Ex-10.1


 


EXECUTION VERSION


 


 


 


CREDIT
AND GUARANTEE AGREEMENT


 


dated
as of September 30, 2010


 


among


 


CLOPAY
AMES TRUE TEMPER HOLDING CORP.,


as Borrower,


 


CLOPAY
AMES TRUE TEMPER LLC


and


CERTAIN
SUBSIDIARIES OF CLOPAY AMES TRUE TEMPER HOLDING CORP.,


as Guarantors,


 


THE
LENDERS PARTY HERETO,


 


and


 


GOLDMAN
SACHS LENDING PARTNERS LLC,


as
Administrative Agent and Collateral Agent,


 






 


GOLDMAN
SACHS LENDING PARTNERS LLC


and


DEUTSCHE
BANK SECURITIES INC.,


as Lead
Arrangers, Lead Bookrunners and Syndication Agents,


 






 


$375,000,000
Senior Secured Term Loan Facility


 






 

















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  SECTION 1. DEFINITIONS AND INTERPRETATION

  	
  1

  
	
  1.1.

  	
  Definitions

  	
  1

  
	
  1.2.

  	
  Accounting
  Terms; GAAP

  	
  38

  
	
  1.3.

  	
  Interpretation,
  Etc.

  	
  38

  
	
  1.4.

  	
  Classification
  of Term Loans and Borrowings

  	
  39

  
	
   

  	
   

  
	
  SECTION 2. TERM LOANS

  	
  39

  
	
  2.1.

  	
  Term
  Loans

  	
  39

  
	
  2.2.

  	
  Pro Rata
  Shares; Availability of Funds

  	
  39

  
	
  2.3.

  	
  Use of
  Proceeds

  	
  40

  
	
  2.4.

  	
  Evidence
  of Debt; Register; Lenders’ Books and Records; Notes

  	
  40

  
	
  2.5.

  	
  Interest
  on Term Loans

  	
  41

  
	
  2.6.

  	
  Conversion/Continuation

  	
  42

  
	
  2.7.

  	
  Default
  Interest

  	
  43

  
	
  2.8.

  	
  Fees

  	
  43

  
	
  2.9.

  	
  Scheduled
  Payments

  	
  44

  
	
  2.10.

  	
  Voluntary
  Prepayments

  	
  44

  
	
  2.11.

  	
  Mandatory
  Prepayments

  	
  46

  
	
  2.12.

  	
  Application
  of Prepayments

  	
  49

  
	
  2.13.

  	
  General
  Provisions Regarding Payments

  	
  49

  
	
  2.14.

  	
  Ratable
  Sharing

  	
  50

  
	
  2.15.

  	
  Making or
  Maintaining Eurodollar Rate Term Loans

  	
  51

  
	
  2.16.

  	
  Increased
  Costs; Capital Adequacy

  	
  53

  
	
  2.17.

  	
  Taxes;
  Withholding, Etc.

  	
  54

  
	
  2.18.

  	
  Obligation
  to Mitigate

  	
  57

  
	
  2.19.

  	
  Removal
  or Replacement of a Lender

  	
  57

  
	
   

  	
   

  
	
  SECTION 3. CONDITIONS PRECEDENT

  	
  58

  
	
  3.1.

  	
  Closing
  Date

  	
  58

  
	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND WARRANTIES

  	
  63

  
	
  4.1.

  	
  Organization;
  Powers

  	
  63

  
	
  4.2.

  	
  Authorization;
  Enforceability

  	
  63

  
	
  4.3.

  	
  Governmental
  Approvals; No Conflicts

  	
  63

  
	
  4.4.

  	
  Historical
  Financial Statements; Pro Forma Financial Statements; No Material Adverse
  Effect

  	
  63

  
	
  4.5.

  	
  Projections

  	
  64

  
	
  4.6.

  	
  No
  Restricted Payments

  	
  64

  
	
  4.7.

  	
  Properties

  	
  64

  
	
  4.8.

  	
  Litigation
  and Environmental Matters

  	
  65

  
	
  4.9.

  	
  Compliance
  with Laws and Contractual Obligations

  	
  65

  
	
  4.10.

  	
  Investment
  Company Status

  	
  65

  
	
  4.11.

  	
  Taxes

  	
  65

  
	
  4.12.

  	
  ERISA;
  Employee Benefit Plans

  	
  66

  



 

















 


	
  4.13.

  	
  Disclosure

  	
  66

  
	
  4.14.

  	
  Use of
  Credit

  	
  66

  
	
  4.15.

  	
  Burdensome
  Agreements

  	
  66

  
	
  4.16.

  	
  Insurance

  	
  67

  
	
  4.17.

  	
  Capitalization
  and Subsidiaries

  	
  67

  
	
  4.18.

  	
  Labor
  Matters

  	
  67

  
	
  4.19.

  	
  Security
  Interest in Collateral

  	
  67

  
	
  4.20.

  	
  Holdings

  	
  68

  
	
  4.21.

  	
  Certain
  Fees

  	
  68

  
	
  4.22.

  	
  Solvency

  	
  68

  
	
  4.23.

  	
  Related
  Agreements

  	
  68

  
	
  4.24.

  	
  PATRIOT
  Act

  	
  68

  
	
   

  	
   

  
	
  SECTION 5. AFFIRMATIVE COVENANTS

  	
  69

  
	
  5.1.

  	
  Financial
  Statements and Other Information

  	
  69

  
	
  5.2.

  	
  Notices
  of Material Events

  	
  72

  
	
  5.3.

  	
  Existence;
  Conduct of Business

  	
  73

  
	
  5.4.

  	
  Payment
  of Obligations

  	
  73

  
	
  5.5.

  	
  Maintenance
  of Properties

  	
  74

  
	
  5.6.

  	
  Maintenance
  of Insurance

  	
  74

  
	
  5.7.

  	
  Books and
  Records; Inspection Rights

  	
  74

  
	
  5.8.

  	
  Lenders
  Meetings

  	
  74

  
	
  5.9.

  	
  Compliance
  with Laws and Contractual Obligations

  	
  74

  
	
  5.10.

  	
  Use of
  Proceeds

  	
  74

  
	
  5.11.

  	
  Casualty
  and Condemnation

  	
  75

  
	
  5.13.

  	
  Collateral;
  Further Assurances

  	
  75

  
	
   

  	
   

  
	
  SECTION 6. NEGATIVE COVENANTS

  	
  76

  
	
  6.1.

  	
  Indebtedness;
  Guarantees

  	
  76

  
	
  6.2.

  	
  Liens

  	
  79

  
	
  6.3.

  	
  Mergers, Consolidations, Etc.

  	
  81

  
	
  6.4.

  	
  Dispositions

  	
  81

  
	
  6.5.

  	
  Lines of
  Business

  	
  83

  
	
  6.6.

  	
  Investments
  and Acquisitions

  	
  83

  
	
  6.7.

  	
  Restricted
  Payments

  	
  85

  
	
  6.8.

  	
  Transactions
  with Affiliates

  	
  87

  
	
  6.9.

  	
  Restrictive
  Agreements

  	
  88

  
	
  6.10.

  	
  Hedge
  Agreements

  	
  89

  
	
  6.11.

  	
  Financial
  Covenants

  	
  89

  
	
  6.12.

  	
  Stock
  Issuance

  	
  90

  
	
  6.13.

  	
  Modifications
  of Certain Documents

  	
  91

  
	
  6.14.

  	
  Passive
  Holding Company Status

  	
  91

  
	
  6.15.

  	
  Sale and
  Leaseback Transactions

  	
  91

  
	
  6.16.

  	
  Capital
  Expenditures

  	
  91

  
	
  6.17.

  	
  Fiscal
  Year

  	
  92

  



 


ii

















 


	
  SECTION 7. GUARANTY

  	
  92

  
	
  7.1.

  	
  Guarantee
  of the Obligations

  	
  92

  
	
  7.2.

  	
  Contribution
  by Guarantors

  	
  92

  
	
  7.3.

  	
  Payment
  by Guarantors

  	
  93

  
	
  7.4.

  	
  Liability
  of Guarantors Absolute

  	
  93

  
	
  7.5.

  	
  Waivers
  by Guarantors

  	
  95

  
	
  7.6.

  	
  Guarantors’
  Rights of Subrogation, Contribution, Etc.

  	
  96

  
	
  7.7.

  	
  Subordination
  of Other Obligations

  	
  97

  
	
  7.8.

  	
  Continuing
  Obligations Guarantee

  	
  97

  
	
  7.9.

  	
  Authority
  of Guarantors or Borrower

  	
  97

  
	
  7.10.

  	
  Financial
  Condition of Borrower

  	
  97

  
	
  7.11.

  	
  Bankruptcy,
  Etc.

  	
  97

  
	
  7.12.

  	
  Discharge
  of Obligations Guarantee upon Sale of Guarantor

  	
  98

  
	
   

  	
   

  
	
  SECTION 8. EVENTS OF DEFAULT

  	
  98

  
	
   

  	
   

  
	
  SECTION 9. AGENTS

  	
  101

  
	
  9.1.

  	
  Appointment
  of Agents

  	
  101

  
	
  9.2.

  	
  Powers
  and Duties

  	
  101

  
	
  9.3.

  	
  General
  Immunity

  	
  102

  
	
  9.4.

  	
  Agents
  Entitled To Act as Lender

  	
  103

  
	
  9.5.

  	
  Lenders’
  Representations, Warranties and Acknowledgment

  	
  103

  
	
  9.6.

  	
  Right to
  Indemnity

  	
  104

  
	
  9.7.

  	
  Successor
  Administrative Agent and Collateral Agent

  	
  104

  
	
  9.8.

  	
  Collateral
  Documents and Obligations Guarantee

  	
  106

  
	
  9.9.

  	
  Withholding
  Taxes

  	
  107

  
	
   

  	
   

  
	
  SECTION 10. MISCELLANEOUS

  	
  108

  
	
  10.1.

  	
  Notices

  	
  108

  
	
  10.2.

  	
  Expenses

  	
  110

  
	
  10.3.

  	
  Indemnity

  	
  110

  
	
  10.4.

  	
  Set-Off

  	
  111

  
	
  10.5.

  	
  Amendments
  and Waivers

  	
  111

  
	
  10.6.

  	
  Successors
  and Assigns; Participations

  	
  113

  
	
  10.7.

  	
  Independence
  of Covenants

  	
  116

  
	
  10.8.

  	
  Survival
  of Representations, Warranties and Agreements

  	
  117

  
	
  10.9.

  	
  No
  Waiver; Remedies Cumulative

  	
  117

  
	
  10.10.

  	
  Marshalling;
  Payments Set Aside

  	
  117

  
	
  10.11.

  	
  Severability

  	
  117

  
	
  10.12.

  	
  Obligations
  Several; Independent Nature of Lenders’ Rights

  	
  117

  
	
  10.13.

  	
  Headings

  	
  118

  
	
  10.14.

  	
  APPLICABLE
  LAW

  	
  118

  
	
  10.15.

  	
  CONSENT
  TO JURISDICTION

  	
  118

  
	
  10.16.

  	
  WAIVER OF
  JURY TRIAL

  	
  118

  
	
  10.17.

  	
  Confidentiality

  	
  119

  
	
  10.18.

  	
  Usury
  Savings Clause

  	
  120

  
	
  10.19.

  	
  Counterparts

  	
  120

  



 


iii

















 


	
  10.20.

  	
  Effectiveness;
  Entire Agreement

  	
  120

  
	
  10.21.

  	
  PATRIOT
  Act

  	
  121

  
	
  10.22.

  	
  Electronic
  Execution of Assignments

  	
  121

  
	
  10.23.

  	
  No Fiduciary
  Duty

  	
  121

  



 


	
  SCHEDULES:

  	
  2.1

  	
  Term Loan Commitments

  
	
   

  	
  3.1(h)

  	
  Collateral and Guarantee Requirement

  
	
   

  	
  4.7(a)

  	
  Real Property

  
	
   

  	
  4.7(b)

  	
  Intellectual Property

  
	
   

  	
  4.8

  	
  Litigation and Environmental Matters

  
	
   

  	
  4.15

  	
  Burdensome Agreements

  
	
   

  	
  4.16

  	
  Insurance

  
	
   

  	
  4.17

  	
  Capitalization and Subsidiaries

  
	
   

  	
  4.18

  	
  Labor Matters

  
	
   

  	
  4.19

  	
  Security Interest in Collateral

  
	
   

  	
  5.2

  	
  Material Amendments

  
	
   

  	
  6.1

  	
  Certain Indebtedness and Guarantees

  
	
   

  	
  6.2

  	
  Certain Liens

  
	
   

  	
  6.6

  	
  Certain Investments

  
	
   

  	
  6.9

  	
  Restrictive Agreements

  
	
   

  	
  6.15

  	
  Sale and Leaseback Transactions

  
	
   

  	
  10.1

  	
  Notices

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
  A-1

  	
  Funding Notice

  
	
   

  	
  A-2

  	
  Conversion/Continuation Notice

  
	
   

  	
  B

  	
  Compliance Certificate

  
	
   

  	
  C

  	
  Opinions of Counsel

  
	
   

  	
  D

  	
  Assignment Agreement

  
	
   

  	
  E

  	
  Certificate re: Non-Bank Status

  
	
   

  	
  F-1

  	
  Closing Date Certificate

  
	
   

  	
  F-2

  	
  Solvency Certificate

  
	
   

  	
  G

  	
  Counterpart Agreement

  
	
   

  	
  H

  	
  Pledge and Security Agreement

  
	
   

  	
  I

  	
  Intercreditor Agreement

  
	
   

  	
  J

  	
  Mortgage

  
	
   

  	
  K

  	
  Intercompany Note

  
	
   

  	
  L

  	
  Auction Procedures

  



 


iv

















 


CREDIT
AND GUARANTEE AGREEMENT


 


This CREDIT AND
GUARANTEE AGREEMENT, dated as of September 30, 2010, is entered
into by and among CLOPAY AMES TRUE TEMPER
HOLDING CORP., a Delaware corporation (“Borrower”); CLOPAY AMES TRUE TEMPER
LLC, a Delaware limited liability company (“Holdings”), and CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors; the LENDERS party hereto from time to time; and GOLDMAN SACHS LENDING PARTNERS LLC (“GSLP”), as Administrative Agent and as
Collateral Agent.


 


RECITALS:


 


WHEREAS, capitalized terms used
in these recitals shall have the meanings set forth for such terms in
Section 1.1;


 


WHEREAS, Acquisition Sub entered into the Purchase Agreement, pursuant to which
Acquisition Sub has agreed to acquire the Acquired Business;


 


WHEREAS,
Lenders have agreed to extend Term Loans to Borrower, in an aggregate principal
amount of $375,000,000;


 


WHEREAS, Borrower has agreed to
secure the Obligations by granting to Collateral Agent, for the benefit of
Secured Parties, a First Priority Lien on all Term Collateral held by it and a
Second Priority Lien on all ABL Collateral held by it; and


 


WHEREAS, each Guarantor has
agreed to Guarantee the Obligations and to secure the Obligations by granting
to Collateral Agent, for the benefit of Secured Parties, a First Priority Lien
on all Term Collateral held by it and a Second Priority Lien on all ABL
Collateral held by it.


 


NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:


 


SECTION 1.  
DEFINITIONS AND INTERPRETATION


 


1.1.   Definitions.  The following terms used herein,
including in the preamble, recitals, exhibits and schedules hereto, shall have
the following meanings:


 


“ABL Collateral” as defined in the Intercreditor Agreement.


 


“Acquired Business” means CHATT Holdings Inc., a Delaware corporation, and its Subsidiaries
as of July 19, 2010, the date of the execution of the Purchase Agreement
(including the Acquired Company).


 


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


 

















 


“Acquisition” means the purchase by Acquisition Sub of all outstanding Equity Interests
of CHATT Holdings Inc., a Delaware corporation, in accordance with and pursuant
to the terms of the Purchase Agreement.


 


“Acquisition Sub” means Clopay Acquisition Corp., a Delaware corporation that is a
subsidiary of Borrower and is a Guarantor.


 


“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.


 


“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an
Interest Period for a Eurodollar Rate Term Loan, the rate per annum obtained by
dividing (and rounding upwards, if necessary, to the next 1/100 of 1%)
(i) (a) the rate per annum (rounded, if necessary, to the nearest 1/100
of 1%) equal to the rate determined by Administrative Agent to be the offered
rate that appears on the page of the Reuters Screen that displays an
average British Bankers Association Interest Settlement Rate (such
page currently being LIBOR01 page) for deposits (for delivery on the first
day of such Interest Period) with a term equivalent to such period in Dollars,
determined as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service
or if the Reuters Screen shall cease to be available, the rate per annum
(rounded, if necessary, to the nearest 1/100 of 1%) equal to the rate
determined by Administrative Agent to be the offered rate on such other
page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period in Dollars,
determined as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per
annum (rounded, if necessary, to the nearest 1/100 of 1%) equal to the offered
quotation rate to first class banks in the London interbank market by Goldman
Sachs Bank USA for deposits (for delivery on the first day of such Interest
Period) in Dollars of amounts in same day funds comparable to the principal
amount of the applicable Term Loan of Administrative Agent, in its capacity as
a Lender, for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such Interest Period as of approximately
11:00 a.m. (London, England time) on such Interest Rate Determination
Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement; provided, however, that
notwithstanding the foregoing, the Adjusted Eurodollar Rate shall at no time be
less than 1.75% per annum.


 


2

















 


“Administrative Agent” means GSLP, in its capacity as administrative agent for the Lenders
hereunder and under the other Credit Documents, and its successors in such
capacity as provided in Section 9.


 


“Adverse Proceeding” means any action, suit, proceeding, hearing or investigation, in each
case, whether administrative, judicial or otherwise, by or before any Governmental
Authority or arbitrator, that is pending or, to the knowledge of Holdings or
any of its Subsidiaries, threatened against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries.


 


“Affected Lender” as defined in Section 2.15(b).


 


“Affected Loans” as defined in Section 2.15(b).


 


“Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling”, “controlled by” and “under common control with”), as
applied to any Person, means the possession, directly or indirectly, of the
power (i) to vote 10% or more of the Securities having ordinary voting
power for the election of directors of such Person or (ii) to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.


 


“Agent” means each of (a) Administrative Agent, (b) Collateral Agent,
(c) each Syndication Agent and (d) any auction manager appointed in
connection with a repurchase by Borrower of Term Loans pursuant to
Section 2.10(c).


 


“Aggregate Amounts Due” as defined in Section 2.14.


 


“Aggregate Payments” as defined in Section 7.2.


 


“Agreement” means this Credit and Guarantee Agreement, dated as of
September 30, 2010, as it may be amended, restated, supplemented or
otherwise modified from time to time.


 


“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.


 


“Applicable Margin” means, for any day, (i) 5.00% per annum, in the case of a Base Rate
Term Loan and (ii) 6.00% per annum, in the case of a Eurodollar Rate Term
Loan.


 


“Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Term Loan, the maximum rate,
expressed as a decimal, at which reserves (including any basic marginal,
special, supplemental, emergency or other reserves) are required to be
maintained with respect thereto against “Eurocurrency liabilities” (as such
term is defined in Regulation D) under regulations issued from time to time by
the Board of Governors or other applicable banking regulator.  Without limiting the effect of the foregoing,
the Applicable Reserve Requirement


 


3

















 


shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the applicable
Adjusted Eurodollar Rate or any other interest rate of a Term Loan is to be
determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Term Loans. 
A Eurodollar Rate Term Loan shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefit of credit for proration, exceptions or offsets that may be available
from time to time to the applicable Lender. 
The rate of interest on Eurodollar Rate Term Loans shall be adjusted
automatically on and as of the Closing Date of any change in the Applicable
Reserve Requirement.


 


“Approved Electronic
Communications” means any notice, demand, communication,
information, document or other material that any Credit Party provides to
Administrative Agent pursuant to any Credit Document or the transactions
contemplated therein that is distributed to Agents or Lenders by means of
electronic communications pursuant to Section 10.1(b).


 


“Arrangers” means GSLP and DBSI, in their capacities as
joint lead arrangers for the term loan facility established hereunder.


 


“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 6.4(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.


 


“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form
of Exhibit D, with such amendments or modifications thereto as may be
approved by Administrative Agent.


 


“Assignment Effective Date” as defined in Section 10.6(b).


 


“Authorized Officer” means, with respect to any Person, any individual holding the position
of chairman of the board (if an officer), chief executive officer, president,
vice president (or the equivalent thereof), chief financial officer or
treasurer of such Person; provided that the secretary or assistant
secretary of such Person shall have delivered an incumbency certificate to the
Administrative Agent as to the authority of such Authorized Officer.


 


“Availability” has the meaning assigned to such term in the Revolving Credit Agreement.


 


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


 


“Base Rate” means, for any day, a rate per annum equal to the greatest of
(i) the Prime Rate in effect on such day, (ii) the Federal Funds
Effective Rate in effect on such day plus 1⁄2 of 1% and (iii) the sum of (a) the
Adjusted Eurodollar Rate that would be applicable to a Eurodollar Rate Term
Loan with an Interest Period of one month commencing on such day and 


 


4

















 


(b) the excess of the Applicable Margin with respect
to Eurodollar Rate Term Loans over the Applicable Margin with respect to Base
Rate Term Loans; provided that, notwithstanding the foregoing, the Base
Rate shall at no time be less than 2.75% per annum.  Any change in the Base Rate due to a change
in the Prime Rate, the Federal Funds Effective Rate or the Adjusted Eurodollar
Rate shall be effective on the effective day of such change in the Prime Rate,
the Federal Funds Effective Rate or the Adjusted Eurodollar Rate, as the case
may be.


 


“Base Rate Term Loan” means a Term Loan bearing interest at a rate determined by reference to
the Base Rate.


 


“Board of Governors” means the Board of Governors of the United States Federal Reserve
System, or any successor thereto.


 


“Borrower” as defined in the preamble hereto.


 


“Borrowing” means Term Loans of the same Type made, converted or continued on the
same date and, in the case of Eurodollar Rate Term Loans, as to which a single
Interest Period is in effect.


 


“Business Day” means any day other than a Saturday, Sunday or a day that is a legal
holiday under the laws of the State of New York or on which banking
institutions located in such State are authorized or required by law to remain
closed; provided that, with respect to all notices, determinations,
fundings and payments in connection with the Adjusted Eurodollar Rate or any
Eurodollar Rate Term Loan, such day is also a day for trading by and between
banks in Dollar deposits in the London interbank market.


 


“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 conformity with GAAP. For purposes
of Section 6.1, 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” means money, currency or a credit balance in any demand or Deposit
Account.


 


“Cash Equivalents” means, as at any date of determination, any of the following: (i) securities
(a) issued or directly and unconditionally guaranteed as to interest and
principal by the United States of America or (b) issued by any agency of
the United States of America the obligations of which are backed by the full
faith and credit of the United States of America, in each case maturing within
one year after such date; (ii) direct obligations issued by any state of
the United States of America or the District of Columbia or any political
subdivision of any such State or District or any public instrumentality
thereof, in each case maturing within one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-1 from S&P or
at least P-1 from Moody’s; (iii) commercial paper maturing no more than
270 days (or 90 days, in the case of any investment in commercial paper held
pursuant to Section 2.11(a), (b) or (c) in a Deposit Account
constituting Term Collateral) from the date of acquisition thereof and having,
at the time of the acquisition thereof, a rating of at least A-1 from S&P
or at least P-1 from Moody’s; (iv) certificates of deposit, bankers’
acceptances or time deposits maturing within 180 days (or 90 days, in the case
of any investments in certificates of deposit, bankers’ acceptances or time
deposits held pursuant to Section 2.11(a), (b) or (c) in a 


 


5

















 


Deposit Account constituting Term Collateral) from the
date of acquisition thereof and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America, or
any State thereof or the District of Columbia that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of
not less than $500,000,000; and (v) shares of any money market mutual fund
that (a) complies with the criteria set forth in SEC Rule 2a-7 under
the Investment Company Act of 1940, as amended, (b) has net assets of not
less than $5,000,000,000, and (c) has the highest rating obtainable from
either S&P or Moody’s.


 


“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit E.


 


“Change of Control” means (i) any Person or “group” (within the meaning of the Exchange
Act and the rules of the SEC thereunder) (a) shall have acquired
ownership or control, directly or indirectly, beneficially or of record, of 35%
or more on a fully diluted basis of the aggregate voting power and/or aggregate
economic interest represented by the issued and outstanding Equity Interests of
Control Person or (b) 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 Control Person; (ii) 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; (iii) 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; (iv) the majority of the seats (other than vacant seats) on
the board of directors (or similar governing body) of Control Person shall
cease to be occupied by Persons who either (a) were members of the board
of directors of Control Person on the Closing Date or (b) were nominated
for election by the board of directors of Control Person, a majority of whom
were directors on the Closing Date or whose election or nomination for election
was previously approved by a majority of such directors; or (v) any “change
of control” (as such term is defined in the Revolving Credit Agreement) under
the Revolving Credit Agreement shall occur.


 


“Closing Date” means the date on which the conditions specified in Section 3.1
have been satisfied (or waived in accordance with Section 10.5).


 


“Closing Date Certificate” means a Closing Date Certificate substantially in the form of
Exhibit F-1.


 


“Collateral” means, collectively, all of the property (including Equity Interests) in
which Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.


 


6
















 


“Collateral Access Agreement” as defined in the Pledge and Security
Agreement.


 


“Collateral Agent” means GSLP, in its capacity as collateral agent for the Secured Parties
under the Credit Documents, and its successors in such capacity as provided in
Section 9.


 


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


 


(a) 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 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 Closing Date, a
Counterpart Agreement duly executed and delivered on behalf of such Person;


 


(b) Collateral Agent shall have received
from Borrower, Holdings and each Domestic Subsidiary (other than any Immaterial
Subsidiary) either (i) a counterpart of the Pledge and 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 Closing Date, a supplement to the Pledge and
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
Closing Date, Administrative Agent shall have received documents and opinions
of the type referred to in Sections 3.1(b), 3.1(h) and
3.1(k) with respect to such Domestic Subsidiary;


 


(d) all Equity Interests owned by or on
behalf of any Credit Party shall have been pledged pursuant to the Pledge and
Security Agreement and, in the case of Equity Interests in any first-tier
Foreign Subsidiary (other than any Immaterial Subsidiary), where the Collateral
Agent so requests in connection with the pledge of such Equity Interests, a
Foreign Pledge Agreement (provided that the Credit Parties shall not be
required to pledge more than 65% of the outstanding voting Equity Interests in
any Foreign Subsidiary), and the Collateral Agent shall, to the extent required
by the Pledge and Security 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
Credit Party shall be evidenced by the Intercompany Note (and no other
instrument) and (ii) such Intercompany Note (along with any other 


 


7

















 


promissory notes evidencing Indebtedness of any other
Person in a principal amount of $250,000 or more that is owing to any Credit
Party, if any) shall have been pledged pursuant to the Pledge and Security
Agreement, and the Collateral Agent shall have received such Intercompany Notes
(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
Collateral 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
Collateral Agent for filing, registration or recording;


 


(g) Collateral Agent shall have received
(i) counterparts of a Mortgage with respect to each Material Real Estate
Asset duly executed and delivered by the record owner of such Material Real
Estate Asset, (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 First Priority Lien on the Material Real
Estate Asset described therein, free of any other Liens other than Permitted
Encumbrances, together with such endorsements, coinsurance and reinsurance as
the Collateral Agent may reasonably request, (iii) if any Material Real
Estate Asset is located in an area determined by the Federal Emergency
Management Agency to have special flood hazards, evidence of such flood
insurance as may be required under applicable law, including Regulation H of
the Board of Governors, and (iv) such surveys, abstracts, appraisals,
legal opinions and other documents (including an opinion of counsel (which
shall be reasonably satisfactory to the Collateral Agent) in each state in
which Material Real Estate Assets are located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state
and such other matters as the Collateral Agent may reasonably request, in each
case in form and substance reasonably satisfactory to the Collateral Agent) as
the Collateral Agent may reasonably request with respect to any such Mortgage
or Material Real Estate Asset; and


 


(h) 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 Credit Party with any depositary bank
or securities intermediary, the Collateral Agent shall have received a
counterpart, duly executed and delivered by the applicable Credit Party and
such depositary bank or securities intermediary, as the case may be, of a
Control Agreement.


 


Collateral 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 Closing Date or in connection with assets acquired, or
Subsidiaries formed or acquired, after the Closing Date) where it determines
that such action cannot be accomplished 


 


8

















 


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.


