Document:

Exhibit 4.8

 

CALIPER LIFE SCIENCES, INC.

 

Issuer

 

AND

 

[   ]   Trustee

 

INDENTURE

 

Dated as of [    ]

 

Subordinated Debt Securities

 

 

CROSS-REFERENCE TABLE (1)

 

	
Section of
 Trust Indenture Act
 of 1939, as Amended
  	
 
  	
Section of
 Indenture
  
	
 
  	
 
  	
 
  
	
310(a).
  	
 
  	
7.09
  
	
310(b).
  	
 
  	
7.08
  
	
 
  	
 
  	
7.10
  
	
310(c).
  	
 
  	
Inapplicable
  
	
311(a).
  	
 
  	
7.13(a)
  
	
311(b).
  	
 
  	
7.13(b)
  
	
311(c).
  	
 
  	
Inapplicable
  
	
312(a)
  	
 
  	
5.02(a)
  
	
312(b).
  	
 
  	
5.02(b)
  
	
312(c).
  	
 
  	
5.02(c)
  
	
313(a).
  	
 
  	
5.04(a)
  
	
313(b).
  	
 
  	
5.04(a)
  
	
313(c).
  	
 
  	
5.04(a)
  
	
 
  	
 
  	
5.04(b)
  
	
313(d).
  	
 
  	
5.04(b)
  
	
314(a).
  	
 
  	
5.03
  
	
314(b).
  	
 
  	
Inapplicable
  
	
314(c).
  	
 
  	
13.06
  
	
314(d).
  	
 
  	
Inapplicable
  
	
314(e).
  	
 
  	
13.06
  
	
314(f).
  	
 
  	
Inapplicable
  
	
315(a).
  	
 
  	
7.01(a)
  
	
 
  	
 
  	
7.02
  
	
315(b).
  	
 
  	
6.07
  
	
315(c).
  	
 
  	
7.01
  
	
315(d).
  	
 
  	
7.01(b)
  
	
 
  	
 
  	
7.01(c)
  
	
315(e).
  	
 
  	
6.07
  
	
316(a).
  	
 
  	
6.06
  
	
 
  	
 
  	
8.04
  
	
316(b).
  	
 
  	
6.04
  
	
316(c).
  	
 
  	
8.01
  
	
317(a).
  	
 
  	
6.02
  
	
317(b).
  	
 
  	
4.03
  
	
318(a).
  	
 
  	
13.08
  

 

(1) This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

i

 

TABLE OF CONTENTS (2)

	
 
  	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE I
  	
 
  	
DEFINITIONS
  	
1
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 1.01
  	
 
  	
Definitions of Terms
  	
1
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE II
  	
 
  	
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
  	
5
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 2.01
  	
 
  	
Designation and Terms of Securities
  	
5
  
	
SECTION 2.02
  	
 
  	
Form of Securities and Trustee’s Certificate
  	
7
  
	
SECTION 2.03
  	
 
  	
Denominations: Provisions for Payment
  	
7
  
	
SECTION 2.04
  	
 
  	
Execution and Authentications
  	
9
  
	
SECTION 2.05
  	
 
  	
Registration of Transfer and Exchange
  	
10
  
	
SECTION 2.06
  	
 
  	
Temporary Securities
  	
11
  
	
SECTION 2.07
  	
 
  	
Mutilated, Destroyed, Lost or Stolen Securities
  	
11
  
	
SECTION 2.08
  	
 
  	
Cancellation
  	
12
  
	
SECTION 2.09
  	
 
  	
Benefits of Indenture
  	
12
  
	
SECTION 2.10
  	
 
  	
Authenticating Agent
  	
13
  
	
SECTION 2.11
  	
 
  	
Global Securities
  	
13
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE III
  	
 
  	
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
  	
14
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 3.01
  	
 
  	
Redemption
  	
14
  
	
SECTION 3.02
  	
 
  	
Notice of Redemption
  	
14
  
	
SECTION 3.03
  	
 
  	
Payment Upon Redemption
  	
16
  
	
SECTION 3.04
  	
 
  	
Sinking Fund
  	
16
  
	
SECTION 3.05
  	
 
  	
Satisfaction of Sinking Fund Payments with Securities
  	
17
  
	
SECTION 3.06
  	
 
  	
Redemption of Securities for Sinking Fund
  	
17
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE IV
  	
 
  	
COVENANTS
  	
17
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 4.01
  	
 
  	
Payment of Principal, Premium and Interest
  	
17
  
	
SECTION 4.02
  	
 
  	
Maintenance of Office or Agency
  	
17
  
	
SECTION 4.03
  	
 
  	
Paying Agents
  	
18
  
	
SECTION 4.04
  	
 
  	
Appointment to Fill Vacancy in Office of Trustee
  	
19
  
	
SECTION 4.05
  	
 
  	
Compliance with Consolidation Provisions
  	
19
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE V
  	
 
  	
SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
  	
19
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 5.01
  	
 
  	
Company to Furnish Trustee Names and Addresses of Securityholders
  	
19
  
	
SECTION 5.02
  	
 
  	
Preservation Of Information; Communications With Securityholders
  	
19
  
	
SECTION 5.03
  	
 
  	
Reports by the Company
  	
20
  
	
SECTION 5.04
  	
 
  	
Reports by the Trustee
  	
20
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE VI
  	
 
  	
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
  	
21
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 6.01
  	
 
  	
Events of Default
  	
21
  

 

ii

 

	
SECTION 6.02
  	
 
  	
Collection of Indebtedness and Suits for Enforcement by Trustee
  	
23
  
	
SECTION 6.03
  	
 
  	
Application of Moneys Collected
  	
24
  
	
SECTION 6.04
  	
 
  	
Limitation on Suits
  	
25
  
	
SECTION 6.05
  	
 
  	
Rights and Remedies Cumulative; Delay or Omission Not Waiver
  	
26
  
	
SECTION 6.06
  	
 
  	
Control by Securityholders
  	
26
  
	
SECTION 6.07
  	
 
  	
Undertaking to Pay Costs
  	
27
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE VII
  	
 
  	
CONCERNING THE TRUSTEE
  	
27
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 7.01
  	
 
  	
Certain Duties and Responsibilities of Trustee
  	
27
  
	
SECTION 7.02
  	
 
  	
Certain Rights of Trustee
  	
29
  
	
SECTION 7.03
  	
 
  	
Trustee Not Responsible for Recitals or Issuance of Securities
  	
30
  
	
SECTION 7.04
  	
 
  	
May Hold Securities
  	
30
  
	
SECTION 7.05
  	
 
  	
Moneys Held in Trust
  	
30
  
	
SECTION 7.06
  	
 
  	
Compensation and Reimbursement
  	
30
  
	
SECTION 7.07
  	
 
  	
Reliance on Officers’ Certificate
  	
31
  
	
SECTION 7.08
  	
 
  	
Disqualification; Conflicting Interests
  	
31
  
	
SECTION 7.09
  	
 
  	
Corporate Trustee Required; Eligibility
  	
31
  
	
SECTION 7.10
  	
 
  	
Resignation and Removal; Appointment of Successor
  	
32
  
	
SECTION 7.11
  	
 
  	
Acceptance of Appointment By Successor
  	
33
  
	
SECTION 7.12
  	
 
  	
Merger, Conversion, Consolidation or Succession to Business
  	
35
  
	
SECTION 7.13
  	
 
  	
Preferential Collection of Claims Against the Company
  	
35
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE VIII
  	
 
  	
CONCERNING THE SECURITYHOLDERS
  	
35
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 8.01
  	
 
  	
Evidence of Action by Securityholders
  	
35
  
	
SECTION 8.02
  	
 
  	
Proof of Execution by Securityholders
  	
36
  
	
SECTION 8.03
  	
 
  	
Who May be Deemed Owners
  	
36
  
	
SECTION 8.04
  	
 
  	
