Exhibit
4.3


 


EXECUTION COPY


	
   

  	
   

  



 


 


GUARANTEE
AND COLLATERAL AGREEMENT


 


dated
as of


 


June 23,
2006


 


among


 


INTERLINE
BRANDS, INC.,

a Delaware corporation,

as Holdings,


 


INTERLINE
BRANDS, INC.,

a New Jersey corporation

as Borrower,


 


THE
SUBSIDIARIES OF INTERLINE BRANDS, INC.


IDENTIFIED
HEREIN


 


and


 


JPMORGAN CHASE BANK,
N.A.,


as
Collateral Agent


 


	
   

  	
   

  



 

















 


TABLE
OF CONTENTS


 


	
  ARTICLE I

  
	
   

  
	
  Definitions

  
	
   

  	
   

  
	
  SECTION 1.01.
  Credit Agreement

  	
  1

  
	
  SECTION 1.02.
  Other Defined Terms

  	
  1

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
   

  
	
  Guarantee

  
	
   

  	
   

  
	
  SECTION 2.01.
  Guarantee

  	
  5

  
	
  SECTION 2.02.
  Guarantee of Payment

  	
  5

  
	
  SECTION 2.03.
  No Limitations

  	
  5

  
	
  SECTION 2.04.
  Reinstatement

  	
  6

  
	
  SECTION 2.05.
  Agreement To Pay; Subrogation

  	
  6

  
	
  SECTION 2.06.
  Information

  	
  6

  
	
   

  	
   

  
	
  ARTICLE
  III

  
	
   

  
	
  Pledge of
  Securities

  
	
   

  	
   

  
	
  SECTION 3.01.
  Pledge

  	
  7

  
	
  SECTION 3.02.
  Delivery of the Pledged Collateral

  	
  7

  
	
  SECTION 3.03.
  Representations, Warranties and Covenants

  	
  8

  
	
  SECTION 3.04.
  Certification of Limited Liability Company and Limited Partnership Interests

  	
  9

  
	
  SECTION 3.05.
  Registration in Nominee Name; Denominations

  	
  9

  
	
  SECTION 3.06.
  Voting Rights; Dividends and Interest

  	
  10

  
	
   

  	
   

  
	
  ARTICLE
  IV

  
	
   

  
	
  Security
  Interests in Personal Property

  
	
   

  	
   

  
	
  SECTION 4.01.
  Security Interest

  	
  11

  
	
  SECTION 4.02.
  Representations and Warranties

  	
  13

  
	
  SECTION 4.03.
  Covenants

  	
  15

  
	
  SECTION 4.04.
  Other Actions

  	
  18

  
	
  SECTION 4.05.
  Covenants Regarding Patent, Trademark and Copyright Collateral

  	
  20

  



 

















 


	
  ARTICLE V

  
	
   

  
	
  Remedies

  
	
   

  	
   

  
	
  SECTION 5.01.
  Remedies Upon Default

  	
  22

  
	
  SECTION 5.02.
  Proceeds to be Turned Over to Collateral Agent

  	
  24

  
	
  SECTION 5.03.
  Application of Proceeds

  	
  24

  
	
  SECTION 5.04.
  Grant of License to Use Intellectual Property

  	
  25

  
	
  SECTION 5.05.
  Securities Act

  	
  25

  
	
  SECTION 5.06.
  Registration

  	
  26

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  Indemnity, Subrogation and Subordination

  
	
   

  	
   

  
	
  SECTION 6.01.
  Indemnity and Subrogation

  	
  26

  
	
  SECTION 6.02.
  Contribution and Subrogation

  	
  27

  
	
  SECTION 6.03.
  Subordination

  	
  27

  
	
   

  	
   

  
	
  ARTICLE
  VII

  
	
   

  
	
  Miscellaneous

  
	
   

  	
   

  
	
  SECTION 7.01.
  Notices

  	
  28

  
	
  SECTION 7.02.
  Waivers; Amendment

  	
  28

  
	
  SECTION 7.03.
  Collateral Agent’s Fees and Expenses; Indemnification

  	
  28

  
	
  SECTION 7.04.
  Successors and Assigns

  	
  29

  
	
  SECTION 7.05.
  Survival of Agreement

  	
  29

  
	
  SECTION 7.06.
  Counterparts; Effectiveness; Several Agreement

  	
  29

  
	
  SECTION 7.07.
  Severability

  	
  30

  
	
  SECTION 7.08.
  Right of Set-Off

  	
  30

  
	
  SECTION 7.09.
  Governing Law; Jurisdiction; Consent to Service of Process

  	
  30

  
	
  SECTION 7.10.
  WAIVER OF JURY TRIAL

  	
  31

  
	
  SECTION 7.11.
  Headings

  	
  31

  
	
  SECTION 7.12.
  Security Interest Absolute

  	
  32

  
	
  SECTION 7.13.
  Termination or Release

  	
  32

  
	
  SECTION 7.14.
  Additional Subsidiaries

  	
  33

  
	
  SECTION 7.15.
  Collateral Agent Appointed Attorney-in-Fact

  	
  33

  



 

















 


	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule I

  	
  Subsidiary Parties

  
	
  Schedule II

  	
  Capital Stock; Debt
  Securities

  
	
  Schedule III

  	
  Intellectual Property

  
	
  Schedule IV

  	
  Insurance Requirements

  
	
  Schedule V

  	
  Commercial Tort Claims

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit I

  	
  Form of Supplement

  
	
  Exhibit II

  	
  Form of Perfection
  Certificate

  



 

















 


GUARANTEE
AND COLLATERAL AGREEMENT (this “Agreement”)
dated as of June 23, 2006, among INTERLINE BRANDS, INC., a Delaware
corporation (“Holdings”),  INTERLINE BRANDS, INC., a New Jersey corporation
(the “Borrower”), the
Subsidiaries of the Borrower identified herein (the “Subsidiary Parties”) and JPMORGAN CHASE BANK, N.A., a New
York banking corporation (“JPMCB”),
as Collateral Agent.


 


Reference is made to the Credit Agreement dated as of June 23,
2006 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, the
Borrower, the Lenders party thereto, JPMCB, as Administrative Agent, Lehman
Commercial Paper Inc., as Syndication Agent, and Credit Suisse, Bank of
America, N.A., SunTrust Bank and Wachovia Bank, National Association, as
Co-Documentation Agents.  The Lenders
have agreed to extend credit to the Borrower subject to the terms and
conditions set forth in the Credit Agreement. 
The obligations of the Lenders to extend such credit are conditioned
upon, among other things, the execution and delivery of this Agreement.  Holdings and the Subsidiary Parties are
affiliates of the Borrower, will derive substantial benefits from the extension
of credit to the Borrower pursuant to the Credit Agreement and are willing to
execute and deliver this Agreement in order to induce the Lenders to extend
such credit.  Accordingly, the parties
hereto agree as follows:


 


ARTICLE
I


 


Definitions


 


SECTION 1.01.  Credit Agreement.  (a)  Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreement.  All terms defined in
the New York UCC (as defined herein) and not defined in this Agreement have the
meanings specified therein; the term “instrument” shall have the meaning
specified in Article 9 of the New York UCC.


 


(b)  The rules of construction specified in Section 1.03
of the Credit Agreement also apply to this Agreement.


 


SECTION 1.02.  Other Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:


 


“Account
Debtor” means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.


 


“Article 9
Collateral” has the meaning assigned to such term in Section 4.01.


 


“Collateral” means Article 9
Collateral and Pledged Collateral.


 

















 


“Copyright
License” means any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or hereafter
owned by any Grantor or that such Grantor otherwise has the right to license,
or granting any right to any Grantor under any copyright now or hereafter owned
by any third party, and all rights of such Grantor under any such agreement.


 


“Copyrights” means all of
the following now owned or hereafter acquired by any Grantor:  (a) all copyright rights in any work
subject to the copyright laws of the United States or any other country,
whether as author, assignee, transferee or otherwise, and (b) all registrations
and applications for registration of any such copyright in the United States or
any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the United States
Copyright Office, including those listed on Schedule III.


 


“Credit
Agreement” has the meaning assigned to such term in the
preliminary statement of this Agreement.


 


“Federal
Securities Laws” has the meaning assigned to such term in Section 5.05.


 


“General
Intangibles” means all choses in action and causes of action
and all other intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including corporate
or other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Swap Agreements
and other agreements), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
or support payment by an Account Debtor of any of the Accounts.


 


“Grantors” means
Holdings, the Borrower and the Subsidiary Parties.


 


“Guarantors” means Holdings and the
Subsidiary Parties.


 


“Intellectual
Property” means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to any of the
foregoing.


 


“License” means any
Patent License, Trademark License, Copyright License or other license or
sublicense agreement to which any Grantor is a party, including those listed on
Schedule III.


 


“Loan
Document Obligations” means (a) the due and
punctual payment by the Borrower of (i) the principal of and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, 


 


2

















 


regardless of whether allowed or allowable in
such proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) and obligations to provide cash collateral, and (iii) all
other monetary obligations of the Borrower to any of the Secured Parties under
the Credit Agreement and each of the other Loan Documents, including
obligations to pay fees, expense reimbursement obligations and indemnification
obligations, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), (b) the due and punctual
performance of all other obligations of the Borrower under or pursuant to the
Credit Agreement and each of the other Loan Documents, and (c) the due and
punctual payment and performance of all the obligations of each other Loan
Party under or pursuant to this Agreement and each of the other Loan Documents.


 


“New York
UCC” means the Uniform Commercial Code as from time to
time in effect in the State of New York.


 


“Obligations” means (a) Loan
Document Obligations  and (b) the
due and punctual payment and performance of all obligations of each Loan Party
under each Swap Agreement that (i) is in effect on the Effective Date with
a counterparty that is a Lender or an Affiliate of a Lender as of the Effective
Date or (ii) is entered into after the Effective Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such Swap
Agreement is entered into.


 


“Patent
License” means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any
invention on which a Patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.


 


“Patents” means all of
the following now owned or hereafter acquired by any Grantor:  (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or the equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those listed on
Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.


 


3














 


“Perfection
Certificate” means a certificate substantially in the form of Exhibit II,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer and the chief legal officer
of the Borrower.


 


“Pledged
Collateral” has the meaning assigned to such term in Section 3.01.


 


“Pledged
Debt Securities” has the meaning assigned to such term
in Section 3.01.


 


“Pledged
Securities” means any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.


 


“Pledged
Stock” has the meaning assigned to such term in Section 3.01.


 


“Proceeds” has the
meaning specified in Section 9-102 of the New York UCC.


 


“Secured
Parties” means (a) the Lenders, (b) the
Collateral Agent, (c) each Issuing Bank, (d) each counterparty to any
Swap Agreement with a Loan Party the obligations under which constitute
Obligations, (e) the beneficiaries of each indemnification obligation
undertaken by any Loan Party under any Loan Document and (f) the
successors and assigns of each of the foregoing.


 


“Security
Interest” has the meaning assigned to such term in Section 4.01.


 


“Subsidiary
Parties” means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary that becomes a party to this
Agreement as a Subsidiary Party after the Effective Date.


 


“Trademark
License” means any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark or service
mark now or hereafter owned by any third party, and all rights of any Grantor
under any such agreement.


 


“Trademarks” means all of
the following now owned or hereafter acquired by any Grantor: (a) all
trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all registration and recording applications filed in
connection therewith, including registrations and registration applications in
the United States Patent and Trademark Office or any similar offices in any
State of the United States or any other country or any political subdivision
thereof, and all extensions or renewals thereof, including those listed 


 


4

















 


on Schedule III, (b) all goodwill
associated therewith or symbolized thereby and (c) all other trademark and
service mark rights and interests that uniquely reflect or embody such
goodwill.


 


ARTICLE
II


 


Guarantee


 


SECTION 2.01.  Guarantee. 
Each Guarantor absolutely, irrevocably and unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, the due and punctual payment and performance of the
Obligations.  Each of the Guarantors
further agrees that the Obligations may be extended or renewed, in whole or in
part, or amended or modified, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal, or amendment or modification, of any Obligation.  Each of the Guarantors waives presentment to,
demand of payment from and protest to the Borrower or any other Loan Party of
any of the Obligations, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment.


 


SECTION 2.02.  Guarantee of Payment.  Each of the Guarantors further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit
on the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.


 


SECTION 2.03.  No Limitations.  (a)  Except for termination of a
Guarantor’s obligations hereunder as expressly provided in Section 7.13,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise.  Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by (i) the
failure of the Collateral Agent or any other Secured Party to assert any claim
or demand or to enforce any right or remedy under the provisions of any Loan
Document or otherwise; (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, any
Loan Document or any other agreement, including with respect to any other
Guarantor under this Agreement; (iii) the release of, or any impairment of
or failure to perfect any Lien on or security interest in, any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may
or might in any manner or to any extent vary the risk of any Guarantor or
otherwise operate as a discharge of any Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of all the
Obligations).  Each Guarantor expressly
authorizes the Secured Parties to take and hold security for the payment and
performance 


 


5

















 


of
the Obligations, to exchange, waive or release any or all such security (with
or without consideration), to enforce or apply such security and direct the
order and manner of any sale thereof in their sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of
the Obligations, all without affecting the obligations of any Guarantor
hereunder.


 


(b)  To the fullest extent permitted by applicable law, each
Guarantor waives any defense based on or arising out of any defense of the
Borrower or any other Loan Party or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower or any other Loan Party, other than the indefeasible
payment in full in cash of all the Obligations. 
The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other Loan Party or exercise any
other right or remedy available to them against the Borrower or any other Loan
Party, without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly
paid in full in cash.  To the fullest
extent permitted by applicable law, each Guarantor waives any defense arising
out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower or
any other Loan Party, as the case may be, or any security.


 


SECTION 2.04.  Reinstatement.  Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrower, any other
Loan Party or otherwise.


 


SECTION 2.05.  Agreement To Pay; Subrogation.  In furtherance of the foregoing and not in
limitation of any other right that the Collateral Agent or any other Secured
Party has at law or in equity against any Guarantor by virtue hereof, upon the
failure of the Borrower or any other Loan Party to pay any Obligation when and
as the same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Collateral Agent for distribution to
the applicable Secured Parties in cash the amount of such unpaid Obligation.  Upon payment by any Guarantor of any sums to
the Collateral Agent as provided above, all rights of such Guarantor against
the Borrower or any other Loan Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subject to Article VI.


 


SECTION 2.06.  Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such 


 


6

















 


Guarantor
assumes and incurs hereunder, and agrees that none of the Collateral Agent or
the other Secured Parties will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.


