Exhibit 10.8

JPMORGAN CHASE BANK, N.A.
270 Park Avenue
New York, New York 10017

J.P. MORGAN SECURITIES LLC
383 Madison Avenue
New York, New York 10179

March 4, 2011

Senior Revolving Credit Facility
Commitment Letter

Griffon Corporation
712 Fifth Avenue, 18th Floor
New York, New York 10019

Attention: Douglas J. Wetmore

Ladies and Gentlemen:

                    You have advised J.P. Morgan Securities LLC (“JPMorgan”) and
JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”; together with JPMorgan, the
“Commitment Parties”) that you (“you” or “Borrower”) intend to issue up to
$500,000,000 in senior unsecured notes “the “Notes”) and, in connection with the
issuance of the Notes, you wish to obtain a $200,000,000 revolving credit
facility (the “Revolving Credit Facility”) which will replace (a) the Credit
Agreement, dated as of March 31, 2008 (as amended, the “Telephonics Credit
Agreement”), among Gritel Holding Co., Inc., Telephonics Corporation, the
lenders party thereto, and JPMorgan Chase Bank, as administrative agent, and (b)
the Amended and Restated Credit Agreement, dated as of September 30, 2010 (the
“Clopay Ames Credit Agreement” and, together with the Telephonics Credit
Agreement, the “Existing Credit Agreements”), among Clopay Ames True Temper
Holding Corp, Clopay Ames True Temper LLC, certain subsidiaries as guarantors,
the lenders parties thereto and JPMorgan Chase Bank, as administrative agent.
You have further advised the Commitment Parties that you will require amendments
to the Existing Credit Agreements in connection with the issuance of the Notes
(the “Amendments”). You have requested that JPMorgan agree to structure, arrange
and syndicate the Revolving Credit Facility and that JPMorgan Chase Bank commit
to provide a portion of the Revolving Credit Facility and to serve as
administrative agent for the Revolving Credit Facility. You have also requested
that JPMorgan agree to structure and arrange the Amendments.

                    JPMorgan is pleased to advise you that it is willing to act
as the sole lead arranger and sole bookrunner for the Revolving Credit Facility
and to arrange the Amendments.

                    Furthermore, JPMorgan Chase Bank is pleased to advise you of
(a) its commitment to provide up to $50,000,000 of the Revolving Credit Facility
and (b) its agreement, together with

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JPMorgan, (i) to use commercially reasonable efforts to assemble a syndicate of
Lenders (as defined below) to provide the balance of the necessary commitments
for the Revolving Credit Facility, in each case upon the terms and subject to
the conditions set forth or referred to in this commitment letter (the
“Commitment Letter”) and in the Summary of Terms and Conditions attached hereto
as Exhibit A (the “Term Sheet”) and (ii) to arrange the Amendments on terms and
conditions to be agreed. It is a condition to JPMorgan Chase Bank’s commitment
hereunder that the portion of the Revolving Credit Facility not being provided
by JPMorgan Chase Bank in respect of the Revolving Credit Facility shall be
provided by the other Lenders.

                    It is agreed that JPMorgan will act as the sole lead
arranger and sole bookrunner in respect of the Revolving Credit Facility and the
Amendments (in such capacities, the “Lead Arranger”), and that JPMorgan Chase
Bank will act as the sole administrative agent in respect of the Revolving
Credit Facility. You agree that, as a condition to the commitments and
agreements hereunder, no other agents, co-agents, arrangers or bookrunners will
be appointed, no other titles will be awarded and no compensation (other than
that expressly contemplated by the Term Sheet and the Fee Letter referred to
below) will be paid in connection with the Revolving Credit Facility or the
Amendments unless you and we shall so agree; provided that you shall have the
right to appoint other agents or co-agents with our consent (not to be
unreasonably withheld), it being understood and agreed that no such agent or
co-agent shall receive greater economics with respect to the Revolving Credit
Facility than the Commitment Parties.

