Document:

becn-ex105_486.htm

EXHIBIT 10.5

 

EXECUTION VERSION

 

 

					
	
WELLS FARGO BANK, NATIONAL ASSOCIATION
WF INVESTMENT HOLDINGS, LLC
WELLS FARGO SECURITIES, LLC
550 S. TRYON STREET
CHARLOTTE, NC 28202
	
CITIGROUP GLOBAL MARKETS INC.
390 GREENWICH STREET
NEW YORK, NY 10013

	
BANK OF AMERICA, N.A.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

One Bryant Park

New York, New York 10036
	
 
	
JPMORGAN CHASE BANK, N.A.

383 MADISON AVENUE
NEW YORK, NY 10179

 
	
SUNTRUST BANK

SUNTRUST ROBINSON HUMPHREY, INC.

3333 PEACHTREE ROAD

ATLANTA, GA 30326

September 6, 2017

Beacon Roofing Supply, Inc.
505 Huntmar Park Drive, Suite 300
Herndon, VA 20170

Attention:  Joseph Nowicki

Project Alpine 
Amended and Restated Commitment Letter
Senior Secured Credit Facilities
Senior Unsecured Bridge Facility

Ladies and Gentlemen:

Beacon Roofing Supply, Inc., a Delaware corporation (the “Borrower”, “Holdings” or “you”), has advised Wells Fargo Bank, National Association (“Wells Fargo Bank”), WF Investment Holdings, LLC (“WF Investments”), Wells Fargo Securities, LLC (“Wells Fargo Securities” and, collectively with Wells Fargo Bank and WF Investments, “WF”), Citi (as defined below), MLPFS (as defined below), JPMorgan Chase Bank, N.A. (“JPMCB”), SunTrust Robinson Humphrey, Inc. (“STRH”) and SunTrust Bank (“SunTrust Bank” and, collectively with STRH, “SunTrust”) (each of the foregoing, as applicable, a “Commitment Party” and, collectively, the “Commitment Parties”, “we” or “us”) that the Borrower desires to consummate the Transactions (as defined in Exhibit A hereto (such exhibit, the “Transactions Description”)).  Capitalized terms used in this letter agreement but not defined herein shall have the meanings given to them in the Exhibits (as defined below) hereto.  For the purposes of this Commitment Letter and the Fee Letter referred to below, “Citi” shall mean Citigroup Global Markets Inc. (“CGMI”), Citibank, N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as Citi shall determine to be appropriate to provide the services contemplated herein. For the purposes of this Commitment Letter and the Fee Letter referred to below, “MLPFS” shall mean Merrill Lynch, Pierce, 

 

 

 

Fenner & Smith Incorporated, Bank of America, N.A. and any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred, without notice to the Borrower or any other party hereto, following the date of this Commitment Letter.

Upon the terms and subject to the conditions described in this letter agreement and the attached Exhibit A, Exhibit B, Exhibit C, Exhibit D and Exhibit E (collectively, the “Exhibits” and, together with this amended and restated letter agreement, this “Commitment Letter”), (a) (i) each of Wells Fargo Bank, Citi, MLPFS, JPMCB and SunTrust Bank is pleased to inform the Borrower of its several (but not joint) commitment to provide the percentage of the aggregate principal amount of the Term Loan Facility (as defined in the Transactions Description) set forth opposite its name on Schedule A hereto, (ii) each of Wells Fargo Bank, Citi, MLPFS, JPMCB and SunTrust Bank is pleased to inform the Borrower of its several (but not joint) commitment to provide the percentage of the aggregate principal amount of the ABL Facility Increase (as defined below) set forth opposite its name on Schedule B hereto (it being understood that the sum of (A) the commitments of lenders under the Existing ABL Credit Agreement as in effect on the date hereof plus (B) the Commitments of Wells Fargo Bank, Citi, MLPFS, JPMCB and SunTrust Bank hereunder in respect of the ABL Facility Increase are not less than $1,300,000,000) and (iii) each of  WF Investments, Citi, MLPFS, JPMCB and SunTrust Bank is pleased to inform the Borrower of its several (but not joint) commitment to provide the percentage of the aggregate principal amount of the Bridge Facility (as defined in the Transactions Description) set forth opposite its name on Schedule C hereto. In addition, effective on the Closing Date for the ABL Facility, each Commitment Party in its capacity as a lender under the Existing ABL Credit Agreement agrees to consent to the amendment and restatement of the Existing ABL Credit Agreement on terms consistent with those set forth on Exhibit C to this Commitment Letter, including the extension of the Maturity Date (as defined in Exhibit C) to the date that is five years from the Closing Date. 

Citi, Wells Fargo Bank, MLPFS, JPMCB and SunTrust Bank, in their capacity as initial lenders of the Senior Secured Facilities (as defined below), are each referred to herein as an “Initial Bank Lender”; Citi, WF Investments, MLPFS, JPMCB and SunTrust Bank, in their capacity as initial lenders of the Bridge Facility, are each referred to herein as an “Initial Bridge Lender”; the Initial Bank Lenders and the Initial Bridge Lenders, in such capacity, are each referred to as an “Initial Lender” and collectively, as the “Initial Lenders”. For purposes hereof, the term “ABL Facility Increase” means the amount equal to the increase in the aggregate amount of the commitments for the ABL Facility from the aggregate amount of the commitments in effect under the Existing ABL Credit Agreement as of the date hereof. This Commitment Letter amends and restates in its entirety that certain commitment letter, dated as of August 24, 2017, among WF, Citi and you (the “Prior Commitment Letter”).

For the purposes of this Commitment Letter and the Fee Letter referred to below, the term “Facilities” shall mean: (1) senior secured credit facilities comprised of the Term Loan Facility and the ABL Facility (together, the “Senior Secured Facilities”) and (2) the Bridge Facility.

Section 1.Title and Roles.

You hereby appoint (i) each of WF, Citi, MLPFS, JPMCB and STRH to act, and each of WF, Citi, MLPFS, JPMCB and STRH hereby agrees to act, as a joint bookrunner and joint lead arranger with respect to the Facilities, including in connection with the amendment, extension, repricing, increase or replacement of indebtedness and/or commitments under the Existing ABL Credit Agreement (as defined in the Transactions Description) in connection with the Transactions (each in such capacity, an “Arranger” and, collectively in such capacities, the “Arrangers”, it being understood that the Borrower 

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agrees that JPMCB may perform its responsibilities hereunder through its affiliate, J.P. Morgan Securities LLC) and each of WF, Citi, MLPFS, JPMCB and STRH hereby agrees to use commercially reasonable efforts to arrange and obtain consents for an amendment and restatement of the Existing ABL Credit Agreement on the terms set forth on Exhibit C, including an extension of the maturity date thereunder to five years after the Closing Date (as defined therein), (ii) Citi to act, and Citi hereby agrees to act, as sole administrative agent and collateral agent with respect to the Term Loan Facility, (iii) Wells Fargo Bank to act, and Wells Fargo Bank hereby agrees to act, as sole administrative agent and collateral agent with respect to the ABL Facility and (iv) WF Investments (or an affiliate selected by it) to act, and WF Investments (or such affiliate) hereby agrees to act, as sole administrative agent with respect to the Bridge Facility, in each case upon the terms and subject to the conditions described in this Commitment Letter.  You agree that no additional agents, co-agents, bookrunners or lead arrangers will be appointed, or other titles conferred, and no compensation (other than that expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any other person in order to obtain commitments to the Facilities unless you and the Commitment Parties shall so agree.  It is understood and agreed that MLPFS, JPMCB and STRH shall not be physical bookrunners and that (a) Citi will have primary authority for managing the syndication of the Term Loan Facility and (b) WF will have primary authority for managing the syndication of the ABL Facility and the Bridge Facility.  It is further understood and agreed that (a) (x) Citi shall have “left side” placement in any and all marketing materials or other documentation used in connection with the Term Loan Facility and shall hold the leading role and responsibilities conventionally associated with such “left” placement and (y) WF will appear to the immediate “right” of Citi in such marketing materials or other documentation in respect of the Term Loan Facility, and MLPFS, JPMCB and STRH will appear to the “right” of WF (in such order) in such marketing materials or documentation and (b) (x) WF shall have “left side” placement in any and all marketing materials or other documentation used in connection with the ABL Facility and the Bridge Facility and shall hold the leading role and responsibilities conventionally associated with such “left” placement and (y) Citi will appear to the immediate “right” of WF in such marketing materials or other documentation in respect of the ABL Facility and the Bridge Facility, and MLPFS, JPMCB and STRH will appear to the “right” of Citi (in such order) in such marketing materials or documentation.

Section 2.Syndication.

The Commitment Parties reserve the right, prior to and/or after the execution of the definitive documentation with respect to the Facilities (including any security agreements, intercreditor agreement, ancillary agreements and certificates or other documents delivered in connection therewith) (collectively, the “Operative Documents”) to syndicate all or a portion of their commitments under the Facilities to one or more other banks, financial institutions, investors and other lenders identified by us in consultation with you and subject to your consent (such consent not to be unreasonably withheld, conditioned or delayed) (the lenders providing any of the Facilities, together with the Initial Lenders, are collectively referred to herein as the “Lenders”); provided that we agree not to syndicate our commitments to (x) certain banks, financial institutions, investors, other institutional lenders and other entities, in each case, identified by name in writing to us prior to August 24, 2017, (y) those persons that are competitors of you, your subsidiaries or the Acquired Company that are identified by name in writing to us from time to time or (z) any affiliates of the persons identified under clause (x) or (y) above that are clearly identifiable as such by name or identified by name in writing (such persons, collectively, the “Disqualified Institutions”) and that none of the Disqualified Institutions may become a Lender or participant in respect of any of the Facilities.  Subject to the foregoing and the last sentence of Section 1 above, Citi and WF will manage all aspects of the syndication of the Facilities in consultation with the Borrower, including the timing of the commencement of syndication efforts, the timing of all offers to potential Lenders, the determination of all amounts offered to potential Lenders, the selection of Lenders and the allocation of commitments among the Lenders.  Notwithstanding any other provision of this 

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Commitment Letter to the contrary and notwithstanding any syndication, assignment or other transfer by any Initial Lender, (a) no Initial Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund its applicable percentage of the Facilities on the Closing Date) in connection with any syndication, assignment or other transfer until after the initial funding of the Facilities on the Closing Date, (b) no such syndication, assignment or other transfer shall become effective with respect to any portion of the Initial Lenders’ commitments in respect of the Facilities until the initial funding of the Facilities on the Closing Date and (c) unless the Borrower agrees in writing, each Initial Lender shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Facilities, including all rights with respect to consents, waivers, modifications, supplements and amendments, until the Closing Date has occurred.

Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that our commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, the Facilities and in no event shall the commencement or successful completion of syndication of the Facilities, nor the obligation to assist with syndication efforts as set forth herein (including, without limitation, any of your agreements in this paragraph or the following paragraph), constitute a condition to the commitment hereunder or the funding of the Facilities on the Closing Date.  The Arrangers may commence syndication efforts promptly upon the execution of this Commitment Letter and as part of their syndication effort it is the Arrangers’ intent to have Lenders commit to the Facilities as soon as reasonably practicable (and in any event prior to the Closing Date).  Until the earlier of (i) the 60th day following the date of the consummation of the Acquisition with the proceeds of the initial funding under any of the Facilities (or, if any portion of the Term Loan Facility is funded into escrow as provided in the Arranger Fee Letter (as defined below), with the proceeds of such escrowed funds and the initial funding under the remainder of the Facilities) (the date of such consummation and funding, the “Closing Date”) and (ii) the date upon which a Successful Syndication (as defined in the Arranger Fee Letter) is achieved (such earlier date, the “Syndication Date”), the Borrower hereby agrees to assist, and use its commercially reasonable efforts to cause the Acquired Company to assist, us in achieving a syndication that is reasonably satisfactory to us and you as soon as reasonably practicable after August 24, 2017.  The Borrower’s assistance in achieving such syndication shall include but not be limited to:  (i) making appropriate members of the senior management, representatives and non-legal advisors of the Borrower (and, to the extent not in contravention of the Acquisition Agreement, using its commercially reasonable efforts to make appropriate members of the senior management, representatives and non-legal advisors of the Acquired Company) available to participate in meetings and conference calls with potential Lenders and/or ratings agencies at such times and places as the Arrangers may reasonably request; (ii) using its commercially reasonable efforts to ensure that the syndication efforts benefit from the existing lending relationships of the Borrower (and, to the extent practical and appropriate, of the Acquired Company); (iii) assisting (including, using its commercially reasonable efforts to cause its non-legal advisors, and the Acquired Company and its non-legal advisors, to assist) in the preparation (and/or providing to us) of a customary confidential information memorandum for each Facility, other customary marketing materials and any other information reasonably requested by any Arranger with respect to the Borrower and its subsidiaries, the Acquired Company or the Transactions in connection with the syndication (collectively, the “Company Materials”) and using its commercially reasonable efforts to ensure that the Arrangers shall have received as promptly as reasonably practicable after August 24, 2017 and in any event no later than 15 business days prior to the earlier of (x) the Closing Date and (y) December 8, 2017, all necessary information to complete each such confidential information memorandum (including executed customary authorization letters in respect thereof that include a customary “10b-5” representation); (iv) using its commercially reasonable efforts (A) to procure a rating of each of the Facilities by Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Rating Services (“S&P”) as promptly as reasonably practicable after August 24, 2017 and in any event prior to the commencement of syndication of any of the Facilities (but 

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no specific rating) (it being understood that the Arrangers shall, in accordance with their customary practice, assist the Borrower in procuring credit ratings by providing assistance that would customarily be provided by investment banks in their capacity as arrangers in connection with arranging credit facilities of a like nature) and (B) to maintain a corporate family rating or corporate rating, as applicable, of the Borrower from each of Moody’s and S&P (but no specific rating) and (v) deliver to the Arrangers, promptly upon receipt thereof, all financial and other information reasonably requested by the Arrangers, including customary projections; provided that, for the purposes of clause (iii) above, November 22, 2017 through November 24, 2017 and December 22, 2017 through January 1, 2018 shall not be deemed to be business days.  You also agree to use your commercially reasonable efforts to assist the Arrangers in obtaining field examinations and appraisals for the ABL Facility prior to the Closing Date.

In addition, you agree to deliver to us prior to the Closing Date projected balance sheets, income statements, statements of cash flows and availability of the Borrower and its subsidiaries giving effect to the Transactions and covering the term of the ABL Facility, which projections shall be on a monthly basis for the twelve-month period following the Closing Date, a quarterly basis for the twelve-month period thereafter and on an annual basis thereafter for the term of the ABL Facility, in each case with the results and assumptions in all of such projections in form and substance reasonably satisfactory to the Arrangers and, to the extent the Borrower may prepare them prior to the Closing Date, any updates and modifications to the projected financial statements of the Borrower and subsidiaries previously received by the Arrangers.

The Borrower acknowledges that (i) the Arrangers may make available the Company Materials on a confidential basis to potential Lenders by posting the Company Materials on Intralinks, SyndTrak Online, Debtdomain, the internet, email and/or similar electronic transmission systems (the “Platform”) and (ii) certain of the potential Lenders may be public side Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to you, your subsidiaries, the Acquired Company or any securities of any thereof) (each, a “Public Lender”).  The Borrower agrees that at the request of any Arranger, it will assist us in preparing a version of the information package and presentation to be provided to potential Lenders that does not contain any material non-public information concerning you, your subsidiaries, the Acquired Company or any securities of any thereof for purposes of United States federal and state securities laws (any such information, “MNPI”).  You also agree, at our request, to identify Company Materials that are suitable for distribution to Public Lenders by clearly and conspicuously marking the same as “PUBLIC” (it being understood that such information shall nonetheless be subject to the confidentiality provisions contained herein).  All information that is not specifically identified as “PUBLIC” (including Projections (as defined below)) shall be treated as being suitable only for posting to private Lenders.  By identifying any Company Materials as suitable for distribution to Public Lenders (including by marking any documents, information or other data “PUBLIC”) you shall be deemed to have authorized the Commitment Parties and the Lenders to treat such Company Materials as not containing MNPI.  You also agree to provide us with customary authorization letters for inclusion in the Company Materials that represents that any Company Materials identified as “PUBLIC” does not include MNPI and exculpates us with respect to any liability related to the use or misuse of the contents of the Company Materials by the recipients thereof.  The Arrangers agree to treat any Company Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Lender”.  To ensure an orderly and effective syndication of each Facility, the Borrower agrees that, until the Syndication Date, it will not, and will not permit any of its subsidiaries to (and the Borrower will use commercially reasonable efforts to not permit the Acquired Company to), syndicate, issue, place, arrange or attempt to syndicate, issue, place or arrange, or announce or authorize the announcement of the syndication, issuance, placement or arrangement of, any debt facility or debt security (including, without limitation, the renewal of any thereof, but excluding the Facilities and excluding any additional borrowings under any existing revolving credit facilities of the 

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Borrower, the Acquired Company or any of their respective affiliates and any ordinary course capital leases, purchase money indebtedness, equipment financings, letters of credit and surety bonds) without the prior written consent of the Arrangers if such syndication, issuance, placement or arrangement could reasonably be expected to impair the primary syndication of any of the Facilities.

Section 3.Conditions.

The commitments of each Commitment Party hereunder to fund its respective portion of the Facilities on the Closing Date and the agreements of each of the Arrangers to perform the services described herein are subject solely to the satisfaction (or waiver by each of the Commitment Parties) of the following conditions precedent:  (a) except as set forth in clause (iii) of Schedule 3.16 to the Acquisition Agreement (or as set forth in any other schedule to the Acquisition Agreement to the extent that the relevance of any fact or item or contents set forth therein is reasonably apparent), since December 31, 2016, no Group Company (as defined in the Acquisition Agreement) has suffered a Material Adverse Effect (as defined below) and no effect, development, event, change, state of facts, circumstance or occurrence exists that has had or is reasonably expected to have a Material Adverse Effect, (b) subject to the Limited Conditionality Provisions (as defined below), the negotiation, execution and delivery of the Operative Documents by the Borrower and the Guarantors on the terms set forth in this Commitment Letter and with respect to any terms not specifically set forth herein, subject to the applicable Documentation Principles, on terms reasonably satisfactory to the Borrower and the Arrangers, and (c) in the case of each of the Facilities, the satisfaction (or waiver by each of the Commitment Parties) of the other conditions set forth in Exhibit E hereto (clauses (a), (b) and (c), collectively, the “Funding Conditions”); it being understood that there are no conditions (implied or otherwise) to the commitments hereunder other than the Funding Conditions (and upon satisfaction or waiver of the Funding Conditions, the initial funding (and, if any portion of the Term Loan Facility is funded into escrow as provided in the Arranger Fee Letter, the release and application of the proceeds of such escrowed funds) under the applicable Facilities shall occur (except to the extent of any gross proceeds from Notes or the Common Shares issued in lieu of the Bridge Facility or a portion thereof)). 

For purposes of this Commitment Letter, “Material Adverse Effect” means any effect, state of facts, development, event, change, occurrence or circumstance that (x) has had, or is reasonably likely to have, individually or in the aggregate, a material adverse effect upon the financial condition, business, or results of operations of the Group Companies, taken as a whole; provided, however, that any adverse effect, state of facts, development, event, change, occurrence or circumstance arising from or related to (i) conditions generally affecting the economy, credit or financial or capital markets in the United States or elsewhere in the world, including any changes in interest or exchange rates, (ii) any national or international political or social conditions, including acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), sabotage or terrorism, (iii) changes in GAAP, (iv) changes in any laws, rules, regulations, orders, or other binding directives issued by any Governmental Entity, (v) any change that is generally applicable to the industries or markets in which the Group Companies operate, (vi) the public announcement of the transactions contemplated by the Acquisition Agreement, (vii) any failure by Seller to meet any projections, forecasts or revenue or earnings predictions (provided that, unless subject to another exclusion set forth in this definition, the underlying cause of any such change may be taken into account in determining whether there has been a Company Material Adverse Effect), (viii) any action required or contemplated by the Acquisition Agreement and/or the Ancillary Documents, including the completion of the transactions contemplated thereby, (ix) any action taken by Seller or any of the Group Companies at Borrower’s written request, or (x) any change resulting from the consummation of the transactions contemplated by the Acquisition Agreement or the Ancillary Documents, including any such change relating to the identity of, or facts and circumstances relating to, Seller and including any actions taken by 

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the Group Companies’ customers, suppliers or personnel, shall not be taken into account in determining whether a “Material Adverse Effect” has occurred; provided, however, that any change or effect referred to in clauses (i), (ii), (iii), (iv) and (v) immediately above may be taken into account in determining whether a Material Adverse Effect has occurred to the extent that such change or effect has a materially disproportionate effect on the Group Companies relative to other companies in the industries or markets in which the Group Companies operate or (y) would reasonably be expected to prevent the consummation of the transactions contemplated by the Acquisition Agreement. Capitalized terms used in this paragraph shall have the meanings ascribed to such terms in the Acquisition Agreement as in effect on August 24, 2017.

Notwithstanding anything set forth in this Commitment Letter, the Fee Letter referred to below or the Operative Documents, or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations and warranties, the making and accuracy of which shall be a condition to availability of the Facilities on the Closing Date, shall be (x) such of the representations and warranties made by or on behalf of the Acquired Company in the Acquisition Agreement as are material to the interests of the Lenders (in their capacities as such), but only to the extent that you (or any of your affiliates) have the right to terminate your (or its) obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement as a result of a breach of any of such representations and warranties (to such extent, the “Acquisition Agreement Representations”) and (y) the Specified Representations (as defined below) made by the Borrower and Guarantors in the Operative Documents and (ii) the terms of the Operative Documents shall be in a form such that they do not impair the availability of the Facilities on the Closing Date if the Funding Conditions are satisfied (it being understood that to the extent any Collateral (other than Collateral in which a security interest may be perfected by (A) the filing of a UCC or PPSA financing statement, (B) taking delivery and possession of stock (or other equity interest) certificates of wholly-owned subsidiaries and related stock powers executed in blank (other than certificates of “branch” subsidiaries of the Acquired Company that are lost or misplaced and cannot be reissued prior to the Closing Date after use of commercially reasonable efforts) or (C) the filing of a short form security agreement with the United States Patent and Trademark Office or the United States Copyright Office or Canadian equivalent) cannot be delivered or a security interest therein cannot be created or perfected on the Closing Date after your use of commercially reasonable efforts to do so, then the creation and/or perfection of the security interest in such Collateral shall not constitute a condition precedent to the availability of the Facilities on the Closing Date but, instead, may be accomplished pursuant to arrangements and timing to be reasonably and mutually agreed by the parties hereto acting reasonably (but in any event no less than 90 days, with extensions available in the reasonable discretion of the Term Loan Administrative Agent and the ABL Administrative Agent).  For purposes hereof, “Specified Representations” means the representations and warranties set forth in the Operative Documents (with respect to the Borrower and its subsidiaries, after giving effect to the Transactions) relating to the legal existence of the Borrower and the Guarantors; power and authority, due authorization, execution and delivery, in each case, related to the entering into, borrowing under, guaranteeing under, performance of, and, subject to the parenthetical beginning “it being understood” appearing in the preceding sentence, granting of security interests in the Collateral pursuant to, the Operative Documents; the enforceability of the Operative Documents; the execution and performance of the Operative Documents not conflicting with or violating the Borrower’s or any Guarantor’s organizational documents; Federal Reserve margin regulations; the Investment Company Act of 1940, as amended; solvency of the Borrower and its subsidiaries on a consolidated basis as of the Closing Date (after giving effect to the Transactions and as determined pursuant to Exhibit E hereto); USA PATRIOT Act; use of proceeds not violating laws applicable to sanctioned persons and not violating laws and regulations promulgated by OFAC, anti-money laundering or the Foreign Corrupt Practices Act; and, subject to the parenthetical beginning “it being understood” appearing in the preceding sentence, the creation, validity, perfection and priority (subject to customary permitted liens to be agreed consistent 

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with the Documentation Principles) of the security interests granted in the Collateral.  The provisions of this paragraph are referred to as the “Limited Conditionality Provisions”.

