Ex-10.2

 

EXECUTION VERSION

 

 

 

 

GRAPHIC [g187541kc01i001.gif]

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

September 30, 2010

 

among

 

CLOPAY AMES TRUE TEMPER HOLDING CORP.,

as Borrower,

 

CLOPAY AMES TRUE TEMPER LLC,

as Holdings,

 

CERTAIN SUBSIDIARIES OF CLOPAY AMES TRUE TEMPER HOLDING CORP.,

as Guarantors,

 

The Lenders Party Hereto

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

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J.P. MORGAN SECURITIES LLC and DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arrangers, Joint Bookrunners and Co-Syndication Agents

 

WELLS FARGO CAPITAL FINANCE, LLC and U.S. BANK, N.A.,

as Co-Documentation Agents

 

 

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I

 

Definitions

 

 

 

 

Section 1.01.

 

Defined Terms

2

Section 1.02.

 

Classification of Loans and Borrowings

39

Section 1.03.

 

Terms Generally

40

Section 1.04.

 

Accounting Terms; GAAP

40

 

 

 

 

ARTICLE II

 

The Credits

 

 

 

 

Section 2.01.

 

Commitments

40

Section 2.02.

 

Loans and Borrowings

40

Section 2.03.

 

Requests for Revolving Borrowings

41

Section 2.04.

 

Protective Advances

42

Section 2.05.

 

Swingline Loans and Overadvances

42

Section 2.06.

 

Letters of Credit

44

Section 2.07.

 

Funding of Borrowings

47

Section 2.08.

 

Interest Elections

48

Section 2.09.

 

Termination and Reduction of Commitments; Increase in Revolving Commitments;
Canadian Facility

49

Section 2.10.

 

Repayment and Amortization of Loans; Evidence of Debt

51

Section 2.11.

 

Prepayment of Loans

51

Section 2.12.

 

Fees

52

Section 2.13.

 

Interest

53

Section 2.14.

 

Alternate Rate of Interest

54

Section 2.15.

 

Increased Costs

54

Section 2.16.

 

Break Funding Payments

55

Section 2.17.

 

Taxes

56

Section 2.18.

 

Payments Generally; Allocation of Proceeds; Sharing of Set-offs

58

Section 2.19.

 

Mitigation Obligations; Replacement of Lenders

60

Section 2.20.

 

Defaulting Lenders

60

Section 2.21.

 

Returned Payments

62

 

 

 

 

ARTICLE III

 

Representations and Warranties

 

 

 

 

Section 3.01.

 

Organization; Powers

62

Section 3.02.

 

Authorization; Enforceability

62

 

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Section 3.03.

 

Governmental Approvals; No Conflicts

63

Section 3.04.

 

Financial Condition; No Material Adverse Effect; Projections

63

Section 3.05.

 

Properties

63

Section 3.06.

 

Litigation and Environmental Matters

64

Section 3.07.

 

Compliance with Laws and Contractual Obligations

64

Section 3.08.

 

Investment Company Status

64

Section 3.09.

 

Taxes

65

Section 3.10.

 

ERISA; Employee Benefit Plans

65

Section 3.11.

 

Disclosure

65

Section 3.12.

 

Use of Credit

65

Section 3.13.

 

Burdensome Agreements

65

Section 3.14.

 

Insurance

66

Section 3.15.

 

Capitalization and Subsidiaries

66

Section 3.16.

 

Labor Matters

66

Section 3.17.

 

Security Interest in Collateral

66

Section 3.18.

 

Holdings

67

Section 3.19.

 

Solvency

67

Section 3.20.

 

No Restricted Payments

67

Section 3.21.

 

Related Agreements

67

Section 3.22.

 

Patriot Act Compliance

67

 

 

 

 

ARTICLE IV

 

Conditions

 

 

 

 

Section 4.01.

 

Closing

67

Section 4.02.

 

Each Credit Event

72

 

 

 

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

 

 

 

Section 5.01.

 

Financial Statements, Borrowing Base and Other Information

73

Section 5.02.

 

Notices of Material Events

77

Section 5.03.

 

Existence; Conduct of Business

78

Section 5.04.

 

Payment of Obligations

79

Section 5.05.

 

Maintenance of Properties

79

Section 5.06.

 

Maintenance of Insurance

79

Section 5.07.

 

Books and Records

79

Section 5.08.

 

Inspection Rights; Collateral Reports

79

Section 5.09.

 

Compliance with Laws and Contractual Obligations

80

Section 5.10.

 

Use of Proceeds

80

Section 5.11.

 

Casualty and Condemnation

80

Section 5.12.

 

Depositary Banks

80

Section 5.13.

 

Collateral; Further Assurances

80

Section 5.14.

 

Post-Closing Deliverables

80

 

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Section 5.15.

 

Ratings

81

Section 5.16.

 

Interest Rate Protection

81

 

 

 

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

 

 

 

Section 6.01.

 

Indebtedness; Guarantees

81

Section 6.02.

 

Liens

84

Section 6.03.

 

Mergers, Consolidations, Etc.

86

Section 6.04.

 

Dispositions

86

Section 6.05.

 

Lines of Business

87

Section 6.06.

 

Investments and Acquisitions

88

Section 6.07.

 

Restricted Payments

89

Section 6.08.

 

Transactions with Affiliates

92

Section 6.09.

 

Restrictive Agreements

92

Section 6.10.

 

Swap Agreements

93

Section 6.11.

 

Fixed Charge Coverage Ratio

93

Section 6.12.

 

Stock Issuance

93

Section 6.13.

 

Modifications of Certain Documents

93

Section 6.14.

 

Passive Holding Company Status

94

Section 6.15.

 

Sale and Leaseback Transactions

94

Section 6.16.

 

Fiscal Year

94

 

 

 

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

ARTICLE VIII

 

The Administrative Agent

 

ARTICLE IX

 

Miscellaneous

 

 

 

 

Section 9.01.

 

Notices

99

Section 9.02.

 

Waivers; Amendments

100

Section 9.03.

 

Expenses; Indemnity; Damage Waiver

102

Section 9.04.

 

Successors and Assigns

103

Section 9.05.

 

Survival

107

Section 9.06.

 

Counterparts; Integration; Effectiveness

107

Section 9.07.

 

Severability

107

Section 9.08.

 

Right of Setoff

107

 

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Section 9.09.

 

Release of Collateral

108

Section 9.10.

 

Governing Law; Jurisdiction; Consent to Service of Process

108

Section 9.11.

 

WAIVER OF JURY TRIAL

109

Section 9.12.

 

Headings

109

Section 9.13.

 

Confidentiality

109

Section 9.14.

 

Several Obligations; Nonreliance; Violation of Law

110

Section 9.15.

 

USA PATRIOT Act

110

Section 9.16.

 

Disclosure

110

Section 9.17.

 

Appointment for Perfection

110

Section 9.18.

 

Interest Rate Limitation

110

Section 9.19.

 

Effect of Agreement

111

 

 

 

 

ARTICLE X

 

Guaranty

 

 

 

 

Section 10.01.

 

Guaranty

111

Section 10.02.

 

Guaranty of Payment

111

Section 10.03.

 

No Discharge or Diminishment of Guaranty

111

Section 10.04.

 

Defenses Waived

112

Section 10.05.

 

Rights of Subrogation

112

Section 10.06.

 

Reinstatement; Stay of Acceleration

113

Section 10.07.

 

Information

113

Section 10.08.

 

[Reserved]

113

Section 10.09.

 

Maximum Liability

113

Section 10.10.

 

Contribution

113

Section 10.11.

 

Liability Cumulative

114

 

SCHEDULES:

 

Commitment Schedule

Schedule 1.01(a) — Account Debtors

Schedule 1.01(b) — Griffon Letters of Credit

Schedule 1.01(c) — Effective Date Guarantors

Schedule 3.05 — Properties

Schedule 3.06 — Disclosed Matters

Schedule 3.13 — Burdensome Agreements

Schedule 3.14 — Insurance

Schedule 3.15 — Capitalization and Subsidiaries

Schedule 3.16 — Labor Matters

Schedule 3.17 — Perfection Schedule

Schedule 4.01(p) — Post-Closing Perfection

Schedule 6.01(a) — Existing Indebtedness

Schedule 6.01(b) — Existing Guaranties

Schedule 6.02 — Existing Liens

Schedule 6.06 — Existing Investments

Schedule 6.09 — Existing Restrictive Agreements

 

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EXHIBITS:

 

Exhibit A — Form of Assignment and Assumption

Exhibit B — Form of Borrowing Base Certificate

Exhibit C — Form of Compliance Certificate

Exhibit D — Form of Joinder Agreement

Exhibit E — Form of Security Agreement

Exhibit F — Form of Intercreditor Agreement

Exhibit G — Form of Effective Date Certificate

Exhibit H — Form of Global Intercompany Note

 

v

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AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 30, 2010 (as it may
be amended or modified from time to time, this “Agreement”), among CLOPAY AMES
TRUE TEMPER LLC, a Delaware limited liability company (“Holdings”), CLOPAY AMES
TRUE TEMPER HOLDING CORP., a Delaware corporation (the “Borrower”), the other
Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK,
N.A., as Administrative Agent.

 

W I T N E S S E T H

 

WHEREAS, Clopay Acquisition Corp., a Delaware corporation and a subsidiary of
the Borrower (“Acquisition Sub”), has entered into the Stock Purchase Agreement,
dated as of July 19, 2010 (the “Acquisition Agreement”), with CHATT Holdings
Inc., a Delaware corporation (the “Target”) and CHATT Holdings LLC, pursuant to
which Acquisition Sub has agreed to acquire all of the Equity Interests of the
Target and its subsidiaries (the “Acquisition”);

 

WHEREAS, to fund, in part, the Acquisition, the Borrower will incur term loans
in an aggregate principal amount of $375,000,000;

 

WHEREAS, certain Subsidiaries of the Borrower are parties to the Credit
Agreement, dated as of June 24, 2008, as amended, among Clopay Building Products
Company, Inc., a Delaware corporation (“Clopay Building”), as a borrower, Clopay
Plastic Products Company, Inc., a Delaware corporation (“Clopay Plastic”), as a
borrower, JPMorgan Chase Bank, N.A., as administrative agent and the other
lender parties thereto (the “Existing Credit Agreement”);

 

WHEREAS, the Borrower has requested to amend and restate the Existing Credit
Agreement such that (a) the Lenders will extend credit in the form of Revolving
Loans, (b) the Issuing Banks will issue Letters of Credit and (c) the Swingline
Lender will extend credit in the form of Swingline Loans, in each case at any
time and from time to time, in an aggregate principal amount of up to
$125,000,000, prior to the Maturity Date;

 

WHEREAS, the Obligations of the Borrower under the Loan Documents will continue
to be guaranteed by the Guarantors;

 

WHEREAS, the Borrower and the other Loan Parties will continue to secure the
Obligations (with the Administrative Agent, for the benefit of the Secured
Parties, receiving a First Priority Lien on all ABL Collateral and a Second
Priority Lien on all Term Collateral in accordance with the Intercreditor
Agreement); and

 

WHEREAS, the Required Lenders (as defined in the Existing Credit Agreement) and
the Administrative Agent are willing to amend the Existing Credit Agreement and
the Lenders and the Issuing Banks are willing to make available to the Borrower
such revolving credit and letter of credit facilities, in each case upon the
terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree that, as of the
Effective Date, the Existing Credit Agreement shall be amended and restated in
its entirety as follows:

 

1

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ARTICLE I

 

Definitions

 

Section 1.01.          Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:

 

“ABL Collateral” has the meaning assigned to such term in the Intercreditor
Agreement.

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan bears, or the Loans comprising such Borrowing bear, interest at a rate
determined by reference to the Alternate Base Rate.

 

“Account” has the meaning assigned to such term in the Security Agreement.

 

“Account Debtor” means any Person obligated on an Account.

 

“Acquisition” has the meaning assigned to such term in the recitals hereto.

 

“Acquisition Agreement” has the meaning assigned to such term in the recitals
hereto.

 

“Acquisition Consideration” means the purchase consideration for any Permitted
Acquisition and all other payments by Holdings or any of its Subsidiaries in
exchange for, or as part of, or in connection with, any Permitted Acquisition,
whether paid in cash or by exchange of Equity Interests or of properties or
otherwise and whether payable at or prior to the consummation of such Permitted
Acquisition or deferred for payment at any future time, whether or not any such
future payment is subject to the occurrence of any contingency, and includes any
and all payments representing the purchase price and any assumptions of
Indebtedness, “earn-outs” and other agreements to make any payment the amount of
which is, or the terms of payment of which are, in any respect subject to or
contingent upon the revenues, income, cash flow or profits (or the like) of any
Person or business.

 

“Acquisition Sub” has the meaning assigned to such term in the recitals hereto.

 

“Act” has the meaning assigned to such term in Section 9.15.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

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“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders.

 

“Agreement” has the meaning assigned to such term in the preamble hereto.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate in effect
on such day (or, if such day is not a Business Day, as of the preceding Business
Day) in respect of a proposed Eurodollar Loan with a one-month Interest Period
commencing two Business Days thereafter plus the excess of the Applicable Rate
with respect to Eurodollar Loans over the Applicable Rate with respect to ABR
Loans.  Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective
from and including the effective date of such change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Alternative Currency” means any currency other than dollars that is freely
available, freely transferable and freely convertible into dollars and in which
dealings in deposits are carried on in the London interbank market.

 

“Ames” means Ames True Temper, Inc., a Delaware corporation.

 

“Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure, Swingline Loans or Overadvances, a percentage
equal to a fraction the numerator of which is such Lender’s Commitment and the
denominator of which is the aggregate Commitments of all the Lenders (if the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the aggregate Revolving Exposures
at that time), and (b) with respect to Protective Advances or with respect to
the Aggregate Credit Exposure, a percentage based upon its share of the
Aggregate Credit Exposure and the unused Commitments; provided that in the case
of Section 2.20 when a Defaulting Lender shall exist, “Applicable Percentage”
shall, in each case, be calculated disregarding the Defaulting Lender’s
Commitment.

 

“Applicable Pricing Grid” means the table set forth below:

 

Average Availability

 

ABR Spread

 

Eurodollar Spread

 

Commitment Fee
Rate

 

 

 

 

 

 

 

 

 

Category 1

> $83,000,000

 

1.25

%

2.25

%

0.50

%

 

 

 

 

 

 

 

 

Category 2

> $42,000,000 but

< $83,000,000

 

1.50

%

2.50

%

0.50

%

 

 

 

 

 

 

 

 

Category 3

< $42,000,000

 

1.75

%

2.75

%

0.375

%

 

For purposes of the foregoing, (a) each of the Applicable Rate and the
Commitment Fee Rate shall be determined as of the end of each fiscal quarter of
the Borrower (commencing after the end of the first full fiscal quarter ended
after the Effective Date) based upon the daily average Availability for such
fiscal quarter and (b) each change in the Applicable Rate and the

 

3

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Commitment Fee Rate as determined by the Administrative Agent pursuant to clause
(a) shall be effective on the first day of the next succeeding quarter (with
such change to be effective until the next successive change) and the
Administrative Agent shall promptly notify the Borrower and the Lenders of the
determination of the average Availability for the applicable quarter, provided
that the average Availability shall be deemed to be in Category 3 (A) at any
time that an Event of Default has occurred and is continuing or (B) at the
option of the Administrative Agent or at the request of the Required Lenders if
the Borrower fails to deliver a Borrowing Base Certificate required to be
delivered by it pursuant to Section 5.01(l), during the period from the
expiration of the time for delivery thereof until such Borrowing Base
Certificate is delivered.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, as the case may be, the applicable rate per annum determined pursuant to
the Applicable Pricing Grid under the caption “ABR Spread” or “Eurodollar
Spread”, as the case may be, based upon the daily average Availability for the
most recently completed fiscal quarter of the Borrower, provided that, the first
such adjustment shall be made in respect of the first full fiscal quarter ended
after the Effective Date and, until such adjustment is made, the “Applicable
Rate” shall be the applicable rate per annum set forth in the Applicable Pricing
Grid in Category 1.

 

“Approved Fund” has the meaning assigned to such term in Section 9.04.

 

“Arrangers” means J.P. Morgan Securities LLC and Deutsche Bank Securities Inc.
in their capacities as joint lead arrangers of the Commitments.

 

“Asset Sale” means any sale, transfer, lease (other than operating leases
entered into in the ordinary course of business) or other disposition of assets
made in reliance on Section 6.04(e), other than any such disposition resulting
in aggregate Net Asset Sale Proceeds not exceeding $2,000,000 in a single
transaction or a series of related transactions and not exceeding $5,000,000
when aggregated with the Net Asset Sale Proceeds of other such dispositions
during any fiscal year of Holdings.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“ATT” means ATT Holding Co., a subsidiary of the Target.

 

“Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Revolving Commitment and (ii) the Borrowing Base minus (b) the Aggregate Credit
Exposure of all Lenders.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

 

“Available Revolving Commitments” means, at any time, the Revolving Commitments
then in effect minus the Revolving Exposure of all Lenders at such time.

 

“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) commercial credit
cards, (b) stored value cards and (c) treasury management services (including,
without limitation, controlled

 

4

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disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services).

 

“Banking Services Obligations” of the Loan Parties means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

 

“Banking Services Reserves” means all Reserves which the Administrative Agent
from time to time establishes in its Permitted Discretion for Banking Services
then provided or outstanding Banking Services Obligations.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended from time to time, or any successor statute.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or such Person has consented to, approved of, or
acquiesced in, any such proceeding or appointment, provided that a Bankruptcy
Event shall not result solely by virtue of any ownership interest, or the
acquisition of any ownership interest, in such Person by a Governmental
Authority or instrumentality thereof, provided, further, that such ownership
interest does not result in or provide such Person with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” has the meaning assigned to such term in the preamble hereto.

 

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, (b) a Swingline Loan, (c) a Protective
Advance and (d) an Overadvance.

 

“Borrowing Base” means, at any time, the sum of (a) 85% of the Loan Parties’
Eligible Accounts at such time, plus (b) the lesser of (i) 70% of the Loan
Parties’ Eligible Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time and (ii) the product of
85% multiplied by the Net Orderly Liquidation Value percentage identified in the
most recent inventory appraisal ordered by the Administrative Agent multiplied
by the Loan Parties’ Eligible Inventory, valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time, plus (c) 100% of
cash and Permitted Investments in Controlled Accounts with the Administrative
Agent, minus (d) Reserves.  The Administrative Agent may, in its Permitted
Discretion, adjust Reserves, with any such changes to be effective two Business
Days after delivery of notice thereof to the Borrower and the Lenders.  The
Borrowing Base at any time shall be determined by reference to the most recent
Borrowing Base Certificate delivered to the Administrative Agent pursuant to
Section 5.01(l) of the Agreement.

 

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“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower, in substantially
the form of Exhibit B or another form which is acceptable to the Administrative
Agent in its Permitted Discretion.

 

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.02.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Buying Group” means any Person (a) that provides Account Debtors who are
members of such Person discounts on the purchase of merchandise and (b) to which
any Account Debtor forwards payments on Accounts for such Person to remit to the
Loan Parties.

 

“Canadian Borrower” means any Subsidiary of the Borrower that is organized under
the laws of Canada and has been designated as the borrower under the Canadian
Facility in accordance with Section 2.09(h).

 

“Canadian Borrowing Base Assets” has the meaning assigned to such term in
Section 2.09(h).

 

“Canadian Commitment” means, with respect to any Lender, the commitment, if any,
of such Person to make loans to a Canadian Borrower in accordance with Section
2.09(h).

 

“Canadian Facility” means the Canadian Commitments and the loans thereunder.

 

“Canadian Lender” has the meaning assigned to such term in Section 2.09(i).

 

“Capital Expenditures” means, for any period, expenditures during such period
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of Holdings and its
Subsidiaries prepared in accordance with GAAP.

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.  For
purposes of Section 6.01, a Capital Lease Obligation shall be deemed to be
secured by a Lien on the property being leased and such property shall be deemed
to be owned by the lessee.

 

“Cash Dominion Period” has the meaning assigned to such term in the Security
Agreement.

 

“Change of Control” means (a) any Person or “group” (within the meaning of the
Exchange Act and the rules of the SEC thereunder) (i) shall have acquired
ownership or control, directly or indirectly, beneficially or of record, of 35%
or more on a fully diluted basis of the

 

6

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aggregate voting power and/or aggregate economic interest represented by the
issued and outstanding Equity Interests of the Control Person or (ii) shall have
obtained the power (whether or not exercised) to elect a majority of the members
of the board of directors (or similar governing body) of the Control Person; (b)
prior to a Permitted Change of Control Transaction, Griffon shall beneficially
own and control, directly or indirectly, less than 100% on a fully diluted basis
of the economic and voting interest in the Equity Interests of Holdings; (c)
 Holdings shall beneficially own and control, directly or indirectly, less than
100% on a fully diluted basis of the economic and voting interest in the Equity
Interests of Borrower; (d)  the majority of the seats (other than vacant seats)
on the board of directors (or similar governing body) of the Control Person
shall cease to be occupied by Persons who either (i) were members of the board
of directors of the Control Person on the Effective Date or (ii) were nominated
for election by the board of directors of the Control Person, a majority of whom
were directors on the Effective Date or whose election or nomination for
election was previously approved by a majority of such directors; or (e) any
“change of control” (as such term is defined in any Term Loan Document) under
any Term Loan Document shall occur.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or such Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline
Loans, Protective Advances, or Overadvances.

 

“Clopay Building” has the meaning assigned to such term in the recitals hereto.

 

“Clopay Plastic” has the meaning assigned to such term in the recitals hereto.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” means any and all assets (including Equity Interests) on which a
Lien is purported to be granted to the Administrative Agent, for the benefit of
the Secured Parties, pursuant to any Collateral Document to secure the Secured
Obligations.

 

“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreement.

 

“Collateral and Guarantee Requirement” means, at any time, the requirement that:

 

(a)           the Administrative Agent shall have received from Holdings and
each of its Domestic Subsidiaries (other than any Immaterial Subsidiary) either
(i) a counterpart of this Agreement duly executed and delivered on behalf of
such Person as a “Guarantor” (or “Borrower”, in the case of the Borrower) or
(ii) in the case of any Person that becomes a Domestic Subsidiary (other than an
Immaterial Subsidiary), or a Domestic Subsidiary that ceases to be an Immaterial
Subsidiary, in each case after the Effective Date, a Joinder Agreement duly
executed and delivered on behalf of such Person;

 

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(b)           the Administrative Agent shall have received from the Borrower,
Holdings and each Domestic Subsidiary (other than any Immaterial Subsidiary)
either (i) a counterpart of the Security Agreement duly executed and delivered
on behalf of such Person or (ii) in the case of any Person that becomes a
Domestic Subsidiary (other than an Immaterial Subsidiary), or a Domestic
Subsidiary that ceases to be an Immaterial Subsidiary, in each case after the
Effective Date, a supplement to the Security Agreement, in the form specified
therein, duly executed and delivered on behalf of such Person;

 

(c)           in the case of any Person that becomes a Domestic Subsidiary
(other than an Immaterial Subsidiary), or a Domestic Subsidiary that ceases to
be an Immaterial Subsidiary, in each case after the Effective Date, the
Administrative Agent shall have received documents and opinions of the type
referred to in Section 4.01(c), Section 4.01(p) and Section 4.01(q) with respect
to such Domestic Subsidiary;

 

(d)           all Equity Interests owned by or on behalf of any Loan Party shall
have been pledged pursuant to the Security Agreement and, in the case of Equity
Interests in any first-tier Foreign Subsidiary (other than any Immaterial
Subsidiary), where the Administrative Agent so requests in connection with the
pledge of such Equity Interests, a Foreign Pledge Agreement (provided that the
Loan Parties shall not be required to pledge more than 65% of the outstanding
voting Equity Interests in any Foreign Subsidiary), and the Administrative Agent
shall, to the extent required by the Intercreditor Agreement, have received
certificates or other instruments representing all such Equity Interests,
together with undated stock powers or other instruments of transfer with respect
thereto endorsed in blank;

 

(e)           (i) all Indebtedness of Griffon and its Affiliates, Holdings, the
Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced
by the Global Intercompany Note (and no other instrument) and (ii) such Global
Intercompany Note (along with any other promissory notes evidencing Indebtedness
of any other Person in a principal amount of $250,000 or more that is owing to
any Loan Party, if any) shall have been pledged pursuant to the Security
Agreement, and, to the extent required by the Intercreditor Agreement, the
Administrative Agent shall have received such Global Intercompany Note (and any
such promissory notes), together with undated instruments of transfer with
respect thereto endorsed in blank;

 

(f)            all documents and instruments, including UCC financing
statements, required by applicable law or reasonably requested by Administrative
Agent to be filed, registered or recorded to create the Liens intended to be
created by the Collateral Documents and perfect such Liens to the extent
required by, and with the priority required by, the Collateral Documents, shall
have been filed, registered or recorded or delivered to the Administrative Agent
for filing, registration or recording;

 

(g)           in respect of a Mortgaged Property not subject to a Mortgage
pursuant to the Existing Credit Agreement as of the Effective Date, the
Administrative Agent shall have received (i) counterparts of a Mortgage with
respect to each Mortgaged Property duly executed and delivered by the record
owner of such Mortgaged Property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each Mortgage as a valid and enforceable Lien with the priority required by the
Intercreditor Agreement on the Mortgaged Property described therein, free of any
other Liens other than Permitted Encumbrances and Liens under the Term Loan
Documents, together with such endorsements, coinsurance and reinsurance as the
Administrative Agent may reasonably request,

 

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(iii)  (A) a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination with respect to such Mortgaged Property (together with a
notice about special flood hazard area status and flood disaster assistance duly
executed by the Borrower or the applicable Loan Party in the event any such
Mortgaged Property is located in a special flood hazard area) and (B) if any
portion of such Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency (or any successor agency) as a Special Flood
Hazard Area with respect to which flood insurance has been made available under
the National Flood Insurance Act of 1968 (now or as hereafter in effect or any
successor act thereto), (1) flood insurance with a financially sound and
reputable insurer, in an amount and otherwise sufficient to comply with all
applicable rules and regulations promulgated pursuant to (a) the National Flood
Insurance Act of 1968 as now or hereafter in effect or any successor statute
thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in
effect or any successor statute thereto, (c) the National Flood Insurance Reform
Act of 1994 as now or hereafter in effect or any successor statute thereto and
(d) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto and (2) evidence of such insurance in form and
substance reasonably acceptable to the Administrative Agent, and (iv) such
surveys, abstracts, appraisals, legal opinions and other documents (including an
opinion of counsel (which shall be reasonably satisfactory to the Administrative
Agent) in each state in which Mortgaged Property is located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state and such
other matters as the Administrative Agent may reasonably request, in each case
in form and substance reasonably satisfactory to the Administrative Agent) as
the Administrative Agent may reasonably request with respect to any such
Mortgage or Mortgaged Property;

 

(h)           in the case of Mortgaged Properties subject to an Existing
Mortgage, the Administrative Agent shall have received (i) counterparts of an
amendment to the Existing Mortgage covering such Mortgaged Property in form and
substance reasonably satisfactory to the Administrative Agent, duly executed and
delivered by the record owner of such Mortgaged Property, (ii) either (A) a
“date-down” endorsement to the existing title insurance policy for such parcel
of Mortgaged Property issued by the title company that issued such existing
title insurance policy, which endorsement shall update the effective date of
such existing title insurance policy, shall amend the description of the insured
Existing Mortgage to include the amendment to such Existing Mortgage, which
shall insure the Lien of each Existing Mortgage, as amended,  as a valid and
enforceable Lien with the priority required by the Intercreditor Agreement on
the Mortgaged Property described therein, free of any other Liens other than
Permitted Encumbrances and Liens under the Term Loan Documents, and shall
otherwise be in form and substance reasonably satisfactory to the Administrative
Agent or (B) a policy or policies of title insurance issued by a nationally
recognized title insurance company insuring the Lien of each Mortgage as a valid
and enforceable Lien with the priority required by the Intercreditor Agreement
on the Mortgaged Property described therein, free of any other Liens other than
Permitted Encumbrances and Liens under the Term Loan Documents, together with
such endorsements, coinsurance and reinsurance as the Administrative Agent may
reasonably request, (iii) (A) a “Life-of-Loan” Federal Emergency Management
Agency Standard Flood Hazard Determination with respect to such Mortgaged
Property (together with a notice about special flood hazard area status and
flood disaster assistance duly executed by the Borrower or the applicable Loan
Party in the event any such Mortgaged Property is located in a special flood
hazard area) and (B) if any portion of such Mortgaged Property is located in an
area identified by the Federal Emergency Management Agency (or any successor
agency) as a Special Flood Hazard Area with respect to which flood insurance has
been made available under the National Flood Insurance Act of 1968 (now or as
hereafter in effect or any successor act thereto), (1) flood insurance with a
financially sound and reputable insurer, in an amount and otherwise

 

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sufficient to comply with all applicable rules and regulations promulgated
pursuant to (a) the National Flood Insurance Act of 1968 as now or hereafter in
effect or any successor statute thereto, (b) the Flood Disaster Protection Act
of 1973 as now or hereafter in effect or any successor statute thereto, (c) the
National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any
successor statute thereto and (d) the Flood Insurance Reform Act of 2004 as now
or hereafter in effect or any successor statute thereto and (2) evidence of such
insurance in form and substance reasonably acceptable to the Administrative
Agent, and (iv) such surveys, abstracts, appraisals, legal opinions and other
documents (including an opinion of counsel (which shall be reasonably
satisfactory to the Administrative Agent) in each state in which Mortgaged
Property is located with respect to the enforceability of the form(s) of
Mortgages to be recorded in such state and such other matters as the
Administrative Agent may reasonably request, in each case in form and substance
reasonably satisfactory to the Administrative Agent) as the Administrative Agent
may reasonably request with respect to any such Mortgage or Mortgaged Property;
and

 

(i)           with respect to each Deposit Account (other than (x) any Deposit
Account the funds in which are used, in the ordinary course of business, solely
for the payment of salaries and wages, workers’ compensation and similar
expenses and (y) Deposit Accounts with a balance not exceeding $25,000
individually or $100,000 in the aggregate) and each securities account
maintained by any Loan Party with any depositary bank or securities
intermediary, the Collateral Agent shall have received a counterpart, duly
executed and delivered by the applicable Loan Party and such depositary bank or
securities intermediary, as the case may be, of a Control Agreement.

 

The Administrative Agent may grant extensions of time for the creation and
perfection of security interests in or the obtaining of title insurance, legal
opinions or other deliverables with respect to particular assets or the
provision of any Guarantee by any Subsidiary (including extensions beyond the
Effective Date or in connection with assets acquired, or Subsidiaries formed or
acquired, after the Effective Date) where it determines that such action cannot
be accomplished without undue effort or expense by the time or times at which it
would otherwise be required to be accomplished by this Agreement or the
Collateral Documents.

 

“Collection Account” has the meaning assigned to such term in the Security
Agreement.