 


ARTICLE III


 


Pledge of Securities


 


SECTION 3.01.  Pledge. 
As security for the payment or performance, as the case may be, in full
of the Obligations, each Grantor hereby assigns and pledges to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, a security interest in, all of
such Grantor’s right, title and interest in, to and under (a) the shares
of capital stock and other Equity Interests owned by it and listed on Schedule II
and any other Equity Interests obtained in the future by such Grantor and the
certificates representing all such Equity Interests (the “Pledged Stock”); provided that the Pledged Stock shall not
include (i) more than 65% of the issued and outstanding voting Equity
Interests of any Foreign Subsidiary that is not a Loan Party but is owned
directly by a Loan Party, (ii) any Equity Interests of a Foreign
Subsidiary that is not owned directly by a Loan Party and (iii) any
Equity Interests in a Joint Venture or Glenwood Acquisition LLC; (b)(i) the
debt securities listed opposite the name of such Grantor on Schedule II, (ii) any
debt securities in the future issued to such Grantor and (iii) the
promissory notes and any other instruments evidencing such debt securities (the
debt securities referred to in clauses (i), (ii) and (iii) of clause (b) being
collectively referred to as the “Pledged
Debt Securities”); (c) all other property that may be delivered
to and held by the Collateral Agent pursuant to the terms of this Section 3.01;
(d) subject to Section 3.06, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the
conversion of, and all other Proceeds received in respect of, the securities
referred to in clauses (a) and (b) above; (e) subject to Section 3.06,
all rights and privileges of such Grantor with respect to the securities and
other property referred to in clauses (a), (b), (c) and (d) above;
and (f) all Proceeds of any of the foregoing (the items referred to in
clauses (a) through (f) above being collectively referred to as the “Pledged Collateral”).


 


TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject,
however, to the terms, covenants
and conditions hereinafter set forth.


 


SECTION 3.02.  Delivery of the Pledged Collateral.  (a)  Each Grantor agrees promptly to
deliver or cause to be delivered to the Collateral Agent any and all
certificates or other instruments evidencing any Pledged Securities.


 


(b)  In the event any Indebtedness for borrowed money owed to any
Grantor by any Person is in excess of $250,000, or if in the aggregate all such
Indebtedness owed to any Grantor shall exceed $500,000, such Grantor shall
cause any 


 


7

















 


such
Indebtedness to be evidenced by a duly executed promissory note that is pledged
and delivered to the Collateral Agent pursuant to the terms hereof.


 


(c)  Upon delivery to the Collateral Agent, (i) any Pledged
Securities shall be accompanied by undated stock powers duly executed in blank
or other undated instruments of transfer reasonably satisfactory to the
Collateral Agent and duly executed in blank and by such other instruments and
documents as the Collateral Agent may reasonably request and (ii) all
other property comprising part of the Pledged Collateral shall be accompanied
by proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Collateral Agent may reasonably
request.  Each delivery of Pledged
Securities shall be accompanied by a schedule describing such Pledged
Securities, which schedule shall be attached hereto as an amended and restated
Schedule II and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. 
Each schedule so delivered shall supplement any prior schedules so
delivered.


 


SECTION 3.03.  Representations, Warranties and Covenants.  The Grantors jointly and severally represent,
warrant and covenant to and with the Collateral Agent, for the benefit of the
Secured Parties, that:


 


(a) Schedule II
correctly sets forth the percentage of the issued and outstanding shares of
each class of the Equity Interests of the issuer thereof represented by Pledged
Stock and includes all Equity Interests, debt securities and promissory notes
required to be pledged hereunder in order to satisfy the Collateral and
Guarantee Requirement;


 


(b) the Pledged Stock
and, to the best of each Grantor’s knowledge, the  Pledged Debt Securities have been duly and
validly authorized and issued by the issuers thereof and (i) in the case
of Pledged Stock, are fully paid and nonassessable and (ii) in the case of
Pledged Debt Securities, to the best of each Grantor’s knowledge, are legal,
valid and binding obligations of the issuers thereof, and there exists no
defense, offset or counterclaim to any obligation of the maker or issuer of any
Pledged Debt Securities;


 


(c) except for the
security interests granted hereunder, each of the Grantors (i) is and,
subject to any transfers made in compliance with the Credit Agreement, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II as owned by such Grantor, (ii) holds
the same free and clear of all Liens, other than Liens created by this
Agreement, Permitted Encumbrances and transfers made in compliance with the
Credit Agreement, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other
Lien on, the Pledged Collateral, other than Liens created by this Agreement,
Permitted Encumbrances and transfers made in compliance with the Credit
Agreement, and (iv) will defend its title or interest thereto or therein
against any and all Liens (other than the Lien 


 


8

















 


created by this Agreement
and Permitted Encumbrances), however arising, of all Persons whomsoever;


 


(d) except for restrictions
and limitations imposed by the Loan Documents or securities laws generally, the
Pledged Collateral is and will continue to be freely transferable and
assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law
provisions or contractual restriction of any nature that might prohibit,
impair, delay or otherwise affect the pledge of such Pledged Collateral
hereunder, the sale or disposition thereof pursuant hereto or the exercise by
the Collateral Agent of rights and remedies hereunder;


 


(e) each of the
Grantors has the power and authority to pledge the Pledged Collateral pledged
by it hereunder in the manner hereby done or contemplated;


 


(f) no consent or
approval of any Governmental Authority, any securities exchange or any other
Person was or is necessary to the validity of the pledge effected hereby (other
than such as have been obtained and are in full force and effect);


 


(g) by virtue of the
execution and delivery by the Grantors of this Agreement, when any Pledged
Securities are delivered to the Collateral Agent in accordance with this
Agreement, the Collateral Agent will obtain, for the benefit of the Secured
Parties, a legal, valid and perfected first priority lien upon and security
interest in such Pledged Securities as security for the payment and performance
of the Obligations; and


 


(h) the pledge effected
hereby is effective to vest in the Collateral Agent, for the benefit of the
Secured Parties, the rights of the Collateral Agent in the Pledged Collateral
as set forth herein.


 


SECTION 3.04.  Certification of Limited Liability Company and
Limited Partnership Interests. 
Each Grantor shall cause each interest in any limited liability company
or limited partnership controlled by such Grantor and pledged hereunder to be
represented by a certificate and to be a “security” within the meaning of Article 8
of the New York UCC and governed by Article 8 of the New York UCC.


 


SECTION 3.05.  Registration in Nominee Name; Denominations.  The Collateral Agent, on behalf of the
Secured Parties, shall have the right (in its sole and absolute discretion) to
hold the Pledged Securities in its own name as pledgee, the name of its nominee
(as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or
assigned in blank or in favor of the Collateral Agent.  Each Grantor will promptly give to the
Collateral Agent copies of any material notices or other communications received
by it with respect to Pledged Securities registered in the name of such
Grantor.  The Collateral Agent shall at
all times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.


 


9

















 


SECTION 3.06.  Voting Rights; Dividends and Interest.  (a)  Unless and until an Event of
Default shall have occurred and be continuing and the Collateral Agent shall
have notified the Grantors that their rights under this Section 3.06 are
being suspended:


 


(i) Each Grantor shall
be entitled to exercise any and all voting and/or other consensual rights and
powers inuring to an owner of Pledged Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Collateral Agent or the
other Secured Parties under this Agreement or the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the same.


 


(ii) The Collateral
Agent shall execute and deliver to each Grantor, or cause to be executed and
delivered to such Grantor, all such proxies, powers of attorney and other
instruments as such Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.


 


(iii) Each Grantor
shall be entitled to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Pledged Securities to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise
paid or distributed in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws; provided that any noncash dividends,
interest, principal or other distributions that would constitute Pledged Stock
or Pledged Debt Securities, whether resulting from a subdivision, combination
or reclassification of the outstanding Equity Interests of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if received
by any Grantor, shall not be commingled by such Grantor with any of its other
funds or property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Collateral Agent and the other Secured Parties
and shall be forthwith delivered to the Collateral Agent in the same form as so
received (endorsed in a manner reasonably satisfactory to the Collateral Agent).


 


(b)  Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(iii) of this Section 3.06,
then all rights of any Grantor to dividends, interest, principal or other
distributions that such Grantor is authorized to receive pursuant to
paragraph (a)(iii) of this Section 3.06 shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which shall
have the sole and 


 


10

















 


exclusive
right and authority to receive and retain such dividends, interest, principal
or other distributions.  All dividends,
interest, principal or other distributions received by any Grantor contrary to
the provisions of this Section 3.06 shall be held in trust for the benefit
of the Collateral Agent and the other Secured Parties, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (endorsed in a
manner reasonably satisfactory to the Collateral Agent).  Any and all money and other property paid
over to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to
be established by the Collateral Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of Section 5.03.  After all Events of Default have been cured
or waived and the Borrower has delivered to the Collateral Agent a certificate
to that effect, the Collateral Agent shall promptly repay to each Grantor
(without interest) all dividends, interest, principal or other distributions
that such Grantor would otherwise be permitted to retain pursuant to the terms
of paragraph (a)(iii) of this Section 3.06 and that remain in such
account.


 


(c)  Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(i) of this Section 3.06,
then all rights of any Grantor to exercise the voting and consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 3.06, and the obligations of the Collateral Agent under
paragraph (a)(ii) of this Section 3.06, shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which shall
have the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Collateral Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Grantors to exercise such rights.


 


(d)  Any notice given by the Collateral Agent to the Grantors
suspending their rights under paragraph (a) of this Section 3.06
(i) may be given by telephone if promptly confirmed in writing, (ii) may
be given to one or more of the Grantors at the same or different times and (iii) may
suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in
part without suspending all such rights (as specified by the Collateral Agent
in its sole and absolute discretion) and without waiving or otherwise affecting
the Collateral Agent’s rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.


 


ARTICLE
IV


 


Security
Interests in Personal Property


 


SECTION 4.01.  Security Interest.  (a)  As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor
hereby assigns and pledges to the Collateral Agent, its successors and assigns,
for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, a
security interest (the “Security Interest”)
in, all right, 


 


11

















 


title
or interest in or to any and all of the following assets and properties now
owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the  “Article 9 Collateral”):


 


	
  (i)

  	
   

  	
  all Accounts;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  all Chattel Paper;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  all cash and Deposit
  Accounts;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  all Documents;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  all Equipment;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  all General Intangibles;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  all Instruments;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  all Inventory;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  all Investment Property;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  all letter-of-credit
  rights;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  all commercial tort claims
  specified on Schedule V;

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  all books and records
  pertaining to the Article 9 Collateral; and

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  to the extent not
  otherwise included, all Proceeds and products of any and all of the foregoing
  and all 

  
	
  collateral
  security and guarantees given by any Person with respect to any of the
  foregoing;

  



 


provided that, for the avoidance of doubt, the foregoing
shall not include (A) any asset in which a Grantor has a leasehold
interest pursuant to a capital lease (as determined in accordance with GAAP), (B) any
asset of any Subsidiary acquired by any Grantor after the date hereof which is
not permitted to be pledged hereunder pursuant to any Indebtedness of such
Subsidiary existing prior to such acquisition and permitted by the Credit
Agreement or (C) any Collateral not permitted to be pledged by any Grantor
pursuant to a non-assignment provision that is not rendered ineffective by the
New York UCC; provided further that in the case of this clause (C),
(1) the Grantor shall have used its commercially reasonable efforts to
permit the pledge of any such Collateral pursuant to this Agreement and (2) the
fair market value of any such Collateral excluded from the Article 9
Collateral pursuant to this clause (C) shall not exceed $250,000 in
any fiscal year of such Grantor.


 


(b)  Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction
any initial financing 


 


12

















 


statements
(including fixture filings) with respect to the Article 9 Collateral or
any part thereof and amendments thereto that (i) indicate the Collateral
as all assets of such Grantor or words of similar effect as being of an equal
or lesser scope or with greater detail, and (ii) contain the information
required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including (a) whether
such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (b) in the
case of a financing statement filed as a fixture filing or covering Article 9
Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Article 9
Collateral relates.  Each Grantor agrees
to provide such information to the Collateral Agent promptly upon request.


 


Each Grantor also ratifies its authorization for the Collateral Agent
to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.


 


The Collateral Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such documents as
may be necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Grantor, without
the signature of any Grantor, and naming any Grantor or the Grantors as debtors
and the Collateral Agent as secured party.


 


(c)  The Security Interest is granted as security only and shall
not subject the Collateral Agent or any other Secured Party to, or in any way
alter or modify, any obligation or liability of any Grantor with respect to or
arising out of the Article 9 Collateral.


 


SECTION 4.02.  Representations and Warranties.  The Grantors jointly and severally represent
and warrant to the Collateral Agent and the other Secured Parties that:


 


(a)  Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent,
for the benefit of the Secured Parties, the Security Interest in Article 9
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained.


 


(b)  The Perfection Certificate has been duly prepared, completed
and executed and the information set forth therein, including the exact legal
name of each Grantor, is correct and complete as of the Effective Date.  The Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations prepared by the Collateral Agent based
upon the information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other office
specified in Schedule 6 to the Perfection


 


13














 


Certificate
(or specified by notice from the Borrower to the Collateral Agent after the
Effective Date in the case of filings, recordings or registrations required by Section 5.03(a) or
5.12 of the Credit Agreement), are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and
Trademark Office and the United States Copyright Office in order to perfect the
Security Interest in Article 9 Collateral consisting of United States
Patents, Trademarks and Copyrights) that are necessary to publish notice of and
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the benefit of the Secured
Parties) in respect of all Article 9 Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.  Each
Grantor shall ensure that a fully executed agreement and containing a
description of all Article 9 Collateral consisting of applicable
Intellectual Property shall have been received and recorded within three months
after the execution of this Agreement with respect to United States Patents and
United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and within one month after the execution
of this Agreement with respect to United States registered Copyrights by the
United States Patent and Trademark Office and the United States Copyright
Office, respectively, pursuant to 35 U.S.C. § 261,
15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9
Collateral consisting of Patents, Trademarks and Copyrights in which a security
interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any Article 9
Collateral consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof).


 


(c)  The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and
performance of the Obligations, (ii) subject to the filings described in Section 4.02(b),
a perfected security interest in all Article 9 Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any
political subdivision thereof) and its territories and possessions pursuant to
the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of
this Agreement with the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or
15 U.S.C. § 1060 or the one-month period (commencing as of the date
hereof) pursuant to 17 U.S.C. § 205. 
The Security Interest is and shall be prior to any other Lien on any of
the Article 9 Collateral, other than Permitted Encumbrances that have
priority as a matter 


 


14

















 


of
law and Liens expressly permitted to be prior to the Security Interest pursuant
to  Section 6.02 of the Credit
Agreement.


 


(d)  The Article 9 Collateral is owned by the Grantors free
and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement.  None of the
Grantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other
applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (iii) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens
expressly permitted pursuant to Section 6.02 of the Credit Agreement.


