---------------- ---------------- ---------------- Total Current Liabilities 1,327.3 87.1 (148.8) 1,091.4 ---------------- ---------------- ---------------- ---------------- Long-Term Debt 1,658.1 0.1 (111.5) 1,546.5 Deferred Income Taxes 55.6 - 55.6 Postretirement Benefits 283.0 8.8 274.2 Other Long-Term Liabilities 192.3 1.0 191.3 Stockholders' Equity Common stock 46.5 46.5 Other stockholders' equity 654.8 232.8 262.3 684.3 ---------------- ---------------- ---------------- ---------------- Total Stockholders' Equity 701.3 232.8 262.3 730.8 ---------------- ---------------- ---------------- ---------------- $ 4,217.6 $ 329.8 $ 2.0 $ 3,889.8 ================ ================ ================ ================ See notes to unaudited pro forma consolidated financial statements.
9 Notes to Unaudited Pro Forma Consolidated Balance Sheet The Corporation's historical consolidated balance sheet as of June 28, 1998, reflects the sale of the household products business (excluding certain assets associated with cleaning and lighting products) in North America, Central America, the Caribbean, and Latin America (excluding Brazil), the receipt of $288.0 million in cash proceeds through that date, and a reduction of indebtedness with those cash proceeds after deducting selling expenses. Less: Divested Businesses To eliminate the assets sold and liabilities assumed of those Divested Businesses included in the Corporation's historical consolidated balance sheet at June 28, 1998--that is, Emhart Glass and True Temper Sports. Pro Forma Adjustments For purposes of the unaudited pro forma consolidated balance sheet, it was assumed that: (i) the gross proceeds from the sales of the Divested Businesses were reduced by taxes and other selling expenses and the payment of certain liabilities retained by the Corporation; and (ii) that these net proceeds were first used to reduce short-term indebtedness and then used to reduce long-term indebtedness at June 28, 1998. 10 Exhibit No. Description 2(a) Amendment No. 2 dated as of September 30, 1998, to the Reorganization, Recapitalization and Stock Purchase Agreement dated as of June 29, 1998, by and between The Black & Decker Corporation, True Temper Corporation, and True Temper Sports, LLC. 2(b) Amendment No. 1 dated as of September 21, 1998, to the Transaction Agreement date as of July 12, 1998, by and between The Black & Decker Corporation and Bucher Holding A.G. 2(c) Amendment No. 3 dated as of September 23, 1998, to the Transaction Agreement dated as of May 10, 1998, by and between The Black & Decker Corporation and Windmere-Durable Holdings, Inc. 2(d) Letter Agreement dated as of July 29, 1998, between The Black & Decker Corporation and Windmere-Durable Holdings, Inc. 99(a) Securities Purchase Agreement dated as of September 30, 1998, among True Temper Corporation and Emhart Inc. 99(b) Warrant Agreement among True Temper Corporation and Emhart Inc. dated as of September 30, 1998. 99(c) Debt Registration Rights Agreement among True Temper Corporation and Emhart Inc. dated as of September 30, 1998. 99(d) Equity Registration Rights Agreement among True Temper Corporation and Emhart Inc. dated as of September 30, 1998. 11 THE BLACK & DECKER CORPORATION S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE BLACK & DECKER CORPORATION By /s/ STEPHEN F.REEVES Stephen F. Reeves Vice President and Controller EX-2 2 EXHIBIT 2(A) 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 & DECKER CORPORATION, TRUE TEMPER CORPORATION (FORMERLY TRUE TEMPER SPORTS, INC.) AND TRUE TEMPER SPORTS, LLC (FORMERLY TTSI LLC) -1- 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 & Decker 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 -2- 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: -3- 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 -4- 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 & Decker Corporation 701 East Joppa Road Towson, Maryland 21286 Attention: Senior Vice President and Chief Financial Officer Telecopy: (410) 716-3318 with a copy to: The Black & Decker Corporation 701 East Joppa Road Towson, Maryland 21286 Attention: Senior Vice President and General Counsel Telecopy: (410) 716-2660 and Miles & Stockbridge P.C. 10 Light Street Baltimore, Maryland 21202 Attention: Glenn C. Campbell David A. Gibbons Telecopy: (410) 385-3700 if to Buyer (or TTSI after Closing): TTSI LLC c/o Cornerstone Equity Investors, LLC 717 5th Avenue -5- Suite 1100 New York, New York 10022 Attention: Mr. Mark Rossi Telecopy: (212) 826-6798 with a copy to: Kirkland & Ellis 153 East 53rd Street New York, New York 10022 Attention: Frederick Tanne, Esquire Telecopy: (212) 446-4900 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 -6- 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 & DECKER CORPORATION By:/s/CHARLES E. FENTON Name: Charles E. Fenton Title: Senior Vice President and General Counsel TRUE TEMPER CORPORATION By:/s/CHARLES E. FENTON Name: Charles E. Fenton Title: Vice President -7- TRUE TEMPER SPORTS, LLC By:/s/TYLER J. WOLFRAM Name: Tyler J. Wolfram Title: Managing Director EX-2 3 EXHIBIT 2(B) AMENDMENT NO. 1 Dated as of September 21, 1998 to TRANSACTION AGREEMENT Dated as of July 12, 1998 By and Between THE BLACK & DECKER CORPORATION and BUCHER HOLDING AG AMENDMENT NO. 1 TO TRANSACTION AGREEMENT This Amendment No. 1 to Transaction Agreement (the "Amendment") is made as of the 21st day of September, 1998, by and between among The Black & Decker Corporation, a Maryland corporation ("Black & Decker"), and Bucher Holding AG, a Swiss corporation ("Buyer"). W I T N E S S E T H: WHEREAS, Black & Decker, through certain of its direct and indirect Subsidiaries, is engaged in the Glass Machinery Business; WHEREAS, Black & Decker and Buyer entered into a Transaction Agreement dated as of July 12, 1998 (the "Agreement") pursuant to which Black & Decker agreed to sell and Buyer agreed to purchase the Glass Machinery Business upon the terms and subject to the conditions set forth therein; WHEREAS, Black & Decker and Buyer desire to amend the Agreement in accordance with the terms of this Amendment; 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 but not defined herein have the meanings given to them in the Agreement. Section 2. Amendments. The Transaction Agreement is hereby amended as follows. 2.01. Employment Matters. The following amendments relate to the provisions of the Transaction Agreement that relate to employment matters. (a) U.S. Benefit Arrangements. Certain welfare benefits described on Schedule B.20 (medical, dental, life and disability benefits) will continue to be provided to the US Transferred Employees by Black & Decker on an interim basis pursuant to a Benefit Continuation Agreement between Black & Decker and the Buyer to be executed at the Closing. (b) Pension Asset Transfers. The fund to fund asset transfers from Seller's U.S. Salaried Pension Plan and Seller's U.S. Hourly Pension Plan, as contemplated in Sections D.08 and D.09, will be made in the amounts required under Section 414(l) of the Internal Revenue Code as determined by the PBGC. The fund to fund asset transfer from Seller's U.K. Pension Plan, as contemplated in Section D.15(b), will be made in the amount determined by the Trustees of the Seller's U.K. Pension Plan subject to the consent of each Non-US Transferred Employee that participates in such plan. Such fund to fund transfers will be included as pension assets in the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount pursuant to Section 2.04(b) and Attachment XVIII; provided that the pension assets so included in the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall not exceed the sum of (i) the pension liabilities included in the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount (determined in accordance with Attachment XVIII), plus (ii) $400,000. An example of the application of this section using hypothetical amounts is attached as Exhibit A. (c) Swedish Pension Liability. In accordance with Section D.19(a), Black & Decker has made payment to the Swedish pension authorities in the amount specified by the Swedish pension authorities to eliminate the unfunded Swedish pension liability. The amount so paid may be subject to some adjustment to be specified by the Swedish pension authorities based on updated census data. According to the Swedish pension authorities such adjustment will not be calculated until after January 1, 1999. B&D will be responsible for any additional payment required by the adjustment and will be entitled to any refund if the adjustment results in an overpayment having been made by B&D and any additional payment requirement shall be an Excluded Liability or an Excluded Asset, respectively. (d) Individual Employee Severance Agreements. Prior to the Closing one of the Employees listed on Schedule B.20 as having an individual employee severance agreement has been terminated and the severance benefits described in such agreement have been paid in full prior to the Closing. Another of the Employees listed on Schedule B.20 as having an individual employee severance agreement will be terminated after the Closing. Black & Decker will be responsible for paying the severance benefits described in such agreement to the Employee who will be terminated after the Closing Date and such obligation shall be an Excluded Liability. (e) Black & Decker Stock Option Plan. The Buyer shall assume no liability of Black & Decker to Employees under the Black & Decker Stock Option Plan and such liabilities shall be Excluded Liabilities. The U.S. Employees who participate in the Black & Decker Stock Option Plan have been notified by Black & Decker of their continuing rights under such plan. 2.02. Kishinev Matter. Since the date of execution of the Transaction Agreement, a claim has been made against Emhart Deutschland GmbH by Hermes relating to the Kishinev Matter (as defined in the Supplemental Asset Sale Agreement between Emhart Deutschland GmbH, Emhart Glass S.A. (formerly, New Emhart Glass S.A.), Emhart Glass GmbH and Emhart Glass Manufacturing GmbH (the "German Supplemental Agreement")). The Kishinev Matter shall be deemed to have been disclosed as a threatened claim under Schedule B.11. Black & Decker has retained responsibility for the claim being made by Hermes by treating such claim as an Excluded Liability under the German Supplemental Agreement and has retained certain rights against third parties by treating such rights as Excluded Assets under the German Supplemental Agreement. 2.03. Anchor Bankruptcy Matter. Emhart Glass Machinery (U.S.), Inc. has unsecured creditor claims against the Anchor bankruptcy estate and preference claims have been asserted against Emhart Glass Machinery (U.S.), Inc by the trustee in the bankruptcy proceeding described in Schedule B.11. Emhart Glass Machinery (U.S.), Inc. will attempt to finally settle the claims by the date that the statement of the Proposed Final Net Tangible Asset Amount is due. If such unsecured creditor claims and preference claims are so finally settled, such claims by and against Emhart Glass Machinery (U.S.), Inc. will be included in the statement of the Proposed Final Net Tangible Asset Amount and in the Final Net Tangible Asset Amount. If such unsecured creditor claims and preference claims are not so finally settled by such date, any assets, liabilities and reserves relating to such claims will not be included in the statement of the Proposed Final Net Tangible Asset Amount and in the Final Net Tangible Asset Amount and shall be treated as Excluded Assets and Excluded Liabilities, respectively. 2.04. Cash. The parties have agreed to transfer to the Buyer Companies certain bank accounts used by the Glass Machinery Units. Therefore, clause (i) of the definition of Excluded Assets is hereby amended to add to the end of such clause (i): "or cash or cash equivalents that are otherwise transferred to a Buyer Company on the Closing Date." 2.05 Intellectual Property. The following amendments relate to the provisions of the Transaction Agreement that relate to Intellectual Property matters. (a) Registered Patents and Trademarks. The parties have agreed that beneficial title to the registered patents and trademarks of a Glass Machinery Share Company would be transferred to one of the Sellers of Transferred Assets prior to the Closing and that beneficial title to all such registered patents and trademarks will be transferred to Emhart Glass S.A. (formerly, "New Emhart Glass S.A.") by assignment at the Closing. (b) Trademark License Agreement. The parties have agreed that a Trademark License Agreement will be executed at the Closing. 2.06 Emhart (U.K.) Ltd.. The following amendments relate to the provisions of the Transaction Agreement that relate to the sale of the shares of Emhart (U.K.) Ltd. (a) Capital Stock. Since the date of the Transaction Agreement, Emhart (U.K.) Ltd. has issued an additional 500 shares of capital stock to Emhart International Ltd. The relevant disclosures on Schedule B.03 are hereby amended to reflect that the number of authorized and issued shares of capital stock of Emhart (U.K.) Ltd. is 38,000, all of which are held by Emhart International Ltd. and are being transferred to Bucher Holding A.G. pursuant to the Supplemental Share Sale Agreement between Emhart International Ltd. and Bucher Holding A.G. (b) Midland Bank. Emhart (U.K.) Ltd. is a party to a guaranty of Black & Decker credit facilities with Midland Bank. Black & Decker will have Emhart (U.K.) Ltd. released from such guaranty and will indemnify Buyer against any claims made against Emhart (U.K.) Ltd. under such guaranty. 2.07 Allocation. With respect to the allocation of the Exchange Consideration pursuant to Section 2.02(b), Net Asset Values of the Glass Machinery Units listed on Attachment IV shall be determined using the same accounting methods as are used in the determination of the Final Net Tangible Asset Amount. 2.08 Madrid and Moscow Offices. (a) Madrid Office. There is an existing, written agreement between Sistemas de Fijacion Tucker and Emhart Srl. regarding the provision of Madrid office space and the administration of Ms. Rentero's payroll for Emhart Srl. that will remain in effect after the Closing. (b) Moscow Office. Alexander Simonian, is on the payroll of Black & Decker GmbH and Black & Decker GmbH provides office space and office support to Mr. Simonian pursuant to a written agreement between Black & Decker GmbH and Emhart Deutschland GmbH that is being assigned to one of the Buyers pursuant German Supplemental Agreement. Since Mr. Simonian will, therefor, not be a Transferred Employee, his name is hereby removed from Attachment XVI. 2.09 Emhart Sweden A.B.. The Buyer agrees that it will cause Emhart Sweden A.B. not to declare and pay dividends prior to January 1, 1999. 2.10 Environmental Matters. The environmental matters described below were ascertained by Buyer as the result of the investigations that Buyer had conducted by Zurich Insurance Company pursuant to Section 6.02. Each such matter shall be deemed to have been disclosed in Schedule B.15. The parties agree to the following amendments to the Transaction Agreement with respect to such matters. (a) Indemnification Limitation. One hundred percent shall be substituted for the 75% and 50% limitations contained in Section 10.04(b)(ii) with respect to Black & Decker's indemnification obligations under clauses (iii)(a) and (iii)(b) of Section 10.02(b) arising out of the following conditions described in the reports prepared by Zurich Insurance Company for Buyer it being agreed that any Remedial Action conducted with respect to such conditions shall be conducted in accordance with Section 10.03(b) of the Transaction Agreement: (i) Orebro Facility. (A) Diesel contaminated soil; (B) Lack of spill prevention management; and (C) Oil residue in catch basin and drainage pipe. (ii) Sundsvall Facility. (A) Secondary Containment Upgrade; (B) Asbestos wrapping around piping; and (C) Testing for PCBs in window insulation. (iii) Laclede Facility. Failure to have obtained regulatory approval of disposal of NORM in solid waste landfill. (b) Contacts with Governmental Authorities. (i) Elmira Facility. Black & Decker agrees that Buyer's contacting the relevant Governmental Authorities to confirm that the municipal incinerator ash used as fill at the facility does not contain levels of heavy metals that are below regulatory reporting thresholds will not affect Buyer's rights to indemnification for such condition. (ii) Sundsvall Facility. Black & Decker agrees that Buyer's contacting the relevant Governmental Authorities to confirm that the window insulation does not contain PCBs will not affect Buyer's rights to indemnification for such condition. 2.11 Canceled Orders. The parties agree that the Transferred Assets affected as the result of the cancellation of the orders for machines prior to the Closing (such as the cancellation by Rosalko) shall be included in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount after taking into account the cancellation. 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 & DECKER CORPORATION By:__________________________________ Name: Title: BUCHER HOLDING AG By:__________________________________ Name: Title: EXHIBIT A EXAMPLE OF THE APPLICATION OF SECTION 2.01(b) Pension Liabilities (in 000s) to be determined pursuant to Attachment XVII. Total PBO Liability Included on Statements of Proposed Final Net Tangible Asset Amount and Final Net Tangible Asset Amount Pension Plan PBO Liability Transferred U.S. Hourly 3,500 U.S. Salaried 7,900 U.K. 1,500 Swiss 2,000 German 2,700 Total 17,600 17,600 Pension Assets (in 000s) to be determined pursuant to Attachment XVII. Total Pension Assets Included on Statements of Proposed Final Net Tangible Asset Amount and Final Net Tangible Asset Amount Pension Plan Pension Assets Transferred U.S. Hourly 4,400 U.S. Salaried 10,000 U.K. 2,300 Swiss 3,000 German 0 Total 19,700 18,000* * Total Pension Assets Included on Statements of Proposed Final Net Tangible Asset Amount and Final Net Tangible Asset Amount not to exceed Total PBO Liability plus $400. Post Retirement Benefits Other Than Pensions (FASB No. 106) and Post Employment Benefits (FASB No. 112) to be included on Statements of Proposed Final Net Tangible Asset Amount and Final Net Tangible Asset Amount in the amounts determined pursuant to Attachment XVII. EX-2 4 EXHIBIT 2(C) AMENDMENT NO. 3 Dated as of September 23, 1998 to TRANSACTION AGREEMENT Dated as of May 10, 1998 By and Between THE BLACK & DECKER CORPORATION and WINDMERE-DURABLE HOLDINGS, INC. AMENDMENT NO. 3 TO TRANSACTION AGREEMENT This Amendment No. 3 to Transaction Agreement (this "Amendment") is made as of the 23rd day of September 1998, by and between The Black & Decker Corporation, a Maryland corporation ("Seller"), and Windmere-Durable Holdings, Inc., a Florida corporation ("Buyer"). W I T N E S S E T H: WHEREAS, Seller and Buyer have entered into a Transaction Agreement dated as of May 10, 1998, as amended by Amendment No. 1 to Transaction Agreement dated as of June 26, 1998 and by a letter agreement dated as of July 23, 1998 (as amended, the "Agreement"), pursuant to which Seller transferred and caused the Affiliated Transferors to transfer substantially all of the assets held, owned by or used to conduct the HPG Business, and assigned certain liabilities associated with the HPG Business, to Buyer or Buyer Companies designated by Buyer, and Buyer received and caused such designated Buyer Companies to receive such assets and assume such liabilities upon the terms and subject to the conditions set forth in the Agreement; and WHEREAS, Seller and Buyer desire to further amend the Agreement in accordance with the terms of this Amendment to correct a typographical error in the Agreement to ensure that the language in the Agreement properly reflects the intentions of Seller and Buyer; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the parties agree as follows: Section 1. Capitalized terms used but not defined herein have the meanings given to them in the Agreement. Section 2. Section 5.06(e) of the Agreement is deleted in its entirety and the following is inserted in its place and stead: (e) From and after the date of this Agreement until the first anniversary of the Closing Date, Seller Companies shall not, without prior written approval of Buyer employ any exempt (within the meaning of the Fair Labor Standards Act) Transferred Employee. In addition, from and after the date of this Agreement until the fifth anniversary of the Closing Date, no Seller Company shall, without the prior written approval of Buyer, directly or indirectly solicit any individual who was an exempt (within the meaning of the Fair Labor Standards Act) Transferred Employee to terminate his or her employment relationship with Buyer or Buyer Companies; provided, however, that the foregoing shall not apply to individuals hired as a result of the use of an independent employment agency (so long as the agency was not directed to solicit a particular individual or a class of individuals that could only be satisfied by employees of Buyer Companies) or as a result of the use of a general solicitation (such as an advertisement) not specifically directed to employees of Buyer Companies. From and after the date of this Agreement until the fifth anniversary of the Closing Date, no Seller Company will induce or seek to induce any contractor, supplier, client or customer of Buyer or Buyer Companies to terminate their relationship with Buyer or Buyer Companies in respect of the HPG Business. Section 3. Section 6.06 of the Agreement is deleted in its entirety and the following is inserted in its place and stead: Section 6.06 Nonsolicitation of Employees, etc. From and after the date of this Agreement until the fifth anniversary of the Closing Date, neither Buyer nor any Buyer Companies shall, without the prior written approval of Seller, directly or indirectly solicit any individual who is an exempt (within the meaning of the Fair Labor Standards Act) employee of a Seller Company to terminate his or her employment relationship with Seller Companies; provided, however, that the foregoing shall not apply to individuals hired as a result of the use of an independent employment agency (so long as the agency was not directed to solicit a particular individual or a class of individuals that could only be satisfied by employees of Seller Companies) or as a result of the use of a general solicitation (such as an advertisement) not specifically directed to employees of Seller Companies. Buyer recognizes and agrees that a breach by Buyer or Buyer Companies of any of the covenants and agreements in this Section 6.06 could cause irreparable harm to Seller, that Seller's remedies at law in the event of such breach would be inadequate, and that, accordingly, in the event of such breach a restraining order or injunction or both may be issued against Buyer or Buyer Companies, in addition to any other rights and remedies that may be available to Seller under Applicable Law. If this Section 6.06 is more restrictive than permitted by Applicable Laws of the jurisdiction in which Seller seeks enforcement hereof, this Section 6.06 shall be limited to the extent required to permit enforcement under such Applicable Laws. 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 & DECKER CORPORATION By: /s/ WINDMERE-DURABLE HOLDINGS, INC. By: /s/ EX-2 5 EXHIBIT 2(D) THE BLACK & DECKER CORPORATION 701 East Joppa Road Towson, Maryland 21286 410-716-3900 Telex 87-930 July 23, 1998 Windmere-Durable Holdings Inc. 5980 Miami Lakes Drive Miami Lakes, Florida 33014-2467 Gentlemen: Reference is made to the Transaction Agreement dated as of May 10, 1998, by and between The Black & Decker Corporation ("Seller") and Windmere-Durable Holdings, Inc. ("Buyer"), as amended by Amendment No. 1 to Transaction Agreement dated as of June 26, 1998, pursuant to which, among other things, Seller agreed to sell and cause its subsidiaries to sell, and Buyer agreed to buy, the HPG Business on the terms and conditions set forth therein. Capitalized terms used herein but not defined shall have the meaning given to them in the Transaction Agreement. The Mexican Federal Competition Commission (the "Commission") has reviewed the transactions contemplated by the Transaction Agreement, and pursuant to its Communique dated July 6, 1998, has not objected to said transactions. The Commission has, however, conditioned the performance of the transactions in Mexico upon the modification of the term of the non-competition clause contained in Section 5.06 of the Transaction Agreement. This letter, therefore, confirms our agreement to modify the non-competition clause in accordance with the Commission's Communique, and to add the following at the end of Section 5.06(a) of the Transaction Agreement: Notwithstanding anything contained in this Section 5.06(a) to the contrary, with respect to both Additional Products and Designated Products, for a period commencing on the Closing Date and ending on the fifth anniversary thereof (the "Mexican Non-compete Term"), no Seller Company (for so long but only for so long as it remains a Seller Company) will, directly or indirectly, carry on or participate in the ownership, management or control of any Mexican Competing Business (as hereafter defined). "Mexican Competing Business" shall mean any business enterprise that sells in Mexico any Additional Products or Designated Products as of the date of the Transaction Agreement. Notwithstanding any provision of the Trademark License Agreement, the Mexican Non-compete Term shall not be subject to any extensions. Windmere-Durable Holdings, Inc. July 23, 1998 Page 2 If you agree to the foregoing, please sign and return the enclosed copy of this letter agreement. Very truly yours, THE BLACK & DECKER CORPORATION By /s/ Charles E. Fenton Charles E. Fenton Senior Vice President and General Counsel Accepted and agreed as of July 29, 1998 WINDMERE-DURABLE HOLDINGS INC. By /s/ Arnold Thaler Name: Arnold Thaler Title: Senior Vice President EX-99 6 EXHIBIT 99(A) SECURITIES PURCHASE AGREEMENT dated as of September 30, 1998 among TRUE TEMPER CORPORATION and THE PURCHASER PARTY HERETO SECURITIES PURCHASE AGREEMENT TABLE OF CONTENTS Page ARTICLE 1.Definitions..........................................................1 Section 1.01. Definitions.........................................1 Section 1.02. Accounting Terms and Determinations................11 ARTICLE 2.Purchase and Sale of Securities; Terms of Securities................11 Section 2.01. Commitment to Purchase.............................11 Section 2.02. Takedown Procedures................................12 Section 2.03. Fees...............................................12 Section 2.04. Mandatory Termination of Commitments...............12 Section 2.05. Interest...........................................12 Section 2.06. Maturity of Notes; Prepayment of Notes.............13 Section 2.07. Taxes..............................................14 ARTICLE 3.Representations and Warranties......................................16 Section 3.01. Corporate Existence and Power......................16 Section 3.02. Authorization, Execution and Enforceability........16 Section 3.03. Governmental Authorization.........................17 Section 3.04. Contravention......................................17 Section 3.05. Financial Information..............................17 Section 3.06. Litigation.........................................18 Section 3.07. Environmental Matters..............................18 Section 3.08. Taxes..............................................19 Section 3.09. Subsidiaries.......................................19 Section 3.10. Governmental Regulations...........................19 Section 3.11. Full Disclosure....................................20 Section 3.12. Capitalization.....................................20 Section 3.13. Solicitation.......................................20 Section 3.14. Non-fungibility....................................20 Section 3.15. Permits............................................21 Section 3.16. Representations in Other Financing Documents and in Material Recapitalization Documents.........21 Section 3.17. No Undisclosed Liabilities.........................21 Section 3.18. ERISA Matters......................................21 ARTICLE 4.Representations and Warranties of Purchaser.........................22 Section 4.01. Purchase for Investment; Authority; Binding Agreement..........................................22 ARTICLE 5.Conditions Precedent to Purchase....................................22 Section 5.01. Conditions to Purchaser's Obligation at Takedown...22 ARTICLE 6.Covenants...........................................................24 Section 6.01. Information........................................24 Section 6.02. Payment of Obligations.............................25 Section 6.03. Insurance..........................................25 Section 6.04. Conduct of Business and Maintenance of Existence...26 Section 6.05. Compliance with Laws...............................26 Section 6.06. Inspection of Property, Books and Records..........26 Section 6.07. Investment Company Act.............................26 