 

“Collateral Documents” means, collectively, the Security Agreement, the
Mortgages, the Intellectual Property Security Agreements, the Perfection
Certificate, the Control Agreements, the Collateral Access Agreements, if any,
and any other instruments, documents or agreements delivered by or on behalf of
a Loan Party pursuant to this Agreement or any of the other Loan Documents in
order to grant or perfect a Lien upon the Collateral as security for payment of
the Secured Obligations.

 

“Combined Material Adverse Effect” means any change, effect, event, occurrence,
state of facts or development that, individually or in the aggregate with any
other change, effect, event, occurrence, state of facts or development, is or is
reasonably likely to be materially adverse to the financial condition or results
of operations, assets, liabilities or business of Holdings, the Target and their
respective subsidiaries, taken as a whole (the “Combined Business”), provided
that any material adverse change (including a prospective change) to the
Combined Business’s, taken as a whole, business relationship with The Home Depot
Inc., Lowe’s Companies, Inc., Wal-Mart Stores, Inc., Menards, Inc. or Procter &
Gamble, Co. or any of their respective subsidiaries or affiliates with whom the
Combined Business and its subsidiaries, taken as a whole, has a material
business relationship as of the date hereof

 

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(collectively, the “Combined Business Major Customers”) shall constitute the
basis for a Combined Material Adverse Effect or a material adverse change, since
September 30, 2009 (with respect to Holdings and its Subsidiaries) and October
3, 2009 (with respect to the Target and its Subsidiaries); provided, however,
that none of the following shall be deemed in itself, or in any combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, a Combined Material Adverse Effect: (a) any
adverse change, effect, event, occurrence, state of facts or development
attributable to the announcement or pendency of the transactions contemplated by
the Acquisition Agreement (other than with respect to any of the Combined
Business’s and its subsidiaries’ relationships with any Combined Business Major
Customer); (b) any adverse change, effect, event, occurrence, state of facts or
development affecting the lawn and garden industry (that does not
disproportionately affect the Combined Business and its subsidiaries, taken as a
whole), the United States economy as a whole or the capital markets in general;
(c) any adverse change, event, development, or effect arising from or relating
to changes in GAAP; (d) any adverse change, effect, event, occurrence, state of
facts or development resulting from or relating to compliance with the terms of,
or the taking of any action required by, the Acquisition Agreement (other than
consummation of the closing of the transactions contemplated by the Acquisition
Agreement itself); or (e) any adverse change, effect, event, occurrence, state
of facts or development arising from or relating to the commencement,
continuation or escalation of a war, material armed hostilities or other
material international or national calamity or act of terrorism directly
involving the United States of America.

 

“Commitment” means, with respect to each Lender, the sum of such Lender’s
Revolving Commitment, together with the commitment of such Lender to acquire
participations in Protective Advances hereunder.  The initial amount of each
Lender’s Commitment is set forth on the Commitment Schedule, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.

 

“Commitment Fee Rate” means, as of any date of determination, the rate per annum
determined pursuant to the Applicable Pricing Grid under the caption “Commitment
Fee Rate”, based upon the daily average Availability for the most recently
completed fiscal quarter of the Borrower, provided that, the first such
adjustment shall be made in respect of the first full fiscal quarter ended after
the Effective Date and, until such adjustment is made, the Commitment Fee Rate
shall be 0.50%.

 

“Commitment Schedule” means the Schedule attached hereto identified as such.

 

“Company Intellectual Property” has the meaning assigned to such term in Section
3.05(b).

 

“Company Material Adverse Effect” “ means any change, effect, event, occurrence,
state of facts or development that, individually or in the aggregate with any
other change, effect, event, occurrence, state of facts or development, is or is
reasonably likely to be materially adverse to (i) the financial condition or
results of operations, assets, liabilities or business of the Target and its
subsidiaries taken as a whole, provided that any material adverse change
(including a prospective change) to the Target’s and its subsidiaries’, taken as
a whole, business relationship with The Home Depot Inc., Lowe’s Companies, Inc.
or Wal-Mart Stores, Inc. or any of their respective subsidiaries or affiliates
with whom the Target and its subsidiaries, taken as a whole, has a material
business relationship as of the date hereof (collectively, the “Company Major
Customers”) shall constitute the basis for a Company Material Adverse Effect or
a material adverse change; provided, however, that none of the following shall
be deemed in itself,

 

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or in any combination, to constitute, and none of the following shall be taken
into account in determining whether there has been or will be, a Company
Material Adverse Effect: (a) any adverse change, effect, event, occurrence,
state of facts or development attributable to the announcement or pendency of
the transactions contemplated by the Acquisition Agreement (other than with
respect to any of the Target’s and its subsidiaries’ relationships with any
Company Major Customer); (b) any adverse change, effect, event, occurrence,
state of facts or development affecting the lawn and garden industry (that does
not disproportionately affect the Target and its subsidiaries, taken as a
whole), the United States economy as a whole or the capital markets in general;
(c) any adverse change, event, development, or effect arising from or relating
to changes in GAAP; (d) any adverse change, effect, event, occurrence, state of
facts or development resulting from or relating to compliance with the terms of,
or the taking of any action required by, the Acquisition Agreement (other than
consummation of the closing of the transactions contemplated by the Acquisition
Agreement itself); or (e) any adverse change, effect, event, occurrence, state
of facts or development arising from or relating to the commencement,
continuation or escalation of a war, material armed hostilities or other
material international or national calamity or act of terrorism directly
involving the United States of America, or (ii) the ability of the Target to
timely consummate the transactions contemplated by the Acquisition Agreement.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. 
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Control Agreement” has the meaning assigned to such term in the Security
Agreement.

 

“Control Person” means, prior to a Permitted Change of Control Transaction,
Griffon, and, thereafter, Holdings.

 

“Controlled Accounts” means deposit accounts and/or securities accounts
maintained with the Administrative Agent or with respect to which a Control
Agreement reasonably satisfactory to the Administrative Agent shall been
executed and delivered by the applicable Loan Party and depositary institution
or securities intermediary, as applicable; provided that in no event shall any
deposit account be a Controlled Account if such account is established for the
sole purpose of depositing the net cash proceeds of any Loan Party with respect
to any asset sale, incurrence of Indebtedness or casualty event pending the
application of such proceeds to the prepayment of loans under the Term Loan
Documents in accordance with the mandatory prepayment provisions thereof.

 

“Covenant Defeasance” with respect to any Senior Notes, has the meaning assigned
to such term in the Senior Notes Indenture under which such Senior Notes were
issued.

 

“Credit Exposure” means, as to any Lender at any time, the sum of (a) such
Lender’s Revolving Exposure at such time, plus (b) an amount equal to its
Applicable Percentage, if any, of the aggregate principal amount of Protective
Advances outstanding at such time.

 

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“Credit Party” means the Administrative Agent, any Issuing Bank, the Swingline
Lender or any other Lender.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Revolving Loans, (ii) fund any portion of its participations in Letters of
Credit, Swingline Loans, Protective Advances or Overadvances or (iii) pay over
to any Credit Party any other amount required to be paid by it hereunder,
unless, in the case of clause (i) above, such Lender notifies the Administrative
Agent in writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified and
including the particular default, if any) has not been satisfied, (b) has
notified the Borrower or any Credit Party in writing, or has made a public
statement to the effect, that it does not intend or expect to comply with any of
its funding obligations under this Agreement (unless such writing or public
statement indicates that such position is based on such Lender’s good faith
determination that a condition precedent (specifically identified and including
the particular default, if any) to funding a loan under this Agreement cannot be
satisfied) or generally under other agreements in which it commits to extend
credit, (c) has failed, within three Business Days after request by a Credit
Party, acting in good faith, to provide a certification in writing from an
authorized officer of such Lender that it will comply with its obligations (and
is financially able to meet such obligations) to fund prospective Revolving
Loans and participations in then outstanding Letters of Credit, Swingline Loans,
Protective Advances and Overadvances under this Agreement, provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
such Credit Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of a Bankruptcy Event.

 

“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

 

“Dilution Factors” shall mean, without duplication, with respect to any period,
the aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits which are recorded to
reduce accounts receivable in a manner consistent with current and historical
accounting practices of the Loan Parties.

 

“Dilution Ratio” shall mean, at any date, the amount (expressed as a percentage)
equal to (a) the aggregate amount of the applicable Dilution Factors for the
twelve most recently ended fiscal months divided by (b) total gross sales for
such twelve most recently ended fiscal months.

 

“Dilution Reserve” shall mean, at any date on which the Dilution Ratio exceeds
5%, an amount equal to the product of (i) the percentage by which the applicable
Dilution Ratio exceeds 5% multiplied by (ii) the Eligible Accounts, in each
case, on such date.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

 

“Disqualified Equity Interests” means any Equity Interest which, by its terms
(or by the terms of any security or other Equity Interests into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition, (i) matures or is mandatorily

 

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redeemable (other than solely for Equity Interests which are not otherwise
Disqualified Equity Interests), pursuant to a sinking fund obligation or
otherwise, (ii) is redeemable at the option of the holder thereof (other than
solely for Equity Interests which are not otherwise Disqualified Equity
Interests), in whole or in part, (iii) provides for the scheduled payments or
dividends in cash, or (iv) is or becomes convertible into or exchangeable for
Indebtedness or any other Equity Interests that would constitute Disqualified
Equity Interests, in each case, prior to the date that is 91 days after the
Maturity Date.

 

“Documents” has the meaning assigned to such term in the Security Agreement.

 

“Dollar Equivalent” means, on any date of determination, with respect to any
amount in any currency other than dollars, the equivalent in dollars of such
amount, determined using the Exchange Rate with respect to such currency in
effect for such amount on such date.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.

 

“EBITDA” means, for any period, the sum of Net Income, plus to the extent
reducing net income, the sum, without duplication, of (i) Interest Expense, (ii)
total depreciation and amortization expense, (iii) foreign, Federal, state and
local income taxes for such period, computed in accordance with GAAP, (iv) other
non-cash charges reducing Net Income (excluding such non-cash charge to the
extent it represents an accrual or reserve for a potential cash charge in any
future period or amortization of a prepaid cash charge that was paid in a prior
period, and it being understood that any write down or write off of current
assets is not a non-cash charge), (v) transaction costs, fees and expenses
relating to the Transactions (if incurred prior to the date that is 90 days
after the Effective Date), (vi) management fees paid to Castle Harlan, Inc.
pursuant to the Target Management Agreement (if paid prior to the Effective
Date), (vii) restructuring charges incurred in connection with the closing and
restructuring of idle facilities (excluding restructuring charges incurred in
connection with the Louisville, Kentucky facility and the internal legal entity
restructuring of Garant Inc.) and non-recurring restructuring charges incurred
in connection with consolidation of facilities of Clopay Building; provided that
(A) the aggregate amount of such charges referred to in this clause (vii) that
occurred during any portion of such period prior to the Effective Date shall not
exceed $9,000,000 and (B) the aggregate amount of such charges referred to in
this clause (vii) for all periods ending after the Effective Date shall not
exceed $7,000,000, (viii) expenses related to the acquisition of West Barrows
Mix Pty Ltd., in aggregate amount not to exceed $2,000,000, (ix) any severance
or similar one time compensation charges in an aggregate amount not to exceed
$5,000,000 in any four fiscal quarter period, provided that the aggregate amount
of such charges for all periods ending after the Effective Date shall not exceed
$10,000,000, (x) fees, expenses and charges relating to any offering of Equity
Interests or Indebtedness of Holdings or its Subsidiaries or any Permitted
Acquisition, (xi) stock options or other equity-based compensation charges that
are non-cash, (xii) any dividend on preferred Equity Interests (other than
Disqualified Equity Interests) and (xiii) any after-tax losses attributable to
Asset Sales, Insurance/Condemnation Events or returned surplus assets of any
Plan or repurchase by the Borrower of loans under the Term Loan Credit Agreement
pursuant to Section 2.10(c) of the Term Loan Credit Agreement, minus the sum of
(a) other non-cash gains increasing Net Income for such period (excluding any
such non-cash gain to the extent it represents the reversal of an accrual or
reserve for potential cash gain in any prior period), (b) any after-tax gains
attributable to Asset Sales, Insurance/Condemnation Events or returned surplus
assets of any Plan or repurchase by the

 

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Borrower of loans under the Term Loan Credit Agreement pursuant to Section
2.10(c) of the Term Loan Credit Agreement, (c) payments received from the
distribution of tariffs collected under the U.S. Continued Dumping and Subsidy
Offset Act of 2000 and (d) any payments permitted by Section 6.07(a)(ii) made by
the Borrower to Holdings that do not otherwise reduce EBITDA.

 

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).

 

“Effective Date Certificate” means a certificate substantially in the form
attached hereto as Exhibit G.

 

“Eligible Accounts” means, at any time, the Accounts of the Loan Parties which
the Administrative Agent determines in its Permitted Discretion are eligible as
the basis for the extension of Revolving Loans, Swingline Loans and the issuance
of Letters of Credit hereunder (it being understood that any representation and
warranty by the Borrower as to whether Accounts constitute Eligible Accounts
shall be based on the eligibility criteria set forth in this Agreement and any
additional standards of eligibility or changes to eligibility or standard of
eligibility effected by the Administrative Agent in accordance with this
Agreement).  Without limiting the Administrative Agent’s Permitted Discretion
provided herein, Eligible Accounts shall not include any Account:

 

(a)           which is not subject to a first priority perfected security
interest in favor of the Administrative Agent;

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent, (ii) a Permitted Encumbrance which does not have priority
over the Lien in favor of the Administrative Agent and (iii) a Lien permitted by
Section 6.02(c);

 

(c)           with respect to which the scheduled due date is more than 90 days
after the original invoice date, is unpaid more than 120 days after the date of
the original invoice therefor or more than 60 days after the original due date,
or which has been written off the books of the applicable Loan Party or
otherwise designated as uncollectible;

 

(d)           which is owing by an Account Debtor, or for which payments shall
be remitted by a Buying Group, for which more than 50% of the aggregate amount
of Accounts owing from such Account Debtor or its Affiliates, or with respect to
which the Buying Group or its Affiliates will remit payments, are ineligible
pursuant to clause (c) above;

 

(e)           which is owing by an Account Debtor to the extent the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates (or, with
respect to any Buying Group, the aggregate amount of Accounts for which payments
shall be remitted by such Buying Group) to the Loan Parties exceeds, except as
set forth on Schedule 1.01(a), (i) 25%, with respect to Menards, Inc., and (ii)
otherwise, 10%, in each case of the aggregate amount of Eligible Accounts of
such Loan Parties;

 

(f)            with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Security Agreement has been breached or is
not true;

 

(g)           which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation

 

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reasonably satisfactory to the Administrative Agent which has been sent to the
Account Debtor, (iii) represents a progress billing, (iv) is contingent upon the
applicable Loan Party’s completion of any further performance, (v) represents a
sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis or (vi)
relates to payments of interest;

 

(h)           for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to such
Account have not been performed by the applicable Loan Party or if such Account
was invoiced more than once;

 

(i)            with respect to which any check or other instrument of payment
has been returned uncollected for any reason;

 

(j)            which is owed by an Account Debtor, or for which payments shall
be remitted by a Buying Group, which has at the time of the determination (i)
applied for, suffered, or consented to the appointment of any receiver,
custodian, trustee, or liquidator of its assets, (ii) has had possession of all
or a material part of its property taken by any receiver, custodian, trustee or
liquidator, (iii) filed, or had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as
bankrupt, winding-up, or voluntary or involuntary case under any state or
federal bankruptcy laws (other than post-petition accounts payable of an Account
Debtor or a Buying Group that is a debtor-in-possession under the Bankruptcy
Code and reasonably acceptable to the Administrative Agent), (iv) has admitted
in writing its inability, or is generally unable to, pay its debts as they
become due, (v) become insolvent, or (vi) ceased operation of its business;

 

(k)           which is owed by any Account Debtor which has sold all or a
substantially all of its assets;

 

(l)            which is owed by an Account Debtor, or for which payments shall
be remitted by a Buying Group, which, (i) does not maintain its chief executive
office in the U.S. or Canada, or (ii) is not organized under applicable law of
the U.S., any state of the U.S., Canada or any province of Canada, unless, in
either case, (x) such Account is backed by a Letter of Credit reasonably
acceptable to the Administrative Agent which is in the possession of, has been
assigned to and is directly drawable by the Administrative Agent or (y) such
Account Debtor is a foreign Affiliate of either Proctor & Gamble, Co., Kimberly
Clark, The Home Depot Inc., Lowe’s Companies, Inc., or Wal-Mart Stores, Inc.,
but only to the extent to which the Eligible Accounts of such Account Debtors do
not exceed in the aggregate $20,000,000 at any time;

 

(m)          which is owed in any currency other than U.S. dollars;

 

(n)           which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
U.S. unless such Account is backed by a Letter of Credit acceptable to the
Administrative Agent which is in the possession of the Administrative Agent, or
(ii) the government of the U.S., or any department, agency, public corporation,
or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940,
as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other
steps reasonably necessary to perfect the Lien of the Administrative Agent in
such Account have been complied with to the Administrative Agent’s reasonable
satisfaction;

 

(o)           which is owed by any Affiliate, employee, officer, director, agent
or stockholder of any Loan Party;

 

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(p)           which is owed by an Account Debtor or any Affiliate of such
Account Debtor, or for which payment shall be remitted by any Buying Group or
any Affiliate of such Buying Group, to which the applicable Loan Party is
indebted, but only to the extent of such indebtedness or is subject to any
security, deposit, progress payment, retainage or other similar advance made by
or for the benefit of an Account Debtor or a Buying Group, in each case to the
extent thereof;

 

(q)           which is subject to any counterclaim, deduction, defense, setoff
or dispute but only to the extent of any such counterclaim, deduction, defense,
setoff or dispute;

 

(r)            which is evidenced by any promissory note, chattel paper, or
instrument;

 

(s)           which is owed by an Account Debtor, or for which payment shall be
remitted by a Buying Group, located in any jurisdiction which requires filing of
a “Notice of Business Activities Report” or other similar report in order to
permit the applicable Loan Party to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Loan Party has filed such
report or qualified to do business in such jurisdiction;

 

(t)            with respect to which the applicable Loan Party has made any
agreement with the Account Debtor for any reduction thereof, other than
discounts and adjustments given in the ordinary course of business, or any
Account which was partially paid and the applicable Loan Party created a new
receivable for the unpaid portion of such Account;

 

(u)           which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board;

 

(v)           which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than the applicable
Loan Party has an ownership interest in such goods, or which indicates any party
other than the applicable Loan Party as payee or remittance party; or

 

(w)          which was created on cash on delivery terms.

 

In the event that a material Account which was previously an Eligible Account
ceases to be an Eligible Account hereunder, the Borrower shall notify the
Administrative Agent thereof on and at the time of submission to the
Administrative Agent of the next Borrowing Base Certificate.  In determining the
amount of an Eligible Account, the face amount of an Account may, in the
Administrative Agent’s Permitted Discretion, be reduced by, without duplication,
to the extent not reflected in such face amount (without duplication of any
Reserve taken therefor), (i) the amount of all accrued and actual discounts,
claims, credits or credits pending, promotional program allowances, price
adjustments, finance charges or other allowances (including any amount that the
applicable Loan Party may be obligated to rebate to an Account Debtor pursuant
to the terms of any agreement or understanding (written or oral)) and (ii) the
aggregate amount of all cash received in respect of such Account but not yet
applied by the applicable Loan Party to reduce the amount of such Account. 
Standards of eligibility may be made more restrictive from time to time solely
by the Administrative Agent in the exercise of its Permitted Discretion, with
any such changes to be effective two Business Days after delivery of written
notice thereof to the Borrower and the Lenders.

 

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“Eligible Inventory” means, at any time, the Inventory of the Loan Parties which
the Administrative Agent determines in its Permitted Discretion is eligible as
the basis for the extension of Revolving Loans, Swingline Loans and the issuance
of Letters of Credit hereunder (it being understood that any representation and
warranty by the Borrower as to whether Inventory constitutes Eligible Inventory
shall be based on the eligibility criteria set forth in this Agreement and any
additional standards of eligibility or changes to eligibility or standards of
eligibility effected by the Administrative Agent in accordance with this
Agreement).  Without limiting the Administrative Agent’s Permitted Discretion
provided herein, Eligible Inventory shall not include any Inventory:

 

(a)           which is not subject to a first priority perfected Lien in favor
of the Administrative Agent;

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent, (ii) a Permitted Encumbrance which does not have priority
over the Lien in favor of the Administrative Agent and (iii) a Lien permitted by
Section 6.02(c);

 

(c)           which is, in the Administrative Agent’s opinion as notified to the
Borrower, slow moving, obsolete, unmerchantable, defective, used, unfit for
sale, not salable at prices approximating at least the cost of such Inventory in
the ordinary course of business or unacceptable due to age, type, category
and/or quantity;

 

(d)           with respect to which any covenant, representation, or warranty
contained in this Agreement or the Security Agreement has been breached or is
not true and which does not conform in any material respect to all reasonably
applicable standards imposed by any Governmental Authority;

 

(e)           in which any Person other than the applicable Loan Party shall (i)
have any direct or indirect ownership, interest or title to such Inventory or
(ii) be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein;

 

(f)            which is not finished goods (other than raw materials) or which
constitutes work-in-process, spare or replacement parts, subassemblies,
packaging and shipping material, manufacturing supplies, samples, prototypes,
displays or display items, bill-and-hold goods, goods that are returned or
marked for return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business; provided that “Eligible Inventory” may include
work-in-process of Ames or any of its Subsidiaries, in an aggregate amount not
to exceed $10,000,000, to the extent such work-in-process is supported for
inclusion in the Borrowing Base by an Inventory appraisal acceptable to the
Administrative Agent;

 

(g)           which is not located in the U.S. or is in transit with a common
carrier from vendors and suppliers;

 

(h)           on or after the date which is 90 days after the Effective Date,
which is located in any location leased by the applicable Loan Party where
Inventory valued in excess of $500,000 is located unless (i) the lessor has
delivered to the Administrative Agent a Collateral Access Agreement or (ii) a
Rent Reserve has been established by the Administrative Agent in its Permitted
Discretion;

 

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(i)            which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document unless (i) such warehouseman or bailee has delivered to the
Administrative Agent a Collateral Access Agreement and such other documentation
as the Administrative Agent may reasonably require or (ii) an appropriate
Reserve has been established by the Administrative Agent in its Permitted
Discretion;

 

(j)            which is being processed offsite at a third party location or
outside processor, or is in-transit to or from said third party location or
outside processor;

 

(k)           which is a discontinued product or component thereof;

 

(l)            which is the subject of a consignment by the applicable Loan
Party as consignor;

 

(m)          which contains or bears any intellectual property rights licensed
to the applicable Loan Party unless the Administrative Agent is reasonably
satisfied that it may sell or otherwise dispose of such Inventory without (i)
infringing the rights of such licensor, (ii) violating any contract with such
licensor, or (iii) incurring any liability with respect to payment of royalties
other than royalties incurred pursuant to sale of such Inventory under the
current licensing agreement;

 

(n)           which is not reflected in a current perpetual inventory report of
the applicable Loan Party (unless such Inventory is reflected in a report to the
Administrative Agent as “in transit” Inventory); or

 

(o)           for which reclamation rights have been asserted by the seller.

 

In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, the Borrower shall notify the Administrative Agent
thereof on and at the time of submission to the Administrative Agent of the next
Borrowing Base Certificate.  Standards of eligibility may be made more
restrictive from time to time solely by the Administrative Agent in the exercise
of its Permitted Discretion, with any such changes to be effective two Business
Days after delivery of written notice thereof to the Borrower and the Lenders.

 

“Environmental Laws” means all applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, written notices of
non-compliance or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release
of any Hazardous Material or to health and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Holdings directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

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“Equity Contribution” means a cash equity contribution (direct or indirect) from
Griffon to Holdings in an aggregate amount equal to the excess of $196,000,000
over the aggregate amount of unrestricted freely available cash on hand of
Holdings and its Subsidiaries as of the Effective Date (before giving effect to
the Acquisition); provided that any Equity Interests issued in respect thereof
should be common Equity Interests of Holdings.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with Holdings, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414(m) of
the Code.

 

“ERISA Event” means (a) any Reportable Event; (b) the existence with respect to
any Plan of a Prohibited Transaction, (c) any failure by any Plan to satisfy the
minimum funding standards (within the meaning of Sections 412 or 430 of the Code
or Section 302 of ERISA), whether or not waived; (d) the filing pursuant to
Section 412 of the Code or Section 303 of ERISA of an application for a waiver
of the minimum funding standard with respect to any Plan, the failure to make by
its due date a required installment under Section 430(j) of the Code with
respect to any Plan or the failure by Holdings or any of its ERISA Affiliates to
make any required contribution to a Multiemployer Plan; (e) the incurrence by
Holdings or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan, including but not limited to the
imposition of any Lien in favor of the PBGC or any Plan; (f) a determination
that any Plan is, or is expected to be, in “at risk” status (within the meaning
of Section 430 of the Code or Section 303 of ERISA); (g) the receipt by Holdings
or any of its ERISA Affiliates from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan under Section 4042 of ERISA; (h) the incurrence
by Holdings or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (i) the
receipt by Holdings or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Holdings or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, Insolvent, in Reorganization, or in
“endangered” or “critical status” (within the meaning of Section 432 of the Code
or Section 305 of ERISA).

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Exchange Rate” means, on any day, with respect to dollars in relation to any
Alternative Currency, the rate at which dollars may be exchanged into such
currency, as set forth on such day on the applicable Reuters World Currency
Page.  In the event such rate does not appear on the applicable Reuters World
Currency Page, the Exchange Rate shall be determined

 

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by reference to such other publicly available service for displaying exchange
rates, or such other method, as may be determined by the Borrower (subject to
the approval of Administrative Agent, not to be unreasonably withheld), and such
determination shall be conclusive and binding, absent manifest error.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of any Loan Party hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income or any similar tax imposed in
lieu of net income taxes by the United States of America, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction referred to in
clause (a), and (c) in the case of any Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.19(b)), any United States
withholding tax resulting from any law in effect (including FATCA) on amounts
payable to such Lender at the time (and in the case of FATCA, including any
regulations or official interpretations thereof issued after) such Lender
becomes a party to this Agreement (or designates a new lending office) or is
attributable to such Lender’s failure to comply with Section 2.17(e), except to
the extent that such Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a).

 

“Existing Credit Agreement” has the meaning assigned to such term in the
recitals hereto.

 

“Existing Debt Agreements” means all agreements, undertakings, instruments and
other documents in effect immediately prior to the Effective Date under which
Holdings or any of its Subsidiaries has any Indebtedness (other than
Indebtedness set forth on Schedule 6.01(a)), including (i) the Amended and
Restated Credit Agreement, dated as of April 7, 2006, as amended, among Ames,
Acorn Products, Inc., UnionTools, Inc. and Ames True Temper Properties, Inc., as
Borrower, ATT, as a parent guarantor, Bank of America, N.A., as Administrative
Agent, Swingline Lender and L/C Issuer, and the other lender parties thereto and
(ii) the Senior Notes Indentures.

 

“Existing Mortgages” means each of the mortgages, deeds of trust or other
agreements made pursuant to the Existing Credit Agreement by any Loan Party in
favor or the Administrative Agent.

 

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

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“Fee Letters” means, collectively, (i) the Second Amended and Restated Fee
Letter, dated as of September 8, 2010, among the Parent, Clopay Acquisition
Corp., the Administrative Agent, Goldman Sachs Lending Partners LLC, JPMorgan,
J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Deutsche Bank
Trust Company Americas and (ii) the Administrative Agent Fee Letter, dated as of
September 30, 2010, among the Borrower and the Administrative Agent.

 

“Fee Payment Date” means the third Business Day following the last day of each
March, June, September and December.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of a Loan Party or the Borrower, as the case
may be.

 

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is perfected and
has priority over all other Liens to which such Collateral is subject, other
than any Permitted Encumbrances.

 

“Fixed Charges” means, with reference to any period, without duplication, cash
Interest Expense, plus prepayments and scheduled principal payments on
Indebtedness (other than Indebtedness under this Agreement) made during such
period, plus expense for taxes paid in cash (net of any cash refunds in respect
of such taxes, but not less than zero), plus dividends, distributions or
management fees paid in cash, all calculated for Holdings and its Subsidiaries
on a consolidated basis in accordance with GAAP.

 

“Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each
fiscal month of Holdings for the most-recently ended twelve fiscal months, of
(a) EBITDA minus Capital Expenditures paid in cash (excluding cash payments
financed with Indebtedness other than Revolving Loans) to (b) Fixed Charges, all
calculated for Holdings and its Subsidiaries on a consolidated basis in
accordance with GAAP (provided, that such determination in respect of any such
period which includes the Effective Date shall be made on a pro forma basis with
respect to the Acquisition as though the Acquisition had been consummated on the
first day of such period).

 

“Floating Rate Notes” means the Senior Floating Rate Notes due 2012, issued by
Ames pursuant to the Floating Rate Notes Indenture.

 

“Floating Rate Notes Indenture” means the Indenture for Senior Floating Notes
due 2012, dated January 14, 2005, among Ames, as Issuer, ATT, as Guarantor, and
The Bank of New York, as Trustee, and the Supplemental Indenture to the
Indenture dated January 14, 2005, dated as of December 17, 2007 and among Ames,
Ames U.S. Holding Corp., Ames Holdings, Inc., Ames True Temper Properties, Inc.,
ATT and The Bank of New York, as Trustee.

 

“Floating Rate Supplemental Indenture” means a Supplemental Indenture to the
Floating Rate Notes Indenture to be entered into on or prior to the Effective
Date among Ames, Ames U.S. Holding Corp., Ames Holdings, Inc. Ames True Temper
Properties, Inc., ATT, and The Bank of New York, as Trustee, which Supplemental
Indenture shall be substantially the same, in form and substance, as the form of
Supplemental Indenture previously delivered to the Administrative Agent.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

 

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“Foreign Plan” means each employee benefit plan (within the meaning of Section
3(3) of ERISA, whether or not subject to ERISA) that is not subject to U.S. law
and is maintained or contributed to by Holdings or any ERISA Affiliate.

 

“Foreign Pledge Agreement” means a pledge or charge agreement granting a Lien on
Equity Interests in a Foreign Subsidiary to secure the Obligations, governed by
the laws of the jurisdiction of organization of such Foreign Subsidiary and in
form and substance reasonably satisfactory to the Administrative Agent.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Funding Accounts” has the meaning assigned to such term in Section 4.01(j).

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect as of the date of determination thereof.

 

“Global Intercompany Note” means a promissory note substantially in the form of
Exhibit H evidencing Indebtedness owed among the Loan Parties and their
Subsidiaries.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Griffon” means Griffon Corporation, a Delaware corporation.

 

“Griffon Letters of Credit” means the outstanding letters of credit issued by
JPMorgan Chase Bank, N.A. or Bank of America, N.A. described on Schedule
1.01(b).