Section 4.Commitment Termination; Reduction.

Each Commitment Party’s commitment hereunder and the other obligations set forth in this Commitment Letter will terminate on the earliest of:  (a) the consummation of the Acquisition with or without the funding of any of the Facilities, (b) February 28, 2018; provided that to the extent that the Termination Date (as defined in the Acquisition Agreement as in effect on August 24, 2017) is extended in accordance with Section 7.1(b) of the Acquisition Agreement (as in effect on August 24, 2017), the date under this clause (b) shall automatically be extended to August 31, 2018 and (c) the date the Acquisition Agreement is terminated (such earliest date, the “Termination Date”).

Section 5.Fees.

As consideration for our commitments and other obligations hereunder and our agreement to perform the services described herein, you agree to pay (or to cause to be paid) to us the fees set forth in this Commitment Letter and in the amended and restated arranger fee letter dated the date hereof among you and the other parties thereto (such amended and restated arranger fee letter, as amended, amended and restated, supplemented or otherwise modified, the “Arranger Fee Letter”) and in the amended and restated administrative agents fee letter dated the date hereof among you and the other parties thereto (such amended and restated administrative agents fee letter, as amended, amended and restated, supplemented or otherwise modified, together with the Arranger Fee Letter, the “Fee Letter”).  The terms of the Fee Letter are an integral part of our commitments and other obligations hereunder and our agreement to perform the services described herein and constitute part of this Commitment Letter for all purposes hereof.  Each of the fees described in this Commitment Letter and the Fee Letter shall be nonrefundable when paid except as expressly set forth therein.

Section 6.Indemnification.

The Borrower shall indemnify and hold harmless each Commitment Party, its affiliates, and each Commitment Party’s and such affiliates’ respective directors, officers, employees, agents, trustees, representatives, attorneys, consultants and advisors (each, an “Indemnified Person”) from and against any and all claims (including, without limitation, shareholder actions), damages, losses, liabilities and expenses (including, without limitation, reasonable and documented out-of-pocket fees and disbursements of counsel), that may be incurred by or asserted or awarded against any Indemnified Person (including, without limitation, in connection with or relating to any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Commitment Letter, the Prior Commitment Letter or any fee letter related thereto, the Fee Letter or the Operative Documents, or the transactions contemplated hereby or thereby or any use of the proceeds thereof (any of the foregoing, a “Proceeding”), except to the extent such claim, damage, loss, liability or expense is (i) found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the bad faith, gross negligence or willful misconduct of or material breach of its funding obligations hereunder by such Indemnified Person or any of its affiliates or (ii) the result of any Proceeding that is not the result of an act or omission by you or any of your affiliates and that is brought by an Indemnified Person against any other Indemnified Person (other than any claims against any Commitment Party in its capacity or in fulfilling its role as Arranger, administrative agent, collateral agent or any similar role under any of the Facilities).  The foregoing indemnity, in the case of legal fees and expenses, is limited to one counsel to all Indemnified Persons taken as a whole and, solely in the case of an actual or reasonably perceived conflict of interest, one additional counsel to all affected 

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Indemnified Persons, taken as a whole and, if reasonably necessary, of one local counsel in any relevant material jurisdiction to all such Indemnified Persons, taken as a whole and, solely in the case of such conflict of interest, one additional local counsel to all affected Indemnified Persons taken as a whole.  In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Person or any other person, or an Indemnified Person is otherwise a party thereto and whether or not the Transactions are consummated. 

In no event shall any party hereto be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings); provided that nothing contained in this paragraph shall limit your indemnity and reimbursement obligations for such damages awarded to third parties to the extent set forth in the immediately preceding paragraph.

You shall not be liable for any settlement of any Proceeding effected without your written consent (which consent shall not be unreasonably withheld, conditioned or delayed), but if settled with your written consent or if there is a judgment in any such Proceeding, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with the other provisions of this Section 6.

You agree that, without our prior written consent, neither you nor any of your subsidiaries will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could be sought under the indemnification provision of this Commitment Letter (whether or not we or any other Indemnified Person is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action or proceeding and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnified Person.

The Borrower acknowledges that information and other materials relative to the Operative Documents and the Transactions may be transmitted through the Platform.  No Indemnified Person will be liable to the Borrower or any of its affiliates or any of its security holders or creditors for any damages arising from the use by unauthorized persons of information or other materials sent through the Platform that are intercepted by such persons, except to the extent such liability is determined by a final non-appealable judgment by a court of competent jurisdiction to have resulted from the bad faith, gross negligence or willful misconduct of or material breach of its funding obligations hereunder by such Indemnified Person or any of its affiliates.

Section 7.Costs and Expenses.

The Borrower shall pay, or reimburse the Commitment Parties promptly following demand for (but in no event prior to the earlier of (a) the Closing Date or (b) the termination of each Commitment Party’s commitments hereunder in accordance with the terms of Section 4 hereof), all reasonable and documented out-of-pocket costs and expenses incurred by the Commitment Parties in connection with the Facilities and the preparation, negotiation, execution and delivery of this Commitment Letter, the Prior Commitment Letter and any fee letter related thereto, the Fee Letter and the Operative Documents, including, without limitation, the reasonable fees, disbursements and other charges of counsel identified on the exhibits hereto, regardless of whether any of the transactions contemplated hereby is consummated.  The 

9

 

 

Borrower shall also pay all reasonable and documented out-of-pocket costs and expenses of the Commitment Parties (including, without limitation, the reasonable fees, disbursements and other charges of counsel (limited to one counsel to all Commitment Parties taken as a whole and, solely in the case of an actual or reasonably perceived conflict of interest, one additional counsel to all affected Commitment Parties, taken as a whole and, if reasonably necessary, of one local counsel in any relevant material jurisdiction to all such Commitment Parties, taken as a whole and, solely in the case of such conflict of interest, one additional local counsel to all affected Commitment Parties taken as a whole)) incurred in connection with the enforcement of any of their rights and remedies hereunder.

Section 8.Confidentiality

The Borrower agrees that this Commitment Letter, the Prior Commitment Letter and any fee letter related thereto and the Fee Letter are for its confidential use only and that neither their existence nor the terms hereof will be disclosed by it to any person other than its subsidiaries and the officers, directors, employees, managers, members, partners, accountants, attorneys and other advisors of the Borrower and its subsidiaries (the “Borrower Representatives”), and then only on a confidential and “need to know” basis in connection with the transactions contemplated hereby; provided, however, that the Borrower may disclose this Commitment Letter and the contents hereof and, except to the extent specified below, the Fee Letter and the contents thereof:  (a) as may be compelled in (i) a judicial or administrative proceeding or in any proceeding or pursuant to the order of any court or administrative agency or upon the request or demand of any regulatory authority or (ii) as otherwise required by law or in any required filings with the Securities and Exchange Commission and to the extent required by applicable regulatory authorities or stock exchanges (but, with respect to this clause (ii) in the case of the Fee Letter and the contents thereof, only as part of disclosure of aggregate sources and uses with respect to the Transactions) (it being understood and acknowledged that the Borrower made the Prior Commitment Letter, but not any fee letter related thereto, publicly available by filing it with the Securities and Exchange Commission on EDGAR); (b) to Moody’s or S&P in connection with obtaining a rating of the Facilities (but in the case of the Fee Letter and the contents thereof, only as part of disclosure of aggregate sources and uses with respect to the Transactions); (c) to the Acquired Company and its controlling persons and the officers, directors, employees, managers, members, partners, accountants, attorneys and other advisors of any of the foregoing who are directly involved in the consideration of this matter, in each case on a confidential and “need to know” basis in connection with the transactions contemplated hereby (but in the case of the Fee Letter and the contents thereof, redacted in respect of the amounts, percentages and basis points of compensation set forth therein and the pricing and other terms of the “flex provisions” and “securities demand provisions”); (d) in syndication or other marketing materials relating to the Facilities (but in the case of the Fee Letter and the contents thereof, only as part of disclosure of aggregate sources and uses with respect to the Transactions) or (e) with our prior written consent.

Each Commitment Party, on behalf of itself and its affiliates, agrees that it will use all confidential information provided to it or its affiliates by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially all such information; provided that nothing herein shall prevent any Commitment Party from disclosing any such information (a) pursuant to the order of any court or administrative agency or otherwise as required by applicable law or regulation or as requested by a governmental authority (in which case such Commitment Party, to the extent permitted by law and except with respect to any audit or examination conducted by bank accountants or any governmental bank authority exercising examination or regulatory authority, agrees to inform you promptly thereof), (b) upon the request or demand of any regulatory authority having jurisdiction over such Commitment Party or any of its affiliates, (c) to the extent that such information becomes publicly available other than by reason of 

10

 

 

disclosure by any Commitment Party in violation of this paragraph, (d) to the extent that such information is received by any Commitment Party from a third party that is not, in each case to such Commitment Party’s knowledge, (i) in such third party’s possession illegally or (ii) subject to confidentiality obligations to you or any of your affiliates, to the Acquired Company or any of its affiliates, (e) to the extent that such information is independently developed by any Commitment Party, (f) to any of the Commitment Parties’ affiliates and any of their respective employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with the Facilities and are informed of the confidential nature of such information, (g) to prospective Lenders, participants or assignees of obligations under the Facilities (other than any Disqualified Institution), in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph) pursuant to standard syndication practices, or to lenders, participants or assignees of obligations under the Existing ABL Credit Agreement in connection with the ABL Facility in accordance with the confidentiality provisions of the Existing ABL Credit Agreement, (h) to Moody’s or S&P in connection with obtaining a rating of the Facilities in consultation and coordination with you or (i) for the purposes of establishing a “due diligence” defense.  The Commitment Parties’ obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the Operative Documents upon the execution and delivery thereof and, in the event the Operative Documents have not been executed and delivered, shall expire on the date occurring 24 months after August 24, 2017.  Nothing in this paragraph shall apply to any information received by a Commitment Party or its affiliates pursuant to its relationship as an agent, lender or issuing bank, as the case may be, under the Existing Term Loan Credit Agreement (as defined in Exhibit B) or the Existing ABL Credit Agreement (which information will be subject to the applicable terms of each such agreement).

You acknowledge that neither any of the Commitment Parties nor any of their affiliates provide accounting, tax or legal advice.  You further acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, the Acquired Company and your and its respective affiliates may have conflicting interests regarding the transactions described herein and otherwise.  You also acknowledge that none of the Commitment Parties or their affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.  As you know, the Commitment Parties are full service securities firms engaged, either directly or through their affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals.  In the ordinary course of these activities, the Commitment Parties and their respective affiliates actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of the Borrower and other companies which may be the subject of the arrangements contemplated by this Commitment Letter for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and financial instruments.  The Commitment Parties or their affiliates also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities and financial instruments of you, the Acquired Company or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof.

In addition, the Borrower, WF, MLPFS, JPMCB and SunTrust each acknowledge that the Borrower has retained Citi as financial advisor (in such capacity, the “Buy Side Financial Advisor”) in connection with the Acquisition.  The Borrower, WF, MLPFS, JPMCB and SunTrust each agree not to assert any claim that the Borrower, WF, MLPFS, JPMCB or SunTrust might allege based on any actual or 

11

 

 

potential conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of the Buy Side Financial Advisor and, on the other hand, Citi and its affiliates’ relationships with the Borrower or each other as described and referred to herein.

In addition, the Borrower, WF, Citi, MLPFS and SunTrust each acknowledge that CRH plc has retained J.P. Morgan Securities LLC as financial advisor (in such capacity, the “Sell Side Financial Advisor”) in connection with the Acquisition.  The Borrower, WF, Citi, MLPFS and SunTrust each agree not to assert any claim that the Borrower, WF, Citi, MLPFS or SunTrust might allege based on any actual or potential conflicts of interest that might be asserted to arise or result from, on the one hand, the engagement of the Sell Side Financial Advisor and, on the other hand, JPMCB and its affiliates’ relationships with the Borrower or each other as described and referred to herein.

Section 9.Representations and Warranties.

The Borrower represents and warrants (which representation and warranty, in the case of any information relating to the Acquired Company prior to the Acquisition, is to the best of the Borrower’s knowledge) that all factual written information, other than Projections, other forward-looking information and information of a general economic or industry-specific nature, that has been or will hereafter be made available to any of the Commitment Parties or any Lender by or on behalf of the Borrower or any of its representatives in connection with the transactions contemplated hereby (the “Information”) is and will be, when furnished, true and correct in all material respects and does not and will not, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were or are made (after giving effect to all supplements and updates thereto provided prior to the Syndication Date) and (ii) all financial projections, if any, that have been or will be prepared by or on behalf of the Borrower or any of its representatives and made available to any of the Commitment Parties, any Lender or any potential Lender in connection with the transactions contemplated hereby (the “Projections”) have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time made and at the time the related financial projections are made available (it being understood that such Projections are as to future events and are not to be viewed as facts, that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and that such differences may be material, that such Projections are subject to significant uncertainties and contingencies many of which are beyond your control, and that no assurance can be given that the projected results will be realized).  If, at any time from August 24, 2017 until the later of the Closing Date and the Syndication Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information or Projections were being furnished, and such representations and warranties were being made, at such time, then you agree to (or, in the case of Information or Projections relating to the Acquired Company and its affiliates, to use commercially reasonable efforts to) promptly supplement the Information and/or Projections so that the representations and warranties contained in this paragraph remain true and correct in all material respects under those circumstances. It is understood and agreed that our commitments hereunder are not conditioned upon the accuracy of the representations made in this Section 9 and in no event shall the accuracy of such representations in and of itself constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date.

In arranging and syndicating the Facilities, the Commitment Parties will be entitled to use, and to rely on the representations and warranties in the preceding paragraph relating to, any information furnished to us by or on behalf of the Borrower and its affiliates without responsibility for independent verification thereof.

12

 

 

Section 10.Assignments.

The Borrower may not assign or delegate any of its rights or obligations under this Commitment Letter or the Fee Letter without our prior written consent, and any attempted assignment without such consent shall be null and void.  No Commitment Party may assign or delegate any of its rights or obligations under this Commitment Letter or its commitment hereunder (except to one or more of its affiliates) other than as expressly permitted hereunder without the Borrower’s prior written consent, and any attempted assignment or delegation without such consent shall be null and void.

Section 11.Amendments.

Neither this Commitment Letter nor the Fee Letter may be amended or any provision hereof waived or modified except by an instrument in writing signed by each party hereto or thereto, as applicable.

Section 12.Governing Law, Etc.

This Commitment Letter (and any claim, controversy or dispute arising under or related to any of the foregoing, whether based on contract, tort or otherwise) shall be governed by, and construed in accordance with, the law of the State of New York, without giving effect to any conflicts of law principles which would result in the application of the laws of another state; provided, however, that (i) the interpretation of the definition of Material Adverse Effect (and whether a Material Adverse Effect has occurred), (ii) the determination of the accuracy of any Acquisition Agreement Representations and whether as a result of any inaccuracy thereof you (or any of your affiliates) have the right to terminate your (or its) obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement and (iii) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement, in each case shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.

Each party hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter, the Fee Letter, the Prior Commitment Letter or any fee letter related thereto, the Operative Documents, the transactions contemplated hereby or thereby or the actions of the parties hereto or any of their affiliates in the negotiation, performance or enforcement of this Commitment Letter.

Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in The City of New York, Borough of Manhattan, over any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, the Prior Commitment Letter or any fee letter related thereto, the Operative Documents, the transactions contemplated hereby or thereby or the actions of the parties hereto or thereto or any of their affiliates in the negotiation, performance or enforcement of this Commitment Letter, the Fee Letter, the Prior Commitment Letter or any fee letter related thereto or the Operative Documents, and agrees that all claims in respect of any such action or proceeding shall be brought, heard and determined only in such New York State court or, to the extent permitted by law, in such federal court.  Service of any process, summons, notice or document by registered mail addressed to any such party shall be effective service of process against such person for any suit, action or proceeding brought in any such court.  Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding 

13

 

 

has been brought in an inconvenient forum.  A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction such party is or may be subject by suit upon judgment.

Section 13.Payments.

All payments under this Commitment Letter and the Fee Letter will, except as otherwise provided herein, be made in U.S. Dollars in New York, New York.

To the fullest extent permitted by law, the Borrower will make all payments under this Commitment Letter and the Fee Letter regardless of any defense or counterclaim, including, without limitation, any defense or counterclaim based on any law, rule or policy which is now or hereafter promulgated by any governmental authority or regulatory body and which may adversely affect the Borrower’s obligation to make, or the right of the Commitment Parties to receive, such payments.

Section 14.Miscellaneous.

This Commitment Letter and the Fee Letter contain the entire agreement between the parties relating to the subject matter hereof and supersede all oral statements and prior writings with respect thereto.  Section headings herein are for convenience only and are not a part of this Commitment Letter.  This Commitment Letter and the Fee Letter are solely for the benefit of the parties hereto and thereto (and Indemnified Persons, to the extent set forth in Section 6), and no other person shall acquire or have any rights under or by virtue of this Commitment Letter or the Fee Letter.  This Commitment Letter is not intended to create a fiduciary relationship among the parties hereto, and the Borrower waives, to the fullest extent permitted by law, any claims it may have against any of the Commitment Parties or any of their affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated by this Commitment Letter and agrees that none of the Commitment Parties or any of their affiliates shall have any liability (whether direct or indirect) to the Borrower or any of its affiliates in respect of such a fiduciary duty claim or to any person asserting such a fiduciary duty claim on behalf of or in right of the Borrower or any of its affiliates.  Any and all services to be provided by any of the Commitment Parties hereunder may be performed, and any and all rights of any of the Commitment Parties hereunder may be exercised, by or through any of such Commitment Party’s affiliates and branches, and, in connection with the provision of such services, each Commitment Party may exchange with such affiliates and branches information concerning the Borrower and the other companies that may be the subject of the transactions contemplated by this Commitment Letter and, to the extent so employed, such affiliates and branches shall be entitled to the benefits afforded to the Commitment Parties hereunder, subject to the confidentiality provisions herein.

The indemnification, compensation, reimbursement, sharing of information, absence of fiduciary relationships, jurisdiction, governing law, venue, waiver of jury trial, syndication, market flex and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Operative Documents shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Commitment Parties’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication thereof (including supplementing and/or correcting Information and Projections) prior to the Syndication Date and (b) confidentiality) shall be superseded by the provisions of the Operative Documents upon the initial funding thereunder, in each case solely to the extent covered thereby.

We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), we and the other Lenders may 

14

 

 

be required to obtain, verify and record information that identifies the borrower and each guarantor under the Operative Documents, which information includes the name, address and tax identification number and other customary information regarding any such borrower or guarantor that will allow us and the other Lenders to identify any such borrower or guarantor in accordance with the Patriot Act.  We and the other Lenders may also request corporate formation documents, or other forms of identification, to verify the information provided.  This notice is given in accordance with the requirements of the Patriot Act and is effective as to each Lender.  The Borrower hereby acknowledges and agrees that the Commitment Parties shall be permitted to share any or all such information with the Lenders.

Each of the parties hereto agrees that, if accepted by you in the manner required herein, each of this Commitment Letter and the Fee Letter to which it is a party is a binding and enforceable agreement with respect to the subject matter contained herein or therein (including an obligation to negotiate in good faith); it being acknowledged and agreed that the funding of the Facilities is subject solely to the conditions specified herein, including the execution and delivery of the Operative Documents by the parties hereto in a manner consistent with this Commitment Letter (including the applicable Documentation Principles); provided that nothing contained in this Commitment Letter obligates you or any of your affiliates to consummate the Acquisition or the other Transactions or to draw down any portion of the Facilities.

If any term, provision, covenant or restriction contained in this Commitment Letter is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  The Borrower and the Commitment Parties shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions.

This Commitment Letter may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile or electronic (pdf) transmission shall be as effective as delivery of a manually executed counterpart hereof.

If the foregoing correctly sets forth our agreement with you, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning executed counterparts to this Commitment Letter and the Fee Letter to Scott Joyce, Wells Fargo Securities, LLC, 550 S. Tryon Street, Charlotte, NC 28202 (or by electronic (pdf) transmission to scott.joyce@wellsfargo.com), Justin Tichauer, Citigroup Global Markets Inc., 390 Greenwich Street, New York, New York 10013 (or by electronic (pdf) transmission to justin.s.tichauer@citi.com), Alan B. Clarke II, Bank Of America Corporate Center, 100 N Tryon Street, Charlotte, NC, 28255-0001 (or by electronic (pdf) transmission to alan.clarke@baml.com), Matthew T. O’Keefe, Bank of America Merrill Lynch, 100 Federal Street, MA5-100-09-12, Boston, MA 02110 (or by electronic (pdf) transmission to matthew.o’keefe@baml.com), Joon Hur, J.P. Morgan, 270 Park Avenue, 43rd Floor, New York, NY 10017 (or by electronic (pdf) transmission to joon.hur@jpmorgan.com) and Tommy Parrott, SunTrust Robinson Humphrey, Inc., 3333 Peachtree Road, Atlanta, GA 30326 (or by electronic (pdf) transmission to Tommy.Parrott@SunTrust.com) at or before 11:59 p.m. (New York City time) on September 6, 2017.  If you do not return such executed counterparts prior to the date and time provided above, the commitment and other obligations of the Commitment Parties set forth in this Commitment Letter will automatically terminate.  Please arrange for the executed originals to follow by next-day courier.

[Signature Pages Follow]

 

15

 

 

 

Very truly yours,

 

		
	
WELLS FARGO BANK, NATIONAL ASSOCIATION

	
By:
	
/s/ Anwar S. Young

	
 
	
Name:Anwar S. Young

	
 
	
Title:Authorized Signatory

 

		
	
WF INVESTMENT HOLDINGS, LLC

	
By:
	
/s/ Scott Yarbrough

	
 
	
Name:  Scott Yarbrough

	
 
	
Title:

 

		
	
WELLS FARGO SECURITIES, LLC

	
By:
	
/s/ Scott Yarbrough

	
 
	
Name:Scott Yarbrough

	
 
	
Title:Managing Director

 

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

 

 

		
	
CITIGROUP GLOBAL MARKETS INC.

	
By:
	
/s/ Justin Tichauer

	
 
	
Name:  Justin Tichauer

	
 
	
Title:Managing Director

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

BANK OF AMERICA, N.A.

By:   /s/ Paul M. Liptak
Name:  Paul M. Liptak
Title:    Director

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By:   /s/ Paul M. Liptak
Name:   Paul M. Liptak
Title:     Director

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

JPMORGAN CHASE BANK, N.A.