Section 6.08. Limitation on Debt.................................27 Section 6.09. Restricted Payments; Voluntary Prepayments.........27 Section 6.10. Investments........................................28 Section 6.11. Negative Pledge....................................28 Section 6.12. Transactions with Affiliates.......................28 Section 6.13. Consolidations, Mergers and Sales of Assets; Ownership of Subsidiaries..........................29 Section 6.14. Use of Proceeds....................................29 Section 6.15. Restrictions on Certain Amendments.................29 Section 6.16. Limitation on Sales of Assets and Subsidiary Stock..............................................29 Section 6.17. Sale and Leaseback Transactions....................30 Section 6.18. Assumed Debt.......................................30 Section 6.19. Business Activities................................30 ARTICLE 7.Events of Default...................................................30 Section 7.01. Events of Default Defined; Acceleration of Maturity; Waiver of Default........................30 ARTICLE 8.Limitation on Transfers.............................................32 Section 8.01. Restrictions on Transfer...........................32 Section 8.02. Restrictive Legends................................32 Section 8.03. Notice of Proposed Transfers.......................33 ARTICLE 9.Miscellaneous.......................................................34 Section 9.01. Notices............................................34 Section 9.02. No Waivers; Amendments.............................34 Section 9.03. Indemnification....................................35 Section 9.04. Expenses...........................................37 Section 9.05. Payment............................................37 Section 9.06. Confidentiality....................................37 Section 9.07. Successors and Assigns.............................37 Section 9.08. Brokers............................................38 Section 9.09. New York Law; Submission to Jurisdiction; Waiver of Jury Trial......................................38 Section 9.10. Severability.......................................38 Section 9.11. Counterparts.......................................38 SCHEDULES Schedule 3.04 Contravention Schedule 3.07 Environmental Matters Schedule 3.09 Subsidiaries Schedule 3.12 Capitalization of the Company Schedule 6.08 Debt Schedule 6.10 Investments Schedule 6.11 Liens EXHIBITS Exhibit A Form of Escrow Agreement Exhibit B Form of Note Exhibit C Form of Debt Registration Rights Agreement Exhibit D Form of Warrant Agreement Exhibit E Form of Equity Registration Rights Agreement SECURITIES PURCHASE AGREEMENT AGREEMENT dated as of September 30, 1998 among True Temper Corporation and the Purchaser. The parties hereto agree as follows: ARTICLE 1. DEFINITIONS Section 1.1. Definitions. The following terms, as used herein, have the following meanings: "Accreted Value" means, for each $1,000 face amount of Notes as of any date of determination prior to the Maturity Date, the sum of (i) the initial offering price of each Note and (ii) that portion of the excess of the principal amount of each Note over such initial offering price which shall have been accreted thereon through such date, such amount to be so accreted on a daily basis and compounded quarterly on each March 31, June 30, September 30 and December 31 at the rate of 10.5% per annum (subject to adjustment pursuant to Section 2.05) from the date of issuance of the Notes through the date of determination. "Administrative Agent" means The First National Bank of Chicago, in its capacity as administrative agent under the Senior Credit Facilities, and any successor thereto. "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement" means this Agreement, as amended from time to time in accordance with its terms. "Applicable Premium" means, with respect to any Note on any date of redemption with respect thereto, the excess of (A) the present value at such date of redemption of (1) the principal amount of such Note at the Maturity Date plus (2) all required interest payments due on such Note through the Maturity Date (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate on such date of redemption plus .50% over (B) the Accreted Value of such Note. "Asset Sale" means any sale, lease or other disposition (including any such transaction effected by way of merger or consolidation) by the Company or any of its Subsidiaries of any asset, including without limitation any sale and leaseback transaction, but excluding (i) dispositions in the ordinary course of business, (ii) dispositions to the Company or a wholly-owned Subsidiary of the Company; (iii) the licensing of intellectual property in the ordinary course of business, and (iv) cash payments otherwise permitted under this Agreement; provided, that any disposition not excluded pursuant to clauses (i) through (iv) shall constitute an Asset Sale only if, and solely to the extent that, the Net Cash Proceeds therefrom, together with the Net Cash Proceeds from all other such dispositions effected by the Company and its Subsidiaries after the date hereof, exceed $1,000,000. "Base Financial Statements" has the meaning set forth in Section 3.05(a). "Black & Decker" means The Black & Decker Corporation, a Maryland corporation, and its successors. "Business Acquisition" means (i) an Investment by the Company or any of its Subsidiaries in any other Person pursuant to which such Person shall become a Subsidiary or shall be merged into or consolidated with the Company or any of its Subsidiaries or (ii) an acquisition by the Company or any of its Subsidiaries of the property and assets of any Person (other than the Company or any of its Subsidiaries) that constitute a substantial part of the assets of such Person or of any division or other business unit of such Person. "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in the City of New York or London are authorized or required by law to close. "Cash Equivalents" means (i) United States dollars, (ii) Government Securities having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to the Senior Credit Facilities or with any domestic commercial bank having capital and surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper having the rating of "P-2" (or higher) from Moody's Investors Service, Inc. or "A-3" (or higher) from Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition and (vi) any fund investing exclusively in investments of the type described in clauses (i) through (v) above. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of any association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) in the nature of corporate stock, (iii) in the case of a partnership or limited liability company, any and all partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with U.S. GAAP. "Change of Control" means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties (as defined below), (ii) the adoption of a plan relating to the liquidation or dissolution of the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (measured by voting power rather than number of shares), or (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors. "Code" means the Internal Revenue Code of 1986, as amended, and any regulation promulgated thereunder. "Commission" means the Securities and Exchange Commission. "Commitment" means, with respect to the Purchaser, the amount set forth opposite its name on the signature pages hereto. "Common Stock" means the authorized common stock, par value $.01 per share, of the Company. "Company" means True Temper Corporation, a Delaware corporation. "Company Corporate Documents" means the certificate of incorporation and by-laws of the Company. "Consolidated Subsidiary" means, at any date with respect to any Person, any Subsidiary or other entity, the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date. "Continuing Directors" means as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the date of hereof, (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election or (iii) was nominated by the Principals (or any entity controlled by the Principals) pursuant to the Stockholders Agreement. "Debt" of any Person means, with respect to any Person, any indebtedness of such Person, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or bankers' acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with U.S. GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such Indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest, and (ii) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Debt Incurrence" means any incurrence by the Company or any of its Subsidiaries of any Debt, other than Debt permitted under Section 6.08. "Debt Registration Rights Agreement" means the Debt Registration Rights Agreement, dated as of September 30, 1998, between the Company and the Purchaser, in the form attached as Exhibit C to this Agreement, as amended, supplemented or otherwise modified from time to time. "Default" means any Event of Default or any event or condition which, with the giving of notice or lapse of time or both, would, unless cured or waived, become an Event of Default. "DLJSC" means Donaldson, Lufkin & Jenrette Securities Corporation, a Delaware corporation, and its successors. "dollars" or "$" mean lawful currency of the United States of America. "Environmental Laws" means any and all statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, governmental grants, licenses and governmental restrictions relating to the effect of the environment or Hazardous Materials on human health, the environment or to emissions, discharges or releases of pollutants, contaminants, Hazardous Materials or wastes into the environment, including ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Materials or wastes or the clean-up or other remediation thereof. "Environmental Report" means the Environmental Due Diligence Audit in respect of the Company and its Subsidiaries prepared by Strata Environmental in September 1998. "Equity Investors" means True Temper Sports, LLC, a Delaware limited liability company organized at the direction of Cornerstone Equity Investors IV, L.P., GS Private Equity Partners, L.P., GS Private Equity Partners Offshore, L.P., Randolph Street Partners 1998 DIF, LLC, Randolph Street Partners and certain current members of management of the Company and certain of its Subsidiaries. "Equity Issuance" means the issuance of any equity securities by the Company or any of its Subsidiaries (including without limitation any equity securities issued pursuant to the exercise of stock options or warrants or the Permanent Financing), but excluding (i) any subscription agreement incentive plan or similar arrangement with any officer, employee or director of the Company or any of its Subsidiaries, or (ii) the issuance of any Capital Stock of the Company or any of its Subsidiaries to any officer, director or employee of the Company or any of its Subsidiaries. "Equity Registration Rights Agreement" means the Equity Registration Rights Agreement, dated as of September 30, 1998, among the Company and the Purchaser, in the form attached as Exhibit E to this Agreement, as amended, supplemented or otherwise modified from time to time. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any regulation promulgated thereunder. "ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with the Company or any Subsidiary of the Company is treated as a single employer under Title IV of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. ERISA Affiliate shall not include Black & Decker or any other entity that would be an ERISA Affiliate solely as a result of Black & Decker's classification as an ERISA Affiliate. "Escrow Agent" means Snoga Inc., a Delaware corporation. "Escrow Agreement" means the escrow agreement, dated as of September 30, 1998, among the Company, the Purchaser and the Escrow Agent, in the form attached as Exhibit A to this Agreement, as amended, supplemented or otherwise modified from time to time. "Event of Default" has the meaning set forth in Section 7.01. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" has the meaning set forth in Section 2.01. "Extension Fee" means that certain cash duration fee, to be paid to the Purchaser on the first anniversary of the Issuance Date, in an amount equal to 3.00% of the Accreted Value of Notes outstanding on such date. "Financing Documents" means this Agreement, the Notes, the Debt Registration Rights Agreement, the Equity Registration Rights Agreement, the Warrant Agreement, the Warrants and the Escrow Agreement. "Grafalloy Transaction" means the acquisition by Cornerstone Equity Investors IV, L.P., or its assignee (including the Company) of all of the outstanding capital stock of Grafalloy Corporation. "Guarantee Obligation" means as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Debt, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined in good faith by the Person to whom such Guarantee Obligation is payable. "Hazardous Materials" means (i) asbestos; (ii) polychlorinated biphenyls; (iii) petroleum, its hazardous derivatives, by-products and other hydrocarbons; and (iv) any other toxic, radioactive, caustic or otherwise hazardous substance regulated under Environmental Laws. "Hazardous Materials Contamination" means contamination of the buildings, facilities, soil or groundwater on or of the property of the Company by Hazardous Materials, or any derivatives thereof, or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating from or disposed of in connection with the property of the Company. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency exchange rates or commodities prices. "Holder" means any holder of any Note. "Intellectual Property Rights" means any patent, trade mark, service mark, registered design, trade name or copyright required to carry on the business of the Company and such other business as may be permitted by the terms of this Agreement and which is carried on at the relevant time. "Interest Payment Date" means each March 31, June 30, September 30 and December 31 (or, if any such date is not a Business Day, the next succeeding Business Day). "Investment" means any investment in any Person, whether by means of share purchase, capital contribution, loan, time deposit, Guarantee Obligation or otherwise. "Issuance Date" means the date the Notes are issued by the Company and purchased by the Purchaser. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Majority Holders" means (i) at any time prior to the issuance of the Notes, the holders of a majority of the Commitments and (ii) at any time thereafter, the holders of voting rights with respect to waivers, amendments and other actions permitted or required to be taken by Holders under the terms of the Notes constituting a majority of such voting rights attributable to the aggregate outstanding amount of Notes at such time. "Material Adverse Effect" means a material adverse affect on the properties, condition (financial or otherwise) operations, performances, projections, prospects or business of the Company and its Subsidiaries, taken as a whole. "Material Recapitalization Documents" means the Recapitalization Agreement, as amended from time to time in accordance with Section 6.15, and such other agreements entered into in connection therewith. "Maturity Date" means the eleventh anniversary of the Issuance Date. "Multiemployer Plan" means any Plan that is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA. "Net Cash Proceeds" means, with respect to any transaction, an amount equal to the cash proceeds received by the Company or any of its Subsidiaries from or in respect of such transaction (including any non-cash proceeds of such transaction to the extent sold for cash within 30 days of such transaction), less (i) any expenses (including commissions) reasonably incurred by the Company or such Subsidiary in respect of such transaction, (ii) the amount of any Debt secured by a Lien on a related asset and discharged from the proceeds of such transaction and (iii) any taxes paid or payable by the Company or such Subsidiary with respect to such transaction (as reasonably estimated by the Company's chief financial officer in good faith). "Notes" means the Company's Senior Increasing Rate Discount Notes substantially in the form set forth as Exhibit B hereto. "Other Taxes" has the meaning set forth in Section 2.07(a). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any of its functions under ERISA. "Permanent Financing" means any Debt Incurrence or Equity Issuance following the date hereof for the purpose of refinancing the Notes. "Permits" means all domestic and foreign licenses, permits and approvals required for the full operation of the Company and its Subsidiaries, including provincial, state, federal, city and county permits and approvals. "Permitted Business" means any business in which the Company and its Subsidiaries are engaged on the Issuance Date or any business reasonably related, incidental or ancillary thereto. "Permitted Liens" means Liens expressly permitted to exist by the terms of Section 6.11 hereof. "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or any agency or political subdivision thereof) or other entity of any kind. "Plan" means any employee benefit plan as defined in Section 3(3) of ERISA to which the Company, any Subsidiary or any ERISA Affiliate has, or, within the six years preceding the date of this Agreement, had, any liability or in respect of which the Company or any Subsidiary of the Company or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Prime Rate" means, for any day, a rate per annum equal to the rate of interest publicly announced by The Bank of New York (or its successor) from time to time in The City of New York as its prime, reference or base rate, it being understood that such rate is one of such bank's base rates and serves as a basis upon which effective rates of interest are calculated for those loans making reference thereto and may not be the lowest of such bank's base rates. "Principals" means Cornerstone Equity Investors IV, L.P. and its Affiliates, GS Private Equity Partners, L.P., GS Private Equity Partners Offshore, L.P., Randolph Street Partners 1998 DIF, LLC and Randolph Street Partners. "Purchaser" means Emhart, Inc., a Delaware corporation, and its successors. "Qualified Plan" means a Plan (other than a Multiemployer Plan) which is "a pension plan" (as defined in Section 3(2) of ERISA) intended to be tax-qualified under Section 401(a) of the Code. "Recapitalization" means the reorganization, recapitalization and sale of stock of the Company pursuant to the terms of the Recapitalization Agreement. "Recapitalization Agreement" means the Reorganization, Recapitalization and Stock Purchase Agreement, dated as of June 29, 1998, among Black & Decker, the Company and TTSI LLC, as amended by Amendment No. 1 thereto, dated as of August 1, 1998 and Amendment No. 2 thereto, dated as of September 30, 1998, and as further amended from time to time in accordance with Section 6.15. "Related Party" with respect to any Principal means (A) any controlling stockholder or partner, 50% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (B) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding (directly or through one or more Subsidiaries) a 50.1% or more controlling interest of which consist of the Principals and/or such other Persons referred to in the immediately preceding clause (A). "Restricted Payment" means (i) any dividend or other distribution on any shares of the capital stock of the Company (except dividends payable solely in shares of its capital stock) or (ii) any payment on account of the purchase, redemption, retirement or acquisition of (a) any shares of the capital stock of the Company or (b) any option, warrant or other right to acquire shares of the capital stock of the Company. "Securities Act" means the Securities Act of 1933, as amended. "Senior Credit Facilities" means a $57,500,000 senior secured financing consisting of a six year $20,000,000 non-amortizing revolving credit facility and term loans in aggregate principal amount of $37,500,000 consisting of a $10,000,000 Term A Loan due 2004 and a $27,500,000 Term B Loan due 2005, in each case, under that certain Credit Agreement, dated as of September 30, 1998, among TTSI, the Subsidiaries of TTSI party thereto, the lenders party thereto, DLJ Capital Funding, Inc., as syndication agent, Donaldson, Lufkin & Jenrette Securities Corporation, as lead arranger and The First National Bank of Chicago, as administrative agent for the lenders, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time, provided that the principal amount thereof does not exceed $57,500,000, plus the amount of reasonable expenses incurred in connection therewith (other than as a result of currency fluctuations) less (a) the amount of all scheduled principal repayments actually made from time to time hereafter of term Debt thereunder and (b) the amount of all principal repayments actually made from time to time hereafter of revolving Debt thereunder to the extent made with the net cash proceeds of Asset Sales to the extent applied to permanently reduce the revolving commitments thereunder. "Shelf Registration" means a "shelf" registration statement on any appropriate form pursuant to Rule 415 (or similar rule that may be adopted by the Commission) under the Securities Act. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Registration S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. "Sponsors" means Cornerstone Equity Investors IV, L.P.. "Stockholders' Agreement" means the Stockholders' Agreement, dated as of September 30, 1998, among the Equity Investors, the Company and Emhart Industries, Inc., a wholly-owned subsidiary of Black & Decker, as amended, supplemented or otherwise modified from time to time. "Subordinated Notes" means TTSI's 10 1/2% Senior Subordinated Increasing Rate Notes or the refinancing thereof. "Subsidiary" means, with respect to any Person, any corporation or other entity of which a majority of the capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. "Taxes" has the meaning set forth in Section 2.07(a). "Transfer" means any disposition of Notes that would constitute a sale thereof under the Securities Act. "Treasury Rate" means, as of any date, the yield to maturity as of such date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the remaining term to maturity of the Notes; provided, however, that if such term to maturity is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. "TTSI" means True Temper Sports, Inc., a Delaware corporation, and a wholly-owned subsidiary of the Company. "U.S. GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America. "Voting Stock" means, in respect of any Person, any class or classes of Capital Stock of such Person pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency). "Warrants" means the warrants to purchase common stock of the Company to be issued pursuant to the Warrant Agreement. "Warrant Agreement" means the warrant agreement, dated as of September 30, 1998, between the Company and the Purchaser in the form attached as Exhibit D to this Agreement, as amended, supplemented or otherwise modified from time to time. "Warrant Shares" has the meaning set forth in Section 5.01(o). Section 1.2. Accounting Terms and Determinations1.2. Accounting Terms and DeterminaAccounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with U.S. GAAP applied on a consistent basis (except for changes concurred in by the Company's independent public accountants). ARTICLE 2. PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES Section 2.1. Commitment to Purchase (a) Subject to the terms and conditions set forth herein and in reliance on the representations and warranties of the Company contained herein and in the other Financing Documents, the Company may at its option issue and sell to the Purchaser on the Issuance Date, and the Purchaser agrees to purchase on the Issuance Date, Notes with an initial Accreted Value equaling the Purchaser's Commitment. The purchase price for the Notes shall be 100% of the initial Accreted Value thereof. (b) Each Commitment will terminate (the "Expiration Date") on the earliest of (i) the termination of the Recapitalization Agreement in accordance with the terms thereof prior to the consummation of the Recapitalization, (ii) the consummation of the Recapitalization without the issuance of the Notes (if such date occurs prior to the Issuance Date), (iii) the date on which the Company, any of its Subsidiaries or the Sponsors commences the marketing of any proposed Permanent Financing with respect to which DLJSC or any of its Affiliates is not the sole manager, sole agent, sole initial purchaser or sole underwriter (if such date occurs prior to the Issuance Date) and (iv) 5:00 P.M. (New York City time) on October 15, 1998 (if such date occurs prior to the Issuance Date); provided, that if at any time on or after the date hereof an Event of Default shall have occurred and be continuing, the Purchaser may at its option terminate its Commitment by notice to the Company, such termination to be effective upon the giving of such notice; and provided further that each Commitment shall automatically terminate, without notice to the Company or any other action on the part of the Purchaser, upon the occurrence of any of the events specified in Sections 7.01(e) and 7.01(f) with respect to the Company. (c) No Commitment is revolving in nature, and principal amounts of Notes prepaid in accordance with Section 2.06 may not be resold to the Purchaser hereunder. Section 2.2. Takedown Procedures. As partial consideration for the sale of stock and other transactions contemplated by the Reorganization, Recapitalization and Stock Purchase Agreement, dated as of June 29, 1998, among Black & Decker, TTSI and TTSI LLC, the Company shall deliver to the Purchaser a single Note representing the aggregate principal amount at the Maturity Date of Notes to be purchased by the Purchaser registered in the name of the Purchaser, or, if requested by the Purchaser, separate Notes in such other denominations and registered in such name or names as shall be designated by the Purchaser by notice to the Company at least one Business Day prior to the Issuance Date. Section 2.3. Fees. (a) The Company shall pay the Purchaser a fee of $625,000. (b) On the first anniversary of the Issuance Date, the Company shall pay the Purchaser the Extension Fee. Section 2.4. Mandatory Termination of Commitments. Each Commitment shall terminate on the Expiration Date. Section 2.5. Interest (a) Each Note will accrete at the rate in effect under clause (b), (c) or (e) of this Section, compounded quarterly to the Maturity Date, on each Interest Payment Date of each year in which such Note remains outstanding commencing with the first Interest Payment Date after the date of issuance thereof. No cash interest will be payable on the Notes prior to the Maturity Date. Interest on each Note shall be calculated at the rates per annum set forth below, and shall accrue from and including the most recent Interest Payment Date to which interest has been paid on such Note (or if no interest has accrued on such Note, from the date of issuance thereof) to but excluding the date on which payment in full of the principal sum of such Note has been made. (b) The interest rate applicable to each Note shall be a floating rate per annum equal to the sum of (i) the Prime Rate in effect from time to time plus (ii) 2.00% plus (iii) an additional percentage amount equal to 1.00% from and including the Interest Payment Date falling on March 31, 1999 and increasing by 0.50% effective on each Interest Payment Date thereafter until the earlier of (x) the date the principal amount of, and accrued and unpaid interest on, if any, such Note is paid in full and (y) the first anniversary of the Issuance Date or, in any case, if less, the maximum rate permitted by applicable law. Interest on each Note will be calculated on the basis of a 365-day year and paid for the actual number of days elapsed. (c) The interest rate applicable to each Note commencing on the first anniversary of the Issuance Date shall be a floating rate per annum equal to greatest of (i) the sum of (A) the Prime Rate in effect from time to time plus (B) 4.00%, (ii) the sum of (A) the Treasury Rate plus (B) 7.00%, (iii) the sum of (A) the DLJ High Yield Composite Index plus (B) 3.00%, and (iv) the sum of (A) the interest rate applicable to such Note on the day immediately preceding the first anniversary of the Issuance Date plus (B) .50%, in each case, increasing by .50% on each Interest Payment Date thereafter until the date the principal amount of, and accrued and unpaid interest on, if any, such Note is paid in full. (d) In addition to any adjustments to the Interest Rate set forth in subsections (b) and (c) of this Section 2.05, if, pursuant to the terms of the Debt Registration Rights Agreement, a Shelf Registration with respect to the Notes either (i) has not been filed with the Commission on or prior to the 90th day following the first anniversary of the Issuance Date or (ii) has not been declared effective