Item 5 Other Information
−Removed: Entry into a Material Definitive Agreement
−Removed: On August 1, 2023, the Company and certain of its subsidiaries amended its credit agreement to increase the size of its revolving credit facility (the “Revolving Facility”) from $400 million to $500 million and extend the maturity of the Revolving Facility to August 1, 2028.
−Removed: However, if the Company’s 5.75% Senior Notes are not repaid, refinanced or replaced prior to December 1, 2027, the Revolving Facility will mature on December 1, 2027.
−Removed: The other parties to the credit agreement are Bank of America, N.A., as administrative agent, and the lenders party thereto, among others.
−Removed: We refer to the amended credit agreement as the “Amended Credit Agreement.” The Amended Credit Agreement also provides for a senior secured term loan facility (the “Term B Facility” and, together with the Revolving Facility, the “Credit Facilities”), due January 24, 2029.
−Removed: The Amended Credit Agreement modifies certain other provisions of the Revolving Facility, as described below.
−Removed: The Amended Credit Agreement provides for commitments under the Revolving Facility in the aggregate principal amount of $500 million (increased from $400 million), and includes a letter of credit sub-facility with a limit of $125 million (increased from $100 million) and a foreign currency sub-facility of $200 million.
−Removed: The Amended Credit Agreement contains a customary accordion feature that permits the Company to increase the Revolving Facility commitment, and/or incur additional Term B Facility loans, by up to an aggregate amount equal to the greater of (i) $500 million and (ii) an amount such that the consolidated senior secured net leverage ratio does not exceed 3.5x.
−Removed: The consent of each individual affected lender is required to increase such lender’s commitment or loan under the Amended Credit Agreement.
−Removed: The Amended Credit Agreement also permits the Company to refinance loans under the Amended Credit Agreement, subject to customary conditions.
−Removed: Borrowings under the Revolving Facility may be repaid and re-borrowed at any time, subject to final maturity of the Revolving Facility or the occurrence of an event of default under the Amended Credit Agreement.
−Removed: The Term B Facility is subject to nominal quarterly amortization of principal equal to 1.00% per annum of the aggregate principal amount of all Term B Loans.
−Removed: Amounts repaid or prepaid in respect of Term B Loans may not be reborrowed.
−Removed: The maturity date of the Revolving Facility has been extended to August 1, 2028 (from March 22, 2025);
−Removed: except that if the Company’s 5.75% Senior Notes are not repaid, refinanced or replaced prior to December 1, 2027, then the Revolving Facility will mature on December 1, 2027.
−Removed: The Term B Facility matures on January 24, 2029.
−Removed: The Amended Credit Agreement also contains mandatory prepayment provisions triggered upon the receipt of net cash proceeds from certain dispositions of property and assets (subject to certain exceptions and reinvestment rights), Extraordinary Receipts (as defined in the Amended Credit Agreement) (subject to certain reinvestment rights), proceeds of indebtedness not permitted to be incurred under the Amended Credit Agreement and based on excess cash flow (for the fiscal year ending on September 30, 2023, 50% of such excess cash flow, with step-downs to 25% and 0% upon achieving certain consolidated senior secured net leverage ratios).
−Removed: The amount of the net cash proceeds of any of the foregoing will be applied to the prepayment of loans under the Term B Facility first, and then to corresponding permanent reductions in commitments under the Revolving Facility.
−Removed: The Term B Loans can generally be prepaid without penalty.
−Removed: Interest is payable on the outstanding aggregate principal amount of each Credit Facility at a SOFR benchmark rate, or at a Base Rate benchmark rate, in either case plus an applicable margin, which will fluctuate based on our financial performance.
−Removed: Current margins for borrowings under the Revolving Facility are 2.00% for SOFR loans and 1.00% for Base Rate loans, and current margins for borrowings under the Term B Facility are 2.25% for SOFR loans and 1.25% for Base Rate loans.
−Removed: The Term B Facility does not contain any financial maintenance covenants.
−Removed: The Revolving Facility contains the following three financial maintenance tests:
−Removed: • A maximum consolidated leverage ratio that is calculated as a ratio of consolidated net funded debt to consolidated EBITDA.
−Removed: This ratio is set at 5:50:1.00.
−Removed: • A maximum consolidated senior secured leverage ratio that is calculated as a ratio of consolidated senior secured funded debt to consolidated EBITDA.
−Removed: This ratio is set at 3.50:1.00.
−Removed: • A minimum consolidated interest coverage ratio that is calculated as a ratio of consolidated EBITDA to consolidated interest expense.
−Removed: This ratio is set at 2.00:1.00.
−Removed: Capital expenditures are subject to a $100 million cap for each fiscal year, and the Company is permitted to carry forward 100% of unused amounts to the next succeeding fiscal year and 50% of unused amounts to the second next succeeding fiscal year.
−Removed: Other material terms of the Term B Facility and the Revolving Facility include customary affirmative and negative covenants and events of default.
−Removed: A financial maintenance covenant default under the Revolving Facility does not trigger an event of default under the Term B Facility unless a majority of the revolving lenders terminate the commitments under the Revolving Facility and accelerate the revolving loans.
−Removed: The Company is subject to certain customary negative covenants which include restrictions on indebtedness, liens, restricted payments and investments.
−Removed: Under our existing guaranty and collateral agreement, borrowings under the Amended Credit Agreement are guaranteed by our material domestic subsidiaries, and are secured on a first priority basis by (i) substantially all assets (except real estate and fixtures) of the Company and its material domestic subsidiaries, and (ii) a pledge of not greater than 65% of the
−Removed: equity interest in each of our material, first-tier foreign subsidiaries.
−Removed: None of our foreign subsidiaries guarantee our obligations under the Amended Credit Agreement.
−Removed: As of June 30, 2023, there were $86.7 million of outstanding borrowings, and $12.8 million of outstanding letters of credit, under the Revolving Facility;
−Removed: and $490 million of outstanding borrowings under the Term B Facility.
−Removed: A copy of the Amended Credit Agreement is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.
−Removed: The foregoing description of the Amended Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Amended Credit Agreement.
−Removed: Insider Trading Arrangements
−Removed: During the fiscal quarter ended June 30, 2023, no ne of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any ‘non-Rule 10b5-1 trading arrangement”.
+Added: Rule 10b5-1 Trading Plans
+Added: During the fiscal quarter ended December 31, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 6 Exhibits
−Removed: 10.1 First Amendment, dated August 1, 2023, to that Fifth Amended and Restated Credit Agreement, dated as of January 24, 2022, by and among Griffon Corporation and certain of its subsidiaries, Bank of America, N.A., as administrative agent, and the several banks and other financial institutions or entities from time to time parties thereto.
31.1 Certification pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
17 unchanged sentences
(Principal Accounting Officer)
−Removed: August 2, 2023
+Added: February 7, 2024
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.