 


SECTION 4.03.  Covenants. 
(a)   Each Grantor agrees to
maintain, at its own cost and expense, such complete and accurate records with
respect to the Article 9 Collateral owned by it as is consistent with its
current practices and in accordance with such prudent and standard practices
used in industries that are the same as or similar to those in which such
Grantor is engaged, but in any event to include complete accounting records
indicating all payments and proceeds received with respect to any part of the Article 9
Collateral, and, at such time or times as the Collateral Agent may reasonably
request, promptly to prepare and deliver to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all Article 9
Collateral.


 


(b)  Each Grantor shall, at its own expense, take any and all
actions necessary to defend title to the Article 9 Collateral against all
Persons and to defend the Security Interest of the Collateral Agent hereunder
in the Article 9 Collateral and the priority thereof against any Lien not
expressly permitted to be prior to the Security Interest pursuant to Section 6.02
of the Credit Agreement.


 


(c)  Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions as the Collateral Agent may from time
to time reasonably request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the
filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. 
If any amount payable under or in connection with any of the Article 9
Collateral shall be or become evidenced by any promissory note or other
instrument in excess of $250,000, such note or instrument shall be immediately
pledged and delivered to the Collateral Agent (for the benefit of the Secured
Parties), duly endorsed in a manner satisfactory to the Collateral Agent.


 


15

















 


Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall have the
right, exercisable within 10 Business Days after it has been notified by
the Collateral Agent of the specific identification of such Collateral, to
advise the Collateral Agent in writing of any inaccuracy of the representations
and warranties made by such Grantor hereunder with respect to such
Collateral.  Each Grantor agrees that it
will use its commercially reasonable efforts to take such action as shall be
necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such Collateral within 30 days after the
date it has been notified by the Collateral Agent of the specific
identification of such Collateral.


 


(d)  The Collateral Agent and such Persons as the Collateral Agent
may reasonably designate shall have the right, at the Grantors’ own cost and
expense, to inspect the Article 9 Collateral, all records related thereto
(and to make extracts and copies from such records) and the premises upon which
any of the Article 9 Collateral is located, to discuss the Grantors’
affairs with the officers of the Grantors and their independent accountants and
to verify under reasonable procedures, in accordance with Section 5.03 of
the Credit Agreement, the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the Article 9 Collateral,
including, in the case of Accounts or other Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such
a verification.  The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.


 


(e)  At its option, the Collateral Agent may discharge past due
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Article 9 Collateral and
not permitted pursuant to Section 6.02 of the Credit Agreement, and may
pay for the maintenance and preservation of the Article 9 Collateral to
the extent any Grantor fails to do so as required by the Credit Agreement or
this Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization; provided that nothing in this paragraph
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.


 


(f)  If at any time any Grantor shall take a security interest in
any property of an Account Debtor or any other Person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent for the benefit of the Secured Parties.  Such assignment need not be filed of public
record 


 


16

















 


unless
necessary to continue the perfected status of the security interest against
creditors of and transferees from the Account Debtor or other Person granting
the security interest.


 


(g)  Each Grantor shall remain liable to observe and perform all
the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral,
all in accordance with the terms and conditions thereof, and each Grantor
jointly and severally agrees to indemnify and hold harmless the Collateral
Agent and the other Secured Parties from and against any and all liability for
such performance.


 


(h)  None of the Grantors shall make or
permit to be made an assignment, pledge or hypothecation of the Article 9
Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Credit Agreement.  None of the Grantors shall make or permit to
be made any transfer of the Article 9 Collateral, and each Grantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except that unless and until the Collateral Agent shall notify the Grantors
(which notice may be given by telephone if promptly confirmed in writing) that
an Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign,
transfer or otherwise dispose of any Article 9 Collateral (other than (i) Inventory
in the ordinary course of business consistent with its past practice and (ii) other
Collateral which, prior to the receipt of such notice, the Grantor is obligated
to sell), the Grantors may use and dispose of the Article 9 Collateral in
any lawful manner not inconsistent with the provisions of this Agreement, the
Credit Agreement or any other Loan Document. 
Notwithstanding the foregoing, in the event any Grantor, in the exercise
of its reasonable business judgment, decides to abandon or let lapse any Article 9
Collateral consisting of Intellectual Property with a value not in excess of
$250,000, such Grantor may do so, provided it shall promptly give written
notice to the Collateral Agent identifying such collateral and indicating its
fair market value.  Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory with a value in excess of $250,000 to be in the possession or control
of any warehouseman, agent, bailee, or processor at any time unless such
warehouseman, bailee, agent or processor shall have been notified of the
Security Interest and shall have acknowledged in writing, in form and substance
reasonably satisfactory to the Collateral Agent, that such warehouseman, agent,
bailee or processor holds the Inventory for the benefit of the Collateral Agent
and the other Secured Parties subject to the Security Interest and shall act
upon the instructions of the Collateral Agent without further consent from the
Grantor, and that such warehouseman, agent, bailee or processor further agrees
to waive and release any Lien held by it with respect to such Inventory,
whether arising by operation of law or otherwise.


 


(i)  None of the Grantors will, without the Collateral Agent’s
prior written consent, grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, compromises, settlements,
releases, credits or discounts granted or made in the ordinary course of
business and consistent with its current practices.


 


17

















 


(j)  The Grantors, at their own expense, shall maintain or cause
to be maintained insurance covering physical loss or damage to the Inventory
and Equipment in accordance with the requirements set forth in Schedule IV
hereto and Section 5.07 of the Credit Agreement.  Each Grantor shall notify the Collateral
Agent immediately of any notice specified in paragraph (b) of
Schedule IV provided by any insurer to the Borrower.  Each Grantor irrevocably makes, constitutes
and appoints the Collateral Agent (and all officers, employees or agents
designated by the Collateral Agent) as such Grantor’s true and lawful agent
(and attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto.  In the event that any
Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay
such premium and take any other actions with respect thereto as the Collateral
Agent deems advisable.  All sums
disbursed by the Collateral Agent in connection with this paragraph, including
reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent
and shall be additional Obligations secured hereby.


 


(k)  Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.


 


SECTION 4.04.  Other Actions.  In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Article 9
Collateral:


 


(a) Instruments.  If any Grantor shall at any time hold or
acquire any Instruments with a value in excess of $250,000, such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral Agent,
accompanied by such undated instruments of transfer or assignment duly executed
in blank as the Collateral Agent may from time to time reasonably request.


 


(b) Investment Property.  Except to the extent otherwise provided in Article III,
if any Grantor shall at any time hold or acquire any certificated securities,
such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such undated instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
specify.  If any securities now or
hereafter acquired by any Grantor are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, such Grantor shall immediately
notify the Collateral Agent thereof and, at the Collateral Agent’s request and
option, pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent, either (i) cause the 


 


18

















 


issuer to agree to comply
with instructions from the Collateral Agent as to such securities, without
further consent of any Grantor or such nominee, or (ii) arrange for the
Collateral Agent to become the registered owner of the such securities.  If any securities, whether certificated or
uncertificated, or other Investment Property now or hereafter acquired by any
Grantor are held by such Grantor or its nominee through a securities
intermediary or commodity intermediary, such Grantor shall immediately notify
the Collateral Agent thereof and, at the Collateral Agent’s request and option,
pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) cause such securities intermediary or (as the
case may be) commodity intermediary to agree to comply with entitlement orders
or other instructions from the Collateral Agent to such securities intermediary
as to such security entitlements, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by the Collateral
Agent to such commodity intermediary, in each case without further consent of
any Grantor or such nominee, or (ii) in the case of Financial Assets or
other Investment Property held through a securities intermediary, arrange for
the Collateral Agent to become the entitlement holder with respect to such
Investment Property, with the Grantor being permitted, only with the consent of
the Collateral Agent, to exercise rights to withdraw or otherwise deal with such
Investment Property.  The Collateral
Agent agrees with each of the Grantors that the Collateral Agent shall not give
any such entitlement orders or instructions or directions to any such issuer,
securities intermediary or commodity intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by any Grantor,
unless an Event of Default has occurred and is continuing, or, after giving
effect to any such investment and withdrawal rights would occur.  The provisions of this paragraph shall not
apply to any financial assets credited to a securities account for which the
Collateral Agent is the securities intermediary.


 


(c) Electronic Chattel Paper and Transferable Records.  If any Grantor at any time holds or acquires
an interest in any electronic chattel paper or any “transferable record,” as
that term is defined in Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, such
Grantor shall promptly notify the Collateral Agent thereof and, at the request
of the Collateral Agent, shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under New York
UCC Section 9-105 of such electronic chattel paper or control under Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, Section 16 of the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record.  The Collateral Agent agrees with such Grantor
that the Collateral Agent will arrange, pursuant to procedures reasonably
satisfactory to the Collateral Agent and so long as such procedures will not
result in the Collateral Agent’s loss of control, for the Grantor to make
alterations to the electronic chattel paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss 


 


19

















 


of control, unless an Event
of Default has occurred and is continuing or would occur after taking into
account any action by such Grantor with respect to such electronic chattel
paper or transferable record.


 


(d) Letter-of-Credit Rights.  If any Grantor is at any time a beneficiary
under a letter of credit now or hereafter issued in favor of such Grantor, such
Grantor shall promptly notify the Collateral Agent thereof and, at the request
and option of the Collateral Agent, such Grantor shall, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent,
either (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to the Collateral Agent of the proceeds of
any drawing under such letter of credit or (ii) arrange for the Collateral
Agent to become the transferee beneficiary of such letter of credit, with the
Collateral Agent agreeing, in each case, that the proceeds of any drawing under
such letter of credit are to be paid to the applicable Grantor unless an Event
of Default has occurred or is continuing.


 


(e) Commercial Tort Claims.  If any Grantor shall at any time hold or
acquire a commercial tort claim in an amount reasonably estimated to exceed
$250,000 such Grantor shall promptly notify the Collateral Agent thereof in a
writing signed by such Grantor including a summary description of such claim
and grant to the Collateral Agent for the benefit of the Secured Parties in
such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.


 


SECTION 4.05.  Covenants Regarding Patent, Trademark and Copyright
Collateral.  (a)  Each
Grantor agrees that it will not do any act or omit do to any act (and will
exercise commercially reasonable efforts to prevent its licensees from doing
any act or omitting to do any act) whereby any Patent that is material to the
conduct of such Grantor’s business may become invalidated or dedicated to the
public, and agrees that it shall continue, consistent with its past practice,
to mark any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its rights under applicable
patent laws; provided that this provision shall cease to apply with
respect to any Patent which, in the Grantor’s reasonable business judgment, is
no longer material to the conduct of such Grantor’s business; provided
further that, in such event, such Grantor shall promptly give written
notice to the Collateral Agent identifying such Patent and indicating its fair
market value.


 


(b)  Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor’s
business, (i) maintain such Trademark, consistent with its past practice,
in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain
the quality of products and services offered under such Trademark, consistent
with its past practice, (iii) display such Trademark, consistent with its past
practice, with notice of Federal or foreign registration to the extent
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights; provided that
this provision shall cease 


 


20

















 


to
apply with respect to any Trademark which, in such Grantor’s reasonable
business judgment, is no longer material to the conduct of such Grantor’s
business; provided further that, in such event, such Grantor shall
promptly give written notice to the Collateral Agent identifying such Trademark
and indicating its fair market value.


 


(c)  Each Grantor (either itself or through its licensees or
sublicensees) will, consistent with its past practice, for each work covered by
a material Copyright, continue to mark such work with appropriate copyright
notice as necessary and sufficient to establish and preserve its rights under
applicable copyright laws.


 


(d)  Each Grantor shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or material development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any country) regarding such
Grantor’s ownership of any Patent, Trademark or Copyright, its right to
register the same, or its right to keep and maintain the same.


 


(e)  In the event that any Grantor, either itself or through any
agent, employee, licensee or designee, files an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, the United States Copyright
Office or any office or agency in any political subdivision of the United
States or in any other country or any political subdivision thereof, it shall
inform the Collateral Agent, within 10 Business Days of such application and,
upon request of the Collateral Agent, it shall execute and deliver any and all
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent’s security interest
hereunder in such Patent, Trademark or Copyright.


 


(f)  Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any office or
agency in any political subdivision of the United States or in any other
country or any political subdivision thereof, to maintain and pursue each
material application relating to the Patents, Trademarks and/or Copyrights (and
to obtain the relevant grant or registration) and to maintain each issued
Patent and each registration of the Trademarks and Copyrights that is material
to the conduct of any Grantor’s business, including timely filings of
applications for renewal, affidavits of use, affidavits of incontestability and
payment of maintenance fees, and, if consistent with good business judgment, to
initiate opposition, interference and cancelation proceedings against third
parties.


 


(g)  In the event that any Grantor has reason to believe that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation 


 


21

















 


or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as are appropriate
under the circumstances to protect such Article 9 Collateral.


 


(h)  Upon and during the continuance of an Event of Default and
upon notice from the Collateral Agent, each Grantor shall use its commercially
reasonable best efforts to obtain all requisite consents or approvals by the
licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all such Grantor’s right, title and interest
thereunder to the Collateral Agent or its designee for the benefit of the
Secured Parties.


 


ARTICLE
V


 


Remedies


 


SECTION 5.01.  Remedies Upon Default.  Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times:  (a) with
respect to any Article 9 Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Article 9 Collateral by the applicable
Grantors to the Collateral Agent (for the benefit of  the Secured Parties), or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or nonexclusive basis, any such Article 9 Collateral throughout the world
on such terms and conditions and in such manner as the Collateral Agent shall
determine (other than in violation of any then-existing licensing arrangements
to the extent that waivers cannot be obtained), and (b) with or without
legal process and with or without prior notice or demand for performance, to
take possession of the Article 9 Collateral and without liability for
trespass to enter any premises where the Article 9 Collateral may be
located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law.  Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral at a public or private sale or at
any broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at
any such sale of securities (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral
shall hold the property sold absolutely, free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
law) all rights of redemption, stay and appraisal which such Grantor


 


22














 


now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted.


 


The Collateral Agent shall give the
applicable Grantors 10 days’ written notice (which each Grantor agrees is
reasonable notice within the meaning of Section 9-611 of the New York
UCC or its equivalent in other jurisdictions) of the Collateral Agent’s
intention to make any sale of Collateral. 
Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. 
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. 
At any such sale, the Collateral , or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the Collateral Agent
may (in its sole and absolute discretion) determine.  The Collateral Agent shall not be obligated
to make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given.  The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.  In
case any sale of all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by the Collateral Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent and the other Secured Parties shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again upon like notice.  At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price (but in the case of such payment, such Secured Party will promptly notify
the Collateral Agent of the amount of such credit), and such Secured Party may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Obligations paid in full.  As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall


 


23

















 


be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of
the New York UCC or its equivalent in other jurisdictions.