                    We intend to syndicate the Revolving Credit Facility
(including, in our discretion, all or part of JPMorgan Chase Bank’s commitment
hereunder) to a group of lenders (together with JPMorgan Chase Bank, the
“Lenders”) identified by us in consultation with you. We intend to promptly
commence syndication efforts as well as our efforts to arrange the Amendments,
and you agree actively to assist us in completing a syndication reasonably
satisfactory to us and in soliciting the approvals required for the Amendments.
Such assistance shall include (a) your using commercially reasonable efforts to
ensure that the syndication and solicitation efforts benefit materially from the
existing banking relationships of the Borrower and its subsidiaries, (b) direct
contact between senior management and advisors of the Borrower and its
subsidiaries and the proposed Lenders, (c) commercially reasonable assistance
from the Borrower in the preparation of materials to be used in connection with
the syndication and (d) the attendance, with us and senior management and the
Borrower, at one or more meetings of prospective Lenders. You also agree to
provide us with reasonable prior notice of the syndication of any credit
facility in connection with any other financing of the Borrower or its domestic
subsidiaries and, upon our request, to coordinate the syndication of such credit
facility with the syndication of the Revolving Credit Facility.

                    JPMorgan, in its capacity as Lead Arranger, will manage, in
consultation with you, all aspects of the syndication of the Revolving Credit
Facility and the solicitation of the approvals required for the Amendments,
including decisions as to the selection of institutions to be approached and
when they will be approached, when their commitments will be accepted, which
institutions will participate, the allocation of the commitments among the
Lenders and the amount and distribution of fees among the Lenders. In its
capacity as Lead Arranger, JPMorgan will have no responsibility other than to
arrange the syndication of the Revolving Credit Facility and the approval of the
Amendments as set forth herein and in no event shall be subject to any fiduciary
or other implied duties. Additionally, you acknowledge and agree that, as Lead
Arranger, JPMorgan is not advising you as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. You shall consult with
your own advisors concerning such matters and shall be responsible for making
its own independent investigation and appraisal of the transactions contemplated
hereby, and the Lead Arranger shall have no responsibility or liability to you
with respect thereto.

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                    To assist us in our syndication and solicitation efforts,
you agree promptly to prepare and provide to us all information with respect to
the Borrower and its subsidiaries and the other transactions contemplated
hereby, including all financial information and projections (the “Projections”),
as we may reasonably request in connection with the arrangement and syndication
of the Revolving Credit Facility and the arrangement of the Amendments. You
hereby represent and covenant that (a) all written information (including, to
your knowledge, any information of a general or industry nature) other than the
Projections (the “Information”) that has been or will be made available to us by
you or any of your representatives is or will be, taken as a whole when
furnished, complete and correct in all material respects and does not or will
not, when 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 not materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to us by you or any of your representatives have been or will be
prepared in good faith based upon assumptions that are believed by you to be
reasonable at the time made, it being understood that the actual results may
vary from the results projected therein. You understand that in arranging and
syndicating the Revolving Credit Facility and the Amendments we may use and rely
on the Information and Projections without independent verification thereof.

                    As consideration for the commitments and agreements of the
Commitment Parties hereunder, you agree to cause to be paid the nonrefundable
fees described in the Fee Letter dated the date hereof and delivered herewith
(the “Fee Letter”).

                    Each Commitment Party’s commitments and agreements hereunder
are subject to (a) there not occurring or becoming known to such Commitment
Party any event, development or circumstance since September 30, 2010 that has
had or could reasonably be expected to have a material adverse effect on the
business, assets, property, liabilities, operation or condition (financial or
otherwise) of the Borrower and its subsidiaries, taken as a whole, (b) such
Commitment Party not becoming aware after the date hereof of any information or
other matter (including any matter relating to financial models and underlying
assumptions relating to the Projections) affecting the Borrower or its
subsidiaries that in such Commitment Party’s reasonable judgment is inconsistent
in a material and adverse manner with any such information or other matter
disclosed to such Commitment Party by the Borrower prior to the date hereof, (c)
such Commitment Party’s reasonable satisfaction that prior to and during the
syndication of the Revolving Credit Facility there shall be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of the Borrower, or any of its domestic subsidiaries (other than
the Notes), (d) the closing of the Revolving Credit Facility on or before June
30, 2011 and (e) the other conditions set forth or referred to in the Term
Sheet. The terms and conditions of the commitments hereunder and of the
Revolving Credit Facility are not limited to those set forth herein and in the
Term Sheet; provided, however, that those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of the Commitment Parties and the Borrower.