 


“Collateral Documents” means the Pledge and Security Agreement, the Mortgages, the Intellectual
Property Security Agreements, the Perfection Certificate, the Control
Agreements, the Collateral Access Agreements, if any, and all other
instruments, documents and agreements delivered by or on behalf of any Credit
Party pursuant to this Agreement or any of the other Credit Documents in order
to grant to, or perfect in favor of, Collateral Agent, for the benefit of
Secured Parties, a Lien on any property of such Credit Party as security for
the 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 Acquired Business 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 (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 Acquired Business
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 Purchase
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
Purchase Agreement (other than consummation of the closing of the transactions
contemplated by the Purchase 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 Letter” means the
second amended and restated commitment letter, dated September 8, 2010,
among GSLP, J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A., DBSI, DBTCA,
Acquisition Sub and Parent.


 


9

















 


“Company Intellectual Property” as defined in Section 4.7(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 Acquired Business and its subsidiaries taken as a whole, provided
that any material adverse change (including a prospective change) to the
Acquired Business’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 Acquired Business 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, 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 Purchase Agreement (other than with respect to
any of the Acquired Business’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 Acquired 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 Purchase Agreement (other than consummation of the closing of
the transactions contemplated by the Purchase 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 Acquired Business to timely
consummate the transactions contemplated by the Purchase Agreement.


 


“Compliance Certificate” means a Compliance Certificate substantially in the form of
Exhibit B.


 


“Consolidated Adjusted EBITDA” means, for any period, the sum of Consolidated Net Income, plus
to the extent reducing Consolidated Net Income, the sum, without duplication,
of amounts for (a) consolidated interest expense, (b) total
depreciation and amortization expense, (c) provisions for foreign, Federal,
state and local income taxes, (d) other non-Cash charges reducing
Consolidated Net Income (excluding any such non-Cash charge to the extent that
it represents an accrual or reserve for 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), (e) Transaction Costs (if incurred prior
to the date that is 90 days after the Closing Date), (f) management fees
paid to Castle Harlan, Inc. pursuant to the Acquired Business Management
Agreement (if paid prior to the Closing Date), (g) restructuring charges
incurred in connection with the closing and 


 


10

















 


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 Products Company; provided that
(x) the aggregate amount of such charges referred to in this clause
(g) that occurred during any portion of such period prior to the Closing
Date shall not exceed $9,000,000 and (y) the aggregate amount of such
charges referred to in clause (g) for all periods ending after the Closing
Date shall not exceed $7,000,000, and (h) expenses related to the
acquisition of West Barrows Mix Pty Ltd., in aggregate amount not to exceed $2,000,000,
(i) 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
Closing Date shall not exceed $10,000,000, (j) any losses that are both
infrequent and unusual, (k) fees, expenses and charges relating to any
offering of Equity Interests or Indebtedness of Holdings or its Subsidiaries or
any Permitted Acquisition, (l) stock options or other equity-based
compensation charges that are non-Cash, (m) any dividend on preferred
Equity Interests (other than Disqualified Interests) and (n) any after-tax
losses attributable to Asset Sales, Insurance/Condemnation Events,
returned surplus assets of any Pension Plan or repurchase by Borrower of Term
Loans pursuant to Section 2.10(c), minus (ii) the sum of
(a) other non-Cash gains increasing Consolidated 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 gains that are both infrequent and unusual, (c) any
after-tax gains attributable to Asset Sales, Insurance/Condemnation
Events, returned surplus assets of any Pension Plan or repurchase by Borrower
of Term Loans pursuant to Section 2.10(c), (d) payments received from
the distribution of tariffs collected under the U.S. Continued Dumping and
Subsidy Offset Act of 2000 and (e) any payments permitted by Section 6.7(a)(ii) made
by Borrower to Holdings that do not otherwise reduce Consolidated Adjusted
EBITDA.


 


“Consolidated Capital Expenditures” means, for any
period, expenditures during such period (including expenditures made by the
Acquired Business prior to the Closing Date) 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 the Group Members prepared in accordance
with GAAP.


 


“Consolidated Current Assets” means, as at any date of determination, the total assets of a Person and
its Subsidiaries on a consolidated basis that may properly be classified as
current assets in conformity with GAAP, excluding Cash and Cash Equivalents.


 


“Consolidated Current
Liabilities” means, as at any date of
determination, the total liabilities of a Person and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.


 


“Consolidated Excess Cash Flow” means, for any Fiscal Year, an amount equal to:


 


(i) the sum, without duplication, of
(a) Consolidated Net Income (after adjustments for any after-tax losses or
gains attributable to Asset Sales or 
Insurance/Condemnation Events) for such Fiscal Year, plus,
(b) to the extent deducted in 


 


11

















 


determining Consolidated Net Income for such Fiscal
Year, the sum, without duplication, of amounts for non-Cash charges and losses
deducted in determining Consolidated Net Income, including for depreciation
expense and amortization expense (excluding any such non-Cash charge to the
extent that it represents an accrual or reserve for a potential Cash item in
any future period or amortization of a prepaid Cash charge that was paid in a
prior period), plus (c) the Consolidated Working Capital
Adjustment, minus


 


(ii) the sum, without duplication, of
(a) the amounts for such Fiscal Year paid from Internally Generated Cash
(and, in the case of clause (2) below, from additional Cash equity
contributions to Holdings from Griffon and its Subsidiaries (other than Group
Members)) of (1) scheduled repayments of Indebtedness for borrowed money
(excluding scheduled repayments of the Term Loans and excluding repayments of
Revolving Loans or other revolving extensions of credit except to the extent
any such repayment is accompanied by a permanent reduction in related
commitments) and scheduled repayments of obligations under Capital Leases
(excluding any interest expense portion thereof), (2) (x) the
scheduled repayments of the Term Loans and (y) the aggregate principal
amount of Term Loans voluntarily prepaid by Borrower pursuant to
Section 2.10(a) and (b) during such Fiscal Year and (3) the
aggregate amount of Consolidated Capital Expenditures made by Holdings and its
Subsidiaries in cash during such Fiscal Year, plus (b) to the
extent recognized in determining Consolidated Net Income for such Fiscal Year,
other non-Cash gains for such Fiscal Year. 
As used in this clause (ii), “scheduled repayments of Indebtedness” do
not include mandatory prepayments or voluntary prepayments, and repurchases of
Term Loans pursuant to Section 2.10(c) shall not be taken into
account in the calculation of Consolidated Excess Cash Flow.


 


“Consolidated Interest Expense” means, for any period, total Cash interest expense (including that
portion attributable to Capital Lease Obligations in accordance with GAAP) of
Holdings and its Subsidiaries for such period with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries (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 Holdings and its
Subsidiaries for such period in accordance with GAAP).


 


“Consolidated Net Income” means, for any period, the consolidated net income (or loss) of
Holdings and its Subsidiaries on a consolidated basis determined 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 or acquired by 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 from such Person 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 or payment 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 


 


12

















 


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.


 


“Consolidated Total Debt” means, as at any date of determination, the sum of (a) the
aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries
outstanding as of such date, whether or not such Indebtedness would be
reflected on a balance sheet, determined on a consolidated basis in accordance
with GAAP (and without giving effect to any election to value any Indebtedness
at “fair value” or any other accounting principal that results in the amount of
any such Indebtedness (other than zero coupon Indebtedness) as reflected on
such balance sheet as being below the stated principal amount of such
Indebtedness) and (b) Indebtedness of Holdings and its Subsidiaries of the
type referred to in clause (vi) of the definition of “Indebtedness” (other
than any such Indebtedness consisting of letters of credit that do not support
Indebtedness).


 


“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated
Current Assets of Holdings and its Subsidiaries over Consolidated Current
Liabilities of Holdings and its Subsidiaries.


 


“Consolidated Working Capital
Adjustment” means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.  In calculating the Consolidated Working
Capital Adjustment for any period, there shall be excluded the effect of
reclassification during such period of current assets to long term assets and
current liabilities to long term liabilities and the effect of any Permitted
Acquisition made during such period; provided that there shall be
included with respect to any Permitted Acquisition made during such period an
amount (which may be a negative number) by which the Consolidated Working
Capital attributable to the Person or Persons acquired in such Permitted
Acquisition as of the time of such acquisition exceeds (or is less than)
Consolidated Working Capital attributable to such Person or Persons as of the
end of such period.


 


“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by
that Person or of any agreement, instrument or other undertaking to which that
Person is a party or by which it or any of its properties is bound.


 


“Contributing Guarantors” as defined in Section 7.2.


 


“Control Agreement” means, with respect to any Deposit Account or
securities account maintained by any Credit Party, a control agreement in form
and substance reasonably satisfactory to Collateral Agent, duly executed and
delivered by Collateral Agent, such Credit Party and the depositary bank or the
securities intermediary, as the case may be, with which such account is
maintained.


 


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


 


“Conversion/Continuation Date” means the effective date of a continuation or conversion, as the case
may be, as set forth in the applicable Conversion/Continuation Notice.


 


13

















 


“Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the form of
Exhibit A-2.


 


“Counterpart Agreement” means a Counterpart Agreement substantially in the form of
Exhibit G.


 


“Covenant Defeasance”, with respect to any Senior Notes, as defined
under the Senior Notes Indenture under which such Senior Notes were issued.


 


“Credit Document” means any of this Agreement, the Notes, if any, the Intercreditor
Agreement, the Collateral Documents and all other documents, certificates,
instruments, fee letters or agreements executed and delivered by or on behalf
of any Credit Party for the benefit of any Agent or any Lender in connection
herewith prior to, on or after the date hereof.


 


“Credit Parties” means Borrower and the Guarantors.


 


“DBSI” means
Deutsche Bank Securities Inc.


 


“DBTCA” means
Deutsche Bank Trust Company Americas.


 


“Default” means a condition or event that (a)  constitutes an Event of
Default or (b)  after notice or lapse of time or both (unless cured or
waived), would constitute an Event of Default.


 


“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.


 


“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 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.


 


“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” and the sign “$” mean the
lawful money of the United States of America.


 


14

















 


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


 


“Eligible Assignee” means any Person other than a natural Person that is (i) a Lender,
an Affiliate of any Lender or a Related Fund (any two or more Related Funds
being treated as a single Eligible Assignee for all purposes hereof), or
(ii) a commercial bank, insurance company, investment or mutual fund or
other entity that is an “accredited investor” (as defined in Regulation D
under the Securities Act) and which extends credit or buys loans in the
ordinary course of business; provided neither Griffon, Parent, any
Credit Party nor any Affiliate thereof (other than GSLP and any Affiliate
thereof, except Griffon, Parent, Holdings or any of their respective
Subsidiaries) shall be an Eligible Assignee.


 


“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA, which is or was sponsored, maintained or
contributed to by, or required to be contributed by, Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates.


 


“Environmental Claim” means any investigation, notice, notice of violation, claim, action,
suit, proceeding, demand, abatement order or other order or directive
(conditional or otherwise), by any Governmental Authority or any other Person,
arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or
harm to health, safety, natural resources or the environment.


 


“Environmental Laws” means any and all current or future foreign or domestic, federal or
state (or any subdivision of either of them), statutes, ordinances, orders,
rules, regulations, judgments, Governmental Authorizations, or any other
requirements of Governmental Authorities relating to (i) environmental
matters, including those relating to any Hazardous Materials Activity;
(ii) the generation, use, storage, transportation or disposal of Hazardous
Materials; or (iii) occupational safety and health, industrial hygiene,
land use or the protection of human, plant or animal health or welfare, in any
manner applicable to Holdings or any of its Subsidiaries or any Facility.


 


“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 Closing 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 any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation), including
partnership interests and membership interests, and any and all warrants,
rights or options to purchase or other arrangements or rights to acquire any of
the foregoing.


 


15

















 


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


 


“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a
member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is
a member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that
Person is a member; and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which that Person, any corporation described in clause
(i) above or any trade or business described in clause (ii) above is
a member.  Any former ERISA Affiliate of
Holdings or any of its Subsidiaries shall continue to be considered an ERISA
Affiliate of Holdings or any such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of
Holdings or such Subsidiary and with respect to liabilities arising after such
period for which Holdings or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.


 


“ERISA Event” means (i) a “reportable event” within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(c) of the Internal Revenue Code) or the failure to make
by its due date a required installment under Section 430(j) of the
Internal Revenue Code with respect to any Pension Plan or the failure to make
any required contribution to a Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the withdrawal by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability to
Holdings, any of its Subsidiaries or any of their respective Affiliates
pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which constitutes grounds under ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates in a complete
or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA)
from any Multiemployer Plan if there is any potential liability therefor, or
the receipt by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Section 4041A or 4042
of ERISA; (viii) the occurrence of an act or omission which could give
rise to the imposition on Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect
of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan
other than a 


 


16

















 


Multiemployer Plan or the assets thereof, or against
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition on Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates of a lien pursuant to Section 430(k) of the Internal
Revenue Code or ERISA or a violation of Section 436 of the Internal
Revenue Code.


 


“Eurodollar Rate Term Loan” means a Term Loan bearing interest at a rate determined by reference to
the Adjusted Eurodollar Rate.


 


“Event of Default” means each of the conditions or events set forth in Section 8.1.


 


“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and any successor statute.


 


“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
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.


 


“Existing Debt
Agreements” means all agreements, undertakings, instruments and
other documents in effect immediately prior to the Closing Date under which
Holdings or any of its Subsidiaries has any Indebtedness (other than Indebtedness
set forth on Schedule 6.1), including (i) the Amended and Restated Credit
Agreement, dated as of April 7, 2006, as amended, among Ames True
Temper, Inc., Acorn Products, Inc., UnionTools, Inc. and Ames
True Temper Properties, Inc., as Borrower, ATT Holding Co., as a parent
guarantor, Bank of America, N.A., as Administrative Agent, Swingline Lender and
L/C Issuer, and the other lender parties thereto, (ii) the Existing
Revolving Credit Agreement and (iii) the Senior Notes Indentures.


 


“Existing Revolving
Credit Agreement” means the Credit Agreement, dated as of
June 24, 2008, among Clopay Building Products Company, Inc., Clopay
Plastic Products Company, Inc., as borrowers, JPMorgan Chase Bank, N.A.,
as Administrative Agent and the other lender parties thereto.


 


“Facility” means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.


 


“Fair Share Contribution Amount” as defined in Section 7.2.


 


17
















 


“Fair Share” as defined in Section 7.2.


 


“Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal, rounded
upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided, (i) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent on such day on such transactions
as determined by Administrative Agent.


 


“Financial Officer Certification” means, with respect to any consolidated 
financial statements of any Person, the certification of the chief
financial officer of such Person that such financial statements fairly present,
in all material respects, the consolidated financial position of such Person
and its Subsidiaries as of the dates indicated and the consolidated results of
their operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements), subject to changes resulting from
audit and normal year-end adjustments and the absence of footnotes.


 


“Financial Plan” as defined in Section 5.1(g).


 


“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.


 


“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.


 


“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on (or, in
the case of certain Subsidiaries, about) September 30 of each calendar
year.


 


“Floating Rate
Notes” means the Senior Floating Rate Notes due 2012, issued by the
Acquired Company, 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 the Acquired Company, as Issuer, ATT Holding
Co., 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 the Acquired Company, Ames U.S. Holding Corp.,
Ames Holdings, Inc., Ames True Temper Properties, Inc., ATT Holding
Co. and The Bank of New York, as Trustee.


 


“Floating Rate Supplemental
Indenture” means a Supplemental Indenture to the Floating Rates
Indenture to be entered into on or prior to the Closing Date among the Acquired
Company, Ames U.S. Holding Corp., Ames Holdings, Inc., Ames True Temper
Properties, Inc., ATT Holding Co. 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 


 


18

















 


Indenture previously delivered to Administrative Agent
in connection with the tender offer for the purchase of the Floating Rate
Notes.


 


“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in favor of Collateral
Agent, for the benefit of Secured Parties, and located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.


 


“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 law of the
jurisdiction of organization of such Foreign Subsidiary and in form and
substance reasonably satisfactory to Collateral Agent.


 


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


 


“Funding Guarantors” as defined in Section 7.2.


 


“Funding Notice” means a notice substantially in the form of Exhibit A-1.


 


“GAAP” means, subject to the limitations on the application thereof set forth
in Section 1.2, United States generally accepted accounting principles in
effect as of the date of determination thereof.


 


“Governmental Acts” means any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or Governmental Authority.


 


“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.


 


“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order
or consent decree of or from any Governmental Authority.


 


“Grantor” as defined in the Pledge and Security Agreement.


 


“Griffon” means Griffon Corporation, a Delaware
corporation.


 


“Group Members” means, concurrently with or after the Transactions, the collective
reference to Holdings, the Borrower and their respective Subsidiaries.


 


“GSLP” as defined in the preamble hereto.


 


19

















 


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


 


“Guaranteed Obligations” as defined in Section 7.1.


 


“Guarantor” means each of Holdings and each Domestic Subsidiary of Holdings (other
than Borrower) that is a party hereto as a “Guarantor” and a party to the
Pledge and Security Agreement as a “Grantor” thereunder.


 


“Guarantor Subsidiary” means each Guarantor other than Holdings.


 


“Hazardous Materials” means any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Governmental Authority or which may or
could pose a hazard to the health and safety of the owners, occupants or any
Persons in the vicinity of any Facility or to the indoor or outdoor environment.


 


“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.


 


“Hedge 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 Interest Rate Agreements); provided
that no phantom stock or similar plan providing for payments only on 


 


20

















 


account of services provided by current or former
directors, officers, employees or consultants of Holdings or its Subsidiaries
shall be a Hedge Agreement.


 


“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from
time to time may be contracted for, charged, or received under the laws
applicable to any Lender which are presently in effect or, to the extent allowed
by law, under such applicable laws which may hereafter be in effect and which
allow a higher maximum nonusurious interest rate than applicable laws now
allow.


 


“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 Holding Co. and its Subsidiaries, for the immediately preceding three
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 Holding Co. and its Subsidiaries as of the end
of and for each subsequent Fiscal Quarter, 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 Holding Co. and its Subsidiaries as of the end of and
for each subsequent calendar month.


 


“Holdings” as defined in the preamble hereto.


 


“Increased-Cost Lenders” as defined in Section 2.19.


 


“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 Borrower will designate in writing to 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” means, as
applied to any Person, without duplication, (i) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind;
(ii) all Capital Lease Obligations of such Person which are required to be
classified as liabilities under GAAP; (iii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments; (iv) 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);
(v) 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, (vi) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty; (vii) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances;
(viii) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person;
(ix) all Guarantees by such Person of 


 


21

















 


Indebtedness of others; and (x) 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 Liabilities” means, collectively, any and all liabilities, obligations, losses,
damages (including natural resource damages), penalties, claims (including
Environmental Claims), actions, judgments, suits, costs (including the
reasonable and documented costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity),
reasonable and documented expenses and disbursements of any kind or nature
whatsoever (including the reasonable and documented fees and disbursements of
counsel for Indemnitees in connection with any investigative, administrative or
judicial proceeding or hearing commenced or threatened by any Person, whether
commenced or threatened by Holdings or any of its Affiliates or by any other
Person and whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any reasonable and documented fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect,
special or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including securities and commercial
laws, statutes, rules or regulations and Environmental Laws), on common
law or equitable cause or on contract or otherwise, that may be imposed on,
incurred by, or asserted against any such Indemnitee, in any manner relating to
or arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders’ agreement
to make Term Loans, the syndication of the credit facility provided for herein
or the use or intended use of the proceeds thereof, any amendments, waivers or
consents with respect to any provision of this Agreement or any of the other
Credit Documents, or any enforcement of any of the Credit Documents (including
any sale of, collection from, or other realization upon any of the Collateral
or the enforcement of the Obligations Guarantee)); (ii) the Commitment
Letter (and any related fee letter); or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or
practice of Holdings or any of its Subsidiaries.


 


“Indemnitee” as defined in Section 10.3.


 


“Installment” as defined in Section 2.9.


 


“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.


 


“Intellectual Property” as defined in the Pledge and Security Agreement.


 


22

















 


“Intellectual Property Asset” means, at the time of determination, any interest (fee, license or
otherwise) then owned by any Credit Party in any Intellectual Property.


 


“Intellectual Property Security
Agreements” has the meaning assigned to
that term in the Pledge and Security Agreement.


 


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


 


“Intercreditor Agreement” means an Intercreditor Agreement dated as of the date hereof, between
the Credit Parties, Collateral Agent and the Revolving Collateral Agent,
substantially in the form of Exhibit I.


 


“Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of
(i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then
ended to (ii) Consolidated Interest Expense for such four-Fiscal Quarter period.


 


“Interest Payment Date” means with respect to (i) any Term Loan that is a Base Rate Term
Loan, each March 31, June 30, September 30 and December 31
of each year, commencing on the first such date to occur after the Closing
Date, and the final maturity date of such Term Loan; and (ii) any Term
Loan that is a Eurodollar Rate Term Loan, the last day of each Interest Period
applicable to such Term Loan; provided, in the case of each Interest
Period of longer than three months “Interest Payment Date” shall also include
each date that is three months, or an integral multiple thereof, after the
commencement of such Interest Period.


 


“Interest Period” means, in connection with a Eurodollar Rate Term Loan, an interest
period of one, two, three or six months (or, if available to all Lenders, nine
or twelve months), as selected by Borrower in the applicable Funding Notice or
Conversion/Continuation Notice, (i) initially, commencing on the Closing
Date or Conversion/Continuation Date thereof, as the case may be; and
(ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided that (a) if an Interest Period
would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day unless in the case of
Eurodollar Rate Borrowings only, no further Business Day occurs in such month,
in which case such Interest Period shall expire on the immediately preceding
Business Day; (b) any Interest Period pertaining to Eurodollar Rate
Borrowings that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c), of this
definition, end on the last Business Day of a calendar month; and (c) no
Interest Period shall extend beyond the Maturity Date.


 


“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.


 


“Interest Rate Determination
Date” means, with respect to any Interest Period, the
date that is two Business Days prior to the first day of such Interest Period.


 


23

















 


“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof
and from time to time hereafter, and any successor statute.


 


“Internally Generated Cash” means, with respect to any period, any cash of Holdings or any
Subsidiary generated during such period, excluding Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds and any cash that is generated from an
incurrence of Indebtedness, an issuance of Equity Interests or a capital
contribution.


 


“Investment”
means by any Person, (i) 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, (ii) 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
(iii) all investments consisting of any exchange traded or over the
counter derivative transaction, including any Interest Rate Agreement and other
Hedge Agreement, whether entered into for hedging or speculative purposes or otherwise.  The amount of any Investment of the type
described in clauses (i), (ii) and (iii) shall be the original cost
of such 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 Investment, and any Investment in the form of a
Guarantee shall be determined in accordance with the definition of the term “Guarantee”.


 


“Joint Venture” means a joint venture, partnership or other similar arrangement, whether
in corporate, partnership or other legal form; provided that in no event
shall any corporate Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.


 


“Leasehold Property” means any leasehold interest of any Credit Party as lessee under any
lease of real property, other than any such leasehold interest designated from
time to time by Collateral Agent in its sole discretion as not being required
to be included in the Collateral.


 


“Lender” means each Person listed on the signature pages hereto as a Lender,
and any other Person that becomes a party hereto pursuant to an Assignment
Agreement, other than any such Person that shall have ceased to be a party
hereto pursuant to an Assignment Agreement.


 


“Leverage Ratio” means, on any date, the ratio of (i) Consolidated Total Debt as of
such date to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period ending on such date (or, if such date is not the last day of a Fiscal
Quarter, ended on the last day of the Fiscal Quarter most recently ended prior
to such date).


 


24

















 


“Licensed
Intellectual Property” means any interest of any Credit Party as
licensee or sublicensee under any license of Intellectual Property from any
other Person, other than any such interest that has been designated from time
to time by Collateral Agent as not being required to be included in the
Collateral.


 


“Licensor Consent and Estoppel” means, with
respect to any Licensed Intellectual Property, a letter, certificate or other
instrument in writing from the licensor under the related license, pursuant to
which, among other things, the licensor consents to the granting of a Lien on
such Licensed Property by the applicable Credit Party in favor of Collateral
Agent pursuant to the Collateral Documents, such Licensor Consent and Estoppel
to be in form and substance acceptable to Collateral Agent in its reasonable
discretion.


 


“Lien” means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease or license in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing
and (ii) in the case of Securities, any purchase option, call or similar
right of a third party with respect to such Securities.


 


“Management Agreement” means the management agreement dated July 8, 1986, between Griffon
and Parent.


 


“Margin Stock” as defined in Regulation U of the Board of Governors as in effect
from time to time.


 


“Material Adverse Effect” means a material adverse effect on and/or material adverse developments
with respect to (i) the business, operations, properties, assets,
condition (financial or otherwise) of Holdings and its Subsidiaries taken as a
whole; (ii) the validity or enforceability of any material provisions of
the Credit Document; or (iii) the Collateral, or Collateral Agent’s Liens
(on behalf of the Secured Parties) on the Collateral or the priority of such
Liens or the material rights, remedies and benefits available to, or conferred
upon, any Agent and any Lender or any Secured Party under the Credit Documents.


 


“Material Acquisition” means
any acquisition, or a series of related acquisitions, whether by purchase,
merger or otherwise, of Equity Interests in, or all or substantially all of the
assets of, or all or substantially all of the assets constituting a business
unit, division or line of business of, any Person, if the Acquisition
Consideration therefor exceeds $1,000,000 in the aggregate.  The Acquisition constitutes a Material
Acquisition.


 


“Material Contract” means any contract or other arrangement to which Holdings or any of its
Subsidiaries is a party (other than the Credit Documents) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected
to have a Material Adverse Effect.


 


“Material Disposition”
means any sale, transfer or other disposition, or a series of related sales,
transfers or other dispositions, of any assets, if the gross proceeds received
therefrom exceed $1,000,000 in the aggregate.


 


25

















 


“Material Indebtedness” means (a) Indebtedness under the Revolving Credit Agreement and
(b) any other Indebtedness (other than the Term Loans), or obligations in
respect of one or more Hedge Agreements, of one or more Group Members in an
aggregate principal amount exceeding $15,000,000. For purposes of determining
Material Indebtedness, the “principal amount” in respect of any Hedge 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 Hedge
Agreement were terminated at such time.


 


“Material Real Estate Asset’’ 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.


 


“Maturity Date” means September 30, 2016.


 


The “Minimum Availability
Condition” shall be satisfied if Administrative Agent receives a
Borrowing Base Certificate (as of a date, and in form and substance, reasonably
satisfactory to the administrative agent under the Revolving Credit Agreement)
demonstrating that, after giving effect to Transactions and all borrowings to
be made on the Closing Date and the issuance of any letters of credit on the
Closing Date under the Revolving Credit Agreement and payment of all
Transaction Expenses, the Availability plus, to the extent not already
included in the Borrowing Base, Cash of Borrower and Guarantor Subsidiaries,
which Cash is unrestricted and unencumbered (except for Liens granted under the
Revolving Credit Documents and the Credit Documents and non-consensual
Permitted Encumbrances imposed under applicable law) shall not be less than
$50,000,000. For the purposes of this definition, the terms “Borrowing Base
Certificate” and “Borrowing Base” shall have the meanings assigned to such
terms in the Revolving Credit Agreement.


 


“Moody’s” means Moody’s Investor Services, Inc.


 


“Mortgage” means a Mortgage substantially in the form of Exhibit J, as it may
be amended, restated, supplemented or otherwise modified from time to time.


 


“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as
defined in Section 3(37) of ERISA.


 


“NAIC” means The National Association of Insurance Commissioners, and any
successor thereto.


 


“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 Cash
Equivalents) 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 


 


26

















 


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 Term Loans and Indebtedness under
the Revolving Credit Documents) 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 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 Cash Equivalents)
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 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.


 


“Non-Public Information” means information which has not been disseminated in a manner making it
available to investors generally, within the meaning of Regulation FD.


 


“Non-US Lender” as defined in Section 2.17(c).


 


“Note” means a promissory note issued to any Lender pursuant to
Section 2.4.


 


“Notice” means a Funding Notice, an Issuance Notice, or a Conversion/
Continuation Notice.


 


“Obligations” means all obligations of every nature of each Credit Party, including
obligations from time to time owed to Agents (including former Agents),
Arrangers, Lenders or any of them and Secured Hedge Counterparties (other than
in each case any of the Revolving Secured Parties, in their capacities as
such), under any Credit Document or Secured Hedge Agreement, whether for principal,
interest (including interest which, but for the filing of a petition in
bankruptcy with respect to such Credit Party, would have accrued on any
Obligation, whether or not a claim is allowed against such Credit Party for
such interest in the related 


 


27

















 


bankruptcy proceeding), payments for early termination
of Secured Hedge Agreements, fees, expenses, indemnification or otherwise.


 


“Obligations Guarantee” means the guaranty of each Guarantor set forth in Section 7.