 

	
 
	
By:
	
 /s/ Joon Hur

Name:   Joon Hur

Title:     Vice President

 

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

SUNTRUST BANK

By: /s/ Amanda Watkins
Name:  Amanda Watkins
Title:    Director

[Signature Page to Amended and Restated Commitment Letter]

 

 

SUNTRUST ROBINSON HUMPHREY, INC.

By: /s/ William Challas
Name:  William Challas
Title:     Managing Director

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

ACCEPTED and agreed to as of the date

first written above:

BEACON ROOFING SUPPLY, INC.

 

By: /s/ Joseph Nowicki
Name:  Joseph M. Nowicki
Title:    Executive Vice President and
             Chief Financial Officer

 

 

 

[Signature Page to Amended and Restated Commitment Letter]

 

 

Schedule A

 

		
	
Commitment Party
	
Term Loan Facility

	
 
	
 

	
Citibank, N.A.
	
41%

	
Wells Fargo Bank, National Association
	
41%

	
Bank of America, N.A.
	
6%

	
JPMorgan Chase Bank, N.A.
	
6%

	
SunTrust Bank

 
	
6%

 

 

 

 

 

 

Schedule B

 

		
	
Commitment Party
	
ABL Facility Increase

	
 
	
 

	
Wells Fargo Bank, National Association
	
32 1/2%

	
Citibank, N.A.
	
32 1/2%

	
Bank of America, N.A.
	
11 2/3%

	
JPMorgan Chase Bank, N.A.
	
11 2/3%

	
SunTrust Bank

 
	
11 2/3%

 

 

 

 

 

 

Schedule C

 

 

		
	
Commitment Party
	
Bridge Facility

	
 
	
 

	
WF Investment Holdings, LLC
	
41%

	
Citibank, N.A.
	
41%

	
Bank of America, N.A.
	
6%

	
JPMorgan Chase Bank, N.A.
	
6%

	
SunTrust Bank

 
	
6%

 

 

 

 

 

 

Exhibit A
to
Commitment Letter

Transactions Description

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit A is attached or in the other Exhibits to such letter agreement, as applicable.  The following transactions are referred to herein collectively as the “Transactions”.

	
 
	
1.
	
On the Closing Date (or on a prior date if required to be funded into escrow as provided in the Arranger Fee Letter), the Borrower will obtain a senior secured term loan “B” credit facility in an aggregate principal amount of up to $970,000,000 with the terms set forth in Exhibit B to the Commitment Letter (the “Term Loan Facility”) and use the net proceeds thereof to (a) repay in full all outstanding indebtedness, pay accrued and unpaid interest, fees and expenses, and terminate all commitments, under the Existing Term Loan Credit Agreement (as defined in Exhibit B), (b) finance the purchase price of the Acquisition and (c) pay any costs, fees and expenses in connection therewith.

	
 
	
2.
	
On the Closing Date, the Borrower will obtain a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $1,300,000,000 with the terms set forth in Exhibit C to the Commitment Letter (the “ABL Facility”) of which (a) up to $382,000,000 may be borrowed on the Closing Date to finance the purchase price of the Acquisition and (b) up to the Closing Date ABL Borrowing Amount (as defined in Exhibit C) less the amount borrowed pursuant to clause (a) may be borrowed on the Closing Date to (x) refinance outstanding indebtedness, pay accrued and unpaid interest, fees and expenses, and terminate all commitments, under the Existing ABL Credit Agreement (as defined below), and which it is anticipated will be an amendment and restatement of the Credit Agreement, dated as of October 1, 2015, among the US Borrowers and Canadian Borrowers (each as defined in Exhibit C), Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank, the other lenders, agents and other parties party thereto from time to time (as amended, amended and restated, supplemented or otherwise modified through August 24, 2017, the “Existing ABL Credit Agreement”), and (y) pay any costs, fees and expenses in connection therewith.

	
 
	
3.
	
The Borrower (a) will issue and sell senior notes (such notes, whether issued by the Borrower or a subsidiary of the Borrower, the “Notes”) in a Rule 144A exempt offering or other private placement on or prior to the Closing Date yielding $1,300,000,000 in gross proceeds (less the Equity Bridge Reduction Amount (as defined below)) and/or (b) will obtain, if and to the extent that the issuance and sale of any Notes on or prior to the Closing Date yields gross proceeds less than $1,300,000,000 minus the Equity Bridge Reduction Amount, a senior unsecured bridge facility in an aggregate principal amount of up to $1,300,000,000 (less any gross proceeds from Notes issued on or prior to the Closing Date and less the Equity Bridge Reduction Amount) with the terms set forth in Exhibit D to the Commitment Letter (the “Bridge Facility”).  The “Equity Bridge Reduction Amount” means the greater of (i) the amount, if any, by which the aggregate gross proceeds from the Equity Financing (as defined below) is in excess of $498,000,000 and (ii) the amount, if any, by which the sum of (x) $400,000,000 (less the aggregate gross proceeds (if any), up to $400,000,000, from any Preferred Equity Financing consummated prior to the Closing Date and included in subclause (y)) and (y) the aggregate gross proceeds from any Equity Financing consummated prior to the Closing Date, is in excess of $498,000,000.

A-1

	
 
	
4.
	
The Borrower will issue and sell shares of a newly-designated series of preferred stock of the Borrower with terms reasonably satisfactory to the Arrangers (it being understood that the terms of the preferred stock set forth in the Investment Agreement and the Certificate of Designation (each as identified and defined in Exhibit E) are satisfactory to the Arrangers) yielding gross proceeds of (i) no less than $400,000,000 and (ii) no greater than $498,000,000 in a private placement on or prior to the Closing Date to an investor previously identified to the Arrangers (such shares, the “Preferred Shares”, and such issuance and sale, the “Preferred Equity Financing”).  The Borrower may also issue and sell shares of its common stock (the “Common Shares”) after August 24, 2017 and on or prior to the Closing Date (each, a “Common Equity Financing” and, together with the Preferred Equity Financing, the “Equity Financing”).

	
 
	
5.
	
The Borrower will use the proceeds of the Facilities (and the Notes, as applicable), together with the proceeds of the Equity Financing, for the purpose of (a) financing the acquisition (the “Acquisition”) by the Borrower or one of its wholly-owned subsidiaries of 100% of the outstanding capital stock of Allied Building Products Corp., a New Jersey corporation (“Alpine”) and Kapalama Kilgos Acquisition Corp., a Delaware corporation (“Kilauea” and, together with Alpine and their respective subsidiaries, the “Acquired Company”), pursuant to the Stock Purchase Agreement, dated as of August 24, 2017 by and among the Borrower, Oldcastle, Inc., a Delaware corporation, and Oldcastle Distribution, Inc., a Delaware corporation (together with all schedules, exhibits and annexes thereto, the “Acquisition Agreement”), (b) repaying in full all outstanding indebtedness for borrowed money, including accrued and unpaid interest, fees and expenses, of the Acquired Company and the Borrower and their respective subsidiaries, and terminating all commitments with respect thereto, other than (i) indebtedness of the Acquired Company permitted to remain outstanding under the Acquisition Agreement, (ii) $300,000,000 aggregate principal amount of the Borrower’s 6.375% Senior Notes due 2023 (the “Existing Notes”), (iii) ordinary course capital leases, purchase money indebtedness, equipment financings, letters of credit and surety bonds, (iv) indebtedness owing by any Loan Party to another Loan Party, (v) certain other limited indebtedness that the Borrower and the Commitment Parties reasonably agree may remain outstanding after the Closing Date (collectively, “Surviving Indebtedness”), and (vi) the Facilities and (c) paying the fees, costs and expenses referred to below.

	
 
	
6.
	
The Borrower will pay all fees, costs and expenses incurred in connection with the foregoing transactions (including debt prepayment premiums, if any).

A-2

 

Exhibit B
to
Commitment Letter

Beacon Roofing Supply, Inc.

$970,000,000 Senior Secured Term Loan B Facility

Summary of Principal Terms and Conditions

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit B is attached or in the other Exhibits to such letter agreement, as applicable.

 

			
	
Borrower:
	
 
	
Beacon Roofing Supply, Inc., a Delaware corporation (the “Borrower”).

 

	
Administrative Agent; Collateral Agent:
	
 
	
Citi will act as sole administrative agent and collateral agent (in such capacities, the “Term Loan Administrative Agent”) for a syndicate of banks, financial institutions, investors and other lenders, excluding any Disqualified Institutions, in respect of the Term Loan Facility, and will perform the duties customarily associated with such roles.

 

	
Syndication Agent
	
 
	
WF will act as sole syndication agent (in such capacity, the “Term Loan B Syndication Agent” and, together with the Term Loan Administrative Agent, the “Term Loan B Agents”), and will perform the duties customarily associated with such role.

 

	
Arrangers:
	
 
	
Citi, WF, MLPFS, JPMCB and STRH will each act as a joint bookrunner and joint lead arranger (collectively, in such capacities, the “Arrangers”) for the Term Loan Facility referred to below, and will perform the duties customarily associated with such roles.

 

	
Term Loan Facility:
	
 
	
A seven-year senior secured term loan B facility in an aggregate principal amount of up to $970,000,000 (the “Term Loan Facility”).

 

	
Purpose:
	
 
	
The proceeds of the Term Loan Facility will be used by the Borrower on the Closing Date to (a) repay in full all outstanding indebtedness, pay any accrued and unpaid interest, fees and expenses, and terminate any commitments, under the Existing Term Loan Credit Agreement and (b) consummate the other Transactions, including the payment of fees, costs and expenses in connection therewith.

 

	
Availability:
	
 
	
The full amount of the Term Loan Facility must be drawn in a single drawing on the Closing Date (or on a prior date if required to be funded into escrow as provided in the Arranger Fee Letter).  Amounts borrowed under the Term Loan Facility and repaid may not be reborrowed.

 

B-1

 

			
	
Maturity and 

Amortization:
	
 
	
The Term Loan Facility will mature on the date that is seven years after the Closing Date.  The Term Loan Facility will amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the initial aggregate principal amount of the Term Loan Facility, with the balance due on the maturity of the Term Loan Facility.

 

	
Uncommitted Incremental Facilities:
	
 
	
The Borrower shall be entitled on one or more occasions to incur additional term loans (the “Incremental Term Loans”) under (x) the Term Loan Facility (each, an “Incremental Term Increase”), or (y) a newly established tranche of term loans (an “Incremental Term Facility”), in each case (x) under the Operative Documents in an aggregate principal amount not to exceed the greater of (A) $675,000,000 and (B) such other amount, so long as on a pro forma basis after giving effect to the incurrence of any such Incremental Term Increase or Incremental Term Facility, as applicable (and after giving effect to any acquisition consummated concurrently therewith and all other appropriate pro forma adjustment events and calculated as if any Incremental Term Increase or Incremental Term Facility, as applicable, were fully drawn on the effective date thereof), the senior secured leverage ratio (to be defined in a manner to be reasonably agreed) is equal to or less than 3.50 to 1.00 and (y) except as provided above, on substantially the same terms as set forth in the Existing Term Loan Credit Agreement, subject to the Term Loan Documentation Principles. 

 

	
 
	
 
	
Nothing contained herein or in the Commitment Letter constitutes, or shall be deemed to constitute, a commitment by any person to provide any Incremental Term Increase or Incremental Term Facility.

 

	
Guarantees:
	
 
	
All obligations of the Borrower under the Term Loan Facility will be unconditionally guaranteed on a joint and several basis and on a senior secured basis (the “Guarantees”) by each direct or indirect domestic subsidiary of the Borrower (whether owned on the Closing Date or formed or acquired thereafter, including any such subsidiary acquired in the Acquisition) (the “Guarantors”), in each case subject to customary exceptions and limitations to be substantially the same as those applicable to the guarantee requirements of the Existing Term Loan Credit Agreement and the Subsidiary Guaranty Agreement, dated as of October 1, 2015, among certain subsidiaries of the Borrower, as Subsidiary Guarantors (as defined therein), and Citibank, N.A., as Administrative Agent (as defined therein) (as amended, amended and restated, supplemented or otherwise modified through August 24, 2017, the “Existing TLB Guaranty Agreement”).

 

B-2

 

 

			
	
Security:
	
 
	
Subject to the Limited Conditionality Provisions, all obligations of the Borrower under the Term Loan Facility and the Guarantees will be secured (1) on a first-priority basis by substantially all the assets of the Borrower and each of the Guarantors, whether owned on the 

Closing Date or thereafter acquired consisting of the Term Loan Priority Collateral (as defined in the Intercreditor Agreement, dated as of October 1, 2015, among Wells Fargo Bank, National Association, as the ABL Agent (as defined therein), and Citibank, N.A., as Term Loan Agent (as defined therein) (as amended, amended and restated, supplemented or otherwise modified through August 24, 2017, the “Existing Intercreditor Agreement”)), and (2) on a second-priority basis (junior only to the security interest securing obligations under the ABL Facility) with respect to the ABL Priority Collateral (as defined in the Existing Intercreditor Agreement), except, in the case of each of clauses (1) and (2), Excluded Assets (as defined in the Existing Intercreditor Agreement), and in each case subject to customary exceptions to be substantially the same as those applicable to the collateral requirements of the Existing Term Loan Credit Agreement and the Collateral Agreement, dated as of October 1, 2015, among the Borrower, certain subsidiaries of the Borrower, as Grantors (as defined therein), and Citibank, N.A., as Administrative Agent (as defined therein) (as amended, amended and restated, supplemented or otherwise modified through August 24, 2017, the “Existing TLB Collateral Agreement”).  “Collateral” means the Term Loan Priority Collateral and the ABL Priority Collateral.

 

	
 
	
 
	
Subject to the Limited Conditionality Provisions, all the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation to be substantially the same as those that secure the obligations under the Existing Term Loan Credit Agreement, and none of the Collateral shall be subject to any other liens (other than in favor of the ABL Facility), subject to customary exceptions to be substantially the same as those applicable to the collateral requirements of the Existing Term Loan Credit Agreement and the Existing TLB Collateral Agreement, subject to the Term Loan Documentation Principles.

 

	
Intercreditor Agreement:

 
	
 
	
The lien priority, relative rights and other creditors’ rights issues in respect of the Term Loan Facility and the ABL Facility will be set forth in the Existing Intercreditor Agreement or in another customary intercreditor agreement for a crossing-lien collateral structure that is substantially the same as the Existing Intercreditor Agreement (the “Intercreditor Agreement”).

 

	
Mandatory Prepayments:
	
 
	
The loans under the Term Loan Facility shall be prepaid pursuant to mandatory prepayment provisions that will be substantially the same as the mandatory prepayment provisions of the Existing Term Loan Credit Agreement, subject to the Term Loan Documentation Principles.

	
 
	
 
	
 

B-3

 

 

			
	
Voluntary Prepayments:
	
 
	
Voluntary prepayments with respect to the Term Loan Facility may be made at any time, on notice and in minimum principal amounts the same as provided in the Existing Term Loan Credit Agreement, without premium or penalty (except as otherwise provided below 

under the caption “Call Protection”); provided that voluntary prepayments of LIBOR Loans made on a date other than the last day of an interest period applicable thereto shall be subject to customary breakage costs.  Each voluntary prepayment of loans under the Term Loan Facility shall be applied to the remaining installments thereof as directed by the Borrower.

 

	
Call Protection:
	
 
	
The occurrence of any Repricing Event (to be defined in a manner substantially the same as in the Existing Term Loan Credit Agreement) prior to the date that is six months after the Closing Date will require payment of a fee (the “Prepayment Fee”) in an amount equal to 1.00% of the aggregate principal amount of the loans under the Term Loan Facility subject to such Repricing Event.

	
 
	
 
	
 

	
Interest Rates:
	
 
	
At the Borrower’s option, loans under the Term Loan Facility may be maintained from time to time as (x) “Base Rate Loans”, which shall bear interest at the Base Rate in effect from time to time plus the Applicable Margin or (y) “LIBOR Loans”, which shall bear interest at the London interbank offered rate for U.S. dollars (adjusted for statutory reserve requirements) as determined by the Term Loan Administrative Agent for the respective interest period (or, if greater at any time, the LIBOR Floor, if applicable) plus the Applicable Margin.

 

	
 
	
 
	
“Applicable Margin” shall mean a percentage per annum equal to in the case of loans under the Term Loan Facility (x) maintained as Base Rate Loans, 1.75%, and (y) maintained as LIBOR Loans, 2.75%.

 

	
 
	
 
	
“Base Rate” shall mean the highest of (w) the rate that the Term Loan Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time, (x) 1/2 of 1% in excess of the federal funds effective rate, (y) the London interbank offered rate for U.S. dollars for an interest period of one month (adjusted for statutory reserve requirements) plus 1.00% and (z) 1.00% per annum.

 

	
 
	
 
	
“LIBOR Floor” shall mean 0.00% per annum.

 

	
 
	
 
	
Interest periods of 1, 2, 3 and 6 months or, to the extent agreed to by all applicable Lenders, 12 months, shall be available in the case of LIBOR Loans.

 

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

360-day year and actual days elapsed (or, in the case of Base Rate Loans determined by reference to the prime lending rate or the federal funds effective rate, a 365/366-day year and actual days elapsed).

 

	
 
	
 
	
Any principal payable under or in respect of the Term Loan Facility not paid when due shall bear interest at the applicable interest rate plus 2.00% per annum.  Other overdue amounts (including overdue interest) with respect to the Term Loan Facility shall bear interest at the interest rate applicable to Base Rate Loans under the Term Loan Facility plus 2.00% per annum.

 

	
Original Issue Discount/Upfront Fees:
	
 
	
The loans under the Term Loan Facility will be issued to the Lenders participating in the Term Loan Facility at a price of 99.50% (or such greater or lower percentage determined pursuant to the terms of the Arranger Fee Letter) of their principal amount.

 

	
 
	
 
	
Notwithstanding the foregoing, (a) all calculations of interest and fees in respect of loans under the Term Loan Facility will be calculated on the basis of their full stated principal amount and (b) at the option of the Arrangers, any original issue discount may instead be effected in the form of an upfront fee to the applicable Lenders.

 

	
Conditions Precedent:
	
 
	
The funding of the loans under the Term Loan Facility shall be subject to only those conditions precedent set forth in Section 3 of the Commitment Letter and in Exhibit E to the Commitment Letter.

 

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Documentation:
	
 
	
The Operative Documents with respect to the Term Loan Facility shall be negotiated in good faith and shall be consistent with this Commitment Letter and the Fee Letter and, in each case except as otherwise expressly provided herein or in the Fee Letter, based on (but no less favorable to the Borrower than) the Existing Term Loan Credit Agreement, the Existing TLB Guaranty Agreement, the Existing TLB Collateral Agreement and related security agreements executed and delivered in connection therewith, with additions, deletions, modifications and other changes as you and the Arrangers shall reasonably agree (i) to permit and give effect to the Transactions and other transactions contemplated hereby, (ii) to provide for and give effect to the Guarantees and the security over the Collateral and the arrangements contemplated by the Intercreditor Agreement, (iii) to reflect changes in law or accounting standards or cure mistakes or defects, (iv) to reflect reasonable administrative, agency and operational requirements of the Term Loan Administrative Agent, and (v) to reflect the operational and strategic requirements of the Borrower and its subsidiaries and the Acquired Company in light of their consolidated capital structure, size, industry and practices, in each case, after giving effect to the Transactions, including as reflected in the Projections.  The “Existing Term Loan Credit Agreement” means the Term Loan Credit Agreement, dated as of October 1, 

2015, among the Borrower, Citibank, N.A., as administrative agent and collateral agent, the other lenders, agents and other parties party thereto from time to time (as amended, amended and restated, supplemented or otherwise modified through August 24, 2017). This paragraph and the provisions herein are referred to as the “Term Loan Documentation Principles”.  The Term Loan Documentation Principles, the ABL Documentation Principles and the Bridge Documentation Principles are referred to herein, collectively, as the “Documentation Principles”.

 

	
Financial Maintenance Covenant:

 
	
 
	
None.

	
Representations and Warranties; Affirmative Covenants; Negative Covenants; Events of Default; Voting; Cost and Yield Protection; Assignments and Participation; Expenses and Indemnification; Governing Law; Forum:

 
	
 
	
Substantially the same as the Existing Term Loan Credit Agreement, subject to the Term Loan Documentation Principles (it being understood that (a) the documentation for the Term Loan Facility shall include a restriction limiting the Borrower’s ability to amend or modify the terms of preferred shares, including the Preferred Shares, in a manner materially adverse to the lenders under the Term Loan Facility, (b) the Preferred Shares shall not be treated as debt for any purpose under the Term Loan Facility, including for purposes of calculating any financial ratios, covenants or tests thereunder and (c) the payment of any dividends in respect of the Preferred Shares that are made in cash under and in accordance with the Certificate of Designation shall be permitted under the Term Loan Facility, in an amount not to exceed $40 million in any fiscal year, so long as no default or event of default shall have occurred and be continuing at the time of or as a consequence of such payment).

 

	
Counsel to Term Loan B Agents and Arrangers:
	
 
	
Cravath, Swaine & Moore LLP

 

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Exhibit C

to
Commitment Letter

Beacon Roofing Supply, Inc.

$1,300,000,000 Senior Secured Asset-Based Revolving Loan Facility
Summary of Principal Terms and Conditions

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit C is attached or in the other Exhibits to such letter agreement as applicable.

		
	
Borrowers:
	
Each of the wholly-owned subsidiaries of Holdings organized under the laws of a jurisdiction in the United States or Canada with assets to be included in the Borrowing Base after giving effect to the Acquisition (individually, a “Borrower” and collectively, “Borrowers”).  Such subsidiaries organized under the laws of a jurisdiction in Canada are referred to herein as “Canadian Borrowers” and such subsidiaries organized under the laws of a jurisdiction in the United States are referred to herein as “US Borrowers”.  All references to subsidiaries of Holdings include such subsidiaries after giving effect to the Transactions.

	
Guarantors:
	
Holdings and all of its existing and subsequently acquired or organized direct or indirect subsidiaries that are not Borrowers and are required to provide Guarantees as set forth herein (individually, a “Guarantor” and collectively, the “Guarantors”, and together with Borrowers, individually a “Loan Party” and collectively, “Loan Parties”). 

	
ABL Administrative and Collateral Agent:
	

Wells Fargo Bank, National Association will act as sole administrative and collateral agent (in such capacities, “ABL Administrative Agent”) for a syndicate of banks, financial institutions and other lenders, excluding any Disqualified Institutions, in respect of the ABL Facility.

	
Syndication Agent:
	
Citi will act as sole syndication agent (in such capacity, the “ABL Syndication Agent”, and together with ABL Administrative Agent, the “ABL Agents”).

	
Joint Lead Arrangers and Joint Bookrunners:
	
Wells Fargo Bank, National Association, Citigroup Global Markets Inc., MLPFS, JPMCB and STRH (collectively, in such capacities, the “Arrangers”).

	
Lenders:
	
Wells Fargo Bank, National Association (and/or such other affiliate or branch as it may designate), Citi, MLPFS, JPMCB, SunTrust and such other institutions as may become parties to the financing arrangements as lenders (collectively, “Lenders”), but excluding Disqualified Institutions.

C-1

 

		
	
Letter of Credit Issuers:
	
Wells Fargo and any other Lender so designated by Holdings from time to time that agrees to act in such capacity and is reasonably acceptable to ABL 

Administrative Agent (in such capacity, each an “Issuing Bank”).

	
Swingline Lender:
	
Wells Fargo Bank, National Association (and/or such other affiliate or branch as it may designate) (in such capacity, “Swingline Lender”).