                    You agree (a) to indemnify and hold harmless the Commitment
Parties, their affiliates and their respective directors, employees, advisors,
and agents (each, an “indemnified person”) from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this Commitment Letter, the
Revolving Credit Facility, the use of the proceeds thereof, the Amendments or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person
is a party thereto, and to reimburse each indemnified person upon demand for any
legal or other expenses incurred in connection with investigating or defending
any of the foregoing, provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities or related
expenses to the extent they are found by a final, non-appealable judgment of a
court to arise from the willful misconduct or gross negligence of such
indemnified person, and (b) to reimburse each Commitment Party and its
affiliates on demand for all out-of-pocket reasonable,

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documented expenses (including due diligence expenses, syndication expenses,
consultant’s fees and expenses, travel expenses, and reasonable fees, charges
and disbursements of counsel) incurred in connection with the Revolving Credit
Facility, the Amendments and any related documentation (including this
Commitment Letter and the definitive financing documentation) or the
administration, amendment, modification or waiver thereof. No indemnified person
shall be liable for any damages arising from the use by others of Information or
other materials obtained through electronic, telecommunications or other
information transmission systems, except to the extent any such damages are
found by a final, non-appealable judgment of a court to arise from the gross
negligence or willful misconduct of such indemnified person or such indemnified
person’s affiliates, directors, employees, advisors or agents or for any
special, indirect, consequential or punitive damages in connection with the
Revolving Credit Facility or the Amendments.

                    You acknowledge that each Commitment Party and its
affiliates (the term “Commitment Party” as used below in this paragraph being
understood to include such affiliates) may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests regarding the
transactions described herein and otherwise. No Commitment Party will use
confidential information obtained from you by virtue of the transactions
contemplated hereby or its other relationships with you in connection with the
performance by such Commitment Party of services for other companies, and no
Commitment Party will furnish any such information to other companies. You also
acknowledge that no Commitment Party has any obligation to use in connection
with the transactions contemplated hereby, or to furnish to you, confidential
information obtained from other companies. You further acknowledge that JPMorgan
is a full service securities firm and JPMorgan may from time to time effect
transactions, for its own or its affiliates’ account or the account of
customers, and hold positions in loans, securities or options on loans or
securities of the Borrower and its affiliates and of other companies that may be
the subject of the transactions contemplated by this Commitment Letter.

                    Each Commitment Party may employ the services of its
affiliates in providing certain services hereunder and, in connection with the
provision of such services, may exchange with such affiliates information
concerning you and the other companies that may be the subject of the
transactions contemplated by this Commitment Letter, and, to the extent so
employed, such affiliates shall be entitled to the benefits afforded such
Commitment Party hereunder.

                    Notwithstanding the two immediately preceding paragraphs,
JPMorgan acknowledges the terms and conditions contained in the letter agreement
entered into on February 18, 2011 between you and JPMorgan (the “NDA”) and
agrees that nothing in this Commitment Letter shall supersede or render
inapplicable the NDA, and JPMorgan reaffirms its obligations to comply with the
terms and conditions of the NDA.

                    Neither this Commitment Letter nor the Fee Letter shall be
assignable by you without the prior written consent of each Commitment Party
(and any purported assignment without such consent shall be null and void). This
Commitment Letter is intended to be solely for the benefit of the parties hereto
and is not intended to confer any benefits upon, or create any rights in favor
of, any person other than the parties hereto and the indemnified persons. This
Commitment Letter may not be amended or waived except by an instrument in
writing signed by you and each Commitment Party. This Commitment Letter may be
executed in any number of counterparts, each of which shall be an original, and
all of which, when taken together, shall constitute one agreement. Delivery of
an executed signature page of this Commitment Letter by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof. This
Commitment Letter, the Fee Letter and the NDA are the only agreements that have
been entered into among us with respect to the Revolving Credit Facility and the
Amendments and set forth the entire understanding of the parties with respect
thereto.

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                    This Commitment Letter shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York. You
hereby consent to the exclusive jurisdiction and venue of the state or federal
courts located in the City of New York. Each party hereto irrevocably waives, to
the fullest extent permitted by applicable law, (a) any objection that it may
now or hereafter have to the laying of venue of any such legal proceeding in the
state or federal courts located in the City of New York and (b) any right it may
have to a trial by jury in any suit, action, proceeding, claim or counterclaim
brought by or on behalf of any party related to or arising out of this
Commitment Letter, the Term Sheet, the transactions contemplated hereby or the
performance of services hereunder.