Certain Securities Owned by Company Disregarded
  	
36
  
	
SECTION 8.05
  	
 
  	
Actions Binding on Future Securityholders
  	
37
  
	
SECTION 8.06
  	
 
  	
Purposes for Which Meetings May Be Called
  	
37
  
	
SECTION 8.07
  	
 
  	
Call Notice and Place of Meetings
  	
37
  
	
SECTION 8.08
  	
 
  	
Persons Entitled To Vote at Meetings
  	
38
  
	
SECTION 8.09
  	
 
  	
Quorum; Action
  	
38
  
	
SECTION 8.10
  	
 
  	
Determination of Voting Rights; Conduct and Adjournment of Meetings
  	
38
  
	
SECTION 8.11
  	
 
  	
Counting Votes and Recording Action of Meetings
  	
39
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE IX
  	
 
  	
SUPPLEMENTAL INDENTURES
  	
40
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 9.01
  	
 
  	
Supplemental Indentures Without the Consent of Securityholders
  	
40
  
	
SECTION 9.02
  	
 
  	
Supplemental Indentures With Consent of Securityholders
  	
41
  
	
SECTION 9.03
  	
 
  	
Effect of Supplemental Indentures
  	
41
  
	
SECTION 9.04
  	
 
  	
Securities Affected by Supplemental Indentures
  	
42
  
	
SECTION 9.05
  	
 
  	
Execution of Supplemental Indentures
  	
42
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE X
  	
 
  	
SUCCESSOR ENTITY
  	
42
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 10.01
  	
 
  	
Company May Consolidate, Etc.
  	
42
  
	
SECTION 10.02
  	
 
  	
Successor Entity Substituted
  	
43
  
	
SECTION 10.03
  	
 
  	
Evidence of Consolidation, Etc. to Trustee
  	
43
  

 

iii

 

	
ARTICLE XI
  	
 
  	
SATISFACTION AND DISCHARGE
  	
44
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 11.01
  	
 
  	
Satisfaction and Discharge of Indenture
  	
44
  
	
SECTION 11.02
  	
 
  	
Discharge of Obligations
  	
44
  
	
SECTION 11.03
  	
 
  	
Deposited Moneys to be Held in Trust
  	
45
  
	
SECTION 11.04
  	
 
  	
Payment of Moneys Held by Paying Agents
  	
45
  
	
SECTION 11.05
  	
 
  	
Repayment to Company
  	
45
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE XII
  	
 
  	
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
  	
45
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 12.01
  	
 
  	
No Recourse.
  	
45
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE XIII
  	
 
  	
MISCELLANEOUS PROVISIONS
  	
46
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 13.01
  	
 
  	
Effect on Successors and Assigns.
  	
46
  
	
SECTION 13.02
  	
 
  	
Actions by Successor.
  	
46
  
	
SECTION 13.03
  	
 
  	
Surrender of Company Powers.
  	
46
  
	
SECTION 13.04
  	
 
  	
Notices.
  	
46
  
	
SECTION 13.05
  	
 
  	
Governing Law.
  	
47
  
	
SECTION 13.06
  	
 
  	
Treatment of Securities as Debt.
  	
47
  
	
SECTION 13.07
  	
 
  	
Compliance Certificates and Opinions.
  	
47
  
	
SECTION 13.08
  	
 
  	
Payments on Business Days.
  	
47
  
	
SECTION 13.09
  	
 
  	
Conflict with Trust Indenture Act.
  	
48
  
	
SECTION 13.10
  	
 
  	
Counterparts.
  	
48
  
	
SECTION 13.11
  	
 
  	
Separability.
  	
48
  
	
SECTION 13.12
  	
 
  	
Assignment.
  	
48
  
	
 
  	
 
  	
 
  	
 
  
	
ARTICLE XIV
  	
 
  	
SUBORDINATION OF SECURITIES
  	
48
  
	
 
  	
 
  	
 
  	
 
  
	
SECTION 14.01
  	
 
  	
Subordination Terms.
  	
48
  

 

(2) This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

iv

 

INDENTURE, dated as of [   ], by and between Caliper Life Sciences, Inc., a Delaware corporation (the “Company”), and [   ], as trustee (the “Trustee”):

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

 

WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

 

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

 

NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities:

 

ARTICLE I

 

DEFINITIONS

SECTION 1.01       Definitions of Terms.

 

The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular.  All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

 

“Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant to Section 2.10.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

“Board of Directors” means the Board of Directors of the Company or any duly authorized committee of such Board.

 

 

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

 

“Business Day” means, with respect to any series of Securities, any day other than a day on which Federal or State banking institutions in the Borough of Manhattan, the City and State of New York, are authorized or obligated by law, executive order or regulation to close.

 

“Certificate” means a certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company. The Certificate need not comply with the provisions of Section 13.07.

 

“Commission” means the Securities and Exchange Commission.

 

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

 

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at [ ], except that whenever a provision herein refers to an office or agency of the Trustee in the Borough of Manhattan, the City and State of New York, such office is located, at the date hereof, at [ ].

 

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

 

“Default” means an event which is, or after notice or lapse of time, or both, would constitute an Event of Default.

 

“Depositary” means, with respect to Securities of any series, for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or Section 2.11.

 

“Event of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Global Security” means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with this Indenture, which shall be registered in the name of the Depositary or its nominee.

 

“Governmental Obligations” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations

 

2

 

of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are non-callable 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 of 1933, as amended) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, 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 the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

 

“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.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof.

 

“Interest Payment Date,” when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

 

“Officers’ Certificate” means a certificate signed by the President or a Vice President and by the Chief Financial Officer, the Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller or the Secretary or an Assistant Secretary of the Company that is delivered to the Trustee in accordance with the terms hereof. Certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

 

“Opinion of Counsel” means a written opinion of counsel, who may be counsel to the Company (and may include directors or employees of the Company) and which opinion is acceptable to the Trustee which acceptance shall not be unreasonably withheld.

 

“Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article III provided, or provision satisfactory to the Trustee shall have been

 

3

 

made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

 

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

 

“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 2.07 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.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer of the Trustee, including any vice president, assistant vice president, secretary, assistant secretary, the treasurer, any assistant treasurer, the managing director 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 such officer’s knowledge of and familiarity with the particular subject.

 

“Securities” means the debt Securities authenticated and delivered under this Indenture.

 

“Security Register” has the meaning specified in Section 2.05.

 

“Security Registrar” has the meaning specified in Section 2.05.

 

“Securityholder,” “holder of Securities,” “registered holder,” or other similar term, means the Person or Persons in whose name or names a particular Security shall be registered in the Security Register.

 

“Subsidiary” means, with respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner.

 

“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 such successor Trustee. The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, subject to the provisions of Sections 9.01, 9.02, and 10.01, as in effect at the date of execution of this instrument; provided, however, that in the event the Trust Indenture Act is amended after such

 

4

 

date, Trust Indenture Act means, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended, or any successor statute.

 

“Voting Stock,” as applied to any Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

 

ARTICLE II

 

ISSUE, DESCRIPTION, TERMS, EXECUTION, 

REGISTRATION AND EXCHANGE OF SECURITIES

 

SECTION 2.01       Designation and Terms of Securities.