	
ABL Facility:
	
The ABL Facility will consist of: 

(a)a senior secured revolving credit and letter of credit facility provided to US Borrowers of up to the US Loan Limit (the “US Facility”); and

(b)a senior secured revolving credit and letter of credit facility provided to the Canadian Borrowers of up to the Canadian Loan Limit (the “Canadian Facility”).

(c) The US Facility and the Canadian Facility are individually and collectively, the “ABL Facility.”  The term “Maximum Credit” as used herein means the aggregate of the commitments of Lenders for the US Facility and the Canadian Facility. 

(d)A Canadian affiliate of ABL Administrative Agent may be the Lender for such Canadian facility and/or agent or sub-agent.  Notwithstanding anything to the contrary contained herein, the ABL Loan Documents may include additional customary provisions to reflect applicable matters of Canadian law (whether Federal or Provincial).  All references to “$” herein are to the lawful currency of the United States of America. Notwithstanding anything herein to the contrary, SunTrust Bank will not be a Lender under the Canadian Facility.

(e)Loan Parties will appoint Holdings to act as the agent for Loan Parties for all purposes of dealing with ABL Administrative Agent, Issuing Banks, and Lenders, including requesting Revolving Loans and Letters of Credit.

C-2

 

		
	
Availability:
	
The revolving loans under the ABL Facility (“Revolving Loans”) will be available to each Borrower outstanding at any one time of up to the lesser of the aggregate commitments of Lenders in the Canadian Facility or the US Facility, as applicable, or the applicable Borrowing Base of the Borrowers as described below and subject to the terms and conditions of the ABL Loan Documents.  The Canadian Facility will be a subfacility included in the ABL Loan Documents to be provided in Canadian dollars and US dollars to the Canadian Borrowers of up to the equivalent of a $100,000,000, subject to any Facility Increase (the “Canadian Loan Limit”), and subject to the Canadian Borrowing Base.  The US Facility will be provided in US dollars to the US Borrowers in an amount of up to $1,200,000,000, subject to any Facility Increase (the “US Loan Limit”, and together with the Canadian Loan Limit, a “Loan Limit”) and subject to the US Borrowing Base.  

Borrowers shall have the right one time during each 12 month period on such terms and conditions as ABL Administrative Agent and Borrowers may agree to decrease the US Loan Limit and contemporaneously increase the Canadian Loan Limit by the same amount (provided, that, in no event shall the Canadian 

Loan Limit be greater than the equivalent of $125,000,000). 

Revolving Loans may be drawn, repaid and reborrowed.

	
Letter of Credit Subfacility:
	

A portion of the ABL Facility will be available for letters of credit arranged by ABL Administrative Agent and issued by an Issuing Bank (“Letters of Credit”) in an aggregate amount at any time outstanding not to exceed $80,000,000.  Letters of Credit will reduce the amount of the Revolving Loans available under the applicable Borrowing Base and the applicable Loan Limit.

Letters of Credit will be issued by the Issuing Bank and each Lender will purchase an irrevocable and unconditional participation in each Letter of Credit.

	
Swing Line Facility:
	
A portion of the ABL Facility will be available as swing line loans (“Swing Line Loans”) with a sublimit on Swing Line Loans to Borrowers outstanding at any time in an amount up to $130,000,000 (allocated between the US Facility and Canadian Facility in amounts to be agreed).  Swing Line Loans will reduce the amount of the Revolving Loans available under the applicable Borrowing Base and the applicable Loan Limit.  The term “Revolving Loans” as used herein includes Swing Line Loans, except as otherwise provided herein.  

Swing Line Loans will be made available by Swing Line Lender and each Lender will purchase an irrevocable and unconditional participation in each Swing Line Loan.

	
Purpose:
	
The proceeds of the Revolving Loans under the ABL Facility and the Letters of Credit will be used by Borrowers (a) on the Closing Date, (i) to refinance outstanding indebtedness and pay any accrued and unpaid interest, fees and expenses under the Existing ABL Credit Agreement and (ii) after the application of the proceeds of the Term Loan Facility and Bridge Facility thereto, for the payment of a portion of the consideration payable for the Acquisition (provided, that, in no event will the aggregate amount of the Revolving Loans and Letters of Credit on the Closing Date for the purposes under clause (ii) exceed $382,000,000 nor will the aggregate amount of the Revolving Loans and Letters of Credit on the Closing Date for the purposes under clause (i) and (ii) together exceed (A) if the Closing Date occurs between August 24, 2017 and November 30, 2017, $900,000,000, (B) if the Closing Date occurs between December 1, 2017 and April 30, 2018, $800,000,000 or (C) if the Closing Date occurs between May 1, 2018 and August 31, 2018, $900,000,000 (the applicable borrowing amount referred to in the foregoing clauses (A), (B) or (C), the “Closing Date ABL Borrowing Amount”), and (b) after the Closing Date, for working capital of Borrowers and their subsidiaries and other general corporate purposes including funding capital expenditures and permitted acquisitions.  

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Unrestricted 

Subsidiaries:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Facility Increase:
	
Substantially the same as the Existing ABL Credit Agreement, subject to modification based on the ABL Documentation Principles and with any increase in Incremental Commitments (as defined in the Existing ABL Credit Agreement) not to exceed $500,000,000 in the aggregate.

	
Guarantees:
	
Substantially the same as the Existing ABL Credit Agreement, the US Guaranty Agreement (as defined in the Existing ABL Credit Agreement) and the Canadian Guaranty Agreement (as defined in the Existing ABL Credit Agreement), subject to the ABL Documentation Principles.

C-4

 

		

C-5

 

		
	
Borrowing Base:
	
Subject to the terms below with respect to the Alternative Closing Borrowing Base:

US Borrowing Base.  The Revolving Loans to US Borrowers under the US Facility (“US Revolving Loans”) and Letters of Credit for the account of US Borrowers will be subject to availability under the US Borrowing Base calculated as follows:

(a)the amount equal to 85% multiplied by the net amount of eligible accounts of US Borrowers; plus

(b)the amount equal to the lesser of: (i) 70% multiplied by the value of each category of eligible inventory of US Borrowers or (ii) 85% of the Net Recovery Percentage of each category of eligible inventory of US Borrowers multiplied by the value thereof; minus

(c)applicable reserves established by ABL Administrative Agent in its Permitted Discretion in accordance with the terms of the ABL Loan Documents.

Canadian Borrowing Base.  The Revolving Loans to Canadian Borrowers under the Canadian Facility (“Canadian Revolving Loans”) and Letters of Credit for the account of Canadian Borrowers will be subject to availability under the Canadian Borrowing Base calculated as follows:

(a)the amount equal to 85% multiplied by the net amount of eligible accounts of Canadian Borrowers; plus

(b)the amount equal to the lesser of: (i) 70% multiplied by the value of each category of eligible inventory of Canadian Borrowers or (ii) 85% of the Net Recovery Percentage of each category of eligible inventory of Canadian Borrowers multiplied by the value thereof; minus

(c)applicable reserves established by ABL Administrative Agent in its Permitted Discretion in accordance with the terms of the ABL Loan Documents.

The US Borrowing Base and the Canadian Borrowing Base are referred to herein as the “Borrowing Base”; provided, that, if the Alternative Closing Borrowing Base (as defined below) is in effect, then the amount available on the Closing Date (but not on any date thereafter) will be the greater of (A) the Closing Date ABL Borrowing Amount or (B) the Borrowing Base.

The “value” of each category of eligible inventory will be determined at the lower of cost or market, consistent with the current practices of Holdings in effect immediately prior to the Closing Date, without regard to the portion of the value of inventory equal to intercompany profit on the sale thereof or to the extent applicable, write ups or write downs in value with respect to currency exchange rates.  

The term “Net Recovery Percentage” means the fraction, expressed as a percentage (a) the numerator of which is the amount equal to the recovery on the aggregate amount of the applicable category of eligible inventory at such time on a “net orderly liquidation value” (i.e., net of costs and expenses incurred in connection with liquidation) basis determined by reference to the most recent inventory appraisal received by ABL Administrative Agent in accordance with the requirements of the ABL Loan Documents, and (b) the denominator of which is the cost of the aggregate amount of the eligible inventory subject to such appraisal.

The term “Permitted Discretion” as used in this Term Sheet with reference to ABL Administrative Agent, shall mean a determination made in good faith in the exercise of its reasonable business judgment based on how an asset-based lender with similar rights providing a credit facility of the type set forth herein would act in similar circumstances at the time with the information then available to it.

The right of ABL Administrative Agent to establish reserves will be in accordance with its customary practices in the exercise of its Permitted Discretion and as may be applicable under the circumstances based on its field examination and other due diligence.  The amount of any reserve established by ABL Administrative Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve as determined by ABL Administrative Agent in good faith and to the extent that such reserve is in respect of amounts that may be payable to third parties ABL Administrative Agent may deduct such reserve from the Maximum Credit at any time that such limit is less than the amount of the Borrowing Base.  ABL Administrative Agent will provide notice to Holdings as agent for Borrowers of any new categories of reserves that may be established after the Closing Date or any changes in the methodology of the calculation of an existing category of reserves and will consult with Holdings in connection with the basis for such new categories of reserves to the extent Holdings is available in a reasonably timely manner, provided, that, no such consultation shall be required at any time a default or event of default exists or has occurred and is continuing.  New categories of reserves may be established after the Closing Date by ABL Administrative Agent in the exercise of its Permitted Discretion based on either: (i) an event, condition or other circumstance arising after the 

Closing Date, or (ii) an event, condition or other circumstance existing on the Closing Date to the extent that such event, condition or circumstance has not been identified by a Borrower to the field examiners of ABL Administrative Agent prior to the Closing Date (except to the extent that it may have been identified but ABL Administrative Agent has elected not to establish a reserve with respect thereto as of the Closing Date).

C-6

 

		
	
Alternative Closing Borrowing Base:
	

In the event that as of the Closing Date, ABL Administrative Agent has not received a current third party appraisal of the inventory or a final report from the field examinations of the business and collateral of the Acquired Company, the Borrowing Base shall be deemed to be, for purposes of the initial Revolving Loans and Letters of Credit on the Closing Date, the Alternative Closing Borrowing Base.  The “Alternative Closing Borrowing Base” means after the Closing Date the amount equal to (a) the Borrowing Base calculated as provided above, plus (b) (i) if the Closing Date occurs between August 24, 2017 and November 30, 2017, $300,000,000, (ii) if the Closing Date occurs between December 1, 2017 and April 30, 2018, $275,000,000 or (iii) if the Closing Date occurs between May 1, 2018 and August 31, 2018, $300,000,000.

The Alternative Closing Borrowing Base shall only be in effect until the earlier of 60 days after the Closing Date (or such later date as may be agreed by ABL Administrative Agent) or the date ABL Administrative Agent has received the current third party appraisals with respect to the inventory of the Acquired Company and an acceptable draft report or the final report from a current field examination of the Acquired Company, provided, that, ABL Administrative Agent may adjust, in its Permitted Discretion, the Alternative Closing Borrowing Base as to reserves and including only eligible accounts and eligible inventory based on any field examination results at the time that it receives such results and as to the inventory at the time that it receives any appraisal with respect thereto.  On and after the receipt by ABL Administrative Agent of the field examination results and appraisals as provided below, Revolving Loans and Letters of Credit shall be provided to Borrowers subject to the terms and conditions of the ABL Loan Documents and availability under the Borrowing Base, which will be calculated in a manner consistent with the definition of the term Borrowing Base as set forth above.

In the event that ABL Administrative Agent has not received a current third party appraisal of the inventory and a final report from the field examinations of the business and collateral of the Acquired Company prior to the Closing Date, Borrowers shall use commercially reasonable efforts to provide ABL Administrative Agent and the field examiners and appraisers sufficient access and information to complete such field examinations and appraisal on or before the 60th day after the Closing Date (or such later date as may be agreed by ABL Administrative Agent) and the Arrangers and Holdings each agree to cooperate in good faith to cause such field examinations and appraisals with respect to the Acquired Company to be completed as soon as practicable.  If ABL Administrative Agent has not received such appraisals and final report from the field examinations on or prior to the 60th day after the Closing Date 

(or such later date as may be agreed by ABL Administrative Agent), availability with respect to the collateral of the Acquired Company shall be zero on and after such 60th day (or such later date as may be agreed by ABL Administrative Agent) until ABL Administrative Agent's receipt and reasonable opportunity to review the results of such appraisal and final report from the field examination.

	
Eligibility:
	
Criteria for determining eligible accounts and eligible inventory will be in accordance with ABL Administrative Agent’s customary practices and consistent with asset-based lending facilities for other similarly situated companies in similar businesses as Borrowers for which it is an agent, and as appropriate under the circumstances as reasonably determined by ABL Administrative Agent pursuant to field examinations and other due diligence and as otherwise may be reasonably acceptable to Holdings (but in no event will the eligibility criteria be less favorable than as set forth in the Existing ABL Credit Agreement), subject to (a) the ABL Documentation Principles, and (b) such modifications as ABL Administrative Agent may otherwise reasonably require in respect of the eligible accounts and eligible inventory of the Acquired Company in its Permitted Discretion.

	
Mandatory Prepayments:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Optional Prepayments:
	
Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Interest and Fees:
	
See Schedules 1 and 2 to this Exhibit C.

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Security:
	
Subject to the Limited Conditionality Provisions, to secure all obligations of each Loan Party under the ABL Facility (and including ABL Bank Product Obligations) (1) on a first-priority basis by substantially all the assets of each Loan Party, whether owned on the Closing Date or thereafter acquired consisting of the ABL Priority Collateral (as defined in the Existing Intercreditor Agreement), and (2) on a second-priority basis (junior only to the security interest securing obligations under the Term Loan Facility) with respect to the Term Loan Priority Collateral (as defined in the Existing Intercreditor Agreement), but excluding,  in the case of each of clauses (1) and (2), Excluded Assets (as defined in the Existing Intercreditor Agreement).

Subject to Limited Conditionality Provisions, all the above-described pledges, security interest and mortgages shall be created on terms, and pursuant to documentation consistent with the ABL Documentation Principles (including, without limitation, in the case of fee interests in real property, by customary items such as satisfactory title insurance and surveys and subject to the delivery of flood certificates and evidence of satisfactory flood insurance, as required by applicable law, provided, that, no mortgage or other security instrument with respect to real property will be executed and delivered until at 

least twenty days after each Lender has been provided a life of loan flood zone determination and such other documents for each Flood Hazard Property (as defined in the Existing ABL Credit Agreement) as it may reasonably request to complete its flood insurance diligence), and none of the Collateral shall be subject to any other liens (other than in favor of the ABL Facility and the Term Loan Facility), subject to customary exceptions to be mutually agreed.

As to specific items of Collateral, ABL Administrative Agent may determine not to perfect its security interest therein based on the minimal value thereof relative to the costs of such perfection. 

“ABL Bank Product Obligations” means any obligation on account of (a) any Cash Management Services furnished to any of the Loan Parties or any of their subsidiaries and/or (b) any transaction with ABL Administrative Agent or any Lender or any of their affiliates, which arises out of any Bank Product entered into with any Loan Party and any such person, as each may be amended from time to time.

“Bank Products” means any services of facilities provided to any Loan Party by any Lender or any of its affiliates (but excluding Cash Management Services) including, without limitation, on account of (a) swap contracts, (b) merchant services constituting a line of credit, and (c) supply chain finance services including, without limitation, trade payable services and supplier accounts receivable purchases, but excluding any factoring services.

“Cash Management Services” means any one or more of the following types or services or facilities provided to any Loan Party by any Lender or any of its affiliates: (a) ACH transactions, (b) cash management services, including, without limitation, controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer services, (c) foreign exchange facilities, (d) credit or debit cards, (e) credit card processing services, and (f) purchase cards.

	
Intercreditor Agreement:
	

The lien priority, relative rights and other creditors’ rights issues in respect of the Term Loan Facility and the ABL Facility will be set forth in the Intercreditor Agreement, which shall be reasonably satisfactory to Borrowers, the Term Loan Administrative Agent and ABL Administrative Agent.

	
Closing Date:
	
The date on which the initial borrowings under the ABL Facility are made (the “Closing Date”).  

	
Term: 
	
The ABL Facility maturity date is October 1, 2020 (the “Maturity Date”); except to the extent each Lender may agree to a Maturity Date of 5 years from the Closing Date.

C-8

 

		
	
Documentation:
	
The definitive loan documentation (collectively, the “ABL Loan Documents”) will be mutually agreed upon, the definitive terms of which (including materiality thresholds, baskets, exceptions, qualifications and grace periods) 

will be negotiated in good faith, and will be consistent with the terms set forth in the Commitment Letter (including this Term Sheet), as modified in accordance with the flex provisions of the Fee Letter and based on (but no less favorable to the Borrower than) the Existing ABL Credit Agreement and related documents executed and delivered in connection therewith, with additions, deletions, modifications and other changes as Borrower and Arrangers shall reasonably agree and subject to modifications to reflect the terms hereof, to give effect to the Transactions (including the Term Loan Facility, the Bridge Facility, the Equity Financing), the Acquisition and other transactions contemplated hereby, to provide for and give effect to the Guarantees and the security over the Collateral and the arrangements contemplated by the Intercreditor Agreement, to reflect changes in law or accounting standards (including, but not limited, to EU bail-in provisions, anti-terrorism, anti-money laundering, FCPA and know your customer provisions) or cure mistakes or defects, to reflect reasonable administrative, agency and operational requirements of ABL Administrative Agent and to reflect the operational and strategic requirements of Holdings and its subsidiaries and the Acquired Company in light of their consolidated capital structure, size, industry, projected performance (including as reflected in the Projections), reporting and accounting systems, Excess Availability, collateral and practices of Holdings, the Acquired Company and their subsidiaries, and shall contain such modifications as Borrowers and ABL Administrative Agent shall mutually agree, provided, that, notwithstanding anything to the contrary contained herein, in no event will any of the terms of the ABL Facility include changes from the Existing ABL Credit Agreement that require the approval of more than Required Lenders under the Existing ABL Credit Agreement, except to the extent that such additional approvals are obtained and in full force and effect (collectively, the “ABL Documentation Principles”)

Borrowers shall use commercially reasonable efforts to obtain collateral access agreements prior to the Closing Date at locations where Collateral of the Acquired Company in excess of $2,500,000 is located and thereafter to the extent not delivered prior to the Closing Date.  To the extent that ABL Administrative Agent has not received a reasonably acceptable collateral access agreement for a leased or third party location in a jurisdiction where the landlord or other third party may have a lien on any of the Collateral of the Acquired Company under applicable law or under the terms of the applicable lease, it may establish a reserve in respect of amounts payable under the applicable lease or other agreement with such lessor or other third party (which reserve, as to any one such location, will not exceed three months of rent or other payments owing to the applicable lessor or other third party) (it being understood that to the extent a reserve is imposed then no collateral access agreement shall be required).  The delivery of such collateral access agreement shall not be a condition of closing.

	
Representations and Warranties:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

C-9

 

		
	
Affirmative Covenants:
	
Substantially the same as the Existing ABL Credit Agreement, subject to the 

ABL Documentation Principles.

C-10

 

		
	
Collateral and Financial Reporting:
	

The ABL Loan Documents will provide for the following collateral and financial reporting:

(a)monthly borrowing base certificates, (i) so long as Adjusted Excess Availability is not less than the greater of (A) 15.0% of the Loan Cap and (B) $135,000,000 for any 5 consecutive business days and no event of default exists, otherwise weekly and (ii) Borrowers may at any time at their option elect to deliver borrowing base certificates on a weekly basis, provided, that, at any time borrowing base certificates are delivered on a weekly basis under clause (i) or (ii), it shall continue for not less than four consecutive weeks; 

(b)field examinations and appraisals as ABL Administrative Agent may from time to time require, but no more than:

(i)1 field examination and 1 appraisal of inventory in any 12 month period at the expense of Borrowers so long as Adjusted Excess Availability is not less than the greater of (A) 15.0% of the Loan Cap or (B) $135,000,000 during such 12 months,

(ii)2 field examinations and 2 appraisals in any 12 month period at the expense of Borrowers if at any time Adjusted Excess Availability during such 12 months is less than or equal to the greater of (A) 15.0% of the Loan Cap or (B) $135,000,000,

(iii)such other field examinations and appraisals as ABL Administrative Agent may request at any time upon the occurrence and during the continuance of an event of default at the expense of Borrowers or at any time at the expense of ABL Administrative Agent; 

(c)quarterly financial statements (including management discussion and analysis), except so long as a default or event of default shall have occurred and be continuing, then monthly financial statements;

(d)annual audited financial statements (including management discussion and analysis) and projections;

(e)other financial and collateral reports to be agreed.

The term “Loan Cap” means, at any time, the lesser of the Maximum Credit or the Borrowing Base at such time (or to the extent that the Alternative Closing Borrowing Base is then applicable, the Alternative Closing Borrowing Base).  

The term “Adjusted Excess Availability” as used herein means at any time, the sum of (a) the Excess Availability, plus (b) Specified Suppressed Availability, plus (c) Qualified Cash.

The term “Excess Availability” as used herein means at any time, the amount 

equal to (a) the Loan Cap minus (b) Revolving Loans, unreimbursed drawings under Letters of Credit and amounts available under Letters of Credit.

The term “Specified Suppressed Availability” means the lesser of:  (a) the amount by which the Borrowing Base exceeds the Maximum Credit at such time or (b) the amount equal to 7.5% of the Maximum Credit less the amount of the Qualified Cash included in the calculation of Adjusted Excess Availability, provided, that, if Excess Availability is less than the greater of (i) 5.0% of the Loan Cap or (ii) $45,000,000, Specified Suppressed Availability shall be zero.

The term “Qualified Cash” means unrestricted cash and cash equivalents of a Loan Party that are subject to the valid, enforceable and first priority perfected security interest and pledge of ABL Administrative Agent in an investment account or deposit account at ABL Administrative Agent or another institution reasonably satisfactory to ABL Administrative Agent subject to a control agreement (which will limit the terms of withdrawal of such funds by a Loan Party subject to certain conditions) and free and clear of any pledge, security interest, lien, claim or other encumbrance (other than in favor of ABL Administrative Agent and other than in favor of the depository bank or securities intermediary where the deposit account or investment account is maintained for its reasonable and customary fees and charges related to such account), are available for use by such Loan Party without condition or restriction (other than in favor of ABL Administrative Agent), and for which ABL Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to ABL Administrative Agent, of the amount of such cash or cash equivalents held in such deposit account or investment account as of the applicable date of the calculation of the Excess Availability and the satisfaction of the other conditions herein; provided, that, if Excess Availability is less than the greater of (i) 5.0% of the Loan Cap or (ii) $45,000,000, Qualified Cash shall be zero.

C-11

 

		
	
Cash Management:
	
Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles (including the change to the definition of the term “Cash Dominion Event” as set forth below), and Borrowers shall cause the Acquired Company to establish, not later than 90 days after the Closing Date (or such later date as ABL Administrative Agent may agree in its reasonable discretion), a cash management system in form and substance reasonably satisfactory to ABL Administrative Agent; provided, that the Acquired Company shall be under no obligation to move its deposit accounts or cash management system to Wells Fargo Bank or any other depository institution.