                    This Commitment Letter is delivered to you on the
understanding that neither this Commitment Letter, the Term Sheet or the Fee
Letter nor any of their terms or substance shall be disclosed, directly or
indirectly, to any other person (including, without limitation, other potential
providers or arrangers of financing) except (a) to your officers, agents and
advisors who are directly involved in the consideration of this matter or (b) as
may be compelled in a judicial or administrative proceeding or as otherwise
required by law (in which case you agree to inform us promptly thereof),
provided, that the foregoing restrictions shall cease to apply (except in
respect of the Fee Letter and its terms and substance) after this Commitment
Letter has been accepted by you.

                    The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter and any other
provision herein or therein which by its terms expressly survives the
termination of this Commitment Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or the
commitments hereunder.

                    If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to us executed counterparts hereof and of the Fee Letter not
later than 5:00 p.m., New York City time, on March 4, 2011. This offer will
automatically expire at such time if we have not received such executed
counterparts in accordance with the preceding sentence.

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                    We are pleased to have been given the opportunity to assist
you in connection with this important financing.

 

 

 

 

 

 

 

 

Very truly yours,

 

 

 

 

 

 

 

J.P. MORGAN SECURITIES LLC

 

 

 

 

 

 

 

By:

  /s/ Cornelius J. Droogan

 

 

 

 

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Name: /s/ Cornelius J. Droogan

 

 

 

 

Title: Managing Director

 

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

 

 

By:

  /s/ Edmond F. Thompson

 

 

 

 

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Name: /s/ Edmond F. Thompson

 

 

 

 

Title: SVP

 

 

 

 

 

Accepted and agreed to as of

 

 

 

the date first written above by:

 

 

 

 

 

 

 

 

GRIFFON CORPORATION

 

 

 

 

 

 

 

By:

    /s/ Thomas D. Gibbons

 

 

 

 

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Name: Thomas D. Gibbons

 

 

 

 

Title: Treasurer

 

 

 

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EXHIBIT A

$200,000,000 Revolving Credit Facility
Summary of Principal Terms and Conditions

 

 

Borrower:

Griffon Corporation.

 

 

Administrative Agent:

JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”)

 

 

Lead Arranger:

J.P. Morgan Securities LLC.

 

 

Facility:

1. Amount: Revolving credit facility in an aggregate principal amount of $200
million (the “Revolving Credit Facility”).

 

 

 

2. Use of Proceeds: The proceeds of loans under the Revolving Credit Facility
(the “Revolving Loans”) shall be utilized for debt repayment, working capital,
capital expenditures and other general corporate purposes.

 

 

 

3. Maturity: The final maturity date of the Revolving Credit Facility shall be
the fifth anniversary of the Closing Date (the “Revolving Loan Maturity Date”).

 

 

 

4. Availability: Revolving Loans may be borrowed, repaid and reborrowed on and
after the Closing Date and prior to the Revolving Loan Maturity Date in
accordance with the terms of the Revolving Credit Documentation (as defined
below).

 

 

 

5. Letter of Credit Sublimit: $50 million will be available for the issuance of
stand-by and trade letters of credit in US Dollars and Available Foreign
Currencies (as defined below) in each case, at the Borrower’s option (“Letters
of Credit”) by JPMorgan Chase Bank (or its affiliates) to support obligations of
the Borrower and its subsidiaries. Each Letter of Credit shall expire not later
than the earlier of (a) 12 months after its date of issuance or such longer
period of time as may be agreed by the applicable Issuing Lender and (b) the
tenth business day prior to the final maturity of the Revolving Facility;
provided that any Letter of Credit may provide for renewal thereof for
additional periods of up to 12 months or such longer period of time as may be
agreed by the applicable Issuing Lender (which in no event shall extend beyond
the date referred to in clause (b) above), except to the extent cash
collateralized or backstopped pursuant to arrangements reasonably acceptable to
the relevant Issuing

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Lender. Letter of Credit outstandings will reduce availability under the
Revolving Credit Facility on a dollar-for-dollar basis.

 

 

 

6. Swingline Loans: $30 million will be available prior to the Revolving Loan
Maturity Date for swingline loans (the “Swingline Loans” and, together with
Revolving Loans, the “Loans”) to be made by by JPMorgan Chase Bank (or its
affiliates) (in such capacity, the “Swingline Lender”) on same-day notice. Any
Swingline Loans will reduce availability under the Revolving Credit Facility on
a dollar-for-dollar basis.