 


SECTION 5.02.  Proceeds
to be Turned Over to Collateral Agent.  In addition to any rights of the Collateral
Agent and the Lenders specified in this Agreement, if an Event of Default shall
occur and be continuing, at the request of the Collateral Agent, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Collateral Agent and the other
Secured Parties, segregated from other funds of such Grantor, in a deposit
account, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required).  All Proceeds received by the Collateral Agent
hereunder shall be held by the Collateral Agent in an account maintained under
its sole dominion and control either (i) with the Collateral Agent or an
Affiliate or authorized agent thereof or (ii) in a deposit account with
respect to which the depositary bank has agreed to comply with instructions
from the Collateral Agent to such depositary bank directing the disposition of
funds from time to time credited to such account, without further consent of
such Grantor or any other Person, pursuant to an agreement satisfactory to the
Collateral Agent.  All Proceeds while
held by the Collateral Agent in a Collateral Account (or by such Grantor in
trust for the Collateral Agent and the other Secured Parties) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 5.03.


 


SECTION 5.03.  Application
of Proceeds.  The proceeds of
any collection or sale of Collateral, including any Collateral consisting of
cash, shall be applied as follows:


 


FIRST, to the payment
of all costs and expenses incurred by the Collateral Agent in connection with
such collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all court costs and
the fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Collateral Agent hereunder or under any other Loan
Document on behalf of any Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any
other Loan Document;


 


SECOND, to the payment
in full of the Obligations (the amounts so applied to be distributed among the
Secured Parties pro rata in accordance with the amounts of the Obligations owed
to them on the date of any such distribution); and


 


THIRD, to the
Grantors, their successors or assigns, or as a court of competent jurisdiction
may otherwise direct.


 


The Collateral Agent shall have absolute
discretion as to the time of application of any such proceeds, moneys or
balances in accordance with this Agreement. 
Upon any sale of Collateral by the Collateral Agent (including pursuant
to a power of sale granted by


 


24

















 


statute or under a judicial proceeding), the
receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.


 


SECTION 5.04.  Grant of
License to Use Intellectual Property.  For the purpose of enabling the Collateral
Agent to exercise rights and remedies under this Agreement at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to the Grantors) to use, license or sublicense any of the Article 9
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.  The use
of such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event
of Default; provided that any
license, sublicense or other transaction entered into by the Collateral Agent
in accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.


 


SECTION 5.05.  Securities
Act.  In view of the position
of the Grantors in relation to the Pledged Collateral, or because of other
current or future circumstances, a question may arise under the Securities Act
of 1933, as now or hereafter in effect, or any similar statute hereafter
enacted analogous in purpose or effect (such Act and any such similar statute as
from time to time in effect being called the “Federal
Securities Laws”) with respect to any disposition of the Pledged
Collateral permitted hereunder.  Each
Grantor understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Collateral Agent if the Collateral
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Pledged Collateral under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect.  Each Grantor recognizes that in
light of such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Pledged Collateral, limit the purchasers to those
who will agree, among other things, to acquire such Pledged Collateral for
their own account, for investment, and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges and agrees that in light of such restrictions and limitations, the
Collateral Agent, in its sole and absolute discretion (a) may proceed to
make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws and (b) may approach and negotiate with a
single potential purchaser to effect such sale. 
Each Grantor acknowledges and agrees that any such sale might result in
prices and other terms less favorable to the seller than if such sale were a
public sale without such restrictions.  In the event of any such sale, the Collateral
Agent


 


25

















 


and the other Secured Parties shall incur no responsibility or
liability for a sale of all or any part of the Pledged Collateral at a price
that the Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached.  The
provisions of this Section 5.05 will apply notwithstanding the existence
of a public or private market upon which the quotations or sales prices may
exceed substantially the price at which the Collateral Agent sells.


 


SECTION 5.06.  Registration.  Each Grantor agrees that, upon the occurrence
and during the continuance of an Event of Default, if for any reason the
Collateral Agent desires to sell any of the Pledged Collateral at a public sale,
it will, at any time and from time to time, upon the written request of the
Collateral Agent, use its best efforts to take or to cause the issuer of such
Pledged Collateral to take such action, and prepare, distribute and/or file
such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of such Pledged
Collateral.  Each Grantor further agrees
to indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates and
controlling persons from and against all loss, liability, expenses, costs of
counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to such Grantor or the issuer of such Pledged
Collateral by the Collateral Agent or any other Secured Party expressly for use
therein.  Each Grantor further agrees,
upon such written request referred to above, to use its best efforts to
qualify, file or register, or cause the issuer of such Pledged Collateral to
qualify, file or register, any of the Pledged Collateral under the Blue Sky or
other securities laws of such states as may be requested by the Collateral
Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. 
Each Grantor will bear all costs and expenses of carrying out its
obligations under this Section 5.06. 
Each Grantor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.06 and that
such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 5.06 may be
specifically enforced.


 


ARTICLE
VI


 


Indemnity,
Subrogation and Subordination


 


SECTION 6.01.  Indemnity
and Subrogation.  In addition
to all such rights of indemnity and subrogation as the Guarantors may have
under applicable law (but subject to Section 6.03), the Borrower agrees
that (a) in the event a payment of an


 


26

















 


obligation shall be made by any Guarantor under this Agreement, the
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be subrogated to the rights of the Person to whom such
payment shall have been made to the extent of such payment and (b) in the
event any assets of any Grantor shall be sold pursuant to this Agreement or any
other Security Document to satisfy in whole or in part an obligation owed to
any Secured Party, the Borrower shall indemnify such Grantor in an amount equal
to the greater of the book value or the fair market value of the assets so
sold.


 


SECTION 6.02.  Contribution
and Subrogation.  Each
Guarantor and Grantor (a “Contributing Party”)
agrees (subject to Section 6.03) that, in the event a payment shall be
made by any other Guarantor hereunder in respect of any Obligation or assets of
any other Grantor shall be sold pursuant to any Security Document to satisfy
any Obligation owed to any Secured Party and such other Guarantor or Grantor
(the “Claiming Party”) shall not
have been fully indemnified by the Borrower as provided in Section 6.01,
the Contributing Party shall indemnify the Claiming Party in an amount equal to
the amount of such payment or the greater of the book value or the fair market
value of such assets, as the case may be, in each case multiplied by a fraction
of which the numerator shall be the net worth of the Contributing Party on the
date hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, in the case of any Guarantor or
Grantor becoming a party hereto pursuant to Section 7.16, the date of the
supplement hereto executed and delivered by such Guarantor or Grantor).  Any Contributing Party making any payment to
a Claiming Party pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Party under Section 6.01 to the extent of such
payment.


 


SECTION 6.03.  Subordination.  (a)  Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations.  No failure on the part of the Borrower or any
Guarantor or Grantor to make the payments required by Sections 6.01 and
6.02 (or any other payments required under applicable law or otherwise) shall
in any respect limit the obligations and liabilities of any Guarantor or
Grantor with respect to its obligations hereunder, and each Guarantor and
Grantor shall remain liable for the full amount of the obligations of such
Guarantor or Grantor hereunder.


 


(b)  Each Guarantor and Grantor hereby
agrees that all Indebtedness and other monetary obligations owed by it to any
other Guarantor, Grantor or any other Subsidiary shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations.


 


27

















 


ARTICLE
VII


 


Miscellaneous


 


SECTION 7.01.  Notices.  All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 9.01 of the Credit Agreement.  All communications and notices hereunder to
any Subsidiary Party shall be given to it in care of the Borrower as provided
in Section 9.01 of the Credit Agreement.


 


SECTION 7.02.  Waivers;
Amendment.  (a)  No
failure or delay by the Collateral Agent, the Issuing Banks or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. 
The rights and remedies of the Collateral Agent, the Issuing Banks and
the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section 7.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Collateral
Agent, any Lender or any Issuing Bank may have had notice or knowledge of such
Default at the time.  No notice or demand
on any Loan Party in any case shall entitle any Loan Party to any other or
further notice or demand in similar or other circumstances.


 


(b)  Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Collateral Agent and the
Loan Party or Loan Parties with respect to which such waiver, amendment or
modification is to apply, subject to any consent required in accordance with Section 9.02
of the Credit Agreement.


 


SECTION 7.03.  Collateral
Agent’s Fees and Expenses; Indemnification.  (a)  The parties hereto agree that the
Collateral Agent shall be entitled to reimbursement of its expenses incurred
hereunder as provided in Section 9.03 of the Credit Agreement.


 


(b)  Without limitation of its
indemnification obligations under the other Loan Documents, each Grantor and
each Guarantor jointly and severally agrees to indemnify the Collateral Agent
and the other Indemnitees (as defined in Section 9.03 of the Credit
Agreement) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of,
the execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding


 


28

















 


relating to any of the foregoing, or to the Collateral, whether or not
any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee or any of its Related Parties. 
To the extent permitted by applicable law, each Grantor and each
Guarantor shall not assert, and hereby waives, any claims against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of proceeds thereof.


 


(c)  Any such amounts payable as
provided hereunder shall be additional Obligations secured hereby and by the
other Security Documents.  The provisions
of this Section 7.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party.  All amounts due under this Section 7.03
shall be payable on written demand therefor.


 


SECTION 7.04.  Successors
and Assigns.  Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns and shall inure to
the benefit of the other Secured Parties and their respective successors and
assigns.


 


SECTION 7.05.  Survival
of Agreement.  All covenants,
agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or on its behalf and notwithstanding that the Collateral Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under
the Credit Agreement, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under any Loan Document is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Commitments have not expired or
terminated.


 


SECTION 7.06.  Counterparts;
Effectiveness; Several Agreement. 
This Agreement may be executed in counterparts, each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become


 


29

















 


effective as provided in this Section 7.06.  Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement. 
This Agreement shall become effective as to any Loan Party when a
counterpart hereof executed on behalf of such Loan Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding
upon such Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral without the prior written consent of the Lenders (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement.  This
Agreement shall be construed as a separate agreement with respect to each Loan
Party and may be amended, modified, supplemented, waived or released with
respect to any Loan Party without the approval of any other Loan Party and
without affecting the obligations of any other Loan Party hereunder.


 


SECTION 7.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.


 


SECTION 7.08.  Right of
Set-Off.  If an Event of
Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of any Subsidiary Party against any of and all the obligations
of such Subsidiary Party now or hereafter existing under this agreement owed to
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be
unmatured.  The applicable Lender shall
notify the Borrower and the Collateral Agent of such set-off or application; provided
that any failure to give or delay in giving such notice shall not affect the
validity of a set-off or application under this Section 7.08.  The rights of each Lender under this Section 7.08
are in addition to other rights and remedies (including other rights of
set-off) which such Lender may have.


 


SECTION 7.09.  Governing
Law; Jurisdiction; Consent to Service of Process.  (a)  This Agreement shall be construed
in accordance with and governed by the law of the State of New York.


 


30

















 


(b)  Each of the Loan Parties hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the Collateral
Agent, the Issuing Banks or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or any other Loan Document against any
Grantor or Guarantor, or its properties in the courts of any jurisdiction.


 


(c)  Each of the Loan Parties hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section 7.09.  Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.


 


(d)  Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 7.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.


 


SECTION 7.10.  WAIVER OF
JURY TRIAL.  EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.


 


SECTION 7.11.  Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this


 


31

















 


Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.


 


SECTION 7.12.  Security
Interest Absolute.  All rights
of the Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Collateral and all obligations of each Grantor and
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor or Guarantor
in respect of the Obligations or this Agreement.


 


SECTION 7.13.  Termination
or Release.  (a)  This
Agreement, the Guarantees made herein, the Security Interest and all other
security interests granted hereby shall terminate when all the Loan Document
Obligations then due and owing have been indefeasibly paid in full and the
Lenders have no further commitment to lend under the Credit Agreement, the LC
Exposure has been reduced to zero and the Issuing Banks have no further
obligations to issue Letters of Credit under the Credit Agreement, provided
that this Agreement shall not terminate with respect to any Obligations (other
than contingent obligations that have not become due and owing) that remain
outstanding after the indefeasible payment in full of the Loan Document Obligations
and after giving effect to the termination of the security interests granted
herein, unless such Obligations are secured substantially to the same extent as
under this Agreement, as determined in the reasonable discretion of the Secured
Parties owed such remaining Obligations.


 


(b)  A Subsidiary Party shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Subsidiary Party shall be automatically
released upon the consummation of any transaction permitted by the Credit
Agreement as a result of which such Subsidiary Party ceases to be a Subsidiary;
provided that the Required
Lenders shall have consented to such transaction (to the extent required by the
Credit Agreement) and the terms of such consent did not provide otherwise.


 


(c)  Upon any sale or other transfer by
any Grantor of any Collateral that is permitted under the Credit Agreement to
any Person that is not a Grantor, or upon the effectiveness of any written
consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 9.02 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.


 


(d)  In connection with any termination
or release pursuant to paragraph (a), (b) or (c), the Collateral
Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all
documents that such Grantor shall reasonably request to


 


32














 


evidence such termination or release. 
Any execution and delivery of documents pursuant to this Section 7.13
shall be without recourse to or warranty by the Collateral Agent or any other
Secured Party.


 


SECTION 7.14.  Additional
Subsidiaries.  Pursuant to Section 5.12
of the Credit Agreement, each Subsidiary of a Loan Party that was not in
existence or not a Subsidiary on the date of the Credit Agreement and is not a
Foreign Subsidiary is required to enter in this Agreement as a Subsidiary Party
upon becoming such a Subsidiary.  Upon
execution and delivery by the Collateral Agent and a Subsidiary of an
instrument in the form of Exhibit I hereto, such Subsidiary shall become a
Subsidiary Party hereunder with the same force and effect as if originally
named as a Subsidiary Party herein.  The
execution and delivery of any such instrument shall not require the consent of
any other Loan Party hereunder.  The
rights and obligations of each Loan Party hereunder shall remain in full force
and effect notwithstanding the addition of any new Loan Party as a party to
this Agreement.


 


SECTION 7.15.  Collateral
Agent Appointed Attorney-in-Fact. 
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact
of such Grantor for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the
foregoing, the Collateral Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral
or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Collateral; (c) to
sign the name of any Grantor on any invoice or bill of lading relating to any
of the Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of
the Collateral; (g) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Collateral Agent; and (h) to
use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and
things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Collateral Agent were the absolute owner of the
Collateral for all purposes; provided
that nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present
or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. 
The Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to them herein, and neither they nor their 


 


33

















 


officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.


 


34

















 


IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.