“Cash Dominion Event” means (a) Adjusted Excess Availability is less than the greater of (i) 10.0% of the Loan Cap at any time or (ii) $90,000,000, for any 5 consecutive business days or (b) a Specified Event of Default exists or has occurred and be continuing; provided, that, 

(i)to the extent that the Cash Dominion Event has occurred due to clause (a) of this definition, if Adjusted Excess Availability shall be equal to 

or greater than the amount in clause (a) of this definition for at least 30 consecutive days, the Cash Dominion Event shall no longer be deemed to exist or be continuing until such time as Adjusted Excess Availability may again be less than such amount and

(ii)to the extent that the Cash Dominion Event has occurred due to clause (b) of this definition, if such event of default is cured or waived or otherwise no longer exists for a period of at least 30 consecutive days, the Cash Dominion Event shall no longer be deemed to exist or be continuing.

The term “Specified Event of Default” means any event of default arising in connection with (i) a failure to make any payment when due, (ii) any insolvency proceeding (whether voluntary or involuntary), (iii) the failure to deliver a borrowing base certificate or other required borrowing base report, (iv) if ABL Administrative Agent determines in the exercise of its Permitted Discretion that such event shall be a “Specified Event of Default,” any representation or warranty contained in any borrowing base certificate being incorrect or (v) the failure to comply with representations and covenants relating to cash management or any financial covenant.

C-12

 

		

C-13

 

		
	
Negative Covenants:
	
Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles (including the changes with respect to permitted acquisitions described below, the change of the definition of the term “Payment Conditions” as set forth below and the changes in respect of the Preferred Shares as set forth below).

The negative covenant governing acquisitions will expressly allow an acquisition, which satisfies the following conditions: (a) ABL Administrative Agent receives at least 10 business days prior notice; (b) Borrowers certify to ABL Administrative Agent that the acquisition is approved by the board of directors of the entity being acquired; (c) the entity or business being acquired is in the same or reasonably related or ancillary business as Borrowers; (d) if the transaction involves a Loan Party, such party is the surviving person and no change of control occurs; (e) the entity being acquired (unless not required to be a Guarantor) will deliver joinders to the credit documents and any certificated stock or comparable certificates to ABL Administrative Agent; (f) if the consideration for the acquisition (or series of related acquisitions) exceeds $85,000,000, then: (i) Borrowers will deliver a compliance certificate to ABL Administrative Agent at least 5 business days prior to the acquisition showing the Loan Parties are in compliance with the financial covenant (as if there were a Compliance Period), (ii) each of the Payment Conditions is satisfied, and (iii) Borrowers will deliver financial statements on a pro forma basis after giving effect to such acquisition and all indebtedness incurred in connection therewith; (g) Borrowers will deliver to ABL Administrative Agent copies of substantially final acquisition documents in form and substance reasonably satisfactory to ABL Administrative Agent; (h) no default or event of default exists immediately before or after such acquisition; (i) if the consideration for the acquisition (or series of related acquisitions) exceeds $85,000,000, the entity being acquired has positive consolidated EBITDA for 

the 4 fiscal quarters immediately prior to the acquisition; and (j) Borrowers deliver to ABL Administrative Agent a certificate that all of the requirements above are satisfied, and provides such other documents reasonably requested by ABL Administrative Agent.

Notwithstanding anything to the contrary set forth above, in the case of any acquisition where the aggregate amount of the consideration payable in respect thereof is less than or equal to $85,000,000, then as to such acquisition instead of satisfying each of the Payment Conditions, Borrowers shall only be required to have the daily average of the Adjusted Excess Availability for the immediately preceding 45 consecutive day period be not less than the greater of (i) 12.5% of the Loan Cap or (ii) $112,500,000, and after giving effect to the acquisition and the making of any payment in respect thereof, on a pro forma basis using the most recent calculation of the Borrowing Base immediately prior to any such payment, the Adjusted Excess Availability shall be not less than such amount..

Assets of any new domestic or foreign subsidiary acquired pursuant to an acquisition will only be eligible after a satisfactory field examination, appraisal and legal diligence and subject to reserves and eligibility criteria based thereon (provided, that, in the case of asset substantially similar to those of Borrowers prior to the acquisition, such assets that otherwise satisfy the applicable eligibility criteria may be included in the Borrowing Base prior to the field examination or appraisal, but in no event shall the aggregate amount of such assets included in the Borrowing Base exceed the lesser of (i) 5.0% of the Loan Cap or (ii) $65,000,000.

“Payment Conditions” means, at the time of determination with respect to any specified transaction or payment the following: 

(a)as of the date of any such transaction or payment, and after giving effect thereto, no Specified Event of Default shall exist or have occurred and be continuing, 

(b)as of the date of any such transaction or payment, and after giving effect thereto, either:

(i)the daily average of the Adjusted Excess Availability for the immediately preceding 45 consecutive day period shall be not less than the greater of (A) 17.5% of the Loan Cap or (B) $157,500,000 and after giving effect to the transaction or payment, on a pro forma basis using the most recent calculation of the Borrowing Base immediately prior to any such payment or transaction, the Adjusted Excess Availability shall be not less than the greater of such amounts, or 

(ii)both (A) on a pro forma basis using the most recent calculation of the Borrowing Base immediately prior to any such payment or transaction, the daily average of the Adjusted Excess Availability for the immediately preceding 45 consecutive day period shall be not less than the greater of (1) 12.5% of the Loan Cap or (2) $112,500,000 and 

after giving effect to the transaction or payment, on a pro forma basis using the most recent calculation of the Borrowing Base immediately prior to any such payment or transaction, the Adjusted Excess Availability shall be not less than the greater of such amounts, and (B) as of the date of any such transaction or payment, and after giving effect thereto, on a pro forma basis, the Fixed Charge Coverage Ratio for the immediately preceding 4 fiscal quarters (or 12 consecutive fiscal months at any time Borrowers are required to provide monthly financial statements) ending on the last day of the applicable fiscal period prior to the date of such payment or transaction for which ABL Administrative Agent has received financial statements shall be at least 1.00 to 1.00; 

(c)ABL Administrative Agent shall receive 10 business days prior written notice of such payments and transactions, and 

(d)ABL Administrative Agent shall have received a certificate of an authorized officer of Borrowers certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereby. 

The ABL Loan Documents shall (a) include a restriction limiting the ability of Holdings to amend or modify the terms of the Preferred Shares after the Closing Date in a manner materially adverse to the Lenders and (b) permit the payment of dividends in respect of the Preferred Shares that are made in cash under and in accordance with the Certificate of Designation, in an amount not to exceed $40 million in any fiscal year, so long as no default or event of default shall have occurred and be continuing at the time of or as a consequence of such payment. The Preferred Shares shall not be treated as debt for any purpose under the ABL Facility, including for purposes of calculating any financial ratios, covenants or tests thereunder; provided, that, any dividends paid pursuant to clause (b) of the previous sentence shall be treated as fixed charges for purposes of calculating the Fixed Charge Coverage Ratio.

C-14

 

		
	
Financial Covenant:
	
Minimum Fixed Charge Coverage Ratio of 1.00 to 1.00 as of the end of each fiscal quarter, based on the 4 immediately preceding quarters for which ABL Administrative Agent has received financial statements (or such other period or periods as ABL Administrative Agent and Holdings may agree for periods prior to the first anniversary of the Closing Date and at any time Borrowers are required to deliver monthly financial statements, as of the end of each fiscal month based on the 12 immediately preceding months for which financial statements have been received), provided, that, compliance with such financial covenant shall only be required during a Compliance Period, in which case such financial covenant shall be tested as of the last day of the then most recently completed fiscal period for which financial statements have been delivered and for each quarter end (or month end as applicable) thereafter until the Compliance Period ends.  The definitions used for purposes of the Fixed Charge Coverage Ratio will be as set forth in the Existing ABL Credit 

Agreement.

“Compliance Period” means at any time Adjusted Excess Availability is less than the greater of (i) 10.0% of the Loan Cap or (ii) $90,000,000 and shall continue for the period until Adjusted Excess Availability has been greater than such amount for a period of at least 30 consecutive days.

	
Events of Default:
	
Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Conditions Precedent to all Borrowings:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Conditions Precedent to Initial Borrowings:
	

The conditions precedent to the initial borrowings under the ABL Facility will only be those conditions precedent set forth in Section 3 of the Commitment Letter and Exhibit E to the Commitment Letter.

	
Assignments and Participations:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Amendments and Waivers:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

	
Cost and Yield Protections:
	

Customary for facilities and transactions of this type, including customary tax gross-up provisions and including provisions relating to Dodd-Frank, Basel III and FATCA.

	
Governing Law:
	
New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the State of New York (other than certain security documents that will be governed by local law as applicable or as the parties may otherwise agree).

	
Expenses, Waivers and Indemnity:
	

Substantially the same as the Existing ABL Credit Agreement, subject to the ABL Documentation Principles.

 

C-15

 

SCHEDULE 1
TO

EXHIBIT C

TO

COMMITMENT LETTER

Interest and Certain Fees

		

C-16

 

C-17

 

		
		
	
Interest Rate Options:
	
Borrowers may elect that Revolving Loans (other than Swing Line Loans) bear interest at a rate per annum equal to (a) with respect to Revolving Loans denominated in US dollars (i) the US Base Rate plus the Applicable Margin or (ii) the LIBOR Rate plus the Applicable Margin and (b) with respect to Revolving Loans denominated in Canadian dollars (i) the Canadian Base Rate plus the Applicable Margin or (ii) the Canadian BA Rate plus the Applicable Margin.  Swing Line Loans will bear interest at a rate per annum equal to the US Base Rate or Canadian Base Rate (as applicable) plus the Applicable Margin. 

As used herein:

“Applicable Margin” means, with respect to Revolving Loans, other than Swing Line Loans, a percentage determined in accordance with the pricing grid attached hereto as Schedule 2 to the ABL Term Sheet.

“Canadian BA Rate” means (a) for a Lender that is a Canadian Reference Bank, the CDOR Rate, and (b) for any other Lender, the CDOR Rate plus 0.10%. 

“Canadian Base Rate” means, for any day, a rate per annum equal to the greater of (a) the CDOR Rate existing on such day (which rate shall be calculated based upon an interest period of one month), plus one percentage point, and (b) the “prime rate” for Canadian Dollar commercial loans made in Canada as reported by Thomson Reuters under Reuters Instrument Code <CAPRIME=> on the “CA Prime Rate (Domestic Interest Rate) – Composite Display” page (or any successor page or such other commercially available service or source (including the Canadian Dollar “prime rate” announced by a Schedule I bank under the Bank Act (Canada)) as ABL Administrative Agent may designate from time to time).

“Canadian Reference Bank” means any one or more of The Bank of Nova Scotia, Bank of Montreal, Royal Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce or National Bank of Canada, as ABL Administrative Agent may determine.

“CDOR Rate” means the average rate per annum as reported on the Reuters Screen CDOR Page (or any successor page or such other page or commercially available service displaying Canadian interbank bid rates for Canadian Dollar bankers’ acceptances as ABL Administrative Agent may designate from time to time, or if no such substitute service is available, the rate quoted by a Schedule I bank under the Bank Act (Canada) selected by ABL Administrative Agent at which such bank is offering to purchase Canadian Dollar bankers’ 

acceptances) as of 10:00 a.m. Eastern (Toronto) time on the date of commencement of the requested interest period, for a term, and in an amount, comparable to the interest period and the amount of the Canadian BA Rate Loan requested (and, if any such rate is below zero, then such rate shall be deemed to be zero). 

“Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as a decimal) which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining reserve requirements (including, without limitation, any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“LIBOR” means:

 

(a)  for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in US Dollars for a period equal to the applicable interest period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two business days prior to the first day of the applicable interest period (and if any such rate is below zero, LIBOR shall be deemed to be zero).  If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR” shall be determined by ABL Administrative Agent to be the arithmetic average of the rate per annum at which deposits in US Dollars in minimum amounts of at least $5,000,000 would be offered by first class banks in the London interbank market to ABL Administrative Agent at approximately 11:00 a.m. (London time) two business days prior to the first day of the applicable interest period for a period equal to such interest period (and, if any such rate is below zero, then such rate shall be deemed to be zero); and

(b)  for any interest rate calculation with respect to a US Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in US Dollars in minimum amounts of at least $5,000,000 for a period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a business day, then the immediately preceding business day (and if any such rate is below zero, LIBOR shall be deemed to be zero).  If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then “LIBOR” for such US Base Rate Loan shall be determined by ABL Administrative Agent to be the arithmetic average of the rate per annum at which deposits in US Dollars in minimum amounts of at least $5,000,000, as applicable, would be offered by first class banks in the London interbank market to ABL Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination (and, if any such rate is below zero, then such rate shall be deemed to be zero).

“LIBOR Rate” means with respect to each interest period for any LIBOR Rate Loan, the rate per annum determined by ABL Administrative Agent by dividing (a) LIBOR for such interest period by (b) a percentage equal to: (i) one minus (ii) the Eurodollar Reserve Percentage.

“US Base Rate” means the greatest of (a) the Federal Funds Rate plus 1⁄2%, (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of one month and shall be determined on a daily basis), plus one percentage point, and (c) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate (and, if any such announced rate is below zero, then the rate determined pursuant to this clause (d) shall be deemed to be zero).

Interest rate reference terms will be subject to customary provisions, including applicable reserve requirements, limits on the number of outstanding LIBOR Rate loans and minimum amounts of each LIBOR Rate loan.

	
Unused Line Fee: 
	
Borrowers shall pay to ABL Administrative Agent, for the account of Lenders (to the extent and in accordance with the arrangements by and among Lenders) an unused line fee calculated at 0.25% per annum multiplied by the difference between the Maximum Credit and the average outstanding Revolving Loans and Letters of Credit during the immediately preceding quarter, payable quarterly in arrears.  Swing Line Loans will not be considered in the calculation of the unused line fee.

	
Letter of Credit Fees:
	
Borrowers shall pay to (a) ABL Administrative Agent, for the account of Lenders (to the extent and in accordance with the arrangements by and among Lenders), on the daily outstanding balance of Letters of Credit, a letter of credit fee calculated at a rate per annum based on the then Applicable Margin for Revolving Loans using the LIBOR Rate and (b) to Issuing Bank, a fronting fee equal to 0.125% per annum, in each case under clauses (a) and (b), payable quarterly in arrears.  In addition, Borrowers shall pay customary issuance, arranging and other fees of the Issuing Bank.

	
Default Rate:
	
After a bankruptcy or payment default and for so long as the same is continuing, or at the election of the Required Lenders, upon the occurrence of any other event of default and for so long as the same is continuing, the applicable rates of interest and rate for letter of credit fees shall be increased by 2% per annum above the otherwise then applicable rates.  

C-18

 

		
	
Rate and Fee Basis; Payment Dates:
	

All per annum rates and fees will be computed on basis of actual days elapsed over a 360 day year (or 365 or 366 days, as the case may be, in the case of Revolving Loans for which the Base Rate is used).  In the case of Revolving Loans for which the LIBOR Rate is used, interest is payable on the last day of each relevant interest period or in the case of an interest period longer than 3 

months, then within 3 months, in arrears, and in the case of Revolving Loans for which the Base Rate is used, interest is payable quarterly in arrears.

C-19

 

SCHEDULE 2
TO

EXHIBIT C

TO

COMMITMENT LETTER

					
	

Tier
	

Quarterly Average Excess Availability
	
Applicable LIBOR Margin
	
Applicable 
Base Rate Margin
	
Applicable 
Canadian BA Rate
Margin

	
1
	
Equal to or greater than 66 2/3% of the Maximum Credit
	

1.25%
	

0.25%
	

1.25%

	
2
	
Greater than or equal to 33 1/3% of the Maximum Credit but less than 66 2/3% of the Maximum Credit
	

1.50%
	

0.50%
	

1.50%

	
3
	
Less than 33 1/3% of the Maximum Credit
	

1.75%
	

0.75%
	

1.75%

The Applicable Margin for the interest rates shall be the applicable percentage calculated based on the percentage set forth in Tier 2 of the chart above until the last day of the first full calendar quarter after the Closing Date.  The interest rates will be adjusted every three months thereafter based on the chart above

The Applicable Margin shall be calculated and established once every three months, effective as of the first day of such three month period and shall remain in effect until adjusted thereafter as of the last day of the month at the end of such three month period.  

The term “Applicable Margin” as used in the Term Sheet means, at any time (subject to the paragraph above):  (a) as to Revolving Loans for which interest is calculated based on the US Base Rate or the Canadian Base Rate, the Applicable Base Rate Margin set forth above, (b) as to Revolving Loans for which interest is calculated based on the LIBOR Rate, the Applicable LIBOR Margin set forth above, and (c) as to Revolving Loans for which interest is calculated based on the Canadian BA Rate, the Applicable Canadian BA Rate Margin as set forth above, in each case determined if the Quarterly Average Excess Availability for the immediately preceding three month period is at or within the amounts indicated for such percentage.

The term “Quarterly Average Excess Availability” shall mean, at any time, the daily average of the aggregate amount of the Excess Availability for the immediately preceding three month period, commencing on the first day of such three month period

 

C-20

 

 

 

 

Exhibit D
to
Commitment Letter

Beacon Roofing Supply, Inc.
$1,300,000,000 Senior Unsecured Bridge Facility
Summary of Principal Terms and Conditions

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit D is attached or in the other Exhibits to such letter agreement, as applicable.

 

		
	
Borrower:
	
The Borrower under the Term Loan Facility.

	
Joint Lead Arrangers and Joint Bookrunning Managers:
	
Wells Fargo Securities, CGMI, MLPFS, JPMCB and STRH will act as the joint lead arrangers and joint bookrunning managers (in such capacity, the “Bridge Arrangers”).

	
Lenders:
	
WF Investments, CGMI, MLPFS, JPMCB and SunTrust (or one or more of their respective affiliates) and a syndicate of financial institutions and other entities arranged by the Bridge Arrangers with your reasonable approval (excluding Disqualified Institutions) (the “Bridge Lenders”).

	
Administrative Agent:
	
WF Investments (in such capacity, the “Bridge Administrative Agent”).

	
Syndication Agent:
	
CGMI will act as sole syndication agent (in such capacity, the “Bridge Syndication Agent” and, together with the Bridge Administrative Agent, the “Bridge Agents”).

	
Bridge Loans:
	
Unsecured senior bridge facility (the “Bridge Facility”) consisting of bridge loans (the “Bridge Loans”) in an aggregate principal amount of (A) $1,300,000,000 less (B) the aggregate gross proceeds of the Notes, if any, issued on or prior to the Closing Date (including pursuant to an escrow arrangement) and less the Equity Bridge Reduction Amount.

	
Purpose:
	
The proceeds of the Bridge Loans will be used by the Borrower on the Closing Date to consummate the Transactions, including the payment of fees, costs and expenses in connection therewith.

 

	
Availability:
	
The full amount of the Bridge Facility must be drawn in a single drawing on the Closing Date.  Amounts borrowed under the Bridge Facility and repaid or prepaid may not be reborrowed.

D-1

 

		
	
Documentation:
	
The Operative Documents with respect to the Bridge Loans (collectively, the “Bridge Loan Documentation”) will include, among other items, a bridge loan agreement, guarantees and other appropriate documents, including an exhibit with the form of the 

indenture in connection with the issuance of any Exchange Notes as contemplated below.  

The Bridge Loan Documentation shall be negotiated in good faith and shall be consistent with the Commitment Letter (including this Exhibit D) and the Fee Letter and, in each case except as otherwise expressly provided herein or in the Fee Letter, based on (but no less favorable to the Borrower than) the Indenture, dated as of October 1, 2015, by and among the Borrower, the subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee (as amended, supplemented or otherwise modified through August 24, 2017, the “Existing Indenture”), as modified to reflect the nature of the Bridge Facility as a credit agreement, with additions, deletions, modifications and other changes as you and the Bridge Arrangers reasonably agree (i) to permit and give effect to the Transactions and other transactions contemplated hereby, (ii) to provide for and give effect to the Guarantees, (iii) to reflect changes in law or accounting standards or cure mistakes or defects, (iv) to reflect reasonable administrative, agency and operational requirements of the Bridge Administrative Agent, and (v) to reflect the operational and strategic requirements of the Borrower and its subsidiaries and the Acquired Company in light of their consolidated capital structure, size, industry and practices, in each case, after giving effect to the Transactions, including as reflected in the Projections.  The provisions of this paragraph are referred to as the “Bridge Documentation Principles.”

	
Ranking:
	
The Bridge Loans and the Guarantees thereof will be senior debt of the Borrower and the Guarantors, respectively, pari passu with all other unsecured senior debt of the Borrower and the Guarantors.

	
Guarantors:
	
The guarantors under the Term Loan Facility (each a “Guarantor”; and its guarantee is referred to herein as a “Guarantee”).

	
Security:
	
None.

	
Interest:
	
Interest rates and fees in connection with the Bridge Loans and the Exchange Notes will be as specified in the Arranger Fee Letter and on Schedule I attached hereto.

D-2

 

		
	
Maturity/Exchange:
	
The Bridge Loans will mature on the date (the “Initial Maturity Date”) that is twelve months after the Closing Date.  If any Bridge Loan has not been repaid in full on or prior to the Initial Maturity Date, subject to payment of the Bridge Rollover Fee (as defined in the Arranger Fee Letter), the Bridge Loans will automatically be converted into term loans (each, an “Extended Term Loan”) due on the date that is eight years after the Closing Date.  The Extended Term Loans will be governed by the provisions of the Bridge Loan Documentation and will have the same terms as the Bridge Loans except as expressly set forth on Schedule II hereto.

Lenders under the Extended Term Loans will have the option at any time or from time to time to receive Senior Unsecured Exchange Notes (the “Exchange Notes”) in exchange for such Extended Term Loans having the terms set forth on Schedule III hereto; provided that the Borrower may defer the issuance of Exchange Notes until such time as the Borrower has received requests to issue an aggregate principal amount of Exchange Notes equal to at least $100,000,000.

D-3

 

		
	
Mandatory Prepayment:
	
Subject to any restrictions set forth in the Operative Documents with respect to the Senior Secured Facilities and the Intercreditor Agreement (solely with respect to clauses (b) and (c) below), the Borrower will be required to prepay the Bridge Loans on a pro rata basis, at par plus accrued and unpaid interest with:

(a)100% of the net cash proceeds from the issuance of the Notes and/or any other indebtedness (other than the Senior Secured Facilities) by the Borrower or any of its subsidiaries, subject to baskets and other exceptions to be mutually agreed upon;

(b)100% of the net cash proceeds from any issuance of equity securities of, or from any capital contribution to, the Borrower, subject to exceptions to be mutually agreed upon; and

(c)100% of the net cash proceeds of all non-ordinary course asset sales, insurance and condemnation recoveries and other asset dispositions by the Borrower or any of its subsidiaries, subject to reinvestment rights and exceptions to be mutually agreed upon, 

provided that with respect to clause (b) and (c) above the Bridge Loan Documentation shall provide that such net proceeds may be applied to prepay either of the Senior Secured Facilities in lieu of the Bridge Facility if required under the terms of the Operative Documents with respect to the applicable Senior Secured Facility.

Each such prepayment will be made together with accrued interest to the date of prepayment, but without premium or penalty (except breakage costs related to prepayments not made on the last day of the relevant interest period).