 

“Group Members” means the collective reference to Holdings, the Borrower and
their respective Subsidiaries.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.  The amount, as of any
date of determination, of any Guarantee shall be the principal amount
outstanding on such date of Indebtedness or other obligation guaranteed thereby
(or, in the case of (i) any Guarantee the terms of which limit the monetary
exposure of the guarantor or (ii) any Guarantee of an obligation that does not
have a principal amount, the maximum monetary exposure as of such date of the
guarantor under such Guarantee (as determined, in the case of

 

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clause (i), pursuant to such terms or, in the case of clause (ii), reasonably
and in good faith by the chief financial officer of the Borrower)).

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

 

“Guarantor” means each of Holdings and each Domestic Subsidiary of Holdings
(other than the Borrower) that is a party to this Agreement as a “Guarantor” and
a party to the Security Agreement as a “Grantor” thereunder.  The Guarantors as
of the Effective Date are set forth on Schedule 1.01(c).

 

“Guaranty” means Article X of this Agreement.

 

“Hazardous Materials”  means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
hazardous or toxic polychlorinated biphenyls, radon gas, infectious or medical
wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.

 

“Hazardous Materials Activity” means any past, current or proposed activity,
event or occurrence involving any Hazardous Materials, including the use,
manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

 

“Historical Financial Statements” means (a) separate audited consolidated
financial statements of each of Clopay Holding Co. and its Subsidiaries (prior
to the Acquisition) and of ATT and its Subsidiaries, for the 2007, 2008 and 2009
fiscal years, consisting of audited consolidated balance sheets and the related
consolidated statements of income, stockholders’ equity and cash flows for such
fiscal years, and (b) (i) separate unaudited consolidated quarterly financial
statements of each of Clopay Holding Co. and its Subsidiaries (prior to the
Acquisition) and of ATT and its Subsidiaries as of the end of and for each
fiscal quarter subsequent to the financial statements provided for the 2009
fiscal year pursuant to clause (a), consisting of a consolidated balance sheet
and the related consolidated statements of income, stockholders’ equity and cash
flows for the twelve-month period, ending on such date and (ii) internal monthly
“flash reports” of each of Clopay Holding Co. and its Subsidiaries (prior to the
Acquisition) and of ATT and its Subsidiaries as of the end of and for each
subsequent calendar month.

 

“Holdings” has the meaning assigned to such term in the preamble hereto.

 

“Immaterial Subsidiary” means, as of any date, any Subsidiary with consolidated
total assets of less than $2,500,000, provided that the aggregate consolidated
assets of all Immaterial Subsidiaries may not exceed $10,000,000, collectively,
at any time (and the Borrower will designate in writing to the Administrative
Agent from time to time the Subsidiaries which will cease to be treated as
“Immaterial Subsidiaries” in order to comply with the foregoing limitation).

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to

 

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property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding trade
payables, accrued expenses and current accounts payable in each case incurred in
the ordinary course of business), (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f)
all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person which are required to be classified as liabilities
under GAAP, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (i) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances and (j) Disqualified Equity Interests.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Insolvent” with respect to any Multiemployer Plan, means insolvent within the
meaning of Section 4245 of ERISA.

 

“Insurance/Condemnation Event” means any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, or any disposition under a threat of such taking, of all or any
part of any assets of Borrower or any Subsidiary other than any of the foregoing
resulting in aggregate Net Insurance/Condemnation Proceeds not exceeding
$2,000,000 from a single event or a series of related events and not exceeding
$5,000,000 when aggregated with the Net Insurance/Condemnation Proceeds from all
other such events during any fiscal year of Holdings.

 

“Intellectual Property” has the meaning assigned to such term in the Security
Agreement.

 

“Intellectual Property Security Agreements” has the meaning assigned to such
term in the Security Agreement.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of the date hereof, between the Loan Parties, the Administrative Agent and the
Term Loan Administrative Agent, substantially in the form attached hereto as
Exhibit F.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.

 

“Interest Expense” means, with reference to any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the Group
Members for such period with respect to all outstanding Indebtedness of the
Group Members (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing and net
costs under Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), calculated on a
consolidated basis for the Group Members for such period in accordance with
GAAP.

 

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“Interest Payment Date” means (a) with respect to any ABR Loan, the first day of
each April, July, October and January to occur while such Loan is outstanding
and the Maturity Date, and (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such
Interest Period and the Maturity Date.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, if available to all Lenders, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (ii)
any Interest Period pertaining to a Eurodollar Borrowing that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.  For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement.

 

“Inventory” has the meaning assigned to such term in the Security Agreement.

 

“Investment” means, by any Person, (a) the amount paid or committed to be paid,
or the value of property or services contributed or committed to be contributed,
by such person for or in connection with the direct or indirect redemption,
purchase or other acquisition by such Person of any stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any capital contribution to any other Person, (b) the amount of
any direct or indirect redemption, purchase or other advance, loan or extension
of credit by such Person, to any other Person, or Guarantee or other similar
obligation of such Person with respect to any Indebtedness or other obligation
of such other Person (other than trade payables in the ordinary course of
business), and (without duplication) any amount committed to be advanced, loans,
or extended by such Person to any other Person, or any amount the payment of
which is committed to be assured by a Guarantee or similar obligation by such
Person for the benefit of, such other Person and (c) all investments consisting
of any exchange traded or over the counter derivative transaction, including any
Swap Agreement, whether entered into for hedging or speculative purposes or
otherwise.  The amount of any Investment of the type described in clauses (a),
(b) and (c) shall be the original cost of the Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investments, and
any Investment in the form of a Guarantee shall be determined in accordance with
the definition of the term “Guarantee”.

 

“Issuing Bank” means JPMorgan or Bank of America, N.A., each with respect to
Letters of Credit issued by it, and in each case its successors in such capacity
as provided in Section 2.06(i).  An Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be

 

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issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank”
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.

 

“Joinder Agreement” means a Joinder Agreement substantially in the form of
Exhibit D.

 

“JPMorgan” means JPMorgan Chase Bank, N.A., a national banking association, in
its individual capacity, and its successors.

 

“LC Collateral Account” has the meaning assigned to such term in Section
2.06(j).

 

“LC Disbursement” means a payment made by the applicable Issuing Bank pursuant
to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

 

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.  Unless the context otherwise requires, the
term “Lenders” includes the Swingline Lender.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
eurodollar deposits in dollars in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for eurodollar deposits in dollars with a maturity
comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement, any promissory notes issued pursuant to
this Agreement, any Letter of Credit applications, the Collateral Documents, the
Guaranty, the Intercreditor Agreement, and all other agreements, instruments,
documents and certificates

 

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executed and delivered to, or in favor of, the Administrative Agent or any
Lenders whether heretofore, now or hereafter executed by or on behalf of any
Loan Party, or any employee of any Loan Party, and delivered to the
Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby.  Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.

 

“Loan Parties” means the Borrower and the Guarantors.

 

“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans, Overadvances and Protective Advances.

 

“Management Agreement” means that certain Management Agreement, dated as of July
8, 1986, between Griffon and the Parent.

 

“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X
of the Board.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, (b)  the Collateral, or the Administrative
Agent’s Liens (on behalf of the Secured Parties) on the Collateral or the
priority of such Liens, in each case, taken as a whole, or (c) the validity and
enforceability of the material provisions of the Loan Documents or the material
rights of or benefits available to the Administrative Agent, the Issuing Banks
or the Lenders thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of one or
more Group Members, in an aggregate principal amount exceeding $15,000,000.  For
purposes of determining Material Indebtedness, the “obligations” of any one or
more Group Members in respect of any Swap Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that any
Group Member would be required to pay if such Swap Agreement were terminated at
such time.

 

“Maturity Date” means September 30, 2015 or any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.

 

“Maximum Liability” has the meaning assigned to such term in Section 10.09.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgaged Properties” means any fee-owned Real Estate Asset having a fair
market value in excess of $100,000 as of the date of the acquisition thereof
(which properties, in each case as of the Effective Date, are specified as
“Mortgaged Properties” on Schedule 3.05).

 

“Mortgages” means any mortgage, deed of trust or other agreement which conveys
or evidences a Lien in favor of the Administrative Agent, for the benefit of the
Secured Parties, on owned real property in the United States of America of a
Loan Party, including any amendment, modification or supplement thereto.

 

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“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

“Narrative Report” means with respect to the financial statements for which such
narrative report is required, a narrative report describing the operations of
Holdings and its Subsidiaries (providing a summary of such operations consistent
with disclosure that would be made by a public company registered with the SEC)
for the applicable fiscal quarter or fiscal year and for the period from the
beginning of the then current fiscal year to the end of such period to which
such financial statements relate.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal
to: (i) cash (which term, for the purposes of this definition, shall include
Permitted Investments) payments (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by Holdings or any of its Subsidiaries
from such Asset Sale, minus (ii) any bona fide costs, fees and expenses incurred
in connection with such Asset Sale, including (a) income or gains taxes payable
(or reasonably and good faith estimated to be payable) by the seller as a result
of any gain recognized in connection with such Asset Sale, (b) attorneys fees,
accounting fees, investment banking fees and consulting fees incurred in
connection with such Asset Sale, (c) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than the
Loans or the Term Loans) that is secured by a Lien on the stock or assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale and (d) a reasonable escrow or reserve for any
indemnification payments (fixed or contingent) attributable to seller’s
indemnities and representations and warranties to purchaser in respect of such
Asset Sale undertaken by Holdings or any of its Subsidiaries in connection with
such Asset Sale; provided that upon release of any such reserve, the amount
released shall be considered Net Asset Sale Proceeds.

 

“Net Income” means, for any period, the consolidated net income (or loss) of
Holdings and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income (or deficit) of
any Person accrued prior to the date it becomes a Subsidiary or is merged into
or consolidated with any Group Member, (b) the income (or deficit) of any Person
(other than a Subsidiary of Holdings) in which any Group Member has an ownership
interest, except the income of such Person shall be included to the extent that
any such income is actually received by such Group Member in the form of
dividends or similar distributions, (c) the income of any Subsidiary of Holdings
to the extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary and (d) (to the
extent not included in clauses (a) through (c) above) any extraordinary gains or
losses in accordance with GAAP.

 

“Net Insurance/Condemnation Proceeds” means, with respect to any
Insurance/Condemnation Event, an amount equal to: (i) any cash (which term, for
the purposes of this definition, shall include Permitted Investments) payments
or proceeds received by Holdings or any of its Subsidiaries (a) under any
casualty insurance policy in respect of a covered loss thereunder or (b) as a
result of the taking of any assets of Holdings or any of its Subsidiaries by any
Person pursuant to the power of eminent domain, condemnation or otherwise, or
pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, minus (ii) (a) any actual and reasonable costs, fees
and expenses incurred by Holdings or any of its Subsidiaries in connection with
the adjustment or settlement of any claims

 

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of Holdings or such Subsidiary in respect thereof, and (b) any bona fide costs,
fees and expenses incurred in connection with any sale of such assets as
referred to in clause (i)(b) of this definition, including, without limitation,
income taxes payable (or reasonably and good faith estimated to be payable) as a
result of any gain recognized in connection therewith and any attorneys fees
incurred in connection with such Insurance/Condemnation Event.

 

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person,
the orderly liquidation value thereof as determined in a manner reasonably
acceptable to the Administrative Agent by an appraiser reasonably acceptable to
the Administrative Agent, net of all costs of liquidation thereof.

 

“Non-Consenting Lender” has the meaning assigned to such term in Section
9.02(d).

 

“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.10.

 

“Obligated Party” has the meaning assigned to such term in Section 10.02.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lenders or to any Lender, the Administrative Agent, the Issuing Banks or any
indemnified party arising under the Loan Documents (other than any of the Term
Loan Secured Parties (as defined in the Intercreditor Agreement), in their
capacities as such).

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document, including
any interest, additions to tax or penalties applicable thereto.

 

“Overadvance” has the meaning assigned to such term in Section 2.05(b).

 

“Overadvance Exposure” means, with respect to any Lender at any time, an amount
equal to such Lender’s Applicable Percentage of the aggregate principal amount
of Overadvances at such time.

 

“Parent” means Clopay Corporation, a Delaware corporation.

 

“Parent Entity” means, with respect to any Lender, any Person as to which such
Lender is, directly or indirectly, a subsidiary.

 

“Participant” has the meaning set forth in Section 9.04(b)(v)(1).

 

“Paying Guarantor” has the meaning assigned to such term in Section 10.10.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” means a certificate in form and substance reasonably
satisfactory to the Administrative Agent that provides information with respect
to Holdings, the Borrower and each Domestic Subsidiary and their respective
assets.

 

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“Permitted Acquisition” means any acquisition (other than the Acquisition) by
any Loan Party, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, at least 51% of the Equity Interests of, or
a business line or unit or a division of, any Person; provided, that:

 

(a)           such acquisition shall be consummated in accordance with all
applicable laws and in conformity with all applicable governmental
authorizations, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect;

 

(b)           in the case of the acquisition of Equity Interests, (i) at least
51% of the Equity Interests acquired or otherwise issued by such Person or any
newly formed Subsidiary of any Loan Party in connection with such acquisition
shall be directly and beneficially owned by a Loan Party and (ii) the Person
whose Equity Interests are acquired shall become a Subsidiary and, unless such a
Subsidiary is an Immaterial Subsidiary, a Guarantor and shall otherwise comply
with the requirements of Section 5.13;

 

(c)           in the case of any acquisition of $10,000,000 or more (whether
paid in cash, securities, the assumption of debt or otherwise), the Borrower
shall have delivered to Administrative Agent at least five Business Days prior
to such proposed acquisition, a certificate evidencing compliance with Section
6.06(e), together with a reasonably detailed description of such acquisition,
including the aggregate Acquisition Consideration for such acquisition, and any
other information reasonably required to demonstrate such compliance;

 

(d)           such acquisition shall be consensual; and

 

(e)           if the assets acquired are to be included in the Borrowing Base,
the Borrower shall have delivered all information reasonably requested by the
Administrative Agent in its Permitted Discretion and the Administrative Agent
shall have received acceptable field examinations and Inventory appraisals to
include the acquired assets within the Borrowing Base.

 

“Permitted Change of Control Transaction” means a “spin-off” transaction whereby
all the Equity Interests in Holdings are “spun-off” from Parent to Griffon, and
from Griffon ratably to the holders of all the Equity Interests in Griffon,
pursuant to which Holdings ceases to be an indirect Subsidiary of Griffon and
becomes a public company; provided that (i) any Indebtedness and liabilities of
Griffon, Parent or their respective Affiliates (other than the Group Members)
assumed by any Group Member in connection with such transaction must be
expressly permitted to be assumed under Section 6.01 and Section 6.02, (ii)
prior to and immediately after giving effect to such transaction, no Default
shall have occurred and be continuing, (iii) any potential Tax liability
incurred or assumed by any Group Member (either as a primary obligor or as a
member of Griffon’s or the Parent’s consolidated group) as a result of such
spin-off transaction and/or related transactions could not reasonably be
expected to have more than an immaterial adverse effect on the Group Members
taken as a whole and (iv) any expenses related to or resulting from the
accelerated vesting of any equity-based compensation program, time-vested
management incentive program or management bonus program of Griffon, Holdings or
its Affiliates in connection with such “spin-off” transaction shall be paid
solely by Griffon or its Affiliates (other than the Group Members) .

 

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

 

“Permitted Encumbrances” means:

 

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(a)           Liens imposed by law for taxes, assessments and governmental
charges or claims that are not yet due and payable or are being contested in
compliance with Section 5.04;

 

(b)           landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not material and not overdue by
more than 30 days or are being contested in compliance with Section 5.04;

 

(c)           pledges, deposits and statutory trusts made in the ordinary course
of business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations;

 

(d)           deposits to secure the performance of bids, trade contracts,
governmental contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;

 

(e)           judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;

 

(f)            easements, zoning restrictions, rights-of-way, licenses,
covenants or other imperfections of title and similar encumbrances on or other
matters affecting real property that do not materially detract from the value of
the affected property or materially interfere with the ordinary conduct of
business of Holdings or any Subsidiary of Holdings;

 

(g)           with respect to any leasehold property, Liens placed upon or
suffered by the landlord with respect to the underlying fee estate; and

 

(h)           other Liens or matters approved by the Administrative Agent in any
policy of title insurance issued in connection with any Mortgage for a Mortgaged
Property;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Investments” means:

 

(a)           direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

 

(c)           investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000; and

 

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(d)           money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Permitted Refinancing” means any modification, refinancing, refunding, renewal
or extension of the Term Loan Facility; provided that (a) the principal amount
thereof does not exceed the principal amount of the Term Loan Facility except by
an amount equal to unpaid accrued interest and premium thereon plus other
reasonable amounts paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
, (b) such modification, refinancing, refunding, renewal or extension has a
final maturity date equal to or later than the final maturity date of, and has a
weighted average life to maturity equal to or greater than the weighted average
life to maturity of the Term Loan Facility, (c) no Default or Event of Default
shall have occurred and be continuing, (d) such modification, refinancing,
refunding, renewal or extension is incurred by the Borrower, (e) such Permitted
Refinancing is secured only by all or any portion of the Collateral (but not by
any other assets) pursuant to one or more security agreements subject to the
Intercreditor Agreement, (f) prior to the Maturity Date, such Permitted
Refinancing shall not have any scheduled amortization payments greater than
5.00% per annum of the initial aggregate principal amount thereof, (g) such
Permitted Refinancing shall not have financial covenants that are more
restrictive than the Term Loan Credit Agreement, (h) such Permitted Refinancing
shall not have a “Change of Control” (or any defined term having a similar
purpose) that is materially more restrictive than the definition of Change of
Control set forth herein, (i) such Permitted Refinancing is not guaranteed by
any Group Member which is not a Guarantor and (j) any mandatory prepayments
pursuant to such Permitted Refinancing shall be subject to (i) the payment of
any mandatory prepayments required hereunder and (ii) the Intercreditor
Agreement.

 

“Permitted Subordinated Debt” means unsecured Indebtedness of the Borrower for
borrowed money which (a) matures no earlier than, and does not require any
scheduled principal payments prior to, six months after the Maturity Date, (b)
is not subject to any mandatory prepayment, redemption, repurchase, sinking fund
or other similar obligation prior to six months after the Maturity Date, in each
case that could require any payment on account of principal in respect thereof
prior to six months after the Maturity Date, (c) is not guaranteed by any Group
Member which is not a Guarantor, (d) is subordinated to the Obligations on terms
and conditions reasonably satisfactory to the Administrative Agent in its
Permitted Discretion, (e) has terms and conditions (other than interest rate,
redemption premiums and subordination terms), taken as a whole, that are not
materially less favorable or more restrictive to the Borrower than the terms and
conditions customary at the time for high-yield subordinated debt securities
issued in a public offering (except to the extent otherwise approved by the
Administrative Agent) and (f) has terms and conditions (other than interest
rate, redemption premiums and subordination terms), taken as a whole, that are
not materially less favorable or more restrictive to the Borrower than the terms
and conditions contained in this Agreement; provided that prior to and
immediately after giving effect to such transaction, no Default shall have
occurred and be continuing.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan, as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan), subject to the provisions of Title IV
of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of
which Holdings or any ERISA Affiliate

 

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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.

 

“Pledged Collateral” has the meaning assigned to such term in the Security
Agreement.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan as its prime rate at its offices at 270 Park Avenue in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.

 

“Pro Forma Financial Statements” means the pro forma financial statements
referred to in Section 4.01(b)(ii).

 

“Prohibited Transaction” has the meaning assigned to such term in Section 406 of
ERISA and Section 4975(f)(3) of the Code.

 

“Projections” has the meaning assigned to such term in Section 3.04(d).

 

“Protective Advance” has the meaning assigned to such term in Section 2.04.

 

“Protective Advance Exposure” means, with respect to any Lender at any time, an
amount equal to such Lender’s Applicable Percentage of the aggregate principal
amount of Protective Advances at such time.

 

“Real Estate Asset” means, at any time of determination, any interest (fee,
leasehold or otherwise) then owned by any Loan Party in any real property.

 

“Register” has the meaning set forth in Section 9.04.

 

“Related Agreements” means, collectively, the Acquisition Agreement and the
equity commitment letter, dated July 19, 2010, between Griffon and Acquisition
Sub.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.

 

“Rent Reserve” means, with respect to any leased location or storage facility
not owned by any Loan Party where any Inventory equal to or in excess of
$1,000,000 is located, a reserve equal to three months’ rent (or, in the absence
of rent, storage fees, if applicable) applicable to location or such storage
facility.

 

“Reorganization” means, with respect to a Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

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“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the Loan Parties’ assets from information furnished by or on behalf of the
Borrower, after the Administrative Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.

 

“Reportable Event” means any “reportable event,” as defined in Section 4043 (c)
of ERISA or the regulations issued thereunder, other than those events as to
which the 30-day notice period referred to in Section 4043(c) of ERISA has been
waived, with respect to a Plan (other than a Plan maintained by an ERISA
Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Section 414 of the Code).

 

“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Commitments representing more than 50% of the sum of the total Credit Exposure
and unused Commitments at such time.

 

“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Reserves” means any and all reserves which the Administrative Agent deems
necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Secured Obligations,
Banking Services Reserves, Rent Reserves, Dilution Reserves, reserves for
consignee’s, warehousemen’s and bailee’s charges, reserves for Inventory
shrinkage, reserves for customs charges and shipping charges related to any
Inventory in transit, reserves for Swap Obligations, reserves for contingent
liabilities of any Loan Party, reserves for uninsured losses of any Loan Party,
reserves for uninsured, underinsured, un-indemnified or under-indemnified
liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments, and other governmental charges) with respect to
the Collateral or any Loan Party.

 

“Restricted Payment” means (a) any dividend or other distribution, direct or
indirect (whether in cash, securities or other property), with respect to any
Equity Interests in any Group Member or (b) any payment, direct or indirect
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of, or any other return of capital with
respect to, any such Equity Interests in any Group Member, or, prior to a
Permitted Change of Control Transaction, Griffon or any of its Subsidiaries, or
any option, warrant or other right to acquire any such Equity Interests in any
Group Member, or, prior to a Permitted Change of Control Transaction, Griffon or
any of its Subsidiaries or (c) any payments to Griffon or any of its Affiliates
(other than Group Members) in respect of fees or in respect of any Indebtedness
owing to Griffon or any of its Affiliates (other than Group Members).

 

“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit, Overadvances and Swingline Loans hereunder, expressed as an
amount representing the maximum possible aggregate amount of such Lender’s
Revolving Exposure hereunder, as such commitment may be reduced or increased
from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such
Lender pursuant to Section 9.04.  The initial amount of each Lender’s

 

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Revolving Commitment is set forth on the Commitment Schedule, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable.  The initial aggregate amount of the
Lenders’ Revolving Commitments is $125,000,000.

 

“Revolving Exposure” means, with respect to any Lender at any time, the sum
(without duplication) of (a) the outstanding principal amount of such Lender’s
Revolving Loans and its LC Exposure, plus (b) an amount equal to its Applicable
Percentage of the aggregate principal amount of Swingline Loans at such time,
plus (c) an amount equal to its Applicable Percentage of the aggregate principal
amount of Overadvances outstanding at such time.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

 

“S&P” means Standard & Poor’s Financial Services LLC.

 

“SEC” means the Securities and Exchange Commission, or any regulatory body that
succeeds to the functions thereof.

 

“Second Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is perfected and
has priority over all other Liens to which such Collateral is subject, other
than (a) First Priority Liens to which such Collateral is subject that are
permitted hereby and are subject to the Intercreditor Agreement and (b) any
Permitted Encumbrances.

 

“Secured Obligations” has the meaning assigned to such term in the Security
Agreement.

 

“Secured Parties” has the meaning assigned to such term in the Security
Agreement.

 

“Security Agreement” means that certain Amended and Restated Pledge and Security
Agreement, dated as of the date hereof, between the Loan Parties and the
Administrative Agent, for the benefit of the Secured Parties, substantially in
the form attached hereto as Exhibit E, and any other pledge or security
agreement entered into, after the date of this Agreement by any other Loan Party
(as required by this Agreement or any other Loan Document), or any other Person,
for the benefit of the Secured Parties, as the same may be amended, restated or
otherwise modified from time to time.

 

“Settlement” has the meaning assigned to such term in Section 2.05(d).

 

“Settlement Date” has the meaning assigned to such term in Section 2.05(d).

 

“Senior Notes” means the 10% Senior Subordinated Notes due 2012, issued by Ames,
and the Floating Rate Notes, in each case pursuant to the applicable Senior
Notes Indentures.

 

“Senior Notes Indentures” means (a) the Indenture for 10% Senior Subordinated
Notes due 2012, dated June 28, 2004, by and among Ames, as Issuer, ATT, as
Guarantor, and The Bank of New York, as Trustee, and the Supplemental Indenture,
to the Indenture dated June 28, 2004, dated as of December 17, 2007, among Ames
U.S. Holding Corp, Ames Holdings, Inc., Ames True Temper Properties, Inc., Ames,
ATT and The Bank of New York, as Trustee, and (b) the Floating Rate Notes
Indenture.

 

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“Solvent” means, with respect to any Person, that as of the date of
determination, (a) the sum of such Person’s debt and other liabilities
(including contingent liabilities) does not exceed the present fair saleable
value of such Person’s present assets, (b) such Person’s capital is not
unreasonably small in relation to its business as contemplated on the Effective
Date and reflected in the Projections or with respect to any transaction
contemplated to be undertaken after the Effective Date, (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts and liabilities (including contingent
liabilities) beyond its ability to pay such debts and liabilities as they become
due (whether at maturity or otherwise), and (d) such Person is “solvent” within
the meaning given that term and similar terms under the Bankruptcy Code and
applicable laws relating to fraudulent transfers and conveyances.  For purposes
of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (irrespective of whether such contingent
liabilities meet the criteria for accrual under GAAP).

 

“Specified Representations” means the representations made by or with respect to
the Target and its subsidiaries in the Acquisition Agreement as are material to
the interests of the Lenders, but only to the extent that Acquisition Sub has
the right to terminate its obligations under the Acquisition Agreement as a
result of the breach of such representations in the Acquisition Agreement.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated in writing to payment of the Secured
Obligations to the reasonable satisfaction of the Administrative Agent.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

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“Subsidiary” means any direct or indirect subsidiary of the Borrower or any
other Group Member, as applicable.

 

“Supermajority Lenders” means, at any time, Lenders having Credit Exposure and
unused Commitments representing more than 66 2/3% of the sum of the total Credit
Exposure and unused Commitments at such time.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions (including any Interest Rate Agreements);
provided that no phantom stock or similar plan providing for payments only on
account of services provided by current or former directors, officers, employees
or consultants of the Borrower or its Subsidiaries shall be a Swap Agreement.

 

“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.

 

“Swingline Exposure” means, with respect to any Lender at any time, an amount
equal to such Lender’s Applicable Percentage of the aggregate principal amount
of Swingline Loans at such time.

 

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.

 

“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).

 

“Target” has the meaning assigned to such term in the recitals hereto.

 

“Target Management Agreement” means the Management Agreement, dated as of June
28, 2004, among Castle Harlan, Inc., ATT, Ames and the Target.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Term Collateral” has the meaning assigned to such term in the Intercreditor
Agreement.

 

“Term Loan Administrative Agent” means Goldman Sachs Lending Partners LLC, as
administrative agent under the Term Loan Credit Agreement, and, after any
Permitted Refinancing of the Term Loan Facility, the administrative agent or
similar representative with respect to such Permitted Refinancing.

 

“Term Loan Credit Agreement” means that certain Credit and Guarantee Agreement,
dated as of the date hereof, between the Loan Parties, the Term Loan
Administrative Agent and the lenders and other parties party thereto from time
to time.

 

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“Term Loan Documents” has the meaning assigned to such term in the Intercreditor
Agreement.

 

“Term Loan Facility” means the commitments to make loans under the Term Loan
Credit Agreement and the loans thereunder.

 

“Transactions” means (a) the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the creation of the
Liens provided for in the Collateral Documents and, in the case of the Borrower,
the borrowing of Loans and the issuance of Letters of Credit hereunder and the
use of proceeds thereof in accordance with the terms hereof, (b) the Acquisition
and the other transactions contemplated by the Acquisition Agreement, (c) the
execution, delivery and performance by each Loan Party of the Term Loan Credit
Agreement and the related Term Loan Documents and the borrowing of term loans
under the Term Loan Credit Agreement, (d) the repayment in full of all
obligations under the Existing Debt Agreements, the termination of all
commitments thereunder and the releases of all Guarantees and Liens in respect
thereof, (e) the repayment in full of all obligations outstanding under the
Existing Credit Agreement as of the Effective Date and (f) the payment of the
fees, costs and expenses payable by Holdings or any of its Subsidiaries in
connection with the Transactions.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

 

“Unrestricted Cash” means cash or cash equivalents of the Borrower or any of its
Subsidiaries that would not appear as “restricted” on a consolidated balance
sheet of the Borrower or any of its Subsidiaries.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withholding Agent” means any Loan Party and the Administrative Agent.

 

Section 1.02.          Classification of Loans and Borrowings.  For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type
(e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a
“Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving
Borrowing”).

 

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Section 1.03.          Terms Generally.  The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

 

Section 1.04.          Accounting Terms; GAAP.  Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.  Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Statement of Financial Accounting Standards 159 (or any other Financial
Accounting Standard having a similar result or effect) to value any Indebtedness
or other liabilities of Holdings, the Borrower or any Subsidiary at “fair
value”, as defined therein.

 

ARTICLE II

 

The Credits

 

Section 2.01.          Commitments.  (a)  Subject to the terms and conditions
set forth herein, each Lender severally agrees to make Revolving Loans,
denominated in dollars, to the Borrower from time to time during the
Availability Period in an aggregate principal amount that will not result in (i)
such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or
(ii) the total Revolving Exposures exceeding the lesser of (x) the aggregate
Revolving Commitments, or (y) the Borrowing Base, subject to the Administrative
Agent’s authority, in its sole discretion, to make Protective Advances and
Overadvances pursuant to the terms of Section 2.04 and Section 2.05.

 

(b)           Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.

 

Section 2.02.          Loans and Borrowings.  (a)  Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the

 

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Lenders ratably in accordance with their respective Commitments of the
applicable Class.  Any Protective Advance, any Overadvance and any Swingline
Loan shall be made in accordance with the procedures set forth in Section 2.04
and Section 2.05.

 

(b)           Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith, provided that all Borrowings made on the Effective Date
must be made as ABR Borrowings but may be converted into Eurodollar Borrowings
in accordance with Section 2.08.  Each Swingline Loan shall be an ABR Loan. 
Each Lender at its option may make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of this Agreement.

 

(c)           At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000.  ABR Revolving
Borrowings may be in any amount.  Borrowings of more than one Type and Class may
be outstanding at the same time; provided that there shall not at any time be
more than a total of ten Eurodollar Borrowings outstanding.

 

(d)           Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.

 

Section 2.03.          Requests for Revolving Borrowings.  To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request either in writing (delivered by hand or facsimile) in a form approved by
the Administrative Agent in its reasonable discretion and signed by the Borrower
or by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00
a.m., Chicago time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than noon, Chicago
time, on the date of the proposed Borrowing; provided that any such notice of an
ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago
time, on the date of the proposed Borrowing.  Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower.  Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.01:

 

(i)            the aggregate amount of the requested Borrowing and a breakdown
of the separate wires comprising such Borrowing;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

 

(iv)          in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period.”