 


	
   

  	
  INTERLINE
  BRANDS, INC.,

  
	
   

  	
  a
  Delaware corporation,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Name:
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INTERLINE
  BRANDS, INC.,

  
	
   

  	
  a
  New Jersey corporation,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Name:
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EACH
  OF THE SUBSIDIARIES

  LISTED ON SCHEDULE I HERETO

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Name:
  Thomas J. Tossavainen

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  



 


35

















 


	
   

  	
  JPMORGAN
  CHASE BANK, N.A., 

  as Collateral Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Neil R. Boylan

  
	
   

  	
   

  	
  Name:
  Neil R. Boylan

  
	
   

  	
   

  	
  Title:
  Managing Director

  



 


36














 


Schedule I to


the Guarantee and


Collateral Agreement


 


SUBSIDIARY PARTIES


 


Wilmar
Holdings, Inc.


Wilmar
Financial, Inc.


Glenwood
Acquisition LLC


 


1

















 


Schedule II to


the Guarantee and


Collateral Agreement


 


EQUITY INTERESTS


 


	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage

  of Equity

  Interests

  
	
  Wilmar Financial, Inc.

  	
   

  	
  1

  	
   

  	
  Interline
  Brands, Inc.

  	
   

  	
  Common

  	
   

  	
  100%

  
	
  Wilmar Holdings, Inc.

  	
   

  	
  1

  	
   

  	
  Interline
  Brands, Inc.

  	
   

  	
  Common

  	
   

  	
  100%

  
	
  Sexauer Ltd.

  	
   

  	
  Com-2 Reissued

  	
   

  	
  Interline
  Brands, Inc.

  	
   

  	
  Common

  	
   

  	
  65%

  
	
  Barnett
  of the Caribbean Inc.

  	
   

  	
  2

  	
   

  	
  Interline
  Brands, Inc.

  	
   

  	
  Common

  	
   

  	
  65%

  
	
  Barnett
  of the Caribbean Inc.

  	
   

  	
  3

  	
   

  	
  Interline
  Brands, Inc.

  	
   

  	
  Common

  	
   

  	
  35%

  
	
  Interline
  Brands, Inc., a New Jersey corporation

  	
   

  	
  100

  	
   

  	
  Interline
  Brands, Inc., a Delaware corporation

  	
   

  	
  Common

  	
   

  	
  100%

  
	
  Interline
  Brands, Inc., a New Jersey corporation

  	
   

  	
  100

  	
   

  	
  Interline
  Brands, Inc., a Delaware corporation

  	
   

  	
  Senior Preferred

  	
   

  	
  100%

  



 


DEBT SECURITIES


 


None.


 


2

















 


Schedule III to


the Guarantee and


Collateral Agreement


 


COPYRIGHTS OWNED BY INTERLINE BRANDS, INC. AND ITS SUBSIDIARIES


 


I.              Interline
Brands, Inc., a New Jersey corporation


 


U.S. Copyright Registrations


 


	
  Title

  	
   

  	
  Reg. No.

  
	
  Ace
  Maintenance Mart

  	
   

  	
  TX-4-153-802

  
	
  One
  Source Supply, Inc.

  	
   

  	
  TX-2-761-878

  
	
  One
  Source Supply, Inc.

  	
   

  	
  TX-3-090-373

  
	
  One
  Source Supply, Inc.

  	
   

  	
  TX-3-265-612

  
	
  One
  Source Supply, Inc.

  	
   

  	
  TX-3-824-524

  
	
  One
  Source Supply, Inc.

  	
   

  	
  TX-4-075-516

  
	
  The
  Supply Depot, Inc., catalog ‘95

  	
   

  	
  TX-4-061-009

  
	
  The
  Supply Depot, Inc.

  	
   

  	
  TX-2-293-655

  
	
  The
  Supply Depot, Inc., Catalog, volume 1

  	
   

  	
  TX-5-136-514

  
	
  The
  Supply Depot, Inc.

  	
   

  	
  TX-2-744-527

  
	
  The
  Supply Depot, Inc.

  	
   

  	
  TX-3-563-041

  TX-3-563-040

  
	
  Wilmar
  quality maintenance products master catalog: vol. 7.

  	
   

  	
  TX-3-734-942

  
	
  Wilmar
  quality maintenance products: vol. 10P.

  	
   

  	
  TX-4-777-852

  
	
  Wilmar
  master catalog: vol. 12P.

  	
   

  	
  TX-4-777-853

  
	
  Wilmar
  master catalog: vol. 9P.

  	
   

  	
  TX-4-777-854

  
	
  Wilmar
  quality maintenance products: vol. 11P.

  	
   

  	
  TX-4-777-855

  
	
  Wilmar,
  the big book: vol. 13.

  	
   

  	
  TX-4-777-856

  
	
  Wilmar
  multi-housing & lodging catalog.

  	
   

  	
  TX-4-777-881

  
	
  Wilmar
  buying guide: vol. 6.

  	
   

  	
  TX-4-777-882

  
	
  Wilmar
  Catalog, vol. 14

  	
   

  	
  TX-5-136-540

  
	
  Trayco, Inc.,
  tools, cleaners, compounds, and fasteners: catalog section E

  	
   

  	
  TX-2-464-014

  
	
  Residential
  faucet & valve repair parts: catalog section B

  	
   

  	
  TX-2-464-713

  
	
  Trayco, Inc.,
  catalog section F.

  	
   

  	
  TX-2-467-505

  
	
  Trayco, Inc.,
  commercial and institutional faucet & valve repair parts: OEM parts
  and quality Trayco replacements: catalog section C.

  	
   

  	
  TX-2-469-423

  
	
  Trayco, Inc.:
  flushometers and repair parts: catalog section G.

  	
   

  	
  TX-2-478-400

  
	
  Trayco, Inc.,
  waste & supply products: catalog section D.

  	
   

  	
  TX-2-596-036

  
	
  Plumbing &
  heating specialties.

  	
   

  	
  TX-2-664-040

  
	
  Trayco, Inc.,
  heating repair products catalog section K.

  	
   

  	
  TX-2-779-067

  
	
  Master
  Catalog

  	
   

  	
  TX-3-524-155

  
	
  The
  Sexauer system of standardized repair service. By Harold Frederick
  Springhorn.

  	
   

  	
  RE-347-421

  
	
  Catalog.
  By J.A. Sexauer Manufacturing Co., Inc.

  	
   

  	
  RE-586-821

  
	
  Stem
  catalogue. By J.A. Sexauer Manufacturing Co., Inc.

  	
   

  	
  RE-652-972

  
	
  K-70
  price list. By J.A. Sexauer Manufacturing Co., Inc.

  	
   

  	
  RE-782-951

  
	
  Supplement
  to Sexauer catalog edition “K.” By J.A. Sexauer

  	
   

  	
  RE-782-952

  



 


3

















 


	
  Title

  	
   

  	
  Reg. No.

  
	
  Manufacturing
  Co., Inc.

  	
   

  	
   

  
	
  1971
  price list—50th anniversary. By J.A. Sexauer Manufacturing Co., Inc.

  	
   

  	
  RE-792-254

  
	
  50th
  anniversary

  	
   

  	
  RE-804-125

  
	
  Sexauer
  master catalog, 1997.

  	
   

  	
  PA-907-451

  
	
  Plumbing &
  heating repair parts: catalog section 1: general maintenance.

  	
   

  	
  TX-191-680

  
	
  Tools,
  kits & chemicals: catalog section 2.

  	
   

  	
  TX-192-815

  
	
  Kitchen &
  utility sink repairs: catalog section 5.

  	
   

  	
  TX-194-393

  
	
  Toilet &
  tank repairs: catalog section 7.

  	
   

  	
  TX-194-394

  
	
  Lavatory
  repairs: catalog section 4.

  	
   

  	
  TX-194-413

  
	
  Commercial &
  institutional repairs: catalog section 3.

  	
   

  	
  TX-194-580

  
	
  Tub &
  shower repairs: catalog section 6.

  	
   

  	
  TX-194-836

  
	
  Take
  a look at what’s new from Sexauer]: Supplement to Master catalog/1st edition.

  	
   

  	
  TX-348-827

  
	
  Master
  catalog.

  	
   

  	
  TX-589-452

  
	
  Master
  catalog.

  	
   

  	
  TX-792-694

  
	
  Stem
  handbook: faucet stems, cartridges & bonnet assemblies

  	
   

  	
  TX-1-206-527

  
	
  Electrical
  maintenance products: catalog section 9.

  	
   

  	
  TX-1-684-509

  
	
  Stern
  handbook: faucet stems, cartridges & bonnet assemblies: catalog
  section 10.

  	
   

  	
  TX-1-686-817

  
	
  Electrical
  maintenance products: catalog section 9.

  	
   

  	
  TX-2-398-521

  
	
  Master
  catalog / J.A. Sexauer

  	
   

  	
  TX-2-584-387

  
	
  Master
  catalog / J.A. Sexauer

  	
   

  	
  TX-3-021-301

  
	
  Master
  catalog

  	
   

  	
  TX-3-518-677

  
	
  Heating
  and air conditioning repair and maintenance products: catalog
  section 11.

  	
   

  	
  TX-3-581-973

  
	
  Faucet
  stems, handles, and bibb seats: catalog section 10.

  	
   

  	
  TX-3-606-319

  
	
  Faucet
  stems, handles, and bibb seats: catalog section 10.

  	
   

  	
  TX-4-178-061

  
	
  Electrical
  maintenance products: catalog section 9, rev. July, 1995.

  	
   

  	
  TX-4-242-472

  
	
  Home
  products.

  	
   

  	
  TX-4-250-716

  
	
  Maintenance
  Choice

  	
   

  	
  TX-4-422-964

  
	
  Maintenance
  choice

  	
   

  	
  TX-4-691-586

  
	
  Maintenance
  choice.

  	
   

  	
  TX-4-901-157

  
	
  Sexauer

  	
   

  	
  TX-1-206-528

  
	
  Sexauer

  	
   

  	
  TX-1-688-620

  
	
  Sexauer

  	
   

  	
  TX-4-115-636

  
	
  Sexauer

  	
   

  	
  TX-4-619-198

  
	
  Stem
  handbook

  	
   

  	
  TX-2-022-382

  
	
  Stem
  handbook

  	
   

  	
  TX-2-394-386

  
	
  Value
  Plus

  	
   

  	
  TX-2-385-475

  
	
  Value
  Plus

  	
   

  	
  TX-2-532-178

  Prev.
  reg. 1988,

  TX-2-385-475

  



 


4

















 


	
  Title

  	
   

  	
  Reg. No.

  
	
  Electrical
  maintenance products

  	
   

  	
  TX-3-049-488

  
	
  Electrical
  maintenance products

  	
   

  	
  TX-3-254-289

  
	
  Electrical
  maintenance products

  	
   

  	
  TX-3-709-457

  
	
  Heating
  and air conditioning repair and maintenance products.

  	
   

  	
  TX-3-051-570

  
	
  Barnett
  Brass & Copper, net price catalog K-179J, 1979.

  	
   

  	
  TX-306750

  
	
  Barnett
  Brass & Copper, net price catalog K-479J, 1979.

  	
   

  	
  TX-306749

  
	
  Barnett
  Brass & Copper, net price catalog K-779J, 1979.

  	
   

  	
  TX-306748

  
	
  Barnett,
  the contractor’s choice: 1958-1998.

  	
   

  	
  TX-4790268

  
	
  Barnett,
  plumbing, electrical, hardware: Jan., Feb., Mar., 1995

  	
   

  	
  TX-4064429

  
	
  Catalog
  Section 11

  	
   

  	
  TX-1684489

  
	
  Catalog
  Section 9

  	
   

  	
  TX-1855090

  
	
  Heating &
  A/C Repair & Maintenance Products Catalog Section 11

  	
   

  	
  TX-3266913

  
	
  Heating &
  Air Conditioning Repair & Maintenance Products

  	
   

  	
  TX-2037172

  
	
  Master
  Catalog 1999

  	
   

  	
  TX-5032652

  
	
  Master
  Catalog Sixth Edition

  	
   

  	
  TX-2084000

  
	
  Stern
  Handbook

  	
   

  	
  TX-1848095

  
	
  The
  Supply Depot: Repair and Maintenance Products for Apartment Buildings —
  Vol. 1

  	
   

  	
  TX-5136514

  
	
  Trayco
  Inc. Catalog Section G

  	
   

  	
  TX-2478400

  
	
  Trayco
  Logo

  	
   

  	
  TX-1954062

  
	
  Value
  Plus Catalog Sec. 12

  	
   

  	
  TX-3261768

  
	
  k-70
  price list

  	
   

  	
  A250998

  
	
  Supplement
  to Sexauer catalog edition “K”

  	
   

  	
  A250999

  
	
  Stem
  catalog

  	
   

  	
  A311767

  
	
  50th
  Anniversary

  	
   

  	
  A437485,
  A437676

  
	
  Catalog
  K

  	
   

  	
  A687909

  
	
  Sexauer
  Stem catalog for master plumbers and maintenance mechanics

  	
   

  	
  A756033

  
	
  Supplement
  to third edition catalog “P”

  	
   

  	
  A875698

  
	
  Sexauer
  plumbing products

  	
   

  	
  R320523

  
	
  Supplementary
  catalog of new products added to the famous quality Sexauer line

  	
   

  	
  RE870259

  
	
  Supplementary
  catalog price list

  	
   

  	
  RE870258

  
	
  Price
  list April 30, 1974

  	
   

  	
  RE870260

  
	
  Catalog

  	
   

  	
  RE870261

  
	
  Electrical
  maintenance products

  	
   

  	
  TX2027996

  
	
  Catalog
  Special Edition

  	
   

  	
  A579-349

  
	
  Industry,
  Intensity, Integrity & Intelligence (3rd Edition Catalog P)

  	
   

  	
  A
  894353

  
	
  Mule-Kick

  	
   

  	
  15713/R313192

  
	
  Mule-Kick

  	
   

  	
  40304/R226770

  
	
  Plumbing
  and Heating Supplies

  	
   

  	
  RE
  2-879/AA160070

  
	
  Price
  List April 30, 1974

  	
   

  	
  A
  579348

  
	
  Price
  List Edition P

  	
   

  	
  A
  705092

  



 


5

















 


	
  Title

  	
   

  	
  Reg. No.

  
	
  Price
  List Edition P

  	
   

  	
  A
  875699

  
	
  Quality
  Plumbing and Heating Specialties

  	
   

  	
  RE
  353-291/A402577

  
	
  Sexauer
  Plumbing Products

  	
   

  	
  15903/R320523

  
	
  Sexauer
  Products Edition P (Catalog)

  	
   

  	
  A
  670029

  
	
  Sexauer
  Stern Catalog for Master Plumbers and Maintenance Mechanics

  	
   

  	
  A
  756033

  
	
  Sexauer
  System of Standardized Repair Service

  	
   

  	
  A
  279905

  
	
  Supplement
  to Third Edition Catalog P

  	
   

  	
  A
  875698

  
	
  Supplemental
  Catalog of New Product Added to Quality Sexauer Line

  	
   

  	
  AA
  519333

  
	
  Supplementary
  Catalog Price List

  	
   

  	
  AA
  522439

  
	
  Copperfield
  Chimney Supply, Inc.: wholesale catalog

  	
   

  	
  TX-4-700-197

  
	
  Copperfield
  Chimney Supply, Inc., 1999-2000 fall/winter catalog

  	
   

  	
  TX-5-384-447

  
	
  Copperfield
  Chimney Supply, Inc., 2000-2001 wholesale catalog

  	
   

  	
  TX-5-384-448

  
	
  Copperfield
  Chimney Supply, Inc., 2001-2002 wholesale catalog

  	
   

  	
  TX-5-384-449

  
	
  Copperfield
  Chimney Supply, Inc., 1998-1999 wholesale catalog

  	
   

  	
  TX-5-384-450

  



 


II.            Wilmar Holdings, Inc.


 


None.