In the event any Bridge Lender or affiliate of a Bridge Lender purchases Securities from the Borrower pursuant to the securities demand provisions in the Arranger Fee Letter, the net cash proceeds received by the Borrower in respect of such Securities may, at the option of such Bridge Lender or affiliate, be applied first to prepay the Bridge Loans of such Bridge Lender or affiliate rather than pro rata (provided that if there is more than one such Bridge Lender or affiliate then such net cash proceeds will be applied pro rata to prepay the Bridge Loans of all such Bridge Lenders or affiliates in proportion to such Bridge Lenders’ or affiliates’ principal amount of 

Securities purchased from the Borrower) prior to being applied to prepay the Bridge Loans held by other Bridge Lenders.

	
Change of Control:
	
Upon any change of control (to be defined in the Bridge Loan Documentation), the Borrower will be required to offer to prepay the entire outstanding principal amount of the Bridge Loans (plus any accrued and unpaid interest) at par plus a prepayment fee equal to 1% of such outstanding principal amount.  

	
Voluntary Prepayment:
	
Subject to the provisions of the Senior Secured Facilities, the Bridge Loans may be prepaid at any time, in whole or in part, at the option of the Borrower, upon notice and in a minimum principal amount and in multiples to be agreed upon, at 100% of the principal amount of the Bridge Loans prepaid, plus all accrued and unpaid interest and fees (including any breakage costs) to the date of the repayment.

	
Conditions Precedent to Funding:
	
The funding of the loans under the Bridge Facility shall be subject to only those conditions precedent set forth in Section 3 of the Commitment Letter and in Exhibit E to the Commitment Letter.

	
Representations and Warranties:
	
Subject to the Bridge Documentation Principles and the Limited Conditionality Provisions, the Bridge Loan Documentation will contain usual and customary representations and warranties for facilities of this type and substantially similar to the representations and warranties contained in the Operative Documents with respect to the Term Loan Facility (subject to the Term Loan Documentation Principles), with such changes as are reasonably appropriate in connection with the Bridge Facility.

	
Covenants:
	
Subject to the Bridge Documentation Principles and the Limited Conditionality Provisions, the Bridge Loan Documentation will contain affirmative covenants comparable to those contained in the Operative Documents with respect to the Term Loan Facility (and also including a covenant to comply with the securities demand provisions in the Arranger Fee Letter, a customary offering cooperation covenant and a covenant to use all commercially reasonable efforts to refinance the Bridge Loans as soon as practicable) and incurrence-based negative covenants consistent with the Bridge Documentation Principles; provided that prior to the Initial Maturity Date, the indebtedness, lien and restricted payments covenants may be more restrictive than those contained in the Operative Documents with respect to the Term Loan Facility and/or the Existing Indenture.

The Bridge Loan Documentation will not include any financial maintenance covenants.

D-4

 

		
	
Events of Default:
	
Prior to the Initial Maturity Date, the Bridge Loan Documentation will contain events of default (and, as appropriate, grace periods and threshold amounts) consistent with the Bridge Documentation Principles (and no more restrictive than those set forth in the 

Operative Documents with respect to the Term Loan Facility), including without limitation an event of default for failure to pay fees specified in the Fee Letter. 

	
Yield Protection and Increased Costs:
	
Usual and customary for facilities similar to the Bridge Facility including customary tax gross up provisions.

	
Assignments and Participations:
	
Consents.  Each Bridge Lender will, subject in certain circumstances to the approval of the Bridge Administrative Agent and the Borrower (such consent not to be unreasonably withheld or delayed), be permitted to make assignments in acceptable minimum amounts.  Participations will be permitted without the consent of the Borrower or the Bridge Administrative Agent.

No Assignment or Participation to Certain Persons.  No assignment or participation may be made to natural persons, the Borrower or any of its affiliates or subsidiaries or to any Disqualified Institution.

	
Required Lenders:
	
On any date of determination, those Bridge Lenders who collectively hold more than 50% of the aggregate outstanding Bridge Loans (the “Required Lenders”).

	
Amendments and Waivers:
	
Amendments and waivers of the provisions of the Bridge Loan Documentation will require the approval of the Required Lenders, except that (a) the consent of all Bridge Lenders directly adversely affected thereby will be required with respect to: (i) reductions of principal, interest, fees or other amounts, (ii) except as provided under “Maturity/Exchange” above, extensions of scheduled maturities or times for payment (other than for purposes of administrative convenience), (iii) increases in the amount of any Bridge Lender’s commitment, (iv) additional restrictions on the right to exchange Extended Term Loans for Exchange Notes or any amendment to the rate of such exchange, (v) changes in call dates or call prices (other than notice provisions) and (vi) changes in pro rata sharing provisions, and (b) the consent of 100% of the Bridge Lenders will be required with respect to customary matters, including (i) to permit the Borrower to assign its rights under the Bridge Loan Documentation, (ii) to modify any voting percentages and (iii) to release of all or substantially all of the value of the Guarantees (other than in connection with transactions permitted pursuant to the Bridge Loan Documentation),  and (c) the consent of the Bridge Administrative Agent will be required to amend, modify or otherwise affect its rights and duties.

	
Indemnification:
	
Substantially similar to the Operative Documents with respect to the Term Loan Facility

D-5

 

		
	
Expenses:
	
The Borrower shall pay (a) all reasonable out-of-pocket expenses (including, without limitation, reasonable fees and expenses of counsel thereto) of the Bridge Administrative Agent (promptly following written demand therefore) associated with the syndication 

of the Bridge Facility and the preparation, negotiation, execution, delivery and administration of the Bridge Loan Documentation and any amendment or waiver with respect thereto and (b) all reasonable out-of-pocket expenses (including, without limitation, reasonable fees and expenses of counsel thereto) of the Bridge Administrative Agent and the Bridge Lenders promptly following written demand therefore in connection with the enforcement of the Bridge Loan Documentation or protection of rights (in each case subject to restrictions and limitations substantially similar to those set forth in the Operative Documents with respect to the Term Loan Facility).

	
Governing Law and Forum:
	
Substantially similar to the Operative Documents with respect to the Term Loan Facility

	
Waiver of Jury Trial and Punitive and Consequential Damages:
	
Substantially similar to the Operative Documents with respect to the Term Loan Facility

	
Counsel for the Bridge Arrangers and the Bridge Agents:
	
Cravath, Swaine & Moore LLP.

 

 

D-6

 

Schedule I

to

Exhibit D
to
Commitment Letter

Interest Rates on the Bridge Loans

 

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Schedule I to Exhibit D is attached or in the Exhibits to such letter agreement, as applicable.

 

		
	
Interest Rate:
	
The Bridge Loans will bear interest for the first three month period commencing on the Closing Date at a variable rate per annum (the “Applicable Interest Rate”) equal to the sum of (a) the three-month LIBOR Rate plus (b) a spread equal to 4.75%.

The Applicable Interest Rate will increase by an additional 0.50% following each three-month period after the Closing Date.  Notwithstanding the foregoing, the interest rate on the Bridge Loans will not at any time prior to the Initial Maturity Date exceed the Total Cap (as defined in the Arranger Fee Letter).

Interest will be payable quarterly in arrears and on the Initial Maturity Date and will be calculated on the basis of the actual number of days elapsed in a year of 360 days.

Upon the occurrence of a Demand Failure Event (as defined in the Arranger Fee Letter), all outstanding Bridge Loans will accrue interest at the Total Cap.

The “LIBOR Rate” will be defined and calculated as specified in the Operative Documents with respect to the Term Loan Facility; provided that at no time will the LIBOR Rate be deemed to be less than 0.00% per annum.

	
Default Rate:
	
(a) Automatically upon the occurrence and during the continuance of any payment event of default or upon a bankruptcy event of default of the Borrower or any Guarantor or (b) at the election of the Required Lenders, upon the occurrence and during the continuance of any other event of default, all outstanding principal, fees and other obligations under the Bridge Facility will bear interest at a rate per annum of 2.00% in excess of the rate then applicable to the Bridge Loans, payable on demand of the Bridge Administrative Agent.  Such Default Rate may be in excess of any cap or limitation on yield or interest rate set forth in the Commitment Letter or in the Fee Letter.

 

D-I-1

 

 

Schedule II

to

Exhibit D
to
Commitment Letter

Extended Term Loans
Summary of Proposed Terms and Conditions

 

 

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Schedule II to Exhibit D is attached or in the Exhibits to such letter agreement, as applicable.

 

		
	
Borrower:
	
The Borrower.

	
Guarantors:
	
Same as the Guarantors of the Bridge Loans.

	
Security:
	
None.

	
Ranking:
	
Same as the Bridge Loans.

	
Maturity:
	
Eight years from the Closing Date.

	
Interest Rate:
	
The Extended Term Loans will bear interest at the Total Cap.

	
Default Rate:
	
Same as the default rate for the Bridge Loans.

	
Mandatory Prepayment:
	
Same as the Bridge Loans.

	
Voluntary Prepayment:
	
The Extended Term Loans may be prepaid, in whole or in part, in minimum denominations to be agreed, at par, plus accrued and unpaid interest upon not less than one business day’s prior written notice, at the option of the Borrower at any time.

	
Change of Control:
	
Same as the Bridge Loans.

	
Covenants, Events of Default and Offers to Repurchase:
	
The covenants, events of default and offers to repurchase (other than with respect to a change of control as described above) that would be applicable to the Exchange Notes, if issued, will also be applicable to the Extended Term Loans in lieu of the corresponding provisions applicable to the Bridge Loans.

	
Governing Law and Forum:
	
Same as the Bridge Loans.

 

D-II-1

 

Schedule III

to

Exhibit D
to
Commitment Letter

Exchange Notes 
Summary of Proposed Terms and Conditions

 

 

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Schedule III to Exhibit D is attached or in the Exhibits to such letter agreement, as applicable.

 

		
	
Issuer:
	
The Borrower.

	
Guarantors:
	
Same as the Guarantors of the Bridge Loans.

	
Security:
	
None.

	
Principal Amount:
	
The Exchange Notes will be available only in exchange for the Extended Term Loans.  The principal amount of the Exchange Notes will equal 100% of the aggregate principal amount of the outstanding Extended Term Loans for which they are exchanged and will have the same ranking as the Extended Term Loans for which they are exchanged. 

	
Ranking:
	
Same as the Bridge Loans.

	
Maturity:
	
Eight years from the Closing Date.

	
Interest Rate:
	
The Exchange Notes will bear interest at the Total Cap.

	
Default Rate:
	
Same as the default rate for the Bridge Loans.

	
Mandatory Redemption:
	
No mandatory redemption provisions other than 101% change of control put and customary asset sale offer to redeem provisions, subject to the Bridge Documentation Principles.

	
Optional Redemption:
	
The Exchange Notes will be non-callable until the third anniversary of the Closing Date.  Thereafter, each Exchange Note will be callable at par plus accrued interest plus a premium equal to 75% of the interest rate on such Exchange Note, which premium shall decline ratably on each subsequent anniversary of the Closing Date to zero on the date that is two years prior to the maturity date of the Exchange Notes.

	
Registration Rights:
	
None.

D-III-1

 

		
	
Right to Resell Notes:
	
Any Bridge Lender (and any subsequent holder) will have the absolute and unconditional right to resell the Exchange Notes to one or more third parties, whether by assignment or participation and 

subject to compliance with applicable securities laws.

	
Covenants; Events of Default:
	
The Exchange Notes shall be subject to covenants and events of default that are consistent with the Bridge Documentation Principles and based on those contained in the preliminary offering memorandum or prospectus, if any, used to market the Notes.

	
Defeasance; Satisfaction; and
Discharge:
	
The Exchange Notes shall be subject to defeasance and satisfaction and discharge provisions that are consistent with the Bridge Documentation Principles and based on those contained in the preliminary offering memorandum or prospectus, if any, used to market the Notes.

	
Governing Law
and Forum:
	
Same as the Bridge Loans.

	
Counsel to the Bridge Arrangers:
	
Cravath, Swaine & Moore LLP.

 

 

D-III-2

 

Exhibit E
to
Commitment Letter

Summary of Additional Conditions Precedent

All capitalized terms used herein but not defined herein shall have the meanings provided in the letter agreement to which this Exhibit E is attached or in the other Exhibits to such letter agreement, as applicable.  The initial borrowing under the Facilities shall be subject to the following additional conditions precedent:

	
 
	
1.
	
The Acquisition shall be consummated substantially contemporaneously with the initial funding under the Facilities (or, if any portion of the Term Loan Facility is funded into escrow as provided in the Arranger Fee Letter, substantially contemporaneously with the application of the proceeds of such escrowed funds to consummate the Acquisition and the initial funding under the remainder of the Facilities) in accordance with the terms described in the Acquisition Agreement (together with all schedules, exhibits and annexes thereto) (without any amendment, modification, supplement or waiver thereof or any consent thereunder that is material and adverse to the Lenders or the Arrangers without the prior written consent of the Arrangers, which consent shall not be unreasonably withheld, conditioned or delayed (it being understood and agreed that (x) any decrease in the purchase price of less than 15% shall not be deemed to be materially adverse to the Lenders or the Arrangers if the amounts to be funded under the Facilities are reduced by the full amount of such decrease with such decrease to be allocated among the Facilities as determined by the Arrangers, (y) any decrease in the purchase price of 15% or greater shall be deemed to be materially adverse to the Lenders and Arrangers and (z) any increase in the purchase price of less than 15% shall not be deemed to be materially adverse to the Lenders or the Arrangers if the amount of such increase is funded with proceeds of additional equity)).  The Acquisition Agreement (together with all schedules, exhibits and annexes thereto) shall be in form and substance reasonably satisfactory to the Arrangers; provided that the Arrangers agree that the Acquisition Agreement (together with all schedules, exhibits and annexes thereto) provided to WF and Citi on August 23, 2017 at 5:15 p.m. Eastern Time is satisfactory in form and substance to the Arrangers.

	
 
	
2.
	
The Borrower shall have received gross proceeds from the Equity Financing in an amount not less than $498,000,000.  The Preferred Equity Financing shall be consummated substantially contemporaneously with the initial funding under the Facilities (or, if any portion of the Term Loan Facility is funded into escrow as provided in the Arranger Fee Letter, substantially contemporaneously with the application of the proceeds of such escrowed funds to consummate the Acquisition and the initial funding under the remainder of the Facilities) in accordance with the terms described in the Investment Agreement by and among the Borrower, CD&R Boulder Holdings, L.P. and Clayton, Dubilier & Rice Fund IX, L.P. (together with all schedules, exhibits and annexes thereto, the “Investment  Agreement”) and the Certificate of Designation, in each case provided to WF and Citi on August 23, 2017 at 6:03 p.m. Eastern Time (each without any amendment, modification, supplement or waiver thereof or any consent thereunder that is material and adverse to the Lenders or the Arrangers without the prior written consent of the Arrangers, which consent shall not be unreasonably withheld, conditioned or delayed), it being acknowledged and agreed by the Arrangers that such Investment Agreement and Certificate of Designation, and the terms of the Preferred Shares set forth therein, are satisfactory in form and substance to the Arrangers.

E-1

 

 

	
 
	
3.
	
The Acquisition Agreement Representations shall be true and correct to the extent required by the Limited Conditionality Provisions and the Specified Representations shall be true and correct in all material respects (or in all respects, if qualified by materiality).

	
 
	
4.
	
Subject to the Limited Conditionality Provisions, the Arrangers shall have received customary legal opinions, perfection certificates, UCC financing statements, collateral and security documents consistent with the Commitment Letter, corporate documents and officers’ and public officials’ certifications; a customary notice of borrowing; lien search results (to the extent requested at least ten business days prior to the Closing Date); organizational documents; customary evidence of authorization to enter into the Operative Documents; and good standing certificates in jurisdictions of formation/organization, in each case of the Borrower and the Guarantors.  The Term Loan Administrative Agent and the ABL Administrative Agent shall have received a customary solvency certificate from the chief financial officer of the Borrower in the form attached hereto as Annex E-I.

	
 
	
5.
	
After giving effect to the consummation of the Transactions, the Borrower and its subsidiaries (including, without limitation, the Acquired Company) shall have no outstanding debt for borrowed money or outstanding preferred equity other than (a) debt under the Facilities, (b) Surviving Indebtedness and (c) the Preferred Shares.

	
 
	
6.
	
Subject in all respects to the Limited Conditionality Provisions, (a) the Term Loan Administrative Agent shall have a perfected, (i) first priority lien on and security interest in all Term Loan Priority Collateral and (ii) second priority lien on and security interest in all ABL Priority Collateral and (b) the ABL Administrative Agent shall have a perfected, (i) first priority lien on and security interest in all ABL Priority Collateral and (ii) second priority lien on and security interest in all Term Loan Priority Collateral (in the case of each of clauses (a) and (b), free and clear of all liens, other than liens securing Surviving Indebtedness (excluding the Existing Notes) and other customary exceptions to be agreed upon).

	
 
	
7.
	
All fees required to be paid on the Closing Date pursuant to the Commitment Letter and the Fee Letter and out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter (to the extent invoiced at least three days prior to the Closing Date) shall, upon the initial borrowing under the Facilities, have been paid.

	
 
	
8.
	
Each of the Arrangers shall have received, at least five business days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, that such Arranger has requested at least 11 business days prior to the Closing Date.

	
 
	
9.
	
The Arrangers shall have received (a) (i) audited consolidated balance sheets and related statements of income and cash flows of the Borrower and its consolidated subsidiaries for the three most recently completed fiscal years ended at least 60 days prior to the Closing Date (it being acknowledged that the Arrangers have previously received such financial statements for the fiscal years ended September 30, 2014, 2015 and 2016) and (ii) unaudited consolidated balance sheets and related statements of income and cash flows of the Borrower and its consolidated subsidiaries for each fiscal quarter (other than any fourth fiscal quarter) ended after the most recent audited financial statements delivered pursuant to clause (a)(i) above and at least 45 days prior to the Closing Date (it being acknowledged that the Arrangers have previously received such financial statements through and including the fiscal quarter ended June 30, 2017), (b) (i) audited combined balance sheets and related statements of income and cash flows of the Acquired 

E-2

 

 

	
 
		
Company for the three most recently completed fiscal years ended at least 90 days prior to the Closing Date (it being acknowledged that the Arrangers have previously received such financial statements for the fiscal years ended December 27, 2014, January 2, 2016 and December 31, 2016) and (ii) unaudited combined balance sheets and related statements of income and cash flows of the Acquired Company for each fiscal quarter ended after the most recent audited financial statements delivered pursuant to clause (b)(i) above and at least 45 days prior to the Closing Date (it being acknowledged that the Arrangers have previously received such financial statements through and including the fiscal quarter ended July 1, 2017) and (c) a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Borrower as of, and for the twelve-month period ending on, the last day of the most recently completed four-fiscal quarter period for which financial statements of the Borrower pursuant to clause (a) above has been delivered, in each case prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such income statement).  

	
 
	
10.
	
The Arrangers shall have received the financial statements required to be delivered pursuant to paragraph 9 above and all other financial, marketing and other information customarily provided by borrowers in the preparation of a confidential information memorandum for the syndication of each of the Facilities (the “Required Information”).  The Arrangers shall have been afforded a period (the “Marketing Period”) of 15 consecutive business days (ending on the business day immediately prior to the Closing Date) after receipt of the Required Information to syndicate each of the Facilities; provided that (x) such 15 consecutive business day period will not commence earlier than September 5, 2017, (y) such 15 consecutive business day period shall not be required to be consecutive to the extent it would include November 23, 2017 through November 26, 2017 (which dates shall not count for purposes of satisfying the 15 consecutive business day requirement) and (z) if such period has not ended on or before December 21, 2017, it shall not commence earlier than January 2, 2018.

	
 
	
11.
	
The ABL Administrative Agent shall have received a closing borrowing base certificate using, if applicable, the Alternative Closing Borrowing Base and otherwise consistent with the Commitment Letter.  

	
 
	
12.
	
With respect to the Bridge Facility, (a) investment banks satisfactory to the Arrangers (each, an “Investment Bank”) shall have been engaged to publicly sell or privately place the Notes and the Investment Banks and the Arrangers shall have received a complete printed preliminary prospectus or preliminary offering memorandum or preliminary private placement memorandum (collectively, an “Offering Document”) suitable for use in a customary high-yield road show relating to the issuance of the Notes, which contains all audited and unaudited historical and pro forma financial statements (including, in the case of audited financial statements, the auditors’ report thereon) and other data to be included therein (including other financial data of the type and form customarily included in offering memoranda), and all other data that the Securities and Exchange Commission would require in a registered offering of such Notes (other than those items customarily excluded from a Rule 144A offering memorandum) or would be necessary for the Investment Banks to receive customary “comfort” (including “negative assurance” comfort) from independent accountants in connection with the offering of the Notes (provided that clause (a) of this condition shall be satisfied if such Offering Document excludes sections that would customarily be provided by an Investment Bank (including a “Description of Notes”), but is otherwise complete) and (b) the Investment Banks shall have been afforded a period of at least 15 consecutive business days following receipt of an Offering Document, that includes information satisfying clause (a) above for the entirety of such period, to seek to place the Notes with qualified purchasers thereof; provided that (x) such 15 consecutive business day period will 

E-3

 

 

	
 
		
not commence earlier than September 5, 2017, (y) such 15 consecutive business day period shall not be required to be consecutive to the extent it would include November 23, 2017 through November 26, 2017 (which dates shall not count for purposes of satisfying the 15 consecutive business day requirement) and (z) if such period has not ended on or before December 21, 2017, it shall not commence earlier than January 2, 2018.  The comfort letters to be provided by the independent accountants of the Borrower and the Acquired Company shall be in customary form, and the auditors shall be prepared to deliver such letters at the pricing date (it being understood that receipt of the comfort letter shall not be a condition for commencing such 15 business day period).  If the Borrower shall in good faith reasonably believe that it has delivered the Offering Document required to be delivered pursuant to clause (a) of this paragraph (12), the Borrower may deliver to the Arrangers written notice to that effect (stating when it believes it completed any such delivery), in which case the Borrower shall be deemed to have satisfied its requirements to deliver an Offering Document under clause (a) of this paragraph (12) on the date such notice is received by the Arrangers and the 15 business day marketing period under clause (b) above shall commence as follows: (x) subject to clause (y) and (z) below, on the date such notice is received by the Arrangers; (y) if such notice is received prior to September 5, 2017, on September 5, 2017; or (z) if such notice is received after December 21, 2017 and prior to January 2, 2018, on January 2, 2018, in each case unless the Arrangers in good faith reasonably believe that the Borrower has not delivered the Offering Document required to be delivered pursuant clause (a) of this paragraph (12) and, within three business days after their receipt of such notice from the Borrower, the Arrangers deliver a written notice to the Borrower to that effect (stating with specificity which information is required to satisfy the Borrower’s requirements under clause (a) of this paragraph (12) for purposes of compliance with this condition only).

	
 
	
1.
	

E-4

 

 

 

 

Annex E-I

FORM OF SOLVENCY CERTIFICATE

[_______], 201[_]

This Solvency Certificate (this “Certificate”) is furnished to the Administrative Agent and the Lenders pursuant to Section [____] of the Credit Agreement, dated as of _________ ____, 201[_], among [_________] (the “Credit Agreement”).  Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Credit Agreement.

 

I, [                ], the Chief Financial Officer of the Borrower (after giving effect to the Transactions), in that capacity only and not in my individual capacity (and without personal liability), DO HEREBY CERTIFY on behalf of the Borrower that as of the date hereof, after giving effect to the consummation of the Transactions (including the execution and delivery of the Acquisition Agreement and the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof):

 

	
 
	
1.
	