 


“Obligee Guarantor” as defined in Section 7.7.


 


“Organizational Documents” means (i) with respect to any corporation or company, its
certificate, memorandum or articles of incorporation, organization or
association, as amended, and its by-laws, as amended, (ii) with respect to
any limited partnership, its certificate or declaration of limited partnership,
as amended, and its partnership agreement, as amended, (iii) with respect
to any general partnership, its partnership agreement, as amended, and
(iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended.  In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such “Organizational Document” shall only be to a document of
a type customarily certified by such governmental official.


 


“Parent” means Clopay Corporation, a Delaware corporation.


 


“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)).


 


“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.


 


“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which
is subject to Section 412 of the Internal Revenue Code or Section 302
of ERISA.


 


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


 


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


 


(i) 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;


 


(ii) 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 Credit Party in connection with such acquisition shall be directly and
beneficially 


 


28

















 


owned by a Credit 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;


 


(iii) 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 6.6(d), 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; and


 


(iv) such acquisition shall be consensual.


 


“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 Sections 6.1 and 6.2, (ii) prior to and immediately after
giving effect to such transaction, (x) no Default shall have occurred and
be continuing and (y) the Credit Parties and their respective Subsidiaries
are in compliance with the covenants set forth in Section 6.11 on a Pro
Forma Basis, as of the last day of the most recently ended Fiscal Quarter for
which financial statements have been delivered pursuant to
Section 5.1(a) or (b) (or, prior to the delivery of any such
financial statements, the Fiscal Quarter ended June 30, 2010), and
Borrower shall have delivered to Administrative Agent a certificate of an
Authorized Officer to the effect set forth in clauses (x) and (y),
together with reasonably detailed calculations of the Interest Coverage Ratio
and the Leverage Ratio, (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 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 Encumbrances” means:


 


(i) 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 5.4;


 


(ii) 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 5.4;


 


29
















 


(iii) 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;


 


(iv) 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;


 


(v) judgment liens in
respect of judgments that do not constitute an Event of Default under clause
(k) of Section 8;


 


(vi) easements, zoning
restrictions, rights-of-way, licenses, covenants, 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;


 


(vii) with
respect to any Leasehold Property, Liens placed upon or suffered by the
landlord with respect to the underlying fee estate; and


 


(viii) other
Liens or matters approved by Collateral Agent in any policy of title insurance
issued in connection with any Mortgage for a Material Real Estate Asset;


 


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


 


“Permitted Subordinated Debt” means unsecured Indebtedness of Borrower for borrowed money which
(a) matures no earlier than, and does not require any scheduled principal
payments prior to, the date that is six months after the Maturity Date,
(b) is not subject to any mandatory prepayment, redemption, repurchase,
sinking fund or other similar obligation prior to the date that is six months
after the Maturity Date, in each case that could require any payment on account
of principal in respect thereof prior to the date that is 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 Administrative Agent, (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 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 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 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 and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, 


 


30

















 


business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.


 


“Platform” as defined in Section 5.1.


 


“Pledged Collateral” as defined in the Pledge and Security Agreement.


 


“Pledge and Security Agreement” means the Pledge and Security Agreement to be executed by Collateral
Agent, Borrower and each Guarantor substantially in the form of Exhibit H,
as it may be amended, restated, supplemented or otherwise modified from time to
time.


 


“Prime Rate” means the rate of interest quoted in the print edition of The Wall Street Journal, Money Rates
Section, as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least 75% of the nation’s thirty (30) largest banks), as in
effect from time to time.  The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  Any
Agent or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.


 


“Principal Office” means, for each of Administrative Agent and Collateral Agent, such
Person’s “Principal Office” as set forth on Schedule 10.1, or such other office
of a third party or sub-agent, as appropriate, as such Person may from time to
time designate in writing to Borrower, Administrative Agent and each  Lender.


 


“Projections” as defined in Section 4.5.


 


“Pro Forma Basis” means, for purposes of determining compliance with Section 6.11, as
of the last day of a Fiscal Quarter (the “Compliance Date”)
as a condition to any proposed action or event hereunder (the “Proposed Action”), the calculation of such compliance on
the following basis:


 


(i)            Consolidated Adjusted EBITDA for the
period of four consecutive Fiscal Quarters ended on the Compliance Date shall
be determined on a pro forma basis in accordance with
Section 6.11(c) to give effect to any Material Acquisition or
Material Disposition made subsequent to the Compliance Date (including any
Material Acquisition or Material Disposition being made in connection with the
Proposed Action) as though made on the first day of such period of four
consecutive Fiscal Quarters.


 


(ii)          The Leverage Ratio as of the Compliance
Date shall be determined as if Consolidated Total Debt as of the Compliance
Date were equal to Consolidated Total Debt as of the date of and after giving
effect to the Proposed Action (including any incurrence or payment of
Indebtedness in connection therewith).


 


(iii)         Consolidated Interest Expense for the
period of four consecutive Fiscal Quarters ended on the Compliance Date shall
be determined on a pro forma basis in accordance with
Section 6.11(c) to give effect to any Indebtedness as though
(i) any Indebtedness incurred pursuant to Section 6.1(a)(xii), or any
other Indebtedness incurred in connection with the Permitted Change of Control
Transaction, any Permitted Acquisition or 


 


31

















 


Restricted Payment, in each
case issued or incurred after the Compliance Date (including any such
Indebtedness being issued or incurred in connection with the Proposed Action),
had been issued or incurred on the first day of such period of four consecutive
Fiscal Quarters and (ii) any Indebtedness refinanced or repaid after the
Compliance Date (including any Indebtedness being refinanced or repaid in
connection with the Proposed Action), to the extent refinanced or repaid with
the proceeds of any Indebtedness included in the determination pursuant to
clause (i) above, had been refinanced or repaid on the first day of such
period of four consecutive Fiscal Quarters.


 


“Pro Forma Financial Statements”
means the pro forma
financial statements referred to in Section 3.1(i)(ii).


 


“Pro Rata Share” of any Lender means the percentage obtained by dividing (i) the
Term Loan Exposure of that Lender by (ii) the aggregate Term Loan Exposure
of all Lenders.


 


“Public Lenders” means Lenders that do not wish to receive material non-public information
with respect to Griffon, Holdings, their respective Subsidiaries or their
respective securities.


 


“Purchase Agreement” means the stock purchase agreement dated July 19, 2010, among CHATT
Holdings LLC, a Delaware limited liability company, CHATT Holdings Inc., a
Delaware corporation, Acquisition Sub and, solely for purposes of
Section 7.09 thereof, Griffon.


 


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


 


“Refinancing Indebtedness” means, in respect of any Indebtedness (the “Original
Indebtedness”), any Indebtedness that extends, amends, restates,
renews or refinances such Original Indebtedness (or any Refinancing
Indebtedness in respect thereof); provided that (a) the principal
amount of such Refinancing Indebtedness shall not exceed the principal amount
of such Original Indebtedness except by an amount no greater than accrued and
unpaid interest with respect to such Original Indebtedness and any premiums and
other reasonable amounts paid and fees and expenses incurred in connection
therewith; provided that clause (a) shall not apply to Refinancing
Indebtedness in respect of the Revolving Credit Documents; (b) the stated
final maturity of such Refinancing Indebtedness shall not be earlier, and the
weighted average life to maturity of such Refinancing Indebtedness shall not be
shorter, than that of such Original Indebtedness; (c) such Refinancing
Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased
or defeased, whether on one or more fixed dates, upon the occurrence of one or
more events or at the option of any holder thereof (except, in each case, upon
the occurrence of an event of default or a change in control or as and to the
extent such repayment, prepayment, redemption, repurchase or defeasance would
have been required pursuant to the terms of such Original Indebtedness) prior
to the earlier of (i) the maturity of such Original Indebtedness and
(ii) the date six months  after the
Maturity Date as of the time of such extension, renewal or refinancing;
(d) such Refinancing Indebtedness shall not constitute an obligation
(including pursuant to a Guarantee) of any Subsidiary that shall not have been
(or, in 


 


32

















 


the case of after-acquired Subsidiaries, shall not have
been required to become) an obligor in respect of such Original Indebtedness;
(e) if such Original Indebtedness shall have been subordinated to the
Obligations, such Refinancing Indebtedness shall also be subordinated to the
Obligations on terms not less favorable in any material respect to the Lenders;
(f) such Refinancing Indebtedness shall not be secured by any Lien on any
asset other than the assets that secured such Original Indebtedness (or would
have been required to secure such Original Indebtedness pursuant to the terms
thereof) or, in the event Liens securing such Original Indebtedness shall have
been contractually subordinated to any Lien securing the Obligations, by any
Lien that shall not have been contractually subordinated to at least the same
extent; and (g) in the case of Refinancing Indebtedness in respect of the
Revolving Credit Documents, (i) no Default shall have occurred and be
continuing, (ii) the borrower thereunder shall be Borrower,
(iii) such Refinancing Indebtedness and the Liens securing such
Refinancing Indebtedness are subject to the Intercreditor Agreement,
(iv) such Refinancing Indebtedness shall not have financial covenants that
are more restrictive than those under the Revolving Credit Agreement as of the
Closing Date, (v) such Refinancing Indebtedness 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,
(vi) such Refinancing Indebtedness is not Guaranteed by any Subsidiary
which is not a Guarantor, (vii) such Refinancing Indebtedness is an
asset-based revolving credit facility, (viii) such Refinancing Indebtedness
shall not include any restrictions or conditions on mandatory prepayments of
Term Loans other than any that were included in the Revolving Credit Agreement
on the Closing Date and (ix) the maximum commitments and principal amounts
of such Refinancing Indebtedness shall not exceed the amount permitted by
Section 6.1(a)(i).


 


“Register” as defined in Section 2.4(b).


 


“Regulation D” means Regulation D of the Board of Governors, as in effect from
time to time.


 


“Regulation FD” means Regulation FD as promulgated by the SEC under the Securities Act
and Exchange Act as in effect from time to time.


 


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


 


“Related Fund” means, with respect to any Lender that is an investment fund, any other
investment fund that invests in commercial loans and that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.


 


“Related Parties” means, with respect to any Person, such Person’s
Affiliates and the directors, officers, partners, members, trustees, employees,
controlling persons, agents and advisors of such Person and of 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 


 


33

















 


Material), including the movement of any Hazardous
Material through the air, soil, surface water or groundwater.


 


“Replacement Lender” as defined in Section 2.19.


 


“Requisite Lenders” means, at any time, Lenders having or holding Term Loan Exposure
representing more than 50% of the aggregate Term Loan Exposure of all
Lenders.


 


“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 the 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 the
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 Collateral Agent” means JPMorgan Chase Bank, N.A., in its capacity as collateral agent
under the Revolving Credit Documents and, after any Permitted Refinancing of
the Revolving Credit Agreement, the collateral agent or similar representative
with respect to such Permitted Refinancing.


 


“Revolving Credit Agreement” means (a) the Revolving Credit Agreement dated as of the date hereof
among Borrower, Holdings and certain Subsidiaries of Borrower party thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent and collateral agent or (b) the agreement governing the Refinancing
Indebtedness in respect thereof.


 


“Revolving Credit Documents” means the Revolving Credit Agreement and the other “Credit Documents” (as
defined therein).


 


“Revolving Loans” means the loans under the Revolving Credit Agreement.


 


“Revolving Secured Parties” has the meaning assigned to the term “Secured Parties” in the Revolving
Credit Agreement.


 


“S&P” means Standard & Poor’s Financial Services LLC, or any
successor to its rating agency business.


 


“SEC” means the United States Securities and
Exchange Commission, or any successor thereto.


 


“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 


 


34

















 


such Collateral is subject that are permitted hereby and
are subject to the Intercreditor Agreement and (b) any Permitted
Encumbrances.


 


“Secured Hedge Agreement” means any Interest Rate Agreement entered into by Borrower that
(a) is with a counterparty that is, or was on the Closing Date, an Agent,
an Arranger or any Affiliate of any of the foregoing, whether or not such
counterparty shall have been an Agent, an Arranger or any Affiliate of any of
the foregoing at the time such Hedge Agreement was entered into, (b) is in
effect on the Closing Date with a counterparty that is a Lender or an Affiliate
of a Lender as of the Closing Date or (c) is entered into after the
Closing Date with any counterparty that is a Lender or an Affiliate of a Lender
at the time such Hedge Agreement is entered into.


 


“Secured Hedge Counterparty” each Secured Party that is a party to a Secured Hedge Agreement.


 


“Secured Hedge Obligations” means all obligations of every nature of Borrower under each Secured
Hedge Agreement, whether for interest (including interest that, but for the
filing of a petition in bankruptcy with respect to Borrower, would have accrued
on any such obligation, whether or not a claim is allowed against Borrower for
such interest in the related bankruptcy proceeding), payments for early
termination of such Hedge Agreement, fees, expenses, indemnification or
otherwise; provided that the obligations under any Secured Hedge
Agreement shall not be included as a “Secured Hedge Obligation” unless and
until Borrower or the applicable Secured Hedge Counterparty has provided
written notice to Collateral Agent of the existence of such obligation.


 


“Secured Parties” has the meaning assigned to that term in the Pledge and Security
Agreement.


 


“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.


 


“Securities Act” means the Securities Act of 1933, as amended from time to time, and any
successor statute.


 


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


 


“Senior Notes Indentures” means (i) the Indenture for 10% Senior Subordinated Notes due 2012,
dated June 28, 2004, by and among the Acquired Company, as Issuer, ATT
Holding Co., 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 True 


 


35

















 


Temper, Inc., ATT Holding Co. and The Bank of New
York, as Trustee and (ii) the Floating Rate Notes Indenture.


 


“Senior Notes Redemption Date” as defined in Section 3.1(e).


 


“Solvency Certificate” means a Solvency Certificate of the chief financial officer of Holdings
substantially in the form of Exhibit F-2.


 


“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 Closing Date and
reflected in the Projections or with respect to any transaction contemplated to
be undertaken after the Closing 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 following: (a) the representations and warranties made by
or with respect to the Acquired Business in the Purchase 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 Purchase
Agreement as a result of a breach of such representations in the Purchase
Agreement, (b) the representations and warranties set forth in Sections
4.1, 4.2, 4.3, 4.10, 4.14, 4.19, 4.22 and 4.24 made by or with respect to the
Acquired Business and its Subsidiaries and (c) the representations and
warranties set forth in Article III of the Pledge and Security Agreement
made by or with respect to the Acquired Business.


 


“Subsidiary” means, with
respect to any Person, any corporation, partnership, limited liability company,
association, joint venture or other business entity of which more than 50% of
the total voting power of the Equity Interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or
indirectly, by such Person, one or more of the other Subsidiaries of such
Person or a combination thereof; provided that in determining the
percentage of ownership interests of any Person controlled by another Person,
no ownership interest in the nature of a “qualifying share” of the former
Person shall be deemed to be outstanding.


 


“Swingline Loans” means the swingline loans made under the Revolving Credit Agreement.


 


36

















 


“Syndication Agents” means
GSLP and DBSI, in their capacities as co-syndication agents for the term loan
facility established hereunder.


 


“Tax” means any present or future tax, levy, impost, duty, assessment, charge,
fee, deduction or withholding of any nature and whatever called, by whomsoever,
on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided
that “Tax on the overall net income” of a Person shall be construed as a
reference to a tax imposed by the jurisdiction in which that Person is
organized or in which that Person’s applicable principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or,
in the case of a Lender, its applicable lending office) or any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction described above on or measured by the net income, profits or gains
of such Person.


 


“Term Collateral” as defined in the
Intercreditor Agreement.


 


“Term Loan” means a loan made by a Lender to Borrower pursuant to
Section 2.1(a).


 


“Term Loan Commitment” means, with respect to any Lender, the commitment, if any, of such Lender
to make a Term Loan hereunder in a principal amount not to exceed the amount
set forth under the heading “Term Loan Commitment” opposite such Lender’s name
set forth on Schedule 2.1 or in the applicable Assignment Agreement, subject to
any adjustment or reduction pursuant to the terms and conditions hereof.  The aggregate amount of the Term Loan
Commitments as of the Closing Date is $375,000,000.


 


“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the
outstanding principal amount of the Term Loans of such Lender; provided,
at any time prior to the making of the Term Loans, the Term Loan Exposure of
any Lender shall be equal to such Lender’s Term Loan Commitment.


 


“Terminated Lender” as defined in Section 2.19.


 


“Transaction Costs” means the fees, costs and expenses payable by Holdings, Borrower or any
of Borrower’s Subsidiaries in connection with the Transactions.


 


“Transactions” means (a) the execution, delivery and
performance by each Credit Party of the Credit 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 Borrower, the borrowing of Term Loans and the use of the
proceeds thereof in accordance with the terms hereof, (b) the Acquisition
and the other transactions contemplated by the Purchase Agreement, (c) the
execution, delivery and performance by each Credit Party of the Revolving
Credit Documents, (d) 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 and (e) the
payment of the Transaction Costs.


 


37

















 


“Type of Term Loan” means, with respect to a Term Loan, its character as a Base Rate Term
Loan or a Eurodollar Rate Term Loan.


 


“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect from time to time in any applicable jurisdiction.


 


“U.S. Lender” as
defined in Section 2.17(c).


 


“Wholly-Owned”,
when used in reference to a Subsidiary of any Person, means that all the Equity
Interests in such Subsidiary (other than directors’ qualifying shares and other
nominal amounts of Equity Interests that are required to be held by other
Persons under applicable law) are owned, beneficially and of record, by such
Person, another Wholly-Owned Subsidiary of such Person or any combination
thereof.


 


1.2.   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
Borrower notifies Administrative Agent that 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
Requisite 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, Borrower or any Subsidiary at “fair value”, as defined
therein.


 


1.3.  
Interpretation, Etc.  Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference.  References
herein to any Article, Section, Schedule or Exhibit shall be to an
Article or a Section of, or a Schedule or an Exhibit to, this
Agreement, unless otherwise specifically provided.  The use herein of the words “include” 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”. The words “lease” and “license”
shall be construed to include sub-lease and sub-license, as applicable. The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all real and personal, tangible and intangible
assets and properties, including cash, securities, accounts and contract
rights. The word “law” shall be construed as referring to all statutes, rules,
regulations, codes and other laws (including official rulings and
interpretations thereunder having the force of law or with which affected
Persons customarily comply), and all judgments, orders, writs and decrees, of
all Governmental Authorities. Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other
document (including this Agreement) shall be construed as referring to such
agreement, instrument or other document as from time to time amended, 


 


38

















 


supplemented
or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any definition of or
reference to any statute, rule or regulation shall be construed as
referring thereto as from time to time amended, supplemented or otherwise
modified (including by succession of comparable successor laws), (c) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to any restrictions on assignment set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all functions thereof, and
(d) 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.


 


1.4.   Classification
of Term Loans and Borrowings.  For purposes of this Agreement, Term Loans
and Borrowings may be classified and referred to by Type (e.g., a “Eurodollar
Rate Term Loan” or “Eurodollar Rate Borrowing”).


 


SECTION 2.  
TERM LOANS


 


2.1.   Term Loans.  (a)  Term Loan
Commitments.  Subject to the terms
and conditions hereof, each Lender severally agrees to make, on the Closing
Date,  a Term Loan to Borrower in an
amount equal to such Lender’s Term Loan Commitment. Amounts borrowed pursuant
to this Section 2.1(a) that are subsequently repaid or prepaid may
not be reborrowed.  Subject to Sections
2.10(a) and 2.11, all amounts owed hereunder shall be paid in full no
later than the Maturity Date.  Each
Lender’s Term Loan Commitment shall terminate immediately and without any
further action on the Closing Date upon the making of a  Term Loan by such Lender.


 


(b)  
Borrowing Mechanics for Term Loans.


 


(i)  
Borrower shall deliver to Administrative Agent a fully completed and
executed Funding Notice no later than three days prior to the Closing Date, in
the case of a funding request that includes any Eurodollar Rate Borrowings, or
one Business Day prior to the Closing Date, otherwise.  Promptly upon receipt by Administrative Agent
of such Funding Notice, Administrative Agent shall notify each Lender of the
proposed borrowing.


 


(ii)  
Each Lender shall make the principal amount of the Term Loan required to
be made by it hereunder available to Administrative Agent not later than
12:00 p.m. (New York City time) on the Closing Date, by wire transfer of
same day funds in Dollars, to the account of Administrative Agent most recently
designated by Administrative Agent for such purpose by notice to the
Lenders.  Upon satisfaction or waiver of
the conditions precedent specified herein, Administrative Agent shall thereupon
make the proceeds of the Term Loans available to Borrower on the Closing Date
by causing an amount of same day funds in Dollars equal to the proceeds of all
such Loans received by Administrative Agent from Lenders to be credited to the
account of Borrower designated in writing by Borrower in the Funding Notice.


 


2.2.   Pro Rata Shares;
Availability of Funds.  (a)  Pro Rata Shares.  All Term Loans shall be made by Lenders
proportionately to their respective Pro Rata Shares, it being understood 


 


39

















 


that
(i) no Lender shall be responsible for any default by any other Lender in
such other Lender’s obligation to make a Term Loan requested hereunder and
(ii) no Term Loan Commitment of any Lender shall be increased or decreased
as a result of a default by any other Lender in such other Lender’s obligation
to make a Term Loan requested hereunder.


 


(b)  
Availability of Funds. 
Unless Administrative Agent shall have been notified by any Lender prior
to the Closing Date that such Lender does not intend to make available to
Administrative Agent the amount of such Lender’s Term Loan requested to be made
on the Closing Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on the Closing Date and
Administrative Agent may, in its sole discretion, but shall not be obligated
to, make available to Borrower a corresponding amount on the Closing Date.  If such corresponding amount is not in fact
made available to Administrative Agent by such Lender, then such Lender and the
Borrower severally agree to pay to Administrative Agent such corresponding
amount forthwith on demand 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 such payment to Administrative Agent, at (i) in the
case of a payment to be made by such Lender, (A) at any time prior to the
third Business Day following the date such amount is made available to the Borrower,
the customary rate set by Administrative Agent for the correction of errors
among banks and (B) thereafter, the Base Rate or (ii) in the case of
a payment to be made by the Borrower, the interest rate applicable hereunder to
Base Rate Term Loans.  If such Lender
pays such amount to Administrative Agent, then such amount shall constitute
such Lender’s Term Loan included in the applicable Borrowing.  Nothing in this
Section 2.2(b) shall be deemed to relieve any Lender from its
obligation to fulfill its Term Loan Commitment or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.


 


2.3.   Use of Proceeds.  The Borrower shall use the
proceeds of the Term Loans to (i) fund 
the Acquisition, (ii) pay Transaction Costs and (iii) pay all
principal, premium, if any, interest, fees and other amounts due or outstanding
under the Existing Debt Agreements. 
Borrower agrees that no portion of the proceeds of any Term Loan shall
be used in any manner that causes such Term Loan or the application of such
proceeds to violate Regulation T, Regulation U or Regulation X
of the Board of Governors or any other regulation thereof or to violate the
Exchange Act.


 


2.4.   Evidence of
Debt; Register; Lenders’ Books and Records; Notes.  (a)  Lenders’ Evidence
of Debt.  Each Lender shall maintain
records evidencing the Obligations of Borrower owing to such Lender, including
the principal amounts of the Term Loans made by such Lender and each repayment
and prepayment in respect thereof.  Such
records maintained by any Lender shall be conclusive and binding on Borrower,
absent manifest error; provided that the failure to maintain any such
records, or any error therein, shall not in any manner affect any Lender’s Term
Loan Commitments or Borrower’s Obligations in respect of any applicable Term
Loans; and provided further in the event of any inconsistency between
the Register and any Lender’s records, the recordations in the Register shall
govern.


 


40
















 


(b)   Register.  Administrative Agent (or its agent or
sub-agent appointed by it) shall maintain at one of its offices a register for
the recordation of the names and addresses of Lenders and the principal amount
of the Term Loans owing to each Lender from time to time (the “Register”).  The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice. 
Administrative Agent shall record, or shall cause to be recorded, in the
Register the Term Loans in accordance with the provisions of Section 10.6, and
each repayment or prepayment in respect of the principal amount of the Term
Loans, and any such recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided that failure to make any
such recordation, or any error in such recordation, shall not affect the obligation of Borrower to pay any
amounts due hereunder.  Borrower hereby
designates the Person serving as Administrative Agent to serve as Borrower’s
agent solely for purposes of maintaining the Register as provided in this
Section 2.4, and Borrower hereby agrees that, to the extent such Person serves
in such capacity, such Person and its Related Parties shall constitute “Indemnitees.”


 


(c)   Notes.  If so requested by any Lender by written
notice to Borrower (with a copy to Administrative Agent) at least two Business
Days prior to the Closing Date, or promptly following the request of any Lender
at any time after the Closing Date, Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender (or, if requested by
such Lender, such Lender and its registered assigns) to evidence such Lender’s
Term Loans, which promissory note shall be in a form approved by the
Administrative Agent and the Borrower.


 


2.5.   Interest on Term
Loans.  (a)  Subject to Section 2.7, each Term Loan shall
bear interest on the outstanding principal amount thereof from the date made
through repayment (whether by acceleration or otherwise) thereof as follows:


 


(i)   if a Base Rate Term Loan, at the Base Rate
plus the Applicable Margin; or


 


(ii)   if a Eurodollar Rate Term Loan, at the
Adjusted Eurodollar Rate plus the Applicable Margin.


 


(b)   The basis for determining the rate of interest
with respect to any Term Loan and the Interest Period with respect to any
Eurodollar Rate Term Loan, shall be selected by Borrower and notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice.


 


(c)   In connection with Eurodollar Rate Term Loans
there shall be no more than five (5) Interest Periods outstanding at any
time.  In the event Borrower fails to
specify between a Base Rate Term Loan or a Eurodollar Rate Term Loan in the
applicable Funding Notice or Conversion/Continuation Notice, or in the event
Borrower fails to deliver a Conversion/Continuation Notice with respect to any
Eurodollar Rate Borrowing prior to the end of the Interest Period applicable
thereto in accordance with Section 2.6, such Term Loan (if outstanding as a
Eurodollar Rate Term Loan) will be automatically converted into a Base Rate
Term Loan on the last day of the then-current Interest Period


 


41

















 


for such Term Loan (or if outstanding as a Base Rate
Term Loan will remain as, or (if not then outstanding) will be made as, a Base
Rate Term Loan).  In the event Borrower
fails to specify an Interest Period for any Eurodollar Rate Term Loan in the
applicable Funding Notice or Conversion/Continuation Notice, Borrower shall be
deemed to have selected an Interest Period of one month. The applicable Base
Rate or Adjusted Eurodollar Rate shall be determined by Administrative Agent,
and such determination shall be conclusive and binding on the parties hereto,
absent manifest error.


 


(d)   Interest payable pursuant to Section 2.5(a) or
2.7 shall be computed (i) in the case of Base Rate Term Loans on the basis of a
365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate Term Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues.  In computing
interest on any Term Loan, the date of the making of such Term Loan or the
first day of an Interest Period applicable to such Term Loan or, with respect
to a Base Rate Term Loan being converted from a Eurodollar Rate Term Loan, the
date of conversion of such Eurodollar Rate Term Loan to such Base Rate Term
Loan, as the case may be, shall be included, and the date of payment of such
Term Loan or the expiration date of an Interest Period applicable to such Term
Loan or, with respect to a Base Rate Term Loan being converted to a Eurodollar
Rate Term Loan, the date of conversion of such Base Rate Term Loan to such
Eurodollar Rate Term Loan, as the case may be, shall be excluded; provided
that if a Term Loan is repaid on the same day on which it is made, one day’s
interest shall accrue on such Term Loan.


 


Except
as otherwise set forth herein, accrued interest on the Term Loans shall be
payable in arrears (i) on each Interest Payment Date applicable to such Term
Loan; (ii) upon any repayment or prepayment of the Term Loans, whether
voluntary or mandatory, to the extent accrued on the amount being repaid or
prepaid; and (iii) on the Maturity Date.


 


2.6.  
Conversion/Continuation.  (a)  Subject to Section 2.15 and so long as no
Default shall have occurred and then be continuing, Borrower shall have the
option:


 


(i)   to convert at any time all or any part of any
Borrowing equal to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount from one Type of Term Loan to another Type of Term Loan; provided,
a Eurodollar Rate Term Loan may only be converted on the expiration of the
Interest Period applicable to such Eurodollar Rate Term Loan unless Borrower
shall pay all amounts due under Section 2.15 in connection with any such
conversion; or


 


(ii)   upon the expiration of any Interest Period
applicable to any Eurodollar Rate Borrowing, to continue all or any portion of
such Borrowing equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a Eurodollar Rate Borrowing.