 

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period

 

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of one month’s duration.  Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender,
as applicable, of the details thereof and of the amount of such Lender’s Loan to
be made as part of the requested Borrowing.

 

Section 2.04.          Protective Advances.  (a)  Subject to the limitations set
forth below, the Administrative Agent is authorized by the Borrower and the
Lenders, from time to time in the Administrative Agent’s sole discretion (but
shall have absolutely no obligation to), to make Loans to the Borrower, on
behalf of all Lenders, which the Administrative Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (iii)
to pay any other amount chargeable to or required to be paid by the Borrower
pursuant to the terms of this Agreement, including payments of reimbursable
expenses (including costs, fees, and expenses as described in Section 9.03) and
other sums payable under the Loan Documents (any of such Loans are herein
referred to as “Protective Advances”); provided that, (i) the aggregate amount
of Protective Advances outstanding at any time shall not at any time exceed 10%
of the Revolving Commitments, (ii) the aggregate amount of Protective Advances
outstanding at any time together with the aggregate amount of Overadvances
outstanding at any time shall not at any time exceed $15,000,000 and (iii) the
aggregate amount of outstanding Protective Advances plus the aggregate Revolving
Exposure shall not exceed the aggregate Revolving Commitments.  Protective
Advances may be made even if the conditions precedent set forth in Section 4.02
have not been satisfied.  The Protective Advances shall be secured by the Liens
in favor of the Administrative Agent in and to the Collateral and shall
constitute Obligations hereunder.  All Protective Advances shall be ABR
Borrowings.  The Administrative Agent’s authorization to make Protective
Advances may be revoked at any time by the Required Lenders.  Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof.  At any time that there is sufficient
Availability and the conditions precedent set forth in Section 4.02 have been
satisfied, the Administrative Agent may request the Lenders to make a Loan to
repay a Protective Advance.  At any other time the Administrative Agent may
require the Lenders to fund their risk participations described in Section
2.04(b).

 

(b)           Upon the making of a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default), each Lender shall
be deemed, without further action by any party hereto, to have unconditionally
and irrevocably purchased from the Administrative Agent without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage.  From and after the date, if any, on
which any Lender is required to fund its participation in any Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Lender, such Lender’s Applicable Percentage of all payments of principal and
interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Protective Advance.

 

Section 2.05.          Swingline Loans and Overadvances.  (a)  The
Administrative Agent, the Swingline Lender and the Lenders agree that in order
to facilitate the administration of this Agreement and the other Loan Documents,
promptly after the Borrower requests an ABR Borrowing, the Swingline Lender may
elect to have the terms of this Section 2.05(a) apply to such Borrowing Request
by advancing, on behalf of the Lenders and in the amount requested, same day
funds to the Borrower, on the applicable Borrowing date to the Funding
Account(s) (each such Loan made solely by the Swingline Lender pursuant to this
Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”), with
settlement among them as to the Swingline Loans to take place on a periodic
basis as set forth in Section 2.05(d).  Each Swingline Loan shall be subject to
all the terms and conditions applicable to other ABR Loans funded by the
Lenders, except that all payments thereon shall be payable to the Swingline
Lender solely for its own account.  In addition, the Borrower hereby authorizes
the Swingline Lender to, and the Swingline Lender shall, subject to the terms
and conditions set forth herein (but without any further

 

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written notice required), not later than 1:00 p.m., Chicago time, on each
Business Day, make available to the Borrower by means of a credit to the Funding
Account(s), the proceeds of a Swingline Loan.  The Administrative Agent shall,
upon request of the Borrower, notify the Borrower of the aggregate amount of
Swingline Loans outstanding as of end of the immediately preceding day.  The
aggregate amount of Swingline Loans outstanding at any time shall not exceed
$12,500,000.  The Swingline Lender shall not make any Swingline Loan if the
requested Swingline Loan exceeds the Availability (before giving effect to such
Swingline Loan).  All Swingline Loans shall be ABR Borrowings.

 

(b)           Any provision of this Agreement to the contrary notwithstanding,
at the request of the Borrower, the Administrative Agent may in its sole
discretion (but with absolutely no obligation), make Revolving Loans to the
Borrower, on behalf of the Lenders, in amounts that exceed the Availability (any
such excess Revolving Loans are herein referred to collectively as
“Overadvances”); provided that, no Overadvance shall result in a Default due to
the Borrower’s failure to comply with Section 2.01 for so long as such
Overadvance remains outstanding in accordance with the terms of this paragraph,
but solely with respect to the amount of such Overadvance.  In addition,
Overadvances may be made even if the condition precedent set forth in Section
4.02(c) has not been satisfied.  All Overadvances shall constitute ABR
Borrowings.  The authority of the Administrative Agent to make Overadvances is
limited to an aggregate amount not to exceed 10% of the Revolving Commitments at
any time, no Overadvance may remain outstanding for more than thirty days and no
Overadvance shall cause any Lender’s Revolving Exposure to exceed its Revolving
Commitment; provided that the aggregate amount of Overadvances outstanding at
any time together with the aggregate amount of Protective Advances outstanding
at any time shall not at any time exceed $15,000,000; provided further that the
Required Lenders may at any time revoke the Administrative Agent’s authorization
to make Overadvances.  Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s receipt thereof.

 

(c)           Upon the making of a Swingline Loan or an Overadvance (whether
before or after the occurrence of a Default and regardless of whether a
Settlement has been requested with respect to such Swingline Loan or
Overadvance), each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Swingline
Lender or the Administrative Agent, as the case may be, without recourse or
warranty, an undivided interest and participation in such Swingline Loan or
Overadvance in proportion to its Applicable Percentage of the Revolving
Commitment.  The Swingline Lender or the Administrative Agent may, at any time,
require the Lenders to fund their participations.  From and after the date, if
any, on which any Lender is required to fund its participation in any Swingline
Loan or Overadvance purchased hereunder, the Administrative Agent shall promptly
distribute to such Lender, such Lender’s Applicable Percentage of all payments
of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Loan.

 

(d)           The Administrative Agent, on behalf of the Swingline Lender, shall
request settlement (a “Settlement”) with the Lenders on at least a weekly basis
or on any date that the Administrative Agent elects, by notifying the Lenders of
such requested Settlement by facsimile, telephone, or e-mail no later than 12:00
noon, Chicago time, on the date of such requested Settlement (the “Settlement
Date”).  Each Lender (other than the Swingline Lender, in the case of the
Swingline Loans) shall transfer the amount of such Lender’s Applicable
Percentage of the outstanding principal amount of the applicable Loan with
respect to which Settlement is requested to the Administrative Agent, to such
account of the Administrative Agent as the Administrative Agent may designate,
not later than 2:00 p.m., Chicago time, on such Settlement Date.  Settlements
may occur during the existence of a Default and whether or not the applicable
conditions precedent set forth in Section 4.02 have then been satisfied.  Such
amounts transferred to the Administrative Agent shall be applied against the
amounts of the Swingline Lender’s Swingline Loans and, together with Swingline
Lender’s Applicable Percentage

 

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of such Swingline Loan, shall constitute Revolving Loans of such Lenders,
respectively.  If any such amount is not transferred to the Administrative Agent
by any Lender on such Settlement Date, the Swingline Lender shall be entitled to
recover such amount on demand from such Lender together with interest thereon as
specified in Section 2.07.

 

Section 2.06.          Letters of Credit.  (a)  General.  Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account or for the account of a Loan Party, in a
form reasonably acceptable to the Administrative Agent and the applicable
Issuing Bank, at any time and from time to time during the Availability Period. 
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the applicable Issuing Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.  The Griffon Letters
of Credit outstanding on the Effective Date, and any extensions or renewals
thereof, shall be deemed Letters of Credit issued under this Agreement for all
purposes of this Agreement with such Letters of Credit being deemed issued (i)
as of the Effective Date with respect to the Griffon Letters of Credit and (ii)
as of the date of extension or renewal with respect to any extension or renewal
of the Griffon Letters of Credit.

 

(b)           Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or facsimile (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the applicable Issuing Bank and the Administrative Agent (prior to 9:00 am,
Chicago time, at least three Business Days prior to the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit.  If requested by the applicable Issuing Bank, the Borrower
also shall submit a letter of credit application on such Issuing Bank’s standard
form in connection with any request for a Letter of Credit.  A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $25,000,000
and (ii) the total Revolving Exposures shall not exceed the lesser of the total
Revolving Commitments and the Borrowing Base.

 

(c)           Expiration Date.  Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.

 

(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, the
applicable Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the applicable Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any

 

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reimbursement payment required to be refunded to the Borrower for any reason. 
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If any Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 11:00 a.m., Chicago time, on the Business Day that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 11:00 a.m., Chicago time, on the Business Day immediately
following the day that the Borrower receives such notice; provided that, if such
LC Disbursement is not less than $500,000, the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.03 that such payment be financed with an ABR Revolving Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing.  If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof.  Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to such Issuing Bank the amounts so
received by it from the Lenders.  Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear.  Any payment made by a
Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.

 

(f)            Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Banks,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of

 

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technical terms or any consequence arising from causes beyond the control of the
applicable Issuing Bank; provided that the foregoing shall not be construed to
excuse such Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank’s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof.  The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination.  In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

 

(g)           Disbursement Procedures.  The applicable Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit.  Such Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by facsimile) of such demand for payment and whether such Issuing
Bank has made or will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse such Issuing Bank and the Lenders with respect to
any such LC Disbursement.

 

(h)           Interim Interest.  If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to, ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(d)) shall apply. 
Interest accrued pursuant to this paragraph shall be for the account of the
applicable Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (e) of this Section to reimburse
such Issuing Bank shall be for the account of such Lender to the extent of such
payment.

 

(i)            Replacement of the Issuing Bank.  Any Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank.  The
Administrative Agent shall notify the Lenders of any such replacement of such
Issuing Bank.  At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of such Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require.  After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

 

(j)            Cash Collateralization.   If any Event of Default shall occur and
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required

 

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Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC
Exposure representing greater than 50% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders (the “LC Collateral
Account”), an amount in cash equal to 103% of the LC Exposure as of such date
plus accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII.  Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the applicable Secured Obligations.  The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account and the Borrower hereby grants the Administrative Agent a
security interest in the LC Collateral Account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest.  Interest or profits,
if any, on such investments shall accumulate in such account.  Moneys in such
account shall be applied by the Administrative Agent to reimburse the applicable
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other applicable Secured Obligations.  If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after such Event of Default has been cured or waived.

 

Section 2.07.          Funding of Borrowings.  (a)  Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., Chicago time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders in an amount equal to such Lender’s Applicable Percentage;
provided that Swingline Loans shall be made as provided in Section 2.05.  The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to the Funding Account(s);
provided, further, that ABR Revolving Loans made to finance the reimbursement of
(i) an LC Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank and (ii) a Protective
Advance or an Overadvance shall be retained by the Administrative Agent.

 

(b)           Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate reasonably determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

 

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Section 2.08.          Interest Elections.  (a)  Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request.  Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section.  The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.  This Section shall
not apply to Swingline Borrowings, Overadvances or Protective Advances, which
may not be converted or continued.

 

(b)           To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election.  Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.

 

(c)           Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.03:

 

(i)            the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);

 

(ii)           the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

(d)           If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.

 

(e)           Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

 

(f)            If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so

 

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notifies the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Revolving Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be
converted to an ABR Borrowing and, at the end of the Interest Period applicable
thereto.

 

Section 2.09.          Termination and Reduction of Commitments; Increase in
Revolving Commitments; Canadian Facility.  (a)  Unless previously terminated,
the Commitments shall terminate on the Maturity Date.

 

(b)           The Borrower may at any time terminate the Commitments upon (i)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon and on any Letters of Credit, (ii) the cancellation and return
of all outstanding Letters of Credit (or alternatively, with respect to each
such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a back up standby
letter of credit satisfactory to the Administrative Agent) equal to 103% of the
LC Exposure as of such date), (iii) the payment in full of the accrued and
unpaid fees, and (iv) the payment in full of all reimbursable expenses and other
Obligations (other than any Unliquidated Obligation) together with accrued and
unpaid interest thereon.

 

(c)           The Borrower may from time to time reduce the Revolving
Commitments; provided that (i) each reduction of the Revolving Commitments shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Borrower shall not reduce the Revolving Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.10, the sum of the Revolving Exposures would exceed
the lesser of the total Revolving Commitments and the Borrowing Base.

 

(d)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) or (c) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the Commitments
shall be permanent.  Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

 

(e)           The Borrower shall have the right to increase the Revolving
Commitment up to an aggregate amount of $25,000,000 by obtaining additional
Revolving Commitments, either from one or more of the Lenders or other lending
institutions provided that (i) any such request for an increase shall be in a
minimum amount of $10,000,000, (ii) the Borrower may make a maximum of two such
requests, (iii) the Administrative Agent has approved the identity of any such
new Lender, such approval not to be unreasonably withheld, (iv) any such new
Lender assumes all of the rights and obligations of a “Lender” hereunder, and
(v) the procedure described in Section 2.09(f) have been satisfied.

 

(f)            Any amendment hereto for such an increase or addition to the
Revolving Commitments shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall only require the written signatures of the
Administrative Agent, the Borrower and the Lender(s) being added or increasing
their Commitment, subject only to the approval of all Lenders (other than any
Canadian Lenders, in their capacities as such) if any such increase would cause
the Revolving Commitment to exceed $150,000,000.  As a condition precedent to
such an increase, the Borrower shall

 

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deliver to the Administrative Agent a certificate of each Loan Party (in
sufficient copies for each Lender) signed by an authorized officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, as of the effective date of such increase, before and after
giving effect to such increase, (A) the representations and warranties contained
in Article III and the other Loan Documents are true and correct in all material
respects, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
in all material respects as of such earlier date, provided that any
representation and warranty that is qualified as to “materiality,” “Material
Adverse Effect” or similar language shall be true and correct in all respects on
such date, and (B) no Default exists.

 

(g)           Within a reasonable time after the effective date of any increase,
the Administrative Agent shall, and is hereby authorized and directed to, revise
the Commitment Schedule to reflect such increase and shall distribute such
revised Commitment Schedule to each of the Lenders and the Borrower, whereupon
such revised Commitment Schedule shall replace the old Commitment Schedule and
become part of this Agreement.  On the Business Day following any such increase,
all outstanding ABR Loans shall be reallocated among the Lenders (including any
newly added Lenders) in accordance with the Lenders’ respective revised
Applicable Percentages.  Eurodollar Loans shall not be reallocated among the
Lenders prior to the expiration of the applicable Interest Period in effect at
the time of any such increase.

 

(h)           The Borrower shall have the right to add a Canadian Borrower and
to obtain Canadian Commitments, up to an aggregate amount of $20,000,000, either
from one or more of the Lenders or other lending institutions; provided that (i)
any such request for an increase shall be in a minimum amount of $10,000,000,
(ii) the Administrative Agent has approved the identity of any such new lending
institution, such approval not to be unreasonably withheld, (iii) any such new
lending institution assumes all of the rights and obligations of a “Lender”
under this Agreement (as amended pursuant to Section 2.09(i)), (iv) the Canadian
Facility is not guaranteed by, or secured by any assets of, Holdings or any
Domestic Subsidiary, (v) the Canadian Facility has a final maturity date equal
to or later than the Maturity Date, (vi) the Canadian Facility shall not have
representations and warranties that are materially more restrictive in the
aggregate than the representations and warranties contained in this Agreement,
unless otherwise agreed by the Administrative Agent in its Permitted Discretion,
(vii)  the Canadian Facility shall not have covenants or events of default that
are materially more restrictive than the covenants and events of default
contained in this Agreement, (viii) the Canadian Facility shall otherwise have
terms and conditions reasonably acceptable to the Administrative Agent, as set
forth in an amendment hereto in accordance with Section 2.09(i) and (ix) no
Default or Event of Default shall have occurred and be continuing.

 

(i)            Any amendment hereto for such an increase in, or addition of,
Canadian Commitments shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall only require the written signatures of the
Administrative Agent, the Borrower and the Lender(s) providing Canadian
Commitments pursuant to such amendment (any such Lender, a “Canadian Lender”),
subject only to the approval of all Canadian Lenders if any such increase would
cause the Canadian Commitments to exceed $20,000,000.  As a condition precedent
to such an increase, the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party (in sufficient copies for each Lender) signed by
an authorized officer of such Loan Party (i) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to the Canadian
Facility or an increase in the Canadian Facility, and (ii) in the case of the
Borrower, certifying that, as of the effective date of such increase, before and
after giving effect to such increase, (A) the representations and warranties
contained in Article III and the other Loan Documents are true and correct in
all material respects, except to the extent that such representations and
warranties specifically refer to an earlier date, in which

 

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case they are true and correct in all material respects as of such earlier date,
provided that any representation and warranty that is qualified as to
“materiality,” “Material Adverse Effect” or similar language shall be true and
correct in all respects on such date, and (B) no Default exists.  The
Administrative Agent, the Borrower and the Canadian Lenders may, without the
consent of any other Lenders, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provisions of Section 2.09(h).

 

Section 2.10.          Repayment and Amortization of Loans; Evidence of Debt. 
(a) The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender (or Swingline Lender) the
then unpaid principal amount of each Revolving Loan (and Swingline Loans) on the
Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each
Protective Advance on the earlier of the Maturity Date and demand by the
Administrative Agent, and (iii) to the Administrative Agent the then unpaid
principal amount of each Overadvance on the earlier of the Maturity Date and the
30th day after such Overadvance is made.

 

(b)           At all times during a Cash Dominion Period, on each Business Day,
the Administrative Agent shall apply all funds credited to the Collection
Account the previous Business Day (whether or not immediately available) first
to prepay any Protective Advances and Overadvances that may be outstanding, pro
rata, second to prepay the Revolving Loans (including Swingline Loans) with any
such prepayment of the Revolving Loans being ratable, and third to cash
collateralize outstanding LC Exposure.

 

(c)           Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(d)           The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(e)           The entries made in the accounts maintained pursuant to paragraph
(c) or (d) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

 

(f)            Any Lender may request that Loans made by it be evidenced by a
promissory note.  In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form reasonably satisfactory to the Administrative Agent.  Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

Section 2.11.          Prepayment of Loans.  (a)  The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (f) of this Section.

 

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(b)                                 Except for Overadvances permitted under
Section 2.05, in the event and on such occasion that the total Revolving
Exposure exceeds the lesser of (A) the aggregate Revolving Commitments, or
(B) the Borrowing Base, the Borrower shall prepay the Revolving Loans, LC
Exposure and/or Swingline Loans in an aggregate amount equal to such excess.

 

(c)                                  If any Asset Sale includes assets
constituting ABL Collateral or any Net Insurance/Condemnation Proceeds are
received in respect of assets subject to an Insurance/Condemnation Event
including assets constituting ABL Collateral, then a portion of the Net Asset
Sale Proceeds or Net Insurance/Condemnation Proceeds, as applicable, shall be
applied to prepay the Revolving Loans, LC Exposure and/or Swingline Loans in an
aggregate amount equal to the net book value of the assets constituting ABL
Collateral that were sold in the Asset Sale or in respect of which Net
Insurance/Condemnation Proceeds were received.

 

(d)                                 If a Loan is prepaid pursuant to
Section 2.11(a), (b) or (c) on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.16.

 

(e)                                  All such amounts pursuant to
Section 2.11(b) or (c) shall be applied, first to prepay any Protective Advances
and Overadvances that may be outstanding, pro rata, second to prepay the
Revolving Loans (including Swingline Loans) without a corresponding reduction in
the Revolving Commitment and third to cash collateralize outstanding LC
Exposure.

 

(f)                                    The Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by facsimile) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not
later than 10:00 a.m., Chicago time, three Business Days before the date of
prepayment, or (ii) in the case of prepayment of an ABR Revolving Borrowing, not
later than 10:00 a.m., Chicago time, on the date of prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09.  Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof.   Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02. 
Each prepayment of a Revolving Borrowing shall be applied ratably to the
Revolving Loans included in the prepaid Borrowing.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.

 

Section 2.12.                             Fees.  (a) The Borrower agrees to pay
to the Administrative Agent for the account of each Lender a commitment fee,
which shall accrue at a rate equal to the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period from and including the Effective Date to but excluding the date on which
the Lenders’ Revolving Commitments terminate.  Accrued commitment fees shall be
payable in arrears on each Fee Payment Date and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof.  All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed.

 

(b)                                 The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Rate used to determine the interest rate applicable to
Eurodollar Revolving Loans

 

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on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the applicable Issuing Banks a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as the Issuing Banks’ standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Participation fees and fronting fees accrued through and
including the last day of each calendar quarter shall be payable on each Fee
Payment Date following such last day, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on the
date on which the Revolving Commitments terminate and any such fees accruing
after the date on which the Commitments terminate shall be payable on demand. 
Any other fees payable to the Issuing Banks pursuant to this paragraph shall be
payable within 10 days after demand.  All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed.

 

(c)                                  The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times set forth in the Fee Letters.

 

(d)                                 All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the Administrative Agent (or
to an Issuing Bank, in the case of fees payable to it) for distribution, in the
case of commitment fees and participation fees, to the Lenders.  Fees paid shall
not be refundable under any circumstances.

 

Section 2.13.                             Interest.  (a) The Loans comprising
each ABR Borrowing (including each Swingline Loan) shall bear interest at the
Alternate Base Rate plus the Applicable Rate.

 

(b)                                 The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Rate.

 

(c)                                  Each Protective Advance and each
Overadvance shall bear interest at the Alternate Base Rate plus the Applicable
Rate for Revolving Loans plus 2%.

 

(d)                                 Notwithstanding the foregoing, during the
occurrence and continuance of an Event of Default, (i) all Loans shall bear
interest at 2% plus the rate otherwise applicable to such Loans as provided in
the preceding paragraphs of this Section or (ii) in the case of any other amount
outstanding hereunder, such amount shall bear interest at 2% plus the rate
applicable to ABR Loans, as provided in paragraph (a) of this Section.

 

(e)                                  Accrued interest on each Loan (for ABR
Loans, accrued through the last day of the prior quarter) shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (d) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior
to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

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(f)                                    All interest hereunder shall be computed
on the basis of a year of 360 days, except that interest computed by reference
to the Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed.  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

 

(g)                                 In the event that any Borrowing Base
Certificate or related information delivered pursuant to Section 5.01 is
inaccurate (regardless of whether this Agreement or the Revolving Commitments
are in effect when such inaccuracy is discovered), and such inaccuracy, if
corrected, would have led to the application of a higher Applicable Rate for any
period than the Applicable Rate actually used to determine interest rates for
such period, then (a) the Borrower shall promptly deliver to the Administrative
Agent a corrected Borrowing Base Certificate for such period, (b) the Applicable
Rate for such period shall be retroactively determined based on the average
Availability as set forth in the corrected Borrowing Base Certificate and
(c) the Borrower shall promptly pay to the Administrative Agent (for the account
of the Lenders during such period or their successors and assigns) the accrued
additional interest owing as a result of such increased Applicable Rate for such
period.  This Section 2.13(g) shall not limit the rights of the Administrative
Agent under this Section 2.13 or Article VII, and shall survive the termination
of this Agreement.

 

Section 2.14.                             Alternate Rate of Interest.  If prior
to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(a)                                  the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period; or

 

(b)                                 the Administrative Agent is advised by the
Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan) included
in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

Section 2.15.                             Increased Costs (a)  If any Change in
Law shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank;

 

(ii)                                  impose on any Lender or any Issuing Bank
or the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein; or

 

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(iii)                               subject any Lender or any Issuing Bank to
any Tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any Letter of Credit application or notice requesting the issuance of a
Letter of Credit, or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender or Issuing Bank in respect thereof (except
for Indemnified Taxes covered by Section 2.17 and changes in the rate of tax on
the overall net income of such Lender or Issuing Bank);

 

and the result of any of the foregoing shall be to increase the cost to such
Lender (or, in the case of (iii), to such Lender or Issuing Bank) of making or
maintaining any Eurodollar Loan (or, in the case of (iii), any Loans), or of
maintaining its obligation to make any such Loan, or to increase the cost to
such Lender or Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

 

(b)                                 If any Lender or Issuing Bank determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital
or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as
a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or Issuing Bank or such
Lender’s or Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or Issuing Bank’s
policies and the policies of such Lender’s or Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or Issuing Bank or such Lender’s or
Issuing Bank’s holding company for any such reduction suffered.

 

(c)                                  A certificate of a Lender or an Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error.  The Borrower shall pay such Lender
or Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)                                 Failure or delay on the part of any Lender
or any Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or Issuing Bank’s right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender or
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or
Issuing Bank’s intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

Section 2.16.                             Break Funding Payments.  In the event
of (a) the payment of any principal of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.09(d) and is revoked in accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable

 

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thereto as a result of a request by the Borrower pursuant to Section 2.19, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event.  In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market.  A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

Section 2.17.                             Taxes.  (a)  Any and all payments by
or on account of any obligation of any Loan Party hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes or
Other Taxes are required to be withheld from such payments, as determined in
good faith by the applicable Withholding Agent, then (i) 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 Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii)  such deductions shall be made and such amounts shall be paid to the
relevant Governmental Authority in accordance with applicable law.

 

(b)                                 In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

(c)                                  The Borrower shall indemnify the
Administrative Agent, each Lender and any Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or such Issuing Bank, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender or an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.  In addition, as soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
applicable Loan Party to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(d)                                 Each Lender and Issuing Bank shall indemnify
the Administrative Agent for the full amount of any Taxes that are attributable
to such Lender or Issuing Bank, as applicable, and that are payable or paid by
the Administrative Agent, together with all interest, penalties, reasonable
costs and expenses arising therefrom or with respect thereto, as determined by
the Administrative Agent in good faith. A certificate as to the amount of such
payment or liability delivered to any Lender or Issuing Bank by the
Administrative Agent shall be conclusive absent manifest error.

 

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(e)                                  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Without limiting the generality of the
foregoing, in the event that the Borrower is resident for tax purposes in the
United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement or under an Assignment and Assumption (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable (together with any applicable underlying Internal
Revenue Service forms):

 

(i)                                     duly completed copies of Internal
Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party,

 

(ii)                                  duly completed copies of Internal Revenue
Service Form W-8ECI,

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the
Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of the applicable
Internal Revenue Service Form W-8, or

 

(iv)                              any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit the Borrower and the
Administrative Agent to determine the withholding or deduction required to be
made.

 

Any Lender that is not a Foreign Lender shall deliver to the Borrower and the
Administrative Agent copies of Internal Revenue Service Form W-9 (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Lender becomes a Lender under this Agreement or under an Assignment
and Assumption (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent).  Notwithstanding any other provision of
this paragraph (e), a Lender shall not be required to deliver any form pursuant
to this paragraph that such Lender is not legally able to deliver.

 

(f)                                    If the Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by a Loan Party or with
respect to which a Loan Party has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the applicable Loan Party (but
only to the extent of indemnity payments made, or additional amounts paid, by
the applicable Loan Party under this Section 2.17 with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Loan Parties, upon the request of the Administrative
Agent or such Lender, agree to repay the amount paid over to the Borrower (plus
any

 

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penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph (f) shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to any Loan
Party or any other Person.

 

Section 2.18.                             Payments Generally; Allocation of
Proceeds; Sharing of Set-offs.  (a)  The Borrower shall make each payment
required to be made by them hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
Section 2.16 or Section 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on
the date when due, in immediately available funds, without set-off or
counterclaim.  Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon.  All
such payments shall be made to the Administrative Agent at its offices at 120
South LaSalle Street, Chicago, Illinois, except payments to be made directly to
an Issuing Bank or the Swingline Lender as expressly provided herein and except
that payments pursuant to Section 2.15, Section 2.16, Section 2.17 and 9.03
shall be made directly to the Persons entitled thereto.  The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. 
If any payment hereunder shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension.  All payments hereunder shall be made in dollars. 
At all times during a Cash Dominion Period, solely for purposes of determining
the amount of Loans available for borrowing purposes, checks (in addition to
immediately available funds applied pursuant to Section 2.10(b)) from
collections of items of payment and proceeds of any Collateral shall be applied
in whole or in part against the Obligations, on the Business Day after receipt,
subject to actual collection.

 

(b)                                 Any proceeds of Collateral received by the
Administrative Agent (i) not constituting either (A) a specific payment of
principal, interest, fees or other sum payable under the Loan Documents (which
shall be applied as specified by the Borrower), (B) a mandatory prepayment
(which shall be applied in accordance with Section 2.11) or (C) amounts to be
applied from the Collection Account during a Cash Dominion Period (which shall
be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default
has occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, such funds shall be applied ratably first, to pay
any fees, indemnities, or expense reimbursements including amounts then due to
the Administrative Agent and the Issuing Banks from the Borrower (other than
Banking Services Obligations or Swap Obligations), second, to pay any fees or
expense reimbursements then due to the Lenders from the Borrower (other than
Banking Services Obligations or Swap Obligations), third, to pay interest due in
respect of the Overadvances and Protective Advances, fourth, to pay the
principal of the Overadvances and Protective Advances, fifth, to pay interest
then due and payable on the Loans (other than the Overadvances and Protective
Advances) ratably, sixth, to prepay principal on the Loans (other than the
Overadvances and Protective Advances) and unreimbursed LC Disbursements ratably,
seventh, to pay an amount to the Administrative Agent equal to one hundred three
percent (103%) of the aggregate undrawn face amount of all outstanding Letters
of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as
cash collateral for such Obligations, eighth, to payment of any amounts owing
with respect to Secured Obligations that are Banking Services Obligations and
Swap Obligations, and ninth, to the payment of any other Secured Obligation due
to the Administrative Agent or any Lender by the Borrower.  Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless a Default is in existence, neither the Administrative Agent
nor any Lender shall apply any payment which it receives to any Eurodollar Loan
of a Class, except (a) on the expiration date of the Interest Period applicable
to any such Eurodollar Loan or (b) in the event, and only to the extent,

 

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that there are no outstanding ABR Loans of the same Class and, in any such
event, the Borrower shall pay the break funding payment required in accordance
with Section 2.16. The Administrative Agent and the Lenders shall have the
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Secured Obligations.

 

(c)                                  At the election of the Administrative
Agent, all payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 9.03), and other sums payable under the Loan
Documents, may be paid from the proceeds of Borrowings made hereunder whether
made following a request by the Borrower pursuant to Section 2.03 or a deemed
request as provided in this Section or may be deducted from any deposit account
of the Borrower maintained with the Administrative Agent.  The Borrower hereby
irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the
purpose of paying each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents and agrees that all
such amounts charged shall constitute Loans (including Swingline Loans and
Overadvances, but such a Borrowing may only constitute a Protective Advance if
it is to reimburse costs, fees and expenses as described in Section 9.03) and
that all such Borrowings shall be deemed to have been requested pursuant to
Section 2.03, Section 2.04 or Section 2.05, as applicable and (ii) the
Administrative Agent to charge any deposit account of the Borrower maintained
with the Administrative Agent for each payment of principal, interest and fees
as it becomes due hereunder or any other amount due under the Loan Documents.