The sum of the liabilities (including contingent liabilities) of the Borrower and its subsidiaries, on a consolidated basis, does not exceed the fair value of the present assets of the Borrower and its subsidiaries, on a consolidated basis.

	
 
	
2.
	
The present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is greater than the total amount that will be required to pay the probable liabilities (including contingent liabilities) of the Borrower and its subsidiaries as they become absolute and matured.

	
 
	
3.
	
The capital of the Borrower and its subsidiaries, on a consolidated basis, is not unreasonably small in relation to their business as contemplated on the date hereof.

	
 
	
4.
	
The Borrower and its subsidiaries, on a consolidated basis, have not incurred and do not intend to incur, or believe that they will incur, debts or other liabilities, including current obligations, beyond their ability to pay such debts or other liabilities as they become due (whether at maturity or otherwise).

	
 
	
5.
	
The Borrower and its subsidiaries, on a consolidated basis, are “solvent” within the meaning given to that term and similar terms under applicable laws relating to fraudulent transfers and conveyances.

	
 
	
6.
	
For purposes of this Certificate, the amount of any contingent liability has been computed as the amount that, in light of all of the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability.

	
 
	
7.
	
In reaching the conclusions set forth in this Certificate, the undersigned has (i) reviewed the Credit Agreement and other Loan Documents referred to therein and such other documents deemed relevant, (ii) reviewed the financial statements (including the pro forma financial statements) referred to in Section [  ] of the Credit Agreement (the “Financial Statements”) and (iii) made such other investigations and inquiries as the undersigned has deemed appropriate.  

E-I-1

 

 

 

	
 
	
8.
	
The financial information and assumptions which underlie and form the basis for the representations made in this Certificate were fair and reasonable when made and were made in good faith and continue to be fair and reasonable as of the date hereof.

	
 
	
9.
	
The undersigned confirms and acknowledges that the Administrative Agent and the Lenders are relying on the truth and accuracy of this Certificate in connection with the Commitments and Loans under the Credit Agreement.

 

[Remainder of Page Intentionally Left Blank]

E-I-2

 

 

 

IN WITNESS WHEREOF, I have executed this Certificate this as of the date first written above.

		
	
[__________]

 

 

	
By:

	
 
	
 

	
 
	
Name: 

	
 
	
Title: Chief Financial Officer

 

 

 

 

E-I-3Exhibit 4.4

 

 

SELECT INCOME REIT

 

TO

 

 

Indenture

 

Dated as of                            , 20

 

Senior Debt Securities

 

 

 

Certain Sections of this Indenture relating to Sections 310 through 318,
 inclusive, of the Trust Indenture Act of 1939:

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
§ 310(a)(1)
    	
 
    	
609
    
	
(a)(2)
    	
 
    	
609
    
	
(a)(3)
    	
 
    	
Not Applicable
    
	
(a)(4)
    	
 
    	
Not Applicable
    
	
(a)(5)
    	
 
    	
609
    
	
(b)
    	
 
    	
608
    
	
§ 311(a)
    	
 
    	
613
    
	
(b)
    	
 
    	
613
    
	
§ 312(a)
    	
 
    	
701
    
	
(b)
    	
 
    	
702
    
	
(c)
    	
 
    	
702
    
	
§ 313(a)
    	
 
    	
703
    
	
(b)
    	
 
    	
Article 14, Not   Applicable
    
	
(c)
    	
 
    	
703
    
	
(d)
    	
 
    	
703
    
	
§ 314(a)
    	
 
    	
704
    
	
(b)
    	
 
    	
Article 14, Not   Applicable
    
	
(c)
    	
 
    	
102
    
	
(d)
    	
 
    	
Article 14, Not   Applicable
    
	
(e)
    	
 
    	
102
    
	
§ 315(a)
    	
 
    	
601, 603
    
	
(b)
    	
 
    	
602
    
	
(c)
    	
 
    	
601
    
	
(d)
    	
 
    	
601, 603
    
	
(e)
    	
 
    	
514
    
	
§ 316(a)(1)(A)
    	
 
    	
512
    
	
(a)(1)(B)
    	
 
    	
513
    
	
(a)(2)
    	
 
    	
Not Applicable
    
	
(b)
    	
 
    	
508
    
	
(c)
    	
 
    	
104
    
	
§ 317(a)(1)
    	
 
    	
503
    
	
(a)(2)
    	
 
    	
504
    
	
(b)
    	
 
    	
1003
    
	
§ 318
    	
 
    	
107
    

 

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE ONE
    
	
 
    
	
DEFINITIONS AND   OTHER PROVISIONS OF GENERAL APPLICATION
    
	
 
    	
 
    	
 
    	
 
    
	
Section 101
    	
Definitions
    	
 
    	
1
    
	
Section 102
    	
Compliance Certificates   and Opinions
    	
 
    	
6
    
	
Section 103
    	
Form of Documents Delivered   to Trustee
    	
 
    	
7
    
	
Section 104
    	
Acts of Holders; Record   Dates
    	
 
    	
7
    
	
Section 105
    	
Notices, Etc., to   Trustee and Company
    	
 
    	
9
    
	
Section 106
    	
Notice to Holders;   Waiver
    	
 
    	
9
    
	
Section 107
    	
Conflict with Trust   Indenture Act
    	
 
    	
10
    
	
Section 108
    	
Effect of Headings and Table   of Contents
    	
 
    	
10
    
	
Section 109
    	
Successors and Assigns
    	
 
    	
10
    
	
Section 110
    	
Separability Clause
    	
 
    	
10
    
	
Section 111
    	
Benefits of Indenture
    	
 
    	
10
    
	
Section 112
    	
Governing Law
    	
 
    	
10
    
	
Section 113
    	
Legal Holidays
    	
 
    	
10
    
	
Section 114
    	
Language of Notices,   Etc.
    	
 
    	
11
    
	
Section 115
    	
No Personal Liability
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TWO
    
	
 
    
	
SECURITY FORMS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 201
    	
Forms Generally
    	
 
    	
11
    
	
Section 202
    	
Form of Legend for   Global Securities
    	
 
    	
11
    
	
Section 203
    	
Form of Trustee’s   Certificate of Authentication
    	
 
    	
12
    
	
Section 204
    	
Securities in Global Form
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE THREE
    
	
 
    
	
THE SECURITIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 301
    	
Amount Unlimited;   Issuable in Series
    	
 
    	
13
    
	
Section 302
    	
Denominations
    	
 
    	
16
    
	
Section 303
    	
Execution,   Authentication, Delivery and Dating
    	
 
    	
16
    
	
Section 304
    	
Temporary Securities
    	
 
    	
17
    
	
Section 305
    	
Registration,   Registration of Transfer and Exchange
    	
 
    	
18
    
	
Section 306
    	
Mutilated, Destroyed,   Lost and Stolen Securities
    	
 
    	
19
    
	
Section 307
    	
Payment of Interest;   Interest Rights Preserved
    	
 
    	
20
    
	
Section 308
    	
Persons Deemed Owners
    	
 
    	
21
    
	
Section 309
    	
Cancellation
    	
 
    	
21
    
	
Section 310
    	
Computation of Interest
    	
 
    	
21
    
	
Section 311
    	
CUSIP Numbers
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE FOUR
    
	
 
    
	
SATISFACTION AND   DISCHARGE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 401
    	
Satisfaction and   Discharge of Indenture
    	
 
    	
21
    
	
Section 402
    	
Application of Trust   Money
    	
 
    	
22
    

 

 

TABLE OF CONTENTS

(con’t)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE FIVE
    
	
 
    
	
REMEDIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 501
    	
Events of Default
    	
 
    	
23
    
	
Section 502
    	
Acceleration of   Maturity; Rescission and Annulment
    	
 
    	
23
    
	
Section 503
    	
Collection of   Indebtedness and Suits for Enforcement by Trustee
    	
 
    	
24
    
	
Section 504
    	
Trustee May File   Proofs of Claim
    	
 
    	
25
    
	
Section 505
    	
Trustee   May Enforce Claims Without Possession of Securities
    	
 
    	
25
    
	
Section 506
    	
Application of Money   Collected
    	
 
    	
25
    
	
Section 507
    	
Limitation on Suits
    	
 
    	
26
    
	
Section 508
    	
Unconditional Right of   Holders to Receive Principal, Premium and Interest
    	
 
    	
26
    
	
Section 509
    	
Restoration of Rights   and Remedies
    	
 
    	
26
    
	
Section 510
    	
Rights and Remedies   Cumulative
    	
 
    	
27
    
	
Section 511
    	
Delay or Omission Not   Waiver
    	
 
    	
27
    
	
Section 512
    	
Control by Holders
    	
 
    	
27
    
	
Section 513
    	
Waiver of Past Defaults
    	
 
    	
27
    
	
Section 514
    	
Undertaking for Costs
    	
 
    	
28
    
	
Section 515
    	
Waiver of Usury, Stay   or Extension Laws
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE SIX
    
	
 
    
	
THE TRUSTEE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 601
    	
Certain Duties and   Responsibilities
    	
 
    	
28
    
	
Section 602
    	
Notice of Defaults
    	
 
    	
28
    
	
Section 603
    	
Certain Rights of   Trustee
    	
 
    	
28
    
	
Section 604
    	
Not Responsible for   Recitals or Issuance of Securities
    	
 
    	
29
    
	
Section 605
    	
May Hold   Securities
    	
 
    	
30
    
	
Section 606
    	
Money Held in Trust
    	
 
    	
30
    
	
Section 607
    	
Compensation and   Reimbursement
    	
 
    	
30
    
	
Section 608
    	
Conflicting Interests
    	
 
    	
30
    
	
Section 609
    	
Corporate Trustee   Required; Eligibility
    	
 
    	
31
    
	
Section 610
    	
Resignation and   Removal; Appointment of Successor
    	
 
    	
31
    
	
Section 611
    	
Acceptance of   Appointment by Successor
    	
 
    	
32
    
	
Section 612
    	
Merger, Conversion,   Consolidation or Succession to Business
    	
 
    	
33
    
	
Section 613
    	
Preferential Collection   of Claims Against Company
    	
 
    	
33
    
	
Section 614
    	
Appointment of   Authenticating Agent
    	
 
    	
33
    
	
Section 615
    	
Rules by Trustee
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE SEVEN
    
	
 
    
	
HOLDERS’ LISTS   AND REPORTS BY TRUSTEE AND COMPANY
    
	
 
    	
 
    	
 
    	
 
    
	
Section 701
    	
Company to Furnish   Trustee Names and Addresses of Holders
    	
 
    	
35
    
	
Section 702
    	
Preservation of   Information; Communications to Holders
    	
 
    	
36
    
	
Section 703
    	
Reports by Trustee
    	
 
    	
36
    
	
Section 704
    	
Reports by Company
    	
 
    	
36
    

 

ii

 

TABLE OF CONTENTS

(con’t)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE EIGHT
    
	
 
    
	
CONSOLIDATION,   MERGER, CONVEYANCE, TRANSFER OR LEASE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 801
    	
Company   May Consolidate, Etc., Only on Certain Terms
    	
 
    	
36
    
	
Section 802
    	
Successor Substituted
    	
 
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE NINE
    
	
 
    
	
SUPPLEMENTAL   INDENTURES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 901
    	
Supplemental Indentures   Without Consent of Holders
    	
 
    	
37
    
	
Section 902
    	
Supplemental Indentures   With Consent of Holders
    	
 
    	
39
    
	
Section 903
    	
Execution of Supplemental   Indentures
    	
 
    	
39
    
	
Section 904
    	
Effect of Supplemental   Indentures
    	
 
    	
40
    
	
Section 905
    	
Conformity with Trust   Indenture Act
    	
 
    	
40
    
	
Section 906
    	
Reference in Securities   to Supplemental Indentures
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TEN
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1001
    	
Payment of Principal,   Premium and Interest
    	
 
    	
40
    
	
Section 1002
    	
Maintenance of Office   or Agency
    	
 
    	
40
    
	
Section 1003
    	
Money for Securities   Payments to Be Held in Trust
    	
 
    	
41
    
	
Section 1004
    	
Statement by Officers   as to Default
    	
 
    	
41
    
	
Section 1005
    	
Existence
    	
 
    	
42
    
	
Section 1006
    	
Waiver of Certain   Covenants
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE ELEVEN
    
	
 
    
	
REDEMPTION OF   SECURITIES
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1101
    	
Applicability of   Article
    	
 
    	
42
    
	
Section 1102
    	
Election to Redeem;   Notice to Trustee
    	
 
    	
42
    
	
Section 1103
    	
Selection by Trustee of   Securities to Be Redeemed
    	
 
    	
42
    
	
Section 1104
    	
Notice of Redemption
    	
 
    	
43
    
	
Section 1105
    	
Deposit of Redemption   Price
    	
 
    	
44
    
	
Section 1106
    	
Securities Payable on   Redemption Date
    	
 
    	
44
    
	
Section 1107
    	
Securities Redeemed in   Part
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE TWELVE
    
	
 
    
	
SINKING FUNDS
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1201
    	
Applicability of   Article
    	
 
    	
45
    
	
Section 1202
    	
Satisfaction of Sinking   Fund Payments with Securities
    	
 
    	
45
    
	
Section 1203
    	
Redemption of   Securities for Sinking Fund
    	
 
    	
45
    

 

iii

 

TABLE OF CONTENTS

(con’t)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE THIRTEEN
    
	
 
    
	
DEFEASANCE AND   COVENANT DEFEASANCE
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1301
    	
Company’s Option to   Effect Defeasance or Covenant Defeasance
    	
 
    	
46
    
	
Section 1302
    	
Defeasance and   Discharge
    	
 
    	
46
    
	
Section 1303
    	
Covenant Defeasance
    	
 
    	
46
    
	
Section 1304
    	
Conditions to   Defeasance or Covenant Defeasance
    	
 
    	
47
    
	
Section 1305
    	
Deposited Money and   Government Obligations to Be Held in Trust; Miscellaneous Provisions
    	
 
    	
48
    
	
Section 1306
    	
Reinstatement
    	
 
    	
49
    

 

iv

 

INDENTURE, dated as of                                    , 20         , between Select Income REIT, a real estate investment trust organized and existing under the laws of the State of Maryland (herein called the “Company”) having its principal office at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and U.S. Bank National Association, a national banking organization organized and existing under the laws of the United States, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.

 

All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 101                               Definitions

 

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)                                 the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

(b)                                 all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

(c)                                  all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the Issue Date;

 

(d)                                 unless otherwise specifically set forth herein, all calculations or determinations of a Person shall be performed or made on a consolidated basis in accordance with generally accepted accounting principles;

 

(e)                                  unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

 

 

(f)                                   the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

“Act,” when used with respect to any Holder, has the meaning specified in Section 104.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.

 

“Authorized Newspaper” means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in each place in connection with which the term is used or in the financial community of each such place.  Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

 

“Bankruptcy Law” means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.

 

“Board” means either the board of trustees of the Company or any duly authorized committee of that board.

 

“Board Resolution” means a copy of a resolution certified by a Secretary or Assistant Secretary of the Company to have been duly adopted by the Board and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by a Managing Trustee, its Chief Executive Officer, its Chief Operating Officer, its Chief

 

2

 

Financial Officer, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

“Corporate Trust Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which on the date hereof is located at                                                        .

 

“corporation” means a corporation, association, partnership, limited liability, joint-stock or other company, real estate investment trust or business trust.

 

“Covenant Defeasance” has the meaning specified in Section 1303.

 

“Custodian” means any receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law.

 

“Defaulted Interest” has the meaning specified in Section 307.

 

“Defeasance” has the meaning specified in Section 1302.

 

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.

 

“Event of Default” has the meaning specified in Section 501.

 

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

 

“Expiration Date” has the meaning specified in Section 104.

 

“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 202 (or such legend as may be specified as contemplated by Section 301 for such Securities).

 

“Government Obligation” has the meaning specified in Section 1304.

 

“Holder” means a Person in whose name a Security is registered in the Security Register.

 

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.  The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.

 

“interest,” when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

3

 

“Issue Date” means the date of initial issuance of the Securities pursuant to this Indenture.

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

“Notice of Default” means a written notice of the kind specified in Section 501(d).

 

“Officer’s Certificate” means a certificate signed on behalf of the Company by a Managing Trustee, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Controller, the President, a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company and delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion of legal counsel addressed to the Trustee.  The counsel may be an employee of or counsel to the Company or any Affiliate.

 

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

 

(i)                                     Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(ii)                                  Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(iii)                               Securities as to which Defeasance has been effected pursuant to Section 1302 or satisfaction and discharge has been effected pursuant to Article Four; and

 

(iv)                              Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, or whether a quorum is present at a meeting of Holders of Securities, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,

 

4

 

determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, or upon any such determination as to the presence of a quorum, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

 

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.

 

“Responsible Officer,” when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have responsibility for the administration of this Indenture.

 

5

 

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

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

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

 

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

“Subsidiary” means any corporation or other Person of which a majority of (1) the voting power of the voting equity securities or (2) the outstanding equity interests is owned, directly or indirectly, by the Company or one or more other Subsidiaries of the Company.  For the purposes of this definition, “voting equity securities” means equity securities having voting power for the election of directors or persons serving comparable functions as directors, whether at all times or only so long as no senior class of security has such voting power by reason of any contingency.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

 

“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

 

Section 102                               Compliance Certificates and Opinions

 

Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act.  Each such certificate or opinion shall be given in the form of an Officer’s Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include,

 

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(i)                                     a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(ii)                                  a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii)                               a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv)                              a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

Section 103                               Form of Documents Delivered to Trustee

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 104                               Acts of Holders; Record Dates

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

 

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer

 

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authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof.  Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority.  The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

The ownership of Securities shall be proved by the Security Register.

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

 

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series; provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(b) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders

 

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and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that sets such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.

 

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

 

Section 105                               Notices, Etc., to Trustee and Company

 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

(i)                                     the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Select Income REIT [Title of Securities]; or

 

(ii)                                  the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

 

Section 106                               Notice to Holders; Waiver

 

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  Notwithstanding any other provision of this Indenture or any Security of any series other than a provision that expressly states that this paragraph is not applicable to the Securities of such series, when this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of Securities in global form (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Security (or its designee) pursuant to the customary procedures of such Depositary.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

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In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 107                               Conflict with Trust Indenture Act

 

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required thereunder to be a part of and govern this Indenture, the latter provision shall control.  If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

Section 108                               Effect of Headings and Table of Contents

 

The Article and Section headings herein and the Table of Contents hereof are for convenience only and shall not affect the construction hereof.

 

Section 109                               Successors and Assigns

 

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 110                               Separability Clause

 

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 111                               Benefits of Indenture

 

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 112                               Governing Law

 

This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York.

 

Section 113                               Legal Holidays

 

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity.

 

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Section 114                               Language of Notices, Etc.

 

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

 

Section 115                               No Personal Liability

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT.  ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

ARTICLE TWO

 

SECURITY FORMS

 

Section 201                               Forms Generally

 

The Securities of each series shall be in substantially the forms set forth in Exhibit A hereto or in such other form (including temporary or permanent global form) as shall be established by or pursuant to a Board Resolution or in one or more Officer’s Certificates or indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities as evidenced by their execution thereof.  If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities (or any such temporary global Security).

 

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

 

Section 202                               Form of Legend for Global Securities

 

Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN

 

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WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO SELECT INCOME REIT OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

Section 203                               Form of Trustee’s Certificate of Authentication

 

The Trustee’s certificates of authentication shall be in substantially the following form:

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

 

	
 
    	
 
    
	
 
    	
As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

Section 204                               Securities in Global Form

 

If Securities of or within a series are issuable in global form, as specified as contemplated by Section 301, then, notwithstanding clause (i) of Section 301 and the provisions of Section 302, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges.  Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order to be delivered to the Trustee pursuant to Section 303 or Section 304.  Subject to the provisions of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order.  If a Company Order pursuant to Section 303 or Section 304 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 102 and need not be accompanied by an Opinion of Counsel.

 

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The provisions of the last sentence of Section 303 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 303.

 

Notwithstanding the provisions of Section 307, unless otherwise specified as contemplated by Section 301, payment of principal of and any premium and interest on any Security in permanent global form shall be made to the Person or Persons specified therein.

 

ARTICLE THREE

 

THE SECURITIES

 

Section 301                               Amount Unlimited; Issuable in Series

 

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series.  There shall be either (i) established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officer’s Certificate, or (ii) established in one or more Officer’s Certificates or indentures supplemental hereto, prior to the issuance of Securities of any series,

 

(a)                                 the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series, except to the extent that additional Securities of an existing series are being issued);

 

(b)                                 any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

 

(c)                                  the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest and the extent to which, or the manner in which, any interest payable on a temporary global Security on an Interest Payment Date will be paid if other than in the manner provided in Section 304;

 

(d)                                 the date or dates on which the principal of any Securities of the series is payable;

 

(e)                                  the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, or the method by which such date or dates shall be determined, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date;

 

(f)                                   the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

 

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(g)                                  the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

 

(h)                                 the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(i)                                     if other than minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, the denominations in which Securities of such series shall be issuable;

 

(j)                                    whether the amount of payments of principal, premium, if any, or interest, if any, on the Securities of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more interest rate, currency, commodity, equity or other indices), and the manner in which such amounts shall be determined;

 

(k)                                 the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on any Securities of the series shall be payable, if other than the currency of the United States of America, and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of “Outstanding” in Section 101;

 

(l)                                     if the principal of and any premium and interest on the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies, including composite currencies, other than that or those in which the Securities are stated to be payable, the currency or currencies in which payment of the principal of and any premium and interest on Securities of such series as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

 

(m)                             if other than the principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

 

(n)                                 if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

 

(o)                                 any addition to or change in the provisions related to satisfaction and discharge in Article Four or defeasance in Article Thirteen, or the inapplicability of such Articles or provisions therein to the Securities of such series;

 

(p)                                 if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more temporary or permanent Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any

 

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such Global Security in addition to or in lieu of that set forth in Section 202 and any circumstances in addition to or in lieu of those set forth in clause (a) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

 

(q)                                 any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;

 

(r)                                    any addition to or change in the provisions set forth in Article Ten which applies to Securities of the series;

 

(s)                                   if applicable, that the Securities of the series are convertible into or exchangeable for any securities of any Person (including the Company), the period or periods within which, the price or prices at which and the terms and conditions upon which, and the limitations and restrictions, if any, upon which, any Securities of the series shall be so convertible or exchangeable, and any additions or changes to this Indenture, if any, to permit or facilitate such conversion or exchange;

 

(t)                                    the place or places where any Securities of the series may be surrendered for registration of transfer, where Securities of the series may be surrendered for exchange, where Securities of the series that are convertible or exchangeable may be surrendered for conversion or exchange, as applicable, and where notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served;

 

(u)                                 the form of the Securities of such series;

 

(v)                                 whether the Securities of such series are to be issued as Original Issue Discount Securities and the amount of discount with which such Securities may be issued;

 

(w)                               the guarantors, if any, of the Securities of such series, and the form and terms of the guarantees (including provisions relating to seniority or subordination of such guarantees and the release of the guarantors), if any, of any payment or other obligations on such Securities and any additions or changes to this Indenture to permit or facilitate guarantees of such Securities;

 

(x)                                 whether the Securities of such series are subject to subordination and the terms of such subordination;

 

(y)                                 if any payment or other obligations on Securities of such series are to be secured by any property, the nature of such security and provisions related thereto;

 

(z)                                  any restriction or condition on the transferability of the Securities of such series;

 

(aa)                          any addition or change in the provisions related to compensation and reimbursement of the Trustee which applies to Securities of such series;

 

(bb)                          whether and in what circumstances, and the currency in which, the Company will pay additional amounts to any Holder of Securities of the series that is not a United States Person (including the definition of that term) in respect of any tax, assessment or governmental charge and, if so, whether the Company will have the option to redeem such Securities rather than pay such additional amounts (and the terms of any such option);

 

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(cc)                            provisions, if any, granting special rights to Holders of Securities of such series upon the occurrence of specified events;

 

(dd)                          any addition or change in the provisions related to supplemental indentures set forth in Sections 901, 902 and 904 which applies to Securities of such series; and

 

(ee)                            any other terms of the Securities of such series (which terms shall not be inconsistent with the provisions of the Trust Indenture Act, but may modify, amend, supplement or delete any of the terms of this Indenture with respect to such series).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

 

All Securities of any one series need not be issued at the same time and, unless otherwise provided with respect to a series, a series may be reopened, without the consent of the Holders, for issuances of additional Securities of such series.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series.