 


In
the event any Borrowing shall have been converted or continued in accordance
with this Section 2.6 in part, such conversion or continuation shall be
allocated ratably, in accordance with the Pro Rata Shares, among the Lenders
holding the Term Loans comprising such Borrowing, 


 


42

















 


and
the Term Loans comprising each part of such Borrowing resulting from such
conversion or continuation shall be considered a separate Borrowing.


 


(b)   Borrower shall deliver a
Conversion/Continuation Notice to Administrative Agent no later than 11:00 a.m.
(New York City time) (i) at least one Business Day in advance of the proposed
Conversion/Continuation Date, in the case of a conversion to a Base Rate
Borrowing and (ii) at least three Business Days in advance of the proposed
Conversion/Continuation Date, in the case of a conversion to, or a continuation
of, a Eurodollar Rate Borrowing.  Except
as otherwise provided herein, a Conversion/Continuation Notice for conversion
to, or continuation of, any Eurodollar Rate Borrowing shall be irrevocable on
and after the Interest Rate Determination Date with respect to the Interest
Period requested, or deemed requested, for such Borrowing, and Borrower shall
be bound to effect a conversion or continuation in accordance therewith.  If on any day a Term Loan is outstanding with
respect to which a Funding Notice or Conversion/Continuation Notice has not
been delivered to Administrative Agent in accordance with the terms hereof
specifying the applicable basis for determining the rate of interest, then for
that day such Term Loan shall be a Base Rate Term Loan.


 


2.7.   Default
Interest.  (a)  Upon the occurrence and during the continuance
of an Event of Default, the principal amount of all Term Loans outstanding and,
to the extent permitted by applicable law, any interest payments on the Term Loans
or any fees or other amounts owed hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect
to the applicable Term Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Term Loans); provided, in the
case of Eurodollar Rate Term Loans, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective, such
Eurodollar Rate Term Loans shall thereupon become Base Rate Term Loans and
shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable hereunder for Base Rate
Term Loans.  Payment or acceptance of the
increased rates of interest provided for in this Section 2.7 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.


 


2.8.   Fees.  (a)  Borrower agrees to pay on the Closing Date to
each Lender party hereto as a Lender on the Closing Date, as fee compensation
for the funding of such Lender’s Term Loan, a closing fee in an amount equal to
2.00% of such Lender’s Term Loan Commitment as of the Closing Date, payable to
such Lender from the proceeds of its Term Loan as and when funded on the
Closing Date.  Such closing fee will be
in all respects fully earned, due and payable on the Closing Date and
non-refundable and non-creditable thereafter.


 


(b)   In addition to any of the foregoing fees,
Borrower agrees to pay to Agents such other fees in the amounts and at the
times separately agreed upon by Borrower (or Parent or Acquisition Sub) and the
applicable Agent in writing.


 


43

















 


(c)   Notwithstanding
anything to the contrary contained herein, (i) all prepayments of Term Loans
effected with the proceeds of a substantially concurrent issuance or incurrence
of Indebtedness (including any replacement or incremental term loan facility
effected pursuant to an amendment of this Agreement) or repriced (or
effectively refinanced) through any amendment to the Term Facility, in each
case having an interest rate spread (whether designated as “applicable rate” or
otherwise, and including in such interest rate spread any original issue
discount for, and any upfront fees payable in connection with, such
Indebtedness based on an assumed four-year average life of such Indebtedness)
that is, or upon satisfaction of the specified conditions could be, less than
the Applicable Margin in respect of such Term Loans (based on the definition of
the term Applicable Margin as in effect on the Closing Date) and (ii) all
voluntary prepayments of Term Loans, in each case effected on or prior to the
first anniversary of the Closing Date, shall be accompanied by a prepayment fee
equal to 1.00% of the aggregate principal amount of such prepayment.  Such fee shall be paid by the Borrower to the
Administrative Agent, for the account of the Lenders, on the date of such
prepayment.


 


2.9.   Scheduled
Payments.  The principal amounts of the Term Loans shall
be repaid in consecutive quarterly installments and at final maturity (each
such payment, including the payment due on the Maturity Date, an “Installment”) on the four quarterly
scheduled Interest Payment Dates applicable to Base Rate Term Loans, commencing
on December 31, 2010, with each such Installment (other than the Installment
due on the Maturity Date) to be in an amount equal to 1.25% of the aggregate
principal amount of the Term Loans made on the Closing Date, and the amount of
the Installment due on the Maturity Date to be in an amount equal to the
aggregate principal amount of the Term Loans outstanding on the Maturity Date.


 


The Installments shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
Sections 2.10, 2.11 and 2.12, as applicable.


 


2.10.   Voluntary
Prepayments.  (a)  Subject to the conditions set forth in this
Section 2.10 and Section 2.15, at any time and from time to time, Borrower may
prepay any Borrowing on any Business Day in whole or in part; provided
that each such partial voluntary prepayment of any Borrowing shall be in an
aggregate minimum principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount.


 


(b)   All such prepayments shall be made:


 


(i)   upon not less than one Business Day’s prior
written or telephonic notice in the case of a Base Rate Borrowing; and


 


(ii)   upon not less than three Business Days’ prior
written or telephonic notice in the case of a Eurodollar Rate Borrowing,


 


in each case given to Administrative Agent by 12:00 p.m.
(New York City time) on the date required and, if given by telephone, promptly
confirmed by delivery of written notice thereof to Administrative Agent (and
Administrative Agent will promptly transmit such original notice by
telefacsimile or telephone to each Lender). 
Each such notice shall be irrevocable, and the 


 


44

















 


principal amount of each Borrowing specified in such
notice shall become due and payable on the prepayment date specified therein; provided
that a notice of prepayment of Borrowings pursuant to Section 2.10(b) may state
that such notice is conditioned upon the occurrence (or non-occurrence) of one
or more events specified therein, in which case such notice may be revoked by
Borrower (by notice to the Administrative Agent on or prior to the specified
date of prepayment) if such condition is not satisfied. Any such voluntary
prepayment shall be applied as specified in Section 2.12(a).


 


(c)   Certain
Permitted Term Loan Repurchases. Notwithstanding anything to the contrary
contained in this Section 2.10 or any other provision of this Agreement, so
long as no Default has occurred and is continuing or would result therefrom,
Borrower may repurchase outstanding Term Loans on the following basis:


 


(i)   On or prior to the fourth anniversary of the
Closing Date, Borrower may conduct one or more modified Dutch auctions (each, an
“Auction”) to repurchase all or any
portion of the Term Loans not to exceed $200,000,000 (excluding accrued
interest) in aggregate par value (such Term Loans, the “Offer
Loans”) of Lenders, provided that (A) Borrower
delivers a notice to Administrative Agent (for distribution to the Lenders) no
later than noon  (New
York City time) at least five Business Days in advance of a proposed
consummation date of such Auction indicating (1) the date on which the Auction
will conclude, (2) the maximum principal amount of Term Loans Borrower is
willing to purchase in the Auction and (3) the range of discounts to par at
which Borrower would be willing to repurchase the Offer Loans; (B) the maximum
dollar amount of the Auction shall be no less than an aggregate $5,000,000 or
an integral multiple of $5,000,000 in excess thereof; (C) Borrower shall hold
the Auction open for a minimum period of two Business Days; (D) a Lender who
elects to participate in the Auction may choose to tender all or part of such
Lender’s Offer Loans; (E) the Auction shall be made to Lenders holding the
Offer Loans on a pro rata basis in accordance with their Pro Rata Shares; (F) the
proceeds of Revolving Loans may not be used to fund any repurchase under this
Section 2.10(c) (it being understood that the existence of any borrowed or
outstanding Revolving Loans at or about the time of any such repurchase, if
such Revolving Loans were not intended to be used to fund any repurchase of the
Term Loans, shall not, in and of itself, mean that such repurchase is being
funded with the proceeds of Revolving Loans); (G) before and after giving
effect to the repurchase, the Availability (if any) plus, to the extent
not already included in determining the Availability, Cash of Borrower and
Guarantor Subsidiaries, which Cash is unrestricted and unencumbered (except for
Liens granted under the Revolving Credit Documents and the Credit Documents and
non-consensual Permitted Encumbrances imposed under applicable law) shall not
be less than $50,000,000; (H) prior to and immediately after giving effect to
the repurchase, the Credit Parties and their respective Subsidiaries are in
compliance with the covenants set forth in Section 6.11 on a Pro Forma Basis, as of the last
day of the most recently ended Fiscal Quarter for which financial statements
have been delivered pursuant to Section 5.1(a) or (b) (or, prior to the
delivery of any such financial statements, the Fiscal Quarter ended June 30,
2010); (I) the Auction shall be
conducted pursuant to such procedures set forth in Exhibit L that a
Lender must follow in order to have its Offer Loans repurchased;


 


45

















 


(ii)   With respect to all repurchases made by
Borrower pursuant to this Section 2.10(c), (A) Borrower shall pay to the
applicable assigning Lender all accrued and unpaid interest, if any, on the
repurchased Term Loans to (but not including) the date of repurchase of such
Term Loans, (B) the repurchase of such Term Loans by Borrower shall not be
taken into account in the calculation of Consolidated Excess Cash Flow, (C) Borrower
shall represent that, as of the launch date of the related Auction and the
effective date of any Assignment Agreement, it is not in possession of any
information regarding Borrower, its Subsidiaries or its Affiliates, or Borrower’s
assets, its ability to perform its Obligations or any other matter that may be
material to a decision by any Lender to participate in any Auction or enter
into any Assignment Agreement or any of the transactions contemplated thereby
and that has not previously been disclosed to Administrative Agent and the
Lenders and (D) such repurchases shall not be deemed to be voluntary
prepayments pursuant to this Section 2.10, Section 2.12 or Section 2.13 except that the amount of the Loans so
repurchased shall be applied on a pro rata basis to reduce the scheduled
remaining Installments of principal on such Term Loan; and


 


(iii)   Following repurchase by Borrower pursuant to
this Section 2.10(c), the Term Loans so repurchased shall, without further
action by any Person, be deemed cancelled for all purposes and no longer
outstanding (and may not be resold by Borrower), for all purposes of this
Agreement and all other Credit Documents, including, but not limited to (A) the
making of, or the application of, any payments to the Lenders under this
Agreement or any other Credit Document, (B) the making of any request, demand,
authorization, direction, notice, consent or waiver under this Agreement or any
other Credit Document or (C) the determination of Requisite Lenders, or for any
similar or related purpose, under this Agreement or any other Credit
Document.  In connection with any Term
Loans repurchased and cancelled pursuant to this Section 2.10(c),
Administrative Agent is authorized to make appropriate entries in the Register
to reflect any such cancellation.  Any
payment made by Borrower in connection with a repurchase permitted by this
Section 2.10(c) shall not be subject to the provisions of either Section 2.13(a)
or Section 2.14.  Failure by Borrower to
make any payment to a Lender required by an agreement permitted by this Section
2.10(c) shall not constitute an Event of Default under Section 8.1(a).


 


2.11.   Mandatory
Prepayments.  (a)   Asset
Sales.  Subject to Section 2.11(e),
no later than the fifth Business Day following the date of receipt by Holdings
or any of its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Borrower shall prepay the Term Loans in an aggregate amount equal
to such Net Asset Sale Proceeds; provided that (i) so long as no Default
shall have occurred and be continuing, and (ii) to the extent that aggregate
Net Asset Sale Proceeds from the Closing Date through the applicable date of
determination do not exceed $150,000,000, Borrower may, prior to the date of
the required prepayment, deliver to Administrative Agent a certificate of an
Authorized Officer of Borrower to the effect that Borrower intends to, directly
or through one or more of its Subsidiaries, invest such Net Asset Sale Proceeds
(or a portion thereof specified in such certificate) within 365 days of receipt
thereof in long-term productive assets of the general type used in the business
of Borrower and its Subsidiaries and (unless such Asset Sale was made by a
Subsidiary that is not a Credit Party and such reinvestment is made by such
Subsidiary) that constitute Term Collateral, and certifying that no Default has
occurred and is continuing, in which case Borrower may so 


 


46

















 


reinvest
such Net Asset Sale Proceeds within such period; provided  further,
(x) to the extent any such Net Asset Sale Proceeds shall be received in respect
of assets owned by a Credit Party, such Net Asset Sale Proceeds may be
reinvested only in assets owned by one or more Credit Parties (other than, in
each case, Equity Interests in Foreign Subsidiaries, except to the extent such
Net Asset Sale Proceeds shall have resulted from the sale of Equity Interests
in one or more Foreign Subsidiaries), (y) any such Net Asset Sale Proceeds that
are not so reinvested by the end of such period shall be applied to prepay the
Term Borrowings upon the expiration of such period and (z) all Net Asset Sale
Proceeds received after Net Asset Sale Proceeds exceeding $150,000,000 have
been reinvested pursuant to this clause (ii) may not be so reinvested and shall
be applied to prepay the Term Loans. Any amount referred to in any such
certificate shall, pending prepayment or reinvestment as provided in such
certificate or application to prepay the Term Loan, be held as Cash or Cash
Equivalents in a Deposit Account of Borrower that is subject to a Control
Agreement in favor of the Collateral Agent and constitutes Term Collateral.


 


(b)   Insurance/Condemnation
Events.  Subject to Section 2.11(e),
no later than the fifth Business Day following the date of receipt by Holdings
or any of its Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds in respect of any Insurance/Condemnation Event,
Borrower shall prepay the Term Loans in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds; provided that so long as no Default
shall have occurred and be continuing, Borrower may, prior to the date of the
required prepayment, deliver to Administrative Agent a certificate of an
Authorized Officer of Borrower to the effect that Borrower intends to, directly
or through one or more of its Subsidiaries, invest such Net
Insurance/Condemnation Proceeds (or a portion thereof specified in such
certificate) within 365 days of receipt thereof in long term productive assets
of the general type used in the business of Holdings and its Subsidiaries and
(unless such Net Insurance/Condemnation Proceeds were received in respect of
assets owned by Subsidiary that is not a Credit Party and such reinvestment is
made by such Subsidiary) that constitute Term Collateral (including through the
repair, restoration or replacement of the damaged, destroyed or condemned
assets), and certifying that no Default has occurred and is continuing, in
which case Borrower may so reinvest such Net Insurance/Condemnation Proceeds
within such period (it being understood that any such Net
Insurance/Condemnation Proceeds may be applied to reimburse the cost of repair,
restoration or replacement of the damaged, destroyed or condemned assets
following the applicable Insurance/Condemnation Event but prior to the receipt
by Holdings or any of its Subsidiaries of the related Net
Insurance/Condemnation Proceeds); provided  further, (x) to the
extent any such Insurance/Condemnation Proceeds shall be received in respect of
assets owned by a Credit Party, such Net Insurance/Condemnation Proceeds may be
reinvested only in assets owned by one or more Credit Parties (other than
Equity Interests in Foreign Subsidiaries) and (y) any such Net
Insurance/Condemnation Proceeds that are not so reinvested by the end of such
period shall be applied to prepay the Term Loans promptly upon the expiration
of such period. Any amount referred to in any such certificate shall pending
prepayment or reinvestment as provided in such certificate or application to
prepay the Term Loan, be held as Cash or Cash Equivalents in a Deposit Account
of Borrower that is subject to a Control Agreement in favor of the Collateral
Agent and constitutes Term Collateral.


 


47

















 


(c)   Issuance
of Debt.  On the date of receipt by
Holdings or any of its Subsidiaries of any Cash (which term, for the purposes
of this Section 2.11(c), shall include Cash Equivalents) proceeds from the
incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other
than with respect to any Indebtedness permitted to be incurred pursuant to
Section 6.1), Borrower shall prepay the Term Loans in an aggregate amount equal
to 100% of such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses, accounting fees, investment banking fees and
consulting fees. Any such proceeds shall pending prepayment be held as Cash or
Cash Equivalents in a Deposit Account of Borrower that is subject to a Control
Agreement in favor of the Collateral Agent and constitutes Term Collateral.


 


(d)   Consolidated
Excess Cash Flow.  In the event that
there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing
with the Fiscal Year ending September 30, 2011), Borrower shall, no later than
ninety days after the end of such Fiscal Year, prepay the Term Loans in an
aggregate amount equal to 50% of such Consolidated Excess Cash Flow; provided,
that if, as of end of such Fiscal Year, the Leverage Ratio shall be 2.50:1.00
or less, Borrower shall only be required to make the prepayments otherwise
required hereby in an amount equal to 25% of such Consolidated Excess Cash Flow
and, provided, further, that if, as of the end of such Fiscal
Year, the Leverage Ratio shall be 2.00:1.00 or less, Borrower shall not be
required to make the prepayments otherwise required hereby.


 


(e)   Repayments
Under Revolving Credit Agreement. If any Asset Sale includes assets
constituting ABL Collateral that was pledged to secure the obligations under
the Revolving Credit Documents or any Net Insurance/Condemnation Proceeds are
received in respect of assets subject to an Insurance/Condemnation Event
including assets constituting ABL Collateral that was pledged to secure the
obligations under the Revolving Credit Documents, then a portion of the Net
Asset Sale Proceeds or Net Insurance/Condemnation Proceeds, as applicable,
shall be applied to prepay outstanding Revolving Loans and Swingline Loans, and
to cash collateralize letters of credit issued under the Revolving Credit
Agreement, in either case, in an 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. For the
purposes of determining the amount of Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, as applicable, to be applied to prepay the
Term Loans, or reinvested, under Section 2.11(a) or 2.11(b), such amount shall
be reduced by any such prepayments of loans, or any such cash collateralization
of letters of credit, under the Revolving Credit Agreement made in accordance
with this Section 2.11(e).


 


(f)   Prepayment
Notice and Certificate.  Prior to any
mandatory prepayment pursuant to this Section 2.11, Borrower shall notify
Administrative Agent of such prepayment and deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the calculation of the
amount of the applicable net proceeds or Consolidated Excess Cash Flow, as the
case may be.  Each such notice shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid, and may be given by telephone or in writing
(and, if given by telephone, shall 


 


48

















 


promptly be confirmed in writing).  Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the details
thereof. In the event that Borrower shall subsequently determine that the
actual amount received exceeded the amount set forth in such certificate,
Borrower shall promptly make an additional prepayment of the Term Loans, and
Borrower shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.


 


2.12.   Application of
Prepayments.  (a)  Application
of Voluntary Prepayments by Type of Term Loans.  Any prepayment pursuant to Section 2.10(a) shall
be applied to reduce the subsequent Installments to be paid pursuant to Section
2.9 in the manner specified by Borrower in the notice of prepayment relating
thereto (or, if no such manner is specified in such notice, on a pro rata basis
(in accordance with the principal amounts of such Installments, including the
Installment becoming due on the Maturity Date)).


 


(b)   Application
of Mandatory Prepayments by Type of Term Loans.  Any prepayment pursuant to Section 2.11 shall
be applied to reduce the subsequent Installments to be paid pursuant to Section
2.9 (including the Installment becoming due on the Maturity Date) on a pro rata
basis (in accordance with the principal amounts of such Installments)).


 


(c)   Application
of Prepayments of Term Loans to Base Rate Term Loans and Eurodollar Rate Term
Loans.  Any prepayment shall be
applied first to Base Rate Term Loans to the full extent thereof before
application to Eurodollar Rate Terms Loans, in each case in a manner which
minimizes the amount of any payments required to be made by Borrower pursuant
to Section 2.15(c).


 


2.13.   General
Provisions Regarding Payments.  (a)  All payments by Borrower of principal,
interest, fees and other Obligations shall be made by wire transfer of same day
funds in Dollars, without defense, recoupment, setoff or counterclaim, free of
any restriction or condition, to the account of Administrative Agent most
recently designated by it for such purpose and delivered to Administrative
Agent not later than 3:00 p.m. (New York City time) on the date due at the
Principal Office of Administrative Agent for the account of Lenders; for
purposes of computing interest and fees, funds received by Administrative Agent
after that time on such due date shall be deemed to have been paid by Borrower
on the next succeeding Business Day.


 


(b)   All payments in respect of the principal
amount of any Term Loan shall be accompanied by payment of accrued interest on
the principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Term Loan on a date when interest is
due and payable with respect to such Term Loan) shall be applied to the payment
of interest then due and payable before application to principal.


 


(c)   Administrative Agent (or its agent or
sub-agent appointed by it) shall promptly distribute to each Lender at such
address as such Lender shall indicate in writing, such Lender’s applicable Pro
Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, 


 


49

















 


including all fees payable with respect thereto, to
the extent received by Administrative Agent.


 


(d)   Notwithstanding the foregoing provisions
hereof, if any Conversion/ Continuation Notice is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Term Loans in lieu of its Pro
Rata Share of any Eurodollar Rate Term Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.


 


(e)   Subject to the proviso set forth in the
definition of “Interest Period”, whenever any payment shall be stated to be due
on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.


 


(f)   Borrower hereby authorizes Administrative
Agent to charge Borrower’s accounts with Administrative Agent in order to cause
timely payment to be made to Administrative
Agent of all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).


 


(g)   Administrative Agent shall deem any payment
by or on behalf of Borrower hereunder that is not made in same day funds prior
to 3:00 p.m. (New York City time) to be a non-conforming payment.  Any such payment shall not be deemed to have
been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.  Administrative Agent shall give prompt
telephonic notice to Borrower and each applicable Lender (confirmed in writing)
if any payment is non-conforming.  Any
non-conforming payment may constitute or become a Default in accordance with
the terms of Section 8(a).  Interest
shall continue to accrue on any principal as to which a non-conforming payment
is made until such funds become available funds (but in no event less than the
period from the date of such payment to the next succeeding applicable Business
Day) at the rate determined pursuant to Section 2.7 from the date such amount
was due and payable until the date such amount is paid in full.


 


(h)   If an Event of Default shall have occurred
and not otherwise been waived, and the maturity of the Obligations shall have
been accelerated pursuant to Section 8.1, all payments or proceeds received by
Administrative Agent or Collateral Agent in respect of any of the Obligations
shall be applied in accordance with the application arrangements described in
Section 5.2 of the Pledge and Security Agreement.


 


2.14.   Ratable
Sharing.  Lenders hereby agree among themselves that,
except as otherwise provided in the Collateral Documents with respect to
amounts realized from the exercise of rights with respect to Liens on the
Collateral, if any Lender shall, whether by voluntary payment (other than a
voluntary prepayment of Term Loans made and applied in accordance with the
terms hereof), through the exercise of any right of set-off or banker’s lien,
by counterclaim or cross action or by the enforcement of any right under the
Credit Documents or otherwise, or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of 


 


50

















 


principal, interest, fees and other amounts then due
and owing to such Lender hereunder or under the other Credit Documents
(collectively, the “Aggregate Amounts Due”
to such Lender) resulting in such Lender receiving payment of a greater
proportion of the Aggregate Amounts Due to such Lender than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (a) notify Administrative Agent and each other Lender of the receipt of
such payment and (b) apply a portion of such payment to purchase (for cash at
face value) participations (which it shall be deemed to have purchased from
each seller of a participation simultaneously upon the receipt by such seller
of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided,
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Borrower or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.  Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may
exercise any and all rights of banker’s lien, consolidation, set-off or
counterclaim with respect to any and all monies owing by Borrower to that
holder with respect thereto as fully as if that holder were owed a Term Loan in
the amount of the participation held by that holder in accordance with Section 10.4.  The provisions of this Section 2.14 shall not
be construed to apply to (a) any payment made by Borrower pursuant to and in
accordance with the express terms of this Agreement or (b) any payment obtained
by any Lender as consideration for the assignment or sale of a participation in
any of its Term Loans or other Obligations owed to it.


 


2.15.   Making or
Maintaining Eurodollar Rate Term Loans.  (a)  Inability
to Determine Applicable Interest Rate. 
If, on or prior to any Interest Rate Determination Date with respect to
any Interest Period for any Eurodollar Rate Borrowing, Administrative Agent
shall have determined (which determination shall be final and conclusive and
binding upon all parties hereto), on any Interest Rate Determination Date with
respect to any Eurodollar Rate Term Loans, that by reason of circumstances
affecting the London interbank market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Term Loans on the basis
provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone
confirmed in writing) to Borrower and each Lender of such determination,
whereupon (i) no Term Loans may be made as, or converted to, Eurodollar Rate
Term Loans until such time as Administrative Agent notifies Borrower and
Lenders that the circumstances giving rise to such notice no longer exist
(which notice Administrative Agent agrees to give reasonably promptly upon a
determination that such circumstances no longer exist), and (ii) any Funding
Notice or Conversion/Continuation Notice given by Borrower with respect to the
Term Loans in respect of which such determination was made shall be deemed to
be rescinded by Borrower.


 


(b)   Illegality
or Impracticability of Eurodollar Rate Term Loans.  In the event that on any date any Lender
shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties hereto) that the making, maintaining or
continuation of its Eurodollar Rate Term Loans (i) has become unlawful as a
result of compliance by such Lender in good faith with any law, treaty,
governmental rule, 


 


51

















 


regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the
London interbank market or the position of such Lender in that market, then,
and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by
e-mail or by telephone confirmed in writing) to Borrower and Administrative
Agent of such determination (which notice Administrative Agent shall promptly
transmit to each other Lender).  If the
Administrative Agent receives a notice from (x) any Lender pursuant to clause
(i) of the preceding sentence or (y) a notice from Lenders constituting
Requisite Lenders pursuant to clause (ii) of the preceding sentence, then (1) the
obligation of the Lenders (or, in the case of any notice pursuant to clause (i)
of the preceding sentence, such Lender) to make Term Loans as, or to convert
Term Loans to, Eurodollar Rate Term Loans shall be suspended until such notice
shall be withdrawn by each Affected Lender, (2) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Term Loan
then being requested by Borrower pursuant to a Funding Notice or a Conversion/Continuation
Notice, the Lenders (or in the case of any notice pursuant to clause (i) of the
preceding sentence, such Lender) shall make such Term Loan as (or continue such
Term Loan as or convert such Term Loan to, as the case may be) a Base Rate Term
Loan, (3) the Lenders’ (or in the case of any notice pursuant to clause (i) of
the preceding sentence, such Lender’s) obligations to maintain their respective
outstanding Eurodollar Rate Term Loans (the “Affected
Loans”) shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (4) the Affected Loans shall automatically
convert into Base Rate Term Loans on the date of such termination.  Notwithstanding the foregoing, to the extent
a determination by an Affected Lender as described above relates to a
Eurodollar Rate Term Loan then being requested by Borrower pursuant to a
Funding Notice or a Conversion/Continuation Notice, Borrower shall have the option,
subject to the provisions of Section 2.15(c), to rescind such Funding Notice or
Conversion/Continuation Notice as to all Lenders by giving written or
telephonic notice (promptly confirmed by delivery of written notice thereof) to
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other
Lender).  If any Affected Lender invokes
this Section 2.15(b), it shall reasonably promptly notify Borrower and
Administrative Agent when the conditions giving rise to such action no longer
exist.


 


(c)   Compensation
for Breakage or Non-Commencement of Interest Periods.  Borrower shall compensate each Lender, upon
written request by such Lender (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including any interest paid or payable by such Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Term Loans and any loss,
expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds but excluding loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender) a borrowing of any Eurodollar Rate Term Loan does not
occur on a date specified 


 


52

















 


therefor in a Funding Notice or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Term
Loan does not occur on a date specified therefor in a Conversion/Continuation
Notice or a telephonic request for conversion or continuation; (ii) if any
prepayment or other principal payment of, or any conversion of, any of its
Eurodollar Rate Term Loans occurs on a date prior to the last day of an
Interest Period applicable to that Term Loan; or (iii)  if any prepayment of any of its Eurodollar
Rate Term Loans is not made on any date specified in a notice of prepayment
given by Borrower.


 


(d)   Booking
of Eurodollar Rate Term Loans.  Any
Lender may make, carry or transfer Eurodollar Rate Term Loans at, to, or for
the account of any of its branch offices or the office of an Affiliate of such
Lender.


 


(e)   Assumptions
Concerning Funding of Eurodollar Rate Term Loans.  Calculation of all amounts payable to a
Lender under this Section 2.15 and under Section 2.16 shall be made as though
such Lender had actually funded each of its relevant Eurodollar Rate Term Loans
through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate
in an amount equal to the amount of such Eurodollar Rate Term Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however,
each Lender may fund each of its Eurodollar Rate Term Loans in any manner it
sees fit and the foregoing assumptions shall be utilized only for the purposes
of calculating amounts payable under this Section 2.15 and under Section 2.16.