 

 

 

7. Issuance Price: 100%.

 

 

 

8. Multicurrency Sublimit: $50 million will be available for loans in Euros and
other currencies (all such currencies, the “Available Foreign Currencies”)
agreed to by all the Lenders (“Multicurrency Loans”). Multicurrency Loans will
be made available by all the Lenders on a ratable basis.

 

 

Guaranties:

Each direct and indirect, existing and future, material domestic subsidiary of
the Borrower, which shall be defined so as to include on the Closing Date only
Telephonics Corporation, Clopay Building Products Company, Inc., Clopay Plastics
Products Company, Inc., and Ames True Temper, Inc. (each, a “Guarantor” and,
collectively, the “Guarantors”), shall provide a guaranty (collectively, the
“Guaranties”) of all amounts owing under the Revolving Credit Facility (the
Borrower and the Guarantors, collectively, the “Loan Parties”).

 

 

 

For the avoidance of doubt, no non-U.S. subsidiary of the Borrower which is a
“controlled foreign corporation” (within the meaning of Section 957 of the
Internal Revenue Code) (each, a “CFC”) shall be required to provide a Guaranty
or constitute a Guarantor.

 

 

Security:

All amounts owing under the Revolving Credit Facility will be secured by a first
priority perfected security interest in substantially all the assets of the
Borrower and the Guarantors, except for those assets as to which the
Administrative Agent shall determine in its sole discretion that the cost of
obtaining a security interest therein are excessive in relation to the value of
the security to be afforded thereby, provided that in no event shall more than
65% of the total outstanding voting stock of any

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CFC be required to be pledged.

 

 

Optional Commitment Reductions:

The unutilized portion of the total commitments under the Revolving Credit
Facility may from time to time be reduced or terminated by the Borrower without
penalty (other than breakage costs described below in connection with any
prepayment).

 

 

Voluntary Prepayments:

Voluntary prepayments may be made at any time on three business days’ notice in
the case of Eurocurrency Loans, or one business day’s notice in the case of Base
Rate Loans (or same day notice in the case of Swingline Loans), without premium
or penalty; provided that voluntary prepayments of Eurocurrency Loans made on a
date other than the last day of an interest period applicable thereto shall be
subject to customary breakage costs.

 

 

Mandatory Repayments:

If at any time the outstandings pursuant to the Revolving Credit Facility
(including Letter of Credit outstandings, Swingline Loans and the US Dollar
equivalent of Multicurrency Loans and Letters of Credit issued in Available
Foreign Currencies) exceed the aggregate commitments with respect thereto,
prepayments of Revolving Loans, Swingline Loans and/or Multicurrency Loans (or
the cash collateralization of Letters of Credit) shall be required in an amount
equal to such excess.

 

 

 

Multicurrency Loans and Letters of Credit issued in Available Foreign Currencies
will be marked-to market to the US Dollar equivalent thereof on a periodic basis
to be agreed. To the extent that the US Dollar equivalent of such exposure
exceeds 105% of the Multicurrency Sublimit, prepayments of Multicurrency Loans
(or the cash collateralization of Letters of Credit issued in Available Foreign
Currencies) shall be required in an amount equal to such excess.

 

 

 

The commitments under the Revolving Credit Facility will reduced as described
under “Negative Covenants” below and the Borrower shall comply with the
requirements of the first aragraph of this Section after giving effect to any
such reduction.

 

 

Interest Rates:

At the Borrower’s option, Loans may be maintained from time to time as (x) Base
Rate Loans, which shall bear interest at the Base Rate in effect from time to
time plus the Applicable Margin (as defined below) or (y) Eurocurrency Loans,
which shall bear interest at the Eurocurrency Rate (adjusted for maximum
reserves) as determined by the Administrative Agent for the respective interest
period and the applicable currency, plus the Applicable Margin, provided, that
(a) all Swingline Loans shall

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bear interest based upon the Base Rate and (b) all Multicurrency Loans shall be
Eurocurrency Loans.

 

 

 

“Applicable Margin” shall mean, (A) for Base Rate Loans, initially 1.75% and
following delivery of financial statements for the first full fiscal quarter
ending after the Closing Date a margin based on the leverage ratio from time to
time, as set forth on the grid below, and (B) for Eurocurrency Loans, initially
2.75% and following delivery of financial statements for the first full fiscal
quarter ending after the Closing Date a margin based on the leverage ratio from
time to time, as set forth on the grid below.