 

(a)           The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of a given series, there shall be established in or pursuant to a Board Resolution of the Company, and set forth in an Officers’ Certificate of the Company, or established in one or more indentures supplemental hereto:

 

(1)           the title of the Security of the series (which shall distinguish the Securities of the series from all other Securities);

 

(2)           the aggregate principal amount of the Securities of such series initially to be issued and any limit upon the aggregate principal amount of the Securities of that series that 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 that series);

 

(3)           the currency or units based on or relating to currencies in which debt securities of such series are denominated and the currency or units in which principal or interest or both will or may be payable;

 

(4)           the date or dates on which the principal of the Securities of the series is payable and the place(s) of payment;

 

(5)           the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

 

(6)           the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates, the place(s) of payment,

 

5

 

and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates or the method for determining such dates;

 

(7)           the right, if any, to extend the interest payment periods or to defer the payment of interest and the duration of such extension;

 

(8)           the period or periods within which, the price or prices at which and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option of the Company;

 

(9)           the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(10)         whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;

 

(11)         the form of the Securities of the series including the form of the Certificate of Authentication for such series;

 

(12)         if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

 

(13)         any and all other terms with respect to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;

 

(14)         whether the Securities are issuable as a Global Security and, in such case, the identity of the Depositary for such series;

 

(15)         whether the Securities will be convertible into shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible, including the conversion price and the conversion period;

 

(16)         if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01;

 

(17)         any additional or different Events of Default or restrictive covenants

 

6

 

provided for with respect to the Securities of the series; and

 

(18)         the subordination terms of the Securities of the 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 any such Board Resolution or in any indentures supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, 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 Officers’ Certificate of the Company setting forth the terms of the series.

 

Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates.

 

SECTION 2.02       Form of Securities and Trustee’s Certificate.

 

The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution of the Company and as set forth in an Officers’ Certificate of the Company and the and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that series may be listed, or to conform to usage.

 

SECTION 2.03       Denominations: Provisions for Payment.

 

The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(12). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series.  The principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of New York. Each Security shall be dated the date of its authentication.  Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

 

The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date

 

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is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.

 

Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

 

(1)           The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (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 such Security 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 not be more than 15 nor 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 mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register, 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.

 

(2)           The Company may make payment of any Defaulted Interest on any Securities 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.

 

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Unless otherwise set forth in a Board Resolution of the Company or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities with respect to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the last day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

 

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

 

SECTION 2.04       Execution and Authentications.

 

The Securities shall be signed on behalf of the Company by its President, or one of its Vice Presidents, or its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries, under its corporate seal attested by its Secretary or one of its Assistant Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company may use the facsimile signature of any Person who shall have been a President or Vice President thereof, or of any Person who shall have been a Treasurer or Assistant Treasurer thereof, or of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be the President or a Vice President, the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the Company. The seal of the Company may be in the form of a facsimile of such seal and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication.

 

A Security shall not be valid or obligatory for any purpose and shall not be entitled to any benefit under this Indenture, in each case, until authenticated with a certificate of authentication manually signed by an authorized signatory of the Trustee, or by an Authenticating Agent. Such certificate shall be conclusive evidence, and the only evidence, that the Security so authenticated has been duly authenticated and delivered hereunder and that the Security is entitled to the benefits of this Indenture. 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 written order of the Company for the authentication and delivery of such Securities, signed by its President or any Vice President and its Secretary or any Assistant Secretary, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

 

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

 

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Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture.

 

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 that is not reasonably acceptable to the Trustee.

 

SECTION 2.05       Registration of Transfer and Exchange.

 

(a)           Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the City and State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.

 

(b)           The Company shall keep, or cause to be kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other location designated by the Company a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

 

Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount.

 

All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

 

(c)           No service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or

 

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other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

 

(d)           The Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

 

SECTION 2.06                     Temporary Securities.

 

Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

 

SECTION 2.07                     Mutilated, Destroyed, Lost or Stolen Securities.

 

In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the

 

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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. In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

 

Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

SECTION 2.08                     Cancellation.

 

All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

 

SECTION 2.09                     Benefits of Indenture.

 

Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities (and, with respect to the provisions of Article XIV, the holders of Senior Indebtedness, as defined in any supplement to this Indenture pursuant to Article XIV) any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities (and, with respect to the provisions of Article XIV, the holders of Senior Indebtedness).

 

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SECTION 2.10                     Authenticating Agent.

 

So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, 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. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.

 

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.

 

SECTION 2.11                     Global Securities

 

(a)           If the Company shall establish pursuant to Section 2.01 that some or all of the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Securities of such series which are to be issued as a Global Security, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

 

(b)           Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee

 

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of such successor Depositary.

 

(c)           If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and subject to Section 2.05, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and subject to Section 2.05, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

 

ARTICLE III

 

REDEMPTION OF SECURITIES AND

SINKING FUND PROVISIONS

 

SECTION 3.01                     Redemption.

 

The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

 

SECTION 3.02                     Notice of Redemption.

 

(a)           In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with the right

 

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reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series. 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 Officers’ Certificate evidencing compliance with any such restriction.

 

Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in whole or in part shall specify the particular Securities to be so redeemed. In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

(b)           If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 30 days’ notice in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by

 

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the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.

 

SECTION 3.03                     Payment Upon Redemption.

 

(a)           If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

 

(b)           Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

 

SECTION 3.04                     Sinking Fund.

 

The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series.

 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series 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 Securities of any series is herein referred to as an “optional sinking fund payment.” If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

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SECTION 3.05                     Satisfaction of Sinking Fund Payments with Securities.

 

The Company (i) may deliver Outstanding Securities of a series (other than any Securities previously called for redemption) and (ii) may apply as a credit Securities of a series that 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 the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

SECTION 3.06                     Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before 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 Section 3.02 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 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01                     Payment of Principal, Premium and Interest.

 

The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities.

 

SECTION 4.02                     Maintenance of Office or Agency.

 

So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented or surrendered for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by its President or a Vice President and delivered to the trustee, designate some

 

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other office or agency for such purposes or any of them. 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, 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, notices and demands.

 

SECTION 4.03                     Paying Agents.

 

(a)           If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:

 

(1)           that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

 

(2)           that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

 

(3)           that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

 

(4)           that it will perform all other duties of paying agent as set forth in this Indenture.

 

(b)           If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient with monies held by all other paying agents to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. 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 (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (an premium, if any) 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 this

 

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action or failure so to act.

 

(c)           Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) 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 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 terms and conditions 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.

 

SECTION 4.04                     Appointment to Fill Vacancy in Office of Trustee.

 

The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

SECTION 4.05                     Compliance with Consolidation Provisions.

 

The Company will not, while any of the Securities remain Outstanding, consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or convey all or substantially all of its property to any other company unless the provisions of Article X hereof are complied with.

 

ARTICLE V

 

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

SECTION 5.01                     Company to Furnish Trustee Names and Addresses of Securityholders.

 

If the Company is not the Security Register, the Company will furnish or use reasonable efforts to cause to be furnished to the Trustee (a) on each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company 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; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

 

SECTION 5.02                     Preservation Of Information; Communications With Securityholders.

 

(a)           The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the

 

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names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity) and shall otherwise comply with Section 312(a) of the Trust Indenture Act.

 

(b)                                 The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

(c)                                  Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities.

 

SECTION 5.03                     Reports by the Company.

 

(a)                                 The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the Commission. The Company also shall comply with the other provisions of Section 314(a) of the Trust Indenture Act.

 

(b)                                 The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations.

 

(c)                                  The Company covenants and agrees to transmit by mail, first class postage prepaid, or reputable over-night delivery service that provides for evidence of receipt, to the Securityholders, as their names and addresses appear upon the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

 

SECTION 5.04                     Reports by the Trustee.

 

(a)                                 The Trustee shall transmit to holders as provided in Section 313 of the Trust

 

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Indenture Act such reports concerning the Trustee and its actions under this Indenture as may be required by Section 313 of the Trust Indenture Act at the times and in the manner provided by the Trust Indenture Act.

 

(b)                                 A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each stock exchange upon which any Securities are listed (if so listed) and, if required by Section 313 of the Trust Indenture Act, also with the Commission. The Company agrees to notify the Trustee when any Securities become listed on any stock exchange.

 

ARTICLE VI

 

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

 

SECTION 6.01                     Events of Default.

 

(a)                                 Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

 

(1)                                 the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and continuance of such default for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;

 

(2)                                 the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

 

(3)                                 the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or

 

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certified mail, or to the Company and the Trustee by the holders of not less than a majority in principal amount of the Securities of that series at the time Outstanding;

 

(4)                                 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, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

 

(5)                                 a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company 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 consecutive days.