 


2.16.   Increased
Costs; Capital Adequacy.  (a)  Compensation
For Increased Costs and Taxes. 
Subject to the provisions of Section 2.17 (which shall be controlling
with respect to Taxes and the matters covered thereby), in the event that any
Lender shall determine (which determination shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or Governmental Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law): (i) subjects such Lender (or its applicable
lending office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of the other
Credit Documents or any of its obligations hereunder or thereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder or thereunder; (ii) imposes,
modifies or holds applicable any reserve (including any marginal, emergency,
supplemental, special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to Eurodollar Rate
Term Loans that are reflected in the definition of Adjusted Eurodollar Rate);
or (iii) imposes any other condition (other than with respect to a Tax matter)
on or affecting such Lender (or its applicable lending office) or its
obligations hereunder or the London interbank market; and the result of any of
the foregoing is to increase the cost to 


 


53

















 


such
Lender of agreeing to make, making or maintaining Term Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Borrower shall
pay to such Lender, within ten Business Days of receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder; provided, that Borrower shall
not be required to compensate any Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date
that such Lender delivers the statement referred to in the next sentence; provided
further that, if the basis for such additional amount is retroactive,
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.  Such Lender
shall deliver to Borrower (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.16(a), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.


 


(b)   Capital
Adequacy Adjustment.  In the event
that any Lender shall have determined that the adoption, effectiveness,
phase-in or applicability after the Closing Date of any law, rule or regulation
(or any provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender’s Term Loans
or other obligations hereunder with respect to the Term Loans to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Borrower from such Lender of the statement
referred to in the next sentence, Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrower (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts
owed to Lender under this Section 2.16(b), which statement shall be conclusive
and binding upon all parties hereto absent manifest error.


 


2.17.   Taxes;
Withholding, Etc.  (a)  Payments
to Be Free and Clear.  All sums
payable by or on behalf of any Credit Party hereunder and under the other
Credit Documents shall (except to the extent required by law) be paid free and
clear of, and without any deduction or withholding on account of, any Tax
(other than a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of America or
any political subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of any Credit
Party or by any federation or 


 


54

















 


organization
of which the United States of America or any such jurisdiction is a member at
the time of payment.


 


(b)   Withholding
of Taxes.  If any Credit Party or any
other Person is required by law to make any deduction or withholding on account
of any such Tax from any sum paid or payable by any Credit Party to
Administrative Agent or any Lender under any of the Credit Documents: (i) Borrower
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Borrower becomes aware of it; (ii) Borrower shall
pay any such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on any Credit Party) for
its own account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender; (iii) the sum payable by such Credit Party in respect of
which the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made; and (iv) within thirty
days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty days after the due date of payment
of any Tax which it is required by clause (ii) above to pay, Borrower shall
deliver to Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender (other than a Lender that
becomes a Lender pursuant to Section 2.19) under clause (iii) above except to
the extent that any change in law after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
Closing Date of the Assignment Agreement pursuant to which such Lender became a
Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender; provided that
additional amounts shall be payable to a Lender to the extent such Lender’s
assignor was entitled to receive such additional amounts.


 


(c)   Evidence
of Exemption From U.S. Withholding Tax. 
Each Lender that is not a United States Person (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income
tax purposes (a “Non-US Lender”)
shall deliver to Administrative Agent for transmission to Borrower, on or prior
to the Closing Date (in the case of each Lender listed on the signature pages hereof
on the Closing Date) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), and
at such other times as may be necessary in the determination of Borrower or
Administrative Agent (each in the reasonable exercise of its discretion), (i) two
original copies of Internal Revenue Service Form W-8BEN, W-8ECI and/or W-8IMY
(or, in each case, any successor forms), properly completed and duly executed
by such Lender, and such other documentation required under the Internal
Revenue Code and reasonably requested by Borrower to establish that such Lender
is not subject to deduction or withholding of United States federal income tax
with respect to 


 


55

















 


any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Credit Documents, or (ii) if
such Lender is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8BEN (or any successor
form), properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Borrower to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Credit Documents.  Each Lender that is a United States person
(as such term is defined in Section 7701(a)(30) of the Internal Revenue Code)
for United States federal income tax purposes (a “U.S. Lender”) and is not an exempt recipient within the
meaning of Treasury Regulation Section 1.6049-4(c) shall deliver to
Administrative Agent and Borrower on or prior to the Closing Date (or, if
later, on or prior to the date on which such Lender becomes a party to this
Agreement) two original copies of Internal Revenue Service Form W-9 (or any
successor form), properly completed and duly executed by such Lender,
certifying that such U.S. Lender is entitled to an exemption from United States
backup withholding tax, or otherwise prove that it is entitled to such an
exemption. Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding matters
pursuant to this Section 2.17(c) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any material respect,
that such Lender shall promptly deliver to Administrative Agent for
transmission to Borrower two new original copies of Internal Revenue Service
Form W-8BEN, W-8ECI and/or W-8IMY (or, in each case, any successor form), or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), as the case may be, properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Borrower
to confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to payments to
such Lender under the Credit Documents, or notify Administrative Agent and
Borrower of its inability to deliver any such forms, certificates or other
evidence.  Borrower shall not be required
to pay any additional amount to any Non-US Lender under Section 2.17(b)(iii) if
such Lender shall have failed (1) to deliver the forms, certificates or other
evidence referred to in the first sentence of this Section 2.17(c), or (2) to
notify Administrative Agent and Borrower of its inability to deliver any such
forms, certificates or other evidence, as the case may be; provided, if
such Lender shall have satisfied the requirements of the first sentence of this
Section 2.17(c) on the Closing Date or on the date of the Assignment Agreement
pursuant to which it became a Lender, as applicable, nothing in this last
sentence of Section 2.17(c) shall relieve Borrower of its obligation to pay any
additional amounts pursuant this Section 2.17 in the event that, as a result of
any change in any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that such Lender is
not subject to withholding as described herein.


 


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2.18.   Obligation to
Mitigate.  Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Term Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.15, 2.16 or 2.17,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Term Loans, including any
Affected Loans, through another office of such Lender, or (b) take such other
measures as such Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender pursuant to Section 2.15, 2.16 or 2.17 would be materially reduced and
if, as determined by such Lender in its sole discretion, the making, issuing,
funding or maintaining of Term Loans through such other office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Term Loans or the interests of such Lender; provided, such
Lender will not be obligated to utilize such other office pursuant to this
Section 2.18 unless Borrower agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described above.  A certificate as to the amount of any such
expenses payable by Borrower pursuant to this Section 2.18 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such
Lender to Borrower (with a copy to Administrative Agent) shall be conclusive
absent manifest error.


 


2.19.   Removal or
Replacement of a Lender.  Anything contained herein to the contrary
notwithstanding, in the event that: (a) (i) any Lender (an “Increased-Cost Lender”) shall give notice
to Borrower that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under Section 2.15, 2.16 or 2.17, (ii) the
circumstances which have caused such Lender to be an Affected Lender or which
entitle such Lender to receive such payments shall remain in effect, and (iii) such
Lender shall fail to withdraw such notice within two Business Days after
Borrower’s request for such withdrawal; or (b) in connection with any proposed
amendment, modification, termination, waiver or consent with respect to any of
the provisions hereof as contemplated by Section 10.5(b), the consent of
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each a “Non-Consenting
Lender”) whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender or Non-Consenting Lender
(the “Terminated Lender”),
Borrower may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Term Loans, if any, in full to one or more Eligible Assignees (each
a “Replacement Lender”) in
accordance with the provisions of Section 10.6 and Borrower shall pay the fees,
if any, payable thereunder in connection with any such assignment from an
Increased Cost Lender or a Non-Consenting Lender; provided, (1) on the
date of such assignment, the Replacement Lender shall pay to Terminated Lender
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Term Loans of the Terminated Lender, and
(B) an amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to Section 2.8; (2) on the date of such assignment,
Borrower shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.15, 2.16 or 2.17, or otherwise as if it were a prepayment and (3) in
the event such Terminated Lender is a Non-Consenting Lender, each Replacement
Lender shall consent, at the time of such assignment, to each matter in respect
of which such Terminated 


 


57

















 


Lender
was a Non-Consenting Lender.  Upon the
prepayment of all amounts owing to any Terminated Lender, such Terminated
Lender shall no longer constitute a “Lender” for purposes hereof; provided,
any rights of such Terminated Lender to indemnification hereunder shall survive
as to such Terminated Lender.  Each
Lender agrees that if Borrower exercises its option hereunder to cause an
assignment by such Lender as a Non-Consenting Lender or Terminated Lender, such
Lender shall, promptly after receipt of written notice of such election,
execute and deliver all documentation necessary to effectuate such assignment
in accordance with Section 10.6.  In the
event that a Lender does not comply with the requirements of the immediately
preceding sentence within one Business Day after receipt of such notice, each
Lender hereby authorizes and directs the Administrative Agent to execute and
deliver such documentation as may be required to give effect to an assignment
in accordance with Section 10.6 on behalf of a Non-Consenting Lender or
Terminated Lender and any such documentation so executed by the Administrative
Agent shall be effective for purposes of documenting an assignment pursuant to
Section 10.6.


 


SECTION 3.  
CONDITIONS PRECEDENT


 


3.1.   Closing Date.  The obligation of each Lender to
make Term Loans on the Closing Date is subject to the satisfaction, or waiver
in accordance with Section 10.5, of the following conditions on or before the
Closing Date:


 


(a)   Credit
Documents.  Administrative Agent and
Arrangers shall have received sufficient copies of each Credit Document as
Administrative Agent shall reasonably request, executed and delivered by each
applicable Credit Party and each other party thereto.


 


(b)   Organizational
Documents; Incumbency. 
Administrative Agent and Arrangers shall have received, in respect of
each Credit Party, (i) sufficient copies of each Organizational Document as
Administrative Agent shall reasonably request, and, to the extent applicable,
certified as of the Closing Date or a recent date prior thereto by the
appropriate Governmental Authority; (ii) signature and incumbency certificates
of the officers of such Credit Party authorized to execute each Credit Document
to which such Credit Party is a party; (iii) resolutions of the Board of
Directors or similar governing body of such Credit Party approving and authorizing
the execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party as of the Closing Date, certified as of the
Closing Date by its secretary or an assistant secretary as being in full force
and effect without modification or amendment; (iv) a good standing certificate
from the applicable Governmental Authority of such Credit Party’s jurisdiction
of incorporation, organization or formation dated the Closing Date or a recent
date prior thereto and (v) such other documents and certificates as
Administrative Agent may reasonably request.


 


(c)   Capitalization
of Holdings and Borrower.  On or
before the Closing Date, Holdings shall have received, substantially
simultaneously with the initial funding of Term Loans on the Closing Date, the
Equity Contribution and shall have contributed the proceeds therefrom to
Borrower in the form of cash common equity.


 


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(d)   Consummation
of the Acquisition.  (1) All
conditions to the Acquisition set forth in the Purchase Agreement shall have
been satisfied or the fulfillment of any such conditions shall have been waived
and (2) the Acquisition shall have been, or substantially simultaneously with
the initial funding of the Term Loans on the Closing Date shall be, consummated
in accordance with the terms of the Purchase Agreement, in each case, without
giving effect to any amendment, supplement, modification or waiver of any term
or condition of the Purchase Agreement, or any consent under the Purchase
Agreement, that in the reasonable judgment of Administrative Agent is adverse
in any material respect to the Lenders or any Arranger in their capacities as
such, unless approved by Administrative Agent.


 


(e)   Existing
Indebtedness.  On the Closing Date,
Administrative Agent shall have received evidence reasonably satisfactory to it
that (i) to the extent that any of the Senior Notes are not purchased and
retired on or before the Closing Date pursuant to a tender offers for the
Senior Notes, (A) irrevocable notices of redemption for such Senior Notes not tendered shall have been, or
substantially simultaneously with the initial funding the of the Term Loans
will be, given to the holders of such Senior Notes to redeem such Senior Notes
on or about 30 days following the Closing 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 initial funding
of the Term Loans 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 initial funding of the Term Loans, (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
Notes Indenture in an amount, reasonably estimated by the Borrower (and
reasonably approved by Administrative Agent), sufficient to satisfy the
requirements of Section 8.04(a)(i) of the Floating Rate Notes Indenture; (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.  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 Revolving
Credit Agreement and the Indebtedness set forth on Schedule 6.1 and (ii) that,
immediately after giving effect to the Transactions, there will not exist any
default or any event of default under any of the documents governing the
Indebtedness set forth on Schedule 6.1


 


(f)   Transaction
Costs.  Prior to the Closing Date,
Borrower shall have delivered to Administrative Agent Borrower’s reasonable
best estimate of the Transactions Costs (other than fees payable to any Agent
or Arranger).


 


(g)   Governmental
Authorizations and Consents.  Each
Credit Party shall have obtained all material Governmental Authorizations and
all material consents of other 


 


59

















 


Persons that, in each case, are required in order to
consummate the transactions contemplated by the Credit Documents and the
Related Agreements and each of the foregoing shall be in full force and effect
and in form and substance reasonably satisfactory to Administrative Agent.  All applicable waiting periods shall have
expired without any action being taken or threatened by any competent
Governmental Authority which would restrain, prevent or otherwise impose
materially adverse conditions on the transactions contemplated by the Credit
Documents or the Related Agreements or the financing thereof 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.


 


(h)   Collateral
and Guarantee Requirement.  The
Collateral and Guarantee Requirement shall have been satisfied; provided that
if, notwithstanding the use by the Credit Parties of commercially reasonable
efforts to cause the Collateral and Guarantee Requirement to be satisfied on
the Closing Date, the requirements thereof (other than (i) the execution and
delivery of this Agreement and the Pledge and Security Agreement by the Credit
Parties, (ii) the creation, pledge and perfection of security interests in (x) the
Equity Interests of 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
Credit 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 Credit Parties that may be perfected
by the filing of a financing statement under the UCC) are not satisfied as of
the Closing Date, the satisfaction of such requirements shall not be a
condition to the availability of the Term Loans on the Closing Date (but shall
be required to be satisfied as promptly as practicable after the Closing Date
and in any event within the period specified therefor in Schedule 3.1(h) or
such later date as Collateral Agent may agree in its reasonable discretion).
Collateral Agent shall have received a completed Perfection Certificate, dated
the Closing Date and executed by an Authorized Officer of Borrower, together
with all attachments contemplated thereby, including the results of a search of
the UCC (or equivalent) filings made with respect to the Credit Parties in the
jurisdictions contemplated by the Perfection Certificate and copies of the
financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to Collateral Agent that the Liens indicated
by such financing statements (or similar documents) are permitted under Section
6.2 or have been, or substantially contemporaneously with the initial funding
of the Term Loans on the Closing Date will be, released.


 


(i)   Financial
Statements; Projections. Administrative Agent shall have received from
Holdings (i) the Historical Financial Statements, which shall be accompanied by
a Financial Officer Certification of the Borrower thereon 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 


 


60

















 


Closing 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.


 


(j)   Evidence
of Insurance.  Collateral Agent shall
have received a certificate from the applicable Credit Party’s insurance broker
or other evidence reasonably satisfactory to it that all insurance required to
be maintained pursuant to Section 5.6 is in full force and effect, together with endorsements naming Collateral
Agent, for the benefit of Secured Parties, as additional insured and loss payee
thereunder to the extent required under Section 5.6.


 


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


 


(l)   Fees.  Borrower shall have paid to the 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
Closing Date pursuant to the Commitment Letter or the Credit Documents.


 


(m)   Solvency
Certificate.  On the Closing Date,
Administrative Agent shall have received the Solvency Certificate signed by the
chief financial officer of each Credit Party, in form, scope and substance
reasonably satisfactory to Administrative Agent, and certifying that after
giving effect to the consummation of the Acquisition and the other Transactions
and any rights of contribution, such Credit Party is and will be Solvent.


 


(n)   Closing
Date Certificate.  Holdings and
Borrower shall have delivered to Administrative Agent an executed Closing Date
Certificate, together with all attachments thereto.


 


(o)   Credit
Rating.  Holdings shall have been
assigned a public corporate family rating from Moody’s and a public corporate
credit rating from S&P and the Term Loans shall have been assigned a public
credit rating from each of Moody’s and S&P.


 


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(p)   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
singly or in the aggregate, materially impairs the Acquisition or the other
Transactions, the financing thereof or any of the other transactions
contemplated by the Credit Documents or the Related Agreements.


 


(q)   Letter
of Direction.  Administrative Agent
shall have received a duly executed letter of direction from Borrower addressed
to Administrative Agent, on behalf of itself and Lenders, directing the
disbursement on the Closing Date of the proceeds of the Term Loans to be made
on such date.


 


(r)   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 Acquired Business 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.


 


(s)   Representations
and Warranties.  The Specified
Representations shall be true and correct on and as of the Closing Date in all
material respects, and each of the representations and warranties contained
herein and in the other Credit Documents with respect to or made by Holdings
and its Subsidiaries (excluding the Acquired Business and its Subsidiaries)
shall be true and correct in all material respects on and as of Closing Date; provided
that, in each case, such materiality qualifiers shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof.


 


(t)   PATRIOT
Act, Etc. At least 10 days prior to the Closing 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 PATRIOT Act.


 


(u)   Effectiveness
of Revolving Credit Agreement. Administrative Agent shall have received
evidence reasonably satisfactory to it that (i) the Revolving Credit Agreement
has been executed and delivered by the parties thereto, (ii) the Revolving Credit
Agreement shall have become effective (with aggregate commitments not less than
$125,000,000 on the Closing Date) and (iii) the Minimum Availability Condition
is satisfied, and Administrative Agent shall have received sufficient copies of
each Revolving Credit Document as Administrative Agent shall reasonably
request, executed and delivered by each other party thereto.


 


(v)   Funding
Notice. Administrative Agent shall have received a fully executed and
delivered Funding Notice no later than one Business Day prior to the Closing
Date.


 


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SECTION 4.  
REPRESENTATIONS AND WARRANTIES


 


In order to induce Agents and Lenders to enter into this
Agreement and to make the Term Loan to be made thereby, each Credit Party
represents and warrants to each Agent and Lender, on the Closing Date, that the
following statements are true and correct  (it being
understood and agreed that the representations and warranties are deemed to be
made concurrently with the consummation of the Transactions):


 


4.1.   Organization;
Powers.  Each
of the Credit 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.


 


4.2.   Authorization;
Enforceability.  The Transactions are within each Credit 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 Credit
Documents have been duly executed and delivered by each Credit Party party
thereto and constitutes, or when executed and delivered by such Credit Party will
constitute, a legal, valid and binding obligation of such Credit Party,
enforceable against such Credit 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 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).


 


4.3.   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 Credit Documents and the Revolving Credit
Documents, (b) will not violate (i) in any material respect any provision of
any law or any governmental rule or regulation applicable to Holdings or any of
its Subsidiaries, (ii) any of the Organizational Documents of Holdings or any
of its Subsidiaries, or (iii) any order, judgment or decree of any court or
other agency of government binding on Holdings or any of its Subsidiaries, (c) will
not violate in any material respect or result in a material default under any
Contractual Obligation upon any Credit 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, or (d) except for the Liens created in favor of
Collateral Agent for the benefit of the Secured Parties pursuant to the Credit
Documents and Liens created in favor of the Revolving Collateral Agent for the
benefit of the Revolving Secured Parties under the Revolving Credit Documents,
will not result in the creation or imposition of any Lien on any asset of any
Credit Party or any of its Subsidiaries.


 


4.4.   Historical
Financial Statements; Pro Forma Financial Statements; No Material Adverse
Effect.  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 


 


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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 Closing 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.


 


(a)   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.


 


(b)   Since September 30, 2009, no event,
circumstance or change has occurred that had, or could reasonably be expected
to have, a Material Adverse Effect.


 


4.5.   Projections.  The projections of Holdings and
its Subsidiaries for the period of Fiscal Year 2010 through and including
Fiscal Year 2016 (the “Projections”)
were prepared in good faith based upon assumptions that were believed by the
Credit Parties to be reasonable on and as of the Closing Date (it being
understood that (a) such Projections are subject to significant uncertainties
and contingencies, many of which are beyond the control of the Credit 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).


 


4.6.   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 Revolving Credit Agreement.


 


4.7.   Properties.


 


(a)   As of the date of this Agreement, Schedule
4.7(a) sets forth the address of each parcel of real property that is located
in the United States and is owned or leased by the Credit Parties.  Each of such leases and subleases is valid
and enforceable in all material respects in accordance with its 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 Credit Parties’
knowledge, no default by any party to any such lease or sublease exists.  Each of the Credit 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 6.2 and except for minor defects in title that do not materially
interfere with its ability to conduct its business as currently conducted.


 


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(b)   Each Credit Party and its Subsidiaries has
good title to all trademarks, trade names, copyrights, patents and other
intellectual property owned by such party and which are material to its
business (“Company Intellectual Property”).  All agreements under which a Credit Party or
its Subsidiaries are licensed to use any Intellectual Property owned by a third
party are valid and in full force and effect in all material respects.  Schedule 4.7(b) sets forth a correct and
complete list of all registrations and applications to register Company
Intellectual Property, as of the date of this Agreement, and, to the Credit
Party’s knowledge, the use of such Intellectual Property by the Credit Parties
and their Subsidiaries does not infringe upon the 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.


 


4.8.   Litigation and
Environmental Matters.  (a)  There are no Adverse Proceedings that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or that involve this
Agreement or the Transactions.


 


(b)   Except as set forth in Schedule 4.8 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 Credit 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
Claim, (iii) has received written notice of any claim with respect to any
Environmental Claim or (iv) has actual knowledge of any event or circumstance
which is reasonably expected to give rise to any Environmental Claim.


 


(c)   Since the date of this Agreement, there has
been no change in the status of the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.8 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.


 


4.9.   Compliance with
Laws and Contractual Obligations.  Each Credit Party and its Subsidiaries is in
compliance with its Organizational Documents and all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities and 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.


 


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


 


4.11.   Taxes.  Each Credit 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.


 


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4.12.   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 Pension Plan (calculated by an independent enrolled
actuary on an actuarial valuation basis in compliance with the Code and ERISA)
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 the fair market value of the assets of such Pension Plan, and
the present value of all accumulated benefit obligations of all underfunded
Plans (calculated by an independent enrolled actuary on an actuarial valuation
basis in compliance with the Code and ERISA) 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 the fair
market value of the assets of all such underfunded Pension 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.


 


4.13.   Disclosure.  Each Credit 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 Credit Party to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement and
the other Credit 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 Borrower to be reasonable at the
time made, not misleading; provided that, with respect to projected
financial information, the Credit Parties represent only that such information
was prepared in good faith based upon assumptions that were believed by the
Credit Parties to be reasonable at the time made, it being understood that (a) such
projected financial information is subject to significant uncertainties and
contingencies, many of which are beyond the control of the Credit 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.


 


4.14.   Use of Credit.  No Credit Party nor any of its
Subsidiaries owns any Margin Stock, and no part of the proceeds of the Term
Loans will be used to buy or carry any Margin Stock.


 


4.15.   Burdensome
Agreements.  Except as set forth on Schedule 4.15, to such
Credit Party’s knowledge, no Credit 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, 


 


66

















 


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


 


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


 


4.17.   Capitalization
and Subsidiaries.  Schedule 4.17 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 Subsidiary’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 4.17, and (c) the type of entity of Holdings and each of its
Subsidiaries.  All of the issued and
outstanding Equity Interests owned by any Credit 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.


 


4.18.   Labor
Matters.  Except
as set forth on Schedule 4.18, (a) no collective bargaining agreement or other
labor contract to which any Credit Party or any of its Subsidiaries is a
signatory will expire during the term of this Agreement, (b) to such Credit
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 Credit Party or any of its Subsidiaries, (c) there is no
pending or, to such Credit 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 Credit Party
or any of its Subsidiaries or its union-represented employees, in each case the
consequences of which could reasonably be expected to affect the aggregate
business (regardless of division or entity) of the Credit 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, and (d) there are no
actions, suits, charges, demands, claims, counterclaims or proceedings pending
or, to the best of such Credit Party’s knowledge, threatened against any Credit
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.


 


4.19.   Security
Interest in Collateral.  (a)  The Pledge and Security Agreement is effective
to create in favor of Collateral 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
Collateral Agent, (ii) other Collateral as further described in the Pledge and
Security Agreement, when financing statements and other filings specified on
Schedule 4.19 in appropriate form are filed in the offices specified on
Schedule 4.19, and (iii) property acquired after the date hereof any other
action required pursuant to Section 5.13, the 


 


67

















 


security
interest created pursuant to the Pledge and 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, and the
taking of such actions required pursuant to Section 5.13), as security for the
Obligations, in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 6.2).


 


(b)   Each of the Mortgages is effective to create
in favor of Collateral Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable Lien on the Material Real Estate Assets described therein
and proceeds thereof, and when the Mortgages are filed in the offices specified
on Schedule 4.19, each such Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of, the Credit Parties
in the Material Real Estate Assets and the proceeds thereof, as security for
the Secured Obligations, in each case prior and superior in right to any other
Person.


 


4.20.   Holdings.  Holdings is a newly formed
special purpose Wholly-Owned Subsidiary of Parent whose business and assets
consist exclusively of ownership of Equity Interests of the Borrower.


 


4.21.   Certain
Fees.  No
broker’s or finder’s fee or commission will be payable with respect to the
transactions contemplated by the Purchase Agreement, except as payable to
Agents, Lenders or any Affiliates of Agents.


 


4.22.   Solvency.  Each Credit Party is on the
Closing Date, before and after the consummation of the Transactions to occur on
the Closing Date, Solvent.


 


4.23.   Related
Agreements.  (a)  Delivery.  Holdings and 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)   Conditions
Precedent.  On the Closing 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.


 


4.24.   PATRIOT Act.  To the extent applicable, each
Credit 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 PATRIOT Act. 
No part of the proceeds of the Term 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.


 


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SECTION 5.  
AFFIRMATIVE COVENANTS


 


Until
the principal of and interest on each Term Loan and all fees, expenses and
other amounts payable hereunder shall have been paid in full, each Credit
Party, jointly and severally with all of the Credit Parties, covenants and
agrees with the Lenders that:


 


5.1.   Financial
Statements and Other Information.  The Borrower will furnish to Administrative
Agent, Collateral 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, (x) 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 segment
reporting by business unit consistent with past practice, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all reported
on 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 Financial Officer
Certification and 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
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 consolidated statements of income and cash flows of Holdings
and its Subsidiaries as of the end of and for such Fiscal Quarter and the then
elapsed portion of the Fiscal Year, together with segment reporting by business
unit consistent with past practice, 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, together with
a Financial Officer Certification and Narrative Report with respect thereto;


 


(c)    within 30 days after the end of each fiscal
month of Holdings (or (i) 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 the end of such fiscal month of Holdings), commencing with
respect 


 


69

















 


to the fiscal month ended October 31, 2010, (i) the
consolidated balance sheets 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, together with a Financial Officer
Certification with respect thereto;


 


(d)   concurrently with any delivery of financial
statements under paragraph (a), (b) or (c) of this Section, a Compliance
Certificate duly executed and completed, (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 Interest Coverage Ratio and the
Leverage Ratio and 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 4.4 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 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);


 


(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, a
consolidated plan and financial forecast for such Fiscal Year and each Fiscal
Year (or portion thereof) through the final maturity date of the Term Loans (a “Financial
Plan”), including (i) a forecasted consolidated
balance sheet and forecasted consolidated statements of income and cash flows
of Holdings and its Subsidiaries for each such Fiscal Year, and an explanation
of the assumptions on which such forecasts are based  and (ii) forecasted consolidated statements of income and
cash flows of Holdings and its Subsidiaries for each fiscal quarter of each
such Fiscal Year;


 


(h)   as soon as practicable and in any event by
the last day of each Fiscal Year, a certificate from Borrower’s insurance
broker(s) in form and substance satisfactory to 


 


70

















 


Administrative Agent outlining all material
insurance coverage maintained as of the date of such certificate by Holdings
and its Subsidiaries;


 


(i)   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;


 


(j)   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 its Authorized Officer (i) either
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Closing 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);


 


(k)   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 SEC, or with any
national securities exchange, or distributed by any Group Member to its
shareholders or to the public generally, as the case may be;


 


(l)   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 Credit Parties during such
calendar month; and


 


(m)   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 Credit Documents, as Administrative Agent,
Collateral Agent or any Lender may reasonably request.


 


Documents
required to be delivered pursuant to Section 5.01(a), (b), (c) or, if
applicable (l) (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, Parent, Holdings or Borrower posts such
documents or provides a link thereto on Griffon’s, Parent’s Holdings’ or
Borrower’s website or (ii) on which such documents are posted on Griffon’s, 


 


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Parent’s,
Holdings’ or Borrower’s behalf on Intralinks/IntraAgency, SyndTrak or another
relevant website or other information platform (the “Platform”),
if any, to which each Lender and Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by Administrative Agent); provided
that the Borrower’s Authorized Officer shall notify the Administrative Agent
(by telecopier or electronic mail) of the posting of any such documents and
provide Administrative Agent with electronic mail versions of such documents.