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage
Ratio

 

Applicable
Margin for
Base Rate
Loans

 

Applicable
Margin for
Eurocurrency
Loans

 

Commitment
Fee

 

 

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> 4.00:1.00

 

 

1.75

%

 

2.75

%

 

0.50

%

 

< 4.00:1.00

 

 

1.50

%

 

2.50

%

 

0.45

%

 

< 3.00:1.00

 

 

1.25

%

 

2.25

%

 

0.40

%

 

< 2.00:1.00

 

 

1.00

%

 

2.00

%

 

0.35

%

 

< 1.00:1.00

 

 

0.75

%

 

1.75

%

 

0.30

%

 

 

 

“Base Rate” shall mean the highest of (x) the rate that the Administrative Agent
announces from time to time as its prime lending rate, as in effect from time to
time, (y) 1/2 of 1% in excess of the overnight federal funds rate and (z) the
Eurocurrency Rate plus 1.00%.

 

 

 

The Eurocurrency Rate shall be adjusted for statutory reserve requirements.

 

 

 

“Base Rate Floor”: None

 

 

 

“Eurocurrency Rate Floor”: None

 

 

 

Interest periods of 1, 2, 3 and 6 (or if available to all Lenders, 9 and 12
months) shall be available in the case of Eurocurrency Loans.

 

 

 

The Revolving Credit Facility shall include customary protective provisions for
such matters as defaulting banks, FATCA indemnity for the Borrower, capital
adequacy, increased costs including as the result of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, reserves, funding losses, illegality, and
withholding taxes. The Borrower shall have the right to replace

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any Lender that (i) charges a material amount in excess of that being charged by
the other Lenders with respect to contingencies described in the immediately
preceding sentence or (ii) does not consent to certain amendments or waivers of
the Revolving Credit Facility which expressly require the consent of such Lender
and which have been approved by the Required Lenders.

 

 

 

Interest in respect of Base Rate Loans shall be payable quarterly in arrears on
the last business day of each calendar quarter. Interest in respect of
Eurocurrency Loans shall be payable in arrears at the end of the applicable
interest period and every three months in the case of interest periods in excess
of three months. Interest will also be payable at the time of repayment of any
Loans and at maturity.

 

 

 

Upon the occurrence and during the continuance of a payment default, interest
will accrue (i) in the case of principal on any loan, at a rate of 2.00% per
annum plus the rate otherwise applicable to such loan and (ii) in the case of
any other outstanding amount, at a rate of 2.00% per annum plus the non-default
interest rate then applicable to Base Rate loans, and will be payable on demand.

 

 

Commitment Fee:

A commitment fee, at a per annum rate of 0.50% on the daily undrawn portion of
the commitments of each Lender under the Revolving Credit Facility, will
commence accruing on the Closing Date and will be payable quarterly in arrears.
Following delivery of financial statements for the first full fiscal quarter
ending after the Closing Date, the commitment fee rate will be determined based
on the leverage ratio from time to time, as set forth on the grid above.

 

 

Letter of Credit Fees:

A letter of credit fee equal to the Applicable Margin for Loans maintained as
Eurocurrency Loans on the outstanding stated amount of Letters of Credit (the
“Letter of Credit Fee”) to be shared proportionately by the Lenders under the
Revolving Credit Facility in accordance with their participation in the
respective Letter of Credit, and a facing fee of 1/8% per annum (but in no event
less than $250 per annum for each Letter of Credit) (the “Facing Fee”) to be
paid to the issuer of each Letter of Credit for its own account, in each case
calculated on the aggregate stated amount of all Letters of Credit for the
stated duration thereof. Letter of Credit Fees and Facing Fees shall be payable
quarterly in arrears.

 

 

Conditions

A.

The availability of the Revolving Credit Facility

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Precedent:

shall be conditioned upon the prior or concurrent satisfaction of the following
conditions precedent (the date upon which all such conditions precedent shall be
satisfied, the “Closing Date”):

 

 

 

(i) Each Loan Party shall have executed and delivered reasonably satisfactory
definitive financing documentation with respect to the Revolving Credit Facility
(“Revolving Credit Documentation”).

 

 

 

(ii) The commitments under (a) the Existing Credit Agreements and (b) the Credit
and Guarantee Agreement, dated as of September 30, 2010, among Clopay Ames True
Temper Holding Corp, Clopay Ames True Temper LLC, certain subsidiaries as
guarantors, the lenders parties thereto and Goldman Sachs Lending Partners LLC,
as administrative agent shall have been terminated, all amounts due and payable
thereunder shall have been paid and all liens created in connection therewith
shall have been released.