 

(d)                                 If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply).  The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

 

(e)                                  Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or an Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
such Issuing Bank, as the case may be, the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of

 

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payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(f)                                    If any Lender shall fail to make any
payment required to be made by it hereunder, then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied
obligations are fully paid.

 

Section 2.19.                             Mitigation Obligations; Replacement of
Lenders.  If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then:

 

(a)                                  such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 2.15 or Section 2.17, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender (and the Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment);

 

(b)                                 the Borrower may, at its sole expense and
effort, require such Lender or any Defaulting Lender (herein, a “Departing
Lender”), upon notice to the Departing Lender and the Administrative Agent, to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and if a Revolving Commitment is
being assigned, the Issuing Banks), which consent shall not unreasonably be
withheld, (ii) the Departing Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments.  A Departing Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

 

Section 2.20.                             Defaulting Lenders.  Notwithstanding
any provision of this Agreement to the contrary, if any Lender becomes a
Defaulting Lender, then the following provisions shall apply for so long as such
Lender is a Defaulting Lender:

 

(a)                                  fees shall cease to accrue on the unfunded
portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

 

(b)                                 the Commitment and Credit Exposure of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to

 

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Section 9.02); provided, that this clause (b) shall not apply to the vote of a
Defaulting Lender in the case of an amendment, waiver or other modification
requiring the consent of such Lender or each Lender affected thereby;

 

(c)                                  if any Swingline Loans, Protective Advances
or Overadvances are outstanding or LC Exposure exists at the time such Lender
becomes a Defaulting Lender then:

 

(i)                                     all or any part of the Swingline
Exposure, Protective Advance Exposure, Overadvance Exposure and LC Exposure of
such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in
accordance with their respective Applicable Percentages but only to the extent
the sum of all non-Defaulting Lenders’ Credit Exposures does not exceed the
total of all non-Defaulting Lenders’ Commitments,

 

(ii)                                  if the reallocation described in clause
(i) above cannot, or can only partially, be effected, the Borrower shall within
one Business Day following notice by the Administrative Agent (x) first, prepay
such Overadvance Exposure and Protective Advance Exposure, (y) second, prepay
such Swingline Exposure and (z) third, cash collateralize for the benefit of the
Issuing Banks only the Borrower’s obligations corresponding to such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in
Section 2.06(j) for so long as such LC Exposure is outstanding;

 

(iii)                               if the Borrower cash collateralizes any
portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above,
the Borrower shall not be required to pay any fees to such Defaulting Lender
pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure
during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv)                              if the LC Exposure of the non-Defaulting
Lenders is reallocated pursuant to clause (i) above, then the fees payable to
the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in
accordance with such non-Defaulting Lenders’ Applicable Percentages; and

 

(v)                                 if all or any portion of such Defaulting
Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to
clause (i) or (ii) above, then, without prejudice to any rights or remedies of
any Issuing Bank or any other Lender hereunder, all letter of credit fees
payable under Section 2.12(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the applicable Issuing Bank until and to the extent
that such LC Exposure is reallocated and/or cash collateralized; and

 

(d)                                 so long as such Lender is a Defaulting
Lender, the Swingline Lender shall not be required to fund any Swingline Loan
and the Issuing Banks shall not be required to issue, amend or increase any
Letter of Credit, unless it is satisfied that the related exposure and the
Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 2.20(c), and participating
interests in any newly made Swingline Loan or any newly issued or increased
Letter of Credit shall be allocated among non-Defaulting Lenders in a manner
consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not
participate therein).

 

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If (i) a Bankruptcy Event with respect to a Parent Entity of any Lender shall
occur following the date hereof and for so long as such event shall continue or
(ii) the Swingline Lender or an Issuing Bank has a reasonable belief that any
Lender has defaulted in fulfilling its material obligations under one or more
other agreements in which such Lender commits to extend credit, the Swingline
Lender shall not be required to fund any Swingline Loan and such Issuing Bank
shall not be required to issue, amend or increase any Letter of Credit, unless
the Swingline Lender or such Issuing Bank, as the case may be, shall have
entered into arrangements with the Borrower or such Lender, reasonably
satisfactory to the Swingline Lender or such Issuing Bank, as the case may be,
to defease any risk to it in respect of such Lender hereunder.

 

In the event that the Administrative Agent, the Borrower, the Swingline Lender
and the Issuing Banks each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure, Protective Advance Exposure, Overadvance Exposure and LC
Exposure of the Lenders shall be readjusted to reflect the inclusion of such
Lender’s Commitment and on such date such Lender shall purchase at par such of
the Loans of the other Lenders (other than Swingline Loans) as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans in accordance with its Applicable Percentage.

 

Section 2.21.                             Returned Payments.  If after receipt
of any payment which is applied to the payment of all or any part of the
Obligations, the Administrative Agent or any Lender is for any reason compelled
to surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, impermissible setoff, or a
diversion of trust funds, or for any other reason, then the Obligations or part
thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender.  The provisions of
this Section 2.21 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Administrative Agent or any Lender in
reliance upon such payment or application of proceeds.  The provisions of this
Section 2.21 shall survive the termination of this Agreement.

 

ARTICLE III

Representations and Warranties

 

Each Loan Party represents and warrants to the Lenders that:

 

Section 3.01.                             Organization; Powers.  Each of the
Loan Parties and each of its Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

 

Section 3.02.                             Authorization; Enforceability.  The
Transactions are within each Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, by all necessary
shareholder action.  This Agreement and each of the other Loan Documents have
been duly executed and delivered by each Loan Party party thereto and
constitutes, or when executed and delivered by such Loan Party will constitute,
a legal, valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its terms, except as such enforceability may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the

 

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enforcement of creditors’ rights and (b) the application of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

 

Section 3.03.                             Governmental Approvals; No Conflicts. 
The Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except for
(i) such as have been obtained or made and are in full force and effect and
(ii) filings and recordings in respect of the Liens created pursuant to the Loan
Documents and the Term Loan Documents, (b) will not violate in any material
respect any Requirement of Law, (c) will not violate in any material respect or
result in a material default under any Contractual Obligation upon any Loan
Party or any of its Subsidiaries or their assets, or give rise to a right
thereunder to require any payment to be made by any such Person and (d) except
for the Liens created pursuant to the Loan Documents and the Term Loan
Documents, will not result in the creation or imposition of any Lien on any
asset of any Loan Party or any of its Subsidiaries.

 

Section 3.04.                             Financial Condition; No Material
Adverse Effect; Projections.

 

(a)                                  The Historical Financial Statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position, on a consolidated basis, of the Persons described in
such financial statements as of the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the Persons described in
such financial statements for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments and the absence of footnotes.  As of the
Effective Date, neither Holdings nor any of its Subsidiaries has any contingent
liability or liability for Taxes, any long-term lease or any unusual forward or
long-term commitment that is not reflected in the Historical Financial
Statements or the notes thereto and that in any such case is material in
relation to the business, operations, properties, assets or financial condition
of Holdings and any of its Subsidiaries taken as a whole.

 

(b)                                 The Pro Forma Financial Statements (i) have
been prepared by Borrower in good faith, based on assumptions believed by
Borrower on the date hereof to be reasonable, (ii) accurately reflect in all
material respects all adjustments necessary to give effect to the Transactions
and (iii) present fairly, in all material respects, the pro forma financial
position, results of operations and cash flows of Holdings and its Subsidiaries
as of the date and for the period specified therein as if the Transactions had
occurred on such date or at the beginning of such period, as the case may be.

 

(c)                                  Since September 30, 2009, there has not
occurred any event, development or circumstance that has had or could reasonably
be expected to have a Material Adverse Effect.

 

(d)                                 The projections of Holdings and its
Subsidiaries for the period of fiscal year 2010 through and including fiscal
year 2015 (the “Projections”) were prepared in good faith based upon assumptions
that were believed by the Loan Parties to be reasonable on and as of the
Effective Date (it being understood that (a) such Projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Loan Parties, (b) no assurances can be given that such
Projections will be realized and (c) the actual results may vary from the
results projected therein and such variances may be material).

 

Section 3.05.                             Properties.

 

(a)                                  As of the date of this Agreement, Schedule
3.05 sets forth the address of each parcel of real property that is located in
the United States and is owned or leased by the Loan Parties.  Each of such
leases and subleases is valid and enforceable in all material respects in
accordance with its

 

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terms and is in full force and effect in all material respects (except to the
extent enforcement may be affected by laws relating to bankruptcy,
reorganization, insolvency and creditor’s rights and by the availability of
injunctive relief, specific performance and other equitable remedies), and to
the Loan Parties’ knowledge, no default by any party to any such lease or
sublease exists.  Each of the Loan Parties and its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, subject only to Liens permitted by Section 6.02 and except for
minor defects in title that do not materially interfere with its ability to
conduct its business as currently conducted.

 

(b)                                 Each Loan Party and its Subsidiaries has
valid title to all Intellectual Property owned by such party which is material
to its business (“Company Intellectual Property”).  All agreements under which a
Loan Party or its Subsidiaries are licensed or otherwise authorized to use any
Intellectual Property owned by a third party and all agreements under which a
third party is licensed or otherwise authorized to use the Company Intellectual
Property are valid and in full force and effect in all material respects. 
Schedule 3.05 sets forth a correct and complete list of all registrations and
applications to register such Company Intellectual Property, as of the date of
this Agreement, and, to the Loan Parties’ knowledge, the use of the Company
Intellectual Property by the Loan Parties and their Subsidiaries and the conduct
of their businesses does not infringe upon the Intellectual Property rights of
any other Person except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

Section 3.06.                             Litigation and Environmental Matters.

 

(a)                                  There are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority now pending against or, to
the knowledge of such Loan Party, threatened against or affecting any Loan
Parties or any of their Subsidiaries that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or that involve this
Agreement or the Transactions.

 

(b)                                 Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, no Loan Party
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received written notice of any claim with
respect to any Environmental Liability or (iv) has actual knowledge of any event
or circumstance which is reasonably expected to give rise to any Environmental
Liability.

 

(c)                                  Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.  No Default has occurred or is continuing.

 

Section 3.07.                             Compliance with Laws and Contractual
Obligations.  Each Loan Party and its Subsidiaries is in compliance with all
Requirements of Law applicable to it or its property and all Contractual
Obligations binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

Section 3.08.                             Investment Company Status.  No Loan
Party nor any of its Subsidiaries is an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940.

 

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Section 3.09.                             Taxes.  Each Loan Party and its
Subsidiaries has timely filed or caused to be filed all tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 3.10.                             ERISA; Employee Benefit Plans.

 

(a)                                  No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.  The present value of all
accumulated benefit obligations under each Plan did not, as of the date of the
most recent actuarial valuation report required to be prepared under the Code
and ERISA reflecting such amounts, exceed by more than $50,000,000 (calculated
on an actuarial valuation basis) the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans did not, as of the date of the most recent actuarial valuation
report required to be prepared under the Code and ERISA reflecting such amounts,
exceed by more than $50,000,000 (calculated on an actuarial valuation basis) the
fair market value of the assets of all such underfunded Plans.

 

(b)                                 Except as could not reasonably be expected
to have a Material Adverse Effect, the accrued benefit obligations of each
Foreign Plan (based on those assumptions used to fund such Foreign Plan) with
respect to all current and former participants do not exceed the assets of such
Foreign Plan.

 

Section 3.11.                             Disclosure.  Each Loan Party has
disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  None of the reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  Any projections and
pro forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by the Borrower to be reasonable at the
time made, it being understood that (a) any projected financial information is
subject to significant uncertainties and contingencies, many of which are beyond
the control of the Loan Parties, (b) no assurances can be given that such
projected financial information will be realized and (c) the actual results may
vary from the results projected therein and such variances may be material.

 

Section 3.12.                             Use of Credit.  No Loan Party nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and no
part of the proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock.

 

Section 3.13.                             Burdensome Agreements.  Except as set
forth on Schedule 3.13, to such Loan Party’s knowledge, no Loan Party nor any of
its Subsidiaries is a party to or bound by, nor are any of the properties or
assets owned by any Group Member used in the conduct of their respective
businesses affected by, any agreement, ordinance, resolution, decree, bond,
note, indenture, order or

 

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judgment, including, without limitation, any of the foregoing relating to any
Environmental Liability, that could reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.14.                             Insurance.  Schedule 3.14 sets forth a
description of all insurance maintained by or on behalf of the Loan Parties and
their Subsidiaries as of the Effective Date.  As of the Effective Date, all
premiums in respect of such insurance have been paid.  The Borrower believes
that the insurance maintained by or on behalf of the Borrower and its
Subsidiaries is reasonably adequate.

 

Section 3.15.                             Capitalization and Subsidiaries. 
Schedule 3.15 sets forth (a) a correct and complete (in all material respects)
list of the name and relationship to Holdings of each and all of Holdings’
Subsidiaries, (b) a true and complete (in all material respects) listing of each
class of each of the Borrower’s authorized Equity Interests, of which all of
such issued shares are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified
on Schedule 3.15, and (c) the type of entity of Holdings and each of its
Subsidiaries.  All of the issued and outstanding Equity Interests owned by any
Loan Party have been (to the extent such concepts are relevant with respect to
such ownership interests) duly authorized and issued and are fully paid and
non-assessable.

 

Section 3.16.                             Labor Matters.  Except as set forth on
Schedule 3.16, (a) no collective bargaining agreement or other labor contract to
which any Loan Party or any of its Subsidiaries is a signatory will expire
during the term of this Agreement, (b) to such Loan Party’s knowledge, no union
or other labor organization is seeking to organize, or to be recognized as
bargaining representative for, a bargaining unit of employees of any Loan Party
or any of its Subsidiaries, (c) there is no pending or, to such Loan Party’s
knowledge, threatened strike, work stoppage, material unfair labor practice
claim or charge, arbitration or other material dispute with any union or other
labor organization affecting any Loan Party or any of its Subsidiaries or its
union-represented employees, in each case the consequences of which could
reasonably be expected to affect aggregate business (regardless of division or
entity) of the Loan Parties and their Subsidiaries which business generated
gross revenues in excess of $50,000,000 individually or in the aggregate in the
prior fiscal year, (d) there are no actions, suits, charges, demands, claims,
counterclaims or proceedings pending or, to the best of such Loan Party’s
knowledge, threatened against any Loan Party or any of its Subsidiaries, by or
on behalf of, or with, its employees, other than any such actions, suits
charges, demands, claims, counterclaims or proceedings arising in the ordinary
course of business that could not reasonably be expected to result in a Material
Adverse Effect.

 

Section 3.17.                             Security Interest in Collateral. 
(a) The Security Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest under the laws of the United States in the Collateral as
further described therein and proceeds thereof.  In the case of: (i) the Pledged
Collateral constituting Equity Interests, which are securities for the purposes
of the UCC and are evidenced by certificates, when certificates representing
such Pledged Collateral constituting Equity Interests are delivered to the
Administrative Agent, (ii) other Collateral as further described in the Security
Agreement, when financing statements and other filings specified on Schedule
3.17 in appropriate form are filed in the offices specified on Schedule 3.17,
(iii) property acquired after the date hereof any other action required pursuant
to Section 5.13, the security interest created pursuant to the Security
Agreement shall constitute valid perfected security interests under the laws of
the United States in such Collateral and the proceeds thereof (to the extent a
security interest in such Collateral can be perfected through the filing of such
financing statements, the delivery of such Pledged Collateral constituting
Equity Interests, the taking of such actions required pursuant to Section 5.13,
as security for the Secured Obligations, in each case prior and superior in
right to any other Person (except Liens permitted by Section 6.02).

 

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(b)                                 Each of the Mortgages is effective to create
in favor of the Administrative Agent, for the benefit of the Secured Parties, a
legal, valid and enforceable Lien on the Mortgaged Properties described therein
and proceeds thereof, and when the Mortgages are filed in the offices specified
on Schedule 3.17, each such Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Mortgaged Properties and the proceeds thereof, as security for the Secured
Obligations, in each case prior and superior in right to any other Person (other
than the Term Loan Administrative Agent).

 

Section 3.18.                             Holdings.  Holdings is a newly formed
special purpose wholly-owned Subsidiary of the Parent whose business and assets
consist exclusively of ownership of Equity Interests of the Borrower.

 

Section 3.19.                             Solvency.  Each Loan Party is on the
Effective Date, before and after the consummation of the Transactions to occur
on the Effective Date, Solvent.

 

Section 3.20.                             No Restricted Payments.  Since
September 30, 2009, neither Holdings nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Payment or agreed to do so except as permitted pursuant to
the Existing Credit Agreement.

 

Section 3.21.                             Related Agreements.  (a) Holdings and
the Borrower have delivered to Administrative Agent complete and correct copies
of each Related Agreement and of all exhibits and schedules thereto as of the
date hereof.

 

(b)                                 On the Effective Date, (i) all of the
conditions to effecting or consummating the Acquisition set forth in the Related
Agreements have been duly satisfied or, with the consent of Administrative Agent
(if required hereunder), waived, and (ii) the Acquisition has been consummated
in accordance in all material respects with the Related Agreements and all
applicable laws.

 

Section 3.22.                             Patriot Act Compliance.  To the extent
applicable, each Loan Party is in compliance, in all material respects, with
(i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Act.  No part of the proceeds of the Loans will
be used, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

ARTICLE IV

Conditions

 

Section 4.01.                             Closing.  The obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):

 

(a)                                  Credit Agreement and Loan Documents.  The
Administrative Agent (or its counsel) shall have received (i) (A) from each
party hereto either (1) a counterpart of this Agreement signed on behalf of such
party or (2) written evidence reasonably satisfactory to the Administrative
Agent (which may include facsimile or electronic mail transmission of a signed

 

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signature page of this Agreement) that such party has signed a counterpart of
this Agreement and (B) from the Required Lenders (as defined in the Existing
Credit Agreement) either (1) a counterpart of this Agreement signed on behalf of
such party or (2) written evidence reasonably satisfactory to the Administrative
Agent (which may include facsimile or electronic mail transmission of a signed
consent) that such party has consented to the amendment and restatement of the
Existing Credit Agreement in the form of this Agreement and (ii) duly executed
copies of the Loan Documents and such other certificates, documents, instruments
and agreements as the Administrative Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender.

 

(b)                                 Financial Statements and Projections.  The
Administrative Agent shall have received from Holdings (i) the Historical
Financial Statements, each certified by a Financial Officer of the Borrower as
presenting fairly in all material respects the financial condition and results
of operations of Holdings and its Subsidiaries or ATT and its subsidiaries, as
applicable, in each case on a consolidated basis in accordance with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes and
which (x) in the case of the financial statements referred to in clause (a) of
the definition of “Historical Financial Statements”, shall have been delivered
not fewer than 30 Business Days prior to the Effective Date and (y) in the case
of the financial statements referred to in clause (b) of the definition of
“Historical Financial Statements”, shall have been delivered not fewer than 30
days after the last day of the relevant period, and (ii) the pro forma
consolidated balance sheet and related consolidated statement of operations of
Holdings and its Subsidiaries as of the end of or for the period of twelve
consecutive months ending on the last day of the most recently ended fiscal
quarter or calendar month for which financial statements or “flash reports” have
been delivered pursuant to clause (i) above, prepared after giving effect to the
Transactions, which pro forma financial statements shall be in form and
substance satisfactory to Administrative Agent and which shall have been
delivered concurrently with the financial statements or “flash reports”
delivered pursuant to clause (i) above.

 

(c)                                  Closing Certificates; Certified Certificate
of Incorporation; Good Standing Certificates.  The Administrative Agent shall
have received (i) a certificate of each Loan Party, dated the Effective Date and
executed by its Secretary, Assistant Secretary or Financial Officer, which shall
(A) certify the resolutions of its Board of Directors, members or other body
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, (B) identify by name and title and bear the signatures of
the Financial Officers and any other officers of such Loan Party authorized to
sign the Loan Documents to which it is a party, and (C) contain appropriate
attachments, including the certificate or articles of incorporation or
organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, and (ii) a long
form good standing certificate for each Loan Party from its jurisdiction of
organization.

 

(d)                                 Effective Date Certificate.  The
Administrative Agent shall have received an Effective Date Certificate, duly
executed by Holdings and the Borrower, together with all attachments thereto.

 

(e)                                  Fees.  (i) The Borrower shall have (i) paid
to the Administrative Agent, the Arrangers and the Lenders all costs, fees,
expenses and amounts (including, without limitation, legal fees and expenses)
due and payable on or before the Effective Date pursuant to the

 

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Commitment Letter or the Loan Documents, (ii) prepaid all Loans outstanding
under (and as defined in) the Existing Credit Agreement (and all accrued and
unpaid interest thereon) and (iii) paid all accrued and unpaid commitment fees
and letter of credit fees under the Existing Credit Agreement, accrued to (but
not including) the Effective Date.

 

(f)                                    Lien Searches.  The Administrative Agent
shall have received the results of a recent lien search in each of the
jurisdictions of organization of each of the Loan Parties and where any of the
Mortgaged Properties is located, and such search results shall reveal no liens
on any of the assets of the Loan Parties except for liens permitted by
Section 6.02 or discharged on or prior to the Effective Date pursuant to a
pay-off letter or other documentation satisfactory to the Administrative Agent.

 

(g)                                 Acquisition.  (i) All conditions to the
Acquisition set forth in the Acquisition Agreement shall have been satisfied or
the fulfillment of any such conditions shall have been waived and (ii) the
Acquisition shall have been, or substantially simultaneously with the
effectiveness of this Agreement, shall be, consummated in accordance with the
terms of the Acquisition Agreement, in each case without giving effect to any
amendment, supplement, modification or waiver of any term or condition of the
Acquisition Agreement, or any consent under the Acquisition Agreement, that in
the reasonable judgment of the Administrative Agent is adverse in any material
respect to the Lenders or any Arranger in their capacities as such, unless
approved by the Administrative Agent.

 

(h)                                 Existing Indebtedness.  On the Effective
Date, the Administrative Agent shall have received evidence reasonably
satisfactory to it that (i) to the extent the Senior Notes are not purchased and
retired on or before the Effective Date pursuant to tender offers for the Senior
Notes, (A) irrevocable notices of redemption for the Senior Notes not tendered
shall have been, or substantially simultaneously with the effectiveness of this
Agreement will be, given to the holders of such Senior Notes to redeem the
Senior Notes on or about 30 days following the Effective Date (the “Senior Notes
Redemption Date”) and (B) the conditions to achieve a Covenant Defeasance of the
Senior Notes pursuant to the Senior Notes Indentures have been, or substantially
simultaneously with the effectiveness of this Agreement will be, satisfied;
provided that, with respect to the Floating Rate Notes, a Covenant Defeasance
shall not be required if, prior to or substantially simultaneously with the
effectiveness of this Agreement, (1) the Floating Rate Supplemental Indenture
shall have become effective and (2) cash in dollars shall have been deposited
with the trustee under the Floating Rate Indenture in an amount, reasonably
estimated by the Borrower (and reasonably approved by the Administrative Agent),
sufficient to satisfy the requirements of Section 8.04(a)(i) of the Floating
Rate Indenture; and (ii) all principal, premium, if any, interest, fees and
other amounts due or outstanding under the Existing Debt Agreements (other than
under the Senior Notes Indentures and other than with respect to any outstanding
letters of credit collateralized in a manner satisfactory to the Administrative
Agent) shall have been paid in full, the commitments to lend or make other
extensions of credit thereunder terminated and all guarantees and security in
support thereof discharged and released.  The Administrative Agent shall have
received evidence reasonably satisfactory to it (i) that, immediately after
giving effect to the Transactions, none of Holdings or any of its Subsidiaries
shall have any Indebtedness other than the Indebtedness created under this
Agreement, the Indebtedness created under the Term Loan Credit Agreement and the
Indebtedness set forth on Schedule 6.01(a) and (ii) that, immediately after
giving effect to the Transactions, there will not be exist any default or any
event of default under any of the documents governing the Indebtedness set forth
on Schedule 6.01(a).

 

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(i)                                     Material Adverse Effect.  Since
September 30, 2009 (with respect to Holdings and its Subsidiaries immediately
prior to the Acquisition) and since October 3, 2009 (with respect to the Target
and its Subsidiaries), there shall not have occurred any Combined Material
Adverse Effect.  Since October 3, 2009, there shall not have occurred any
Company Material Adverse Effect.

 

(j)                                     Funding Accounts.  The Administrative
Agent shall have received a notice setting forth the deposit account(s) of the
Borrower (the “Funding Accounts”) to which the Lender is authorized by the
Borrower to transfer the proceeds of any Borrowings requested or authorized
pursuant to this Agreement.

 

(k)                                  Customer List.  The Administrative Agent
shall have received a true and complete list of customers of each Loan Party
(other than with respect to any customer whose accounts shall not exceed $25,000
in the aggregate during the twelve months preceding the date hereof).

 

(l)                                     Specified Representations.  The
Specified Representations shall be true and correct on and as of the Effective
Date in all material respects; provided that, any representation and warranty
that is qualified as to “materiality,” “Material Adverse Effect” or similar
language shall be true and correct in all respects on such date.

 

(m)                               Solvency.  The Administrative Agent shall have
received a satisfactory solvency certificate signed by a Financial Officer of
the Borrower and each Guarantor, in form, scope and substance reasonably
satisfactory to the Administrative Agent and certifying that after giving effect
to the consummation of the Acquisition and the other Transactions and any rights
of contribution, such Loan Party will be Solvent.

 

(n)                                 Borrowing Base Certificate.  The
Administrative Agent shall have received a Borrowing Base Certificate which
calculates the Borrowing Base as of the end of the month immediately preceding
the Effective Date.

 

(o)                                 Closing Availability.  After giving effect
to the Transactions, and with all of the Loan Parties’ indebtedness,
liabilities, and obligations current (other than in the ordinary course of
business), the Borrower’s Availability plus (without duplication) Unrestricted
Cash of the Borrower and its domestic Subsidiaries shall not be less than
$50,000,000.

 

(p)                                 Collateral and Guarantee Requirement.  The
Collateral and Guarantee Requirement shall have been satisfied; provided that
if, notwithstanding the use by the Loan Parties of commercially reasonable
efforts to cause the Collateral and Guarantee Requirement to be satisfied on the
Effective Date, the requirements thereof (other than (i) the execution and
delivery of this Agreement and the Security Agreement by the Loan Parties,
(ii) the creation, pledge and perfection of security interests in (x) the Equity
Interests of the Borrower and the Domestic Subsidiaries of Holdings (to the
extent required by paragraph (d) of the definition of “Collateral and Guarantee
Requirement”) and (y) the certificated securities representing debt (to the
extent required by paragraph (e) of the definition of “Collateral and Guarantee
Requirement”), (iii) the execution and delivery of “short form” intellectual
property security agreements with respect to the Intellectual Property of the
Loan Parties that is to be perfected by filing such agreements with the United
States Patent and Trademark Office or the United States Copyright Office and
(iv) the delivery of UCC financing statements with respect to perfection of
security interests in other assets of the Loan Parties that may be perfected by
the filing of a financing statement under the UCC) are not satisfied as of the
Effective Date, the satisfaction of

 

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such requirements shall not be a condition to the effectiveness of this
Agreement or the availability of the Loans (but shall be required to be
satisfied as promptly as practicable after the Effective Date and in any event
within the period specified therefor in Schedule 4.01(p) or such later date as
the Administrative Agent may agree in its reasonable discretion). The
Administrative Agent shall have received a completed Perfection Certificate,
dated the Effective Date and executed by an authorized officer of the Borrower,
together with all attachments contemplated thereby.

 

(q)                                 Opinions of Counsel to Loan Parties.  The
Administrative Agent shall have received executed copies of the favorable
written opinions of Dechert LLP, counsel for the Loan Parties, addressed to the
Administrative Agent and the Lenders, covering such other matters as the
Administrative Agent may reasonably request, dated as of the Effective Date and
in form and substance reasonably satisfactory to the Administrative Agent (and
each Loan Party hereby instructs such counsel to deliver such opinions to the
Administrative Agent).

 

(r)                                    Ratings.  Holdings shall have been
assigned a public corporate family rating from Moody’s and a public corporate
rating from S&P and the Revolving Loans shall have been assigned a public rating
from each of Moody’s and S&P.

 

(s)                                  Insurance.  The Administrative Agent shall
have received evidence of insurance coverage in form, scope, and substance
reasonably satisfactory to the Administrative Agent and otherwise in compliance
in all material respects with the terms of Section 5.06 and Section 4.12 of the
Security Agreement.

 

(t)                                    [Reserved]

 

(u)                                 Approvals.  All domestic and foreign
governmental and third party approvals reasonably necessary in connection with
the Transactions and the continuing operations of the Borrower and its
Subsidiaries (including shareholder approvals, if any) shall have been obtained
on terms reasonably satisfactory to the Administrative Agent.  Such governmental
and third party approvals shall be in full force and effect in all material
respects.  All applicable waiting periods shall have expired without any action
being taken or threatened by any Governmental Authority of competent
jurisdiction that would restrain, prevent or otherwise impose materially adverse
conditions on the Acquisition or the financing contemplated hereby and by the
Term Loan Credit Agreement and no action, request for stay, petition for review,
or rehearing, reconsideration or appeal with respect to any of the foregoing
shall be pending, and the time for any applicable agency to take action to set
aside its consent on its own motion shall have expired.

 

(v)                                 No Litigation. There shall not exist any
action, suit, investigation, litigation, proceeding, hearing or other legal or
regulatory developments, pending or, to the knowledge of the Borrower,
threatened in any court or before any arbitrator or Governmental Authority that,
individually or in the aggregate, materially impairs the Acquisition or the
other Transactions, the financing thereof or any of the other transactions
contemplated by the Loan Documents or the Related Agreements.

 

(w)                               Collateral Reports.  The Administrative Agent
shall have received asset appraisals of Inventory and field examinations of the
Accounts, Inventory and related working capital matters and financial
information of the Loan Parties and of the related data processing and other
systems (which is reasonably satisfactory to the Administrative Agent) performed
by

 

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the Administrative Agent or from firms and appraisers selected by the
Administrative Agent in its Permitted Discretion.

 

(x)                                   Cash Management.  The Administrative Agent
shall be reasonably satisfied with the cash management arrangements of Holdings,
the Target and their respective subsidiaries.

 

(y)                                 Patriot Act Information.  At least 10 days
prior to the Effective Date, the Lenders shall have received all documentation
and other information required by bank regulatory authorities under applicable
“know-your-customer” and anti-money laundering rules and regulations, including
the Act.

 

(z)                                   Capitalization.  On or before the
Effective Date, Holdings shall have received, substantially simultaneously with
the effectiveness of this Agreement, the Equity Contribution and shall have
contributed the proceeds thereof to the Borrower in the form of cash common
equity.

 

(aa)                            Existing Credit Agreement.  Immediately prior
to, or substantially simultaneously with, the effectiveness of this Agreement,
there shall be no Indebtedness outstanding under the Existing Credit Agreement.

 

(bb)                          Effectiveness of Term Loan Credit Agreement. The
Administrative Agent shall have received evidence reasonably satisfactory to it
that (i) the Term Loan Credit Agreement has been executed and delivered by the
parties thereto, (ii) the Term Loan Credit Agreement shall become effective
(with aggregate commitments not less than $375,000,000 on the Effective Date)
and (iii) the Administrative Agent shall have received sufficient copies of each
Term Loan Document as the Administrative Agent shall reasonably request,
executed and delivered by each other party thereto.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York time, on October 4,
2010 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).