 


Holdings,
Borrower and each Lender acknowledge that certain of the Lenders may be Public
Lenders and, if documents or notices required to be delivered pursuant to this
Section 5.1 or otherwise are being distributed through the Platform, any
document or notice that Holdings or Borrower has indicated contains Non-Public
Information shall not be posted on that portion of the Platform designated for
such Public Lenders.  Each of Holdings
and Borrower agrees to clearly designate all information provided to
Administrative Agent by or on behalf of Holdings or Borrower which is suitable
to make available to Public Lenders.  If
Holdings or Borrower has not indicated whether a document or notice delivered
pursuant to this Section 5.1 contains Non-Public Information, Administrative
Agent reserves the right to post such document or notice solely on that portion
of the Platform designated for Lenders who wish to receive material non-public
information with respect to Holdings, its Subsidiaries and their securities.


 


5.2.   Notices of
Material Events.  The Credit Parties will furnish to Administrative
Agent, Collateral 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);


 


(c)   the occurrence of any ERISA Event, or any
fact or circumstance 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);


 


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(g)   [Reserved];


 


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


 


(i)   any change (i) in any Credit Party’s
corporate name, (ii) in any Credit Party’s corporate structure, (iii) in any
Credit Party’s jurisdiction of organization or (iv) the organizational identification
number, if any, or, with respect to any Credit 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
Credit Party (and Holdings and Borrower agree not to effect or permit any
change referred to in this clause 5.2(i) unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
Collateral 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);


 


(j)   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 an 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; 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 the
chief financial officer or other executive officer of 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.


 


5.3.   Existence;
Conduct of Business.  Each Credit 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 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 6.3.


 


5.4.   Payment of
Obligations.  Each Credit 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 Credit Party, (b) such Credit Party
has set aside 


 


73

















 


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.


 


5.5.   Maintenance of
Properties.  Each Credit 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.


 


5.6.   Maintenance of Insurance.  Each Credit 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
Borrower may maintain self-insurance consistent with its past practices and
policies.


 


5.7.   Books and
Records; Inspection Rights.  Each Credit 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. Each Credit Party will,
and will cause each of its Subsidiaries to, permit any Agent or any authorized
representatives designated by any Lender to visit and inspect any of the
properties of any Credit Party and any of its respective Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
notice and at such reasonable times during normal business hours and as often
as may reasonably be requested
(which, in each case, shall be coordinated through Administrative Agent,
reasonably in advance thereof); provided that so long as no Event of
Default shall have occurred and be continuing, not more than two such visits or
inspections shall be requested during any calendar year.


 


5.8.   Lenders
Meetings.  Holdings and Borrower will, upon the request of Administrative Agent or
Requisite Lenders, participate in a meeting of Administrative Agent and Lenders
once during each Fiscal Year to be held at Borrower’s corporate offices (or at
such other location as may be agreed to by Borrower and Administrative Agent)
at such time as may be agreed to by Borrower and Administrative Agent.


 


5.9.   Compliance with
Laws and Contractual Obligations.  Each Credit Party will, and will cause each
of its Subsidiaries to, comply with its Organizational Documents and all
applicable laws, statutes, regulations (including any Environmental Laws) and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities and 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.


 


5.10.   Use of Proceeds.  The proceeds of the Term Loans
will only be used by the Borrower to (i) fund the Acquisition, (ii) pay
Transaction Costs and (iii) pay all principal, premium, if any, interest, fees
and other amounts due or outstanding under the Existing Debt Agreements.  No part of the proceeds of any Term Loan
issued hereunder will be used, whether 


 


74

















 


directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X.


 


5.11.   Casualty and
Condemnation.  Borrower (a) will furnish to 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 Collateral Documents.


 


5.12.   Interest Rate
Protection.  No later than sixty (60) days following the
Closing Date and at all times thereafter until the  third  anniversary
of the Closing Date, 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
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 Closing Date is either (i) subject to such Interest Rate
Agreements or (ii) Indebtedness that bears interest at a fixed rate.


 


5.13.   Collateral;
Further Assurances.  Each Credit 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 Collateral Agent 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 Credit
Documents, all at the expense of the Credit Parties.  Borrower will provide to Administrative Agent
and Collateral Agent, from time to time upon request, evidence reasonably
satisfactory to Administrative Agent or Collateral Agent, as applicable, as to
the perfection and priority of the Liens created or intended to be created by
the Collateral Documents.


 


5.14.   Maintenance of
Ratings; Cash Management.  (a)  Unless otherwise consented to by
Administrative Agent or Requisite Lenders, the Credit 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 Term Loans.


 


(b)   Holdings and its Subsidiaries shall establish
and maintain cash management systems reasonably acceptable to Administrative
Agent and Collateral Agent.


 


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SECTION 6.  
NEGATIVE COVENANTS


 


Until the principal of and interest on each Term Loan
and all fees, expenses and other amounts payable hereunder have been paid in
full, the Credit Parties, jointly and severally, covenant and agree with the
Lenders that:


 


6.1.   Indebtedness;
Guarantees.  (a)  The
Credit 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 Credit Party pursuant to
any Credit Document (other than the Intercreditor Agreement);


 


(ii)   Indebtedness of Borrower to any other Group
Member and of any Subsidiary of Borrower to any other Group Member; provided
that (A)  such Indebtedness shall be
evidenced by the Intercompany Note, and, if owing to a Credit Party, shall be
subject to a First Priority Lien pursuant to the Pledge and Security Agreement,
(B) such Indebtedness shall be unsecured and, if owed by a Credit Party,
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the 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 such payment is made and (D)
Indebtedness of Group Members which are not Credit Parties to Group Members
which are Credit Parties must also be expressly permitted by Section 6.6(c) or
(o);


 


(iii)   Indebtedness outstanding on the date hereof
and listed on Schedule 6.1(a) and, other than with respect to the Senior Notes,
Refinancing Indebtedness in respect thereof;


 


(iv)   Indebtedness (including, without limitation,
Capital Lease Obligations) secured by Liens expressly permitted by Section 6.2(e)
in an aggregate principal amount (including any Indebtedness that is permitted
by Section 6.1(a)(iii) that constitutes Indebtedness of a type permitted by
this Section 6.1(a)(iv)) not to exceed $75,000,000 at any time outstanding;


 


(v)   Guarantees expressly permitted by Section 6.1(b);


 


(vi)   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;


 


(vii)   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 6.6 or any disposition expressly permitted by Section 6.4;


 


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(viii)   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;


 


(ix)   Indebtedness resulting from judgments not
resulting in an Event of Default under paragraph (k) of Section 8;


 


(x)   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;


 


(xi)   Indebtedness resulting from Hedge Agreements
permitted hereunder;


 


(xii)   (I) Indebtedness incurred by Credit Parties
that is unsecured so long as, prior to and immediately after giving effect to
the incurrence of such Indebtedness, (A) the Credit Parties and their
respective Subsidiaries are in compliance with the covenants set forth in
Section 6.11 on a Pro Forma Basis, as of the last day of the
most recently ended Fiscal Quarter for which financial statements have been
delivered pursuant to Section 5.1(a) or (b) (or, prior to the delivery of any
such financial statements, the Fiscal Quarter ended June 30, 2010), (B) no 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 (xii) shall not exceed $300,000,000 at any time
outstanding, and (II) without limiting any of the forgoing, any refinancings,
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 Credit 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 6.1(a)(xii) cannot be Indebtedness owed to Griffon or any of its
Subsidiaries other than Permitted Subordinated Indebtedness owed to Griffon in
an aggregate principal amount not exceeding $50,000,000;


 


(xiii)   unsecured or secured Indebtedness of
Subsidiaries that are not Credit Parties in an aggregate amount (including any
Indebtedness that is permitted by Section 6.1(a)(iii) that constitutes
Indebtedness of a type permitted by this Section 6.1(a)(xiii)) not to exceed
$50,000,000 at any time outstanding;


 


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


 


(xv)   any Indebtedness of any Person that becomes a
Subsidiary (including in connection with an acquisition explicitly permitted by
Section 6.4 but 


 


77

















 


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;


 


(xvi)   Indebtedness of any Subsidiaries of Holdings
organized under the laws of Canada pursuant to an asset based lending facility
in an aggregate principal amount not to exceed $20,000,000;


 


(xvii)   Indebtedness of the Credit Parties pursuant
to the Revolving Credit Documents; provided that the aggregate principal
amount and commitments under the Revolving Credit Documents shall not exceed
$125,000,000 at any time outstanding; provided further that the
aggregate principal amount and commitments under the Revolving Credit Documents
may be increased to $150,000,000 if, prior to and after giving effect to such
increase and incurrence of Indebtedness, if any, the Leverage Ratio shall not
exceed 2.50 to 1.00 (determined based on the Consolidated Adjusted EBITDA for
the period of four consecutive Fiscal Quarters ending on the last day of the
most recently ended Fiscal Quarter for which financial statements have been
delivered pursuant to Section 5.1(a) or (b) (or, prior to the delivery of any
such financial statements, the Fiscal Quarter ended June 30, 2010) and after
giving effect to the adjustments described in clauses (i) and (ii) of the
definition of “Pro Forma Basis”); 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 Indebtedness incurred in reliance on this
Section 6.1(a) may be Indebtedness owed to Griffon or any of its Subsidiaries
(other than Group Members), except for Permitted Subordinated Indebtedness in
an aggregate principal amount not exceeding $50,000,000 permitted under Section
6.1(a)(xii). For purposes of determining compliance with this Section 6.1, 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 such Indebtedness, and any fluctuation in
the applicable Exchange Rate thereafter shall not affect compliance with this
Section 6.1; 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.


 


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(b)   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 6.1(b);


 


(ii)   Guarantees by any Credit Party of obligations
of any Credit Party (including, without limitation, all Indebtedness of a
Credit Party expressly permitted under Section 6.1(a));


 


(iii)   Guarantees by any Foreign Subsidiary of
obligations incurred pursuant to Section 6.1(a)(xiii);


 


(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 Credit Party or any Subsidiaries of any Credit Party in reliance on Section
6.1(b)(iv) or (v) must also be expressly permitted by Section 6.6(c) or (o).


 


6.2.   Liens.  The Credit Parties will not, and
will not permit any of their 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 (i) the Credit
Documents and (ii) subject to the Intercreditor Agreement, Liens on the
Collateral granted under the Revolving Credit Documents;


 


(b)   Permitted Encumbrances;


 


(c)   any Lien on any property or asset of any
Group Member existing on the date hereof and set forth on Schedule 6.2
(excluding, however, following the making of the Term Loans hereunder on the
Closing 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;


 


79

















 


(d)   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 6.4 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;


 


(e)   Liens on fixed or capital assets acquired,
constructed or improved by any Group Member (including any Liens permitted by
paragraph (c) above that are of a type permitted by this clause (e)); provided
that (i) such security interests secure Indebtedness expressly permitted by
Section 6.1 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;


 


(f)   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;


 


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


 


(h)   Liens granted by any Subsidiaries that are
not Credit Parties on assets of any Subsidiaries that are not Credit Parties to
secure Indebtedness incurred pursuant to Section 6.1(a)(xiii); provided
that any such Liens on assets of Domestic Subsidiaries shall not secure
Indebtedness of Foreign Subsidiaries and any such Liens on assets of Foreign
Subsidiaries shall not secure Indebtedness of Domestic Subsidiaries;


 


(i)   any interest or title of a lessor under any
lease entered into by 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;


 


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


 


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


 


80

















 


(l)   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;


 


(m)   Liens on any assets that are the subject of
an agreement for a disposition thereof expressly permitted under Section 6.4
that arise due to the existence of such agreement;


 


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


 


(o)   Liens securing Indebtedness permitted under
Section 6.1(a)(xvi); 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


 


(p)   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 6.2 may at any time attach to any Credit
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.


 


6.3.   Mergers, Consolidations,
Etc.  No
Credit 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 Borrower may be merged or consolidated with or into
Borrower (provided that Borrower shall be the continuing or surviving
corporation) or with or into any Subsidiary which is a Credit Party (provided
that, in the case of a merger involving a Subsidiary which is a Credit Party
and another Subsidiary which is not a Credit Party, such Subsidiary which is a
Credit Party shall be the continuing or surviving corporation), (ii) any other
Subsidiary of Borrower which is not a Credit Party may be merged or
consolidated with or into any other Subsidiary of Borrower which is not a
Credit Party, and (iii) any Credit Party may make Permitted Acquisitions in
compliance with Section 6.6(d).


 


6.4.   Dispositions.  No Credit 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;


 


81

















 


(c)   any Subsidiary of Borrower may sell, lease,
transfer or otherwise dispose of any or all of its property (upon voluntary
liquidation or otherwise) to any Group Member (provided that, in the
case of any such transfer by a Subsidiary that is a Credit Party, the
transferee must also be a Credit Party);


 


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


 


(e)   any Group Member may sell, lease, transfer or
otherwise dispose of 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 Closing Date in
reliance on this Section 6.4(e), $250,000,000; provided (i)  any disposition of Equity Interests of any
Subsidiary of 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 any such disposition, (A) no Default
shall have occurred and be continuing, and (B) if the fair market value of the
property and assets subject to such disposition exceeds $50,000,000, the Credit
Parties and their respective Subsidiaries are in compliance with the covenants
set forth in Section 6.11 on a Pro Forma Basis, as of the last day of the
most recently ended Fiscal Quarter for which financial statements have been
delivered pursuant to Section 5.1(a) or (b) (or, prior to the delivery of any
such financial statements, the Fiscal Quarter ended June 30, 2010);


 


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


 


(g)   the dispositions expressly permitted by
Section 6.3;


 


(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 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 6.2;


 


(l)   Restricted Payments expressly permitted by
Section 6.7; and


 


82

















 


(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.


 


6.5.   Lines of
Business.  No Credit 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 Closing Date
(after giving effect to the Acquisition) and businesses reasonably related
thereto.


 


6.6.   Investments and
Acquisitions.  No Credit 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)   Investments in Cash and Cash Equivalents,
subject to Control Agreements in favor of Administrative Agent for the benefit
of the Secured Parties or otherwise subject to a perfected security interest in
favor of Administrative Agent for the benefit of the Secured Parties to the
extent required under the Credit Documents;


 


(b)   Investments (other than Investments expressly
permitted under paragraph (a) and (b) of this Section) existing on the date
hereof and set forth on Schedule 6.6;


 


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


 


(d)   Any Permitted Acquisition if, prior to and
after giving effect to such Permitted Acquisition, (i) the Credit Parties and their respective
Subsidiaries are in compliance with the covenants set forth in Section 6.11
on a Pro Forma Basis, as of the
last day of the most recently ended Fiscal Quarter for which financial
statements have been delivered pursuant to Section 5.1(a) or (b) (or, prior to
the delivery of any such financial statements, the Fiscal Quarter ended June 30,
2010) and (ii) no Default shall have
occurred and be continuing; 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 


 


83

















 


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 Closing Date
in reliance on this Section 6.6(d) does not exceed $300,000,000 and (z) the
portion of the fair market value of 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 Closing Date, except to the extent such Investments are
treated, at the time of such Permitted Acquisition, as Investments in such
Persons pursuant to this Section 6.6 and such Investments are permitted to be
made thereunder (other than pursuant to this clause (d) and Section 6.6(k)) at
such time;


 


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


 


(f)   any Restricted Payments expressly permitted
by Section 6.7;


 


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


 


(h)   Investments arising in connection with the
incurrence of Indebtedness expressly permitted by Section 6.1(a);


 


(i)   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;


 


(j)   Investments of any Group Member under Hedge
Agreements expressly permitted hereunder;


 


(k)   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;


 


(l)   Investments resulting from pledges and
deposits referred to in paragraphs (iii) and (iv) of the definition of “Permitted
Encumbrances”;


 


(m)   the forgiveness or conversion to equity of
any Indebtedness expressly permitted by Section 6.1(a)(ii) subject to the
limitations in Section 6.6(c);


 


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


 


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


 


84

















 


(p)   the Acquisition.


 


6.7.   Restricted
Payments.  (a)  No
Credit 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 Borrower may declare and
pay dividends with respect to its common stock payable solely in additional
shares of its common stock;


 


(ii)   Borrower may declare and pay to Holdings
(including, without limitation, for further distribution, prior to a Permitted
Change of Control Transaction, to Parent and ultimately to Griffon) (x) dividends
or 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 it Affiliates in connection
with a Permitted Change of Control Transaction paid by 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 6.7(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 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) shall be permitted under this Section 6.7(a)(ii)(x) regardless of amount)
and (B) other payments not exceeding $7,500,000 in any Fiscal Year, (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 6.7(a)(ii)(y) shall not exceed $5,000,000 in any
Fiscal Year 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 


 


85

















 


payments, no Default shall have occurred and be
continuing; provided that payments made pursuant to this Section 6.7(a)(ii)(z)
in any Fiscal Year 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 6.7(a)(ii)(z) shall be calculated, for any Fiscal Year, 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 6.7(a)(ii)
must be deducted (to the extent not already so deducted) from the Consolidated
Net Income of Holdings and its Subsidiaries;


 


(iii)   Borrower may declare and pay dividends,
distributions or otherwise make payments with respect to its Equity Interests
to any Person of which Borrower is a direct or indirect Subsidiary and with
whom 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 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.


 


(iv)   the Credit Parties may make payment of
regularly scheduled interest as and when due in respect of any Permitted
Subordinated Indebtedness permitted by Section 6.1(xii) owing to Griffon or its
Subsidiaries (other than Group Members); and


 


(v)   Borrower may declare and pay to Holdings
(including, without limitation, for further distribution, prior to a Permitted
Change of Control Transaction to Parent and ultimately to Griffon) dividends
not otherwise permitted hereunder in any Fiscal Year (commencing after the end
of the Fiscal Year ending September 30, 2011); provided that (a) the
aggregate amount of such payments to Holdings pursuant to this Section 6.7(iv) during
any Fiscal Year shall not exceed the Consolidated Excess Cash Flow for the
previous Fiscal Year minus the amount of prepayment required in respect
of such Consolidated Excess Cash Flow pursuant to Section 2.11(d) (it being
understood that no Restricted Payments may be made under this clause (iv) until
after Borrower makes the prepayment required by Section 2.11(d) for the
previous Fiscal Year), (b) prior to and after giving effect to such payment, no
Default shall have occurred and be continuing, (c) after giving effect to such
payment, the Leverage Ratio shall not exceed 2.75 to 1.00 (determined based on
the Consolidated Adjusted EBITDA for the period of four consecutive Fiscal
Quarters ending on the last day of the most recently ended Fiscal Quarter for which
financial statements have been delivered pursuant to Section 5.1(a) or (b) (or,
prior to the delivery of any such financial statements, the Fiscal Quarter
ended June 30, 2010) and after giving effect to the adjustments described in
clause (i) of the 


 


86

















 


definition of “Pro Forma Basis”) and (d) the
Availability under the Revolving Credit Agreement shall be at least 30% of the
aggregate commitments under the Revolving Credit Agreement for each of the most
recent 30 days (or, if less, the number of days elapsed since the Closing Date)
and after giving effect thereto;


 


provided that
nothing herein shall be deemed to prohibit the payment of dividends by any
Subsidiary of Borrower to Borrower, any other Subsidiary of 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 that no Restricted Payments may be made
to Griffon, Parent or their respective Affiliates (other than Holdings and its
Subsidiaries) following a Permitted Change of Control Transaction.


 


(b)   No Credit 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
Credit Documents or the Revolving Credit Documents or payments on Indebtedness
owed by a Subsidiary of a Credit Party to a Credit Party or by a Credit Party
to any other Credit Party;


 


(ii)   payments in respect of any Hedge 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 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 shall have occurred and be
continuing and (B) the Availability under the Revolving Credit Agreement shall
be at least 30% of the aggregate commitments under the Revolving Credit
Agreement for each of the most recent 30 days (or, if less, the number of days
elapsed since the Closing Date) and after giving effect thereto;


 


(iii)   refinancings of Indebtedness to the extent
expressly permitted by Section 6.1; and


 


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


 


6.8.   Transactions
with Affiliates.  No Credit 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:


 


87
















 


(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 Borrower
and its Wholly-Owned Subsidiaries that are Credit Parties and not involving any
other Affiliate or (ii) between or among Wholly-Owned Foreign Subsidiaries not
involving any other Affiliate;


 


(c)   any Investments expressly permitted by Section
6.6; provided that this Section 6.8(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 6.7; and


 


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


 


6.9.   Restrictive
Agreements.  No Credit 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 law or
by this Agreement or by any Revolving Credit Document;


 


(b)   restrictions and conditions existing on the
date hereof identified on Schedule 6.9 (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; and


 


(d)    (solely with respect to clause (i) above)
(i) restrictions or conditions imposed by any agreement (other than any
Revolving Credit 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 


 


88

















 


by this Agreement if such restrictions or conditions
apply only to the applicable Foreign Subsidiary and (ii) customary provisions
in leases and other contracts restricting the assignment thereof.


 


6.10.   Hedge
Agreements.  No Credit Party will, nor will it permit any
of its Subsidiaries to, enter into any Hedge Agreement, other than (a) Hedge
Agreements required by Section 5.12 of this Agreement or by any Revolving
Credit Document and (b) Hedge Agreements entered into 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.


 


6.11.   Financial
Covenants.


 


(a)   Interest
Coverage Ratio.  The Credit Parties
shall not permit the Interest Coverage Ratio as of the last day of any Fiscal
Quarter, beginning with the Fiscal Quarter ending December 31, 2010, to be less
than the correlative ratio indicated:


 


	
  Fiscal Quarter Ending

  	
   

  	
  Interest

  Coverage Ratio

  	
   

  
	
  December 31, 2010

  	
   

  	
  2.90:1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  2.90:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  2.90:1.00

  	
   

  
	
  September 30, 2011

  	
   

  	
  3.00:1.00

  	
   

  
	
  December 31, 2011

  	
   

  	
  3.00:1.00

  	
   

  
	
  March 31, 2012

  	
   

  	
  3.25:1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  3.25:1.00

  	
   

  
	
  September 30, 2012

  	
   

  	
  3.50:1.00

  	
   

  
	
  December 31, 2012

  	
   

  	
  3.50:1.00

  	
   

  
	
  March 31, 2013

  	
   

  	
  3.75:1.00

  	
   

  
	
  June 30, 2013

  	
   

  	
  3.75:1.00

  	
   

  
	
  September 30, 2013 and
  thereafter

  	
   

  	
  4.00:1.00

  	
   

  



 


(b)   Leverage
Ratio.  The Credit Parties shall not
permit the Leverage Ratio as of the last day of any Fiscal Quarter, beginning
with the Fiscal Quarter ending December 31, 2010, to exceed the correlative
ratio indicated:


 


	
  Fiscal Quarter

  	
   

  	
  Leverage

  Ratio

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.95:1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  3.95:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  3.75:1.00

  	
   

  
	
  September 30, 2011

  	
   

  	
  3.50:1.00

  	
   

  
	
  December 31, 2011

  	
   

  	
  3.25:1.00

  	
   

  



 


89

















 


	
  Fiscal Quarter

  	
   

  	
  Leverage

  Ratio

  	
   

  
	
  March 31, 2012

  	
   

  	
  3.25:1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  3.00:1.00

  	
   

  
	
  September 30, 2012

  	
   

  	
  2.75:1.00

  	
   

  
	
  December 31, 2012

  	
   

  	
  2.75:1.00

  	
   

  
	
  March 31, 2013

  	
   

  	
  2.50:1.00

  	
   

  
	
  June 30, 2013

  	
   

  	
  2.50:1.00

  	
   

  
	
  September 30, 2013 and
  thereafter

  	
   

  	
  2.25:1.00

  	
   

  



 


(c)   Certain
Calculations.  For purposes of
determining compliance with the financial covenants set forth in Section 6.11
and for any other purposes for which the Leverage Ratio or the Interest
Coverage Ratio is determined, with respect to any period during which a
Material Acquisition or Material Disposition has occurred, Consolidated
Adjusted EBITDA and the components of Consolidated Interest Expense shall be
calculated with respect to such period on a pro forma basis to give effect
thereto and to any other Material Acquisition or Material Disposition
consummated since the first day of such period (including pro forma adjustments
arising out of events that are directly attributable thereto, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X promulgated
under the Securities Act, as interpreted by the staff of the SEC, which would
include cost savings resulting from head count reduction, closure of facilities
and similar restructuring charges, which pro forma adjustments shall be
certified by the chief financial officer of Borrower) using the historical
financial statements of any assets so acquired or disposed and the consolidated
financial statements of Holdings and its Subsidiaries, which shall be
reformulated as if such Material Acquisition or Material Disposition, and any
Indebtedness incurred or repaid in connection therewith, had been consummated
or incurred or repaid at the beginning of such period (and, in the case of any
such incurred Indebtedness that bears a floating rate of interest, the interest
on such Indebtedness shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period).


 


6.12.   Stock Issuance.  No Credit 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 6.7, (b) the Equity Interests of any Subsidiary to Borrower or any
of its Subsidiaries, (c) the Equity Interests of Holdings (other than
Disqualified Equity Interests) issued to Griffon or Parent in consideration of
the Equity Contribution, (d) (i) prior to the 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 the Permitted Change of Control Transaction the Equity Interests (other
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 Credit Party shall be owned by a Subsidiary that is not a Credit Party.


 


90

















 


6.13.   Modifications
of Certain Documents.  No Credit 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 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, (B) except as permitted by Section 6.1(a)(xii)(II),
any Permitted Subordinated Debt, in each case, without the prior consent of the
Administrative Agent (with the approval of the Requisite Lenders) or (C) the
Management Agreement.


 


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 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 Credit
Documents and the Revolving Credit 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 and the
ownership of shares of Equity Interests of Borrower).


 


6.15.   Sale and
Leaseback Transactions.  No Credit 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 6.1 and Section 6.2 and any sale or
transfer is treated as a sale under Section 6.4(e) and permitted thereunder.


 


6.16.   Capital
Expenditures.  (a)  The Credit Parties will not, nor will they
permit any Subsidiary to, incur or make any Consolidated Capital Expenditures
in any Fiscal Year indicated below, in an aggregate amount for Holdings and its
Subsidiaries in excess of the corresponding amount set forth below opposite
such Fiscal Year.


 




	
  Fiscal Year Ending

  	
   

  	
  Consolidated Capital

  Expenditures

  	
   

  
	
  September
  30, 2010

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  September
  30, 2011

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
  September
  30, 2012

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  September
  30, 2013

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  September
  30, 2014

  	
   

  	
  $

  	
  40,000,000

  	
   

  






 


91

















 




	
  Fiscal Year Ending

  	
   

  	
  Consolidated Capital

  Expenditures

  	
   

  
	
  September
  30, 2015

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  September
  30, 2016

  	
   

  	
  $

  	
  40,000,000

  	
   

  






 


(b)   The amount of any Consolidated Capital
Expenditures permitted to be made in respect of any Fiscal Year (commencing
with the Fiscal Year ending September 30, 2011) shall be increased by 60% of
the unused amount of Consolidated Capital Expenditures that were permitted to
be made during the immediately preceding Fiscal Year pursuant to Section 6.16(a),
without giving effect to any carryover amount. 
Consolidated Capital Expenditures in any Fiscal Year shall be deemed to
use first, the amount for such Fiscal Year set forth in Section 6.16(a) and,
second, any amount carried forward to such Fiscal Year pursuant to this Section
6.16(b).


 


6.17.   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.


 


SECTION 7.  
GUARANTY


 


7.1.   Guarantee of the
Obligations.  Subject to the provisions of Section 7.2,
Guarantors jointly and severally hereby irrevocably and unconditionally
guarantee to Administrative Agent, for the ratable benefit of the Secured
Parties the due and punctual payment in full of all Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code (collectively, the “Guaranteed
Obligations”).