 

 

 

(iii) The Borrower shall have received up to $500 million in aggregate gross
cash proceeds from the issuance of the Notes.

 

 

 

(iv) The Lenders, the Administrative Agent and the Lead Arranger shall have
received all fees required to be paid, and all expenses required to be paid for
which invoices have been presented, pursuant to the Commitment Letter and the
Fee Letter on or before the Closing Date.

 

 

 

(v) The Borrower shall have delivered reasonably satisfactory audited financial
statements of the Borrower for the immediately preceding three fiscal years.

 

 

 

(vi) The Administrative Agent shall have received the results of a recent lien
search in each relevant jurisdiction with respect to each Loan Party, and such
search shall reveal no liens on any of the assets of any Loan Party or its
subsidiaries except for customary liens permitted by the Revolving Credit
Documentation or liens to be discharged on or prior to the Closing Date pursuant
to documentation reasonably satisfactory to the Administrative Agent.

 

 

 

(vii) All documents and instruments reasonably necessary to perfect the
Administrative Agent’s first priority security

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interest in the collateral under the Revolving Credit Facility (including
delivery of stock certificates and undated stock powers executed in blank) shall
have been executed and be in reasonably proper form for filing.

 

 

 

 

(viii) The Administrative Agent shall have received such legal opinions
(including opinions from counsel to the Borrower and its subsidiaries),
documents and other instruments as are customary for transactions of this type
or as they may reasonably request.

 

 

 

 

B.

To All Revolving Loans and Letters of Credit

 

 

 

 

(i)

All representations and warranties shall be true and correct in all material
respects on and as of the date of each borrowing of a Loan and each issuance of
a Letter of Credit (although any representations and warranties which expressly
relate to a given date or period shall be required to be true and correct in all
material respects only as of the respective date or for the respective period,
as the case may be);

 

 

 

 

(ii)

No event of default under the Revolving Credit Facility or event which with the
giving of notice or lapse of time or both would be an event of default under the
Revolving Credit Facility, shall have occurred and be continuing.

 

 

Representations and Warranties:

Representations and warranties which are usual and customary for facilities of
this type.

 

 

Covenants:

Affirmative and negative covenants that are usual and customary for facilities
of this type.

 

 

 

The negative covenants will include the following exceptions (and such others as
may be agreed upon):

 

 

 

(i) Restrictions on incurrence of debt: Exceptions to include, among others, (a)
all scheduled debt of the Borrower and its domestic subsidiaries existing on the
Closing Date, (b) additional secured debt of the Borrower and its subsidiaries
in an aggregate principal amount not to exceed $75 million at any time, (c)
additional secured debt of the foreign subsidiaries of the Borrower in an
aggregate principal amount not to exceed $75 million at any time, (d) additional
unsecured debt of the Borrower and its subsidiaries in an aggregate principal
amount not to exceed $300 million at any time and subject to no default

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and pro forma compliance with financial covenants, (e) additional subordinated
debt of the Borrower and its subsidiaries so long as such debt is subordinated
to the debt under the Revolving Credit Facility on terms and conditions
reasonably satisfactory to the Administrative Agent and subject to no default
and pro forma compliance with financial covenants, (f) additional unsecured debt
of the Borrower and the Guarantors so long as the total leverage ratio does not
exceed 4.5:1 on a pro forma basis, and subject to no default and pro forma
compliance with financial covenants, and (g) ESOP loans constituting debt of the
Borrower in an aggregate principal amount not to exceed $50 million;

 

 

 

(ii) Restrictions on liens: Exceptions to include, among others, all scheduled
liens granted by the Borrower and its subsidiaries (including without limitation
all foreign subsidiaries) existing on the Closing Date), all liens in connection
with secured debt to the extent referenced in the immediately preceding
paragraph relating to exceptions to restrictions on debt incurrence, and a
general-use basket for additional liens securing debt in an amount not to exceed
$35 million;

 

 

 

(iii) Restrictions on dispositions of assets: Exceptions to include, among
others, sales of inventory in the ordinary course of business, sales of obsolete
or worn out assets, and an additional general-use basket for asset sales not to
exceed (together with all other asset sales made in reliance on the basket)
17.5% of consolidated total assets as of the immediately preceding quarter end
for which financial statements are available unless the commitments under the
Revolving Credit Facility are reduced on a dollar-for-dollar basis by the amount
of such excess.