 

(b)                                 In each and every such case, unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal (or, if any Securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series pursuant to Section 2.01(a)(16)) of (and premium, if any, on) and accrued and unpaid interest, if any, on all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. Notwithstanding the foregoing, the payment of such principal (or, if any Securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series pursuant to Section 2.01(a)(16)) of (and premium, if any, on) and accrued and unpaid interest, if any, on the Securities of such series shall remain subordinated to the extent provided in Article XIV.

 

(c)                                  At any time after the principal of the Securities of that series shall have been so declared due and payable, and before a judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder (or, by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting), by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration and (ii) any and all Events of Default under this Indenture with respect to such series, other than the nonpayment of

 

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principal of (and premium, if any, on) and accrued and unpaid interest, if any, on Securities of that series that shall have become due solely because of such acceleration, shall have been remedied, cured or waived as provided in Section 6.06.  No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

 

(d)                                 In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company, and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.

 

SECTION 6.02                     Collection of Indebtedness and Suits for Enforcement by Trustee.

 

(a)                                 The Company covenants that (1) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 90 Business Days, or (2) in case it shall default in the payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.

 

(b)                                 If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or other obligor upon the Securities of that series, wherever situated.

 

(c)                                  In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affected the

 

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Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for the entire amount due and payable by the Company under this Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.

 

(d)                                 All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or 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 payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series.

 

In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

 

SECTION 6.03                     Application of Moneys Collected.

 

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

 

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FIRST:                                                        To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06;

 

SECOND:                                         To the payment of all Senior Indebtedness of the Company if and to the extent required by Article XIV; and

 

THIRD:                                                   To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, 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 premium, if any) and interest, respectively.

 

SECTION 6.04                     Limitation on Suits.

 

No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than a majority in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; and (iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 60 day period, the holders of a majority in principal amount of the Securities of that series (or such amount as shall have acted at a meeting of the holders of Securities of such series pursuant to the provisions of this Indenture) do not give the Trustee a direction inconsistent with the request; provided, however, that no one or more of such holders may use this Indenture to prejudice the rights of another holder or to obtain preference or priority over another holder.

 

Notwithstanding anything contained herein to the contrary, any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all

 

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holders of Securities of such series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

SECTION 6.05                     Rights and Remedies Cumulative; Delay or Omission Not Waiver.

 

(a)                                 Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities.

 

(b)                                 No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or on acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

 

SECTION 6.06                     Control by Securityholders.

 

The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.01, 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 such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the rights of holders of Securities of any other series at the time Outstanding determined in accordance with Section 8.01. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability.

 

The holders either (a) through the written consent of not less than a majority in aggregate principal amount of the Securities of any series at the time Outstanding or (b) by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, by the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)) and except in respect a provision hereof which, under Section

 

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9.02, cannot be modified or amended without the consent of the holders of each Outstanding Security affected; provided however that this Section shall not limit the right of holders of Securities of a series to rescind and annul any acceleration as set forth in Section 6.01. Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. The provisions which otherwise would be automatically deemed to be contained in this Indenture pursuant to Section 316(a)(1) of the Trust Indenture Act are hereby expressly excluded from this Indenture, except to the extent such provisions are expressly included herein.

 

SECTION 6.07                     Undertaking to Pay Costs.

 

All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, 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 or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

 

ARTICLE VII

 

CONCERNING THE TRUSTEE

 

SECTION 7.01                     Certain Duties and Responsibilities of Trustee.

 

(a)                                 The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

(b)                                 No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own

 

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willful misconduct, except that:

 

(1)                                 prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

 

(i)                                     the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                                  in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirement of this Indenture;

 

(2)                                 the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee, was negligent in ascertaining the pertinent facts;

 

(3)                                 the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

 

(4)                                 None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

 

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SECTION 7.02                     Certain Rights of Trustee.

 

Except as otherwise provided in Section 7.01:

 

(a)                                 The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security 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, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically prescribed herein);

 

(c)                                  The Trustee may consult with counsel 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 or suffered or omitted hereunder in good faith and in reliance thereon;

 

(d)                                 The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived) to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

 

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

 

(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, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security

 

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afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and

 

(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.

 

SECTION 7.03                                                                    Trustee Not Responsible for Recitals or Issuance of Securities.

 

(a)                                  The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

 

(b)                                 The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

 

(c)                                  The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

 

SECTION 7.04                                                                    May Hold Securities.

 

The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

 

SECTION 7.05                                                                    Moneys Held in Trust.

 

Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but 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 moneys received by it hereunder except such as it may agree with the Company to pay thereon.

 

SECTION 7.06                                                                    Compensation and Reimbursement.

 

(a)                                  The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), as the Company, and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the

 

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Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in the premises.

 

(b)                                 The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

 

SECTION 7.07                                                                    Reliance on Officers’ Certificate.

 

Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

 

SECTION 7.08                                                                    Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

SECTION 7.09                                                                    Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority. If such corporation publishes reports of condition

 

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at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee.  In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

 

SECTION 7.10                                                                    Resignation and Removal; Appointment of Successor.

 

(a)                                  The Trustee or any successor hereafter appointed, may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register.  Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing 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 Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b)                                 In case at any time any one of the following shall occur:

 

(1)                                  the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or

 

(2)                                  the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

 

(3)                                  the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, 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, the Company may remove the Trustee with respect to all Securities and appoint a successor

 

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trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, unless the Trustee’s duty to resign is stayed as provided herein, any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)                                  The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.

 

(d)                                 Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

(e)                                  Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.

 

SECTION 7.11                                                                    Acceptance of Appointment By Successor.

 

(a)                                  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.

 

(b)                                 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 (1) 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

 

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Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) 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 (3) 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, 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 that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture, the 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.

 

(c)                                  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 paragraph (a) or (b) of this Section, as the case may be.

 

(d)                                 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.

 

(e)                                  Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.

 

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SECTION 7.12                                                                    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 the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. 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 7.13                                                                    Preferential Collection of Claims Against the Company.

 

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

ARTICLE VIII

 

CONCERNING THE SECURITYHOLDERS

 

SECTION 8.01                                                                    Evidence of Action by Securityholders.

 

Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in Person or by agent or proxy appointed in writing.

 

If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the

 

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Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

 

SECTION 8.02                                                                    Proof of Execution by Securityholders.

 

Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

 

(a)                                  The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

 

(b)                                 The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

 

(c)                                  The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

 

SECTION 8.03                                                                    Who May be Deemed Owners.

 

Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

 

SECTION 8.04                                                                    Certain Securities Owned by Company Disregarded.

 

In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent of waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other

 

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obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 

SECTION 8.05                                                                    Actions Binding on Future Securityholders.

 

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

 

SECTION 8.06                                                                    Purposes for Which Meetings May Be Called.

 

A meeting of holders of any series of Securities may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by holders of such series of Securities.

 

Notwithstanding anything contained in this Article VIII, the Trustee may, during the pendency of a Default or an Event of Default, call a meeting of holders of any series of Securities in accordance with its standard practices.

 

SECTION 8.07                                                                    Call Notice and Place of Meetings.

 

(a)                                  The Trustee may at any time call a meeting of holders of any series of Securities for any purpose specified in Section 8.06 hereof, to be held at such time and at such place in The City of New York or Boston, Massachusetts. Notice of every meeting of holders of any series of Securities, setting forth the time and the place of such meeting, in general terms the action proposed to be taken at such meeting and the percentage of the principal amount of the Outstanding Securities of such series which shall constitute a quorum at such meeting, shall be given, in the manner provided in Section 13.04 hereof, not less than 21 nor more than 180 days prior to the date fixed for the meeting to holders of Outstanding Securities of such series.