 


7.2.   Contribution by
Guarantors.  All Guarantors desire to allocate among
themselves (collectively, the “Contributing
Guarantors”), in a fair and equitable manner, their obligations
arising under the Obligations Guarantee set forth in this Section 7.  Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Obligations Guarantee such
that its Aggregate Payments exceeds its Fair Share as of such date, such
Funding Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in an amount sufficient to cause each Contributing
Guarantor’s Aggregate Payments to equal its Fair Share as of such date.  “Fair Share”
means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (a) the ratio of (i) the Fair Share
Contribution Amount with respect to such Contributing Guarantor to (ii) the
aggregate of the Fair Share Contribution Amounts with respect to all
Contributing Guarantors multiplied by (b) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this
Obligations Guarantee in respect of the Obligations.  “Fair Share
Contribution Amount” means, with respect to a Contributing Guarantor
as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Obligations Guarantee that
would not render its obligations hereunder or 


 


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thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548
of the Bankruptcy Code or any comparable applicable provisions of state law; provided
that solely for purposes of calculating the “Fair
Share Contribution Amount” with respect to any Contributing
Guarantor for purposes of this Section 7.2, any assets or liabilities of such
Contributing Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor.  “Aggregate Payments” means, with respect to
a Contributing Guarantor as of any date of determination, an amount equal to
(1) the aggregate amount of all payments and distributions made on or before
such date by such Contributing Guarantor in respect of this Obligations
Guarantee (including in respect of this Section 7.2), minus (2) the
aggregate amount of all payments received on or before such date by such
Contributing Guarantor from the other Contributing Guarantors as contributions
under this Section 7.2.  The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding
Guarantor.  The allocation among
Contributing Guarantors of their obligations as set forth in this Section 7.2
shall not be construed in any way to limit the liability of any Contributing
Guarantor hereunder.  Each Guarantor is a
third party beneficiary to the contribution agreement set forth in this Section
7.2.


 


7.3.   Payment by
Guarantors.  Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Secured Party may have at law or in
equity against any Guarantor by virtue hereof, that upon the failure of
Borrower to pay any of the Guaranteed Obligations when and as the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, Guarantors will upon demand pay, or cause to be paid, in Cash, to
Administrative Agent for the ratable benefit of Secured Parties, an amount
equal to the sum of the unpaid principal amount of all Guaranteed Obligations
then due as aforesaid, accrued and unpaid interest on such Guaranteed
Obligations (including interest which, but for Borrower’s becoming the subject
of a case under the Bankruptcy Code, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against Borrower for such
interest in the related bankruptcy case) and all other Guaranteed Obligations
then owed to Beneficiaries as aforesaid.


 


7.4.   Liability of
Guarantors Absolute.  Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall
not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other than payment in full in Cash of the
Guaranteed Obligations.  In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:


 


(a)   this Obligations Guarantee is a guarantee of
payment when due and not of collectability. 
This Obligations Guarantee is a primary obligation of each Guarantor and
not merely a contract of surety;


 


(b)   Administrative Agent may enforce this
Obligations Guarantee upon the occurrence and during the continuance of an
Event of Default notwithstanding the 


 


93

















 


existence of any dispute between Borrower and any
Secured Party with respect to the existence of such Event of Default;


 


(c)   the obligations of each Guarantor hereunder
are independent of the obligations of Borrower and the obligations of any other
guarantor (including any other Guarantor) of the obligations of Borrower, and a
separate action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Borrower or any of such other
guarantors and whether or not Borrower is joined in any such action or actions;


 


(d)   payment by any Guarantor of a portion, but
not all, of the Guaranteed Obligations shall in no way limit, affect, modify or
abridge any Guarantor’s liability for any portion of the Guaranteed Obligations
which has not been paid.  Without
limiting the generality of the foregoing, if Administrative Agent is awarded a
judgment in any suit brought to enforce any Guarantor’s covenant to pay a
portion of the Guaranteed Obligations, such judgment shall not be deemed to
release such Guarantor from its covenant to pay the portion of the Guaranteed
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Guarantor, limit, affect, modify or
abridge any other Guarantor’s liability hereunder in respect of the Guaranteed
Obligations;


 


(e)   any Secured Party, upon such terms as it
deems appropriate, without notice or demand and without affecting the validity
or enforceability hereof or giving rise to any reduction, limitation, impairment,
discharge or termination of any Guarantor’s liability hereunder, from time to
time may (i) renew, extend, accelerate, increase the rate of interest on, or
otherwise change the time, place, manner or terms of payment of the Guaranteed
Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request and accept
other guaranties of the Guaranteed Obligations and take and hold security for
the payment hereof or the Guaranteed Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the
Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or
any other obligation of any Person (including any other Guarantor) with respect
to the Guaranteed Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of such Secured Party in respect hereof or
the Guaranteed Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that such Secured Party may have against any
such security, in each case as such Secured Party in its discretion may
determine consistent herewith or the applicable Secured Hedge Agreement and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Guarantor against any other Credit Party or any
security for the Guaranteed Obligations; and (vi) exercise any other rights
available to it under the Credit Documents or any Secured Hedge Agreements; and


 


94

















 


(f)   this Obligations Guarantee and the
obligations of Guarantors hereunder shall be valid and enforceable and shall
not be subject to any reduction, limitation, impairment, discharge or
termination for any reason (other than payment in full in cash of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy (whether arising under the Credit Documents or any
Secured Hedge Agreements, at law, in equity or otherwise) with respect to the
Guaranteed Obligations or any agreement relating thereto, or with respect to
any other guarantee of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Credit Documents, any
of the Secured Hedge Agreements or any agreement or instrument executed
pursuant thereto, or of any other guarantee or security for the Guaranteed
Obligations, in each case whether or not in accordance with the terms hereof or
such Credit Document, such Secured Hedge Agreement or any agreement relating to
such other guaranty or security; (iii) the Guaranteed Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received from
any source (other than payments received pursuant to the other Credit Documents
or any of the Secured Hedge Agreements or from the proceeds of any security for
the Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though any
Secured Party might have elected to apply such payment to any part or all of
the Guaranteed Obligations; (v) any Secured Party’s consent to the change,
reorganization or termination of the corporate structure or existence of
Holdings or any of its Subsidiaries and to any corresponding restructuring of
the Guaranteed Obligations; (vi) any failure to perfect or continue perfection
of a security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Borrower may
allege or assert against any Secured Party in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guaranteed Obligations.


 


7.5.   Waivers by
Guarantors.  Each Guarantor hereby waives, to the fullest
extent permitted by law, for the benefit of Secured Parties: (a) any right to
require any Secured Party, as a condition of payment or performance by such
Guarantor, to (i) proceed against Borrower, any other guarantor (including any
other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Borrower, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of any
Deposit Account or credit on the books of any Secured Party in favor of any
Credit Party or any other Person, or (iv) pursue any other remedy in the power
of any Secured Party whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of 


 


95

















 


Borrower
or any other Guarantor, including any defense based on or arising out of the
lack of validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of Borrower or any other Guarantor from any cause other than payment
in full in Cash of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Secured Party’s errors or omissions
in the administration of the Guaranteed Obligations, except behavior which
amounts to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any
legal or equitable discharge of such Guarantor’s obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor’s liability
hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Secured Party protect, secure, perfect or insure any security interest or lien
or any property subject thereto; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, under the Credit
Documents, the Secured Hedge Agreements or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of
credit to Borrower or any other Credit Party and notices of any of the matters
referred to in Section 7.4 and any right to consent to any thereof; and (g) any
defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate guarantors or sureties, or which may conflict
with the terms hereof.


 


7.6.   Guarantors’
Rights of Subrogation, Contribution, Etc.  Until the Guaranteed Obligations shall have
been indefeasibly paid in full in Cash, each Guarantor hereby waives to the
fullest extent permitted by law any claim, right or remedy, direct or indirect,
that such Guarantor now has or may hereafter have against Borrower or any other
Guarantor or any of its assets in connection with this Obligations Guarantee or
the performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or
may hereafter have against Borrower with respect to the Guaranteed Obligations,
(b) any right to enforce, or to participate in, any claim, right or remedy that
any Secured Party now has or may hereafter have against Borrower, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by any Secured Party.  In
addition, until the Guaranteed Obligations shall have been indefeasibly paid in
full, each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guaranteed Obligations, including any such right of contribution as
contemplated by Section 7.2.  Each
Guarantor further agrees that, to the extent the waiver or agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Borrower or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Secured Party may have against Borrower, to all
right, title and interest any Secured Party may have in any such collateral or
security, and to any right any Secured Party may have against such other
guarantor.  If any amount shall be paid
to any Guarantor on account of any such subrogation, 


 


96

















 


reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full in Cash,
such amount shall be held in trust for Administrative Agent on behalf of
Secured Parties and shall forthwith be paid over to Administrative Agent for
the benefit of Secured Parties to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.


 


7.7.   Subordination of
Other Obligations.  Any Indebtedness of Borrower or any Guarantor
now or hereafter held by any Guarantor (the “Obligee
Guarantor”) is hereby subordinated in right of payment to the
Guaranteed Obligations, and any such Indebtedness collected or received by the
Obligee Guarantor after an Event of Default has occurred and is continuing
shall be held in trust for Administrative Agent on behalf of Secured Parties
and shall forthwith be paid over to Administrative Agent for the benefit of
Secured Parties to be credited and applied against the Guaranteed Obligations
in accordance with the terms of this Agreement but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any
other provision hereof.


 


7.8.   Continuing
Obligations Guarantee.  This Obligations Guarantee is a continuing
guarantee and shall remain in effect until all of the Guaranteed Obligations
(other than contingent indemnification obligations) shall have been paid in
full in Cash.  Each Guarantor hereby irrevocably
waives any right to revoke this Obligations Guarantee as to future transactions
giving rise to any Guaranteed Obligations.


 


7.9.   Authority of
Guarantors or Borrower.  It is not necessary for any Secured Party to
inquire into the capacity or powers of any Guarantor or Borrower or the officers,
directors or any agents acting or purporting to act on behalf of any of them.


 


7.10.   Financial
Condition of Borrower.  Any Credit Extension may be made to Borrower
or continued from time to time, and any Secured Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from
any Guarantor regardless of the financial or other condition of Borrower at the
time of any such grant or continuation or at the time such Secured Hedge
Agreement is entered into, as the case may be. 
No Secured Party shall have any obligation to disclose or discuss with
any Guarantor its assessment, or any Guarantor’s assessment, of the financial
condition of Borrower.  Each Guarantor
has adequate means to obtain information from Borrower on a continuing basis
concerning the financial condition of Borrower and its ability to perform its
obligations under the Credit Documents and the Secured Hedge Agreements, and
each Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Borrower and of all circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations. 
Each Guarantor hereby waives and relinquishes any duty on the part of
any Secured Party to disclose any matter, fact or thing relating to the
business, operations or conditions of Borrower now known or hereafter known by
any Secured Party.


 


7.11.   Bankruptcy, Etc.  (a)  So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Borrower or any
other Guarantor.  The obligations of
Guarantors hereunder shall not be reduced, 


 


97

















 


limited,
impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Borrower or any
other Guarantor or by any defense which Borrower or any other Guarantor may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.


 


(b)   Each Guarantor acknowledges and agrees that
any interest on any portion of the Guaranteed Obligations which accrues after
the commencement of any case or proceeding referred to in clause (a) above (or,
if interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if
such case or proceeding had not been commenced) shall be included in the
Guaranteed Obligations because it is the intention of Guarantors and Secured
Parties that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order
which may relieve Borrower of any portion of such Guaranteed Obligations.  Guarantors will permit any trustee in
bankruptcy, receiver, debtor-in-possession, assignee for the benefit of
creditors or similar Person to pay Administrative Agent, or allow the claim of
Administrative Agent in respect of, any such interest accruing after the date
on which such case or proceeding is commenced.


 


(c)   In the event that all or any portion of the
Guaranteed Obligations are paid by Borrower, the obligations of Guarantors
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from any Secured Party as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guaranteed Obligations for all
purposes hereunder.


 


7.12.   Discharge of
Obligations Guarantee upon Sale of Guarantor.  If all of the Equity Interests of any
Guarantor or any of its successors in interest hereunder shall be sold or
otherwise disposed of (including by merger or consolidation) to a Person that
is not a Group Member in accordance with the terms and conditions hereof, the
Obligations Guarantee of such Guarantor or such successor in interest, as the
case may be, hereunder shall automatically be discharged and released without
any further action by any Secured Party or any other Person effective as of the
time of such Asset Sale.


 


SECTION 8.  
EVENTS OF DEFAULT


 


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


 


(a)   the Borrower shall fail to pay any principal
of any Term 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 interest
on any Term Loan or any fee or any other amount (other than an amount referred
to in paragraph (a) of this Section) 


 


98

















 


payable under this Agreement or under any other
Credit 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 Credit Party in or in connection with this
Agreement or any other Credit 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 Credit 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 Credit Party shall fail to observe or
perform any covenant, condition or agreement contained in Section 2.3, 5.1(a),
(b), (c) or (d), 5.2 or 5.3 (with respect to a Credit Party’s existence) or in
Section 6 or any Credit 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 Pledge and Security Agreement or Article VII of the Pledge and
Security Agreement;


 


(e)   any Credit 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
Credit Document and such failure shall continue unremedied for a period of 30
or more days after receipt by Borrower of notice of such default from
Administrative Agent or 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 Hedge Agreement) in respect of any
Material Indebtedness, when and as the same shall become due and payable, and
such failure shall continue unremedied beyond the grace period, if any,
provided therefor;


 


(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, or, prior to the Permitted
Change of Control Transaction, Griffon or Parent, of 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, or, prior to the Permitted Change of
Control Transaction, Griffon 


 


99

















 


or Parent, 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, or, prior to the Permitted
Change of Control Transaction, Griffon or 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 Section, (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;


 


(j)   any Group Member or, prior to the Permitted
Change of Control Transaction, Griffon or 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 Credit Document
for any reason ceases to be valid, binding and enforceable in accordance with
its terms (or any Credit Party shall challenge the enforceability of any Credit
Document or shall assert in writing, or engage in any action based on any such
written assertion, that any provision of any of the Credit Documents has ceased
to be or otherwise is not valid, binding and enforceable in accordance with its
terms)


 


(o)   the Obligations Guarantee contained in
Section 7 shall for whatever reason cease to be in full force and effect or any
Credit Party or any Affiliate of any Credit 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 


 


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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 6.2 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 Credit Party or any Affiliate of any Credit Party shall so
assert, or the enforceability thereof shall be contested by any Credit Party or
any Affiliate of any Credit Party;


 


then, (1) upon the occurrence of any Event of Default
described in clause (h) or (i) of this Section, automatically, and (2) upon the
occurrence and during the continuance of any other Event of Default, at the
request of (or with the consent of) Requisite Lenders, upon notice to Borrower
by Administrative Agent, (A) each of the following shall immediately become due
and payable, in each case without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by each
Credit Party: (I) the unpaid principal amount of and accrued interest on the
Term Loans, and (II) all other Obligations and (B) Administrative Agent may
cause Collateral Agent to enforce any and all Liens and security interests
created pursuant to Collateral Documents.


 


SECTION 9.  
AGENTS


 


9.1.   Appointment of
Agents.  GSLP
and DBSI are hereby appointed Syndication Agents hereunder, and each Lender
hereby authorizes GSLP and DBSI to act as Syndication Agents in accordance with
the terms hereof and of the other Credit Documents.  GSLP is hereby appointed Administrative Agent
and Collateral Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes GSLP to act as Administrative Agent and Collateral
Agent in accordance with the terms hereof and of the other Credit
Documents.  Each Agent hereby agrees to
act in its capacity as such upon the express conditions contained herein and in
the other Credit Documents, as applicable. 
The provisions of this Section 9 are solely for the benefit of Agents
and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. 
In performing its functions and duties hereunder, each Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Holdings or any of its Subsidiaries. 
Each Syndication Agent, without consent of or notice to any party
hereto, may assign any and all of its rights or obligations hereunder to any of
its Affiliates.  As of the Closing Date,
GSLP and DBSI, solely in their capacity as Syndication Agent, shall not have
any obligations under the Credit Documents but shall be entitled to the
benefits of this Section 9.  Each
Syndication Agent and any other Person appointed under the Credit Documents to
serve in an agent or similar capacity may resign from such role at any time,
with immediate effect, by giving prior written notice thereof to Administrative
Agent and Borrower.


 


9.2.   Powers and
Duties.  Each
Lender irrevocably authorizes each Agent to take such action on such Lender’s
behalf and to exercise such powers, rights and remedies hereunder and under the
other Credit Documents as are specifically delegated or granted to such Agent
by the terms hereof and thereof, together with such powers, rights and remedies
as are reasonably incidental thereto. 
Each Agent shall have only those duties and responsibilities that are expressly
specified herein and in the other Credit Documents.  Each Agent may exercise such powers, 


 


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rights
and remedies and perform such duties by or through its agents or
employees.  No Agent shall have, by
reason hereof or any of the other Credit Documents, a fiduciary relationship in
respect of any Lender; and nothing herein or any of the other Credit Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
any Agent any obligations in respect hereof or of any of the other Credit
Documents except as expressly set forth herein or therein.


 


9.3.   General Immunity.  (a)  No Responsibility for Certain Matters.  No Agent shall be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by any Agent to Lenders or by or on behalf of any Credit Party to any Agent or
any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of
the Term Loans or as to the existence or possible existence of any Default or
to make any disclosures with respect to the foregoing.  Anything contained herein to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Term Loans or the component amounts
thereof.


 


(b)   Exculpatory
Provisions.  No Agent nor any of its
Related Parties shall be liable to Lenders for any action taken or omitted by
any Agent under or in connection with any of the Credit Documents except to the
extent caused by such Agent’s gross negligence or willful misconduct, as
determined by a final, non-appealable judgment of a court of competent
jurisdiction.  Each Agent shall be
entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection herewith or any of the other Credit
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 10.5) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), such Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in accordance
with such instructions.  Without
prejudice to the generality of the foregoing, (i) each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper Person or Persons, and shall be entitled to
rely and shall be protected in relying on opinions and judgments of attorneys
(who may be attorneys for Holdings and its Subsidiaries), accountants, experts
and other professional advisors selected by it; and (ii) no Lender shall have
any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).


 


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(c)   Delegation
of Duties.  Each of Administrative
Agent and Collateral Agent may perform any and all of its duties and exercise
its rights and powers under this Agreement or under any other Credit Document
by or through any one or more sub-agents appointed by Administrative Agent or
Collateral Agent, as applicable.  Each of
Administrative Agent and Collateral Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through
their respective Affiliates.  The
exculpatory, indemnification and other provisions of this Section 9.3 and of
Section 9.6 shall apply to any the Affiliates of each of Administrative Agent
and Collateral 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 or Collateral Agent, as applicable.  All
of the rights, benefits, and privileges (including the exculpatory and
indemnification provisions) of this Section 9.3 and of Section 9.6 shall apply
to any such sub-agent and to the Affiliates of any such sub-agent, and shall
apply to their respective activities as sub-agent as if such sub-agent and
Affiliates were named herein. 
Notwithstanding anything herein to the contrary, with respect to each
sub-agent appointed by Administrative Agent or Collateral Agent, as applicable,
(i) such sub-agent shall be a third party beneficiary under this Agreement with
respect to all such rights, benefits and privileges (including exculpatory
rights and rights to indemnification) and shall have all of the rights and
benefits of a third party beneficiary, including an independent right of action
to enforce such rights, benefits and privileges (including exculpatory rights
and rights to indemnification) directly, without the consent or joinder of any
other Person, against any or all of Credit Parties and the Lenders, (ii) such
rights, benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such
sub-agent, and (iii) such sub-agent shall only have obligations to
Administrative Agent or Collateral Agent, as applicable and not to any Credit
Party, Lender or any other Person and no Credit Party, Lender or any other
Person shall have any rights, directly or indirectly, as a third party
beneficiary or otherwise, against such sub-agent.


 


9.4.   Agents Entitled
To Act as Lender.  The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender
hereunder.  With respect to its
participation in the Term Loans, each Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as if it were
not performing the duties and functions delegated to it hereunder, and the term
“Lender” shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity.  Any
Agent and its Affiliates may accept deposits from, lend money to, own
securities of, and generally engage in any kind of banking, trust, financial
advisory or other business with Holdings or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to Lenders.


 


9.5.   Lenders’
Representations, Warranties and Acknowledgment.  (a)  Each Lender represents and warrants that it
has made its own independent investigation of the financial condition and
affairs of Holdings and its Subsidiaries in connection with Credit Extensions
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Holdings and its Subsidiaries.  No Agent shall have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any 


 


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such
appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Term Loans or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.


 


(b)   Each Lender, by delivering its signature page
to this Agreement or  an Assignment
Agreement and funding its Term Loan on the Closing Date shall be deemed to have
acknowledged receipt of, and consented to and approved, each Credit Document
and each other document required to be approved by any Agent, Requisite Lenders
or Lenders, as applicable on the Closing Date.


 


9.6.   Right to
Indemnity.  Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Agent in exercising its powers, rights and
remedies or performing its duties hereunder or under the other Credit Documents
or otherwise in its capacity as such Agent in any way relating to or arising
out of this Agreement or the other Credit Documents; provided, no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent’s gross negligence or willful misconduct, as
determined by a final, non-appealable judgment of a court of competent
jurisdiction.  If any indemnity furnished
to any Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided that in no event shall this
sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender’s Pro Rata Share thereof; and provided
further that this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
in the immediately preceding sentence.


 


9.7.   Successor
Administrative Agent and Collateral Agent.  (a)  Administrative Agent shall have the right to
resign at any time by giving prior written notice thereof to Lenders and
Borrower and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Borrower and Administrative Agent and signed by Requisite Lenders.  Administrative Agent shall have the right to
appoint a financial institution to act as Administrative Agent and/or
Collateral Agent hereunder, subject to the reasonable satisfaction of Borrower
and the Requisite Lenders, and Administrative Agent’s resignation shall become
effective on the earliest of (i) 30 days after delivery of the notice of resignation,
(ii) the acceptance of such successor Administrative Agent by Borrower and the
Requisite Lenders or (iii) such other date, if any, agreed to by the Requisite
Lenders.  Upon any such notice of
resignation or any such removal, if a successor Administrative Agent has not
already been appointed by the retiring Administrative Agent, Requisite Lenders
shall have the right, upon five Business Days’ notice to Borrower, to appoint a
successor Administrative Agent.  If
neither Requisite Lenders nor Administrative Agent have appointed a successor
Administrative Agent, Requisite Lenders shall be deemed to have succeeded to
and become 


 


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vested
with all the rights, powers, privileges and duties of the retiring Administrative
Agent; provided that, until a successor Administrative Agent is so
appointed by Requisite Lenders or Administrative Agent, any collateral security
held by Administrative Agent in its role as Collateral Agent on behalf of the
Lenders under any of the Credit Documents shall continue to be held by the
retiring Collateral Agent as nominee until such time as a successor Collateral
Agent is appointed.  Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Administrative Agent under the Credit Documents, and (ii) execute
and deliver to such successor Administrative Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Administrative Agent shall be discharged from its duties
and obligations hereunder.  Except as
provided above, any resignation or removal of GSLP or its successor as
Administrative Agent pursuant to this Section shall also constitute the
resignation or removal of GSLP or its successor as Collateral Agent.  After any retiring or removed Administrative
Agent’s resignation or removal hereunder as Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent hereunder.  Any successor Administrative Agent appointed
pursuant to this Section shall, upon its acceptance of such appointment, become
the successor Collateral Agent for all purposes hereunder.


 


(b)   In addition to the foregoing, Collateral
Agent may resign at any time by giving prior written notice thereof to Lenders
and the Grantors, and Collateral Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered
to the Grantors and Collateral Agent signed by Requisite Lenders.  Administrative Agent shall have the right to
appoint a financial institution as Collateral Agent hereunder, subject to the
reasonable satisfaction of Borrower and the Requisite Lenders and Collateral
Agent’s resignation shall become effective on the earliest of (i) 30 days after
delivery of the notice of resignation, (ii) the acceptance of such successor
Collateral Agent by Borrower and the Requisite Lenders or (iii) such other
date, if any, agreed to by the Requisite Lenders.  Upon any such notice of resignation or any
such removal, Requisite Lenders shall have the right, upon five Business Days’
notice to Administrative Agent, to appoint a successor Collateral Agent.  Until a successor Collateral Agent is so
appointed by Requisite Lenders or Administrative Agent, any collateral security
held by Collateral Agent on behalf of the Lenders under any of the Credit
Documents shall continue to be held by the retiring Collateral Agent as nominee
until such time as a successor Collateral Agent is appointed.  Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, that successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Collateral Agent
under this Agreement and the Collateral Documents, and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent 


 


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all sums, Securities and other items of Collateral
held hereunder or under the Collateral Documents, together with all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Collateral Agent under this Agreement and the
Collateral Documents, and (ii) execute and deliver to such successor Collateral
Agent or otherwise authorize the filing of such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Collateral Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Collateral Agent shall be discharged from its duties and
obligations under this Agreement and the Collateral Documents.  After any retiring or removed Collateral
Agent’s resignation or removal hereunder as the Collateral Agent, the
provisions of this Agreement and the Collateral Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement or the Collateral Documents while it was the Collateral Agent
hereunder.


 


9.8.   Collateral
Documents and Obligations Guarantee.  (a)  Agents
under Collateral Documents and Obligations Guarantee.  Each Secured Party hereby further authorizes
Administrative Agent or Collateral Agent, as applicable, on behalf of and for
the benefit of Secured Parties, to be the agent for and representative of
Secured Parties with respect to the Obligations Guarantee, the Collateral and
the Collateral Documents; provided that neither Administrative Agent nor
Collateral Agent shall owe any fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or any other obligation whatsoever to any holder of
Obligations with respect to any Secured Hedge Agreement.  Subject to Section 10.5, without further
written consent or authorization from any Secured Party, Administrative Agent
or Collateral Agent, as applicable, may execute any documents or instruments
necessary to (i) in connection with a sale or disposition of assets permitted
by this Agreement, release any Lien encumbering any item of Collateral that is
the subject of such sale or other disposition of assets or to which Requisite
Lenders (or such other Lenders as may be required to give such consent under
Section 10.5) have otherwise consented or (ii) release any Guarantor from the
Obligations Guarantee pursuant to Section 7.12 or with respect to which
Requisite Lenders (or such other Lenders as may be required to give such
consent under Section 10.5) have otherwise consented.


 


(b)   Right
to Realize on Collateral and Enforce Obligations Guarantee.  Anything contained in any of the Credit
Documents to the contrary notwithstanding, Borrower, Administrative Agent,
Collateral Agent and each Secured Party hereby agree that (i) no Secured Party
shall have any right individually to realize upon any of the Collateral or to
enforce the Obligations Guarantee, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of the Secured Parties in accordance with the terms hereof and
all powers, rights and remedies under the Collateral Documents may be exercised
solely by Collateral Agent, and (ii) in the event of a foreclosure by Collateral
Agent on any of the Collateral pursuant to a public or private sale or other
disposition, Collateral Agent or any Lender may be the purchaser or licensor of
any or all of such Collateral at any such sale or other disposition and
Collateral Agent, as agent for and representative of Secured Parties (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at 


 


106

















 


any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale or other disposition.


 


(c)   Rights
under Secured Hedge Agreements.  No
Secured Hedge Agreement will create (or be deemed to create)  in favor of any Secured Hedge Counterparty
that is a party thereto any rights in connection with the management or release
of any Collateral or of the obligations of any Guarantor under the Credit
Documents except as expressly provided in Section 10.5(c)(i) of this Agreement
and Section 5.2 of the Pledge and Security Agreement.  By accepting the benefits of the Collateral,
such Secured Hedge Counterparty shall be deemed to have appointed Collateral
Agent as its agent and agreed to be bound by the Credit Documents as a Secured
Party, subject to the limitations set forth in this clause (c).


 


(d)   Release
of Collateral and Guarantees, Termination of Credit Documents.  Notwithstanding anything to the contrary
contained herein or any other Credit Document, when all Obligations (other than
obligations in respect of any Secured Hedge Agreement or contingent
indemnification obligations) have been paid in full and all Term Loan
Commitments have terminated or expired, upon request of Borrower,
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any Secured Hedge Counterparty) 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 Credit Document, whether or not on
the date of such release there may be outstanding Obligations in respect of
Secured Hedge Agreements.  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 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, 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 request of Borrower in connection
with any disposition of assets or property of any Credit Party permitted
hereunder other than to other Credit Parties, Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate of any
Lender that is a party to any Secured Hedge Agreement) 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 Credit Document of any Person being disposed of in such
disposition, to the extent necessary to permit consummation of such disposition
in accordance with the Credit Documents; provided that Administrative
Agent shall be entitled to receive and rely upon a certificate of Borrower
reasonably satisfactory to it to the effect that such dispositions and the
release of security interests and Guarantee Obligations, if applicable, are
permitted hereunder.


 


9.9.   Withholding
Taxes.  To
the extent required by any applicable law, Administrative Agent may withhold
from any payment to any Lender an amount equivalent to any applicable
Taxes.  Each Lender shall severally
indemnify the Administrative Agent for any such Taxes (but 


 


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only
to the extent that a Credit Party has not already indemnified the
Administrative Agent for such Taxes and without limiting the obligation of the
Credit Parties to do so) attributable to such Lender that are paid or payable
by the Administrative Agent in connection with Credit Document and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  The indemnity
under this Section 9.9 shall be paid within 10 days after the Administrative
Agent delivers to the applicable Lender a certificate stating the amount of
Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the
amount so paid or payable absent manifest error.