by the Commission on or prior to the 180th day following the first anniversary of the Issuance Date, then the Company shall pay liquidated damages thereafter of $.192 per week per $1,000 principal amount of Notes outstanding until the date on which the Shelf Registration is declared effective by the Commission. Following the effectiveness of the Shelf Registration, the Company shall also pay such liquidated damages beginning on the first date on which such Shelf Registration ceases to remain effective and shall continue at such increased interest rate until such Shelf Registration is again declared effective by the Commission. (e) The Purchaser may, on the first anniversary of the Issuance Date, fix the interest rate on the Notes at a rate to be determined by the Purchaser in its sole discretion provided that such rate shall not exceed seventeen percent (17.00%). (f) Notwithstanding anything to the contrary set forth above, at no time shall the per annum interest rate on the Notes exceed seventeen percent (17.00%), nor shall the per annum interest rate on the Notes be lower than ten percent (10.00%). Section 2.6. Maturity of Notes; Prepayment of Notes. (a) The Notes shall mature on the Maturity Date. (b) The Company at its option may, upon ten days' written notice to the Holders, at any time, prepay all or any part of the Notes at a redemption price equal to 100.00% of the Accreted Value or the principal amount of the Notes, as the case may be, so prepaid together with any accrued interest to the date of prepayment, plus the Applicable Premium as of the date of prepayment if the interest rate has been fixed in accordance with Section 2.05(e). (c) The Company shall, within five days of receipt by the Company or any of its Subsidiaries of the Net Cash Proceeds of any Permanent Financing and within thirty days of receipt by the Company or any of its Subsidiaries of the Net Cash Proceeds of any Asset Sale, in each case, to the extent not required to be used to repay the Subordinated Notes or Debt under the Senior Credit Facilities and not subject to any period during which the Company or any of its Subsidiaries may reinvest such proceeds prior to a requirement to repay Debt under the Senior Credit Facilities, redeem an amount of the Notes equal to the amount of such Net Cash Proceeds (less any amounts not required to be paid as a result of the requirement in subsection (d) of this Section 2.06), at a redemption price equal to 100.00% of the Accreted Value or the principal amount of the Notes, as the case may be, so prepaid together with accrued interest to the date of prepayment, plus the Applicable Premium as of the date of prepayment if the interest rate has been fixed in accordance with Section 2.05(e). (d) Any prepayment of the Notes pursuant to Section 2.06(b) shall be in a minimum amount of at least $1,000,000 of Accreted Value, unless less than $1,000,000 of Accreted Value of the Notes remain outstanding, in which case all of the Notes must be prepaid. Any prepayment of the Notes pursuant to Section 2.06(c) shall be in a minimum amount which is a multiple of $1,000 times the number of Holders at the time of such prepayment. (e) Any partial prepayment shall be made so that the Notes then held by each Holder shall be prepaid in an amount which shall bear the same ratio, as nearly as may be, to the total amount being prepaid as the Accreted Value principal amount of such Notes, as the case may be, held by such Holder shall bear to the aggregate Accreted Value or principal amount of all Notes, as the case may be, then outstanding. In the event of a partial prepayment, upon presentation of any Note the Company shall execute and deliver to or on the order of the Holder, at the expense of the Company, a new Note in principal amount at the Maturity Date equal to the remaining outstanding portion of such Note. Section 2.7. Taxes. (a) For the purposes of this Section, the following terms have the following meanings: "Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings with respect to any payment by the Company pursuant to this Agreement or under any Note or any other Financing Document, and all liabilities with respect thereto, excluding, in the case of the Purchaser or any other Holder, taxes imposed on the net income of the Purchaser or such Holder and franchise or similar taxes imposed on the net income of the Purchaser or such Holder, by a jurisdiction under the laws of which the Purchaser or such Holder is organized or in which its principal executive office or the office holding any Notes or any Financing Document is located. "Other Taxes" means any present or future stamp or documentary taxes and any other excise or property taxes, or similar charges or levies, which arise from any payment made pursuant to this Agreement or under any Note or any other Financing Document or from the execution, delivery, registration, recordation or enforcement of, or otherwise with respect to, this Agreement or any Note or any other Financing Document. (b) All payments by the Company to or for the account of the Purchaser or any other Holder under any Financing Document shall be made without deduction for any Taxes or Other Taxes; provided that, if the Company shall be required by law to deduct any Taxes or Other Taxes from any such payment, the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), the Purchaser or such Holder (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, the Company shall make such deductions, the Company shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and the Company shall promptly furnish to the Purchaser or such Holder (as the case may be) the original or a certified copy of a receipt or other documentation available to the Company evidencing payment thereof. (c) The Company agrees to indemnify the Purchaser and each other Holder for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted (whether or not correctly) by any jurisdiction on amounts payable under this Section) paid by the Purchaser or such Holder (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; provided, however, that the Company shall not be obligated to make any payment pursuant to this Section 2.07(c) in respect of penalties or interest attributable to any Taxes or Other Taxes, if written demand therefor has not been made by the Purchaser or such Holder (as the case may be) within 60 days from the date on which the Purchaser or Holder received written notice of the imposition of Taxes or Other Taxes by the relevant taxing authority, or for any additional imposition which may arise from the failure of the Purchaser or the Holder (as the case may be) to apply payments in accordance with the applicable tax law after the Company has made the payments required hereunder. After the Purchaser or a Holder (as the case may be) receives written notice of the imposition of Taxes, the Purchaser or Holder will act in good faith to notify the Company of its obligations thereunder as soon as reasonably possible. (d) The Company shall have no obligation for Taxes under Section 2.07(b) or Section 2.07(c) for or on account of: (i) any Taxes (other than Other Taxes) that would not have been so imposed but for the existence of any present or former connection between the Purchaser or Holder or the beneficial owner (or between a fiduciary, settlor, beneficiary, member, or shareholder of, or possessor of a power over, the Purchaser, Holder or beneficial owner, if the Purchaser, Holder or beneficial owner is an estate, a trust, a partnership or corporation) and the jurisdiction imposing the Tax other than merely holding such Note or any Financing Document, or the receipt of payments in respect thereof, including, without limitation, the Purchaser, Holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder, or possessor) being or having been a citizen or resident thereof, or being or having been engaged in a trade or business or having a permanent establishment or other fixed base therein, or making or having made an election the effect of which is to subject the Purchaser, Holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder, or possessor) to such Tax; (ii) any Taxes in the nature of estate, inheritance or gift taxes; (iii) any Tax that is imposed or withheld by reason of the failure of the Holder or beneficial owner of a Note to comply with a written request by the Company, addressed to such Holder or beneficial owner, to provide information concerning the nationality, residence or identity of such Holder or beneficial owner, if providing such information under a statute, treaty, regulation or administrative practice of the jurisdiction imposing such Tax would result in a complete exemption from such Tax; (iv) any Taxes imposed on any payment on a Note to a Holder that is a fiduciary or partnership or other than sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to the payment of taxes had such beneficiary, settlor, member or beneficial owner directly received its beneficial or distributive share of such payment; and (v) any combination of items (i) through (iv) above. (e) If the Company determines in good faith that a reasonable basis exists for contesting the imposition of a Tax or Other Tax with respect to the Purchaser or a Holder, the Purchaser or Holder shall cooperate with the Company in challenging such Tax or Other Tax at the Company's expense (including, without limitation, any additional costs, expenses or Taxes incurred by the Purchasers or Holders, as the case may be, as a result of such contesting of such Taxes) if requested by the Company; provided, however, that nothing in this Section 2.07(e) shall require the Purchaser or Holder to submit to the Company any tax returns or any part thereof, or to prepare or file any tax returns other than as the Purchaser or Holder in it sole discretion shall determine. (f) The Purchaser and each Holder agrees, to the extent reasonable and without material cost to it, to cooperate with the Company to minimize any amounts payable by the Company under this Section 2.07. ARTICLE 3. REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Purchaser (both before and after giving effect to the Recapitalization) as set forth below: Section 3.1. Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as proposed to be conducted after the Recapitalization. Section 3.2. Authorization, Execution and Enforceability. (a) The execution, delivery and performance by the Company of the Financing Documents and the issuance of the Notes by the Company have been duly and validly authorized and are within its corporate powers. Each of the Financing Documents (other than the Notes) and the Material Recapitalization Documents to which it is a party has been duly authorized, executed and delivered by the Company and constitutes its valid and binding agreement enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally and equitable principles of general applicability. When executed and delivered by the Company against payment therefor in accordance with the terms hereof, the Notes will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally and equitable principles of general applicability. (b) The Warrants have been duly authorized by the Company and, when executed and authenticated pursuant to the terms of the Warrant Agreement and delivered to the Escrow Agent pursuant to the provisions of this Agreement, will be valid and binding obligations of the Company, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally and equitable principles of general applicability. (c) The Warrant Shares to be issued upon exercise of the Warrants have been duly authorized and reserved for issuance by the Company and will be issued at the times and in the manner required by the Warrant Agreement and, upon due exercise of a Warrant, the Warrant Shares issued will be validly issued, fully paid and nonassessable. Section 3.3. Governmental Authorization. The execution and delivery by the Company of each of the Financing Documents and the Material Recapitalization Documents to which it is a party did not and will not, the issuance and sale of the Notes and the Warrants and Warrant Shares by the Company will not, and the consummation of the transactions contemplated hereby and thereby will not, require any action by or in respect of, or filing with, any governmental body, agency or governmental official except such actions and filings which (i) have been taken or made and remain in full force and effect, or (ii) if not taken or made, will not have a material adverse effect on the validity or enforceability of the Financing Documents and the Material Recapitalization Documents. Section 3.4. Contravention. Except as set forth on Schedule 3.04, the execution and delivery by the Company of the Financing Documents and the Material Recapitalization Documents to which it is a party did not and will not, the issuance and sale of the Notes and the Warrants and Warrant Shares by the Company will not, and the consummation of the transactions contemplated hereby and thereby will not, (A) contravene or constitute a default under or violation of any provision of (i) applicable law or regulation, (ii) the Company Corporate Documents or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon it or any of its assets, except, in the case of clauses (i) and (iii), for such contraventions, defaults or violations that would not reasonably be expected to result in a Material Adverse Effect, or (B) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries other than Liens created or imposed pursuant to the Senior Credit Facilities. Section 3.5. Financial Information. (a) (i) The combined balance sheets of the Company and its Subsidiaries as of December 31, 1995, December 31, 1996 and December 31, 1997 and the related combined statements of profit and loss and cash flows for the fiscal years ended December 31, 1995, December 31, 1996 and December 31, 1997 (collectively, the "Base Financial Statements"), audited by Ernst & Young (ii) the unaudited combined balance sheets of the Company and its Subsidiaries as of December 31, 1993 and December 31, 1994 and the related unaudited combined statements of profit and loss and cash flows for the fiscal years ended December 31, 1993 and December 31, 1994, and (iii) the unaudited interim combined balance sheets of the Company and its Subsidiaries as of June 30, 1997 and June 30, 1998 and the related combined interim statements of profit and loss and cash flows for the six moths ended June 30, 1997 and June 30, 1998, in the case of each of clauses (i), (ii) and (iii), have been prepared in conformity with U.S. GAAP, fairly present the combined financial position of such entities as of each such date and their combined results of operations, changes in stockholders' equity and cash flows for each such period. (b) The pro forma combined balance sheets as of December 31, 1997 and June 30, 1998 and the related pro forma combined statements of profit and loss for the fiscal year ended December 31, 1997 and the six months ended June 30, 1998 have been prepared on a basis consistent with the Base Financial Statements of the Company and its Subsidiaries and give effect to assumptions used in the preparation thereof on a reasonable basis and in good faith and present fairly the historical and proposed transactions contemplated by the Recapitalization; and such pro forma financial statements comply as to form in all material respects with the requirements applicable to pro forma financial statements included in registration statements on Form S-1 under the Securities Act. (c) There has occurred no material adverse change in the business, assets or financial condition of the Company and its Subsidiaries, taken as a whole, since December 31, 1997. Section 3.6. Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Company, threatened against the Company, any of its Subsidiaries, any Plan or any fiduciary of any Plan before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could have a material adverse effect on the Financing Documents or the Recapitalization. Section 3.7. Environmental Matters. Except as provided on Schedule 3.07 and except to the extent that the following would not reasonably be expected to result in a Material Adverse Effect: (a) No property owned, leased or operated by the Company or any of its Subsidiaries is affected by any Hazardous Materials Contamination. (b) No asbestos or asbestos-containing materials are present on any of the properties now or previously owned, leased or operated by the Company or any of its Subsidiaries. (c) No polychlorinated biphenyls in regulated concentrations are located on or in any properties now or previously owned, leased or operated by the Company or any of its Subsidiaries, in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils or any other device. (d) No underground storage tanks are located on any properties now or previously owned, leased or operated by the Company or any of its Subsidiaries, or were located on any such property and subsequently removed or filled. (e) No written notice, notification, demand, CERCLA-related request for information, complaint, citation, summons, investigation, administrative order, consent order or consent agreement, litigation or settlement with respect to Hazardous Materials or Hazardous Materials Contamination has been issued to the Company or is pending, as the case may be, or, to the Company's knowledge, proposed, threatened or anticipated, in each case, with respect to or in connection with the operation of any properties now or previously owned, leased or operated by the Company or any of its Subsidiaries. Except to the extent the following would not result in a Material Adverse Effect, all such properties and their existing and prior uses by the Company, and, to the Company's knowledge, the uses of the properties prior to the Company's ownership, lease or operation comply and at all times have complied with any applicable governmental requirements relating to environmental matters or Hazardous Materials and there is no condition on any of such properties which is in violation of any applicable governmental requirements relating to Hazardous Materials, and neither the Company nor any of its Subsidiaries has received any communication from or on behalf of any governmental authority that any such condition exists. (f) For purposes of this Section 3.07, the terms "Company" and "Subsidiary" shall include any business or business entity (including a corporation) which is, in whole or in part, a predecessor of the Company or any Subsidiary to the extent the Company would be liable for the liabilities of such predecessor under any applicable Environmental Laws. Section 3.8. Taxes. (a) All income tax returns and all other tax returns which are required to be filed by or on behalf of the Company and its Subsidiaries have been filed and all taxes shown as due on such returns have been paid or adequate reserves have been established on the books of the Company, except to the extent that the failure to file any such returns or pay any such taxes would not reasonably be expected to result in a Material Adverse Effect and except for any such taxes that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with U.S. GAAP. The charges, accruals and reserves on the books of the Company in respect of taxes or other governmental charges have been established in accordance with U.S. GAAP. (b) There is no tax, levy, impost, deduction, charge or withholding imposed by any governmental instrumentality either (i) on or by virtue of the execution, delivery, performance, enforcement or admissibility into evidence of any Financing Document or (ii) on any payment to be made by the Company pursuant to any Financing Document. The Company is permitted under applicable laws to pay any additional amounts payable by it under Section 2.07. Section 3.9. Subsidiaries. Other than those listed on Schedule 3.09, the Company has no Subsidiaries. Section 3.10. Governmental Regulations. None of the Company or any of its Subsidiaries is or will be subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, the Interstate Commerce Act or to any other statute, rule or regulation limiting its ability to incur Indebtedness for borrowed money. Section 3.11. Full Disclosure. The information heretofore furnished by the Sponsors or the Company to the Purchaser in writing for purposes of or in connection with the Financing Documents or any transaction contemplated hereby does not, and all such information hereafter furnished by the Sponsors or the Company to the Purchaser will not (in each case as amended or supplemented and taken together and on the date as of which such information is furnished), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading. The Company has disclosed to the Purchaser any and all facts which materially and adversely affect or may affect (to the extent the Company can now reasonably foresee), the business, assets or financial position of the Company or the ability of the Company to perform its obligations under the Financing Documents or to complete the Permanent Financing. Section 3.12. Capitalization. At the Issuance Date, after giving effect to the Recapitalization, the capitalization of the Company will be as set forth on Schedule 3.12. All of the issued and outstanding shares of Common Stock are, and, as of the time of the closing of the Recapitalization, will be, validly issued, fully paid and nonassessable and free and clear of any Lien or other right or claim (other than Liens created under the Senior Credit Facilities) and except as contemplated in the Stockholders' Agreement, the holders thereof are not entitled to any preemptive or other similar rights. Except for the Material Recapitalization Documents or as set forth on Schedule 3.12, there are no subscriptions, options, warrants, rights, convertible securities, exchangeable securities or other agreements or commitments of any character pursuant to which the Company is required to issue any shares of its capital stock. Section 3.13. Solicitation. No form of general solicitation or general advertising was used by the Company or, to the best of its knowledge, any other Person acting on behalf of the Company, in connection with the offer and sale of the Notes. Neither the Company nor any Person acting on behalf of the Company has, either directly or indirectly, sold or offered for sale to any Person any of the Notes or any other similar security of the Company except as contemplated by this Agreement, and the Company represents that neither the Company nor any person acting on its behalf other than the Purchaser and its Affiliates will sell or offer for sale to any Person any such security to, or solicit any offers to buy any such security from, or otherwise approach or negotiate in respect thereof with, any Person or Persons so as thereby to bring the issuance or sale of any of the Notes within the provisions of Section 5 of the Securities Act. Section 3.14. Non-fungibility. When the Notes are issued and delivered pursuant to this Agreement, the Notes will not be of the same class (within the meaning of Rule 144A under the Securities Act) as securities which are (i) listed on a national securities exchange registered under Section 6 of the Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation system. Section 3.15. Permits. Except to the extent any of the following would not result in a Material Adverse Effect: (a) the Company and its Subsidiaries have all Permits as are necessary for the conduct of their respective businesses as it has been carried on; (b) all such Permits are in full force and effect, and each of the Company and its Subsidiaries has fulfilled and performed all obligations with respect to such Permits; (c) no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination by the issuer thereof or which results in any other impairment of the rights of the holder of any such Permit; and (d) each of the Company and its Subsidiaries has no reason to believe that any governmental body or agency is considering limiting, suspending or revoking any such Permit. Section 3.16. Representations in Other Financing Documents and in Material Recapitalization Documents. (a) Each of the representations and warranties of the Company set forth in any of the other Financing Documents is true and correct in all material respects. (b) Each of the representations and warranties of the Company set forth in any of the Material Recapitalization Documents is true and correct in all material respects. Section 3.17. No Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any material liability (absolute or contingent) except (A) those shown on the financial statements described in Sections 6.01(a) and (b) and (B) those incurred under the Financing Documents. Section 3.18. ERISA Matters. During the twelve consecutive months ending on the date of the execution and delivery of this Agreement, no steps have been taken to terminate any Qualified Plan, and no contribution failure has occurred with respect to any Qualified Plan sufficient to give rise to a Lien under section 302(f) of ERISA, which, in the aggregate, is reasonably expected to lead to liability on the part of the Company or any ERISA Affiliate in excess of $1,000,000. No condition exists or event or transaction has occurred with respect to any Qualified Plan which could reasonably be expected to result in the incurrence by the Company of any material liability, fine or penalty other than as could not reasonably be expected to have a Material Adverse Effect. Since the date of the last period covered by the Base Financial Statements, none of the Company, any Subsidiary or any ERISA Affiliate has taken any action that could be expected to increase (i) any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in part 6 of Subtitle B of Title I of ERISA or (ii) any contingent liability with respect to any Qualified Plan or Multiemployer Plan, except as would not have a Material Adverse Effect. ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER Section 4.1. Purchase for Investment; Authority; Binding Agreement. The Purchaser represents and warrants to the Company that: (a) the Purchaser is an Accredited Investor within the meaning of Rule 501(a) under the Securities Act and the Notes to be acquired by it pursuant to this Agreement are being acquired for its own account without a view toward distribution and the Purchaser will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of the Notes unless pursuant to a transaction either registered under, or exempt from registration under, the Securities Act; (b) the execution, delivery and performance of this Agreement and the purchase of the Notes pursuant hereto are within the Purchaser's corporate powers and have been duly and validly authorized by all requisite corporate action; (c) this Agreement has been duly executed and delivered by the Purchaser; (d) this Agreement constitutes a valid and binding agreement of the Purchaser enforceable in accordance with its terms; and (e) the Purchaser has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Notes and the Purchaser is capable of bearing the economic risks of such investment. ARTICLE 5. CONDITIONS PRECEDENT TO PURCHASE Section 5.1. Conditions to Purchaser's Obligation at Takedown. The obligation of the Purchaser to purchase the Notes to be issued and sold by the Company on the Issuance Date is subject to the satisfaction of the following conditions contemporaneously with such purchase: (a) (i) Each of the conditions to the parties' obligations under the Material Recapitalization Documents shall have been satisfied or, with the prior written consent of the Purchaser, waived and (ii) the Recapitalization shall have been completed on the terms set forth in the Material Recapitalization Documents (as such terms may have been amended or waived with the consent of the Purchaser). (b) The Purchaser shall have received executed copies of each of the Material Recapitalization Documents, the Financing Documents and the Stockholders' Agreement, each of which shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior written consent of the Purchaser. (c) There shall exist no action, suit, investigation, litigation or proceeding pending or to the Company's knowledge threatened in any court or before any arbitrator or any governmental instrumentality that could reasonably be expected to (A) have a material adverse effect on any Financing Document, the Material Recapitalization Document, the Notes or the Recapitalization or any of the other transactions contemplated thereby or hereby or (B) result in a Material Adverse Effect. (d) The Purchaser shall have received evidence satisfactory to them of the substantially simultaneous repayment in full of all existing Debt of the Company and its Subsidiaries (other than Debt permitted under Sections 6.08) and the termination of each existing Lien on any asset securing any such Debt. (e) The Purchaser shall have received opinions, dated on or prior to the Issuance Date, of Kirkland & Ellis, special counsel for the Company, in the form and substance satisfactory to the Purchaser. (f) All fees and expenses payable to the Purchaser hereunder shall have been paid in full. (g) The representations and warranties of the Company contained in the Financing Documents shall be true and correct in all material respects on and as of the Issuance Date as if made on and as of such date and the Company shall have performed and complied with all covenants and agreements required by the Financing Documents to be performed by it or complied with by it at or prior to the Issuance Date. (h) There shall not exist any Default. (i) The Purchaser shall have received the Notes to be issued on the Issuance Date, duly executed by the Company in the denominations and registered in the names specified in or pursuant to Section 2.02. (j) The capitalization, tax and corporate and ownership structure (including the articles of incorporation and by-laws) of the Company and its Subsidiaries before and after the consummation of the Recapitalization shall be consistent with that set forth in documents provided to the Purchaser prior to the date hereof or shall otherwise be satisfactory to the Purchaser in all material respects. (k) The Purchaser shall have received a certificate of the Secretary or Assistant Secretary of the Company, dated as of a date reasonably satisfactory to the Purchaser, certifying (A) (i) that attached thereto is a true, complete and correct copy of resolutions duly adopted by the Board of Directors of the Company, authorizing (1) the execution, delivery and performance of the Financing Documents to which it is a party, and (2) the transactions contemplated hereby, and (ii) that such resolutions have not been amended, modified, revoked or rescinded, (B) as to the incumbency and specimen signature of each officer executing any Financing Documents on its behalf, and (C) true and complete copies of its constituent documents, and such certificates and the resolutions attached thereto shall be in form and substance satisfactory to the Purchaser. (l) Pursuant to the terms of the Escrow Agreement, the Company shall have executed and delivered to the Escrow Agent fully authenticated Warrants, unregistered or registered in blank, representing the right to purchase at any time up to an aggregate of 2.1% of the fully-diluted common stock of the Company, calculated after giving effect to the transactions occurring on or prior to the Issuance Date (the "Warrant Shares"), exercisable for a period of seven years at a price equal to $.01 per share. (m) All matters relating to the transactions contemplated by this Agreement, the Financing Documents, the Purchase Agreement, the Senior Credit Facilities, the Stockholders' Agreement and the transactions contemplated hereby and thereby shall be satisfactory to the Purchaser in its discretion, and the Purchaser shall have received such additional certificates, legal and other opinions and documentation as they shall reasonably request. ARTICLE 6. COVENANTS6.COVENANTS.COVENANTS The Company agrees that, from and after the Issuance Date and so long as any Notes remain outstanding and unpaid, and for the benefit of the Purchaser and the Holders: Section 6.1. Information. The Company will deliver to the Purchaser: (a) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and cash flows) for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the Commission by independent public accountants of nationally recognized standing; (b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter and the related consolidated statement of income for such quarter and for the portion of the Company's fiscal year ended at the end of such quarter and the related consolidated statement of cash flow for the portion of the Company's fiscal year ended at the end of such quarter, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the Company's previous fiscal year, all certified (subject to footnote presentation and normal year-end adjustments) as to fairness of presentation and consistency by the chief financial officer or the chief accounting officer of the Company and, if required, with footnote reconciliation to U.S. GAAP; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of the Company (i) setting forth in reasonable detail the calculations required to establish whether the Company was in compliance with the requirements of Sections 6.08 through 6.11, inclusive, on the date of such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto; (d) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a statement of the firm of independent public accountants which reported on such statements confirming the calculations set forth in the officer's certificate delivered simultaneously therewith pursuant to clause (c) above; (e) within five days after any executive officer of the Company obtains knowledge of a Default, if such Default is then continuing, a certificate of the chief financial officer or the chief accounting officer of the Company setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto; (f promptly upon the filing thereof, copies of all applications, registration statements or reports which the Company or any of its Subsidiaries shall have filed with the Commission or any other national or international stock exchange; (g promptly following the commencement thereof, notice and a description in reasonable detail of any litigation or proceeding to which the Company or any of its Subsidiaries is a party in which the amount involved is $1,000,000 or more; (h promptly following the occurrence thereof, notice and a description in reasonable detail of any material adverse change in the business, assets or financial position of the Company and its Subsidiaries taken as a whole; (i promptly following the occurrence thereof, notice and a copy of any amendment entered into with respect to the Senior Credit Facilities; and. (j from time to time such additional information regarding the financial position or business of the Company and its Subsidiaries as the Purchaser may reasonably request. Section 6.2. Payment of Obligations. The Company will pay and discharge, and will cause each Subsidiary to pay and discharge, material obligations and liabilities, including, without limitation, tax liabilities, at or before such obligations and liabilities become due, except where the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each Subsidiary to maintain, in accordance with U.S. GAAP, appropriate reserves for the accrual of any of the same. Section 6.3. Insurance. The Company shall, and shall cause each of its Subsidiaries to, keep its insurable properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar locations, including (i) public liability insurance against claims for personal injury or death or property damage occurring upon, in, about in connection with the use of any properties owned, occupied or controlled by it and (ii) business interruption insurance; and maintain such other insurance as may be required by law. Section 6.4. Conduct of Business and Maintenance of Existence. The Company will continue, and will cause each Subsidiary to continue, to engage in business of the same general type as now conducted by the Company and its Subsidiaries, and will preserve, renew and keep in full force and effect, and will cause each Subsidiary to preserve, renew and keep in full force and effect their respective corporate existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business, except that (i) the Company may discontinue any immaterial line of business of the Company and its Subsidiaries if the Board of Directors of the Company determines that such discontinuation is in the best interests of the Company and not disadvantageous to the holder of any Note and (ii) nothing in this Section 6.04 shall prohibit the merger or consolidation of any wholly-owned Subsidiary of the Company with or into any other wholly-owned Subsidiary of the Company. Section 6.5. Compliance with Laws. (a The Company will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder where noncompliance could reasonably be expected to have a Material Adverse Effect). (b The Company will take all actions to ensure that (i) the obligations of the Company under the Financing Documents are at all times valid, binding and enforceable against the Company in accordance with their terms under all applicable laws, and (ii) the Financing Documents may be admitted into evidence in any relevant jurisdiction. Section 6.6. Inspection of Property, Books and Records. The Company will keep, and will cause each Subsidiary to keep, proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Subsidiary to permit, representatives of the Purchaser at reasonable times and intervals, and upon reasonable notice, but, unless an Event of Default shall have occurred and be continuing, not more frequently than once in each fiscal year, to visit its corporate offices, to discuss its financial matters with its officers and, only in the presence of a representative of the Company (whose attendance at such discussion cannot be unreasonably refused), its independent public accountants (and the Company hereby authorizes such independent public accountants to discuss the Company's financial matters with the Purchaser or its representatives, so long as a representative of the Company is present) and to examine any of its books or other financial records. Section 6.7. Investment Company Act. The Company will not be or become an open-end investment trust, unit investment trust or face-amount certificate company that is or is required to be registered under the Investment Company Act of 1940, as amended. Section 6.8. Limitation on Debt. Neither the Company nor any Subsidiary will create, incur, assume or suffer to exist any Debt, except: (a Debt outstanding on the date of this Agreement (other than Debt incurred under the Senior Credit Facilities and the Subordinated Notes) and identified in Schedule 6.08 and refinancings and replacements thereof in a principal amount not exceeding the principal amount of the Debt so refinanced or replaced on terms no less favorable to the Holders of the Notes than those in place on the date of this Agreement and with an average life to maturity of not less than the then average life to maturity of the Debt so refinanced or replaced; (b Debt of the Company evidenced by the Notes and Debt of TTSI evidenced by the Subordinated Notes; (c Debt under the Senior Credit Facilities, in a principal amount not to exceed $50,000,000 (in addition to Debt incurred under clause (f) below); (d Debt owing to the Company or a Subsidiary; (e Debt incurred by the Company or any of its Subsidiaries that is represented by Capital Lease Obligations, mortgage financings or purchase money obligations; provided, that the amount of such Debt does not exceed 90% of the fair market value of the asset so financed and that the maximum aggregate amount of all Debt permitted under this clause (e) shall not at any time exceed $1,000,000; (f Debt incurred by the Company or any of its Subsidiaries in connection with the Grafalloy Transaction in an amount not to exceed $7,500,000 (which may be borrowed pursuant to the Senior Credit Facilities); (g other unsecured Debt of the Company and its Subsidiaries in an aggregate amount at any time outstanding not to exceed $1,000,000; (h other Debt the Net Cash Proceeds of which are applied in accordance with Section 2.06 to prepay all amounts owing under the Notes; and (i) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging: (i) interest rate risk with respect to any floating rate Debt that is permitted by the terms of this Agreement to be outstanding; (ii) exchange rate risk with respect to any agreement or Indebtedness of such Person payable in a currency other than U.S. dollars; or (iii) commodities risk relating to commodities agreements, entered into in the ordinary course of business, for the purchase of raw material used by the Company and its Subsidiaries. Section 6.9. Restricted Payments; Voluntary Prepayments. (a The Company will not declare or make any Restricted Payment other than Restricted Payments contemplated in connection with the Recapitalization; provided, however, the foregoing will not prohibit the purchase, redemption, retirement or acquisition of any equity securities of the Company or any of its Subsidiaries from any officer, director or employee (whether current or former) of the Company or any of its Subsidiaries pursuant to any subscription agreement, incentive plan, employment agreement, stockholders agreement or similar agreement; provided, however, the aggregate amount paid shall not exceed (i) $1,000,000 in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years subject to a maximum (without giving effect to clause (ii)) of $2,000,000 in any fiscal year, plus (ii) the aggregate cash proceeds received by the Company from any issuance or reissuance of any equity securities of the Company or any of its Subsidiaries to any officer, director or employee of the Company or any of its Subsidiaries. (b The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, optionally redeem, retire, purchase, acquire, defease or otherwise make any payment, other than required interest payments, in respect of any Debt which is subordinated to or pari passu with the Notes, other than payments in respect of Debt owing to the Company or a Subsidiary. Section 6.10. Investments. The Company will not, and will not permit any of its Subsidiaries to, make or acquire any Investment in any Person other than (i) Investments in existence on the date hereof and identified on Schedule 6.10; (ii) Investments in Cash Equivalents; (iii) Investments made after the date hereof in Persons which are direct or indirect Subsidiaries immediately after such Investment is made; (iv) Investments in the form of loans to officers, directors and employees of the Company and its Subsidiaries for the sole purpose of purchasing common stock of the Company (or purchases of such loans made by others) in an aggregate amount at any time outstanding not to exceed $1,000,000; (v) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 6.18 hereof; (vi) any acquisition of assets solely in exchange for the issuance of Common Stock of the Company and (vii) the Grafalloy Transaction, provided, such Investment does not exceed an aggregate fair market value of $7,500,000. Without limiting the generality of the foregoing, the Company will not make, or permit any of its Subsidiaries to make, any Business Acquisition other than (i) the Grafalloy Transaction and (ii) any Business Acquisition with respect to which the consideration paid by the Company consists solely of Common Stock. Section 6.11. Negative Pledge. The Company will not create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: (a the Liens identified on Schedule 6.11; (b other Liens approved by the Majority Holders securing Debt permitted by Section 6.08; (c Liens securing the Senior Credit Facilities; (d Liens securing Debt permitted by Sections 6.08(e) and 6.08(i); and (e Liens arising in the ordinary course of its business which (i) do not secure Debt, (ii) do not secure any obligation in an amount exceeding $1,000,000 and (iii) do not in the aggregate materially detract from the value of the assets of the Company and its Subsidiaries, taken as a whole, or materially impair the use thereof in the operation of its business. Section 6.12. Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, directly or indirectly, pay any funds to or for the account of, make any investment (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Debt, or otherwise) in, lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with any joint enterprise or other joint arrangement with, any Affiliate, except on terms to the Company or such Subsidiary no less favorable than terms that could be obtained by the Company or such Subsidiary from a Person that is not an Affiliate, as determined, in the case of any transaction with a value of $1,000,000 or more, in good faith by the Board of Directors of the Company; provided, that no determination of the Board of Directors shall be required with respect to any of the following: (i) transactions entered into in the ordinary course of business; (ii) transactions entered into in connection with the execution or performance of the Company's obligations under the Management Services Agreement; (iii) any transaction among True Temper Funding, Inc. or any of its Affiliates on the one hand and the Company on the other hand; and (iv) the Grafalloy Transaction. Section 6.13. Consolidations, Mergers and Sales of Assets; Ownership of Subsidiaries. (a Neither the Company nor any of its Subsidiaries will consolidate or merge with or into any other Person; provided, that (i) any wholly-owned Subsidiary of the Company may merge or consolidate with or into any other wholly-owned Subsidiary and (ii) the Company or any Subsidiary may merge with an Affiliate for the sole purpose of reincorporating in a new jurisdiction. The Company will not, and will not permit its Subsidiaries to, sell, lease or otherwise transfer, directly or indirectly, any substantial part of the assets of the Company and its Subsidiaries, taken as a whole, to any other Person. (b The Company will at all times continue to own, directly or indirectly, 100% of the capital stock of each Person which is a wholly-owned Subsidiary of the Company on the date hereof. Section 6.14. Use of Proceeds. The proceeds from the issuance and sale of the Notes by the Company pursuant to this Agreement shall be used to fund the Recapitalization and to pay related fees and expenses. Section 6.15. Restrictions on Certain Amendments. The Company will not amend or waive, or suffer to be amended or waived, any Corporate Document or any Material Recapitalization Document from the respective forms thereof delivered to the Purchaser pursuant to Section 5.01 in a way which has a material adverse effect on the Holders or the Purchaser without the prior written consent of the Purchaser. Section 6.16. Limitation on Sales of Assets and Subsidiary Stock. The Company shall not, and shall not permit any of its Subsidiaries to, enter into any agreement with respect to or consummate any Asset Sale, unless (a) at least 75% of the consideration received by the Company or such Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, that any securities sold for cash within 30 days of the consummation of such Asset Sale shall be considered cash for purposes hereof and (y) the consideration received by the Company is at least equal to the fair market value of the assets or property sold, transferred or otherwise disposed of (as determined in good faith by the Board of Directors of the Company) and the Net Cash Proceeds thereof are applied in accordance with Section 2.06(c). Section 6.17. Sale and Leaseback Transactions. The Company shall not, and shall not permit any of its Subsidiaries to, enter into any sale and leaseback transaction. Section 6.18. Assumed Debt. At all times during the 45 days following the Issuance Date, the Company shall have unused revolving commitments available for drawing under the Senior Credit Facilities and/or letters of credit under the Senior Credit Facilities in a principal amount equal to the outstanding principal amount of all outstanding Debt set forth on Schedule 6.08 with respect to which any default or event of default exists on the Issuance Date. If any such default or event of default with respect to any such outstanding Debt is not cured or waived on or prior to the date occurring 45 days after the Issuance Date, the Company shall pay or cause to be paid the principal amount of such Debt outstanding on such 45th day. Section 6.19. Business Activities. The Company will not, and will not permit any Subsidiary to, engage in any business other than a Permitted Business, except to such extent as would not be material to the Company and its Subsidiaries taken as a whole. ARTICLE 7. EVENTS OF DEFAULT Section 7.1. Events of Default Defined; Acceleration of Maturity; Waiver of Default. In case one or more of the following (each, an "Event of Default"), whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body, shall have occurred and be continuing: (a default in the payment of all or any part of the principal or premium, if any, on any of the Notes as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or (b [Reserved]; or (c failure on the part of the Company for 30 days after written notice from a Holder to observe or perform any of the covenants contained in Sections 6.07 through 6.19 of this Agreement; or (d failure on the part of the Company to observe or perform any other of the covenants or agreements contained in the Financing Documents, if such failure shall continue for a period of 30 days after the date on which written notice thereof shall have been given to the Company by a Holder; or (e the Company or any of its Significant Subsidiaries shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect in any jurisdiction or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or (f an involuntary case or other proceeding shall be commenced against the Company or any of its Significant Subsidiaries seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 days; or an order for relief shall be entered against the Company or any of its Significant Subsidiaries under the bankruptcy laws as now or hereafter in effect in any jurisdiction; or (g there shall be a default in respect of any Debt of the Company or any of its Significant Subsidiaries (other than such defaults existing with respect to the Debt set forth on Schedule 3.04 during the period ending on the date that is 45 days after the Issuance Date) in an aggregate principal amount in excess of $1,000,000 whether such Debt now exists or shall hereafter be created (excluding the Notes) if such default results in acceleration of the maturity of such Debt; or the Company or any of its Subsidiaries shall fail to pay at maturity any such Debt whether such Debt now exists or shall hereafter be created; or (h a final judgment for the payment of money which exceeds $1,000,000 shall be rendered against the Company or any of its Subsidiaries by a court of competent jurisdiction and shall remain undischarged for a period (during which execution shall not be effectively stayed) of 60 days after such judgment becomes final; or (i any representation, warranty, certification or statement made or deemed made by the Company or any of its Subsidiaries in any Financing Document or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with any Financing Document shall prove to have been untrue in any material respect when made or deemed made; or (j a Change of Control has occurred; or (k any of the Financing Documents shall for any reason fail to constitute the valid and binding agreement of the Company; or (l any of the following events, to the extent that such events, singly or in the aggregate, could reasonably be expected to give rise to a liability of the Company, any Subsidiary or any ERISA Affiliate in excess of $1,000,000: (i) the Company, any Subsidiary or any ERISA Affiliate shall fail to pay when due any amount or amounts, which such entity shall have become liable to pay under Title IV of ERISA; (ii) notice of intent to terminate a Qualified Plan shall be filed under Title IV of ERISA by the administrator of any Plan, the Company, any Subsidiary, any ERISA Affiliate or any combination of the foregoing; (iii) the PBGC shall institute proceedings under Title IV of ERISA to terminate, impose liability (other than for premiums due under Section 4007 of ERISA and not in default) in respect of or cause a trustee to be appointed to administer, any Plan; (iv) a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Qualified Plan (other than the Formica Corporation Employee Retirement Plan) be terminated; or (v) the Company, any Subsidiary or any ERISA Affiliate shall incur a partial or complete withdrawal from a Multiemployer Plan; then, and in each and every such case (other than under clauses (e) and (f) with respect to the Company), unless the principal of all the Notes shall have already become due and payable, the Majority Holders (or, if at such time the Purchaser no longer hold at least 50% of the aggregate outstanding principal amount of the Notes, Holders of at least 33 1/3% of the aggregate outstanding principal amount of the Notes), by notice in writing to the Company and the agent bank under the Senior Credit Facilities, may declare the entire principal amount of the Notes together with accrued interest thereon to be immediately due and payable; provided that (a) for so long as the Senior Credit Facilities are in effect, such acceleration shall not become effective until the earlier of (i) five Business Days after the notice of acceleration is given to the Administrative Agent and (ii) the date on which the Debt under the Senior Credit Facilities is accelerated; and, (b)for as long as the Subordinated Notes are outstanding, such acceleration shall not become effective until the earlier of (i) five Business Days after the notice of acceleration is given to the holders of Subordinated Notes (or their representatives), and (ii) the date on which the Debt under the Subordinated Notes is accelerated. If an Event of Default specified in clauses (e) or (f) occurs, the principal of and accrued interest on the Notes will be immediately due and payable without any notice, declaration or other act on the part of the Holders. The Majority Holders may annul any such notice of acceleration or past Defaults (other than monetary Defaults not yet cured) by delivering a notice of annulment to the Company and the Administrative Agent. If an Event of Default shall occur and be continuing, the Purchaser shall have the right to appoint one (1) representative to serve as a member of the Company's Board of Directors; provided, however, that such right shall terminate if the Purchaser no longer holds at least 50% of the aggregate outstanding principal amount of the Notes. ARTICLE 8. LIMITATION ON TRANSFERS Section 8.1. Restrictions on Transfer. From and after the Issuance Date, none of the Notes shall be transferable except upon the conditions specified in Sections 8.02 and 8.03, which conditions are intended to ensure compliance with the provisions of the Securities Act in respect of the Transfer of any of such Notes or any interest therein. The Purchaser will cause any proposed transferee of any Notes (or any interest therein) held by it to agree to take and hold such Notes (or any interest therein) subject to the provisions and upon the conditions specified in this Section 8.01 and in Sections 8.02 and 8.03. Section 8.2. Restrictive Legends. (a Each Note issued to the Purchaser or to a subsequent transferee shall (unless otherwise permitted by the provisions of Section 8.02(b) or Section 8.03) include a legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE SECURITIES PURCHASE AGREEMENT DATED AS OF SEPTEMBER 30, 1998, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS SECURITY AT ITS PRINCIPAL EXECUTIVE OFFICE. (b Any Holders of Notes registered pursuant to the Securities Act and qualified under applicable state securities laws may exchange such Notes on transfer for new securities that shall not bear the legend set forth in paragraph (a) of this Section 8.02. Section 8.3. Notice of Proposed Transfers. (a Five Business Days prior to any proposed Transfer (other than Transfers of Notes (i) registered under the Securities Act, (ii) to an Affiliate of DLJSC or a general partnership in which DLJSC, or any of its Affiliates is one of the general partners or (iii) to be made in reliance on Rule 144A under the Securities Act) of any Notes, the holder thereof shall give written notice to the Company of such holder's intention to effect such Transfer, setting forth the manner and circumstances of the proposed Transfer, and shall be accompanied by (i) an opinion of counsel reasonably satisfactory to the Company addressed to the Company to the effect that the proposed Transfer of such Notes may be effected without registration under the Securities Act, (ii) such representation letters in form and substance reasonably satisfactory to the Company to ensure compliance with the provisions of the Securities Act and (iii) such letters in form and substance reasonably satisfactory to the Company from each such transferee stating such transferee's agreement to be bound by the terms of this Agreement. Such proposed Transfer may be effected only if the Company shall have received such notice of transfer, opinion of counsel, representation letters and other letters referred to in the immediately preceding sentence, whereupon the holder of such Notes shall be entitled to Transfer such Notes in accordance with the terms of the notice delivered by the holder to the Company. Each Note transferred as above provided shall bear the legend set forth in Section 8.02(a) except that such Note shall not bear such legend if the opinion of counsel referred to above is to the further effect that neither such legend nor the restrictions on Transfer in Sections 8.01 through 8.03 are required in order to ensure compliance with the provisions of the Securities Act. (b Five Business Days prior to any proposed Transfer of any Notes to be made in reliance on Rule 144A under the Securities Act ("Rule 144A"), the holder thereof shall give written notice to the Company of such holder's intention to