 


III.           Wilmar
Financial, Inc.


 


None.


 


IV.           Glenwood Acquisition
LLC


 


None.


 


6














 


V.            Interline Brands, Inc., a
Delaware corporation


 


	
  Title

  	
   

  	
  Reg. No.

  
	
  Sexauer
  1999, main catalog

  	
   

  	
  TX-5-121-967

  
	
  Maintenance
  Choice

  	
   

  	
  TX-5-129-965

  
	
  Maintenance
  Choice

  	
   

  	
  TX-5-389-157

  
	
  Maintenance
  Choice

  	
   

  	
  TX-5-287-086

  
	
  Master
  Catalog 3rd Edition

  	
   

  	
  CA
  412-503

  
	
  Master
  Catalog 1999

  	
   

  	
  CA
  478-853

  
	
  Master
  Catalog

  	
   

  	
  CA
  389-032

  
	
  Sexauer
  Products; price list

  	
   

  	
  RE
  880-192

  
	
  Sexauer
  Product Edition P (Catalog)

  	
   

  	
  RE
  880-193

  



 


7

















 


LICENSES


 


I.  Licenses/Sublicensees of Interline Brands, Inc.
and its Subsidiaries as Licensor on Date Hereof


 


I.              Interline
Brands, Inc.


 


None.


 


II.            Wilmar Holdings, Inc.


 


None.


 


III.           Wilmar Financial, Inc.


 


None.


 


IV.           Glenwood Acquisition LLC


 


None.


 


8

















 


II.  Licensees/Sublicenses of
Interline Brands, Inc. and its Subsidiaries as Licensee on Date Hereof


 


I.              Interline Brands, Inc.


 


A.  Copyrights


 


None.


 


B.  Patents


 


None.


 


C.  Trademarks


 


U.S. Trademarks


 


	
  Licensee
  Name

  and Address

  	
   

  	
  Date of License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Reg. No.

  
	
  Waxman
  Industries, Inc.

  	
   

  	
  July 9, 2000

  	
   

  	
  WAMI

  	
   

  	
  1,972,824

  
	
  Waxman
  Industries, Inc.

  	
   

  	
  July 9, 2000

  	
   

  	
  ELECTRACRAFT

  	
   

  	
  955,608

  



 


D.  Others


 


None.


 


II.            Wilmar Holdings, Inc.


 


None.


 


III.           Wilmar Financial, Inc.


 


None.


 


IV.           Glenwood Acquisition LLC


 


None.


 


9

















 


PATENTS OWNED BY INTERLINE
BRANDS, INC. AND ITS SUBSIDIARIES


 


I.              Interline Brands, Inc., a
New Jersey corporation


 


Patents


 


	
  Description

  	
   

  	
  US Patent No.

  	
   

  	
  Issue Date

  
	
  Chimney
  Cover

  	
   

  	
  6,152,817

  	
   

  	
  11/28/00

  
	
  Spring
  Based Chimney Damper

  	
   

  	
  5,125,869

  	
   

  	
  6/30/92

  
	
  Chimney
  Damper with Locking Mechanism

  	
   

  	
  5,556,326

  	
   

  	
  9/17/96

  
	
  Chimney
  Damper with Hammer Device

  	
   

  	
  5,127,874

  	
   

  	
  7/7/1992

  
	
  Chimney
  Damper

  	
   

  	
  5,160,291

  	
   

  	
  11/3/92

  
	
  Top
  Sealing Chimney Cap

  	
   

  	
  5,295,901

  	
   

  	
  3/22/94

  
	
  Top
  Sealing Chimney Cap

  	
   

  	
  5,387,151

  	
   

  	
  2/2/95

  
	
  Top
  Sealing Chimney Cap

  	
   

  	
  5,437,574

  	
   

  	
  8/1/95

  
	
  Liner
  Adaptor for Chimneys

  	
   

  	
  6,852,023

  	
   

  	
  2/8/05

  
	
  Chimney
  Damper Device

  	
   

  	
  5,080,006

  	
   

  	
  1/14/92

  



 


Patent Applications


 


	
  Title

  	
   

  	
  App’n No.

  	
   

  	
  App’n Date

  	
   

  	
  Jurisdiction

  
	
  Universal
  Chimney Cap

  	
   

  	
  10/634,753

  	
   

  	
  8/6/03

  	
   

  	
  U.S.

  
	
  Liner
  Adaptor for Chimneys

  	
   

  	
  2455364

  	
   

  	
  1/16/04

  	
   

  	
  Canada

  
	
  Liner
  Adaptor for Chimneys

  	
   

  	
  11/050,798

  	
   

  	
  2/7/05

  	
   

  	
  U.S.

  
	
  Knockdown
  Universal Chimney Cap

  	
   

  	
  11/079,531

  	
   

  	
  3/15/05

  	
   

  	
  U.S.

  



 


II.            Wilmar Holdings, Inc.


 


None.


 


III.           Wilmar Financial, Inc.


 


None.


 


IV.           Glenwood Acquisition LLC


 


None.


 


V.            Interline Brands, Inc., a
Delaware corporation


 


	
  Description

  	
   

  	
  U.S. Patent No.

  	
   

  	
  Reg. Date

  
	
  Light
  Switch Device

  	
   

  	
  D457,145

  	
   

  	
  5/14/02

  



 


10

















 


TRADEMARK/TRADE NAMES OWNED BY INTERLINE BRANDS, INC. AND ITS
SUBSIDIARIES


 


I.              Interline
Brands, Inc., a New Jersey corporation


 


U.S. Trademark Registrations


 


	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  WILMAR

  	
   

  	
  06/24/97

  	
   

  	
  2,072,965

  
	
  BALA

  	
   

  	
  01/18/00

  	
   

  	
  2,308,782

  
	
  THE
  STAIN ERASER

  	
   

  	
  07/20/99

  	
   

  	
  2,262,153

  
	
  LIQUI-ZYME

  	
   

  	
  07/06/99

  	
   

  	
  2,258,587

  
	
  SEXAUER
  and Design

  	
   

  	
  11/03/98

  	
   

  	
  2,200,953

  
	
  SEXAUER

  	
   

  	
  10/20/98

  	
   

  	
  2,197,011

  
	
  SEXAUER

  	
   

  	
  11/04/69

  	
   

  	
  880,136

  
	
  SEXAUER

  	
   

  	
  05/07/68

  	
   

  	
  848,767

  
	
  SEXAUER

  	
   

  	
  12/03/68

  	
   

  	
  861,261

  
	
  SEXAUER

  	
   

  	
  04/29/52

  	
   

  	
  558,236

  
	
  SEXAUER

  	
   

  	
  11/21/50

  	
   

  	
  533,533

  
	
  SEXAUER

  	
   

  	
  03/06/51

  	
   

  	
  538,820

  
	
  SEXAUER

  	
   

  	
  01/06/51

  	
   

  	
  536,341

  
	
  SEXAUER
  (and design)

  	
   

  	
  02/23/79

  	
   

  	
  1,137,747

  
	
  SEXAUER
  (and design)

  	
   

  	
  02/23/79

  	
   

  	
  1,134,409

  
	
  SEXAUER
  (and design)

  	
   

  	
  03/24/81

  	
   

  	
  1,148,671

  
	
  SEXAUER
  (and design)

  	
   

  	
  12/09/80

  	
   

  	
  1,142,351

  
	
  SEXAUER
  (and design)

  	
   

  	
  08/05/80

  	
   

  	
  1,138,354

  
	
  SEXAUER
  (and design)

  	
   

  	
  05/20/80

  	
   

  	
  1,135,402

  
	
  SEXAUER
  (and design)

  	
   

  	
  01/12/82

  	
   

  	
  1,185,370

  
	
  SEXAUER
  (and design)

  	
   

  	
  05/20/80

  	
   

  	
  1,135,759

  
	
  SEXAUER

  	
   

  	
  12/23/80

  	
   

  	
  1,144,052

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  10/03/78

  	
   

  	
  1,103,387

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  08/04/70

  	
   

  	
  896,146

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  06/30/70

  	
   

  	
  893,738

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  08/11/70

  	
   

  	
  896,495

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  07/28/70

  	
   

  	
  891,995

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  07/28/70

  	
   

  	
  895,334

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  06/09/70

  	
   

  	
  892,316

  
	
  SEXAUER
  PRODUCTS and Design

  	
   

  	
  05/12/70

  	
   

  	
  890,775

  
	
  VISIBLE
  STOCK CONTROL

  	
   

  	
  12/25/66

  	
   

  	
  817,247

  
	
  MAINTENANCE
  CHOICE

  	
   

  	
  09/01/98

  	
   

  	
  2,185,338

  
	
  NATURE-GREEN

  	
   

  	
  10/21/97

  	
   

  	
  2,107,994

  
	
  NEO-TITE

  	
   

  	
  09/12/95

  	
   

  	
  1,917,954

  
	
  QUIK-PICK

  	
   

  	
  03/05/96

  	
   

  	
  1,961,071

  
	
  LIME-TAMER

  	
   

  	
  05/23/89

  	
   

  	
  1,539,892

  
	
  ULTRA-SEAL

  	
   

  	
  04/11/89

  	
   

  	
  1,533,798

  
	
  EASY-WRAP

  	
   

  	
  09/21/76

  	
   

  	
  1,048,507

  



 


11

















 


	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  EASY-WRAP

  	
   

  	
  02/08/72

  	
   

  	
  928,898

  
	
  EASY-TITE

  	
   

  	
  05/12/69

  	
   

  	
  891,583

  
	
  EASY-TITE

  	
   

  	
  03/01/27

  	
   

  	
  224,528

  
	
  SURE-GRIP

  	
   

  	
  07/10/72

  	
   

  	
  980,821

  
	
  MULE-KICK

  	
   

  	
  04/15/63

  	
   

  	
  765,651

  
	
  MULE-KICK

  	
   

  	
  08/22/23

  	
   

  	
  180,572

  
	
  MULE-KICK

  	
   

  	
  01/23/31

  	
   

  	
  286,815

  
	
  Design
  of Mule Kicking

  	
   

  	
  04/25/63

  	
   

  	
  765,652

  
	
  Design
  of Flying Mule

  	
   

  	
  01/25/00

  	
   

  	
  2,310,302

  
	
  BIG
  JERRY

  	
   

  	
  07/10/72

  	
   

  	
  765,650

  
	
  Design
  only

  	
   

  	
  03/26/35

  	
   

  	
  322,999

  
	
  Design
  only

  	
   

  	
  04/02/35

  	
   

  	
  323,153

  
	
  Design
  only

  	
   

  	
  05/13/52

  	
   

  	
  558,587

  
	
  Design
  only

  	
   

  	
  07/27/99

  	
   

  	
  2,264,220

  
	
  Stylized
  letters of VALUE PLUS (stylized)

  	
   

  	
  08/19/86

  	
   

  	
  1,405,827

  
	
  Stylized
  letters of VALUE PLUS (stylized)

  	
   

  	
  03/24/87

  	
   

  	
  1,433,579

  
	
  Stylized
  letters of VALUE PLUS (stylized)

  	
   

  	
  02/03/87

  	
   

  	
  1,427,371

  
	
  VALUE
  PLUS

  	
   

  	
  02/24/87

  	
   

  	
  1,429,867

  
	
  VALUE
  PLUS

  	
   

  	
  07/08/86

  	
   

  	
  1,400,327

  
	
  Stylized
  Letters Of CONQUEST (stylized)

  	
   

  	
  02/16/82

  	
   

  	
  1,189,902

  
	
  BULL
  DOG

  	
   

  	
  05/29/73

  	
   

  	
  959,791

  
	
  BULL
  DOG

  	
   

  	
  02/05/52

  	
   

  	
  554,450

  
	
  BLUE
  SPOT

  	
   

  	
  05/15/73

  	
   

  	
  958,856

  
	
  MAKE
  TIGHT STAY and Design

  	
   

  	
  08/22/72

  	
   

  	
  941,244

  
	
  SEX-ITE

  	
   

  	
  11/20/51

  	
   

  	
  551,132

  
	
  BLUE
  SPOT

  	
   

  	
  06/22/48

  	
   

  	
  439,361

  
	
  HANDY
  ANDY

  	
   

  	
  10/20/31

  	
   

  	
  288,175

  
	
  HANDY
  ANDY

  	
   

  	
  12/15/37

  	
   

  	
  289,929

  
	
  BALLOON

  	
   

  	
  08/31/26

  	
   

  	
  217,334

  
	
  VALUE
  PLUS

  	
   

  	
  03/31/87

  	
   

  	
  1,434,614

  
	
  TRACO
  INC

  	
   

  	
  03/21/89

  	
   

  	
  1,530,474

  
	
  TRACO
  INC

  	
   

  	
  05/01/90

  	
   

  	
  1,594,062

  
	
  TRACO
  INC

  	
   

  	
  05/22/90

  	
   

  	
  1,597,320

  
	
  TRACO
  INC

  	
   

  	
  12/20/85

  	
   

  	
  1,529,346

  
	
  TRACO
  INC

  	
   

  	
  03/28/89

  	
   

  	
  1,531,559

  
	
  TRAYCO

  	
   

  	
  07/25/89

  	
   

  	
  1,548,809

  
	
  TRAYCO(1)

  	
   

  	
  02/21/89

  	
   

  	
  1,525,263

  
	
  TRAYCO

  	
   

  	
  07/31/01

  	
   

  	
  2,473,132

  
	
  SUPPLY
  DEPOT (stylized)

  	
   

  	
  08/31/93

  	
   

  	
  1,806,604

  



 






	
  (1)

  	
   

  	
  This mark was assigned to
  Trayco by Dysson-Kissner Moran Corporation, but the assignment was not
  properly recorded in the PTO.