 

(b)                                 In case at any time the Company, pursuant to a Board Resolution, or the holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the holders of Securities of such series for any purpose specified in Section 8.06 hereof, by written request

 

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setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the holders of Securities of such series in the amount specified, as the case may be, may determine the time and the place in The City of New York or Boston, Massachusetts for such meeting and may call such meeting for such purposes by giving notice thereof as provided in paragraph (a) of this Section.

 

SECTION 8.08                                                                    Persons Entitled To Vote at Meetings.

 

To be entitled to vote at any meeting of holders of Securities of a given series, a Person shall be (a) a holder of one or more Outstanding Securities of such series or (b) a Person appointed by an instrument in writing as proxy for a holder or holders of one or more Outstanding Securities of such series by such holder or holders. The only Persons who shall be entitled to be present or to speak at any meeting of holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

SECTION 8.09                                                                    Quorum; Action.

 

The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of a given series shall constitute a quorum with respect to a meeting of holders of Outstanding Securities of such series. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of holders of Securities of such series, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 8.07(a) hereof, except that such notice need be given only once and not less than five days prior to the date on which the meeting is scheduled to be reconvened.

 

At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid, any resolution and all matters (except as limited by the proviso to the first paragraph of Section 9.02 hereof) shall be effectively passed and decided if passed or decided by the Persons entitled to vote not less than a majority in aggregate principal amount of Outstanding Securities of a series represented and voting at such meeting with respect to a meeting of holders of Outstanding Securities of such series.

 

Any resolution passed or decisions taken at any meeting of holders of Securities duly held in accordance with this Section shall be binding on all the holders of Securities of such series, whether or not present or represented at the meeting.

 

SECTION 8.10                                                                    Determination of Voting Rights; Conduct and Adjournment of Meetings.

 

(a)                                  Notwithstanding any other provisions of this Indenture, the Trustee may make

 

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such reasonable regulations as it may deem advisable for any meeting of holders of Securities in regard to proof of the holding of Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate.

 

(b)                                 The Trustee shall, by an instrument in writing, appoint a temporary chairman (which may be the Trustee) of the meeting, unless the meeting shall have been called by the Company or by holders of Securities of a given series as provided in Section 8.07(b) hereof, in which case the Company or the holders of Securities of such series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting.

 

(c)                                  At any meeting, each holder of a Security of the series in respect of which such meeting is being held or proxy shall be entitled to one vote for each $1,000 principal amount of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security of such series challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding.  The chairman of the meeting shall have no right to vote, except as a holder of a Security of such series or proxy.

 

(d)                                 Any meeting of holders of Securities duly called pursuant to Section 8.07 hereof at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of the series in respect of which such meeting is being held represented at the meeting, and the meeting may be held as so adjourned without further notice.

 

SECTION 8.11                                                                    Counting Votes and Recording Action of Meetings.

 

The vote upon any resolution submitted to any meeting of holders of Securities of a given series shall be by written ballots on which shall be subscribed the signatures of the holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them.  The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting.  A record, at least in duplicate, of the proceedings of each meeting of holders of Securities of such series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 8.07 hereof and, if applicable, Section 8.09 hereof. Each copy shall be signed and verified by the affidavits of

 

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the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.  Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.01                                                                    Supplemental Indentures Without the Consent of Securityholders.

 

In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

 

(a)                                  cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein or which is otherwise defective, or make any other provisions with respect to matters or questions arising under this Indenture which the Company and the Trustee may deem necessary or desirable and which shall not be inconsistent with the provisions of this Indenture;

 

(b)                                 to comply with Article X;

 

(c)                                  to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(d)                                 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;

 

(e)                                  to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as herein set forth;

 

(f)                                    to make any change that does not adversely affect the rights of any Securityholder in any material respect;

 

(g)                                 to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities; or

 

(h)                                 comply with the requirements of the Commission in order to effect or maintain

 

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the qualification of this Indenture under the Trust Indenture Act.

 

The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

SECTION 9.02                                                                    Supplemental Indentures With Consent of Securityholders.

 

With the written consent of the holders of at least a majority in aggregate principal amount of the Outstanding Securities of any series or by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, by the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting, the Company, when authorized by Board Resolutions, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, or any consent or waiver, (iii) reduce the principal amount of discount securities payable upon acceleration of the maturity of any Securities of any series or (iv) make the principal of or premium or interest on any Security of a series payable in currency or currency units other than that stated in the Securities of such series.

 

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

 

SECTION 9.03                                                                    Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the

 

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terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION 9.04                                                                    Securities Affected by Supplemental Indentures.

 

Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

 

SECTION 9.05                                                                    Execution of Supplemental Indentures.

 

Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture.  The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided, however, that such Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

 

Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

ARTICLE X

 

SUCCESSOR ENTITY

 

SECTION 10.01                                                              Company May Consolidate, Etc.

 

Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its

 

42

 

successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property.

 

SECTION 10.02                                                              Successor Entity Substituted.

 

(a)                                  In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of, premium, if any, and interest on all of the Securities of all series Outstanding and the due and punctual performance of all of the covenants and conditions of this Indenture or established with respect to each series of the Securities pursuant to Section 2.01 to be performed by the Company with respect to each series, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

(b)                                 In case of any such consolidation, merger, sale, conveyance, transfer or other disposition such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

(c)                                  Nothing contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Company).

 

SECTION 10.03                                                              Evidence of Consolidation, Etc. to Trustee.

 

The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or other disposition, and any such assumption, comply with the provisions of this Article.

 

43

 

ARTICLE XI

 

SATISFACTION AND DISCHARGE

 

SECTION 11.01                                                              Satisfaction and Discharge of Indenture.

 

If at any time:  (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07) and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations sufficient or a combination thereof, sufficient (assuming that no tax liability will be imposed on the Trustee) in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

 

SECTION 11.02                                                              Discharge of Obligations.

 

If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid. Thereafter, Sections 7.06 and 11.05 shall survive.

 

44

 

SECTION 11.03                                                              Deposited Moneys to be Held in Trust.

 

Subject to Section 11.05, all moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

 

SECTION 11.04                                                              Payment of Moneys Held by Paying Agents.

 

In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

 

SECTION 11.05                                                              Repayment to Company.

 

Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, shall be repaid to the Company or (if then held by the Company) shall be discharged from such trust in each case, promptly after the end of any such two-year period or, at the request of the Company, on a later date specified by the Company; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof.

 

ARTICLE XII

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

SECTION 12.01                                                              No Recourse.

 

No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained

 

45

 

in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

 

ARTICLE XIII

 

MISCELLANEOUS PROVISIONS

 

SECTION 13.01                                                              Effect on Successors and Assigns.

 

All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

SECTION 13.02                                                              Actions by Successor.

 

Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

 

SECTION 13.03                                                              Surrender of Company Powers.

 

The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.

 

SECTION 13.04                                                              Notices.

 

Except as otherwise expressly provided herein any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Securities to or on the Company may be given or served by being deposited first class postage prepaid in a post-office letterbox addressed (until another address is filed in writing by the Company with the Trustee), as follows: [   ].  Any notice, election, request or demand by the Company or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee. Any notice or communication to a holder shall be mailed by first-class mail to his address shown on the Security Register kept by the Security Registrar.  Failure to mail a notice or communication to a holder or any defect in such notice or communication shall not affect its sufficiency with respect to other holders.  If a notice or communication is mailed or sent in the manner provided above within the time prescribed, it is duly given as of the date it is mailed, whether or not the addressee receives it, except that notice to the Trustee or the Company shall only be effective upon receipt thereof by the Trustee or the Company, respectively. If the

 

46

 

Company mails a notice or communication to holders of Securities, it shall mail a copy to the Trustee at the same time.

 

SECTION 13.05                                                              Governing Law.

 

This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State.

 

SECTION 13.06                                                              Treatment of Securities as Debt.

 

It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.

 

SECTION 13.07                                                              Compliance Certificates and Opinions.

 

(a)                                  Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company, shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

(b)                                 Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

SECTION 13.08                                                              Payments on Business Days.