effect such Transfer, setting forth the manner and circumstances of the proposed Transfer and certifying that such Transfer will be made (i) in full compliance with Rule 144A and (ii) to a transferee that (A) such holder reasonably believes to be a "qualified institutional buyer" within the meaning of Rule 144A and (B) is aware that such Transfer will be made in reliance on Rule 144A. Such proposed Transfer may be effected only if the Company shall have received such notice of transfer, whereupon the holder of such Notes shall be entitled to Transfer such Notes in accordance with the terms of the notice delivered by the holder to the Company. Each Note transferred as above provided shall bear the legend set forth in Section 8.02(a). ARTICLE 9. MISCELLANEOUS Section 9.1. Notices. All notices, demands and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party at its address set forth on the signature pages hereof, or such other address as such party may hereinafter specify for the purpose. Each such notice, demand or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified on the signature page hereof, or (ii) if given by overnight courier, addressed as aforesaid or by any other means, when delivered at the address specified in this Section. Section 9.2. No Waivers; Amendments. (a No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to any party at law or in equity or otherwise. (b Any provision of this Agreement may be amended, supplemented or waived if, but only if, such amendment, supplement or waiver is in writing and is signed by the Company and the Majority Holders; provided, that without the consent of each Holder of any Note affected thereby, an amendment, supplement or waiver may not (a) reduce the aggregate principal amount of Notes whose Holders must consent to an amendment, supplement or waiver, (b) reduce the rate or extend the time for payment of interest on any Note, (c) reduce the principal amount of or extend the stated maturity of any Note or (d) make any Note payable in money or property other than as stated in the Notes. In determining whether the Holders of the requisite principal amount of Notes have concurred in any direction, consent, or waiver as provided in this Agreement or in the Notes, Notes which are owned by the Company or any other obligor on or guarantor of the Notes, or, except for DLJSC and its Affiliates by any Person controlling, controlled by, or under common control with any of the foregoing, shall be disregarded and deemed not to be outstanding for the purpose of any such determination; and provided, further, that no such amendment, supplement or waiver which affects the rights of the Purchaser and its Affiliates otherwise than solely in their capacities as Holders of Notes shall be effective with respect to them without their prior written consent. Section 9.3. Indemnification. (a The Company (the "Indemnifying Party") agrees to indemnify and hold harmless the Purchaser, its Affiliates, and each Person, if any, who controls the Purchaser, or any of its Affiliates, within the meaning of the Securities Act or the Exchange Act (a "Controlling Person"), and the respective partners, agents, employees, officers and directors of the Purchaser, its Affiliates and any such Controlling Person (each an "Indemnified Party," and collectively, the "Indemnified Parties"), from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation and as incurred, reasonable costs of investigating, preparing or defending any such claim or action, whether or not such Indemnified Party is a party thereto) arising out of, or in connection with any activities contemplated by this Agreement or any other services rendered in connection herewith, including, but not limited to, losses, claims, damages, liabilities or expenses arising out of or based upon any untrue statement or any alleged untrue statement of a material fact or any omission or any alleged omission to state a material fact in any of the disclosure or offering or confidential information documents (the "Disclosure Documents") pertaining to any of the transactions or proposed transactions contemplated herein, including any eventual refinancing or resale of the Notes, provided, that the Indemnifying Party will not be responsible for any claims, liabilities, losses, damages or expenses that are determined by final judgment of a court of competent jurisdiction to result solely from such Indemnified Party's gross negligence, willful misconduct or bad faith. The Indemnifying Party also agrees that (i) no Purchaser shall have liability (except for breach of provisions of this Agreement) for claims, liabilities, damages, losses or expenses, including legal fees, incurred by the Indemnifying Party in connection with this Agreement, unless they are determined by final judgment of a court of competent jurisdiction to result from the Purchaser's gross negligence, willful misconduct or bad faith and (ii) no Purchaser shall in any event have any liability to the Company on any theory of liability for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, or in connection with, or as a result of this Agreement. (b If any action shall be brought against an Indemnified Party with respect to which indemnity may be sought against the Indemnifying Party under this Agreement, such Indemnified Party shall promptly notify the Indemnifying Party in writing and the Indemnifying Party shall, if requested by such Indemnified Party or if the Indemnifying Party desires to do so, assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party and payment of all reasonable fees and expenses. The failure to so notify the Indemnifying Party shall not affect any obligations the Indemnifying Party may have to such Indemnified Party under this Agreement or otherwise unless the Indemnifying Party is materially adversely affected by such failure. Such Indemnified Party shall have the right to employ separate counsel in such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless: (i) the Indemnifying Party has failed to assume the defense and employ counsel reasonably satisfactory to such Indemnified Party or (ii) the named parties to any such action (including any impleaded parties) include such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Party, in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Party, provided, however, that the Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the reasonable fees and expenses of more than one such firm of separate counsel, in addition to any local counsel, which counsel shall be designated by the Purchaser. The Indemnifying Party shall not be liable for any settlement of any such action effected without the written consent of the Indemnifying Party (which shall not be unreasonably withheld) and the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Party from and against any loss or liability by reasons of settlement of any action effected with the consent of the Indemnifying Party. In addition, the Indemnifying Party will not, without the prior written consent of the Purchaser, settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination includes an express unconditional release of the Purchaser and the other Indemnified Parties, reasonably satisfactory in form and substance to the Purchaser, from all liability arising out of such action, claim, suit or proceeding. (c If for any reason the foregoing indemnity is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying the Indemnified Party, the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of such claims, liabilities, losses, damages, or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Party on the one hand and by the Purchaser on the other from the transactions contemplated by this Agreement or (ii) if the allocation provided by clause (i) is not permitted under applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnifying Party on the one hand and the Purchaser on the other, but also the relative fault of the Indemnifying Party and the Purchaser as well as any other relevant equitable considerations. Notwithstanding the provisions of this Section 9.03, the aggregate contribution of all Indemnified Parties shall not exceed the amount of fees actually received by the Purchaser pursuant to this Agreement. It is hereby further agreed that the relative benefits to the Indemnifying Party on the one hand and the Purchaser on the other with respect to the transactions contemplated hereby shall be deemed to be in the same proportion as (i) the aggregate principal amount of Notes issued by the Company bears to (ii) the fees actually received by the Purchaser pursuant to this Agreement. The relative fault of the Indemnifying Party on the one hand and the Purchaser on the other with respect to the transactions contemplated hereby shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of material fact or the omission or alleged omission to state a material fact related to information supplied by the Indemnifying Party or by the Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No Indemnified Party shall have any liability to the Indemnifying Party or any other person in connection with the services rendered pursuant to the Commitment except for the liability for claims, liabilities, losses or damages finally determined by a court of competent jurisdiction to have resulted from action taken or omitted to be taken by such Indemnified Party in bad faith or to be due to such Indemnified Party's willful misconduct, or gross negligence. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (d The indemnification, contribution and expense reimbursement obligations set forth in this Section 9.03 (i) shall be in addition to any liability the Indemnifying Party may have to any Indemnified Party at common law or otherwise, (ii) shall survive the termination of this Agreement and the payment in full of the Notes and (iii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Purchaser or any other Indemnified Party. Section 9.4. Expenses. The Company agrees to pay all reasonable out-of-pocket costs, expenses and other payments in connection with the purchase and sale of the Notes as contemplated by this Agreement including without limitation (i) reasonable fees and disbursements of special counsel and any local counsel for the Purchaser incurred in connection with the preparation of this Agreement, (ii) all reasonable out-of-pocket expenses of the Purchaser, including reasonable fees and disbursements of counsel, in connection with any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (iii) if an Event of Default occurs, all reasonable out-of-pocket expenses incurred by the Purchaser and each Holder of Notes, including reasonable fees and disbursements of a single counsel (which counsel shall be selected by the Purchaser if the Purchaser is a Holder of Notes when such Event of Default occurs), in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. Section 9.5. Payment. The Company agrees that, so long as the Purchaser shall own any Notes purchased by it from the Company hereunder, the Company will make payments to the Purchaser of all amounts due thereon by wire transfer by 1:00 P.M. (New York City time) on the date of payment to such account as is specified beneath the Purchaser's name on the signature page hereof or to such other account or in such other similar manner as the Purchaser may designate to the Company in writing. Section 9.6. Confidentiality. The Purchaser shall not use confidential information obtained from the Company by virtue of the transactions contemplated by this Agreement or their other relationships with the Company in connection with the performance by the Purchaser of services for other companies, and the Purchaser shall not furnish any such information to other companies. The Purchaser has no obligation to use in connection with the transactions contemplated by this Agreement, or to furnish to the Company, confidential information obtained from other companies. Section 9.7. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Company, the Purchaser, the holders of Debt and under the Senior Credit Facilities and their respective successors and assigns; provided that the Company may not assign or otherwise transfer its rights or obligations under this Agreement to any other Person without the prior written consent of the Majority Holders. All provisions hereunder purporting to give rights to the Purchaser and its Affiliates, or to Holders are for the express benefit of such Persons. Section 9.8. Brokers. The Company represents and warrants that, except for DLJSC, it has not employed any broker, finder, financial advisor or investment banker who might be entitled to any brokerage, finder's or other fee or commission in connection with the Recapitalization or the sale of the Notes. Section 9.9. New York Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Section 9.10. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 9.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers, as of the date first above written. TRUE TEMPER CORPORATION By:/s/ Name: Title: Address for Notices: True Temper Corporation 8275 Tournament Drive, Suite 200 Memphis, TN 38125 Attention: Chief Financial Officer with a copy to: Kirkland & Ellis 153 East 53rd Street New York, NY 10022 Attention: Frederick Tanne PURCHASER: Commitment: $25,000,000 [Initial Accreted Value] EMHART, INC. By:/s/ Name: Title: Address for Notices: C/O The Black & Decker Corporation 701 East Joppa Road Towson, MD 21286 Attention: Chief Financial Officer Telecopy: (410) 716-3318 with a copy to: Miles & Stockbridge P.C. 10 Light Street Baltimore, MD 21202 Attention: Glenn C. Campbell Wiring Instructions: ABA# A/C# for further credit to. A/C# Attention: SCHEDULE 3.04 CONTRAVENTION NONE SCHEDULE 3.07 ENVIRONMENTAL MATTERS All matters set forth in the reports entitled "Environmental Review, True Temper Sports, Inc., 8706 Deerfield Drive, Olive Branch, Mississippi 38654" and "Environmental Review, True Temper Sports, Highway 25 South, Amory, Mississippi 38821" prepared by Strata Environmental, copies of which have been provided to Purchaser. SCHEDULE 3.09 SUBSIDIARIES True Temper Sports, Inc., a Delaware corporation SCHEDULE 3.12 CAPITALIZATION OF HOLDINGS SEE ATTACHED SCHEDULE 6.08 DEBT NONE SCHEDULE 6.10 INVESTMENTS NONE SCHEDULE 6.11 LIENS Liens described under Section 7.2.3 to the Senior Credit Facilities. [FORM OF NOTE] THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, AS SUCH TERM IS DEFINED IN SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. UPON INQUIRY MADE BY ANY HOLDER HEREOF, ADDRESSED TO TRUE TEMPER CORPORATION, 8275 TOURNAMENT DRIVE, SUITE 200, MEMPHIS, TENNESSEE 38125, ATTENTION: CHIEF FINANCIAL OFFICER, TRUE TEMPER CORPORATION WILL PROVIDE A STATEMENT SETTING FORTH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY WITH RESPECT TO THE NOTE HELD BY SUCH HOLDER. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE SECURITIES PURCHASE AGREEMENT DATED AS OF SEPTEMBER 30, 1998, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS SECURITY AT ITS PRINCIPAL EXECUTIVE OFFICE No. __ $___________ TRUE TEMPER CORPORATION Senior Increasing Rate Discount Note TRUE TEMPER CORPORATION, a Delaware corporation (together with its successors, the "Company"), for value received hereby promises to pay to Emhart, Inc. and registered assigns (the "Holder") the initial principal sum of _______________________________ plus the amounts by which the principal has been increased in accordance with Section 2.05 of the Securities Purchase Agreement (as defined) by wire transfer of immediately available funds to the Holder's account at such bank in the United States as may be specified in writing by the Holder to the Company, on the Maturity Date in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to accrete interest on the unpaid principal amount hereof on the dates and at the rate or rates provided for in the Securities Purchase Agreement. Reference is made to the Securities Purchase Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. This Note is one of a duly authorized issue of Senior Increasing Rate Discount Notes of the Company (the "Notes") referred to in the Securities Purchase Agreement, dated as of September 30, 1998, among the Company and the Purchaser named therein (as the same may be amended from time to time in accordance with its terms, the "Securities Purchase Agreement"). The Notes are transferable and assignable to one or more purchasers (in minimum denominations of $5,000,000 or larger multiples of $1,000,000), in accordance with the limitations set forth in the Securities Purchase Agreement. The Company agrees to issue from time to time replacement Notes in the form hereof to facilitate such transfers and assignments. The Company shall keep at its principal office a register (the "Register") in which shall be entered the names and addresses of the registered holders of the Notes and particulars of the respective Notes held by them and of all transfers of such Notes. References to the "Holder" or "Holders" shall mean the Person listed in the Register as the payee of any Note. The ownership of the Notes shall be proven by the Register. This Note shall be deemed to be a contract under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. The parties hereto, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein, and assent to extensions of the time of payment, or forbearance or other indulgence without notice. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: TRUE TEMPER CORPORATION By: Name: Title: EX-99 7 EXHIBIT 99(B) WARRANT AGREEMENT among TRUE TEMPER CORPORATION and EMHART, INC. ----------------------- Dated as of September 30, 1998 TABLE OF CONTENTS Page SECTION 1. Warrant Certificates.......................................-1- SECTION 2. Execution of Warrant Certificates..........................-2- SECTION 3. Registration...............................................-2- SECTION 4. Registration of Transfers and Exchanges....................-2- SECTION 5. Terms of Warrants; Exercise of Warrants....................-3- SECTION 6. Payment of Taxes...........................................-4- SECTION 7. Mutilated or Missing Warrant Certificates..................-5- SECTION 8. Reservation of Warrant Shares..............................-5- SECTION 9. Obtaining Stock Exchange Listings..........................-5- SECTION 10. Adjustment of Number of Warrant Shares Issuable............-5- SECTION 11. No Dilution or Impairment; Capital and Ownership Structure.................................................-14- SECTION 12. Fractional Interests......................................-14- SECTION 13. Notices to Warrant Holders................................-14- SECTION 14. Tag Along and Drag-Along Rights...........................-16- SECTION 15. Notices...................................................-16- SECTION 16. Supplements and Amendments................................-16- SECTION 17. Successors................................................-16- SECTION 18. Termination...............................................-16- SECTION 19. New York Law; Submission to Jurisdiction; Waiver of Jury Trial.....................................................-16- SECTION 20. Benefits of This Agreement................................-17- SECTION 21. Counterparts..............................................-17- WARRANT AGREEMENT WARRANT AGREEMENT dated as of September 30, 1998 among TRUE TEMPER CORPORATION, a Delaware corporation ("Holdings"), and the purchaser set forth on the signature pages hereto (the "Purchaser"). Capitalized terms used herein and not defined herein shall have the meanings specified in the Securities Purchase Agreement described below. RECITALS WHEREAS, Holdings and the Purchaser have entered into a Securities Purchase Agreement, dated as of September 30, 1998 (as amended, supplemented or otherwise modified, the "Securities Purchase Agreement"), pursuant to which the Purchaser will purchase up to $25 million in initial accreted value of the Senior Increasing Rate Discount Notes (the "Notes") of Holdings; WHEREAS, Holdings has agreed that if the Notes remain outstanding on the first anniversary of the Closing Date (the "First Anniversary Date"), holders of the Notes will be entitled to receive (on the terms and conditions, and pursuant to the schedule, set forth in the Escrow Agreement referred to below) warrants, as hereinafter described (the "Warrants"), to purchase up to 2.1% of the fully-diluted common stock, $.01 par value per share, of Holdings (the Common Stock or any security substituted for the Common Stock issuable on exercise of the Warrants being referred to herein as the "Warrant Shares"), at an initial exercise price equal to $.01 per share (the "Exercise Price"); WHEREAS, Holdings has agreed that the holders of Notes shall be entitled to receive, on the First Anniversary Date, and again at the end of each of the eight subsequent periods following the First Anniversary Date set forth in the Escrow Agreement, Warrants representing percentages set forth in the Escrow Agreement of the total Warrants placed in escrow, such that on the 721st day following the Closing Date 100% of all Warrants previously held in escrow shall have been released; and WHEREAS, Holdings has agreed to execute the Warrants and deliver the Warrants to an escrow agent on the date hereof and such escrow agent has agreed to deliver the Warrants to the holders of Notes in accordance with an Escrow Agreement dated September 30, 1998 (as amended, supplemented or otherwise modified, the "Escrow Agreement") among Holdings, the Purchaser and Snoga, Inc., as escrow agent. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows: AGREEMENT SECTION 1. Warrant Certificates. The certificates evidencing the Warrants (the "Warrant Certificates") to be delivered pursuant to this Agreement shall be in registered form only and shall be substantially in the form set forth in Exhibit A attached hereto. SECTION 2. Execution of Warrant Certificates. Warrant Certificates shall be signed on behalf of Holdings by its President, any Vice-President or its Chief Financial Officer (each an "Officer"). Each such signature upon the Warrant Certificates may be in the form of a facsimile signature of the present or any future Officer and may be imprinted or otherwise reproduced on the Warrant Certificates and for that purpose Holdings may adopt and use the facsimile signature of any person who shall have been an Officer, notwithstanding the fact that at the time the Warrant Certificates shall be delivered or disposed of he shall have ceased to hold such office. In case any Officer of Holdings who shall have signed any of the Warrant Certificates shall cease to be such Officer before the Warrant Certificates so signed shall have been delivered or disposed of by Holdings, such Warrant Certificates nevertheless may be delivered or disposed of as though such person had not ceased to be such Officer of Holdings. SECTION 3. Registration. Holdings shall number and register each Warrant Certificate in a register as such Warrant Certificate is issued. Holdings may deem and treat the registered holder(s) of the Warrant Certificates as the absolute owner(s) thereof (notwithstanding any notation of ownership or other writing thereon made by anyone), for all purposes, and shall not be affected by any notice to the contrary. SECTION 4. Registration of Transfers and Exchanges. Holdings shall from time to time register the transfer of any outstanding Warrant Certificates in a Warrant register to be maintained by Holdings upon surrender thereof accompanied by a written instrument or instruments of transfer in form satisfactory to Holdings, duly executed by the registered holder or holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney. Upon any such registration of transfer, a new Warrant Certificate shall be issued to the transferee(s) and the surrendered Warrant Certificate shall be canceled and disposed of by Holdings. The Warrant holders agree that prior to any proposed transfer of the Warrant or of the Warrant Shares, if such transfer is not made pursuant to an effective Registration Statement under the Act or Holdings does not receive an opinion of counsel, reasonably satisfactory in form and substance to Holdings, that such transfer is exempt from registration requirements under the Securities Act, the Warrant holder will, if requested by Holdings, deliver to Holdings: (1) an investment covenant reasonably satisfactory to Holdings signed by the proposed transferee; (2) an agreement by such transferee to the placement of the restrictive investment legend set forth below on the Warrant or the Warrant Shares; (3) an agreement by such transferee that Holdings may place a notation in the stock books of Holdings or a "stop transfer order" with any transfer agent or registrar with respect to the Warrant Shares; and (4) an agreement by such transferee to be bound by the provisions of this Section 4 relating to the transfer of such Warrant or Warrant Shares. The Warrant holders agree that each certificate representing Warrant Shares will bear (i) any legend that the Stockholders Agreement may require and (ii) the following legend: "THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS HOLDINGS HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HOLDINGS THAT SUCH REGISTRATION IS NOT REQUIRED." Warrant Certificates may be exchanged at the option of the holder(s) thereof, when surrendered to Holdings at its office for another Warrant Certificate or other Warrant Certificates of like tenor and representing in the aggregate a like number of Warrants. Warrant Certificates surrendered for exchange shall be canceled and disposed of by Holdings. SECTION 5. Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, each Warrant holder shall have the right, which may be exercised commencing at the opening of business on the Exercise Date (as defined below) and until 5:00 p.m. New York City time on the seventh anniversary of the Exercise Date, to receive from Holdings the number of fully paid and nonassessable Warrant Shares which the holder may at the time be entitled to receive on exercise of such Warrant and payment of the Exercise Price for such Warrant Shares. For purposes hereof, "Exercise Date" means, for any Warrant, the date upon which such Warrant was released from escrow pursuant to the terms of the Escrow Agreement. A Warrant may be exercised upon surrender to Holdings at its office designated for such purpose (the address of which is set forth in Section 15 hereof) of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc. (the "NASD"), and upon payment to Holdings of the Exercise Price. Payment of the Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of Holdings, (ii) through the surrender of debt of the Company (including, without limitation, the Notes outstanding under the Securities Purchase Agreement) having a principal amount equal to the aggregate Exercise Price to be paid (the Company shall pay the accrued interest or dividends on such surrendered debt in cash at the time of surrender notwithstanding the stated terms thereof), (iii) by tendering Warrants having a fair market value equal to the Exercise Price or (iv) with any combination of (i), (ii) or (iii). For purpose of clause (iii) above, the fair market value of the Warrants shall be determined as follows: (A) to the extent the Common Stock is publicly traded and listed on the Nasdaq Stock Market, Inc. or a national securities exchange, the fair market value shall be equal to the difference between (1) the Quoted Price of the Common Stock on the date of exercise and (2) the Exercise Price; or (B) to the extent the Common Stock is not publicly traded, or otherwise is not listed on a national securities exchange, the fair market value shall be equal to the value per share as determined in good faith by the Board of Directors of Holdings pursuant to Section 10(n). Subject to the provisions of Section 6 hereof, upon such surrender of Warrants and payment of the Exercise Price, Holdings shall issue and cause to be delivered with all reasonable dispatch, but in no event later than 5 Business Days after such surrender and payment, to or upon the written order of the holder and in such name or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants as provided in Section 10; provided, however, that if any consolidation, merger or lease or sale of assets is proposed to be effected by Holdings as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of Holdings shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, Holdings shall, as soon as possible, but in any event not later than 2 Business Days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence as provided in Section 10. Together with the delivery of such Warrant Shares, Holdings shall deliver a certificate of its chief accounting or chief financial officer setting forth and certifying the calculations made by Holdings pursuant to Section 10 hereof to determine the number of Warrant Shares issuable upon the exercise of the surrendered Warrant or Warrants. Such certificate or certificates representing Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued and delivered pursuant to the provisions of this Section and of Section 2 hereof. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled and disposed of by Holdings. Holdings shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the holders during normal business hours at its office. SECTION 6. Payment of Taxes. Holdings shall pay all documentary stamp taxes attributable to the initial issuance of Warrant Shares upon the exercise of Warrants; provided, however, that Holdings shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue of any Warrant Certificates or any certificates for Warrant Shares in a name other than that of the registered holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and Holdings shall not be required to issue or deliver such Warrant Certificates unless or until the person or persons requesting the issuance thereof shall have paid to Holdings the amount of such tax or shall have established to the satisfaction of Holdings that such tax has been paid. SECTION 7. Mutilated or Missing Warrant Certificates. In case any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, Holdings may in its discretion issue, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for the Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor and representing an equivalent number of Warrants, but only upon receipt of evidence reasonably satisfactory to Holdings of such loss, theft or destruction of such Warrant Certificate and indemnity, if requested, also reasonably satisfactory to it. Applicants for such substitute Warrant Certificates shall also comply with such other reasonable regulations and pay such other reasonable charges as Holdings may prescribe. SECTION 8. Reservation of Warrant Shares. Holdings shall at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued Common Stock or its authorized and issued Common Stock held in its treasury, for the purpose of enabling it to satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the maximum number of shares of Common Stock which may then be deliverable upon the exercise of all outstanding Warrants. Holdings or, if appointed, the transfer agent for the Common Stock (the "Transfer Agent") and every subsequent transfer agent for any shares of Holdings' capital stock issuable upon the exercise of any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be required for such purpose. Holdings will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent transfer agent for any shares of Holdings' capital stock issuable upon the exercise of the rights of purchase represented by the Warrants. Holdings will furnish such Transfer Agent a copy of all notices of adjustments and certificates related thereto, transmitted to each holder pursuant to Section 13 hereof. Before taking any action which would cause an adjustment pursuant to Section 10 or 11 hereof in the Exercise Rate, Holdings will take any corporate action which may, in the opinion of its counsel, be necessary in order that Holdings may validly and legally issue fully paid and nonassessable Warrant Shares at the Exercise Rate as so adjusted. Holdings covenants that all Warrant Shares which may be issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issue thereof. SECTION 9. Obtaining Stock Exchange Listings. Holdings will from time to time take all action which may be necessary so that the Warrant Shares, immediately upon their issuance upon the exercise of Warrants, will be listed on the principal securities exchanges and markets within the United States of America, if any, on which other shares of Common Stock are then listed. SECTION 10. Adjustment of Number of Warrant Shares Issuable. The number of Warrant Shares issuable upon the exercise of each Warrant (the "Exercise Rate") is subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 10 and under the circumstances described in Section 11. For purposes of this Section 10, "Common Stock" means shares now or hereafter authorized of any class of common stock of Holdings and any other stock of Holdings, however designated, that has the right (subject to any prior rights of any class or series of preferred stock) to participate in any distribution of the assets or earnings of Holdings without limit as to per share amount. (a) Adjustment for Change in Capital Stock. If Holdings: (1) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (2) subdivides its outstanding shares of Common Stock into a greater number of shares; (3) combines its outstanding shares of Common Stock into a smaller number of shares; (4) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (5) issues by reclassification of its Common Stock any shares of its capital stock; then the Exercise Rate in effect immediately prior to such action shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive the aggregate number and kind of shares of capital stock of Holdings which he would have owned immediately following such action if such Warrant had been exercised immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a holder of a Warrant upon exercise of it may receive shares of two or more classes of capital stock of Holdings, Holdings shall determine in good faith the allocation of the adjusted Exercise Rate between the classes of capital stock. After such allocation, the exercise privilege and the Exercise Rate of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Section. Such adjustment shall be made successively whenever any event listed above shall occur. (b) Adjustment for Rights Issue. If Holdings issues any rights, options or warrants entitling any person to subscribe for Common Stock or securities convertible into, or exchangeable or exercisable for, Common Stock at an offering price (or with an initial conversion, exchange or exercise price plus such offering price) that is less than the Current Market Price per share of Common Stock on the record date for such issuance (all of the foregoing, "Rights"), the Exercise Rate shall be adjusted in accordance with the formula: O+N E'= E*-------- N*P O+---- M where: E' = the adjusted Exercise Rate. E = the current Exercise Rate. O = the number of shares of Common Stock outstanding on the record date (assuming the conversion, exercise or exchange of all Rights and convertible securities into shares of Common Stock). N = the number of additional shares of Common Stock issuable pursuant to the Rights offered. P = the offering price plus initial conversion, exchange or exercise price per share of the additional shares of Common Stock issuable pursuant to the Rights. M = the Current Market Price per share of Common Stock on the record date. The adjustment shall be made successively whenever any such Rights are issued and shall become effective immediately after the record date for the determination of stockholders entitled to receive the Rights in the case of Rights to be issued to the holders of Common Stock. To the extent that shares of Common Stock are not delivered after the expiration of such Rights, the Exercise Rate shall be readjusted to the Exercise Rate which would otherwise be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. In the event that such rights or warrants are not so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate which would then be in effect if such date fixed for determination of stockholders entitled to receive such rights or warrants had not been so fixed. This subsection (b) does not apply to: (1) Rights issued to persons in a bona fide public offering pursuant to a firm commitment underwriting, (2) Rights issued to persons who are not affiliates of Holdings in a bona fide private placement through a placement agent that is a member firm of the NASD (except to the extent that any discount from the Current Market Price attributable to restrictions on transferability of the Rights, as determined in good faith by the Board of Directors pursuant to Section 10(n) and described in a Board resolution, shall exceed 5%), or (3) Rights issued to Holdings' employees under bona fide employee benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law, if such Rights would otherwise be covered by this subsection (b) (but only to the extent that the aggregate number of Rights excluded hereby and issued after the date of this Agreement shall not exceed the right to subscribe for more than [5]% of the Common Stock then outstanding). (c) Adjustment for Other Distributions. If Holdings distributes to all holders of its Common Stock any of its assets (including but not limited to cash), debt securities, preferred stock or any rights or warrants to purchase any such securities, the Exercise Rate shall be adjusted in accordance with the formula: M E'=E*------ M-F where: E' = the adjusted Exercise Rate. E = the current Exercise Rate. M = the Current Market Price per share of Common Stock on the record date. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of Common Stock. The Board of Directors shall determine the fair market value pursuant to Section 10(n) based upon the trading prices of publicly traded securities where applicable. The adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. This subsection does not apply to Rights referred to in subsection (b) of this Section 10. (d) Adjustment for Common Stock Issue. If Holdings issues shares of Common Stock for a consideration per share less than the Current Market Price per share on the date Holdings fixes the offering price of such additional shares, the Exercise Rate shall be adjusted in accordance with the formula: O+N E'= E*-------- N*P O+---- M where: E' = the adjusted Exercise Rate. E = the then current Exercise Rate. O = the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares (assuming the conversion, exercise or exchange of all Rights and convertible securities into shares of Common Stock). N = the number of additional shares of Common Stock issued. P = the aggregate consideration received per share for the issuance of such additional shares of Common Stock. M = the Current Market Price per share of Common Stock on the date of issuance of such additional shares of Common Stock. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. This subsection (d) does not apply to: (1) any of the transactions described in subsections (a), (b) and (c) of this Section 10, (2) the exercise of Warrants, or the conversion or exchange of other securities convertible or exchangeable for Common Stock, (3) Common Stock issued upon the exercise of rights or warrants issued to the holders of Common Stock, (4) Common Stock issued to stockholders of any person that is not affiliated with Holdings and that merges into Holdings in proportion to their stock holdings of such person immediately prior to such merger, upon such merger, (5) Common Stock issued to persons in a bona fide public offering pursuant to a firm commitment underwriting, or (6) Common Stock issued to persons who are not affiliates of Holdings in a bona fide private placement through a placement agent that is a member firm of the NASD (except to the extent that any discount from the Current Market Price attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors pursuant to Section 10(n) and described in a Board resolution, shall exceed 5%). (e) Adjustment for Convertible Securities Issue. If Holdings issues any securities convertible into or exchangeable for Common Stock (other than securities issued in transactions described in subsections (b) and (c) of this Section 10) for a consideration per share of Common Stock initially deliverable upon conversion or exchange of such securities less than the Current Market Price per share on the date of issuance of such securities, the Exercise Rate shall be adjusted in accordance with the formula: O+N E'= E*-------- N*P O+---- M where: E' = the adjusted Exercise Rate. E = the then current Exercise Rate. O = the number of shares of Common Stock outstanding immediately prior to the issuance of such securities (assuming the conversion, exercise or exchange of all Rights and convertible securities into shares of Common Stock). N = the maximum number of shares of Common Stock deliverable upon conversion of or in exchange for such securities at the initial conversion or exchange rate. P = the aggregate consideration received for the issuance of each such security, plus any additional consideration received upon the exchange or conversion of such security. M = the Current Market Price per share on the date of issuance of such securities. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. If all of the Common Stock deliverable upon conversion or exchange of such securities has not been issued when such securities are no longer outstanding, then the Exercise Rate shall promptly be readjusted to the Exercise Rate which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of Common Stock issued upon conversion or exchange of such securities. This subsection (e) does not apply to: (1) convertible securities issued to stockholders of any person that is not affiliated with Holdings and that merges into Holdings, or with a subsidiary of Holdings, in proportion to their stock holdings of such person immediately prior to such merger, upon such merger, (2) convertible securities issued to persons in a bona fide public offering pursuant to a firm commitment underwriting, (3) convertible securities issued to persons who are not affiliates of Holdings in a bona fide private placement through a placement agent which is a member firm of the NASD (except to the extent that any discount from the Current Market Price attributable to restrictions on transferability of Common Stock issuable upon conversion, as determined in good faith by the Board of Directors pursuant to Section 10(n) and described in a Board resolution, shall exceed 5%), or (4) convertible securities that are otherwise provided for by subsections (a), (b), (c) or (d) of this Section 10. (f) Current Market Price. The current market price per share of Common Stock (the "Current Market Price") on any date is the average of the Quoted Prices of the Common Stock for 30 consecutive trading days commencing 45 trading days before the date in question. The "Quoted Price" of the Common Stock is the last reported sales price of the Common Stock as reported by Nasdaq Stock Market, or if the Common Stock is listed on a securities exchange, the last reported sales price of the Common Stock on such exchange which shall be for consolidated trading if applicable to such exchange, or if neither so reported or listed, the last reported bid price of the Common Stock. In the absence of one or more such quotations, the Board of Directors of Holdings shall determine the Current Market Price pursuant to Section 10(n) in good faith. (g) Consideration Received. For purposes of any computation respecting consideration received pursuant to subsections (d) and (e) of this Section 10, the following shall apply: (1) in the case of the issuance of shares of Common Stock for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or other expenses incurred by Holdings for any underwriting of the issue or otherwise in connection therewith; (2) in the case of the issuance of shares of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Board of Directors pursuant to Section 10(n), based upon the trading prices of publicly traded securities where appropriate (irrespective of the accounting treatment thereof), and described in a resolution of the Board of Directors of Holdings; and (3) in the case of the issuance of securities convertible into or exchangeable for shares, the aggregate consideration received therefor shall be deemed to be the consideration received by Holdings for the issuance of such securities plus the additional minimum consideration, if any, to be received by Holdings upon the conversion or exchange thereof (the consideration in each case to be determined in the same manner as provided in clauses (1) and (2) of this subsection). (h) When De Minimis Adjustment May Be Deferred. No adjustment in the Exercise Rate need be made unless the adjustment would require an increase or decrease of at least 1% in the Exercise Rate. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section shall be made to the nearest 1/100th of a share. (i) When No Adjustment Required. No adjustment need be made for rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the Common Stock. To the extent the Warrants become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash. (j) Notice of Adjustment. Whenever the Exercise Rate is adjusted, Holdings shall provide the notices required by Section 15 hereof. (k) Voluntary Increase. Holdings from time to time may increase the Exercise Rate by any amount for any period of time if the period is at least 20 days and if the increase is irrevocable during the period. Whenever the Exercise Rate is increased, Holdings shall mail to Warrant holders a notice of the increase. Holdings shall mail the notice at least 15 days before the date the increased Exercise Rate takes effect. The notice shall state the increased Exercise Rate and the period it will be in effect. An increase of the Exercise Rate does not change or adjust the Exercise Rate otherwise in effect for purposes of subsections (a), (b), (c), (d) and (e) of this Section 10. (l) Notice of Certain Transactions. If: (1) Holdings takes any action that would require an adjustment in the Exercise Rate pursuant to subsections (a), (b), (c), (d) or (e) of this Section 10; (2) Holdings takes any action that would require a supplemental Warrant Agreement pursuant to subsection (m) of this Section 10; or (3) there is a liquidation or dissolution of Holdings, then Holdings shall mail to Warrant holders a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, transfer, lease, liquidation or dissolution. Holdings shall mail the notice at least 15 days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. (m) Reorganization of Company. If Holdings consolidates or merges with or into, or transfers or leases all or substantially all its assets to, any person, upon consummation of such transaction the Warrants shall automatically become exercisable for the kind and amount of securities, cash or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, transfer or lease if the holder had exercised the Warrant immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the corporation formed by or surviving any such consolidation or merger if other than Holdings, or the person to which such sale or conveyance shall have been made, shall enter into a supplemental Warrant Agreement so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section. The successor company shall mail to Warrant holders a notice describing the supplemental Warrant Agreement. If the issuer of securities deliverable upon exercise of Warrants under the supplemental Warrant Agreement is an affiliate of the formed, surviving, transferee or lessee corporation, that issuer shall join in the supplemental Warrant Agreement. If this subsection (m) applies, subsections (a), (b), (c), (d) and (e) of this Section 10 do not apply. (n) Company Determination Not Final. Any determination that Holdings or its Board of Directors must make pursuant to this Agreement shall be made in good faith and shall be binding on the holders of Warrants, except as set forth herein. Holdings shall give each holder of Warrants written notice of any such determination by Holdings or its Board of Directors. If a majority of the holders of the Warrants do not agree with any such determination by Holdings or its Board of Directors, such holders may request, in a notice delivered to Holdings not later than 30 days after the date on which the holders received notice of such determination from Holdings, that such determination be made by an independent investment banking firm (or, if an investment banking firm is generally not qualified to render such a determination, an independent appraisal firm) of recognized national standing chosen by Holdings, which determination shall be final and binding on Holdings and the holders of Warrants, absent manifest error. All fees and expenses incurred in connection with any determination made by an independent investment banking firm or appraisal firm, as the case may be, shall be borne by Holdings, unless such determination is in agreement with the determination that was made by Holdings or its Board of Directors, in which case such fees and expenses shall be borne by the holders that requested such determination. (o) When Issuance or Payment May Be Deferred. In any case in which this Section 10 shall require that an adjustment in the Exercise Rate be made effective as of a record date for a specified event, Holdings may elect to defer until the occurrence of such event issuing to the holder of any Warrant exercised after such record date the Warrant Shares and other capital stock of Holdings, if any, issuable upon such exercise over and above the Warrant Shares and other capital stock of Holdings, if any, issuable upon such exercise on the basis of the Exercise Rate; provided, however, that Holdings shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional Warrant Shares and other capital stock of Holdings upon the occurrence of the event requiring such adjustment. (p) Form of Warrants. Irrespective of any adjustments in the Exercise Rate or in the kind of shares purchasable upon the exercise of the Warrants, Warrants theretofore or thereafter issued may continue to express the same price and kind of shares as are stated in the Warrants initially issuable pursuant to this Agreement. SECTION 11. No Dilution or Impairment; Capital and Ownership Structure. If any event shall occur as to which the provisions of Section 10 are not strictly applicable but the failure to make any adjustment would adversely affect the purchase rights represented by the Warrants in accordance with the essential intent and principles of such Section, then, in each such case, Holdings shall appoint, at its own expense, an investment banking firm of recognized national standing that does not have a direct or material indirect financial interest in Holdings or any of its subsidiaries, who has not been, and, at the time it is called upon to give independent financial advice to Holdings, is not (and none of its directors, officers, employees, affiliates or stockholders are) a promoter, director or officer of Holdings or any of its subsidiaries, which shall give their opinion upon the adjustment, if any, on a basis consistent with the essential intent and principles established in Section 10, necessary to preserve, without dilution, the purchase rights, represented by this Agreement and the Warrants. Upon receipt of such opinion, Holdings will promptly mail a copy thereof to the holders of the Warrants and shall make the adjustments described therein. Holdings will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Warrants, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of the Warrants against dilution or other impairment. Without limiting the generality of the foregoing, Holdings (1) will take all such action as may be necessary or appropriate in order that Holdings may validly and legally issue fully paid and nonassessable shares of Common Stock on the exercise of the Warrants from time to time outstanding and (2) will not take any action which results in any adjustment of the Exercise Rate if the total number of Warrant Shares issuable after the action upon the exercise of all of the Warrants would exceed the total number of shares of Common Stock then authorized by Holdings' certificate of incorporation and available for the purposes of issue upon such exercise. A consolidation, merger, reorganization or transfer of assets involving Holdings covered by Section 10(m) shall not be prohibited by or require any adjustment under this Section 11. SECTION 12. Fractional Interests. Holdings shall not be required to issue fractional Warrant Shares on the exercise of Warrants. If more than one Warrant shall be presented for exercise in full at the same time by the same holder, the number of full Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrants so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 12, be issuable on the exercise of any Warrants (or specified portion thereof), the number of Warrant Shares which shall be issued by Holdings on exercise of such Warrants shall be rounded (i) to the last previous whole number if the fraction is less than 0.5 of a Warrant Share or (ii) to the next higher whole number if the fraction is greater than or equal to 0.5 of a Warrant Share. SECTION 13. Notices to Warrant Holders. Upon any adjustment of the Exercise Rate pursuant to Section 10, Holdings shall promptly thereafter cause to be delivered, by first-class mail, postage prepaid, to each of the registered holders of the Warrant Certificates at his address appearing on the Warrant register a certificate of an Officer of Holdings setting forth the Exercise Rate after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based and setting forth the number of Warrant Shares (or portion thereof) issuable after such adjustment in the Exercise Rate, upon exercise of a Warrant and payment of the Exercise Price. Where appropriate, such notice may be given in advance and included as a part of the notice required to be mailed under the other provisions of this Section 13. In case: (a) Holdings shall authorize the issuance to all holders of shares of Common Stock of rights, options or warrants to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants; (b) Holdings shall authorize the distribution to all holders of shares of Common Stock or evidences of its indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends payable in shares of Common Stock or distributions referred to in subsection (a) of Section 10 hereof); (c) of any consolidation or merger to which Holdings is a party and for which approval of any stockholders of Holdings is required, or of the conveyance or transfer of the properties and assets of Holdings substantially as an entirety, or of any reclassification or change of Common Stock issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or a tender offer or exchange offer for shares of Common Stock; (d) of the voluntary or involuntary dissolution, liquidation or winding up of Holdings; or (e) Holdings proposes to take any action which would require an adjustment of the Exercise Rate pursuant to Section 10; then Holdings shall cause to be given to each of the registered holders of the Warrant Certificates at his address appearing on the Warrant register, at least 20 days (or 10 days in any case specified in clauses (a) or (b) above) prior to the applicable record date hereinafter specified, or promptly in the case of events for which there is no record date, by first-class mail, postage prepaid, a written notice stating (i) the date as of which any such subdivision, combination or reclassification is to be made, or (ii) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such dividends, rights, options, warrants or distribution are to be determined, or (iii) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (iv) the date on which any such consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up. The failure to give the notice required by this Section 13 or any defect therein shall not affect the legality or validity of any distribution, right, option, warrant, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up, or the vote upon any action. Nothing contained in this Agreement or in any of the Warrant Certificates shall be construed as conferring upon the holders thereof the right to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of Directors of Holdings or any other matter, or any rights whatsoever as stockholders of Holdings. SECTION 14. Tag Along and Drag-Along Rights. Each of the parties hereto agrees, for the benefit of the other parties hereto and the parties to the Stockholders Agreement dated as of September 30, 1998 among Holdings and all of its shareholders, as amended from time to time (the "Stockholders Agreement"), to the provisions of Sections 4(c) and 5(a) of the Stockholders Agreement. SECTION 15. Notices. Any notice or demand authorized by this Agreement to be given or made by the registered holder of any Warrant Certificate to or on Holdings shall be delivered or sent by registered, certified or express mail, postage prepaid, return receipt requested, or given or made by facsimile, in each case, at the "Address for Notices" specified below Holdings' name on the signature pages hereof; or at such other address as shall be designated by Holdings in a written notice to the Warrant holders. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by facsimile or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. Any notice pursuant to this Agreement to be given by Holdings to the registered holder(s) of any Warrant Certificate shall be delivered or sent by registered, certified or express mail, postage prepaid, return receipt requested, or given or made by facsimile, in each case, at the address of such holder appearing on the Warrant register of Holdings, or at such other address as shall be designated by such holder in a written notice to Holdings. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by facsimile or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. SECTION 16. Supplements and Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions of this Agreement may not be given unless Holdings has obtained the written consent of holders of at least 66 2/3% of the outstanding Warrant Certificates. SECTION 17. Successors. All the covenants and provisions of this Agreement by or for the benefit of Holdings shall bind and inure to the benefit of its respective successors and assigns hereunder. SECTION 18. Termination. This Agreement shall terminate when all Warrants have been exercised. SECTION 19. New York Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT AND EACH WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS WARRANT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 20. Benefits of This Agreement. Except as expressly set forth in Section 14 hereof, nothing in this Agreement shall be construed to give to any person or corporation other than Holdings and the registered holders of the Warrant Certificates any legal or equitable right, remedy or claim under this Agreement; but, except as so set forth, this Agreement shall be for the sole and exclusive benefit of Holdings and the registered holders of the Warrant Certificates. SECTION 21. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. [Signature Page Follows] IN WITNESS WHEREOF, the parties hereto have caused this Common Stock Warrant Agreement to be duly executed, as of the day and year first above written. TRUE TEMPER CORPORATION By:/s/ Name: Title: Address for Notices: True Temper Corporation 8275 Tournament Drive, Suite 200 Memphis, TN 38125 Attention: Vice President--Finance & Administration EMHART, INC. By:/s/ Name: Title: Address for Notices: EMHART, INC. c/o The Black & Decker Corporation 701 East Joppa Road Towson, MD 21286 Attention: Chief Financial Officer Facsimile No.: (410) 716-3318 EXHIBIT A [Form of Warrant Certificate] [Face] THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS HAVE BEEN COMPLIED WITH OR UNLESS HOLDINGS HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HOLDINGS THAT SUCH REGISTRATION IS NOT REQUIRED. No. _____ Warrant Certificate TRUE TEMPER CORPORATION This Warrant Certificate certifies that ________________, or registered assigns, is the registered holder of Warrants (the "Warrants") to purchase common stock, $.01 par value per share (the "Common Stock"), of True Temper Corporation, a Delaware corporation ("Holdings"). This Warrant entitles the holder upon exercise to receive from Holdings, ___ fully paid and nonassessable shares of Common Stock (each, a "Warrant Share") at an exercise price of $.01 per share (the "Exercise Price") payable in lawful money of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of Holdings designated for such purpose, but only subject to the conditions set forth herein and in the Warrant Agreement referred to on the reverse hereof. The number of Warrant Shares issuable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement. No Warrant may be exercised after 5:00 p.m., New York City time, on the seventh anniversary of the date upon which the such Warrant was released from escrow (the "Exercise Date") pursuant to the terms of the Escrow Agreement, dated September 30, 1998 (as amended, supplemented or otherwise modified, the "Escrow Agreement"), among Holdings, Emhart, Inc. and Snoga, Inc., as escrow agent. Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place. THIS WARRANT CERTIFICATE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPALS OF CONFLICTS OF LAWS. IN WITNESS WHEREOF, True Temper Corporation has caused this Warrant Certificate to be signed by an officer. Dated: ______________ TRUE TEMPER CORPORATION By: Name: Title: [Form of Warrant Certificate] [Reverse] The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants expiring on the seventh anniversary of such Warrants' Exercise Date entitling the holder on exercise to receive shares of common stock, $0.01 par value per share, of Holdings (the "Common Stock"), and are issued or to be issued pursuant to a Warrant Agreement dated as of September 30, 1998 (as amended, supplemented or otherwise modified, the "Warrant Agreement") among Holdings and Emhart, Inc., which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of Holdings and the holders (the words "holders" or "holder" meaning the registered holders or registered holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to Holdings. A Warrant will not be exercisable until its respective Exercise Date. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price in cash at the office of Holdings designated for such purpose. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his assignee a new Warrant Certificate evidencing the number of Warrants not exercised. No adjustment shall be made for any dividends on any Common Stock issuable upon exercise of this Warrant. The Warrant Agreement provides that upon the occurrence of certain events the number of Warrant Shares issuable upon the exercise of each Warrant (the "Exercise Rate") may, subject to certain conditions, be adjusted. If the Exercise Rate is adjusted, the Warrant Agreement provides that the number of shares of Common Stock issuable upon the exercise of each Warrant shall be adjusted. No fractions of a share of Common Stock will be issued upon the exercise of any Warrant. The holders of the Warrants are entitled to certain tag-along rights and subject to certain drag-along rights with respect to the Common Stock purchasable upon exercise thereof. Said tag-along rights and drag-along rights are set forth in full in a Stockholders Agreement, dated as of September 30, 1998, among Holdings, _________________ and the principal holders of Holdings' Common Stock. A copy of the Stockholders Agreement may be obtained by the holder hereof upon written request to Holdings. Warrant Certificates, when surrendered at the office of Holdings by the registered holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants. Upon due presentation for registration of transfer of this Warrant Certificate at the office of Holdings, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith. Holdings may deem and treat the registered holder(s) thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and Holdings shall not be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of Holdings. [Form of Election to Purchase] (To Be Executed Upon Exercise Of Warrant) The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment for such shares to the order of TRUE TEMPER CORPORATION in the amount of $.01 per share in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of , whose address is and that such shares be delivered to whose address is . If said number of shares is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of , whose address is , and that such Warrant Certificate be delivered to , whose address is . Signature: _________________________ Date: ____________________ Signature Guaranteed: _______________________ EX-99 8 EXHIBIT 99(C) DEBT REGISTRATION RIGHTS AGREEMENT among TRUE TEMPER CORPORATION and EMHART, INC. ----------------------- Dated as of September 30, 1998 TABLE OF CONTENTS Page 1. Definitions...........................................................1 2. Securities Subject to this Agreement..................................2 3. Shelf Registration....................................................3 4. Piggy-Back Registration...............................................3 5. Hold-Back Agreements..................................................4 6. Registration Procedures...............................................6 7. Registration Expenses................................................11 8. Indemnification......................................................12 9. Rule 144.............................................................15 10. Miscellaneous........................................................15 DEBT REGISTRATION RIGHTS AGREEMENT This DEBT REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of September 30, 1998, among True Temper Corporation, a Delaware corporation (the "Company" and, together with its successors and assigns, the "Issuer"), and the purchaser listed on the signature pages hereto (together with its successors and assigns, the "Purchaser"). RECITALS This Agreement is made pursuant to the Securities Purchase Agreement ("Securities Purchase Agreement"), dated as of September 30, 1998, by and among the Company and the Purchaser. In order to induce the Purchaser to enter into the Securities Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the Closing under the Securities Purchase Agreement. AGREEMENT The parties agree as follows: 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: Exchange Act: The Securities Exchange Act of 1934, as amended. Indemnified Parties: See Section 8(a) hereof. Indemnifying Party: See Section 8(c) hereof. NASD: National Association of Securities Dealers, Inc. Notes: The Senior Increasing Rate Discount Notes issued pursuant to the Securities Purchase Agreement in the form of Exhibit C to the Securities Purchase Agreement. Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. Piggy-Back Registration: See Section 4(a) hereof. Prospectus: The prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. Registrable Securities: All Notes; provided that a Note ceases to be a Registrable Security when it is no longer a Transfer Restricted Security. Registrants: The Issuer. Registration Expenses: See Section 7 hereof. Registration Statement: Any registration statement of the Registrants which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended. Shelf Registration: See Section 3(a) hereof. Transfer Restricted Security: Registrable Securities upon original issuance thereof; provided that a Registrable Security is no longer a Transfer Restricted Security when such Registrable Security is sold to the public pursuant to an effective Registration Statement. "Underwritten Registration" or "Underwritten Offering": A registration in which securities of the Company are sold to an underwriter for reoffering to the public. 2. Securities Subject to this Agreement (a)......Registrable Securities. The securities entitled to the benefits of this Agreement are the Registrable Securities. (b)......Holders of Registrable Securities. A Person is deemed to be a holder of Registrable Securities whenever such Person owns Registrable Securities of record or has provided evidence reasonably satisfactory to the Company that such Person has the right to acquire such Registrable Securities, whether or not such acquisition has actually been effected and disregarding any legal restrictions upon the exercise of such right. 3. Shelf Registration. The Registrants shall file, and shall use their best efforts to cause to become effective a "shelf" registration statement on any appropriate form pursuant to Rule 415 (or similar rule that may be adopted by the SEC) under the Securities Act (a "Shelf Registration") on or as soon as practicable after September 30, 1999 in order to permit registered resales of all of the Registrable Securities. Subject to the last paragraph of Section 6, the Registrants agree to use their best efforts thereafter to keep such Shelf Registration continuously effective, and to prevent the happening of any event of the kind described in Section 6(c) hereof that requires the Registrants to give notice pursuant to the last paragraph of Section 6 hereof, until such time as all the Registrable Securities covered by the Shelf Registration have been sold pursuant to such Shelf Registration or have been otherwise redeemed in full by the Company. 4. Piggy-Back Registration (a)......If the Company proposes to file a registration statement under the Securities Act with respect to an offering (other than an offering the proceeds of which are to be used to redeem the Notes) by the Company of any debt securities for its own account or for the account of any of its security holders (provided that, in the case of a registration on demand of such security holders, the holders of a majority in aggregate principal amount of any such debt securities consent in writing) of any class of debt security (other than a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the SEC) or the Shelf Registration, then the Company shall give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable (but in no event less than 30 days before the anticipated filing date), and such notice shall offer such holders the opportunity to register such principal amount of Registrable Securities as each such Holder may request (a "Piggy-Back Registration"). (b)......The Company shall use all reasonable efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in the registration statement for such offering to be included on the same terms and conditions as any similar class of debt securities of the Company or of such other security holders included therein. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering deliver a written opinion to the Company that either because of (i) the kind or combination of securities which the holders of Registrable Securities, the Company and any other persons or entities intend to include in such offering or (ii) the size of the offering which such holders, the Company and such other persons intend to make, are such that the success of the offering would be materially and adversely affected by inclusion of the Registrable Securities requested to be included, then (a) in the event that the size of the offering is the basis of such managing underwriter's opinion, the amount of securities to be offered for the accounts of such holders shall be reduced pro rata (according to the Registrable Securities proposed for registration) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter or underwriters; provided that if securities are being offered for the account of other persons or entities as well as the Company, then with respect to the Registrable Securities intended to be offered by such holders, the proportion by which the amount of such class of securities intended to be offered by such holders is reduced shall not exceed the proportion by which the amount of such class of securities intended to be offered by such other persons or entities is reduced; and (b) in the event that the kind (or combination) of securities to be offered is the basis of such managing underwriter's opinion, (x) the Registrable Securities to be included in such offering shall be reduced as described in clause (a) above (subject to the proviso in clause (a)) or, (y) if the actions described in clause (x) would, in the judgment of the managing underwriter, be insufficient to substantially eliminate the adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering. 5. Hold-Back Agreements (a)......Restrictions on Public Sale by Holder of Registrable Securities. Each holder of Registrable Securities whose Registrable Securities are covered by a Registration Statement filed pursuant to Section 3 hereof agrees, if requested by the managing underwriters in an underwritten offering, not to effect any public sale or distribution of securities of the Registrants of the same class as the securities included in such Registration Statement, including a sale pursuant to Rule 144 under the Securities Act (except as part of such underwritten registration), during the 30-day period prior to, and during the 90-day period beginning on, the closing date of each underwritten offering made pursuant to such Registration Statement, to the extent timely notified in writing by the Registrants or the managing underwriters; provided, however, that each holder of Registrable Securities shall be subject to the hold-back restrictions of this Section 5(a) only once during any 365-day period. The foregoing provisions shall not apply to any holder of Registrable Securities if such holder is prevented by applicable statute or regulation from entering any such agreement; provided, however, that any such holder shall undertake, in its request to participate in any such underwritten offering, not to effect any public sale or distribution of any Registrable Securities held by such holder and covered by a Registration Statement commencing on the date of sale of the Registrable Securities unless it has provided 45 days prior written notice of such sale or distribution to the underwriter or underwriters. (b)......Restrictions on Sale of Debt Securities by the Registrants and Others. The Registrants agree (1) not to effect any public or private offer, sale or distribution of any of their debt securities or any class or series of their capital stock having a preference in liquidation or with respect to dividends, including a sale pursuant to Regulation D under the Securities Act (other than any such sale or distribution of such securities in connection with any merger or consolidation by the Issuer or any subsidiary of the Issuer or the acquisition by the Issuer or a subsidiary of the Issuer of the capital stock or substantially all the assets of any other Person or in connection with any employee stock option or other benefit plan; provided that in each such case the recipients of such securities agree to be bound by a restriction on transfer comparable to that set forth in this Section 5(b)), during the 10-day period prior to, and during the 135-day period beginning with, the effectiveness of a Registration Statement filed under Section 3 to the extent timely notified in writing by a holder of Registrable Securities or the managing underwriters in an underwritten offering and (2) during the aforementioned period, to cause each holder of each of the Registrants' privately placed debt securities or any class or series of the Registrants' capital stock having a preference in liquidation or with respect to dividends purchased from the Registrants at any time on or after the date of this Agreement to agree not to effect any public sale or distribution of any such securities during such period, including a sale pursuant to Rule 144 under the Securities Act (except as part of such registration, if permitted). 6. Registration Procedures. In connection with the Registrants' Shelf Registration obligations set forth in Section 3 hereof, each of the Registrants will use its best efforts to effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Registrants will, as expeditiously as possible: (a)......prepare and file with the SEC, within the time period provided in Section 3 hereof, a Registration Statement or Registration Statements relating to the Shelf Registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Registrable Securities in accordance with the intended method or methods of distribution thereof and shall include all financial statements (including, if applicable, financial statements of any Person that shall have guaranteed any indebtedness of the Registrants) required by the SEC to be filed therewith, cooperate and assist in any filings required to be made with the NASD, and use its best efforts to cause such Registration Statement to become effective; provided that before filing a Registration Statement or any amendments or supplements thereto, the Registrants will furnish to the holders of the Registrable Securities covered by such Registration Statement, copies of all such documents proposed to be filed, which documents will be subject to the review by such holders, and the Registrants will not file any Registration Statement or any amendments or supplements thereto to which the holders of a majority in aggregate principal amount of such Registrable Securities shall reasonably object; (b)......prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (c)......notify the selling holders of Registrable Securities promptly, and (if requested by any such Person) confirm such advice in writing, (1) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (2) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (3) of the issuance by the SEC of any stop order of which any Registrant or its counsel is aware suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (4) if at any time the representations and warranties of the Registrants contemplated by paragraph (o) below cease to be true and correct, (5) of the receipt by the Registrants of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (6) of the Issuer's becoming aware that the Prospectus (including any document incorporated therein by reference), as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (d)......make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible moment; (e)......if reasonably requested by a holder of Registrable Securities being sold in connection with an underwritten offering, promptly incorporate in a Prospectus such information as the holders of a majority in aggregate principal amount of the Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities, including, without limitation, information with respect to the principal amount of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus as promptly as practicable upon being notified of the matters to be incorporated in such Prospectus; (f)......furnish to each selling holder of Registrable Securities without charge, at least one signed copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (g)......deliver to each selling holder of Registrable Securities without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons may reasonably request; the Registrants' consents to the use of the Prospectus by each of the selling holders of Registrable Securities, in connection with the offering and sale of the Registrable Securities covered by the Prospectus; (h)......prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling holders of Registrable Securities, and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such seller reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities; provided that the Registrants will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; (i)......cooperate with the selling holders of Registrable Securities to facilitate, to the extent commercially reasonable under the circumstances, the timely preparation and delivery of certificates representing such Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as such selling holders may request at least two business days prior to any sale of such Registrable Securities; (j)......use their best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities; (k)......upon the occurrence of any event contemplated by paragraph (c)(6) above, prepare a supplement or post-effective amendment to the related Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the holders of the Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances then existing; (l)......use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which similar securities issued by the Registrants are then listed if such listing is permitted under the rules of such exchange and if requested by the holders of a majority in aggregate principal amount of such Registrable Securities; (m)......cause the Registrable Securities covered by a Registration Statement to be rated with such rating agencies as the holders of a majority in aggregate principal amount of such Registrable Securities may designate; (n)......not later than the effective date of the Shelf Registration, provide a CUSIP number for all Registrable Securities and provide the transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company; (o)......[This section intentionally omitted.] (p)......make available for inspection by a representative of the holders of a majority in principal amount of the Registrable Securities and any attorney or accountant retained by such holders, all financial and other records, pertinent corporate documents and properties of the Registrants as may be reasonably necessary to enable them to exercise their due diligence responsibilities, and provide reasonable access to appropriate officers of the Issuer in connection with such due diligence responsibilities; (q)......otherwise use their best efforts to comply with all applicable rules and regulations of the SEC, and make generally available to their security holders, earnings statements for the Registrants satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of any 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Registrants' first fiscal quarter commencing after the effective date of the Registration Statement, which statements shall cover said 12-month periods; provided that the Issuer shall be deemed to have complied with this Section 5(q) if it has satisfied Rule 158 under the Securities Act; and (r)......promptly prior to the filing of any document which is to be incorporated by reference into the Registration Statement or Prospectus (after initial filing of the Registration Statement), provide copies of such document to counsel to the selling holders of Registrable Securities covered by such Registration Statement, make the Registrants' representatives available for discussion of such document with such selling holders and make such changes in such document prior to the filing thereof as counsel for such selling holders may reasonably request in writing. The Registrants may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Registrants such information regarding the distribution of such securities as the Registrants may from time to time reasonably request in writing. Each holder of Registrable Securities agrees by acceptance of such Registrable Securities that, upon receipt of any notice from the Registrants of the happening of any event of the kind described in Section 6(c)(3), (5) or (6) hereof that, in the reasonable judgment of the Registrant's Board of Directors, it is advisable to suspend use of the prospectus for a discrete period of time due to pending corporate developments, public filings with the SEC or similar events, such holder will forthwith discontinue disposition of Registrable Securities until such holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(k) hereof, or until it is advised in writing (the "Advice") by the Registrants that the use of such Prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in such Prospectus, and, if so directed by the Registrants, such holder will deliver to the Registrants (at the Registrants' expense) all copies, other than permanent file copies then in such holder's possession, of such Prospectus covering such Registrable Securities current at the time of receipt of such notice. The Registrant shall use all reasonable efforts to insure that the use of the prospectus may be resumed as soon as practicable, and in any event shall not be entitled to required the Holder to suspend use of any prospectus for more than thirty (30) business days in any twelve month period. 7. Registration Expenses (a)......All reasonable expenses incident to the Registrants' performance of or compliance with this Agreement, including without limitation all (i) registration and filing fees, fees and expenses associated with filings required to be made with the NASD, (ii) fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel for the selling holders in connection with blue sky qualifications of the Registrable Securities and determination of their eligibility for investment under the laws of such jurisdictions as the holders of a majority in aggregate principal amount of the Registrable Securities being sold may reasonably designate), (iii) printing expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) fees and disbursements of counsel for the Registrants and for the sellers of the Registrable Securities (subject to the provisions of Section 6(b)), and customary out of pocket expenses and fees paid by issuers to the extent provided for in any underwriting agreement (excluding discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities, transfer taxes or legal expenses of any Person other than the Registrants and the selling holders), (v) the cost of securities acts liability insurance if the Registrants so desire and (vi) fees and expenses of other Persons retained by the Registrants (all such expenses being herein called "Registration Expenses") will be borne by the Registrants, regardless whether the Registration Statement becomes effective. Each holder of Registrable Securities will pay any fees or disbursements of counsel to such holder (other than as provided in Section 7(b)) and all underwriting discounts and commissions and transfer taxes, if any, and provide other fees, costs and expenses of such holder (other than Registration Expenses) relating to the sale or disposition of such holder's Registrable Securities. The Issuer, in any event, will pay the Issuer's own internal expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange on which similar securities issued by the Registrants are then listed, rating agency fees and the fees and expenses of any Person, including special experts, retained by the Registrants. (b)......In connection with the Shelf Registration hereunder, the Registrants will reimburse the selling holders of Registrable Securities being registered in such registration for the reasonable fees and disbursements of not more than one counsel chosen by the selling holders of a majority in principal amount of such Registrable Securities. 