 

Section 302                               Denominations

 

Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, any Securities of such series, other than Securities issued in global form (which may be of any denomination), shall be issuable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Section 303                               Execution, Authentication, Delivery and Dating

 

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President, one of its Vice Presidents or its Treasurer.  The signature of any of these officers on the Securities may be manual or facsimile.

 

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities.  If the forms or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(a)                                 if the forms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 201, that such forms have been established in conformity with the provisions of this Indenture;

 

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(b)                                 if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

 

(c)                                  that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

If such forms or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Notwithstanding the provisions of Section 301 and of the two preceding paragraphs, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraphs at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

 

Each Security shall be dated the date of its authentication.

 

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.  Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

Section 304                               Temporary Securities

 

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

 

If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay.  After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.  Until so exchanged, the

 

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temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.

 

Section 305                               Registration, Registration of Transfer and Exchange

 

The Company shall cause to be kept at an office or agency to be maintained by the Company in accordance with Section 1002 a register (being the combined register of the Security Registrar and all transfer agents designated pursuant to Section 1002 for the purpose of registration of transfer of Securities and sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and the registration of transfers of Securities.  The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company maintained pursuant to Section 1002 for such purpose in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

 

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency.  Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

 

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

 

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee or any transfer agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or the attorney of such Holder duly authorized in writing.

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

 

If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before any selection of Securities of that series to be redeemed and ending at the close of business on the day of the mailing of the relevant notice of redemption, or (B) to register the transfer of or exchange any Security so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

The provisions of clauses (a), (b) and (c) below shall apply only to Global Securities:

 

(a)                                 Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in

 

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part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered under the Exchange Act and, in the case of each of (A) and (B), a successor Depositary is not appointed by the Company within 90 days after such notice is received by the Company or the Company becomes aware of such cessation, respectively, (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Security Registrar has received a written request from an owner of a beneficial interest in such Global Security to receive registered securities or (iii) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301.

 

(b)                                 Subject to clause (a) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

 

(c)                                  Every Security authenticated and delivered upon registration of, transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

 

Section 306                               Mutilated, Destroyed, Lost and Stolen Securities

 

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company and the Trustee (a) evidence to their satisfaction of the destruction, loss or theft of any Security and (b) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

Notwithstanding the provisions of the previous two paragraphs, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

 

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The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

Section 307                               Payment of Interest; Interest Rights Preserved

 

Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

 

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

 

(a)                                 The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided.  Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)                                 The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

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Section 308                               Persons Deemed Owners

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Section 309                               Cancellation

 

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.  The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee.  No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order or, in the absence of such a Company Order, in the Trustee’s customary manner, which manner shall be communicated in writing to the Company.

 

Section 310                               Computation of Interest

 

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 311                               CUSIP Numbers

 

The Company, in issuing the Securities, may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use such “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company will notify the Trustee of any change in “CUSIP” numbers.

 

ARTICLE FOUR

 

SATISFACTION AND DISCHARGE

 

Section 401                               Satisfaction and Discharge of Indenture

 

This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

 

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(a)                                 either

 

(i)                                     all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

 

(ii)                                  all such Securities not theretofore delivered to the Trustee for cancellation

 

(A)                               have become due and payable, or

 

(B)                               will become due and payable at their Stated Maturity within one year, or

 

(C)                               are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

 

and the Company, in the case of (A), (B) or (C) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; provided that with respect to a Redemption Date, if all or a portion of the Redemption Price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the redemption date, the Redemption Price deposited shall be sufficient for purposes of this paragraph to the extent that the Redemption Price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit;

 

(b)                                 the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

(c)                                  the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge.

 

Section 402                               Application of Trust Money

 

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons

 

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entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

 

ARTICLE FIVE

 

REMEDIES

 

Section 501                               Events of Default

 

“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)                                 default in the payment of the principal of or any premium on any Security of that series at its Maturity; or

 

(b)                                 default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

 

(c)                                  default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series and continuance of such default for a period of 30 days; or

 

(d)                                 default in the performance of, or breach of, any covenant of the Company in this Indenture (other than a covenant a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least a majority in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(e)                                  the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, or (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; or

 

(f)                                   a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days; or

 

(g)                                  any other Event of Default provided with respect to Securities of that series.

 

Section 502                               Acceleration of Maturity; Rescission and Annulment

 

If an Event of Default (other than an Event of Default specified in Section 501(e) or 501(f)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than a majority of the principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of

 

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such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.  If an Event of Default specified in clause (e) or (f) of Section 501 with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

 

(a)                                 the Company has paid or deposited with the Trustee a sum sufficient to pay

 

(i)                                     all overdue interest on all Securities of that series,

 

(ii)                                  the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

 

(iii)                               to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

 

(iv)                              all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(b)                                 all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

 

No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

Section 503                               Collection of Indebtedness and Suits for Enforcement by Trustee

 

The Company covenants that if

 

(a)                                 default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

 

(b)                                 default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any such premium (if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium (if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

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If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem reasonably necessary to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

Section 504                               Trustee May File Proofs of Claim

 

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

 

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

Section 505                               Trustee May Enforce Claims Without Possession of Securities

 

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

Section 506                               Application of Money Collected

 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

FIRST:  To the payment of all amounts due the Trustee under Section 607;

 

SECOND:  To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and

 

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THIRD:  To the Company.

 

Section 507                               Limitation on Suits

 

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture or any Security of any series, unless

 

(a)                                 such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

 

(b)                                 the Holders of not less than a majority in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(c)                                  such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(d)                                 the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(e)                                  no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

 

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or any Security of any series to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture or any Security of any series, except in the manner herein or therein provided and for the equal and ratable benefit of all of such Holders.

 

Section 508                               Unconditional Right of Holders to Receive Principal, Premium and Interest

 

Notwithstanding any other provision of this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

Section 509                               Restoration of Rights and Remedies

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

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Section 510                               Rights and Remedies Cumulative

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 511                               Delay or Omission Not Waiver

 

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 512                               Control by Holders

 

The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that:

 

(a)                                 such direction shall not be in conflict with any rule of law or with this Indenture, and

 

(b)                                 the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

Section 513                               Waiver of Past Defaults

 

The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default

 

(a)                                 in the payment of the principal of or any premium or interest on any Security of such series, or

 

(b)                                 in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

 

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

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Section 514                               Undertaking for Costs

 

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company.

 

Section 515                               Waiver of Usury, Stay or Extension Laws

 

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE SIX

 

THE TRUSTEE

 

Section 601                               Certain Duties and Responsibilities

 

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act.  Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.  Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

Section 602                               Notice of Defaults

 

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in clause (d) of Section 501 with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof.  For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

 

Section 603                               Certain Rights of Trustee

 

Subject to the provisions of Section 601:

 

(a)                                 the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,

 

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request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)                                 any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board shall be sufficiently evidenced by a Board Resolution;

 

(c)                                  whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

 

(d)                                 the Trustee may consult with counsel of its own selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(e)                                  the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(f)                                   the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;

 

(g)                                  the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

 

(h)                                 the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(i)                                     the Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

 

(j)                                    the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and the Person employed to act hereunder.

 

Section 604                               Not Responsible for Recitals or Issuance of Securities

 

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any

 

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Authenticating Agent assumes any responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.  Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

Section 605                               May Hold Securities

 

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

Section 606                               Money Held in Trust

 

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

 

Section 607                               Compensation and Reimbursement

 

The Company agrees

 

(a)                                 to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(b)                                 except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

 

(c)                                  to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

 

Section 608                               Conflicting Interests

 

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.  To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series [or a trustee under — list here any prior indentures between the Company and the Trustee that have not been satisfied and discharged and that may be excluded by the proviso to Section 310(b)(1) of the Trust Indenture Act].

 

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Section 609                               Corporate Trustee Required; Eligibility

 

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series.  Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, and has a combined capital and surplus of at least $50,000,000.  If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

Section 610                               Resignation and Removal; Appointment of Successor

 

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

 

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company.  If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.

 

If at any time:

 

(i)                                     the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

(ii)                                  the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

(iii)                               the Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company,

 

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by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611.  If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company.  If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders of Securities of such series and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106.  Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

Section 611                               Acceptance of Appointment by Successor

 

In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (b) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (c) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee

 

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shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

 

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

Section 612                               Merger, Conversion, Consolidation or Succession to Business

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 613                               Preferential Collection of Claims Against Company

 

If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).  For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act:

 

(a)                                 “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

 

(b)                                 “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

 

Section 614                               Appointment of Authenticating Agent

 

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such

 

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series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company.  Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority.  If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607.

 

If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

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This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

 

	
 
    	
 
    
	
 
    	
As Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
As Authenticating Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities.

 

Section 615                               Rules by Trustee

 

The Trustee may make reasonable rules for any Act of Holders or a meeting of Holders of one or more series of Securities.

 

ARTICLE SEVEN

 

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 701                               Company to Furnish Trustee Names and Addresses of Holders

 

The Company will furnish or cause to be furnished to the Trustee

 

(a)                                 semi-annually, not later than 15 days after each Regular Record Date or in the case of any series of Securities on which semi-annual interest is not payable, not more than 15 days after such semi-annual dates specified by the Trustee, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the Regular Record Date or such semi-annual date, as the case may be, and

 

(b)                                 at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

 

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

 

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Section 702                               Preservation of Information; Communications to Holders

 

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

 

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

Section 703                               Reports by Trustee

 

The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

 

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company.  The Company will notify the Trustee when any Securities are listed on or delisted from any stock exchange.

 

Section 704                               Reports by Company

 

The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

 

ARTICLE EIGHT

 

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 801                               Company May Consolidate, Etc., Only on Certain Terms

 

The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person (other than a direct or indirect wholly owned subsidiary of the Company), and the Company shall not permit any Person (other than a direct or indirect wholly owned subsidiary of the Company) to consolidate with or merge into the Company, unless:

 

(a)                                 The Company is the surviving corporation (as defined herein) or, in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or

 

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substantially all of its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation (as so defined) organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

 

(b)                                 immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

(c)                                  the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 802                               Successor Substituted

 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease all or substantially all of the properties and assets of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section 901                               Supplemental Indentures Without Consent of Holders

 

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(a)                                 to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

 

(b)                                 to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or

 

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(c)                                  to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

 

(d)                                 to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or

 

(e)                                  to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or

 

(f)                                   to add guarantees of or to secure all or any series of the Securities; or

 

(g)                                  to establish the forms or terms of Securities of any series as permitted by Sections 201 and 301; or

 

(h)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or

 

(i)                                     to cure any ambiguity, to correct or supplement any provision contained herein or in any indenture supplemental hereto which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to conform the terms hereof, as amended and supplemented, that are applicable to the Securities of any series to the description of the terms of such Securities in the offering memorandum, prospectus supplement or other offering document applicable to such Securities at the time of initial sale thereof; or

 

(j)                                    to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance (whether legal or covenant defeasance) or satisfaction and discharge of any series of Securities; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

(k)                                 to prohibit the authentication and delivery of additional series of Securities; or

 

(l)                                     to add to or change or eliminate any provision of this Indenture as shall be necessary or desirable in accordance with any amendments to the Trust Indenture Act;

 

(m)                             to comply with the rules of any applicable Depositary; or

 

(n)                                 to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (n) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.

 

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Section 902                               Supplemental Indentures With Consent of Holders

 

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

 

(a)                                 change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

(b)                                 reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

 

(c)                                  modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Section 611 and clause (h) of Section 901.

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Section 903                               Execution of Supplemental Indentures

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

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Section 904                               Effect of Supplemental Indentures

 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 905                               Conformity with Trust Indenture Act

 

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

 

Section 906                               Reference in Securities to Supplemental Indentures

 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE TEN

 

COVENANTS

 

Section 1001                        Payment of Principal, Premium and Interest

 

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

Section 1002                        Maintenance of Office or Agency

 

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

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Section 1003                        Money for Securities Payments to Be Held in Trust

 

If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal and any premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 1004                        Statement by Officers as to Default

 

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or

 

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requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

 

Section 1005                        Existence

 

Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company.

 

Section 1006                        Waiver of Certain Covenants

 

Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to clause (r) of Section 301 or clause (b) or (g) of Section 901 for the benefit of the Holders of such series or in Section 1005, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

 

ARTICLE ELEVEN

 

REDEMPTION OF SECURITIES

 

Section 1101                        Applicability of Article

 

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.

 

Section 1102                        Election to Redeem; Notice to Trustee

 

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.  In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed (unless all of the Securities of a specified tenor are to be redeemed).  In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction.

 

Section 1103                        Selection by Trustee of Securities to Be Redeemed

 

If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single

 

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Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.  If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days (subject to Section 1104) prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

 

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

 

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part.  In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

 

Section 1104                        Notice of Redemption

 

Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, except that any notice of redemption may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a Defeasance of Securities pursuant to Article Thirteen hereof or a satisfaction and discharge of this Indenture pursuant to Article Four hereof.  In connection with any redemption of Securities, any such redemption may, at the Company’s discretion, be subject to satisfaction of one or more conditions precedent.  In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice may state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Company in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Company in its sole discretion) by the Redemption Date, or by the Redemption Date so delayed.

 

All notices of redemption shall state:

 

(a)                                 the Redemption Date,

 

(b)                                 the Redemption Price,

 

(c)                                  if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the

 

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Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

 

(d)                                 that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

 

(e)                                  the place or places where such Securities are to be surrendered for payment of the Redemption Price,

 

(f)                                   that the redemption is for a sinking fund, if such is the case,

 

(g)                                  the applicable “CUSIP” numbers, if any, and

 

(h)                                 if applicable, that such redemption may be subject to satisfaction of one or more conditions precedent.

 

A notice of redemption published as contemplated by Section 106 need not identify the particular Registered Securities to be redeemed.

 

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

 

Section 1105                        Deposit of Redemption Price

 

Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

Section 1106                        Securities Payable on Redemption Date

 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

 

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Section 1107                        Securities Redeemed in Part

 

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or the attorney of such Holder duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

 

ARTICLE TWELVE

 

SINKING FUNDS

 

Section 1201                        Applicability of Article

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities.

 

The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202.

 

Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

 

Section 1202                        Satisfaction of Sinking Fund Payments with Securities

 

The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited.  The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

Section 1203                        Redemption of Securities for Sinking Fund

 

Not less than 30 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered.  Not less than 15 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in

 

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Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

 

ARTICLE THIRTEEN

 

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 1301                        Company’s Option to Effect Defeasance or Covenant Defeasance

 

The Company may, at its option, at any time, elect to have either Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, upon compliance with the conditions set forth below in this Article.

 

Section 1302                        Defeasance and Discharge

 

Upon the Company’s exercise under Section 1301 hereof of the option to have this Section 1302 applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Securities on the date the conditions set forth in Section 1304 are satisfied (hereinafter “Defeasance”).  For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when such payments are due, (b) the Company’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (d) this Article.  Subject to compliance with this Article, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303.

 

Section 1303                        Covenant Defeasance

 

Upon the Company’s exercise of the option to have this Section 1303 applied to any Securities or any series of Securities, as the case may be, (a) the Company shall be released from its obligations with respect to such Securities under Section 801, Section 1005 and Section 1006 and any covenants provided pursuant to clause (r) of Section 301 or clause (b) or (g) of Section 901 for the benefit of the Holders of such Securities and (b) the occurrence of any event specified in clause (c), (d) (with respect to any of Section 801, Section 1005 or Section 1006 and any such covenants provided pursuant to clause (r) of Section 301 or clause (b) or (g) of Section 901) or (g) of Section 501 shall not be deemed to be an Event of Default on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or Article, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

 

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Section 1304                        Conditions to Defeasance or Covenant Defeasance

 

The following shall be the conditions to the application of either Section 1302 or Section 1303, as applicable, to any Securities or any series of Securities, as the case may be:

 

(a)                                 The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (i) money in an amount, or (ii) Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination thereof, in each case sufficient to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of, and any premium (if any) and interest on, such Securities on the respective Stated Maturities or the applicable Redemption Date, in accordance with the terms of this Indenture and such Securities; provided that with respect to a Redemption Date, if all or a portion of the Redemption Price is based on or consists of a redemption premium that is required to be calculated based on a treasury rate or other floating or adjustable rate a specified number of days prior to the Redemption Date, the Redemption Price deposited shall be sufficient for purposes of the immediately preceding sentence to the extent that the Redemption Price so deposited is calculated using an amount equal to such premium computed using such treasury rate or other floating or adjustable rate as of such specified number of days preceding the date of such deposit.  As used herein, “Government Obligations” means, with respect to any series of Securities, securities that are (x) direct obligations of the government that issued the currency in which such series is denominated (or, if such series is denominated in euros, the direct obligations of any government that is a member of the European Monetary Union) for the payment of which such government’s full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case, are not callable or redeemable at the option of the issuer thereof and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligation where the relevant government is the United States of America or a specific payment of principal of or interest on any such Government Obligation held by such custodian for the account of the holder of such depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of such Government Obligation or the specific payment of principal of or interest on such Government Obligation evidenced by such depositary receipt.

 

(b)                                 In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this Indenture, there has been a change in the applicable Federal income tax law, in either case (i) or (ii) to the effect that the Holders of the Outstanding Securities of such series will not recognize gain or loss for Federal income tax purposes as a result of such deposit, Defeasance and discharge and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge had not occurred.

 

(c)                                  In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize gain

 

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or loss for Federal income tax purposes as a result of such deposit and Covenant Defeasance and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance had not occurred.

 

(d)                                 No Event of Default with respect to the Securities of such series shall have occurred and be continuing at the time of such deposit (other than an Event of Default resulting from transactions occurring contemporaneously with the borrowing of funds, or the borrowing of funds, to be applied to such deposit or other indebtedness which is being repaid, repurchased, redeemed, defeased (whether legal or covenant defeasance) or discharged, and, in each case, the granting of liens in connection therewith).

 

(e)                                  Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture or any agreement or instrument governing any other indebtedness which is being repaid, repurchased, redeemed, defeased (whether legal or covenant defeasance) or discharged) to which the Company is a party or by which the Company is bound.

 

(f)                                   The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the Defeasance or the Covenant Defeasance have been satisfied.

 

The Defeasance or Covenant Defeasance will be effective on the day on which all of the applicable conditions above have been satisfied.  Upon satisfaction of such conditions, the Trustee shall, upon written request, execute proper instrument(s) acknowledging such Defeasance or Covenant Defeasance.

 

Section 1305                        Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions

 

Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively, for purposes of this Section 1305, as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and premium (if any) and interest, but such money need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations held by it as provided in Section 1304 hereof which, in the opinion or based on a report or certificate of a nationally recognized firm of independent public accountants, investment bank or appraisal firm expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance, as the case may be.

 

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Section 1306                        Reinstatement

 

If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1302 or 1303 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1302 or 1303; provided, however, that if the Company makes any payment of principal of (and premium, if any) or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of the Securities of such series to receive such payment from the money held by the Trustee or the Paying Agent.

 

ARTICLE FOURTEEN

 

GUARANTEES

 

[Provisions for Subsidiary Guarantees to be provided here, if applicable.]

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.  In proving the existence of this Indenture it shall not be necessary to produce more than one copy.

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.

 

	
 
    	
SELECT INCOME REIT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Base Indenture]

 

 

EXHIBIT A

 

FORM OF REGISTERED SECURITY

 

[Face of Registered Security]

 

	
No.
    	
 
    	
$                       
    

 

Select Income REIT, a real estate investment trust organized under the laws of Maryland (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to                               , or registered assigns, the principal sum of                              Dollars on                                      [If the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from                        or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on                  and              in each year, commencing                  , at the rate of        % per annum, until the principal hereof is paid or made available for payment; provided that any principal and premium (if any), and any such installment of interest, which is overdue shall bear interest at the rate of        % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the            or            (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

 

[If the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of        % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment.  Interest on any overdue principal or premium (if any) shall be payable on demand.  Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of        % per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment.  Interest on any overdue interest shall be payable on demand.]

 

Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in            , in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

A-1

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING SELECT INCOME REIT, DATED MARCH 9, 2012, AS AMENDED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SELECT INCOME REIT SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SELECT INCOME REIT.  ALL PERSONS DEALING WITH SELECT INCOME REIT IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF SELECT INCOME REIT FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
Dated:
    	
 
    	
Select Income REIT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
U.S. Bank National   Association, As Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    	
 
    

 

A-2

 

[Reverse of Registered Security]

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of        [, as supplemented] (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and            , as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof [if applicable, insert — , limited in aggregate principal amount to $        ].

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, [if applicable, insert — (1) on                 in any year commencing with the year         and ending with the year         through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert — on or after                   ,      ], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                ,   %, and if redeemed] during the 12-month period beginning                 of the years indicated,

 

	
Year
    	
 
    	
Redemption Price For
   Redemption Through Operation
   of the Sinking Fund
    	
 
    	
Redemption Price For
   Redemption Otherwise Than
   Through Operation of the Sinking
   Fund
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter at a Redemption Price equal to    % of the principal amount, together in the case of any such redemption [if applicable, insert — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail or pursuant to such rules and procedures of the Depositary that apply to such notices, (1) on                 in any year commencing with the year        and ending with the year        through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after                   ,      ], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning                 of the years indicated,

 

A-3

 

	
Year
    	
 
    	
[Redemption Price For
   Redemption Through Operation
   of
   the Sinking Fund]
    	
 
    	
Redemption Price [For
   Redemption Otherwise Than
   Through Operation of the
   Sinking Fund]
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter at a Redemption Price equal to    % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — Notwithstanding the foregoing, the Company may not, prior to                   ,      , redeem any Securities of this series as contemplated by [if applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than    % per annum.]

 

[If applicable, insert — The sinking fund for this series provides for the redemption on                   ,       in each year beginning with the year         and ending with the year         of [if applicable, insert — not less than $         (“mandatory sinking fund”) and not more than] $         aggregate principal amount of Securities of this series.  Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert — , in the inverse order in which they become due].]

 

[If the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[If applicable, insert — The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]

 

[If the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

 

[If the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.  Such amount shall be equal to [— insert formula for determining the amount.] Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the

 

A-4

 

Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or this Security or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or the attorney of such Holder duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $         and any integral multiple of $         in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is

 

A-5

 

registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

A-6

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