 

 

 

(iv) Restrictions on acquisitions and other investments: Exceptions to include,
among others, permitted acquisitions not to exceed $400 million in aggregate
acquisition consideration and subject to no default and pro forma compliance
with financial covenants, and an additional general-use basket for investments
not exceeding $75 million); and

 

 

 

(v) Restricted payments: Exceptions to include, among others, ability to make
restricted payments in an aggregate amount of $25 million per fiscal year,
unless the total leverage ratio does not exceed 3:1 on a pro forma basis, in
which case restricted payments shall be permitted so long as such leverage ratio
is not exceeded on a pro forma basis and ESOP purchases in an amount not to
exceed $10 million per year (provided there shall be no more than an aggregate
of $50 million in ESOP purchases after

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the Closing Date).

 

 

Financial Covenants.

Maximum Senior Secured Leverage Ratio (definition to be agreed) of 2.75:1.00.

 

 

 

Maximum Total Leverage Ratio (definition to be agreed, but with total debt to be
calculated net of unrestricted cash and cash equivalents in excess of $100
million) of 5.50:1.00, with a step-down to 5.00:1.00 for the last fiscal quarter
of the fiscal year ending 2012; provided that in the event that the Borrower or
its subsidiaries complete a permitted acquisition and incur debt to finance at
least 35% of the consideration therefor, the pro forma Total Leverage Ratio
shall increase by 0.50x for the 12 months following such permitted acquisition.

 

 

 

Minimum Interest Coverage Ratio (to be defined as the ratio of EBITDA to cash
interest expense) of 2.75:1.00. 

 

 

 

Maximum Capital Expenditures of $100 million per fiscal year, with the ability
to carry-forward 50% of unused amounts to the next succeeding fiscal year.

 

 

Events of Default:

Usual and customary for facilities of this type.

 

 

Assignments:

The Borrower may not assign its rights or obligations under the Revolving Credit
Facility. Any Lender may assign its rights and obligations under the Revolving
Credit Facility, subject (other than if an Event of Default shall have occurred
and be continuing) to the prior written consent of the Borrower (not to be
unreasonably withheld) and the Administrative Agent (not to be unreasonably
withheld); provided that no consent of Borrower shall be required for an
assignment to an existing Lender, an affiliate of an existing Lender or an
approved fund. The Borrower will be deemed to have given its consent if no
express refusal is received within 5 business days after notice is received by
the Borrower. The minimum assignment amount shall be $5 million, in each case
unless otherwise agreed by the Borrower and the Administrative Agent. The
Administrative Agent shall receive a processing and recordation fee of $3,500
from the relevant assignor in connection with all assignments. In addition, each
Lender may sell participations in all or a portion of its loans and commitments
under one or more of the Revolving Credit Facility; provided that no purchaser
of a participation shall have the right to exercise or to cause the selling
Lender to exercise voting rights in respect of the Revolving Credit Facility
(except

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as to certain basic issues).

 

 

Waivers and Amendments:

Amendments and waivers of the provisions of the Revolving Loan Documents will
require the approval of Lenders holding commitments and/or outstandings (as
applicable) representing more than 50% of the aggregate commitments and
outstandings under the Revolving Credit Facility from time to time (the
“Required Lenders”), except that (a) the consent of each Lender directly
affected thereby will be required with respect to (i) increases in commitment
amounts, (ii) reductions of principal or interest, (iii) extensions of the
scheduled final maturity of any Loan, and (iv) modifications to the foregoing
required voting percentages or to the pro rata sharing (except in connection
with a prepayment of Loans by the Borrower offered ratably to all Lenders at a
discount to par, which shall be permitted under the Revolving Credit Facility),
and (b) the consent of all of the Lenders shall be required with respect to
releases of all or substantially all of the collateral or of all or
substantially all of the Guaranties provided by the Guarantors.

 

 

Indemnification:

The documentation for the Revolving Credit Facility will contain customary
indemnities for the Administrative Agent and the Lenders, in each case other
than as a result of such person’s gross negligence or willful misconduct.

 

 

Governing Law and Forum:

New York.

 

 

Counsel to the Administrative Agent and Lead Arranger:

Simpson Thacher & Bartlett LLP.

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