8. Indemnification (a)......Indemnification by the Registrants. Each of the Registrants jointly and severally agree to indemnify and hold harmless, to the full extent permitted by law, each holder of Registrable Securities, their officers, directors and employees and each Person who controls such holder (within the meaning of the Securities Act) (the "Indemnified Parties") against all losses, claims, damages, liabilities and expenses incurred by such party in connection with any actual or threatened action arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same arise out of or are based upon any such untrue statement or omission made in reliance on and in conformity with any information furnished in writing to the Registrants by such holder or its counsel expressly for use therein; provided, that no Registrant shall be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Prospectus, if such untrue statement or alleged untrue statement, omission or alleged omission is completely corrected in an amendment or supplement to the Prospectus and the holder of Registrable Securities thereafter fails to deliver such Prospectus as so amended or supplemented prior to or concurrently with the sale of the Registrable Securities to the person asserting such loss, claim, damage, liability or expense after the Registrants had furnished such holder with a sufficient number of copies of the same. Each Registrant shall also indemnify underwriters, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Indemnified Parties, if requested. (b)......Indemnification by Holder of Registrable Securities. In connection with the Shelf Registration, each holder of Registrable Securities will furnish to the Registrants in writing such information and affidavits as the Registrants reasonably request for use in connection with any Registration Statement or Prospectus and agrees to indemnify and hold harmless, to the full extent permitted by law, the Registrants, their directors and officers and each Person who controls a Registrant (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue statement of a material fact contained in any Registration Statement or Prospectus or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission relates to a holder and is made in reliance on and in conformity with any information or affidavit furnished in writing by such holder to the Registrants specifically for inclusion in such Registration Statement or Prospectus. In no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. The Registrants shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution of such Registrable Securities to the same extent as provided above with respect to information or affidavit furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement. (c)......Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder will (i) give prompt notice to the applicable Registrant or holder of Registrable Securities, as the case may be (in either case, as applicable, an "Indemnifying Party"), of any claim with respect to which it seeks indemnification and (ii) permit such Indemnifying Party to assume the defense of such claim with counsel reasonably satisfactory to such Person; provided, however, that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the Indemnifying Party has agreed to pay such fees or expenses, or (b) the Indemnifying Party has failed to assume the defense of such claim or (c) in the reasonable judgment of any such Person, based upon advice of its counsel, a conflict of interest may exist between such Person and the Indemnifying Party with respect to such claims (in which case, if the Person notifies the Indemnifying Party in writing that such Person elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the Indemnifying Party, the Indemnifying Party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No Indemnifying Party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Person entitled to indemnification a release from all liability in respect to such claim or litigation. Any Indemnifying Party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all Persons entitled to indemnification by such Indemnifying Party with respect to such claim, unless in the reasonable judgment of any such Person a conflict of interest may exist between such Person and any other Person entitled to indemnification hereunder with respect to such claim, in which event the Indemnifying Party shall be obligated to pay the fees and expenses of such additional counsel or counsels, but only of one such additional counsel for each group of similarly situated Persons in any one jurisdiction. (d)......Contribution. If for any reason the indemnification provided for in the preceding clauses (a) and (b) is unavailable to a Person entitled to indemnification or is insufficient to hold it harmless as contemplated by the preceding clauses (a) and (b), then the Indemnifying Party shall contribute to the amount paid or payable by such Person as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Person and the Indemnifying Party, but also the relative fault of such Person and the Indemnifying Party, as well as any other relevant equitable considerations, provided that no holder of Registrable Securities shall be required to contribute an amount greater than the dollar amount of the proceeds received by such holder of Registrable Securities with respect to the sale of any securities. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 9 .Rule 144. The Registrants covenant that they will file the reports required to be filed by them under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if any of them is not required to file such reports, the applicable party will, upon the request of any holder of Registrable Securities made after September 30, 1999 make publicly available other information so long as necessary to permit sales pursuant to Rule 144 under the Securities Act), and they will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any holder of Registrable Securities, the Registrants will deliver to such holder a written statement as to whether they have complied with such information and filing requirements. 10. Miscellaneous (a)......Remedies. Each holder of Registrable Securities, in addition to being entitled to exercise all rights provided herein, in the Securities Purchase Agreement or granted by law, including recovery of damages, in connection with the breach by the Registrants of their obligations to register the Registrable Securities will be entitled to specific performance of its rights under this Agreement. The Registrants agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by any of them of the provisions of this Agreement and each agrees, to the extent permitted under applicable law, to waive the defense in any action for specific performance that a remedy at law would be adequate. (b)......No Inconsistent Agreements. The Registrants will not on or after the date of this Agreement enter into any agreement with respect to their securities which is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the holders of Registrable Securities hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Registrants' securities under any other agreements. The Registrants have not previously entered into any inconsistent agreement with respect to their securities granting any registration rights to any Person. (c)......Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions of this Agreement may not be given unless the Registrants have obtained the written consent of holders of at least 66 2/3 % of the principal amount of the outstanding Registrable Securities (excluding Registrable Securities held by the Company or one of its affiliates). (d)......Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, facsimile or air courier guaranteeing overnight delivery: (i) if to a holder of Registrable Securities, at the most current address given by such holder to the Registrants in accordance with the provisions of this Section 10(d), which address initially is, with respect to the Purchaser, the address set forth next to the Purchaser's name on the signature pages of the Securities Purchase Agreement, with copies to Miles & Stockbridge P.C., 10 Light Street, Baltimore, Maryland 21202, Attention: Glenn C. Campbell, Esq. and Latham & Watkins, 885 Third Avenue, Suite 1000, New York, New York 10022-4802, Attention: Philip E. Coviello, Esq.; and (ii).....if to the Registrants, initially to it at the address set forth in the Securities Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 10(d), with a copy to Kirkland & Ellis, 153 East 53rd St., New York, New York 10022, Attention: Frederick Tanne, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid if mailed; when answered back, if delivered by facsimile; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. (e)......Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including without limitation, and without the need for an express assignment, subsequent holders of Registrable Securities. (f)......Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g)......Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h)......New York Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. (i)......Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of any such provision in such jurisdiction in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (j)......Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement with respect to the subject matter contained herein and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Registrants with respect to the securities sold pursuant to the Securities Purchase Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. IN WITNESS WHEREOF, the parties have executed this Debt Registration Rights Agreement as of the date first written above. TRUE TEMPER CORPORATION By:/s/ Name: Title: EMHART, INC. By:/s/ Name: Title: EX-99 9 EXHIBIT 99(D) EQUITY REGISTRATION RIGHTS AGREEMENT among TRUE TEMPER CORPORATION and EMHART, INC. ----------------------- Dated as of September 30, 1998 TABLE OF CONTENTS Page 1. Definitions...........................................................1 2. Securities Subject to this Agreement..................................3 3. Piggy-Back Registration...............................................4 4. Hold-Back Agreements..................................................5 5. Registration Expenses.................................................6 6. Indemnification.......................................................7 7. Rule 144..............................................................9 8. Miscellaneous.........................................................9 EQUITY REGISTRATION RIGHTS AGREEMENT This EQUITY REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of September 30, 1998, among TRUE TEMPER CORPORATION, a Delaware corporation ("Holdings"), and the purchaser listed on the signature pages hereto (together with its successors and assigns, the "Purchaser"). RECITALS This Agreement is made pursuant to the Securities Purchase Agreement, dated as of September 30, 1998 (as amended, supplemented or otherwise modified, "Securities Purchase Agreement"), by and among Holdings and the Purchaser. In order to induce the Purchaser to enter into the Securities Purchase Agreement, Holdings has agreed to provide the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the Closing under the Securities Purchase Agreement. AGREEMENT The parties agree as follows: 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: Common Stock: The authorized common stock, par value $.01 per share, of Holdings. Exchange Act: The Securities Exchange Act of 1934, as amended. Indemnified Parties: See Section 6(a) hereof. NASD: National Association of Securities Dealers, Inc. Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. Piggy-Back Registration: See Section 3(a) hereof. Prospectus: The prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. Registrable Securities: The Registrable Warrants and the Registrable Warrant Shares; provided that a security ceases to be a Registrable Security when it is no longer a Transfer Restricted Security. Registrable Warrant Shares: All Warrant Shares issuable to the holders of Warrants upon exercise of such Warrants. Registrable Warrants: All Warrants originally issued pursuant to the Warrant Agreement. Registration Expenses: See Section 5 hereof. Registration Statement: Any registration statement of the Holdings which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended. Transfer Restricted Security: Registrable Securities upon original issuance thereof; provided that a Registrable Security is no longer a Transfer Restricted Security when such Registrable Security is sold to the public pursuant to an effective Registration Statement. Underwritten Registration or Underwritten Offering: A registration in which securities of Holdings are sold to an underwriter for reoffering to the public. Warrant Agreement: The Warrant Agreement dated as of September 30, 1998 among Holdings and the Purchaser, as amended, supplemented or otherwise modified from time to time. Warrant Shares: The shares of capital stock (including all series of preferred and common stock and all other outstanding warrants, options or other convertible securities) of Holdings issuable to the holders of Warrants upon exercise of the Warrants, together with any other securities that may in the future become issuable upon exercising the Warrants. Warrants: Warrants to purchase capital stock (including all series of preferred and common stock and all other outstanding warrants, options or other convertible securities) of Holdings in accordance with the Warrant Agreement. 2. Securities Subject to this Agreement (a) Registrable Securities. The securities entitled to the benefits of this Agreement are the Registrable Securities. (b) Holders of Registrable Securities. A Person is deemed to be a holder of Registrable Securities whenever such Person owns Registrable Securities of record or has provided evidence reasonably satisfactory to Holdings that such Person has the right to acquire such Registrable Securities, whether or not such acquisition has actually been effected and disregarding any legal restrictions upon the exercise of such right. 3.Piggy-Back Registration (a) Right to Piggyback. Subject to the last sentence of this subsection (a), whenever Holdings proposes to register any shares of Common Stock (or securities exercisable or exchangeable for or convertible into, or options to acquire, Common Stock) with the SEC under the Securities Act and the registration form to be used may be used for the registration of the Registrable Securities (a "Piggyback Registration"), Holdings will give written notice to the Purchaser, at least 30 days prior to the anticipated filing date, of its intention to effect such a registration, which notice will specify the proposed offering price, the kind and number of securities proposed to be registered, the distribution arrangements and such other information that at the time would be appropriate to include in such notice, and will, subject to subsection (b) below, include in such Piggyback Registration all Registrable Securities with respect to which Holdings has received written requests for inclusion therein within 20 days after the effectiveness of Holdings' notice. Except as may otherwise be provided in this Agreement, Registrable Securities with respect to which such request for registration has been received will be registered by Holdings and offered to the public in a Piggyback Registration pursuant to this Section 3 on the terms and conditions at least as favorable as those applicable to the registration of shares of Registrable Securities to be sold by Holdings and by any other person selling under such Piggyback Registration. (b) Priority on Piggyback Registration. Holdings shall use all reasonable efforts to cause the managing underwriter or underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested to be included in the registration statement for such offering to be included on the same terms and conditions as any similar class of equity securities of Holdings or of such other security holders included therein. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering deliver a written opinion to Holdings that either because of (i) the kind or combination of securities which the holders of Registrable Securities, Holdings and any other persons or entities intend to include in such offering or (ii) the size of the offering which such holders, Holdings and such other persons intend to make, are such that the success of the offering would be materially and adversely affected by inclusion of the Registrable Securities requested to be included, then (a) in the event that the size of the offering is the basis of such managing underwriter's opinion, the amount of securities to be offered for the accounts of such holders shall be reduced pro rata (according to the Registrable Securities proposed for registration) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter or underwriters; provided that if securities are being offered for the account of other persons or entities as well as Holdings, then with respect to the Registrable Securities intended to be offered by such holders, the proportion by which the amount of such class of securities intended to be offered by such holders is reduced shall not exceed the proportion by which the amount of such class of securities intended to be offered by such other persons or entities is reduced; and (b) in the event that the kind (or combination) of securities to be offered is the basis of such managing underwriter's opinion, (x) the Registrable Securities to be included in such offering shall be reduced as described in clause (a) above (subject to the proviso in clause (a)) or, (y) if the actions described in clause (x) would, in the judgment of the managing underwriter, be insufficient to substantially eliminate the adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering. (c) Selection of Underwriters. If any Piggyback Registration is an Underwritten Offering, Holdings will select a managing underwriter or underwriters to administer the offering, which managing underwriter or underwriters will be of nationally recognized standing. 4. Hold-Back Agreements. Each holder of Registrable Securities whose Registrable Securities are covered by a Registration Statement filed pursuant to Section 3 hereof agrees, if requested by the managing underwriters in an Underwritten Offering, not to effect any public sale or distribution of securities of Holdings of the same class as the securities included in such Registration Statement, including a sale pursuant to Rule 144 under the Securities Act (except as part of such Underwritten Registration), during the 30-day period prior to, and during the 180-day period beginning on, the closing date of each Underwritten Offering made pursuant to such Registration Statement, to the extent timely notified in writing by Holdings or the managing underwriters; provided, however, that each holder of Registrable Securities shall be subject to the hold-back restrictions of this Section 4(a) only once during any 365-day period. The foregoing provisions shall not apply to any holder of Registrable Securities if such holder is prevented by applicable statute or regulation from entering any such agreement; provided, however, that any such holder shall undertake, in its request to participate in any such Underwritten Offering, not to effect any public sale or distribution of any Registrable Securities held by such holder and covered by a Registration Statement commencing on the date of sale of the Registrable Securities unless it has provided 45 days prior written notice of such sale or distribution to the underwriter or underwriters. 5. Registration Expenses. All reasonable expenses incident to Holdings' performance of or compliance with this Agreement, including without limitation all (i) registration and filing fees, fees and expenses associated with filings required to be made with the NASD (including, if applicable, the fees and expenses of any "qualified independent underwriter" and its counsel as may be required by the rules and regulations of the NASD), (ii) fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities and determination of their eligibility for investment under the laws of such jurisdictions as the managing underwriters), (iii) printing expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) fees and disbursements of counsel for Holdings and for the sellers of the Registrable Securities, and customary out of pocket expenses and fees paid by issuers to the extent provided for in an underwriting agreement (excluding discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities, transfer taxes or legal expenses of any Person other than Holdings and the selling holders), (v) the cost of securities acts liability insurance if Holdings so desires and (vi) fees and expenses of other Persons retained by Holdings (all such expenses being herein called "Registration Expenses") will be borne by Holdings, regardless whether the Registration Statement becomes effective. Each holder of Registrable Securities will pay any fees or disbursements of counsel to such holder and all underwriting discounts and commissions and transfer taxes, if any, and provide other fees, costs and expenses of such holder (other than Registration Expenses) relating to the sale or disposition of such holder's Registrable Securities. Holdings, in any event, will pay Holdings' own internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange on which similar securities issued by Holdings are then listed, rating agency fees and the fees and expenses of any Person, including special experts, retained by Holdings. 6. Indemnification (a) Indemnification by Holdings. Holdings agrees to indemnify and hold harmless, to the full extent permitted by law, each holder of Registrable Securities, its officers, directors and employees and each Person who controls such holder (within the meaning of the Securities Act) (the "Indemnified Parties") against all losses, claims, damages, liabilities and expenses incurred by such party in connection with any actual or threatened action arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same arise out of or are based upon any such untrue statement or omission made in reliance on and in conformity with any information furnished in writing to Holdings by such holder or its counsel expressly for use therein; provided, that Holdings shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Prospectus, if such untrue statement or alleged untrue statement, omission or alleged omission is completely corrected in an amendment or supplement to the Prospectus and the holder of Registrable Securities thereafter fails to deliver such Prospectus as so amended or supplemented prior to or concurrently with the sale of the Registrable Securities to the person asserting such loss, claim, damage, liability or expense after Holdings has furnished such holder with a sufficient number of copies of the same. Holdings shall also indemnify underwriters, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Indemnified Parties, if requested. (b) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder will (i) give prompt notice to Holdings of any claim with respect to which it seeks indemnification and (ii) permit Holdings to assume the defense of such claim with counsel reasonably satisfactory to such Person; provided, however, that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) Holdings has agreed to pay such fees or expenses, or (b) Holdings has failed to assume the defense of such claim or (c) in the reasonable judgment of any such Person, based upon advice of its counsel, a conflict of interest may exist between such Person and Holdings with respect to such claims (in which case, if the Person notifies Holdings in writing that such Person elects to employ separate counsel at the expense of Holdings, Holdings shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by Holdings, Holdings will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). Holdings will not be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Person entitled to indemnification a release from all liability in respect to such claim or litigation. If Holdings is not entitled to, or elects not to, assume the defense of a claim, Holdings will not be obligated to pay the fees and expenses of more than one counsel for all Persons entitled to indemnification by Holdings with respect to such claim, unless in the reasonable judgment of any such Person a conflict of interest may exist between such Person and any other Person entitled to indemnification hereunder with respect to such claim, in which event Holdings shall be obligated to pay the fees and expenses of such additional counsel or counsels, but only of one such additional counsel for each group of similarly situated Persons in any one jurisdiction. (c) Contribution. If for any reason the indemnification provided for in subsection (a) is unavailable to a Person entitled to indemnification or is insufficient to hold it harmless as contemplated by the preceding subsection (a), then Holdings shall contribute to the amount paid or payable by such Person as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Person and Holdings, but also the relative fault of such Person and Holdings, as well as any other relevant equitable considerations, provided that no holder of Registrable Securities shall be required to contribute an amount greater than the dollar amount of the proceeds received by such holder of Registrable Securities with respect to the sale of any securities. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 7. Rule 144. Holdings covenants that it will file the reports required to be filed by them under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if it is not required to file such reports, it will, upon the request of any holder of Registrable Securities made after September 30, 1999, make publicly available other information so long as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any holder of Registrable Securities, Holdings will deliver to such holder a written statement as to whether it has complied with such information and filing requirements. 8. Miscellaneous. (a) Remedies. Each holder of Registrable Securities, in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, in connection with the breach by Holdings of its obligations to register the Registrable Securities will be entitled to specific performance of its rights under this Agreement. Holdings agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and agrees, to the extent permitted under applicable law, to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. Holdings will not on or after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the holders of Registrable Securities hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of Holdings' securities under any other agreements. Holdings has not previously entered into any inconsistent agreement with respect to its securities granting any registration rights to any Person. (c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions of this Agreement may not be given unless Holdings has obtained the written consent of holders of at least 66 2/3 % of the principal amount of the outstanding Registrable Securities (excluding Registrable Securities held by Holdings or one of its affiliates). (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, facsimile or air courier guaranteeing overnight delivery: (i) if to a holder of Registrable Securities, at the most current address given by such holder to Holdings in accordance with the provisions of this Section 8(d), which address initially is, with respect to the Purchaser, the address set forth next to the Purchaser's name on the signature pages of the Securities Purchase Agreement, with a copy to Miles & Stockbridge, 10 Light Street, Baltimore, Maryland 21202 Attention: Glenn Campbell; and (ii) if to Holdings, initially to it at True Temper Corporation, 8275 Tournament Drive, Suite 200, Memphis, Tennessee 38125, Attention: Vice President--Finance and Administration, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 8(d), with a copy to Kirkland & Ellis, 153 East 53rd Street, New York, New York 10022, Attention: Frederick Tanne, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid if mailed; when answered back, if delivered by facsimile; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including without limitation, and without the need for an express assignment, subsequent holders of Registrable Securities. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) New York Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of any such provision in such jurisdiction in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement with respect to the subject matter contained herein and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by Holdings with respect to the securities sold pursuant to the Securities Purchase Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. IN WITNESS WHEREOF, the parties have executed this Equity Registration Rights Agreement as of the date first written above. TRUE TEMPER CORPORATION By:/s/ Name: Title: EMHART, INC. By:/s/ Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----