  



 


 


12

















 


	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  PROPLUS
  (stylized letters)

  	
   

  	
  10/15/96

  	
   

  	
  2,007,761

  
	
  BI
  LOGO (and design)

  	
   

  	
  02/22/00

  	
   

  	
  2,320,496

  
	
  MAINTENANCE
  USA (and design)

  	
   

  	
  03/14/00

  	
   

  	
  2,327,939

  
	
  HARDWAREEXPRESS
  (stylized letters)

  	
   

  	
  01/25/00

  	
   

  	
  2,310,694

  
	
  LEGEND
  (stylized letters)

  	
   

  	
  02/15/00

  	
   

  	
  2,317,422

  
	
  BARNETT
  (stylized)

  	
   

  	
  10/19/99

  	
   

  	
  2,287,527

  
	
  PREMIER

  	
   

  	
  01/05/99

  	
   

  	
  2,215,678

  
	
  BIG
  DUTY DEADBOLT

  	
   

  	
  01/09/96

  	
   

  	
  1,947,684

  
	
  THE
  NATIONWIDE NETWORK OF SECURITY PROFESSIONALS

  	
   

  	
  09/06/88

  	
   

  	
  1,503,483

  
	
  SECURITY
  BOW

  	
   

  	
  04/28/87

  	
   

  	
  1,437,712

  
	
  U.S.
  LOCK and design

  	
   

  	
  12/29/81

  	
   

  	
  1,183,470

  
	
  U.S.
  LOCK

  	
   

  	
  08/04/81

  	
   

  	
  1,163,405

  
	
  GET
  IT RIGHT. GET IT NOW. GUARANTEED

  	
   

  	
  05/22/01

  	
   

  	
  2,453,169

  
	
  BUYER’S
  NETWORK

  	
   

  	
  12/18/01

  	
   

  	
  2,521,417

  
	
  SEXAUER

  	
   

  	
  05/07/68

  	
   

  	
  848,767

  
	
  PROFESSIONAL SOLUTIONS

  	
   

  	
  11/19/02

  	
   

  	
  2,651,741

  
	
  PIPE COOL

  	
   

  	
  11/20/02

  	
   

  	
  2,409,431

  
	
  GREASE MONKEY

  	
   

  	
  02/13/01

  	
   

  	
  2,428,396

  
	
  DESIGN ONLY [MONKEY]

  	
   

  	
  02/13/01

  	
   

  	
  2,428,395

  
	
  DESIGN ONLY [MONKEY]

  	
   

  	
  07/10/01

  	
   

  	
  2,467,409

  
	
  BLUE DISC DESIGN

  	
   

  	
  09/04/28

  	
   

  	
  0246286

  
	
  BLUE DISC ON A WASHER
  DESIGNED

  	
   

  	
  03/11/30

  	
   

  	
  0268242

  
	
  Miscellaneous
  Design of a Chimney

  	
   

  	
  1/9/90

  	
   

  	
  1,576,986

  
	
  COPPERFIELD

  	
   

  	
  2/13/90

  	
   

  	
  1,583,068

  
	
  GET
  IT ALL WITH ONE CALL

  	
   

  	
  3/2/99

  	
   

  	
  2,228,253

  
	
  HOMESAVER

  	
   

  	
  12/22/92

  	
   

  	
  1,740,848

  
	
  HOMESAVER

  	
   

  	
  3/14/00

  	
   

  	
  2,328,111

  
	
  HOMESAVER &
  Design

  	
   

  	
  7/28/92

  	
   

  	
  1,702,822

  
	
  HOMESAVER &
  Design

  	
   

  	
  2/29/00

  	
   

  	
  2,323,254

  
	
  SAFE
  AT HOME PRODUCTS, INC.

  	
   

  	
  12/30/03

  	
   

  	
  2,801,155

  



 


13














 


Common Law Trademarks


 


MAXIM


POWERWORKS


DESIGNERS
TOUCH


ANVIL
MARK


LERAN


BARNETT
OF THE CARIBBEAN


U.S. Trademark Applications


 


	
  Mark

  	
   

  	
  Filing Date

  	
   

  	
  Application No.

  	
   

  
	
  INTERLINE

  	
   

  	
  2/22/01

  	
   

  	
  76/215,195

  	
   

  
	
  POCKET SHOP

  	
   

  	
  9/8/00

  	
   

  	
  76/124,709

  	
   

  
	
  LEGEND(1)

  	
   

  	
  8/9/96

  	
   

  	
  75/153,002

  	
   

  
	
  LUMINA (stylized)(2)

  	
   

  	
  8/9/96 (suspended)

  	
   

  	
  75/153,003

  	
   

  
	
  WOODFIELD

  	
   

  	
  10/14/03

  	
   

  	
  2,774,059

  	
   

  
	
  GELCO

  	
   

  	
  6/21/04

  	
   

  	
  76/599,220

  	
   

  
	
  LYEMANCE

  	
   

  	
  6/21/04

  	
   

  	
  76/598,449

  	
   

  
	
  LOCK-TOP

  	
   

  	
  6/21/04

  	
   

  	
  76/598,448

  	
   

  
	
  WHEN
  IT COMES TO KEEPING CRITTERS OUT OF CHIMNEYS, WE’RE ANIMALS!

  	
   

  	
  8/26/03

  	
   

  	
  76/540,309

  	
   

  



 


Non-U.S. Trademark Registrations


 


	
  Country

  	
   

  	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  	
   

  
	
  Canada

  	
   

  	
  KICKER

  	
   

  	
  05/05/95

  	
   

  	
  442,640

  	
   

  
	
  Canada

  	
   

  	
  MULE
  KICK

  	
   

  	
  08/25/95

  	
   

  	
  446,798

  	
   

  
	
  Canada

  	
   

  	
  SUPER
  MULE DESIGN

  	
   

  	
  10/18/96

  	
   

  	
  464,231

  	
   

  
	
  Canada

  	
   

  	
  MAINTENANCE
  CHOICE

  	
   

  	
  10/08/99

  	
   

  	
  517,696

  	
   

  
	
  Canada

  	
   

  	
  SEXAUER

  	
   

  	
  07/25/86

  	
   

  	
  316,729

  	
   

  
	
  Canada

  	
   

  	
  SEXAUER
  LOGO

  	
   

  	
  01/02/87

  	
   

  	
  322,379

  	
   

  



 






	
  (1)

  	
  This
  intent-to-use application is pending, but the time for further action by
  Barnett Inc. with respect to the prosecution of the application has been
  suspended by the Patent and Trademark Office pursuant to 37. C.F.R.
  § 2.67.

  
	
   

  	
   

  
	
  (2)

  	
  This intent-to-use
  application was published for opposition on June 2, 1998.  An opposition was filed by NSI
  Enterprises, Inc. on December 22, 1999 and is still pending as
  Proceeding No. 116679.

  



 


14

















 


	
  Country

  	
   

  	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  	
   

  
	
  Canada

  	
   

  	
  VALUE
  PLUS LOGO

  	
   

  	
  09/04/87

  	
   

  	
  331,694

  	
   

  
	
  Canada

  	
   

  	
  VALUE
  PLUS

  	
   

  	
  11/20/87

  	
   

  	
  334,336

  	
   

  
	
  Canada

  	
   

  	
  QUICK-PICK

  	
   

  	
  03/26/97

  	
   

  	
  473,783

  	
   

  
	
  Canada

  	
   

  	
  LIQUI-ZYME

  	
   

  	
  09/28/00

  	
   

  	
  533,706

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER

  	
   

  	
  12/06/72

  	
   

  	
  17910

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER
  PRODUCTS

  	
   

  	
  03/08/73

  	
   

  	
  17985

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER

  	
   

  	
  03/08/73

  	
   

  	
  18017

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER

  	
   

  	
  03/08/73

  	
   

  	
  18018

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER

  	
   

  	
  03/08/73

  	
   

  	
  18023

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER
  PRODUCTS (logo)

  	
   

  	
  04/10/73

  	
   

  	
  18177

  	
   

  
	
  Puerto Rico

  	
   

  	
  SEXAUER
  (toilet seats)

  	
   

  	
  10/27/78

  	
   

  	
  21726

  	
   

  
	
  Puerto Rico

  	
   

  	
  SURE-GRIP

  	
   

  	
  10/27/78

  	
   

  	
  21727

  	
   

  
	
  Canada

  	
   

  	
  GELCO

  	
   

  	
  11/30/04

  	
   

  	
  1,239,026

  	
   

  
	
  Canada

  	
   

  	
  LYEMANCE

  	
   

  	
  11/30/04

  	
   

  	
  1,239,027

  	
   

  
	
  Canada

  	
   

  	
  LOCK-TOP

  	
   

  	
  11/30/04

  	
   

  	
  1,239,028

  	
   

  



 


Trade Names


 


	
  Country(s) Where
  Used

  	
   

  	
  Trade Names

  
	
  U.S.

  	
   

  	
  Aaron
  Distributing and Control Sales & Supply

  
	
  U.S.

  	
   

  	
  Ace
  Maintenance Mart USA

  
	
  U.S.

  	
   

  	
  American
  Maintenance Supply

  
	
  U.S.

  	
   

  	
  American
  Maintenance Supply of California and American Maintenance Supply of Nevada

  
	
  U.S.

  	
   

  	
  Apartment
  Cleaning Supply and Pool Supply

  
	
  U.S.

  	
   

  	
  Barnett
  Brass & Copper

  
	
  U.S.

  	
   

  	
  Barnett

  
	
  U.S.

  	
   

  	
  Hardware
  Express

  
	
  U.S.

  	
   

  	
  J.A.
  Sexauer

  
	
  U.S.

  	
   

  	
  Kurzon
  Supply Company

  
	
  U.S.

  	
   

  	
  LeRan

  
	
  U.S.

  	
   

  	
  LeRan
  Gas Products

  
	
  U.S.

  	
   

  	
  Lindley
  Supply

  
	
  U.S.

  	
   

  	
  Lumina

  
	
  U.S.

  	
   

  	
  Maintenance
  USA

  
	
  U.S.

  	
   

  	
  Management
  Supply Company

  
	
  U.S.

  	
   

  	
  The
  Mini Blind Company

  
	
  U.S.

  	
   

  	
  Mini-Blind

  
	
  U.S.

  	
   

  	
  One
  Source Supply

  
	
  U.S.

  	
   

  	
  Pier-Angeli
  Company

  
	
  U.S.

  	
   

  	
  Sexauer

  
	
  U.S.

  	
   

  	
  Sun
  Valley

  
	
  U.S.

  	
   

  	
  Maintenance
  Supply

  
	
  U.S.

  	
   

  	
  HMA
  Enterprises Inc. d/b/a Gulf Coast Supply and Supply Depot

  



 


15

















 


	
  Country(s) Where
  Used

  	
   

  	
  Trade Names

  
	
  U.S.

  	
   

  	
  The
  RX Keyway

  
	
  U.S.

  	
   

  	
  Trayco
  of S.C.

  
	
  U.S.

  	
   

  	
  USL
  Holdings

  
	
  U.S.

  	
   

  	
  U.S.
  Lock Corporation

  
	
  U.S.

  	
   

  	
  US
  Lock Security Center

  
	
  U.S.

  	
   

  	
  Wilflo

  
	
  U.S.

  	
   

  	
  Wilmar
  Industries

  
	
  U.S.

  	
   

  	
  WM
  Acquisition

  
	
  U.S.

  	
   

  	
  Ace
  Maintenance Mart

  
	
  U.S.

  	
   

  	
  Barnett

  
	
  U.S.

  	
   

  	
  Hardware
  Express

  
	
  U.S.

  	
   

  	
  J.A.
  Sexauer

  
	
  U.S.

  	
   

  	
  Kurzon
  Supply Company

  
	
  U.S.

  	
   

  	
  LeRan
  Gas Products

  
	
  U.S.

  	
   

  	
  Maintenance
  USA

  
	
  U.S.

  	
   

  	
  Maintenance
  Mart

  
	
  U.S.

  	
   

  	
  SunStar
  Lighting

  
	
  U.S.

  	
   

  	
  The
  Miniblind Co.

  
	
  U.S.

  	
   

  	
  The
  Supply Depot

  
	
  U.S.

  	
   

  	
  Trayco

  
	
  U.S.

  	
   

  	
  Trayco
  of S.C.

  
	
  U.S.

  	
   

  	
  U.S.
  Lock

  
	
  U.S.

  	
   

  	
  Wilmar

  
	
  U.S.

  	
   

  	
  Wilmar
  Supply Company

  
	
  U.S.

  	
   

  	
  Wilmar
  Industries

  
	
  U.S.

  	
   

  	
  Copperfield

  
	
  U.S.

  	
   

  	
  Copperfield
  Chimney Supply

  
	
  U.S.

  	
   

  	
  Copperfield
  Supply

  
	
  U.S.

  	
   

  	
  Gelco
  Lymance Lock-Top

  
	
  U.S.

  	
   

  	
  Gelco
  Manufacturing, Inc.

  
	
  U.S.

  	
   

  	
  HomeSaver, Inc.

  
	
  U.S.

  	
   

  	
  Lymance
  Locktop, Inc.

  
	
  U.S.

  	
   

  	
  Safe
  at Home Products, Inc.

  



 


II.            Wilmar Holdings, Inc.


 


None.


 


III.           Wilmar Financial, Inc.


 


None.


 


16

















 


IV.           Glenwood Acquisition LLC


 


None.


 


V.            Interline Brands, Inc., a
Delaware corporation


 


	
  Mark

  	
   

  	
  Reg. Number

  	
   

  	
  Reg. Date

  	
   

  
	
  Interline

  	
   

  	
  2,759,591

  	
   

  	
  09/02/03

  	
   

  
	
  Legend

  	
   

  	
  2,724,433

  	
   

  	
  06/10/03

  	
   

  
	
  PI Preferred Industries & Design

  	
   

  	
  2,247,574

  	
   

  	
  05/25/99

  	
   

  
	
  Sunstar Lighting & Design

  	
   

  	
  2,481,105

  	
   

  	
  08/28/01

  	
   

  



 


17






 










 


Schedule
IV to

the Guarantee and

Collateral Agreement


 


INSURANCE REQUIREMENTS


 


(a)   Holdings, the Borrower and
the Subsidiary Parties will maintain (or cause to be maintained on their
behalf), with financially sound and reputable insurance companies:


 


(i)    fire, boiler and machinery,
and extended coverage insurance, on a replacement cost basis, with respect to
all personal property and improvements to real property (in each case
constituting Collateral), in such amounts as are customarily maintained by companies
in the same or similar business operating in the same or similar locations;


 


(ii)   commercial general liability
insurance against claims for bodily injury, death or property damage occurring
upon, about or in connection with the use of any properties owned, occupied or
controlled by it, providing coverage on an occurrence basis with a combined
single limit of not less than $1,000,000 and including the broad form
commercial general liability endorsement;


 


(iii)  business interruption
insurance, insuring against loss of gross earnings for a period of not less
than 12 months arising from any risks or occurrences required to be covered by
insurance pursuant to clause (i) above;


 


(iv)  an umbrella insurance policy
in an amount satisfactory to the Collateral Agent that will immediately enter
into effect in the event any type of insurance described in the previous
paragraphs has reached its maximum limit; and


 


(v)   such other insurance as may
be required by law.