 

Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

 

47

 

SECTION 13.09                                                              Conflict with Trust Indenture Act.

 

If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

SECTION 13.10                                                              Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

SECTION 13.11                                                              Separability.

 

In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

SECTION 13.12                                                              Assignment.

 

The Company will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly-owned Subsidiary of the Company, provided that, in the event of any such assignment, the Company, will remain liable for all such obligations. Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties thereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto.

 

ARTICLE XIV

 

SUBORDINATION OF SECURITIES

 

SECTION 14.01                                                              Subordination Terms.

 

The payment by the Company of the principal of, premium, if any, and interest on any series of Securities issued hereunder shall be subordinated to the extent set forth in an indenture supplemental hereto relating to the Securities of such series.

 

48

 

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

 

	
 
  	
CALIPER LIFE SCIENCES, INC.
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
[                                         ],
  
	
 
  	
As Trustee
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:
  

 

49EXHIBIT 4.1

 

EXECUTION VERSION

 

 

 

 

INTERLINE BRANDS, INC.,

as Issuer,

 

and

 

GUARANTORS NAMED HEREIN,

as Guarantors,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

INDENTURE

 

 

Dated as of November 16, 2010

 

 

7.00% Senior Subordinated Notes due 2018

 

 

 

 

CROSS-REFERENCE TABLE

 

	
TIA
  	
 
  	
Indenture
  
	
Section
  	
 
  	
Section
  
	
 
  	
 
  	
 
  
	
310 (a)(1)
  	
 
  	
7.10
  
	
(a)(2)
  	
 
  	
7.10
  
	
(a)(3)
  	
 
  	
N.A.
  
	
(a)(4)
  	
 
  	
N.A.
  
	
(a)(5)
  	
 
  	
7.10
  
	
(b)
  	
 
  	
7.10
  
	
(c)
  	
 
  	
N.A.
  
	
311 (a)
  	
 
  	
7.11
  
	
(b)
  	
 
  	
7.11
  
	
(c)
  	
 
  	
N.A.
  
	
312 (a)
  	
 
  	
2.05
  
	
(b)
  	
 
  	
13.03
  
	
(c)
  	
 
  	
13.03
  
	
313 (a)
  	
 
  	
7.06
  
	
(b)(1)
  	
 
  	
7.06
  
	
(b)(2)
  	
 
  	
7.06
  
	
(c)
  	
 
  	
7.06; 13.02
  
	
(d)
  	
 
  	
7.06
  
	
314 (a)
  	
 
  	
4.14; 13.02; 13.05
  
	
(b)
  	
 
  	
N.A.
  
	
(c)(1)
  	
 
  	
7.02; 13.04; 13.05
  
	
(c)(2)
  	
 
  	
7.02; 13.04; 13.05
  
	
(c)(3)
  	
 
  	
N.A.
  
	
(d)
  	
 
  	
N.A.
  
	
(e)
  	
 
  	
13.05
  
	
(f)
  	
 
  	
N.A.
  
	
315 (a)
  	
 
  	
7.01
  
	
(b)
  	
 
  	
7.05; 13.02
  
	
(c)
  	
 
  	
7.01
  
	
(d)
  	
 
  	
6.05; 7.01
  
	
(e)
  	
 
  	
6.11
  
	
316 (a)(last sentence)
  	
 
  	
2.09
  
	
(a)(1)(A)
  	
 
  	
6.05
  
	
(a)(1)(B)
  	
 
  	
6.04
  
	
(a)(2)
  	
 
  	
9.02
  
	
(b)
  	
 
  	
6.07
  
	
(c)
  	
 
  	
9.04
  
	
317 (a)(1)
  	
 
  	
6.08
  
	
(a)(2)
  	
 
  	
6.09
  
	
(b)
  	
 
  	
2.04
  
	
318 (a)
  	
 
  	
13.01
  
	
(b)
  	
 
  	
N.A.
  
	
(c)
  	
 
  	
13.01
  

 

N.A. means Not Applicable

 

 

Note:                   This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture

 

 

TABLE OF CONTENTS

 

	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  
	
ARTICLE ONE
  
	
 
  
	
DEFINITIONS AND INCORPORATION BY REFERENCE
  
	
 
  	
 
  	
 
  
	
SECTION 1.01.
  	
Definitions
  	
1
  
	
SECTION 1.02.
  	
Other Definitions
  	
34
  
	
SECTION 1.03.
  	
Incorporation by Reference of TIA
  	
36
  
	
SECTION 1.04.
  	
Rules of Construction
  	
36
  
	
 
  	
 
  	
 
  
	
ARTICLE TWO
  
	
 
  
	
THE NOTES
  
	
 
  	
 
  	
 
  
	
SECTION 2.01.
  	
Form and Dating
  	
37
  
	
SECTION 2.02.
  	
Execution and Authentication
  	
38
  
	
SECTION 2.03.
  	
Registrar and Paying Agent
  	
39
  
	
SECTION 2.04.
  	
Paying Agent To Hold Assets in Trust
  	
39
  
	
SECTION 2.05.
  	
Holder Lists
  	
39
  
	
SECTION 2.06.
  	
Transfer and Exchange
  	
39
  
	
SECTION 2.07.
  	
Replacement Notes
  	
40
  
	
SECTION 2.08.
  	
Outstanding Notes
  	
40
  
	
SECTION 2.09.
  	
Treasury Notes
  	
41
  
	
SECTION 2.10.
  	
Temporary Notes
  	
41
  
	
SECTION 2.11.
  	
Cancellation
  	
41
  
	
SECTION 2.12.
  	
Defaulted Interest
  	
41
  
	
SECTION 2.13.
  	
CUSIP Number
  	
42
  
	
SECTION 2.14.
  	
Deposit of Moneys
  	
42
  
	
SECTION 2.15.
  	
Book-Entry Provisions for Global Notes
  	
42
  
	
SECTION 2.16.
  	
Special Transfer Provisions
  	
43
  
	
SECTION 2.17.
  	
Issuance of Additional Notes
  	
54
  
	
 
  	
 
  	
 
  
	
ARTICLE THREE
  
	
 
  
	
REDEMPTION
  
	
 
  	
 
  	
 
  
	
SECTION 3.01.
  	
Notices to Trustee
  	
55
  
	
SECTION 3.02.
  	
Selection of Notes To Be Redeemed
  	
55
  
	
SECTION 3.03.
  	
Notice of Redemption
  	
55
  
	
SECTION 3.04.
  	
Effect of Notice of Redemption
  	
56
  
	
SECTION 3.05.
  	
Deposit of Redemption Price
  	
56
  
	
SECTION 3.06.
  	
Notes Redeemed in Part
  	
57
  
	
SECTION 3.07.
  	
Mandatory Redemption
  	
57
  
	
SECTION 3.08.
  	
Optional Redemption
  	
57
  

 

i

 

	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  
	
ARTICLE FOUR
  
	
 
  
	
COVENANTS
  
	
 
  	
 
  	
 
  
	
SECTION 4.01.
  	
Payment of Notes
  	
58
  
	
SECTION 4.02.
  	
Maintenance of Office or Agency
  	
58
  
	
SECTION 4.03.
  	
[Reserved]
  	
59
  
	
SECTION 4.04.
  	
[Reserved]
  	
59
  
	
SECTION 4.05.
  	
Compliance Certificate; Notice of Default
  	
59
  
	
SECTION 4.06.
  	
Waiver of Stay, Extension or Usury Laws
  	
59
  
	
SECTION 4.07.
  	
Change of Control
  	
59
  
	
SECTION 4.08.
  	
Limitation on Indebtedness
  	
61
  
	
SECTION 4.09.
  	
Limitation on Restricted Payments
  	
63
  
	
SECTION 4.10.
  	
Limitation on Restrictions on Distributions from Restricted Subsidiaries
  	
68
  
	
SECTION 4.11.
  	