 

Section 4.02.                             Each Credit Event.  The obligation of
each Lender to make a Loan on the occasion of any Borrowing and of the Issuing
Banks to issue, amend, renew or extend any Letter of Credit is subject to the
satisfaction of the following conditions:

 

(a)                                  The representations and warranties of the
Loan Parties set forth in this Agreement shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable; provided that, any representation and warranty that is qualified as
to “materiality,” “Material Adverse Effect” or similar language shall be true
and correct in all respects on such date; provided further that, on the
Effective Date, the only representations and warranties made by, or with respect
to, the Target and its subsidiaries the accuracy of which shall be a condition
to the effectiveness of this Agreement shall be those set forth in
(i) Section 3.01, Section 3.02, Section 3.03, Section 3.08, Section 3.12,
Section 3.17, Section 3.19 and Section 3.22 and (ii) Article III of the Security
Agreement.

 

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(b)                                 At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit (in each case, other than on the Effective Date), as
applicable, no Default shall have occurred and be continuing.

 

(c)                                  After giving effect to any Borrowing or the
issuance of any Letter of Credit, Availability is not less than zero.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable hereunder
shall have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, each Loan Party,
jointly and severally with all of the Loan Parties, covenants and agrees with
the Lenders that:

 

Section 5.01.                             Financial Statements, Borrowing Base
and Other Information.  The Borrower will furnish to the Administrative Agent
and each Lender:

 

(a)                                  on the date that is the earliest of (i) the
date on which Holdings’ (or, prior to a Permitted Change of Control Transaction,
Griffon’s or Holdings’) financial statements shall have been filed with the SEC,
(ii) the date Holdings’ (or, prior to a Permitted Change of Control Transaction,
Griffon’s or Holdings’) financial statements are required to be filed with the
SEC (without regard to any extension of the SEC’s filing requirements) and
(iii) the day which is 120 days after the end of each fiscal year of Holdings,
the audited consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows of Holdings and its Subsidiaries as of the
end of and for such year, together with consolidating balance sheets and
statements of income, stockholders’ equity and cash flows by business unit
consistent with past practice and, within each business unit, a further
breakdown of consolidating financial information between Subsidiaries which are
Loan Parties within such business unit and Subsidiaries which are not Loan
Parties within such business unit (which consolidating financial information
shall not be subject to the audit procedures applied in the audit but shall be
certified by a Financial Officer of the Borrower as presenting fairly in all
material respects the financial condition and results of operations of the
Holdings and its Subsidiaries on a consolidating basis in accordance with GAAP),
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on, in the case of the consolidated financial
statements, by Grant Thornton LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP
together with a Narrative Report with respect thereto;

 

(b)                                 on the date that is the earliest of (i) the
date on which Holdings’ (or, prior to a Permitted Change of Control Transaction,
Griffon’s or Holdings’) financial statements shall have been filed with the SEC,
(ii) the date Holdings’ (or, prior to a Permitted Change of Control

 

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Transaction, Griffon’s or Holdings’) financial statements are required to be
filed with the SEC (without regard to any extension of the SEC’s filing
requirements) and (iii) the day which is 60 days after the end of each of the
first three quarterly periods of each fiscal year of Holdings, commencing with
respect to the fiscal quarter ending December 31, 2010, the consolidated balance
sheet and related statements of income, stockholders’ equity and cash flows of
Holdings and its Subsidiaries as of the end of and for such year, together with
consolidating balance sheets and statements of income, stockholders’ equity and
cash flows by business unit consistent with past practice and, within each
business unit, a further breakdown of consolidating financial information
between Subsidiaries which are Loan Parties within such business unit and
Subsidiaries which are not Loan Parties within such business unit as of the end
of and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for (or, in the case
of the balance sheet, as of the end of) the corresponding period or periods of
the previous fiscal year all certified by a Financial Officer of the Borrower as
presenting fairly in all material respects the financial condition and results
of operations of Holdings and its Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP, subject to normal year end audit
adjustments and the absence of footnotes, together with a Narrative Report with
respect thereto;

 

(c)                                  within 30 days after the end of each fiscal
month of Holdings (or, in the case of a fiscal month which is the last fiscal
month of a fiscal quarter of Holdings, by the date on which the quarterly
financial statements of Holdings are due pursuant to Section 5.01(b)) or (ii) in
the case of the first six fiscal months ending after the closing date, 45 days
after such end of Holdings, commencing with respect to the fiscal month ended
October 31, 2010, the consolidated balance sheet and related consolidated
statements of operations, stockholders’ equity and cash flows of Holdings and
its Subsidiaries as of the end of and for such fiscal month and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by a
Financial Officer of the Borrower as presenting fairly in all material respects
the financial condition and results of operations of Holdings and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes;

 

(d)                                 concurrently with any delivery of financial
statements under paragraph (a), (b) or (c) of this Section, a certificate of a
Financial Officer of the Borrower in substantially the form of Exhibit C
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) commencing with the certificate for the period
ending September 30, 2010, setting forth reasonably detailed calculations of the
Fixed Charge Coverage Ratio and, if applicable, demonstrating compliance with
Section 6.11, and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Historical Financial Statements
referred to in Section 3.04 or since the date of any such notice and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate and delivering one or more statements
of reconciliation for all such prior financial statements in form and substance
reasonably satisfactory to the Administrative Agent;

 

(e)                                  concurrently with any delivery of financial
statements under paragraph (a) of this Section, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default arising as a result of non-compliance with Article VI, including
Section 6.11, if applicable (which certificate may be limited to the extent
required by accounting rules or guidelines);

 

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(f)                                    promptly upon receipt thereof, copies of
all other reports submitted to Holdings and its Subsidiaries by its independent
certified public accountants in connection with any annual or interim audit or
review of the books of Holdings and its Subsidiaries made by such accountants;

 

(g)                                 annually, as soon as available, but in any
event within 45 days after the last day of each fiscal year of Holdings,
consolidated and consolidating projections of Holdings and its Subsidiaries and
for the Loan Parties for the following three fiscal years thereafter (with such
projections to be provided on a quarterly basis for the first year and on an
annual basis for the next two years);

 

(h)                                 promptly following receipt thereof, copies
of any documents described in Sections 101(k) or 101(l) of ERISA that Holdings
or any ERISA Affiliate may request with respect to any Multiemployer Plan;
provided, that if Holdings or any of its ERISA Affiliates have not requested
such documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, then, upon reasonable request of the Administrative Agent,
Holdings and/or their ERISA Affiliates shall promptly make a request for such
documents or notices from such administrator or sponsor and Holdings shall
provide copies of such documents and notices promptly after receipt thereof;

 

(i)                                     annually, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to paragraph (a) of this Section, a certificate of an authorized officer of the
Borrower (i) either confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this
Section and/or identifying such changes and (ii) certifying that all UCC
financing statements (including fixtures filings, as applicable) and all
supplemental intellectual property security agreements or other appropriate
filings, recordings or registrations, have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above (or in such Perfection Certificate) to
the extent necessary to effect, protect and perfect the security interests under
the Collateral Documents for a period of not less than 18 months after the date
of such certificate (except as noted therein with respect to any continuation
statements to be filed within such period);

 

(j)                                     if applicable, promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by any Group Member with the SEC, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by any
Group Member to its shareholders generally, as the case may be;

 

(k)                                  as soon as available and in any event by
the last day of each fiscal year of Holdings, a certificate from the Borrower’s
insurance broker(s) in form and substance satisfactory to the Administrative
Agent outlining all material insurance coverage maintained as of the date of
such certificate by Holdings and its Subsidiaries;

 

(l)                                     as soon as available but in any event
within 20 days of the end of each calendar month (or, if an Event of Default
shall have occurred and be continuing or Availability is less than 15% of the
Revolving Commitments, within 3 days (but in no event earlier than two Business
Days) after the end of each week), as of the period then ended, a Borrowing Base
Certificate and supporting information in connection therewith, together with
any additional reports with respect to Borrowing Base as the Administrative
Agent may reasonably request;

 

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(m)                               as soon as available but in any event within
20 days of the end of each calendar month (or, with respect to clause
(iii) below, if an Event of Default shall have occurred and be continuing or
Availability is less than 15% of Revolving Commitments, within 3 days (but in no
event earlier than two Business Days) after the end of each week) and at such
other times as may be requested by the Administrative Agent, as of the period
then ended, all delivered electronically in a text formatted file acceptable to
the Administrative Agent:

 

(i)                                     a detailed aging of the Loan Parties’
Accounts (1) including all invoices aged by invoice date and due date (with an
explanation of the terms offered) and (2) reconciled to the Borrowing Base
Certificate delivered as of such date prepared in a manner reasonably acceptable
to the Administrative Agent, together with a summary specifying the name,
address, and balance due for each Account Debtor;

 

(ii)                                  a schedule detailing the Loan Parties’
Inventory, in form reasonably satisfactory to the Administrative Agent, (1) by
location (showing Inventory in transit, any Inventory located with a third party
under any consignment, bailee arrangement, or warehouse agreement), by class
(raw material, work-in-process and finished goods), by product type, and by
volume on hand, which Inventory shall be valued at the lower of cost (determined
on a first-in, first-out basis) or market and adjusted for Reserves as the
Administrative Agent has previously indicated to the Borrower in writing are
deemed by the Administrative Agent to be reasonably appropriate, (2) including a
report of any variances or other results of Inventory counts performed by the
Loan Parties since the last Inventory schedule (including information regarding
sales or other reductions, additions, returns, credits issued by the Loan
Parties and complaints and claims made against the Loan Parties), and
(3) reconciled to the Borrowing Base Certificate delivered as of such date;

 

(iii)                               a worksheet of calculations prepared by the
Borrower to determine Eligible Accounts and Eligible Inventory, such worksheets
detailing the Accounts and Inventory excluded from Eligible Accounts and
Eligible Inventory and the reason for such exclusion;

 

(iv)                              a reconciliation of the Loan Parties’ Accounts
and Inventory between the amounts shown in the Loan Parties’ general ledger and
financial statements and the reports delivered pursuant to clauses (i) and
(ii) above; and

 

(v)                                 a reconciliation of the loan balance per the
Borrower’s general ledger to the loan balance under this Agreement;

 

(n)                                 as soon as available but in any event within
20 days of the end of each calendar month, as of the month then ended, a
schedule and aging of the Loan Parties’ accounts payable, delivered
electronically in a text formatted file acceptable to the Administrative Agent;

 

(o)                                 as soon as available but in any event within
20 days of the end of each March 31 and September 30, an updated customer list
(other than with respect to any customer whose accounts shall not exceed $25,000
in the aggregate during the twelve months preceding such date) for each Loan
Party, which list shall state the customer’s name, mailing address and phone
number and shall be certified as true and correct by a Financial Officer of the
Borrower, delivered electronically in a text formatted file acceptable to the
Administrative Agent;

 

(p)                                 promptly upon the Administrative Agent’s
reasonable request:

 

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(i)                                     copies of invoices issued by the Loan
Parties in connection with any Accounts, credit memos, shipping and delivery
documents, and other information related thereto;

 

(ii)                                  copies of purchase orders, invoices, and
shipping and delivery documents in connection with any Inventory purchased by
the Loan Parties; and

 

(iii)                               a schedule detailing the balance of all
intercompany accounts of the Loan Parties;

 

(q)                                 as soon as reasonably practicable but in any
event within 20 days of the end of each calendar month (or, if an Event of
Default shall have occurred and be continuing or Availability is less than 15%
of Revolving Commitments, within 3 days (but in no event earlier than two
Business Days) after the end of each week) and at such other times as may be
requested by the Administrative Agent, as of the period then ended, the Loan
Parties’ sales journal, cash receipts journal (identifying trade and non-trade
cash receipts) and debit memo/credit memo journal;

 

(r)                                    as soon as reasonably practicable and in
any event within ten Business Days after the end of each calendar month, a
detailed listing of all intercompany loans made by the Loan Parties during such
calendar month; and

 

(s)                                  promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of Holdings or any of its Subsidiaries, or compliance with the terms
of this Agreement and the other Loan Documents, as the Administrative Agent or
any Lender may reasonably request.

 

Documents required to be delivered pursuant to Section 5.01(a), (b), (c) or, if
applicable (j) (to the extent any such documents are included in materials
otherwise filed with the SEC) shall be deemed to have been delivered on the date
(i) on which any of Griffon, the Parent, Holdings or the Borrower posts such
documents or provides a link thereto on Griffon’s, the Parent’s, Holdings’ or
the Borrower’s website or (ii) on which such documents are posted on Griffon’s,
Holdings’ or the Borrower’s behalf on Intralinks/IntraAgency or another relevant
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that the Borrower shall notify the
Administrative Agent (by telecopier or electronic mail) of the posting of any
such documents and provide the Administrative Agent with electronic mail
versions of such documents.

 

Section 5.02.                             Notices of Material Events.  The
Borrower and Holdings will furnish to the Administrative Agent and each Lender
prompt written notice of the following:

 

(a)                                  the occurrence of any Default;

 

(b)                                 the filing or commencement of any action,
suit or proceeding by or before any arbitrator or Governmental Authority against
or affecting Holdings or any of its Affiliates, other than disputes in the
ordinary course of business or, whether or not in the ordinary course of
business, disputes involving amounts exceeding $10,000,000 (excluding, however,
any actions relating to workers’ compensation claims or negligence claims
relating to use of motor vehicles, if fully covered by insurance, subject to
deductibles);

 

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(c)                                  the occurrence of any ERISA Event, or any
fact or circumstances that gives rise to a reasonable expectation that any ERISA
Event will occur, that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of Holdings and
any of its ERISA Affiliates in an aggregate amount exceeding $50,000,000;

 

(d)                                 any Lien (other than Permitted Encumbrances)
or claim made or asserted against any of the Collateral;

 

(e)                                  any loss, damage, or destruction to the
Collateral in the amount of $5,000,000 or more, whether or not covered by
insurance;

 

(f)                                    any and all default notices received
under or with respect to any leased location or public warehouse where
Collateral with a value in excess of $1,000,000 is located (which shall be
delivered within three Business Days after receipt thereof);

 

(g)                                 [Reserved];

 

(h)                                 the fact that a Loan Party has entered into
a Swap Agreement or an amendment to a Swap Agreement, together with copies of
all agreements evidencing such Swap Agreement or amendments thereto (which shall
be delivered within three Business Days following execution and delivery
thereof);

 

(i)                                     any fact, condition, event or occurrence
governed by Environmental Law or any Hazardous Materials Activity that, in any
such case, could reasonably be expected to form the basis of any environmental
claim, or the assertion in writing of any environmental claim, by any Person
against, or with respect to the activities of, any Group Member and any alleged
violation of or non compliance with any Environmental Laws or any permits,
licenses or authorizations, other than any environmental claim or alleged
violation that, alone or together with any other such matters that have
occurred, could reasonably be expected to result in liability of the Group
Members in an aggregate amount exceeding $10,000,000;

 

(j)                                     any change (i) in any Loan Party’s
corporate name, (ii) in any Loan Party’s corporate structure, (iii) in any Loan
Party’s jurisdiction of organization or (iv) the organization identification
number, if any, or, with respect to any Loan Party organized under the laws of a
jurisdiction that requires such information to be set forth on the face of a UCC
financing statement, the Federal Taxpayer Identification Number of such Loan
Party (and Holdings and the Borrower agree not to effect or permit any of the
Loan Parties to effect any change referred to in this Section 5.02(j) unless all
filings have been made under the UCC or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral as
contemplated in the Collateral Documents); and

 

(k)                                  any other development that results in, or
could reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

Section 5.03.                             Existence; Conduct of Business.  Each
Loan Party will, and will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full

 

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force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

 

Section 5.04.                             Payment of Obligations.  Each Loan
Party will, and will cause each of its Subsidiaries to, pay its obligations,
including tax liabilities, that, if not paid, could result in a Material Adverse
Effect before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings where a claim has been made against the relevant Loan
Party, (b) such Loan Party has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

Section 5.05.                             Maintenance of Properties. Each Loan
Party will, and will cause each of its Subsidiaries to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and taking into account the
prevailing industry standards and the locations of such property.

 

Section 5.06.                             Maintenance of Insurance.  Each Loan
Party will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations; provided
that the Borrower may maintain self-insurance consistent with its past practices
and policies.

 

Section 5.07.                             Books and Records.  Each Loan Party
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in all material respects are
made of all dealings and transactions in relation to its business and
activities.

 

Section 5.08.                             Inspection Rights; Collateral
Reports.  (a)  Each Loan Party will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender
(including any consultants, lawyers and appraisers retained by the
Administrative Agent), upon reasonable prior notice, to visit and inspect its
properties (including field examinations to ensure the adequacy of the
Collateral to support the Borrowing Base and related reporting and control
systems), to examine and make extracts from its books and records, including
environmental assessment reports, and to discuss its affairs, finances and
condition with its officers and independent accountants, all at the sole expense
of such Loan Party and at such reasonable time as requested and as often as
reasonably requested (it being understood that the Administrative Agent shall
conduct at least one field examination per calendar year); provided that the
Loan Parties shall not be required to reimburse the Administrative Agent for the
reasonable costs of more than one field examination per calendar year unless the
Administrative Agent, in its Permitted Discretion, decides to perform a second
field examination in any calendar year (in which case the Loan Parties shall
also be required to reimburse the Administrative Agent for the reasonable costs
of such second field examination); provided, however, that there shall be no
limitation on the Loan Parties’ obligation to reimburse for, or the number or
frequency of, such field examinations if an Event of Default shall have occurred
and be continuing or if the Availability is less than 15% of the Revolving
Commitments at the time such field examination is scheduled or commenced.

 

(b)                                 At any time that the Administrative Agent
reasonably requests, each Loan Party will, at its sole expense, provide the
Administrative Agent and, to the extent requested by any Lender, such Lender,
with appraisals or updates thereof of their Inventory from an appraiser selected
and engaged by the Administrative Agent, and prepared on a basis reasonably
satisfactory to the Administrative Agent, such appraisals and updates to
include, without limitation, information required by applicable law and
regulations; provided that the Loan Parties shall not be required to reimburse
the

 

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Administrative Agent for the reasonable costs of more than one appraisal of each
Inventory per calendar year; provided, however, that there shall be no
limitation on the Loan Parties’ obligation to reimburse for, or the number or
frequency of, such appraisals if an Event of Default shall have occurred and be
continuing or if the Availability is less than 15% of the Revolving Commitments
at the time such appraisal process is scheduled or commenced.

 

Section 5.09.                             Compliance with Laws and Contractual
Obligations.  Each Loan Party will, and will cause each of its Subsidiaries to,
comply with all Requirements of Law (including any Environmental Laws)
applicable to it or its property, and all Contractual Obligations binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

Section 5.10.                             Use of Proceeds.  The proceeds of the
Loans, and the Letters of Credit issued hereunder, will only be used by the
Borrower to finance the working capital needs and for general corporate purposes
of, including Permitted Acquisitions by, the Borrower and its Subsidiaries.  No
part of the proceeds of any Loan or any Letter of Credit issued hereunder will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations U and X.

 

Section 5.11.                             Casualty and Condemnation.  The
Borrower (a) will furnish to the Administrative Agent and the Lenders prompt
written notice of any casualty or other insured damage to any material portion
of the Collateral or the commencement of any action or proceeding for the taking
of any material portion of the Collateral or interest therein under power of
eminent domain or by condemnation or similar proceeding and (b) will ensure that
the Net Insurance/Condemnation Proceeds of any such event (whether in the form
of insurance proceeds, condemnation awards or otherwise) are collected and
applied in accordance with the applicable provisions of this Agreement and the
Loan Documents.

 

Section 5.12.                             Depository Banks.  On and after the
date which is 90 days after the Effective Date, with respect to the Target and
its subsidiaries, and with respect to the other Loan Parties, on and after the
Effective Date, the Loan Parties will maintain the Administrative Agent (or any
Lender reasonably satisfactory to the Administrative Agent) as their principal
depository bank, including for the maintenance of operating, administrative,
cash management, collection activity, and other deposit accounts for the conduct
of its business.

 

Section 5.13.                             Collateral; Further Assurances.  Each
Loan Party will execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents) that may be required under any applicable law, or
that Administrative Agent or may reasonably request, to cause the Collateral and
Guarantee Requirement to be and remain satisfied at all times and otherwise to
effectuate the provisions of the Loan Documents, all at the expense of the Loan
Parties.  The Borrower will provide to the Administrative Agent, from time to
time upon request, evidence reasonably satisfactory to the Administrative Agent
as to the perfection and priority of the Liens created or intended to be created
by the Collateral Documents.

 

Section 5.14.                             Post-Closing Deliverables.  (a) Within
90 days after the Effective Date, the Loan Parties will use commercially
reasonable efforts to deliver to the Administrative Agent each (i) Collateral
Access Agreement required to be provided pursuant to Section 4.13 of the
Security Agreement and (ii) Control Agreement required to be provided pursuant
to Section 7.1 of the Security Agreement.

 

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(b)                                 Within 15 Business Days after the Effective
Date, the Borrower shall have (i) executed JPMorgan’s master agreement for the
issuance of commercial Letters of Credit in form and substance reasonably
satisfactory to JPMorgan and the Borrower and (ii) entered into assignment
documentation in form and substance reasonably acceptable to JPMorgan with
respect to the Griffon Letters of Credit issued by JPMorgan.

 

Section 5.15.                             Ratings.  Unless otherwise consented
to by the Administrative Agent or the Required Lenders, the Loan Parties shall
use commercially reasonable efforts to maintain a public corporate family rating
from Moody’s with respect to Holdings, a public corporate credit rating from S&P
with respect to Holdings and a public credit rating from each of Moody’s and S&P
with respect to the Revolving Loans.

 

Section 5.16.                             Interest Rate Protection.  No later
than sixty (60) days following the Effective Date and at all times thereafter
until the third anniversary of the Effective Date, the Borrower shall obtain and
cause to be maintained protection against fluctuations in interest rates
pursuant to one or more Interest Rate Agreements in form and substance
reasonably satisfactory to the Administrative Agent, in order to ensure that no
less than 50% of the aggregate principal amount of the total Indebtedness for
borrowed money of Holdings and its Subsidiaries outstanding as of the Effective
Date is either (i) subject to such Interest Rate Agreements or (ii) Indebtedness
that bears interest at a fixed rate.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable hereunder
have been paid in full and all Letters of Credit have expired or terminated and
all LC Disbursements shall have been reimbursed, the Loan Parties, jointly and
severally, covenant and agree with the Lenders that:

 

Section 6.01.                             Indebtedness; Guarantees.  (a) The
Loan Parties will not, and will not permit any of their Subsidiaries to, create,
incur, assume or permit to exist any Indebtedness, except:

 

(i)                                     Indebtedness of any Loan Party pursuant
to any Loan Document (other than the Intercreditor Agreement), including,
without limitation, any additional Indebtedness incurred pursuant to any
increase of Commitments, and Secured Obligations;

 

(ii)                                  Indebtedness of any Loan Party pursuant to
any Term Loan Document (or any Permitted Refinancing thereof) in an aggregate
outstanding principal amount not to exceed $375,000,000;

 

(iii)                               Indebtedness of the Borrower to any other
Group Member and of any Subsidiary of the Borrower to any other Group Member;
provided that (A) such Indebtedness shall be evidenced by the Global
Intercompany Note, and, if owing to a Loan Party, shall be subject to a Lien
pursuant to the Security Agreement, (B) such Indebtedness shall be unsecured
and, if owed by a Loan Party, subordinated in right of payment to the payment in
full of the Obligations pursuant to the terms of the Global Intercompany Note,
(C) any payment by any Guarantor under the Guarantee of the Obligations shall
result in a pro tanto reduction of the amount of any Indebtedness owing by such
Guarantor to the Borrower or any other Subsidiary for whose benefit

 

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such payment is made and (D) Indebtedness of Group Members which are not Loan
Parties to Group Members which are Loan Parties must also be expressly permitted
by Section 6.06(c) or (p);

 

(iv)                              Indebtedness outstanding on the date hereof
and listed on Schedule 6.01(a) and, other than with respect to the Senior Notes,
any refinancings, refundings, renewals, replacement, waivers, amendments,
amendments and restatements or extensions thereof (without increasing, or
shortening the maturity of, the principal amount thereof);

 

(v)                                 Indebtedness (including, without limitation,
Capital Lease Obligations) secured by Liens expressly permitted by
Section 6.02(f) in an aggregate principal amount (including any Indebtedness
that is permitted by Section 6.01(a)(iv) that constitutes Indebtedness of a type
permitted by this Section 6.01(a)(v)) not to exceed $75,000,000 at any time
outstanding;

 

(vi)                              Guarantees expressly permitted by
Section 6.01(b);

 

(vii)                           Indebtedness arising from the endorsement of
instruments, the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn in the ordinary course of
business against insufficient funds, or in respect of netting services,
overdraft protections or otherwise in connection with the operation of customary
deposit accounts in the ordinary course of business;

 

(viii)                        Indebtedness arising from agreements providing for
indemnification or similar obligations in each case incurred in connection with
an acquisition or other Investment expressly permitted by Section 6.06 or any
disposition expressly permitted by Section 6.04;

 

(ix)                                Indebtedness in the form of customary
obligations under indemnification, incentive, non-compete, consulting, deferred
compensation, earn-out (based on the income of the assets acquired after the
acquisition thereof) or other customary similar arrangements otherwise permitted
hereunder;

 

(x)                                   Indebtedness resulting from judgments not
resulting in an Event of Default under paragraph (k) of Article VII;

 

(xi)                                Indebtedness resulting from unfunded pension
fund and other employee benefit plan obligations and liabilities to the extent
that they are permitted to remain unfunded under applicable law;

 

(xii)                             Indebtedness resulting from Swap Agreements
permitted hereunder;

 

(xiii)                          (I) Indebtedness incurred by the Loan Parties
that is unsecured so long as, prior to and immediately after giving effect to
the incurrence of such Indebtedness on a pro forma basis, (A) the Fixed Charge
Coverage Ratio shall be at least 1.20 to 1.0 as of the end of the most recent
fiscal month for which financial statements have been delivered, (B) no Default
or Event of Default shall have occurred and be continuing and (C) the aggregate
amount of all unsecured Indebtedness (other than Permitted Subordinated Debt)
incurred under this clause (xiii) shall not exceed $300,000,000 at any time
outstanding, and, (II) without limiting any of the forgoing, any refinancings,

 

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refundings, renewals, replacement, waivers, amendments, amendments and
restatements or extensions thereof (without increasing, or shortening the
maturity or weighted average life of, the principal amount thereof), provided
that (x) after giving effect to any such refinancings, refundings, renewals,
replacement, waivers, amendments, amendments and restatements or extensions of
Permitted Subordinated Debt, the resulting Indebtedness shall constitute
Permitted Subordinated Debt and (y) Indebtedness incurred in reliance on
(II) shall be unsecured obligations of the Loan Parties and subject to the
limitations of clause (C) above; provided further that, prior to a Permitted
Change of Control Transaction, Indebtedness incurred in reliance on this
Section 6.01(a)(xiii) cannot be Indebtedness owed to Griffon or any of its
Subsidiaries other than Permitted Subordinated Debt owed to Griffon in an
aggregate principal amount not exceeding $50,000,000;

 

(xiv)                         unsecured or secured Indebtedness of Subsidiaries
that are not Loan Parties in an aggregate amount (including any Indebtedness
that is permitted by Section 6.01(a)(iv) that constitutes Indebtedness of a type
permitted by this Section 6.01(a)(xiv)) not to exceed $50,000,000 at any time
outstanding;

 

(xv)                            any Indebtedness arising as a result of sale and
leaseback transactions specified on Schedule 6.15;

 

(xvi)                         any Indebtedness of any Person that becomes a
Subsidiary (including in connection with an acquisition explicitly permitted by
Section 6.06 but excluding the Acquisition) after the date hereof or
Indebtedness of any Person that is assumed by any Subsidiary in connection with
an acquisition of assets by such Subsidiary; provided that (A) such Indebtedness
exists at the time such Person becomes a Subsidiary or such assets are acquired
and is not created in contemplation of or in connection with such Person
becoming a Subsidiary or such acquisition, as the case may be, (B) any
extensions, renewals and replacements of such Indebtedness shall not increase
the original outstanding principal amount thereof, (C) the aggregate principal
amount of all such Indebtedness shall not exceed $100,000,000 at any time
outstanding and (D) no Group Member (other than such Person that becomes a
Subsidiary or the Subsidiary that so assumes such Person’s Indebtedness) shall
Guarantee or otherwise become liable for the payment of such Indebtedness;

 

(xvii)                      Indebtedness of any Subsidiaries of Holdings
organized under the laws of Canada pursuant to an asset based lending facility;
provided that the sum of (a) the aggregate principal amount of Indebtedness
incurred pursuant to this Section 6.01(a)(xvii) and (b) the aggregate
outstanding Canadian Commitments shall not exceed $20,000,000 at any time
outstanding; and

 

(xviii)                   in addition to Indebtedness otherwise expressly
permitted by this Section, Indebtedness of the Group Members in an aggregate
principal amount not to exceed $30,000,000 at any time outstanding.

 

Notwithstanding anything to the contrary, none of the Indebtedness incurred in
reliance on this Section 6.01(a) may be Indebtedness owed to Griffon or any of
its Subsidiaries (other than Group Members), except for Permitted Subordinated
Debt in an aggregate principal amount not exceeding $50,000,000 permitted under
Section 6.01(a)(xiii).  For purposes of determining compliance with this
Section 6.01, the Dollar Equivalent of the aggregate amount of any Indebtedness
denominated in an Alternative Currency as of the date such Indebtedness is
incurred shall be deemed to be the aggregate amount of

 

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such Indebtedness, and any fluctuation in the applicable Exchange Rate
thereafter shall not affect compliance with this Section 6.01; provided that if
any such Indebtedness is refinanced then, to the extent such refinancing is
denominated in the same Alternative Currency and in the same principal amount
and incurred by the same borrower, the Dollar Equivalent of such refinanced
Indebtedness shall be determined using the applicable Exchange Rate as of the
date such Indebtedness so refinanced was incurred.

 

(b)                                 The Borrower will not, and will not permit
any of its Subsidiaries to, assume, endorse, be or become liable for, or
Guarantee, the obligations of any other Person (except by the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business), except for:

 

(i)                                     Guarantees existing on the date hereof
and set forth on Schedule 6.01(b);

 

(ii)                                  Guarantees by any Group Member of
obligations of any Loan Party (including, without limitation, all Indebtedness
of a Loan Party expressly permitted under Section 6.01(a));

 

(iii)                               Guarantees by any Subsidiary that is not a
Loan Party of obligations incurred pursuant to Section 6.01(a)(xiv);

 

(iv)                              Indebtedness consisting of Guarantees of loans
made to officers, directors or employees of any Group Member in an aggregate
amount which shall not exceed $4,000,000 at any time outstanding; and

 

(v)                                 in addition to Guarantees otherwise
expressly permitted by this Section, Guarantees of the Group Members; provided
that the aggregate amount of obligations subject to such Guarantees shall not
exceed $30,000,000 at any time.