 


SECTION 10.  
MISCELLANEOUS


 


10.1.   Notices.  (a)  Notices Generally.  Any notice or other communication herein
required or permitted to be given to a Credit Party, Syndication Agent,
Collateral Agent or Administrative Agent, shall be sent to such Person’s
address as set forth on Appendix B or in the other relevant Credit Document,
and in the case of any Lender, the address as indicated on Appendix B or
otherwise indicated to Administrative Agent in writing.  Except as otherwise set forth in paragraph
(b) below, each notice hereunder shall be in writing and may be personally
served or sent by telefacsimile (except for any notices sent to Administrative
Agent) or United States mail or courier service and shall be deemed to have
been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that no notice to any Agent shall be effective until
received by such Agent; provided further that any such notice or other
communication shall at the request of Administrative Agent be provided to any
sub-agent appointed pursuant to Section 9.3(c) hereto as designated by
Administrative Agent from time to time.


 


(b)   Electronic
Communications.


 


(i)   Notices and other communications to any Agent
and Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites, including the Platform)
pursuant to procedures approved by Administrative Agent; provided that
the foregoing shall not apply to notices to any Agent or any Lender pursuant to
Section 2 if such Person has notified Administrative Agent that it is incapable
of receiving notices under such Section by electronic communication.  Administrative Agent or Borrower 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.  Unless Administrative
Agent otherwise prescribes, (i) notices and other communications 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 such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications 


 


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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 (i) of notification that such
notice or communication is available and identifying the website address
therefor.


 


(ii)   Each Credit Party understands that the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution and agrees and assumes the risks associated with such electronic
distribution, except to the extent caused by the willful misconduct or gross
negligence of Administrative Agent, as determined by a final, non-appealable
judgment of a court of competent jurisdiction.


 


(iii)   The Platform and any Approved Electronic
Communications are provided “as is” and “as available”.  None of the Agents nor any of their
respective Related Parties warrants the accuracy, adequacy, or completeness of
the Approved Electronic Communications or the Platform, and each of the Agents
and its Related Parties expressly disclaims liability for errors or omissions
in the Platform and the Approved Electronic Communications.  No warranty of any kind, express, implied or
statutory, including any warranty of merchantability, fitness for a particular
purpose, non-infringement of third party rights or freedom from viruses or
other code defects, is made by any Agent or any of its Related Parties in
connection with the Platform or the Approved Electronic Communications.


 


(iv)   Each Credit Party and each Lender agrees that
Administrative Agent may, but shall not be obligated to, store any Approved
Electronic Communications on the Platform in accordance with Administrative
Agent’s customary document retention procedures and policies.


 


(v)   Any notice of Default may be provided by
telephone if confirmed promptly thereafter by delivery of written notice
thereof.


 


(c)   Private
Side Information Contacts.  Each
Public Lender agrees to cause at least one individual at or on behalf of such
Public Lender to at all times have selected the “Private Side Information” or
similar designation on the content declaration screen of the Platform in order
to enable such Public Lender or its delegate, in accordance with such Public
Lender’s compliance procedures and applicable law, including United States
Federal and state securities laws, to make reference to information that is not
made available through the “Public Side Information” portion of the Platform
and that may contain Non-Public Information with respect to Holdings, its
Subsidiaries or their securities for purposes of United States Federal or state
securities laws.  In the event that any
Public Lender has determined for itself to not access any information disclosed
through the Platform or otherwise, such Public Lender acknowledges that (i) other
Lenders may have availed themselves of such information and (ii) neither
Borrower nor Administrative Agent has any responsibility for such Public Lender’s
decision to limit the scope of the information it has obtained in connection
with this Agreement and the other Credit Documents.


 


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10.2.   Expenses.  Whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to pay promptly (a) all
the actual and reasonable documented costs and expenses incurred in connection
with the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the costs
of furnishing all opinions by counsel for Borrower and the other Credit
Parties; (c) the actual and reasonable documented fees, expenses and
disbursements of counsel to Agents in connection with the negotiation,
preparation, execution and administration of the Credit Documents (including
exercise of any rights under Section 5.7) and any consents, amendments, waivers
or other modifications thereto and any other documents or matters requested by
Borrower, it being agreed that Borrower shall not be responsible for the fees
and expenses of more than one counsel for both Agents and the Lenders plus, if
necessary, one local counsel per jurisdiction plus, in the case of an actual or
potential conflict of interest, one additional counsel per group of affected
parties; (d) all the actual and reasonable documented costs and reasonable
expenses of creating, perfecting, recording, maintaining and preserving Liens
in favor of Collateral Agent, for the benefit of Secured Parties, including
filing and recording fees, expenses and taxes, stamp or documentary taxes,
search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to each Agent and of counsel providing any opinions
that any Agent or Requisite Lenders may request in respect of the Collateral or
the Liens created pursuant to the Collateral Documents; (e) all the actual and
reasonable documented costs, fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers; (f) all actual and reasonable documented
costs and expenses (including the reasonable fees, expenses and disbursements
of any appraisers, consultants, advisors and agents employed or retained by
Collateral Agent and its counsel) in connection with the enforcement, exercise
or protection of the rights of any Agent in connection with the Credit
Documents, including the rights under this Section, in connection with the Term
Loans, and custody or preservation of any of the Collateral; (g) all other
actual and reasonable documented costs and expenses incurred by each Agent in
connection with the syndication of the Term Loans and Term Loan Commitments and
the transactions contemplated by the Credit Documents and any consents,
amendments, waivers or other modifications thereto; and (h) after the
occurrence of a Default, all actual costs and expenses, including reasonable
attorneys’ fees and costs of settlement, incurred by any Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Credit Documents by reason of such Default
(including in connection with the sale, lease or license of, collection from,
or other realization upon any of the Collateral or the enforcement of the
Obligations Guarantee) or in connection with any refinancing or restructuring
of the credit arrangements provided hereunder in the nature of a “work-out” or
pursuant to any insolvency or bankruptcy cases or proceedings.


 


10.3.   Indemnity.  (a)  In addition to the payment of expenses
pursuant to Section 10.2, whether or not the transactions contemplated hereby
shall be consummated, each Credit Party agrees to defend (subject to
Indemnitees’ selection of counsel), indemnify, pay and hold harmless, each
Agent, Arranger and Lender and each of their respective officers, partners,
members, directors, trustees, advisors, employees, agents, sub-agents and
affiliates (each, an “Indemnitee”),
from and against any and all Indemnified Liabilities; provided that no
Credit Party shall have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of such Indemnitee, in each
case, as determined by a final, non-appealable judgment of a court of competent
jurisdiction.  To the extent that the
undertakings to defend, indemnify, 


 


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pay
and hold harmless set forth in this Section 10.3 may be unenforceable in whole
or in part because they are violative of any law or public policy, the
applicable Credit Party shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.


 


(b)   To the extent permitted by applicable law, no
Credit Party shall assert, and each Credit Party hereby waives, any claim
against each Lender, each Agent, Arranger and their respective Affiliates,
directors, employees, attorneys, agents or sub-agents, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) (whether or not the claim therefor is based on
contract, tort or duty imposed by any applicable legal requirement) arising out
of, in connection with, as a result of, or in any way related to, this
Agreement or any Credit Document or any agreement or instrument contemplated
hereby or thereby or referred to herein or therein, the transactions
contemplated hereby or thereby, any Term Loan or the use of the proceeds
thereof or any act or omission or event occurring in connection therewith, and
Holdings and Borrower and each Credit Party hereby waives, releases and agrees
not to sue upon any such claim or any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.


 


10.4.   Set-Off.  In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
each Lender is hereby authorized by each Credit Party at any time or from time
to time subject to the consent of Administrative Agent (such consent not to be
unreasonably withheld or delayed), without notice to any Credit Party or to any
other Person (other than Administrative Agent), any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by such Lender to or for the
credit or the account of any Credit Party against and on account of the
obligations and liabilities of any Credit Party to such Lender hereunder or
under the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto, irrespective of whether or not
(a) such Lender shall have made any demand hereunder or (b) the principal of or
the interest on the Term Loans or any other amounts due hereunder shall have
become due and payable pursuant to Section 2 and although such obligations and
liabilities, or any of them, may be contingent or unmatured.  If any Lender exercises its rights of set-off
pursuant to this Section 10.4, such Lender agrees to reasonably promptly notify
Borrower thereof (provided that any failure to give such notice shall
not affect the validity of any set-off under this Section).


 


10.5.   Amendments and
Waivers.  (a)  Requisite
Lenders’ Consent.  Subject to the
additional requirements of Sections 10.5(b) and 10.5(c), no amendment,
modification, termination or waiver of any provision of the Credit Documents,
or consent to any departure by any Credit Party therefrom, shall in any event
be effective without the written concurrence of Requisite Lenders; provided
that Administrative Agent may, with the consent of Borrower only, amend, modify
or supplement this Agreement to cure any ambiguity, omission, defect or inconsistency,
so long as such amendment, modification or supplement does not adversely affect
the rights of any Lender.


 


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(b)   Affected
Lenders’ Consent.  Without the
written consent of each Lender that would be directly affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:


 


(i)   extend the scheduled final maturity of any
Term Loan or Note;


 


(ii)   waive, reduce or postpone any scheduled repayment
(but not prepayment);


 


(iii)   reduce the rate of interest on any Term Loan
(other than any waiver of any increase in the interest rate applicable to any
Term Loan pursuant to Section 2.7) or any fee (including any prepayment fees)
or any premium payable hereunder;


 


(iv)   extend the scheduled time for payment of any
such interest or fees;


 


(v)   reduce the principal amount of any Term Loan;


 


(vi)   amend, modify, terminate or waive any
provision of this Section 10.5(b), Section 10.5(c) or any other provision of
this Agreement that expressly provides that the consent of all Lenders is
required;


 


(vii)   amend the definition of “Requisite Lenders” or “Pro Rata Share”;  provided that with the consent of Requisite Lenders, additional extensions of
credit made under this Agreement may be included in the determination of “Requisite Lenders” or “Pro Rata Share” on
substantially the same basis as the Term Loan Commitments and the Term Loans
are included on the Closing Date;


 


(viii)   release all or substantially all of the
Collateral from the Liens of the Collateral Documents or Guarantors
representing all or substantially all of the value of the Obligations Guarantee
from their obligations under the Obligations Guarantee (or limit liability of
all or substantially all of the Guarantors in respect of such Obligations
Guarantee), except as expressly provided in the Credit Documents; or


 


(ix)   consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any Credit Document;


 


provided
that, for the avoidance of doubt, all Lenders shall be deemed directly affected
thereby with respect to any amendment described in clauses (vi), (vii), (viii) and
(ix).


 


(c)   Other
Consents.  No amendment,
modification, termination or waiver of any provision of the Credit Documents,
or consent to any departure by any Credit Party therefrom, shall:


 


(i)   amend, modify or waive this Agreement or the
Pledge and Security Agreement so as to alter the ratable treatment of
Obligations arising under the Credit Documents and Obligations arising under
Secured Hedge Agreements or the definition of “Hedge Agreement,” “Obligations,”
“Secured Hedge Agreement,” “Secured Hedge Counterparty,” or “Secured Hedge Obligations” (as defined in
any applicable 


 


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Collateral Document), in each case in a manner
adverse to any Hedge Counterparty with Obligations then outstanding without the
written consent of any such Hedge Counterparty; or


 


(ii)   amend, modify, terminate or waive any
provision of Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any Agent, in each
case without the consent of such Agent.


 


(d)   Execution
of Amendments, Etc.  Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such
Lender.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.  No notice to or demand on
any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by a Credit Party, on such Credit Party.


 


10.6.   Successors and
Assigns; Participations.  (a)  Generally.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns permitted hereby and
shall inure to the benefit of the parties hereto, their respective successors
and assigns of Lenders.  No Credit Party’s
rights or obligations hereunder nor any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all Lenders
(and any attempted assignment or delegation without such consent shall be null
and void).  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, the
participants referred to in Section 10.6(g) (to the extent provided in clause
(iii) of such Section) and, to the extent expressly contemplated hereby,
Affiliates of each of the Agents, Arrangers and Lenders and other Indemnitees)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.


 


(b)   Register.  Borrower, Administrative Agent, Collateral
Agent and Lenders shall deem and treat the Persons listed as Lenders in the
Register as the holders and owners of the corresponding Term Loan Commitments
and Term Loans listed therein for all purposes hereof, and no assignment or transfer
of any such Term Loan Commitment or Term Loan shall be effective, in each case,
unless and until recorded in the Register following receipt by Administrative
Agent of a fully executed Assignment Agreement effecting the assignment or
transfer thereof, together with the required forms and certificates regarding
tax matters and any fees payable in connection with such assignment, in each
case, as provided in Section 10.6(d). 
Each assignment shall be recorded in the Register promptly following
receipt by the Administrative Agent of the fully executed Assignment Agreement
and all other necessary documents and approvals, prompt notice thereof shall be
provided to Borrower and a copy of such Assignment Agreement shall be
maintained, as applicable.  The date of
such recordation of a transfer shall be referred to herein as the “Assignment Effective Date.”  Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any 


 


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subsequent holder, assignee or transferee of the
corresponding Term Loan Commitments or Term Loans.  Following repurchase and cancellation by
Borrower of Term Loans pursuant to Section 2.10(c), Administrative Agent shall
make appropriate entries in the Register to reflect any such cancelation.


 


(c)   Right
to Assign.  Each Lender shall have
the right at any time to sell, assign or transfer all or a portion of its
rights and obligations under this Agreement, including all or a portion of its
Term Loan Commitment or Term Loans owing to it or other Obligations:


 


(i)   to any Person meeting the criteria of clause
(i) of the definition of the term of “Eligible Assignee” upon the giving of
notice to Borrower and Administrative Agent; and


 


(ii)   to any Person meeting the criteria of clause
(ii) of the definition of the term of “Eligible Assignee” upon giving of notice
to Borrower and Administrative Agent and (except in the case of assignments
made by or to GSLP and its Affiliates or DBTCA and its Affiliates) consented to
by Borrower (which consent shall not be (x) unreasonably withheld or delayed or
(y) required at any time an Event of Default shall have occurred and then be
continuing and which consent shall be deemed to be given unless Borrower
objects thereto by written notice to Administrative Agent within five days
after having received notice thereof)); provided further that each such
assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount
of not less than  $1,000,000 (or
such lesser amount as may be agreed to by Borrower and Administrative Agent or
as shall constitute the aggregate amount of the Term Loans of the assigning
Lender) with respect to the assignment of Term Loans.


 


(d)   Mechanics.  Assignments and assumptions of Term Loans and
Term Loan Commitments by Lenders shall be effected by manual execution and
delivery to Administrative Agent of an Assignment Agreement.  Assignments made pursuant to the foregoing
provision shall be effective as of the Assignment Effective Date.  In connection with all assignments there
shall be delivered to Administrative Agent such forms, certificates or other
evidence, if any, with respect to United States Federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver pursuant to Section 2.17(c), together with payment to the
Administrative Agent of a registration and processing fee of $3,500 (except
that no such registration and processing fee shall be payable (y) in connection
with an assignment by or to GSLP or any Affiliate thereof or (z) in the case of
an Assignee that is already a Lender or is an Affiliate or Related Fund of a
Lender or a Person under common management with a Lender).


 


(e)   Representations
and Warranties of Assignee.  Each
Lender, upon execution and delivery hereof or upon succeeding to an interest in
the Term Loan Commitments and Term Loans, as the case may be, represents and
warrants as of the Closing Date or as of the applicable Assignment Effective
Date, as applicable, that (i) it is an Eligible Assignee; (ii) it has
experience and expertise in the making of or investing in commitments or loans
such as the applicable Term Loan Commitments or Term Loans, 


 


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as the case may be; and (iii) it will make or invest
in, as the case may be, its Term Loan Commitments or Term Loans for its own
account in the ordinary course and without a view to distribution of such Term
Loan Commitments or Term Loans within the meaning of the Securities Act or the
Exchange Act or other Federal securities laws (it being understood that,
subject to the provisions of this Section 10.6, the disposition of such Term
Loan Commitments or Term Loans or any interests therein shall at all times
remain within its exclusive control).


 


(f)   Effect
of Assignment.  Subject to the terms
and conditions of this Section 10.6, as of the “Assignment Effective Date” (i) the
assignee thereunder shall have the rights and obligations of a “Lender”
hereunder to the extent of its interest in the Term Loans and Term Loan
Commitments as reflected in the Register and shall thereafter be a party hereto
and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned
to the assignee, relinquish its rights (other than any rights which survive the
termination hereof under Section 10.8) and be released from its obligations
hereunder (and, in the case of an assignment covering all or the remaining
portion of an assigning Lender’s rights and obligations hereunder, such Lender
shall cease to be a party hereto on the Assignment Effective Date; provided
that anything contained in any of the Credit Documents to the contrary
notwithstanding, such assigning Lender shall continue to be entitled to the
benefit of all indemnities hereunder as specified herein with respect to
matters arising out of the prior involvement of such assigning Lender as a
Lender hereunder); (iii) the Term Loan Commitments shall be modified to reflect
any Term Loan Commitment of such assignee and any Term Loan Commitment of such
assigning Lender, if any; and (iv) if any such assignment occurs after the
issuance of any Note hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon Borrower shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the new outstanding Term Loans
of the assignee and/or the assigning Lender.


 


(g)   Participations.


 


(i)   Each Lender shall have the right at any time
to sell one or more participations to any Person (other than to Griffon,
Parent, any Credit Party or any Affiliates thereof, excluding GSLP and its
Affiliates (other than Griffon, Parent, Holdings or any of their respective
Subsidiaries)) in all or any part of its Term Loan Commitments, Term Loans or
in any other Obligation.


 


(ii)   The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification, waiver or consent that is
described in Section 10.5(b) that affects such participant or requires the
approval of all Lenders (it being understood that a waiver of any Default shall
not constitute a change in the terms of such participation).


 


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(iii)   Borrower agrees that each participant shall
be entitled to the benefits of Sections 2.15(c), 2.16 and 2.17 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (c) of this Section; provided, (x) a participant
shall not be entitled to receive any greater payment under Section 2.16 or 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 Borrower’s prior written
consent, (y) a participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of Section 2.17 unless Borrower is
notified of the participation sold to such participant and such participant
agrees, for the benefit of Borrower, to comply with Section 2.17 as though it
were a Lender and (z) 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 Commitments, Term Loans
or in any other Obligation (the “Participant
Register”) and 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, Term Loans or in any other Obligation) except to
the extent that such disclosure is necessary to establish that such
Commitments, Term Loans or interest in any other Obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations; provided
further that, except as specifically set forth in clauses (x), (y) and (z) of
this sentence, nothing herein shall require any notice to Borrower or any other
Person in connection with the sale of any participation.  The entries in the Participant Register shall
be conclusive and such Lender, each Credit 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.  To the extent permitted by law, each
participant also shall be entitled to the benefits of Section 10.4 as though it
were a Lender, provided such participant agrees to be subject to Section 2.14
as though it were a Lender.


 


(h)   Certain
Other Assignments and Participations. 
In addition to any other assignment or participation permitted pursuant
to this Section 10.6, any Lender may assign, pledge and/or grant a security
interest in all or any portion of its Term Loans, the other Obligations owed by
or to such Lender, and its Notes, if any, to secure obligations of such Lender
including any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors and any operating circular issued by
such Federal Reserve Bank; provided that no Lender, as between Borrower
and such Lender, shall be relieved of any of its obligations hereunder as a
result of any such assignment and pledge, and provided further that in
no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a “Lender” or be entitled to require the assigning Lender to
take or omit to take any action hereunder.


 


10.7.   Independence of
Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default if such action is taken or condition exists.


 


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10.8.   Survival of
Representations, Warranties and Agreements.  All representations, warranties and
agreements made herein shall survive the execution and delivery hereof and the
making of the Term Loans on the Closing Date. 
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.15(c), 2.16, 2.17,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
Sections 2.14, 9.3(b) and 9.6 shall survive the payment of the Terms
Loans and the termination hereof.


 


10.9.   No Waiver;
Remedies Cumulative.  No failure or delay on the part of any Agent
or any Lender in the exercise of any power, right or privilege hereunder or
under any other Credit Document shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege.  The rights, powers and remedies given to each
Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any
statute or rule of law or in any of the other Credit Documents or any of
the Secured Hedge Agreements.  Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.


 


10.10.   Marshalling;
Payments Set Aside.  Neither any Agent nor any Lender shall be
under any obligation to marshal any assets in favor of any Credit Party or any
other Person or against or in payment of any or all of the Obligations.  To the extent that any Credit Party makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent, on behalf of Lenders), or any Agent or Lender enforces any security
interests or exercises any right of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or Federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.


 


10.11.   Severability.  In case any provision in or
obligation hereunder or under any other Credit Document shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.


 


10.12.   Obligations
Several; Independent Nature of Lenders’ Rights.  The obligations of Lenders hereunder are
several and no Lender shall be responsible for the obligations or Commitment of
any other Lender hereunder.  Nothing
contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.


 


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10.13.   Headings.  Section headings herein are
included herein for convenience of reference only and shall not constitute a
part hereof for any other purpose or be given any substantive effect.


 


10.14.   APPLICABLE
LAW.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.


 


10.15.   CONSENT TO
JURISDICTION.  SUBJECT TO CLAUSE (E) OF THE FOLLOWING
SENTENCE, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR
RELATING HERETO OR ANY OTHER CREDIT DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO
ACTIONS BY ANY AGENT IN RESPECT OF RIGHTS UNDER ANY SECURITY AGREEMENT GOVERNED
BY LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY
COLLATERAL SUBJECT THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES
THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER
ANY SECURITY DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.


 


10.16.   WAIVER OF JURY
TRIAL.  EACH
OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE
OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS
BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. 
EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL


 


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INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. 
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED
BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER
CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER.  IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.


 


10.17.  
Confidentiality.  Each Agent and each Lender shall hold all
non-public information regarding Borrower and its Subsidiaries and their
businesses identified as such by Borrower and obtained by such Agent or such
Lender pursuant to the requirements hereof in accordance with such Agent’s and
such Lender’s customary procedures for handling confidential information of
such nature, it being understood and agreed by Borrower that, in any event, the
Administrative Agent may disclose such information to the Lenders and each
Agent and each Lender may make (i) disclosures of such information to
Affiliates of such Lender or Agent and to its and their respective Related
Parties (and to other Persons authorized by a Lender or Agent to organize,
present or disseminate such information in connection with disclosures
otherwise made in accordance with this Section 10.17),
(ii) disclosures of such information reasonably required by any bona fide
or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation of any Term Loans or other
Obligations or any participations therein or by any direct or indirect
contractual counterparties (or the professional advisors thereto) to any swap
or derivative transaction relating to the Credit Parties and their obligations
(provided, such assignees, transferees, participants, counterparties and
advisors are advised of and agree to be bound by either the provisions of this
Section 10.17 or other provisions at least as restrictive as this
Section 10.17), (iii) disclosure to any rating agency when required
by it; provided that, prior to any disclosure, such rating agency shall
undertake in writing to preserve the confidentiality of any confidential
information relating to the Credit Parties received by it from any Agent or any
Lender, (iv) disclosures in connection with the exercise of any remedies
hereunder or under any other Credit Document, (v) disclosures in customary
“tombstone” or similar advertisements, (vi) disclosures necessary for the
obtaining of CUSIP numbers for the Term Loans and (vii) disclosures
required or requested by any governmental agency or representative thereof or
by the NAIC or pursuant to legal or judicial process; provided that
unless specifically prohibited by applicable law or court order, each Lender
and each Agent shall make reasonable efforts to notify Borrower of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition or other
routine examination of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information.  In addition, each Agent and each Lender may
disclose the existence of this Agreement and the information about this
Agreement to market data collectors, similar service


 


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providers
to the lending industry, and service providers to the Agents and the Lenders in
connection with the administration and management of this Agreement and the
other Credit Documents.


 


10.18.   Usury Savings
Clause. 
Notwithstanding any other provision herein, the aggregate interest rate
charged with respect to any of the Obligations, including all charges or fees
in connection therewith deemed in the nature of interest under applicable law
shall not exceed the Highest Lawful Rate. 
If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Term Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect.  In addition, if when the Term Loans made
hereunder are repaid in full the total interest due hereunder (taking into
account the increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect, then to the extent
permitted by law, Borrower shall pay to Administrative Agent an amount equal to
the difference between the amount of interest paid and the amount of interest
which would have been paid if the Highest Lawful Rate had at all times been in
effect.  Notwithstanding the foregoing, it
is the intention of Lenders and Borrower to conform strictly to any applicable
usury laws.  Accordingly, if any Lender
contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at such Lender’s option
be applied to the outstanding amount of the Term Loans made hereunder or be
refunded to Borrower.


 


10.19.   Counterparts.  This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.


 


10.20.   Effectiveness;
Entire Agreement.  Subject to Section 3, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and there shall have been delivered to the Administrative Agent
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or
other electronic imaging shall be effective as delivery of a manually executed
counterpart of this Agreement.  This
Agreement and the other Credit Documents 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 (but do not supersede any other provisions of the Commitment
Letter that do not by the terms of such documents terminate upon the
effectiveness of this Agreement, all of which provisions shall remain in full
force and effect (such terms, the “Surviving
Terms”)). With the exception of the Surviving Terms, all obligations
of the Arrangers and their respective Related Parties under the Commitment
Letter shall terminate and be superseded by the Credit Documents, and the
Arrangers and their respective Related Parties shall be released from all
liability in connection therewith, including any claim for injury or damages,
whether consequential, special, direct, indirect, punitive or otherwise.
Borrower hereby assumes all obligations of Parent and Clopay Acquisition Corp.
under the Commitment Letter with respect to the Surviving Terms.


 


120

















 


10.21.   PATRIOT Act.  Each Lender and Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies each Credit
Party that pursuant to the requirements of the PATRIOT Act, it is required to
obtain, verify and record information that identifies each Credit Party, which
information includes the name and address of each Credit Party and other
information that will allow such Lender or Administrative Agent, as applicable,
to identify such Credit Party in accordance with the PATRIOT Act.


 


10.22.   Electronic
Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in
any Assignment Agreement shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or
the use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.


 


10.23.   No Fiduciary
Duty.  Each
Agent, each Lender and their respective Affiliates (collectively, solely for
purposes of this paragraph, the “Lenders”),
may have economic interests that conflict with those of the Credit Parties,
their stockholders and/or their affiliates. 
Each Credit Party agrees that nothing in the Credit Documents or
otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between any Lender, on the one
hand, and such Credit Party, its stockholders or its affiliates, on the
other.  The Credit Parties acknowledge
and agree that (i) the transactions contemplated by the Credit Documents
(including the exercise of rights and remedies hereunder and thereunder) are
arm’s-length commercial transactions between the Lenders, on the one hand, and
the Credit Parties, on the other, and (ii) in connection therewith and
with the process leading thereto, (x) no Lender has assumed an advisory or
fiduciary responsibility in favor of any Credit Party, its stockholders or its
affiliates with respect to the transactions contemplated hereby (or the
exercise of rights or remedies with respect thereto) or the process leading
thereto (irrespective of whether any Lender has advised, is currently advising
or will advise any Credit Party, its stockholders or its Affiliates on other
matters) or any other obligation to any Credit Party except the obligations
expressly set forth in the Credit Documents and (y) each Lender is acting
solely as principal and not as the agent or fiduciary of any Credit Party, its
management, stockholders, creditors or any other Person.  Each Credit Party acknowledges and agrees
that it has consulted its own legal and financial advisors to the extent it
deemed appropriate and that it is responsible for making its own independent
judgment with respect to such transactions and the process leading
thereto.  Each Credit Party agrees that
it will not claim that any Lender has rendered advisory services of any nature
or respect, or owes a fiduciary or similar duty to such Credit Party, in
connection with such transaction or the process leading thereto.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.


 


 


	
   

  	
  CLOPAY AMES TRUE TEMPER HOLDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Gibbons

  
	
   

  	
   

  	
  Name:  Tom
  Gibbons

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CLOPAY AMES TRUE TEMPER LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Seth L. Kaplan

  
	
   

  	
   

  	
  Name:  Seth K.
  Kaplan

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  



 

















 


	
   

  	
  GOLDMAN SACHS LENDING PARTNERS LLC,

  
	
   

  	
  as Administrative Agent, Collateral Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alexis Maged

  
	
   

  	
   

  	
  Authorized Signatory