 


Deductibles or self-insured retention shall
not exceed $1,000,000 for fire, boiler and machinery and extended coverage
policies, $1,000,000 for commercial general liability policies or 14 days
for business interruption policies.


 


(b)   Fire, boiler
and machinery and extended coverage policies maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a lenders’
loss payable clause in favor of the Collateral Agent and providing for losses
thereunder to be payable to the Collateral Agent or its designee, (ii) a
provision to the effect that neither any Loan Party, the Collateral Agent nor
any other party shall be a coinsurer and (iii) such other provisions as
the Collateral Agent may reasonably require from time to time to protect the
interests of the Secured Parties. 
Commercial general liability policies shall be endorsed to name the
Collateral Agent as an additional insured. 
Business interruption policies shall name the Collateral Agent as loss
payee.  Each such policy referred to in
this paragraph also shall provide that it shall not be canceled, modified or
not renewed (i) by reason of nonpayment of premium except upon not less
than 10 days’ prior written notice thereof by the insurer to Holdings or the
Borrower, as


 

















 


applicable (giving such Loan
Party the right to cure defaults in the payment of premiums), or (ii) for
any other reason except upon not less than 30 days’ prior written notice
thereof by the insurer to Holdings or the Borrower, as applicable.  Holdings or the Borrower, as applicable,
shall deliver to the Collateral Agent, prior to the cancellation, modification
or nonrenewal of any such policy of insurance, a copy of a renewal or
replacement policy (or other evidence of renewal of a policy previously
delivered to the Collateral Agent) together with evidence reasonably
satisfactory to the Collateral Agent of payment of the premium therefor.


 


2

















 


Schedule
V to

the Guarantee and

Collateral Agreement


 


TORT
CLAIMS


 


None.


 


18

















 


Exhibit
I to the

Guarantee and

Collateral Agreement


 


SUPPLEMENT NO.      (this “Supplement”) dated as of                     ,
to the Guarantee and Collateral Agreement dated as of June 23, 2006 among
INTERLINE BRANDS, INC., a New Jersey corporation (the “Borrower”), INTERLINE BRANDS, INC., a
Delaware corporation (“Holdings”),
each subsidiary of the Borrower listed on Schedule I thereto (each such
subsidiary individually a “Subsidiary
Guarantor” and collectively, the “Subsidiary  Guarantors”; the Subsidiary Guarantors, Holdings and the
Borrower are referred to collectively herein as the “Grantors”) and JPMORGAN CHASE BANK, N.A., a New York banking
corporation (“JPMCB”), as
Collateral Agent (in such capacity, the “Collateral
Agent”).


 


A. 
Reference is made to the Credit Agreement dated as of June 23, 2006
(as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, the Borrower, the
lenders from time to time party thereto, JPMCB, as Administrative Agent, Lehman
Commercial Paper Inc., as Syndication Agent, and Credit Suisse, Bank of
America, N.A., SunTrust Bank and Wachovia Bank, National Association, as
Co-Documentation Agents.


 


B. 
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the
Collateral Agreement referred to therein.


 


C.  The
Grantors have entered into the Collateral Agreement in order to induce the
Lenders to make Loans and the Issuing Banks to issue Letters of Credit.  Section 7.14 of the Collateral Agreement
provides that additional Subsidiaries may become Subsidiary Parties under the
Collateral Agreement by execution and delivery of an instrument in the form of
this Supplement.  The undersigned
Subsidiary (the “New Subsidiary”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Subsidiary Party under the Collateral Agreement in order to induce the
Lenders to make additional Loans and the Issuing Banks to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.


 


Accordingly,
the Collateral Agent and the New Subsidiary agree as follows:


 


SECTION 1.  In accordance with Section 7.14 of the
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Party (and accordingly, becomes a Guarantor and a Grantor), Grantor
and Guarantor under the Collateral Agreement with the same force and effect as
if originally named therein as a Subsidiary Party and the New Subsidiary hereby
(a) agrees to all the terms and provisions of the Collateral Agreement
applicable to it as a Subsidiary Party, Grantor and Guarantor


 

















 


thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
and Guarantor thereunder are true and correct on and as of the date
hereof.  In furtherance of the foregoing,
the New Subsidiary, as security for the payment and performance in full of the
Obligations, does hereby (a) create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Subsidiary’s right, title and interest in and to the Collateral of the New
Subsidiary and (b) guarantee the Obligations as set forth in Section 2
of the Collateral Agreement.  Each
reference to a “Guarantor” or “Grantor” in the Collateral Agreement shall be
deemed to include the New Subsidiary. 
Schedule I to the Collateral Agreement is hereby amended to include the
New Subsidiary.  The Collateral Agreement
is hereby incorporated herein by reference.


 


SECTION 2.  The New Subsidiary represents and warrants to
the Collateral Agent and the other Secured Parties that this Supplement has
been duly authorized, executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.


 


SECTION 3.  This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received a counterpart of this Supplement that
bears the signature of the New Subsidiary and the Collateral Agent has executed
a counterpart hereof.  Delivery of an
executed signature page to this Supplement by facsimile transmission shall
be as effective as delivery of a manually signed counterpart of this
Supplement.


 


SECTION 4.  The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of the New
Subsidiary and (b) set forth under its signature hereto, is the true and
correct legal name of the New Subsidiary, its jurisdiction of formation and the
location of its chief executive office.


 


SECTION 5.  Except as expressly supplemented hereby, the
Collateral Agreement shall remain in full force and effect.


 


SECTION 6.  THIS SUPPLEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.


 


SECTION 7.  In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Collateral Agreement shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or 


 


2

















 


unenforceable provisions
with valid provisions the economic effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.


 


SECTION 8.  All communications and notices hereunder
shall be in writing and given as provided in Section 7.01 of the
Collateral Agreement.


 


SECTION 9.  The New Subsidiary agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.


 


IN
WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed
this Supplement to the Collateral Agreement as of the day and year first above
written.


 


	
   

  	
  [NAME
  OF NEW SUBSIDIARY],

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Legal
  Name:

  
	
   

  	
   

  	
   

  	
  Jurisdiction
  of Formation:

  
	
   

  	
   

  	
   

  	
  Location
  of Chief Executive Office:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 

















 


Schedule
I

to the Supplement No    to the

Guarantee and

Collateral Agreement


 


LOCATION OF COLLATERAL


 


	
  Description

  	
   

  	
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EQUITY INTERESTS


 


	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interests

  	
   

  	
  Percentage

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DEBT SECURITIES


 


	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


INTELLECTUAL PROPERTY


 






 










 


	
   

  	
  Exhibit II to the

  Guarantee and

  Collateral Agreement

  



 


[FORM OF]


 


PERFECTION CERTIFICATE


 


Reference is made to the Credit Agreement dated as of June 23,
2006 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Interline Brands, Inc., a Delaware corporation (“Holdings”),
Interline Brands, Inc., a New Jersey corporation (the “Borrower”),
the lenders from time to time party thereto (the “Lenders”), JPMorgan
Chase Bank, N.A., as Administrative Agent for the Lenders (in such capacity,
the “Administrative Agent”), Lehman Commercial Paper Inc., as
Syndication Agent, and Bank of America, N.A., SunTrust Bank and Wachovia Bank,
N.A., as Co-Documentation Agents. 
Capitalized terms used but not defined herein have the meanings assigned
in the Credit Agreement or the Guarantee and Collateral Agreement referred to
therein, as applicable.


 


The undersigned, a Financial Officer, hereby certifies to the
Administrative Agent and each other Secured Party as follows:


 


1.  Names. 
(a)    The exact legal name
of each Grantor, as such name appears in its respective certificate of
formation, is as follows:


 


(b) 
Set forth below is each other legal name each Grantor has had in the past five
years, together with the date of the relevant change:


 


	
  Grantor

  	
   

  	
  Other Legal Names within

  the Past 5 Years

  	
   

  	
  Date of Change

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


(c) 
Except as set forth in Schedule 1 hereto, no Grantor has changed its identity
or corporate structure in any way within the past five years.(1)


 


(d) 
The following is a list of all other names (including trade names or similar appellations)
used by each Grantor or any of its divisions or other business units in connection
with the conduct of its business or the ownership of its properties at any time
during the past five years:


 






(1) Changes
in identity or corporate structure would include mergers, consolidations and acquisitions,
as well as any change in the form, nature or jurisdiction of organization.  If any such change has occurred, include in
Schedule 1 the information required by Sections 1 and 2 of this certificate as
to each acquiree or constituent party to a merger or consolidation.


 

















 


(e) 
Set forth below is the Organizational Identification Number, if any, issued by
the jurisdiction of formation of each Grantor that is a registered
organization:


 


	
  Grantor

  	
   

  	
  Organizational Identification Number

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


(f) 
Set forth below is the Federal Taxpayer Identification Number of each
Grantor:  [only necessary for filing in
North Dakota and South Dakota.]


 


	
  Grantor

  	
   

  	
  Federal Taxpayer Identification Number

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


2.  Current Locations.  (a)  The chief executive office of each
Grantor is located at the address set forth opposite its name below:


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(b) 
Set forth below opposite the name of each Grantor are all locations where such  Grantor
maintains any books or records relating to any Accounts Receivable (with each
location at which chattel paper, if any, is kept being indicated by an “*”):


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(c) 
The jurisdiction of formation of each Grantor that is a registered organization
is set forth opposite its name below:


 


	
  Grantor:

  	
   

  	
  Jurisdiction:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


(d) Set
forth below opposite the name of each Grantor are all the locations where such
Grantor maintains any Equipment or other Collateral not identified above:


 


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  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(e) 
Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(f) 
Attached hereto as Schedule 2(f) is a list of all real property
held by each Grantor, whether owned or leased, the name of the Grantor that
owns or leases said property and the fair market value apportioned to each
site.


 


(g) Set
forth below opposite the name of each Grantor are the names and addresses of
all Persons other than such Grantor that have possession of any of the
Collateral of such Grantor:


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3.  Unusual Transactions.  All Accounts have been originated by the Grantors
and all Inventory has been acquired by the Grantors in the ordinary course of
business.


 


4.  File Search Reports.  File search reports have been obtained from
each Uniform Commercial Code filing office identified with respect to such
Grantor in Section 2 hereof, and such search reports reflect no liens
against any of the Collateral other than those permitted under the Credit
Agreement.


 


5.  UCC Filings.  Financing statements in substantially the
form of Schedule 5 hereto  have been prepared for filing
in the proper Uniform Commercial Code filing office in the jurisdiction in
which each Grantor is located and, to the extent any of the collateral is
comprised of fixtures, timber to be cut or as extracted collateral from the
wellhead or minehead, in the proper local jurisdiction, in each case as set
forth with respect to such Grantor in Section 2 hereof.


 


6.  Schedule of Filings.  Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above,
each filing and the filing office in which such filing is to be made.


 


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7.  Stock Ownership and other Equity
Interests.  Attached hereto as
Schedule 7 is a true and correct list of all the issued and outstanding stock,
partnership interests, limited liability company membership interests or other
equity interests owned by the Borrower, Holdings and each Subsidiary and the
record and beneficial owners of such stock, partnership interests, membership
interests or other equity interests. Also set forth on Schedule 7 is each
equity investment of Holdings, the Borrower or any Subsidiary that represents
50% or more of the equity of the entity in which such investment was made.


 


8.  Debt Instruments.  Attached hereto as Schedule 8 is a true and
correct list of all promissory notes and other evidence of indebtedness held by
Holdings, the Borrower and each Subsidiary that are required to be pledged
under the Collateral Agreement, including all intercompany notes between Holdings
and each Subsidiary of Holdings and each Subsidiary of Holdings and each other
such Subsidiary.


 


9.  Advances.  Attached hereto as Schedule 9 is (a) a
true and correct list of all advances made by the Borrower to any Subsidiary of
the Borrower or made by any Subsidiary of the Borrower to the Borrower or to
any other Subsidiary of the Borrower (other than those identified on Schedule
8), which advances will be on and after the date hereof evidenced by one or
more intercompany notes pledged to the Administrative Agent under the
Collateral Agreement and (b) a true and correct list of all unpaid
intercompany transfers of goods sold and delivered by or to the Borrower or any
Subsidiary of the Borrower.


 


10.  Mortgage Filings.  Attached hereto as Schedule 10 is a schedule
setting forth, with respect to each Mortgaged Property, (a) the exact name
of the Person that owns such property as such name appears in its certificate
of incorporation or other organizational document, (b) if different from
the name identified pursuant to clause (a), the exact name of the current
record owner of such property reflected in the records of the filing office for
such property identified pursuant to the following clause and (c) the
filing office in which a Mortgage with respect to such property must be filed
or recorded in order for the Administrative Agent to obtain a perfected
security interest therein.


 


11.  Intellectual Property.  Attached hereto as Schedule 11(A) in
proper form for filing with the United States Patent and Trademark Office is a
schedule setting forth all of each Grantor’s Patents, Patent licenses and
Patent applications, including the name of the registered owner, type,
registration or application number and the expiration date (if already
registered) of each Patent, Patent license and Patent application owned by any
Grantor.


 


Attached
hereto as Schedule 11(B) in proper form for filing with the United States
Patent and Trademark Office is a schedule setting forth all of each Grantor’s
Trademarks, Trademark licenses and Trademark applications, including the name
of the registered owner, the registration or application number and the
expiration date (if already registered) of each Trademark, Trademark license
and Trademark application owned by any Grantor.


 


Attached
hereto as Schedule 11(C) in proper form for filing with the United States Copyright
Office is a schedule setting forth all of each Grantor’s Copyrights (including


 


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the
name of the registered owner, title and the registration number), Copyright
licenses and Copyright applications (including the name of the registered owner
and title) of each Copyright, Copyright license or Copyright application owned
by any Grantor.


 


12.  Commercial Tort Claims.  Attached hereto as Schedule 12 is a true and
correct list of commercial tort claims in excess of $250,000 held by any
Grantor, including a brief description thereof.


 


13.  Deposit Accounts.  Attached hereto as Schedule 13 is a true and
correct list of deposit accounts maintained by each Grantor, including the name
and address of the depositary institution, the type of account and the account
number.


 


14.  Securities Accounts.  Attached hereto as Schedule 14 is a true and
correct list of securities accounts maintained by each Grantor, including the
name and address of the intermediary institution, the type of account and the
account number.


 


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IN WITNESS WHEREOF, the undersigned have duly executed this certificate
on this [   ] day of [   ], 20[   ].


 


	
   

  	
  [                                  ],

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:               [Financial
  Officer]

  



 


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