 

Notwithstanding the foregoing, any Guarantees made by any Loan Party or any
Subsidiaries off any Loan Party in reliance on Section 6.01(b)(iv) or (v) must
also be expressly permitted by Section 6.06(c) or (p).

 

Section 6.02.                             Liens.  The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

 

(a)                                  Liens created pursuant to the Loan
Documents;

 

(b)                                 Permitted Encumbrances;

 

(c)                                  Liens pursuant to any Term Loan Document,
including any Liens on any deposit account established for the sole purpose of
depositing the net cash proceeds of any Loan Party with respect to any asset
sale, incurrence of Indebtedness or casualty event pending the application of
such proceeds to the prepayment of loans under the Term Loan Documents in
accordance with the mandatory prepayment provisions thereof; provided that such
Liens shall at all times be subject to the Intercreditor Agreement;

 

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(d)                                 any Lien on any property or asset of any
Group Member existing on the date hereof and set forth on Schedule 6.02
(excluding, however, following the making of the initial Loans hereunder as of
the Effective Date, Liens securing Indebtedness and other obligations under the
Existing Debt Agreements); provided that (i) no such Lien shall extend to any
other property or asset of any Group Member and (ii) any such Lien shall secure
only those obligations which it secures on the date hereof and extensions,
renewals, replacements and combinations thereof that do not increase the
outstanding principal amount thereof or commitment therefor, in each case, as in
effect on the date hereof;

 

(e)                                  any Lien existing on any property or asset
(other than Accounts and Inventory) prior to the acquisition thereof by any
Group Member or existing on any property or asset (other than Accounts and
Inventory) of any Person that becomes a Subsidiary after the date hereof prior
to the time such Person becomes a Subsidiary (including in connection with an
acquisition explicitly permitted by Section 6.04 but excluding the Acquisition);
provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary, as the case may be,
(ii) such Lien shall not apply to any other property or assets of any Group
Member and (iii) such Lien shall secure only those obligations which it secures
on the date of such acquisition or the date such Person becomes a Subsidiary, as
the case may be and extensions, renewals and replacements thereof that do not
increase the original outstanding principal amount thereof;

 

(f)                                    Liens on fixed or capital assets
acquired, constructed or improved by any Group Member (including any Liens
permitted by paragraph (d) above that are of a type permitted by this clause
(f)); provided that (i) such security interests secure Indebtedness expressly
permitted by Section 6.01 incurred to finance such acquisition, construction or
improvement, (ii) such security interests and the Indebtedness secured thereby
are incurred prior to or within six months after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring, constructing or improving
such fixed or capital assets and (iv) such security interests shall not apply to
any other property or assets of any Group Member;

 

(g)                                 Liens of a collecting bank arising in the
ordinary course of business under Section 4-208 of the UCC in effect in the
relevant jurisdiction covering only the items being collected upon;

 

(h)                                 Liens granted by a Subsidiary that is not a
Loan Party in favor of the Borrower or another Loan Party in respect of
Indebtedness owed by such Subsidiary;

 

(i)                                     Liens granted by any Subsidiary that is
not a Loan Party on its assets to secure (i) its Indebtedness (other than
Guarantees) or (ii) the Indebtedness of any other Subsidiary organized under the
same jurisdiction (provided that no Subsidiary may Guarantee Indebtedness under
this clause (ii) of Persons organized under a different jurisdiction), in each
case incurred pursuant to Section 6.01(a)(xiv);

 

(j)                                     any interest or title of a lessor under
any lease entered into by the Borrower or any of its Subsidiaries in the
ordinary course of its business and covering only the assets so leased, and any
financing statement filed in connection with any such lease;

 

(k)                                  Liens held by third parties on consigned
goods incurred in the ordinary course of business;

 

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(l)                                     bankers’ liens and rights to setoff with
respect to deposit accounts, in each case, incurred in the ordinary course of
business;

 

(m)                               Liens on insurance policies and the proceeds
thereof securing the financing of the insurance premiums with the providers of
such insurance or their Affiliates in respect thereof;

 

(n)                                 Liens on any assets that are the subject of
an agreement for a disposition thereof expressly permitted under Section 6.04
that arise due to the existence of such agreement;

 

(o)                                 Liens on assets subject to the sale and
leaseback transactions specified on Schedule 6.15;

 

(p)                                 Liens securing Indebtedness permitted by
Section 6.01(a)(xvii); provided that such Liens only apply to assets of
Subsidiaries of Holdings organized under the laws of Canada that are obligors in
respect of such Indebtedness; and

 

(q)                                 additional Liens not otherwise expressly
permitted by this Section on any property or asset of any Group Member securing
obligations in an aggregate amount not exceeding $22,500,000 at any time
outstanding.

 

Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) and (e) of the definition of Permitted
Encumbrance and clause (a) above and (2) Inventory, other than those permitted
under clauses (a), (b) and (e) of the definition of Permitted Encumbrance and
clause (a) above.

 

Section 6.03.                             Mergers, Consolidations, Etc.  No Loan
Party will, nor will it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), except that (i) any
Subsidiary of the Borrower may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Subsidiary which is a Loan Party (provided that
a Loan Party shall be the continuing or surviving corporation), (ii) any other
Subsidiary of the Borrower which is not a Loan Party may be merged or
consolidated with or into any other Subsidiary of the Borrower which is not a
Loan Party, and (iii) any Loan Party may make Permitted Acquisitions in
compliance with Section 6.06(e).

 

Section 6.04.                             Dispositions.  No Loan Party will, nor
will it permit any of its Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, any part
of its business or property, whether now owned or hereafter acquired (including
receivables and leasehold interests) (it being understood that the foregoing
does not include the issuance by any issuer of Equity Interests), except:

 

(a)                                  obsolete or worn out property, tools or
equipment no longer used or useful in its business;

 

(b)                                 any inventory or other property sold or
disposed of in the ordinary course of business and for fair consideration;

 

(c)                                  any Subsidiary of the Borrower may sell,
lease, transfer or otherwise dispose of any or all of its property (upon
voluntary liquidation or otherwise) to any Group Member

 

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(provided that, in the case of any such transfer by a Subsidiary that is a Loan
Party, the transferee must also be a Loan Party);

 

(d)                                 any Equity Interests of any Subsidiary of
the Borrower may be sold, transferred or otherwise disposed of to the Borrower
or any other Subsidiary of the Borrower (provided that, in the case of any such
transfer by a Loan Party, the transferee must also be a Loan Party);

 

(e)                                  any Group Member may sell, lease, transfer
or otherwise dispose of (i) its property and assets the fair market value of
which does not exceed, together with the aggregate fair market value of all
other such dispositions by Group Members consummated after the Effective Date in
reliance on this Section 6.04(e), $250,000,000; provided that (i) any
disposition of Equity Interests of any Subsidiary of the Borrower must include
all Equity Interests of and other Investments in such Subsidiary owned by the
Group Members and (ii) prior to and after giving effect to the consummation of
such disposition, no Default or Event of Default shall have occurred and be
continuing;

 

(f)                                    the cross-licensing or licensing of
intellectual property, in the ordinary course of business;

 

(g)                                 the dispositions expressly permitted by
Section 6.03;

 

(h)                                 the leasing, occupancy or sub-leasing of
real property in the ordinary course of business that would not materially
interfere with the required use of such real property by any Group Member;

 

(i)                                     the sale or discount, in the ordinary
course of business, of overdue or otherwise ineligible accounts receivable
arising in the ordinary course of business, in connection with the compromise or
collection thereof;

 

(j)                                     transfers of condemned property as a
result of the exercise of “eminent domain” or other similar policies to the
respective Governmental Authority or agency that has condemned the same (whether
by deed in lieu of condemnation or otherwise), and transfers of properties that
have been subject to a casualty to the respective insurer of such property as
part of an insurance settlement;

 

(k)                                  Liens expressly permitted by Section 6.02;

 

(l)                                     Restricted Payments expressly permitted
by Section 6.07; and

 

(m)                               sales necessary to effect sale and leaseback
transactions specified on Schedule 6.15;

 

provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (a), (c), (d), (f), (g), (i),
(j), (k) and (l) above) shall be made for fair value and for at least 75% cash
consideration.

 

Section 6.05.                             Lines of Business.  No Loan Party
will, nor will it permit any of its Subsidiaries to, engage to any material
extent in any business other than businesses of the type conducted by the Group
Members on the Effective Date (after giving effect to the Acquisition) and
businesses reasonably related thereto.

 

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Section 6.06.                             Investments and Acquisitions.  No Loan
Party will, nor will it permit any of its Subsidiaries to, make or suffer to
exist any Investment in any Person or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:

 

(a)                                  Permitted Investments, subject to Control
Agreements in favor of the Administrative Agent for the benefit of the Secured
Parties or otherwise subject to a perfected security interest in favor of the
Administrative Agent for the benefit of the Secured Parties to the extent
required under the Loan Documents;

 

(b)                                 Investments (other than Investments
expressly permitted under paragraph (a) of this Section) existing on the date
hereof and set forth on Schedule 6.06;

 

(c)                                  Investments by (i) the Borrower in any
Subsidiary which is a Loan Party or by any Subsidiary of the Borrower in any
Subsidiary which is a Loan Party or in the Borrower; (ii) Holdings in the
Borrower, (iii) any Subsidiary that is not a Loan Party in any Subsidiary that
is not a Loan Party and (iv) any Loan Party (other than Holdings) in a
Subsidiary that is not a Loan Party not exceeding $10,000,000 in the aggregate
for all Investments by Loan Parties in Subsidiaries that are not Loan Parties;

 

(d)                                 the Acquisition;

 

(e)                                  any Permitted Acquisition if, prior to and
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing, (ii) the Fixed Charge Coverage Ratio shall be
at least 1.20 to 1.0 as of the end of the most recent fiscal month for which
financial statements have been delivered and (iii) Availability shall be at
least 25% of the Revolving Commitments; provided that (x) the Acquisition
Consideration (excluding consideration consisting of (1) Equity Interests (other
than Disqualified Equity Interests of Holdings) in Griffon, or, after a
Permitted Change of Control Transaction, Holdings) and (2) a direct or indirect
cash equity contribution from Griffon to Holdings for the purpose of funding (in
whole or in part) such Permitted Acquisition) for such Permitted Acquisition (or
a series of related Permitted Acquisitions) does not exceed $100,000,000,
(y) the aggregate Acquisition Consideration (excluding consideration consisting
of (1) Equity Interests (other than Disqualified Equity Interests of Holdings)
in Griffon, or, after a Permitted Change of Control Transaction, Holdings and
(2) a direct or indirect cash equity contribution from Griffon to Holdings for
the purpose of funding (in whole or in part) such Permitted Acquisition) for all
Permitted Acquisitions consummated after the Effective Date in reliance on this
Section 6.06(e) does not exceed $300,000,000 and (z) the aggregate Acquisition
Consideration (excluding consideration consisting of Equity Interests (other
than Disqualified Equity Interests) in Griffon, or, after a Permitted Change of
Control Transaction, Holdings) that is attributable to Investments in such
Persons that are not wholly-owned Domestic Subsidiaries that become Guarantors
at the time of such Permitted Acquisition may not exceed $50,000,000 in the
aggregate since the Effective Date, except to the extent such Investments are
treated, at the time of such Permitted Acquisition, as Investments in such
Person pursuant to Section 6.06 and such Investments are permitted to be made
thereunder (other than pursuant to this clause (e) and Section 6.06(l)) at such
time;

 

(f)                                    purchases of inventory and other property
to be sold or used in the ordinary course of business;

 

(g)                                 any Restricted Payments expressly permitted
by Section 6.07;

 

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(h)                                 extensions of trade credit in the ordinary
course of business;

 

(i)                                     Investments arising in connection with
the incurrence of Indebtedness expressly permitted by Section 6.01(a);

 

(j)                                     Investments (including debt obligations)
received in the ordinary course of business by any Group Member in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising out of the ordinary course of business;

 

(k)                                  Investments of any Group Member under Swap
Agreements expressly permitted hereunder;

 

(l)                                     Investments of any Person in existence
at the time such Person becomes a Subsidiary pursuant to a transaction expressly
permitted by any other paragraph of this Section (other than the Acquisition);
provided that such Investment was not made in connection with or anticipation of
such Person becoming a Subsidiary;

 

(m)                               Investments resulting from pledges and
deposits referred to in paragraphs (c) and (d) of the definition of “Permitted
Encumbrances”;

 

(n)                                 the forgiveness or conversion to equity of
any Indebtedness expressly permitted by Section 6.01(a)(ii) subject to the
limitations of Section 6.06(c);

 

(o)                                 negotiable instruments and deposits held in
the ordinary course of business; and

 

(p)                                 in addition to Investments otherwise
expressly permitted by this Section, Investments not exceeding in the aggregate
$25,000,000.

 

Section 6.07.                             Restricted Payments.  (a)  No Loan
Party will, nor will it permit any of its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except:

 

(i)                                     each of Holdings and the Borrower may
declare and pay dividends with respect to its common stock payable solely in
additional shares of its common stock;

 

(ii)                                  the Borrower may declare and pay to
Holdings (including, without limitation, for distribution, prior to a Permitted
Change of Control Transaction, to the Parent and ultimately to Griffon)
(x) dividends, or make other payments, to pay the Borrower’s allocated share of
overhead and expenses (other than interest expense) (provided that any expenses
related to or resulting from the accelerated vesting of any equity-based
compensation program, time-vested management incentive program or management
bonus program of Griffon, Holdings or its Affiliates in connection with a
Permitted Change of Control Transaction (such expenses, “Acceleration Expenses”)
paid by the Borrower to Holdings shall not exceed $20,000,000 in the aggregate)
incurred by Holdings in accordance with the exercise of the reasonable business
judgment of Holdings, so long as such amounts are used for such purposes within
60 days after such amounts are paid; provided that the payments made pursuant to
this Section 6.07(a)(ii)(x) shall be limited to (A) payments by the Borrower to
pay its allocated share of (I) audit and accounting fees and expenses, including
costs of internal audit, paid or payable to any third-party provider (other than
Holdings, Parent, Griffon

 

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or any of their respective affiliates); (II) insurance premiums, fees and
expenses, including brokerage and other related fees and expenses, paid or
payable to any third-party provider (other than Holdings, Parent, Griffon or any
of their respective affiliates) and amounts paid or payable in connection with
the settlement of any insurance claim to any third party (other than Holdings,
Parent, Griffon or any of their respective affiliates); (III) environmental fees
and expenses paid or payable to any third-party provider (other than Holdings,
Parent, Griffon or any of their respective affiliates); (IV) administration,
consulting and other fees and expenses paid or payable to any third-party
provider (other than Holdings, Parent, Griffon or any of their respective
affiliates) relating to welfare benefits, plans and arrangements, and relating
to Griffon’s 401(k) plan; and (V) legal, professional and consulting fees and
expenses paid or payable to any third-party provider (other than Holdings,
Parent, Griffon or any of their respective affiliates) (it being understood that
payments by the Borrower to pay its allocated share of the items listed in the
foregoing clauses (I) through (V), other than with respect to Acceleration
Expenses, shall be permitted under this Section 6.07(a)(ii)(x) regardless of
amount) and (B) other payments not exceeding $7,500,000 in any fiscal year of
Holdings and its Subsidiaries, (y) dividends or other payments that are used to
reimburse Griffon for the fair market value, as reasonably determined by the
Borrower in good faith, of any grants made to employees of any Group Member
pursuant to an equity-based compensation program, time-vested management
incentive program or management bonus program of Griffon, Holdings or its
Affiliates; provided that any such payments made pursuant to this
Section 6.07(a)(ii)(y) shall not exceed $5,000,000 in any fiscal year of
Holdings and (z) payments to Griffon, Parent or their respective Affiliates of
management fees pursuant to and to the extent expressly contemplated by the
Management Agreement as in effect as of the Closing Date, so long as prior to
and immediately after giving effect to any such payments, no Default shall have
occurred and be continuing; provided that payments made pursuant to this
Section 6.07(a)(ii)(z) in any fiscal year of Holdings and its Subsidiaries shall
not exceed the greater of (i) $250,000 and (ii) 7.50% of pre-tax consolidated
net income for such fiscal year (which, for purposes of this Section
6.07(a)(ii)(z) shall be calculated, for any fiscal year of Holdings and its
Subsidiaries, as the net income of the Group Members for such fiscal year plus
foreign, Federal, state and local income taxes deducted in determining net
income for such fiscal year); provided that any such payments made pursuant to
this Section 6.07(a)(ii) must be deducted (to the extent not already so
deducted) from the Net Income of Holdings and its Subsidiaries;

 

(iii)                               the Borrower may declare and pay dividends,
distributions or otherwise make payments with respect to its Equity Interests to
any Person of which the Borrower is a direct or indirect Subsidiary and with
whom the Borrower files a consolidated, combined, unitary or affiliated income
tax return at such time (“Consolidated Return”) and in such amounts as shall be
required by such Person to pay the tax liability in respect of such return to
the extent such liability is directly attributable to the income of the Borrower
and any Subsidiaries (the “Borrower Consolidated Group”) that file with such
Person a Consolidated Return; provided that the total amount of any dividends,
distributions or payments made pursuant to this clause for any taxable period
shall not exceed the amount that the Borrower Consolidated Group would be
required to pay in respect of Federal, state and local income Taxes for such
period, determined taking into account any available net operating loss
carryovers or other tax attributes of the Borrower Consolidated Group as if the
Borrower Consolidated Group filed a separate Consolidated Return, less the
amount of any such Taxes paid directly by the Borrower Consolidated Group;

 

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(iv)                              the Loan Parties may make payments of
regularly scheduled interest and principal payments as and when due in respect
of any Permitted Subordinated Debt permitted by Section 6.01(a)(xiii) owing to
Griffon or its Subsidiaries (other than Group Members); and

 

(v)                                 the Borrower may declare and pay to Holdings
(for distribution, prior to a Permitted Change of Control Transaction, to the
Parent and ultimately to Griffon, if applicable) dividends, or make other
payments, not otherwise permitted hereunder in any fiscal year so long as, after
giving pro forma effect to such payment, (i) no Default or Event of Default
shall have occurred and be continuing, and (ii) Availability shall be at least
25% of the Revolving Commitment for each of the most recent 30 days (or, if
less, the number of days elapsed since the Effective Date) and, after giving
effect thereto;

 

provided that nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Borrower to the Borrower, any other
Subsidiary of the Borrower or, if applicable, any minority shareholder of such
Subsidiary (in accordance with the percentage of the Equity Interests of such
Subsidiary owned by such minority shareholder); provided further than no
Restricted Payments may be made to Griffon, the Parent or their respective
Affiliates (other than Holdings and its Subsidiaries) following a Permitted
Change of Control Transaction.

 

(b)                                 No Loan Party will, nor will it permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:

 

(i)                                     payment of Indebtedness created under
the Loan Documents or payments on Indebtedness owed by a Subsidiary of a Loan
Party to a Loan Party or by a Loan Party to any other Loan Party;

 

(ii)                                  (A) mandatory prepayment of Indebtedness
under the Term Loan Credit Agreement under Section 2.11 of the Term Loan Credit
Agreement (as in effect on the date hereof); provided that the Loan Parties have
complied with the requirements of Section 2.11(c) and (B) so long as immediately
before and immediately after giving pro forma effect thereto (i) no Default or
Event of Default shall have occurred and be continuing, (ii) the Fixed Charge
Coverage Ratio shall be at least 1.20 to 1.0 as of the end of the most recent
fiscal month for which financial statements have been delivered, and
(iii) Availability shall be not less than $25,000,000 for each of the most
recent 30 days (or, if less, the number of days elapsed since the Effective
Date) and after giving effect thereto, optional prepayments of Indebtedness
under the Term Loan Documents (including, without limitation, repurchases under
Section 2.10(c) of the Term Loan Credit Agreement);

 

(iii)                               payments in respect of any Swap Agreement
permitted under this Agreement and payment of regularly scheduled interest and
principal payments as and when due in respect of any Indebtedness, other than
payments in respect of the Subordinated Indebtedness prohibited by the
subordination provisions thereof, provided that principal payments (including,
without limitation, any payment due at maturity or any partial or full repayment
upon demand or otherwise) in respect of Indebtedness

 

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owed to Griffon or any subsidiary of Griffon that is not a Group Member shall
only be permitted so long as, after giving pro forma effect to such payment,
(A) no Default or Event of Default shall have occurred and be continuing and
(B) Availability shall be at least 25% of the Revolving Commitments for each of
the most recent 30 days (or, if less, the number of days elapsed since the
Effective Date) and, after giving effect thereto;

 

(iv)                              refinancings of Indebtedness to the extent
expressly permitted by Section 6.01; and

 

(v)                                 payment of secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness.

 

Section 6.08.                             Transactions with Affiliates.  No Loan
Party will, nor will it permit any of its Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except:

 

(a)                                  transactions in the ordinary course of
business at prices and on terms and conditions not less favorable to such Group
Member than could be obtained on an arm’s length basis from a Person that is not
an Affiliate;

 

(b)                                 transactions (i) between or among the
Borrower and its wholly-owned Subsidiaries that are Loan Parties and not
involving any other Affiliate or (ii) between or among wholly-owned Foreign
Subsidiaries and not involving any other Affiliate;

 

(c)                                  any Investments expressly permitted by
Section 6.06; provided that this Section 6.08(c) (i) shall not permit
Investments in Equity Interests of Griffon or any of its Subsidiaries (other
than Group Members) and (ii) any loans, advances or other Investments made by
any Group Member to Griffon or any of its Subsidiaries (other than Group
Members) shall be made at prices and on terms and conditions not less favorable
to such Group Member than could be obtained on an arm’s-length basis from a
Person that is not an Affiliate;

 

(d)                                 any Restricted Payment expressly permitted
by Section 6.07; and

 

(e)                                  any Affiliate who is a natural person may
serve as an employee or director of any Loan Party and receive reasonable
compensation for his services in such capacity.

 

Section 6.09.                             Restrictive Agreements.  No Loan Party
will, nor will it permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (i) the ability of any Group
Member to create, incur or permit to exist any Lien upon any of its property or
assets, or (ii) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its Equity Interests or to make or
repay loans or advances to any Group Member or to Guarantee Indebtedness of any
Group Member, except:

 

(a)                                  restrictions and conditions imposed by
(i) law, (ii) this Agreement, (iii) the Term Loan Credit Agreement or (iv) any
other Term Loan Document, provided that the restrictions and conditions
contained in any such other Term Loan Document are not less favorable to the
Lenders than the restrictions and conditions imposed by the Term Loan Credit
Agreement;

 

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(b)                                 restrictions and conditions existing on the
date hereof identified on Schedule 6.09 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition);

 

(c)                                  customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder;

 

(d)                                 (solely with respect to clause (i) above)
(i) restrictions or conditions imposed by any agreement (other than any Term
Loan Document) relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness and (ii) customary provisions in leases and other contracts
restricting the assignment thereof; and

 

(e)                                  (solely with respect to clause (ii) above)
(i) restrictions or conditions imposed by any agreement relating to secured
Indebtedness of any Foreign Subsidiary permitted by this Agreement if such
restrictions or conditions apply only to the applicable Foreign Subsidiary
securing such Indebtedness and (ii) customary provisions in leases and other
contracts restricting the assignment thereof.

 

Section 6.10.                             Swap Agreements.  No Loan Party will,
nor will it permit any of its Subsidiaries to, enter into any Swap Agreement,
other than Swap Agreements entered into (a) pursuant to Section 5.16 or any Term
Loan Document or (b) in the ordinary course of business to hedge or mitigate
risks to which any Group Member is exposed in the conduct of its business or the
management of its liabilities.

 

Section 6.11.                             Fixed Charge Coverage Ratio.  In the
event that Availability is at any time less than (a) 12.5% of the lesser of
(i) the Borrowing Base and (ii) Revolving Commitments or (b) $15,625,000, the
Borrower will not permit the Fixed Charge Coverage Ratio for the most-recently
ended twelve fiscal months of the Borrower as of the end of the most recent
fiscal month for which financial statements have been delivered and each fiscal
month thereafter to be less than 1.0 to 1.0, provided that this covenant shall
cease to apply (until any subsequent time, if any, at which Availability is less
than (a) or (b) above, as so determined) if Availability exceeds the greater of
(i) 17.5% of the Revolving Commitments and (ii) $18,750,000 for 90 consecutive
calendar days.

 

Section 6.12.                             Stock Issuance.  No Loan Party will,
nor will it permit any of its Subsidiaries to, issue any additional shares, or
any right or option to acquire any shares or any security convertible into any
shares, of the Equity Interests of any Subsidiary, except (a) the Equity
Interests of any Subsidiary, in connection with dividends in Equity Interests
expressly permitted by Section 6.07, (b) the Equity Interests of any Subsidiary
to the Borrower or any of its Subsidiaries, (c) the Equity Interests of Holdings
(other than Disqualified Equity Interests) issued to Griffon or the Parent in
consideration of the Equity Contribution, (d) (i) prior to a Permitted Change of
Control Transaction, the Equity Interests (other than Disqualified Equity
Interests) of Holdings to Griffon and its Subsidiaries (other than any Group
Member) and (ii) after a Permitted Change of Control Transaction, the Equity
Interests (other than Disqualified Equity Interests) of Holdings to any Person
so long as no Default shall have occurred and be continuing; provided that no
Equity Interests of a Loan Party shall be owned by a Subsidiary that is not a
Loan Party.

 

Section 6.13.                             Modifications of Certain Documents. 
No Loan Party will, nor will it permit any of its Subsidiaries to, consent to
any modification, amendment, supplement or waiver of any of the provisions of
(a) its charter, by-laws or other organizational documents or any other
agreement or

 

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instrument to which any Group Member is a party or is bound, in each case that
could reasonably be expected to have a Material Adverse Effect or (b) except as
permitted by Section 6.01(a)(xiii)(II), any Permitted Subordinated Debt, in each
case, without the prior consent of the Administrative Agent (with the approval
of the Required Lenders) or (c) the Management Agreement.

 

Section 6.14.                             Passive Holding Company Status. 
Holdings will not (i) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Equity Interests of the Borrower,
(ii) incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (x) nonconsensual obligations
imposed by operation of law, (y) obligations pursuant to the Loan Documents or
the Term Loan Documents to which it is a party and (z) obligations with respect
to its Equity Interests, or (iii) own, lease, manage or otherwise operate any
properties or assets (other than cash, cash equivalents or other than the
ownership of shares of Equity Interests of the Borrower).

 

Section 6.15.                             Sale and Leaseback Transactions.  No
Loan Party will, nor will it permit any Subsidiary to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, except for any such sale of any fixed or capital
assets by any Group Member that is made for cash consideration in an amount not
less than the fair value of such fixed or capital asset and is consummated
within 90 days after such Group Member acquires or completes the construction of
such fixed or capital asset.  Notwithstanding the foregoing, no transaction or
arrangement shall be restricted under this Section 6.15 if, in connection with
such transaction or arrangement, any Indebtedness or Lien incurred is permitted
to be incurred under Section 6.01 and Section 6.02 and any sale or transfer is
treated as a sale under Section 6.04(e) and permitted thereunder.

 

Section 6.16.                             Fiscal Year.  Holdings shall not
permit its fiscal year or the fiscal year of any of its Subsidiaries to end on a
day other than on (or, in the case of certain Subsidiaries, about) September 30.

 

ARTICLE VII

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(a)                                  the Borrower shall fail to pay any
principal of any Loan when and as the same shall become due and payable in
accordance with the terms hereof, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

 

(b)                                 the Borrower shall fail to pay any
reimbursement obligation in respect of any LC Disbursement or any interest on
any Loan or any fee or any other amount (other than an amount referred to in
paragraph (a) of this Article) payable under this Agreement or under any other
Loan Document, when and as the same shall become due and payable in accordance
with the terms hereof, and such failure shall continue unremedied for a period
of five or more Business Days;

 

(c)                                  any representation or warranty made or
deemed made by or on behalf of any Loan Party in or in connection with this
Agreement or any other Loan Document or any amendment or modification hereof or
thereof, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other Loan

 

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Document or any amendment or modification hereof or thereof, shall prove to have
been false or misleading when made or deemed made in any material respect;

 

(d)                                 any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in (i) Section 5.01(a) or
Section 5.01(b) and such failure shall continue unremedied for a period of 15 or
more days or (ii) Section 5.02 or Section 5.03 (with respect to a Loan Party’s
existence) or in Article VI or any Loan Party shall default in the performance
of any of its obligations contained in Sections 4.1(d), (e) or (f), 4.7(a) or
(b), 4.11 or 4.14 of the Security Agreement or Article VII of the Security
Agreement;

 

(e)                                  any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in paragraph (a), (b) or (d) of this Article) or any other
Loan Document and such failure shall continue unremedied for a period of 30 or
more days after notice thereof from the Administrative Agent (given at the
request of any Lender);

 

(f)                                    any Group Member shall fail to make any
payment (whether of principal or interest and regardless of amount and including
any payment in settlement of a Swap Agreement) in respect of any Material
Indebtedness, when and as the same shall become due and payable, and such
failure shall continue unremedied beyond any applicable grace period;

 

(g)                                 any event or condition occurs that results
in any Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this paragraph (g) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness;

 

(h)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of any Group Member (and, prior to a
Permitted Change of Control Transaction, Griffon or the Parent) or its debts, or
of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Group Member (and, prior to a Permitted
Change of Control Transaction, Griffon or the Parent) or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall continue
undismissed or undischarged for a period of 60 or more days or an order or
decree approving or ordering any of the foregoing shall be entered;

 

(i)                                     any Group Member (and, prior to a
Permitted Change of Control Transaction, Griffon or the Parent) shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in paragraph (h) of
this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for it or for
a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

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(j)                                     any Group Member (and, prior to a
Permitted Change of Control Transaction, Griffon or the Parent) shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;

 

(k)                                  one or more judgments for the payment of
money in an aggregate amount in excess of $15,000,000 shall be rendered against
any Group Member or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed or vacated or, in respect with such judgment, any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of any Group Member to enforce any such judgment;

 

(l)                                     an ERISA Event shall have occurred that,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect;

 

(m)                               a Change of Control shall occur;

 

(n)                                 any material provision of any Loan Document
for any reason ceases to be valid, binding and enforceable in accordance with
its terms (or any Loan Party shall challenge the enforceability of any Loan
Document or shall assert in writing, or engage in any action based on any such
written assertion, that any provision of any of the Loan Documents has ceased to
be or otherwise is not valid, binding and enforceable in accordance with its
terms)

 

(o)                                 the Guaranty contained in Article X shall
for whatever reason cease to be in full force and effect or any Loan Party or
any Affiliate of any Loan Party shall so assert; or

 

(p)                                 the Liens created by the Collateral
Documents shall at any time not constitute a valid and perfected Lien on the
Collateral intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein), free and
clear of all other Liens (other than Liens expressly permitted under
Section 6.02 or under the Collateral Documents), or, except for expiration in
accordance with its terms, any of the Collateral Documents shall for whatever
reason be terminated or cease to be in full force and effect, or any Loan Party
or any Affiliate of any Loan Party shall so assert, or the enforceability
thereof shall be contested by any Loan Party or any Affiliate of any Loan Party;

 

then, and in every such event (other than any event described in paragraphs
(h) or (i) of this Article), and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of the following
actions, at the same or different times: (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower; and in case of any event
described in paragraph (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

 

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ARTICLE VIII

 

The Administrative Agent

 

Each of the Lenders and the Issuing Banks hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Loan Parties or any Subsidiary of a Loan Party
or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents.  Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Loan Party or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity.  The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

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The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties.  The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Banks and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Banks, appoint a successor Administrative Agent which shall be a commercial bank
or an Affiliate of any such commercial bank.  Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.