Limitation on Sales of Assets and Subsidiary Stock
  	
70
  
	
SECTION 4.12.
  	
Limitation on Affiliate Transactions
  	
74
  
	
SECTION 4.13.
  	
Future Guarantors
  	
76
  
	
SECTION 4.14.
  	
SEC Reports
  	
77
  
	
SECTION 4.15.
  	
Limitation on Layering
  	
78
  
	
 
  	
 
  	
 
  
	
ARTICLE FIVE
  
	
 
  
	
SUCCESSOR CORPORATION
  
	
 
  	
 
  	
 
  
	
SECTION 5.01.
  	
Merger, Consolidation or Sale of All or Substantially All Assets
  	
78
  
	
SECTION 5.02.
  	
Successor Corporation Substituted
  	
80
  
	
 
  	
 
  	
 
  
	
ARTICLE SIX
  
	
 
  
	
DEFAULT AND REMEDIES
  
	
 
  	
 
  	
 
  
	
SECTION 6.01.
  	
Events of Default
  	
80
  
	
SECTION 6.02.
  	
Acceleration
  	
82
  
	
SECTION 6.03.
  	
Other Remedies
  	
83
  
	
SECTION 6.04.
  	
Waiver of Past Defaults
  	
83
  
	
SECTION 6.05.
  	
Control by Majority
  	
83
  
	
SECTION 6.06.
  	
Limitation on Suits
  	
83
  
	
SECTION 6.07.
  	
Rights of Holders To Receive Payment
  	
84
  
	
SECTION 6.08.
  	
Collection Suit by Trustee
  	
84
  
	
SECTION 6.09.
  	
Trustee May File Proofs of Claim
  	
84
  
	
SECTION 6.10.
  	
Priorities
  	
85
  
	
SECTION 6.11.
  	
Undertaking for Costs
  	
85
  

 

ii

 

	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  
	
ARTICLE SEVEN
  
	
 
  
	
TRUSTEE
  
	
 
  	
 
  	
 
  
	
SECTION 7.01.
  	
Duties of Trustee
  	
85
  
	
SECTION 7.02.
  	
Rights of Trustee
  	
87
  
	
SECTION 7.03.
  	
Individual Rights of Trustee
  	
88
  
	
SECTION 7.04.
  	
Trustee’s Disclaimer
  	
88
  
	
SECTION 7.05.
  	
Notice of Default
  	
88
  
	
SECTION 7.06.
  	
Reports by Trustee to Holders
  	
89
  
	
SECTION 7.07.
  	
Compensation and Indemnity
  	
89
  
	
SECTION 7.08.
  	
Replacement of Trustee
  	
90
  
	
SECTION 7.09.
  	
Successor Trustee by Merger, Etc.
  	
91
  
	
SECTION 7.10.
  	
Eligibility; Disqualification
  	
91
  
	
SECTION 7.11.
  	
Preferential Collection of Claims Against the Issuer
  	
91
  
	
 
  	
 
  	
 
  
	
ARTICLE EIGHT
  
	
 
  
	
DISCHARGE OF INDENTURE; DEFEASANCE
  
	
 
  	
 
  	
 
  
	
SECTION 8.01.
  	
Satisfaction and Discharge; Termination of the Issuer’s Obligations
  	
91
  
	
SECTION 8.02.
  	
Legal Defeasance and Covenant Defeasance
  	
92
  
	
SECTION 8.03.
  	
Conditions to Legal Defeasance or Covenant Defeasance
  	
93
  
	
SECTION 8.04.
  	
Application of Trust Money
  	
94
  
	
SECTION 8.05.
  	
Repayment to the Issuer
  	
95
  
	
SECTION 8.06.
  	
Reinstatement
  	
95
  
	
 
  	
 
  	
 
  
	
ARTICLE NINE
  
	
 
  
	
AMENDMENTS, SUPPLEMENTS AND WAIVERS
  
	
 
  	
 
  	
 
  
	
SECTION 9.01.
  	
Without Consent of Holders
  	
96
  
	
SECTION 9.02.
  	
With Consent of Holders
  	
97
  
	
SECTION 9.03.
  	
Compliance with TIA
  	
98
  
	
SECTION 9.04.
  	
Revocation and Effect of Consents
  	
98
  
	
SECTION 9.05.
  	
Notation on or Exchange of Notes
  	
98
  
	
SECTION 9.06.
  	
Trustee To Sign Amendments, Etc.
  	
99
  
	
 
  	
 
  	
 
  
	
ARTICLE TEN
  
	
 
  
	
SUBORDINATION
  
	
 
  	
 
  	
 
  
	
SECTION 10.01.
  	
Agreement To Subordinate
  	
99
  
	
SECTION 10.02.
  	
Liquidation, Dissolution, Bankruptcy
  	
99
  
	
SECTION 10.03.
  	
Default on Designated Senior Indebtedness of the Issuer
  	
100
  
	
SECTION 10.04.
  	
Acceleration of Payment of Notes
  	
101
  

 

iii

 

	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  
	
SECTION 10.05.
  	
When Distribution Must Be Paid Over
  	
101
  
	
SECTION 10.06.
  	
Subrogation
  	
102
  
	
SECTION 10.07.
  	
Relative Rights
  	
102
  
	
SECTION 10.08.
  	
Subordination May Not Be Impaired by Issuer
  	
102
  
	
SECTION 10.09.
  	
Rights of Trustee and Paying Agent
  	
102
  
	
SECTION 10.10.
  	
Distribution or Notice to Representative
  	
103
  
	
SECTION 10.11.
  	
Not To Prevent Events of Default or Limit Right To Accelerate
  	
103
  
	
SECTION 10.12.
  	
Trust Moneys Not Subordinated
  	
103
  
	
SECTION 10.13.
  	
Trustee Entitled To Rely
  	
103
  
	
SECTION 10.14.
  	
Trustee To Effectuate Subordination
  	
104
  
	
SECTION 10.15.
  	
Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer
  	
104
  
	
SECTION 10.16.
  	
Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions
  	
104
  
	
 
  	
 
  	
 
  
	
ARTICLE ELEVEN
  
	
 
  
	
GUARANTY
  
	
 
  	
 
  	
 
  
	
SECTION 11.01.
  	
Unconditional Guaranty
  	
105
  
	
SECTION 11.02.
  	
Limitation on Guarantor Liability
  	
106
  
	
SECTION 11.03.
  	
[Intentionally Omitted]
  	
106
  
	
SECTION 11.04.
  	
Release of a Guarantor
  	
106
  
	
SECTION 11.05.
  	
Waiver of Subrogation
  	
107
  
	
SECTION 11.06.
  	
Immediate Payment
  	
108
  
	
SECTION 11.07.
  	
No Set-Off
  	
108
  
	
SECTION 11.08.
  	
Guarantee Obligations Absolute
  	
108
  
	
SECTION 11.09.
  	
Guaranteed Obligations Continuing
  	
108
  
	
SECTION 11.10.
  	
[Reserved
  	
108
  
	
SECTION 11.11.
  	
Guaranteed Obligations Reinstated
  	
108
  
	
SECTION 11.12.
  	
Guaranteed Obligations Not Affected
  	
108
  
	
SECTION 11.13.
  	
Waiver
  	
110
  
	
SECTION 11.14.
  	
No Obligation To Take Action Against the Issuer
  	
110
  
	
SECTION 11.15.
  	
Dealing with the Issuer and Others
  	
110
  
	
SECTION 11.16.
  	
Default and Enforcement
  	
110
  
	
SECTION 11.17.
  	
Amendment, Etc.
  	
111
  
	
SECTION 11.18.
  	
Acknowledgment
  	
111
  
	
SECTION 11.19.
  	
Costs and Expenses
  	
111
  
	
SECTION 11.20.
  	
No Merger or Waiver; Cumulative Remedies
  	
111
  
	
SECTION 11.21.
  	
Survival of Guaranteed Obligations
  	
111
  
	
SECTION 11.22.
  	