 

To the extent requested, the Administrative Agent shall promptly upon receipt
thereof forward to each Lender a copy of each Report.  Each Lender hereby agrees
that (a) it has requested a copy of each Report prepared by or on behalf of the
Administrative Agent; (b) the Administrative Agent (i) makes no representation
or warranty, express or implied, as to the completeness or accuracy of any
Report or any of the information contained therein or any inaccuracy or omission
contained in or relating to a Report and (ii) shall not be liable for any
information contained in any Report; (c) the Reports are not comprehensive
audits or examinations, and that any Person performing any field examination
will inspect only specific information regarding the Loan Parties and will rely
significantly upon the Loan Parties’ books and records, as well as on
representations of the Loan Parties’ personnel and that the Administrative Agent
undertakes no obligation to update, correct or supplement the Reports; (d) it
will keep all Reports confidential and strictly for its internal use, not share
the Report with any Loan Party or any other Person except as otherwise permitted
pursuant to this Agreement; and (e) without limiting the generality of any other
indemnification provision contained in this Agreement, it will pay and protect,
and indemnify, defend, and hold the Administrative Agent and any such other
Person preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other

 

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amounts (including reasonable attorney fees) incurred by as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.

 

ARTICLE IX

Miscellaneous

 

Section 9.01.                             Notices.  (a)  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and subject to paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
facsimile, as follows:

 

(i)                                     if to any Loan Party, to the Borrower
at:

 

Clopay Ames True Temper Holding Corp.

8585 Duke Blvd.

Mason, Ohio 45040

Attention:  Treasurer

Fax:  513-770-6544

 

with a copy, prior to a Permitted Change of Control Transaction, to:

 

Griffon Corporation

712 Fifth Avenue, 18th Floor

New York, New York 10019

Attention:  Chief Financial Officer

Fax:  516-932-1169

 

(ii)                                  if to the Administrative Agent, the
Swingline Lender or JPMorgan, as Issuing Bank, to JPMorgan Chase Bank, N.A. at:

 

270 Park Avenue, 44th Floor

Mailcode:  NY1-K855

New York, NY 10017

Attention:  Donna DiForio

Fax:  646-534-2274

 

(iii)                               if to Bank of America, N.A., as Issuing
Bank, to:

 

Bank of America, N.A.

225 Franklin Street — MA1-225-02-05

Boston, MA 02110

Attention: Christopher M. O’Halloran

Fax: 312-453-6319

 

(iv)                              if to any other Lender, to it at its address
or facsimile number set forth in its Administrative Questionnaire.

 

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile

 

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shall be deemed to have been given when sent, provided that if not given during
normal business hours for the recipient, shall be deemed to have been given at
the opening of business on the next Business Day for the recipient.

 

(b)                                 Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
(including e-mail and internet or intranet websites) pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative Agent or the
Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications. All such notices and
other communications (i) sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.

 

(c)                                  Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to the
other parties hereto.

 

Section 9.02.                             Waivers; Amendments.  (a)  No failure
or delay by the Administrative Agent, any Issuing Bank or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and remedies of the
Administrative Agent, the Issuing Banks and the Lenders hereunder and under any
other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default at the time.

 

(b)                                 Subject to Section 2.09(h), neither this
Agreement nor any other Loan Document nor any provision hereof or thereof may be
waived, amended or modified except (i) in the case of this Agreement, pursuant
to an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Administrative Agent and
the Loan Party or Loan Parties that are parties thereto, with the consent of the
Required Lenders; provided that no such agreement shall (i) (A) increase the
Commitment of any Lender without the written consent of such Lender (provided
that the Administrative Agent may make Protective Advances as set forth in
Section 2.04) or (B) change Section 2.09(f) or otherwise increase the aggregate
Revolving Commitments such that, in either case, the aggregate Revolving
Commitments would exceed $150,000,000, without the written consent of each
Lender (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce or forgive any
interest, fees or other Obligations payable hereunder, without

 

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the written consent of each Lender directly affected thereby, (iii) postpone any
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender directly affected thereby, (iv) amend
Section 2.09(h)(iv) without the written consent of the Supermajority Lenders,
(v) change Section 2.18(b) or (d) in a manner that would alter the manner in
which payments are shared, without the written consent of each Lender,
(vi) increase the advance rates set forth in the definition of Borrowing Base
(or change the constituent definitional provisions thereof in a manner having
the effect of increasing the advance rates) without the written consent of the
Supermajority Lenders, (vii) add new categories of eligible assets or otherwise
change the definition of the Borrowing Base or any eligibility criteria
incorporated therein that, in each case, has the effect of increasing
Availability, without the written consent of the Supermajority Lenders,
(viii) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender, (ix) release any
Guarantor from its obligation under its Guaranty (except as otherwise permitted
herein or in the other Loan Documents), without the written consent of each
Lender, (x) except as provided in clauses (c) and (d) of this Section or in any
Collateral Document, release all or substantially all of the Collateral, without
the written consent of each Lender or (xi) subordinate the Obligations to any
other obligation without the written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Issuing Banks or the Swingline Lender
hereunder without the prior written consent of the Administrative Agent, the
Issuing Banks or the Swingline Lender, as the case may be.  The Administrative
Agent may also amend the Commitment Schedule to reflect assignments entered into
pursuant to Section 9.04.

 

(c)                                  The Lenders hereby irrevocably authorize
the Administrative Agent, at its option and in its Permitted Discretion, to
release any Liens granted to the Administrative Agent by the Loan Parties on any
Collateral (i) upon the termination of all Commitments, payment and satisfaction
in full of all Secured Obligations (other than Unliquidated Obligations), and
the cash collateralization of all Unliquidated Obligations in a manner
satisfactory to each affected Lender, (ii) constituting property being sold or
disposed of if the Loan Party disposing of such property certifies to the
Administrative Agent that the sale or disposition is made in compliance with the
terms of this Agreement (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry), (iii) constituting property
leased to a Loan Party under a lease which has expired or been terminated in a
transaction permitted under this Agreement, or (iv) as required to effect any
sale or other disposition of such Collateral in connection with any exercise of
remedies of the Administrative Agent and the Lenders pursuant to Article VII. 
Except as provided in the preceding sentence, the Administrative Agent will not
release any Liens on Collateral without the prior written authorization of the
Required Lenders; provided that, the Administrative Agent may in its Permitted
Discretion, release its Liens on Collateral valued in the aggregate not in
excess of $7,500,000 during any calendar year without the prior written
authorization of the Required Lenders.  Any such release shall not in any manner
discharge, affect, or impair the Secured Obligations or any Liens (other than
those expressly being released) upon (or obligations of the Loan Parties in
respect of) all interests retained by the Loan Parties, including the proceeds
of any sale, all of which shall continue to constitute part of the Collateral.

 

(d)                                 If, in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each
Lender affected thereby,” the consent of the Required Lenders is obtained, but
the consent of other necessary Lenders is not obtained (any such Lender whose
consent is necessary but not obtained being referred to herein as a
“Non-Consenting Lender”), then the Borrower may elect to replace a
Non-Consenting Lender as a Lender party to this Agreement, provided that,

 

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concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Administrative Agent shall
agree, as of such date, to purchase for cash the Loans and other Obligations due
to the Non-Consenting Lender pursuant to an Assignment and Assumption and to
become a Lender for all purposes under this Agreement and to assume all
obligations of the Non-Consenting Lender to be terminated as of such date and to
comply with the requirements of clause (b) of Section 9.04, and (ii) the
Borrower shall pay to such Non-Consenting Lender in same day funds on the day of
such replacement (1) all interest, fees and other amounts then accrued but
unpaid to such Non-Consenting Lender by the Borrower hereunder to and including
the date of termination, including without limitation payments due to such
Non-Consenting Lender under Section 2.14 and Section 2.16, and (2) an amount, if
any, equal to the payment which would have been due to such Lender on the day of
such replacement under Section 2.16 had the Loans of such Non-Consenting Lender
been prepaid on such date rather than sold to the replacement Lender.  Any such
replaced Non-Consenting Lender shall not be responsible for any assignment fee.

 

Section 9.03.                             Expenses; Indemnity; Damage Waiver. 
(a)  The Borrower shall pay (i) all reasonable documented out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of one counsel for the Administrative
Agent and, if necessary, one local counsel in any applicable jurisdiction, in
connection with the syndication and distribution (including, without limitation,
via the internet or through a service such as Intralinks) of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions of the
Loan Documents (whether or not the transactions contemplated hereby or thereby
shall be consummated), (ii) all reasonable documented out-of-pocket expenses
incurred by the Issuing Banks in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Banks or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Banks
or any Lender, in connection with the enforcement, collection or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit, it being agreed that the Borrower shall not be responsible for the fees
and expenses of more than one counsel for both the Administrative Agent and the
Lenders and, if necessary, one local counsel in any applicable jurisdiction
(and, in the case of a conflict of interest, one additional counsel per group of
similarly affected parties and one additional local counsel in any applicable
jurisdiction, if reasonably necessary).  Expenses being reimbursed by the
Borrower under this Section include, without limiting the generality of the
foregoing, costs and expenses incurred in connection with:

 

(i)                                     appraisals and insurance reviews;

 

(ii)                                  field examinations and the preparation of
Reports based on the fees charged by a third party retained by the
Administrative Agent or the internally allocated fees for each Person employed
by the Administrative Agent with respect to each field examination;

 

(iii)                               taxes, fees and other charges for (A) lien
and title searches and title insurance and (B) recording the Mortgages, filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Administrative Agent’s Liens;

 

(iv)                              sums paid or incurred to take any action
required of any Loan Party under the Loan Documents that such Loan Party fails
to pay or take; and

 

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(v)                                 forwarding loan proceeds, collecting checks
and other items of payment, and establishing and maintaining the accounts and
lock boxes, and costs and expenses of preserving and protecting the Collateral.

 

(vi)                              All of the foregoing costs and expenses may be
charged to the Borrower as Revolving Loans or to another deposit account, all as
described in Section 2.18(c).

 

(b)                                 The Borrower shall indemnify the
Administrative Agent, each Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of the Loan Documents or any agreement
or instrument contemplated thereby, the performance by the parties hereto of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by any Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Group
Member, or any Environmental Liability related in any way to any Group Member,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, penalties, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

 

(c)                                  To the extent that the Borrower fails to
pay any amount required to be paid by it to the Administrative Agent, any
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, such Issuing
Bank or the Swingline Lender, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, penalty, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent, such Issuing Bank or the Swingline Lender in its capacity
as such.

 

(d)                                 To the extent permitted by applicable law,
no Loan Party shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

 

(e)                                  All amounts due under this Section shall be
payable promptly after written demand therefor.

 

Section 9.04.                             Successors and Assigns.  (a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights

 

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or obligations hereunder except in accordance with this Section.  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of an Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Issuing Banks and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 (i)  Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)  the Borrower, provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if
an Event of Default has occurred and is continuing, any other assignee;

 

(B)  the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund; and

 

(C)  the Issuing Banks.

 

(ii)                                  Assignments shall be subject to the
following additional conditions:

 

(A)  except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

 

(B)  each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

 

(C)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

 

(D)  the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about Griffon, the Parent,
any Group Member and their Related Parties or their respective securities) will
be made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws; and

 

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(E)  without the prior written consent of each of the Administrative Agent and
the Borrower, no assignment shall be made to a prospective assignee that bears a
relationship to the Borrower described in Section 108(e)(4) of the Code.

 

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

(iii)                               Subject to acceptance and recording thereof
pursuant to paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 2.15, Section 2.16, Section 2.17 and Section 9.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

 

(iv)                              The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Issuing Banks and the Lenders shall treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by the Borrower, any Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(v)                                 Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Assumption and record the information contained therein in
the Register; provided that if either the assigning Lender or the assignee shall
have failed to make any payment required to be made by it pursuant to
Section 2.05, Section 2.06(d) or (e), Section 2.07(b), Section 2.18(d) or
Section 9.03(c), the Administrative Agent shall have no obligation to accept
such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together
with all accrued interest thereon.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

 

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(1)                                  Any Lender may, without the consent of the
Borrower, the Administrative Agent, any Issuing Bank or the Swingline Lender,
sell participations to one or more banks or other entities (a “Participant”) in
all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (C) the Borrower, the
Administrative Agent, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and (D) without the prior written
consent of each of the Administrative Agent and the Borrower, no participation
shall be sold to a prospective Participant that bears a relationship to the
Borrower described in Section 108(e)(4) of the Code.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant.  Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of, and
subject to the limitations of, Section 2.15, Section 2.16 and Section 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(d) as though it were a Lender.  Each Lender that sells a
participation, acting solely for this purpose as an agent of the Borrower, shall
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register to any Person (including the identity of
any Participant or any information relating to a Participant’s interest in any
Commitments, Loans, Letters of Credit or its other obligations under this
Agreement or any other Loan Document) except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive, and such Lender, each Loan Party and the Administrative Agent shall
treat each person whose name is recorded in the Participant Register pursuant to
the terms hereof as the owner of such participation for all purposes of this
Agreement, notwithstanding notice to the contrary.

 

(2)                                  A Participant shall not be entitled to
receive any greater payment under Section 2.15 or Section 2.17 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  No
Participant shall be entitled to the benefits of Section 2.17 unless such
Participant complies with Section 2.17(e) as though it were a Lender.

 

(c)                                  Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section

 

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shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

Section 9.05.                             Survival.  All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated. 
The provisions of Section 2.15, Section 2.16, Section 2.17 and Section 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

Section 9.06.                             Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.  This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

Section 9.07.                             Severability.  Any provision of any
Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions thereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

 

Section 9.08.                             Right of Setoff.  If an Event of
Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower or such Guarantor against any of and all
the Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured.  The applicable Lender shall notify the Borrower
and the Administrative Agent of such set-off or application, provided that any
failure to give or any delay in giving such notice shall not affect the validity
of any such set-off or application under this Section.  The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

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Section 9.09.                             Release of Collateral. 
Notwithstanding anything to the contrary contained herein or any other Loan
Document, when all Obligations (other than contingent indemnification
obligations) have been paid in full and all Commitments have terminated or
expired, upon the reasonable request of the Borrower, the Administrative Agent
shall (without notice to, or vote or consent of, any Lender) take such actions
as shall be required to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document.  Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made.  Notwithstanding the foregoing, upon the
reasonable request of the Borrower in connection with any disposition of assets
or property of Holdings or any of its Subsidiaries permitted hereunder, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender) take such actions as shall be required to release its security interest
in all Collateral being disposed of in such disposition, and to release any
guarantee obligations provided for in any Loan Document of any Person being
disposed of in such disposition, to the extent necessary to permit consummation
of such disposition in accordance with the Loan Documents.

 

Section 9.10.                             Governing Law; Jurisdiction; Consent
to Service of Process.  (a)  The Loan Documents (other than those containing a
contrary express choice of law provision) shall be governed by and construed in
accordance with the laws of the State of New York, but giving effect to federal
laws applicable to national banks.

 

(b)                                 Each Loan Party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any U.S. Federal or New York State court sitting in New York,
New York in any action or proceeding arising out of or relating to any Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court.  Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent,
any Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.

 

(c)                                  Each Loan Party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

 

(d)                                 Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 9.01.  Nothing in this Agreement or any other Loan Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.

 

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Section 9.11.                             WAIVER OF JURY TRIAL.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.12.                             Headings.  Article and
Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.

 

Section 9.13.                             Confidentiality.  Each of the
Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by Requirement of Laws or by any subpoena
or similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii) 
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, any Issuing Bank
or any Lender on a non-confidential basis from a source other than the
Borrower.  For the purposes of this Section, “Information” means all information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent, any Issuing
Bank or any Lender on a non-confidential basis prior to disclosure by the
Borrower.  Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.13 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING GRIFFON AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

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ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES
AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH
LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.

 

Section 9.14.                             Several Obligations; Nonreliance;
Violation of Law.  The respective obligations of the Lenders hereunder are
several and not joint and the failure of any Lender to make any Loan or perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. Each Lender hereby represents that it is not relying
on or looking to any margin stock for the repayment of the Borrowings provided
for herein.  Anything contained in this Agreement to the contrary
notwithstanding, no Issuing Bank or Lender shall be obligated to extend credit
to the Borrower in violation of any Requirement of Law.

 

Section 9.15.                             USA PATRIOT Act.  Each Lender that is
subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrower
that pursuant to the requirements of the Act, it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the names and addresses of the Borrower and other information that will allow
such Lender to identify the Borrower in accordance with the Act.

 

Section 9.16.                             Disclosure.  Each Loan Party and each
Lender hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with any of the Loan Parties and their respective
Affiliates.

 

Section 9.17.                             Appointment for Perfection.  Each
Lender hereby appoints each other Lender as its agent for the purpose of
perfecting Liens, for the benefit of the Administrative Agent and the Secured
Parties, in assets which, in accordance with Article 9 of the UCC or any other
applicable law can be perfected only by possession.  Should any Lender (other
than the Administrative Agent) obtain possession of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.

 

Section 9.18.                             Interest Rate Limitation. 
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable law (collectively
the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount,

 

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together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

 

Section 9.19.                             Effect of Agreement.  (a) On the
Effective Date, the Existing Credit Agreement shall be amended, restated and
superseded in its entirety.  The parties hereto acknowledge and agree that
(i) this Agreement and the other Loan Documents, whether executed and delivered
in connection herewith or otherwise, do not constitute a novation, payment and
reborrowing, or termination of the “Obligations” (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement as in effect prior to the
Effective Date and (ii) such “Obligations” are in all respects continuing (as
amended and restated hereby) with only the terms thereof being modified as
provided in this Agreement.

 

(b)                                 On the Effective Date, (i) any Lender (as
defined in the Existing Credit Agreement) that is not a Lender under this
Agreement shall have no Commitments or obligations hereunder and
(ii) participations in the Griffon Letters of Credit shall be allocated among
the Lenders in accordance with their respective Applicable Percentages of the
related LC Exposure.

 

ARTICLE X

Guaranty

 

Section 10.01.                       Guaranty.  Each Guarantor hereby agrees
that it is jointly and severally liable for, and, as primary obligor and not
merely as surety, absolutely and unconditionally guarantees to the Secured
Parties the prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of the Secured
Obligations and all costs and expenses including, without limitation, all court
costs and attorneys’ and paralegals’ fees (including allocated costs of in-house
counsel and paralegals) and expenses paid or incurred by the Administrative
Agent, the Issuing Banks and the Secured Parties in endeavoring to collect all
or any part of the Secured Obligations from, or in prosecuting any action
against, the Borrower, any Guarantor or any other guarantor of all or any part
of the Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”). Each Guarantor further
agrees that the Guaranteed Obligations may, to the extent permitted by the terms
of this Agreement or any other Loan Document, be extended or renewed in whole or
in part without notice to or further assent from it, and that it remains bound
upon its guarantee notwithstanding any such extension or renewal. All terms of
this Guaranty apply to and may be enforced by or on behalf of any domestic or
foreign branch or Affiliate of any Lender that extended any portion of the
Guaranteed Obligations.

 

Section 10.02.                       Guaranty of Payment.  This Guaranty is a
guaranty of payment and not of collection. Each Guarantor waives any right to
require the Administrative Agent, any Issuing Bank or any Lender to sue the
Borrower, any Guarantor, any other guarantor, or any other person obligated for
all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.

 

Section 10.03.                       No Discharge or Diminishment of Guaranty. 
(a)  Except as otherwise provided for herein or in any other Loan Document, the
obligations of each Guarantor hereunder are unconditional and absolute and not
subject to any reduction, limitation, impairment or termination for any reason
(other than the indefeasible payment in full in cash of the Guaranteed
Obligations), including:  (i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the Guaranteed
Obligations, by operation of law or otherwise; (ii) any change in the corporate
existence, structure or ownership of the Borrower or any other guarantor of or
other person liable for any of the Guaranteed Obligations; (iii) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting any Obligated
Party, or their assets or any resulting release or discharge of any

 

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obligation of any Obligated Party; or (iv) the existence of any claim, setoff or
other rights which any Guarantor may have at any time against any Obligated
Party, the Administrative Agent, any Issuing Bank, any Lender, or any other
person, whether in connection herewith or in any unrelated transactions.

 

(b)                                 The obligations of each Guarantor hereunder
are not subject to any defense or setoff, counterclaim, recoupment, or
termination whatsoever by reason of the invalidity, illegality, or
unenforceability of any of the Guaranteed Obligations or otherwise, or any
provision of applicable law or regulation purporting to prohibit payment by any
Obligated Party, of the Guaranteed Obligations or any part thereof.

 

(c)                                  Further, the obligations of any Guarantor
hereunder are not discharged or impaired or otherwise affected by: (i) the
failure of the Administrative Agent, any Issuing Bank or any Lender to assert
any claim or demand or to enforce any remedy with respect to all or any part of
the Guaranteed Obligations; (ii) any waiver or modification of or supplement to
any provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection, or invalidity of any indirect or direct security for
the obligations of the Borrower for all or any part of the Guaranteed
Obligations or any obligations of any other guarantor of or other person liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, any Issuing Bank or any Lender with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Guarantor or
that would otherwise operate as a discharge of any Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

 

Section 10.04.                       Defenses Waived.  To the fullest extent
permitted by applicable law, each Guarantor hereby waives any defense based on
or arising out of any defense of the Borrower or any Guarantor or the
unenforceability of all or any part of the Guaranteed Obligations from any
cause, or the cessation from any cause of the liability of the Borrower or any
Guarantor, other than the indefeasible payment in full in cash of the Guaranteed
Obligations. Without limiting the generality of the foregoing, each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any person against any
Obligated Party, or any other person.  The Administrative Agent may, at its
election, foreclose on any Collateral held by it by one or more judicial or
non-judicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral
securing all or a part of the Guaranteed Obligations, compromise or adjust any
part of the Guaranteed Obligations, make any other accommodation with any
Obligated Party or exercise any other right or remedy available to it against
any Obligated Party, without affecting or impairing in any way the liability of
such Guarantor under this Guaranty except to the extent the Guaranteed
Obligations have been fully and indefeasibly paid in cash.  To the fullest
extent permitted by applicable law, each Guarantor waives any defense arising
out of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against any Obligated
Party or any security.

 

Section 10.05.                       Rights of Subrogation.  No Guarantor will
assert any right, claim or cause of action, including, without limitation, a
claim of subrogation, contribution or indemnification that it has against any
Obligated Party, or any collateral, until the Loan Parties and the Guarantors
have fully performed all their obligations to the Administrative Agent, the
Issuing Banks and the Secured Parties.

 

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Section 10.06.                       Reinstatement; Stay of Acceleration.  If at
any time any payment of any portion of the Guaranteed Obligations is rescinded
or must otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of the Borrower or otherwise, each Guarantor’s obligations under
this Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Administrative
Agent, the Issuing Banks and the Secured Parties are in possession of this
Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
any agreement relating to the Guaranteed Obligations shall nonetheless be
payable by the Guarantors forthwith on demand by the Lender.

 

Section 10.07.                       Information.  Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower’s financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that each Guarantor assumes and incurs under this Guaranty, and agrees
that neither the Administrative Agent, any Issuing Bank nor any Lender shall
have any duty to advise any Guarantor of information known to it regarding those
circumstances or risks.

 

Section 10.08.                       [Reserved].

 

Section 10.09.                       Maximum Liability.  The provisions of this
Guaranty are severable, and in any action or proceeding involving any state
corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of any Guarantor under this Guaranty would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of
such Guarantor’s liability under this Guaranty, then, notwithstanding any other
provision of this Guaranty to the contrary, the amount of such liability shall,
without any further action by the Guarantors or the Secured Parties, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Guarantor’s “Maximum Liability”).  This
Section with respect to the Maximum Liability of each Guarantor is intended
solely to preserve the rights of the Secured Parties to the maximum extent not
subject to avoidance under applicable law, and no Guarantor nor any other person
or entity shall have any right or claim under this Section with respect to such
Maximum Liability, except to the extent necessary so that the obligations of any
Guarantor hereunder shall not be rendered voidable under applicable law. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of each Guarantor without impairing this
Guaranty or affecting the rights and remedies of the Secured Parties hereunder,
provided that, nothing in this sentence shall be construed to increase any
Guarantor’s obligations hereunder beyond its Maximum Liability.

 

Section 10.10.                       Contribution.  In the event any Guarantor
(a “Paying Guarantor”) shall make any payment or payments under this Guaranty or
shall suffer any loss as a result of any realization upon any collateral granted
by it to secure its obligations under this Guaranty, each other Guarantor (each
a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or
payments made, or losses suffered, by such Paying Guarantor.  For purposes of
this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with respect
to any such payment or loss by a Paying Guarantor shall be determined as of the
date on which such payment or loss was made by reference to the ratio of
(i) such Non-Paying Guarantor’s Maximum Liability as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrower after the date hereof (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying

 

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Guarantor) as of such date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder), or to the extent that a Maximum
Liability has not been determined for any Guarantor, the aggregate amount of all
monies received by such Guarantors from the Borrower after the date hereof
(whether by loan, capital infusion or by other means).  Nothing in this
provision shall affect any Guarantor’s several liability for the entire amount
of the Guaranteed Obligations (up to such Guarantor’s Maximum Liability).  Each
of the Guarantors covenants and agrees that its right to receive any
contribution under this Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations.  This provision is for the benefit of the Administrative
Agent, the Issuing Banks, the Secured Parties and the Guarantors and may be
enforced by any one, or more, or all of them in accordance with the terms
hereof.

 

Section 10.11.                       Liability Cumulative.  The liability of
each Loan Party as a Guarantor under this Article X is in addition to and shall
be cumulative with all liabilities of each Loan Party to the Administrative
Agent, the Issuing Banks and the Secured Parties under this Agreement and the
other Loan Documents to which such Loan Party is a party or in respect of any
obligations or liabilities of the other Loan Parties, without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

 

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

 

 

 

BORROWER:

 

 

 

CLOPAY AMES TRUE TEMPER HOLDING CORP.

 

 

 

 

 

 

 

By:

/s/ Tom Gibbons

 

 

Name: Tom Gibbons

 

 

Title: Treasurer

 

 

 

 

 

 

 

HOLDINGS:

 

 

 

CLOPAY AMES TRUE TEMPER LLC

 

 

 

 

 

 

 

By:

/s/ Seth L. Kaplan

 

 

Name: Seth K. Kaplan

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

OTHER LOAN PARTIES:

 

 

 

CLOPAY PLASTIC PRODUCTS COMPANY, INC.

 

 

 

 

 

 

 

By:

/s/ Tom Gibbons

 

 

Name: Tom Gibbons

 

 

Title: Treasurer

 

 

 

 

 

 

 

CLOPAY BUILDING PRODUCTS COMPANY, INC.

 

 

 

 

 

 

 

By:

/s/ Tom Gibbons

 

 

Name: Tom Gibbons

 

 

Title: Treasurer

 

 

 

 

 

 

 

CLOPAY BUILDING PRODUCTS INTERNATIONAL SALES CORPORATION

 

 

 

 

 

 

 

By:

/s/ Tom Gibbons

 

 

Name: Tom Gibbons

 

 

Title: Vice President and Treasurer

 

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CLOPAY TRANSPORTATION COMPANY

 

 

 

 

 

 

 

By:

/s/ Tom Gibbons

 

 

Name: Tom Gibbons

 

 

Title: Treasurer

 

 

 

 

 

 

 

CLOPAY ACQUISITION CORP.

 

 

 

 

 

 

 

By:

/s/ Seth L. Kaplan

 

 

Name: Seth K. Kaplan

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

CHATT HOLDINGS INC.

 

 

 

 

 

 

 

By:

/s/ David Nuti

 

 

Name: David Nuti

 

 

Title: Vice President of Finance and CFO

 

 

 

 

 

 

 

ATT HOLDING CO.

 

 

 

 

 

 

 

By:

/s/ David Nuti

 

 

Name: David Nuti

 

 

Title: Vice President of Finance and CFO

 

 

 

 

 

 

 

AMES TRUE TEMPER, INC.

 

 

 

 

 

 

 

By:

/s/ David Nuti

 

 

Name: David Nuti

 

 

Title: Vice President of Finance and CFO

 

 

 

 

 

 

 

AMES U.S. HOLDING CORP.

 

 

 

 

 

 

 

By:

/s/ David Nuti

 

 

Name: David Nuti

 

 

Title: Vice President, Treasurer and Secretary

 

--------------------------------------------------------------------------------

 

 

AMES TRUE TEMPER PROPERTIES, INC.

 

 

 

 

 

By:

/s/ David Nuti

 

 

Name: David Nuti

 

 

Title: CFO and Assistant Secretary

 

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JPMORGAN CHASE BANK, N.A., individually, as Administrative Agent, an Issuing
Bank, Swingline Lender and as a Lender

 

 

 

 

 

 

 

By:

/s/ Kathleen C. Maggi

 

 

Name: Kathleen C. Maggi

 

 

Title: Senior Vice President

 

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BANK OF AMERICA, N.A., as an Issuing Bank and as a Lender

 

 

 

 

 

 

 

By

/s/ Nancy E. Donohue

 

 

Name: Nancy E. Donohue

 

 

Title: Vice President

 

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Manufacturers and Traders Trust Company, as Lender

 

 

 

 

 

 

 

By

/s/ William Terragho

 

 

Name: William Terragho

 

 

Title: Vice President

 

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U.S. Bank National Association, as Lender

 

 

 

 

 

 

 

By

/s/ Aaron Sceva

 

 

Name: Aaron Sceva

 

 

Title: Officer

 

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DEUTCHE BANK TRUST COMPANY AMERICAS, as Lender

 

 

 

 

 

 

 

By

/s/ Stephen R. Lapidus

 

 

Name: Stephen R. Lapidus

 

 

Title: Director

 

 

 

 

By

/s/ Phillip Salibe

 

 

Name: Phillip Salibe

 

 

Title: Director

 

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HSBC Business Credit (USA) Inc., as Lender

 

 

 

 

 

 

 

By

/s/ Kysha A. Pierre-Louis

 

 

Name: Kysha A. Pierre-Louis

 

 

Title: Vice President

 

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Wells Fargo Capital Finance, LLC, as Lender

 

 

 

 

 

 

 

By

/s/ Mark Bradford

 

 

Name: Mark Bradford

 

 

Title: SVP

 

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