Guaranty in Addition to Other Guaranteed Obligations
  	
111
  
	
SECTION 11.23.
  	
Severability
  	
112
  
	
SECTION 11.24.
  	
Successors and Assigns
  	
112
  
	
SECTION 11.25.
  	
Contribution
  	
112
  

 

iv

 

	
 
  	
 
  	
Page
  
	
 
  	
 
  	
 
  
	
ARTICLE TWELVE
  
	
 
  
	
SUBORDINATION OF GUARANTIES
  
	
 
  	
 
  	
 
  
	
SECTION 12.01.
  	
Agreement To Subordinate
  	
112
  
	
SECTION 12.02.
  	
Liquidation, Dissolution, Bankruptcy
  	
112
  
	
SECTION 12.03.
  	
Default on Senior Indebtedness of a Guarantor
  	
113
  
	
SECTION 12.04.
  	
Demand for Payment
  	
114
  
	
SECTION 12.05.
  	
When Distribution Must Be Paid Over
  	
115
  
	
SECTION 12.06.
  	
Subrogation
  	
115
  
	
SECTION 12.07.
  	
Relative Rights
  	
115
  
	
SECTION 12.08.
  	
Subordination May Not Be Impaired by a Guarantor
  	
115
  
	
SECTION 12.09.
  	
Rights of Trustee and Paying Agent
  	
115
  
	
SECTION 12.10.
  	
Distribution or Notice to Representative
  	
116
  
	
SECTION 12.11.
  	
Article Twelve Not To Prevent Events of Default or Limit Right To Demand Payment
  	
116
  
	
SECTION 12.12.
  	
Trust Moneys Not Subordinated
  	
116
  
	
SECTION 12.13.
  	
Trustee Entitled To Rely
  	
117
  
	
SECTION 12.14.
  	
Trustee To Effectuate Subordination
  	
117
  
	
SECTION 12.15.
  	
Trustee Not Fiduciary for Holders of Senior Indebtedness of Guarantors
  	
117
  
	
SECTION 12.16.
  	
Reliance by Holders of Senior Indebtedness of a Guarantor on Subordination Provisions
  	
117
  
	
 
  	
 
  	
 
  
	
ARTICLE THIRTEEN
  
	
 
  
	
MISCELLANEOUS
  
	
 
  	
 
  	
 
  
	
SECTION 13.01.
  	
TIA Controls
  	
118
  
	
SECTION 13.02.
  	
Notices
  	
118
  
	
SECTION 13.03.
  	
Communications by Holders with Other Holders
  	
119
  
	
SECTION 13.04.
  	
Certificate and Opinion as to Conditions Precedent
  	
119
  
	
SECTION 13.05.
  	
Statements Required in Certificate or Opinion
  	
120
  
	
SECTION 13.06.
  	
Rules by Trustee, Paying Agent, Registrar
  	
120
  
	
SECTION 13.07.
  	
Governing Law
  	
120
  
	
SECTION 13.08.
  	
No Adverse Interpretation of Other Agreements
  	
120
  
	
SECTION 13.09.
  	
No Recourse Against Others
  	
120
  
	
SECTION 13.10.
  	
Successors
  	
121
  
	
SECTION 13.11.
  	
Duplicate Originals
  	
121
  
	
SECTION 13.12.
  	
Severability
  	
121
  
	
SECTION 13.13.
  	
U.S.A. Patriot Act
  	
121
  
	
SECTION 13.14.
  	
Force Majeure
  	
121
  
	
 
  	
 
  	
 
  
	
Signatures
  	
 
  	
S-1
  

 

v

 

	
Exhibit A
  	
-
  	
Form of Note
  
	
Exhibit B
  	
-
  	
Form of Legends
  
	
Exhibit C
  	
-
  	
Form of Certificate of Transfer
  
	
Exhibit D
  	
-
  	
Form of Certificate of Exchange
  
	
Exhibit E
  	
-
  	
Form of Supplemental Indenture
  
	
Exhibit F
  	
-
  	
Form of Certificate of Acquiring Institutional Accredited Investor
  

 

Note:      This Table of Contents shall not, for any purpose, be deemed to be part of the Indenture.

 

vi

 

INDENTURE dated as of November 16, 2010, among INTERLINE BRANDS, INC., a New Jersey corporation (the “Issuer”), INTERLINE BRANDS, INC., a Delaware corporation (“Interline Delaware”), the other Guarantors (as defined herein) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Trustee (the “Trustee”).

 

RECITALS

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (a) the Issuer’s 7.00% Senior Subordinated Notes due 2018 issued on the date hereof (the “Original Notes”), (b) any Additional Notes (as defined herein) that may be issued after the date hereof (all such notes in clauses (a) and (b) that are issued in a transaction exempt from the registration requirements of the Securities Act (as defined herein) being referred to collectively as the “Initial Notes”) and (c) if and when issued as provided in the Registration Rights Agreement (as defined herein), the Issuer’s 7.00% Senior Subordinated Notes due 2018 issued in the Exchange Offer (as defined herein) in exchange for any Initial Notes (the “Exchange Notes” and, together with the Initial Notes and any Additional Notes that are not Initial Notes, the “Notes”).  On the date hereof, $300,000,000 in aggregate principal amount of Original Notes will be issued.  Subject to the conditions and compliance with the covenants (including Section 4.08) set forth herein, the Issuer may issue an unlimited aggregate principal amount of Additional Notes.

 

ARTICLE ONE

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.              Definitions.

 

Set forth below are certain defined terms used in this Indenture.

 

“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that shall be issued in a denomination equal to the outstanding principal amount of Notes sold in reliance on Rule 144A.

 

“Additional Assets” means:

 

(1)           any long lived assets (other than Capital Stock) used in a Related Business, in each case including leasehold interests with respect thereto with a term in excess of one year;

 

(2)           the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or another Restricted Subsidiary; or

 

(3)           Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

 

 

provided, however, that any such Restricted Subsidiary described in clause (2) or (3) above is primarily engaged in a Related Business.

 

“Additional Interest” has the meaning ascribed to “Special Interest” in the Registration Rights Agreement.

 

“Additional Notes” means additional Notes (other than the Original Notes) issued from time to time subsequent to the Issue Date under the terms of this Indenture and in accordance with Sections 2.02 and 4.08 hereof; it being understood that any Notes issued in exchange for or replacement of any Initial Notes issued on the Issue Date shall not be Additional Notes, including any Exchange Notes.

 

“Adjusted Treasury Rate” means, with respect to any Redemption Date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after November 15, 2013, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date, in each case calculated on the third Business Day immediately preceding the Redemption Date, plus 0.50%.

 

“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 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.

 

“Agent” means any Registrar, Paying Agent or co-Registrar.

 

“amend” means amend, modify, supplement, restate or amend and restate, including successively, and “amending” and “amended” have correlative meanings.

 

“Applicable Premium” means with respect to a Note at any Redemption Date, the greater of (1) 1.00% of the principal amount of such Note and (2) the excess of (A) the present value at such Redemption Date of (i) the redemption price of such Note on November 15, 2013 (such redemption price being described in Section 3.08(c) exclusive of any accrued interest) plus (ii) all required remaining scheduled interest payments due on such Note through November 15, 2013 (but excluding accrued and unpaid interest to the Redemption Date), computed using a discount

 

2

 

rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such Redemption Date.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such transfer or exchange.

 

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Issuer or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

 

(1)           any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or a Restricted Subsidiary);

 

(2)           all or substantially all the assets of any division or line of business of the Issuer or any Restricted Subsidiary; or

 

(3)           any other assets of the Issuer or any Restricted Subsidiary outside of the ordinary course of business of the Issuer or such Restricted Subsidiary;

 

other than, in the case of clauses (1), (2) and (3) above,

 

(A)          a disposition by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to another Restricted Subsidiary (including the sale or issuance of Capital Stock);

 

(B)           for purposes of Section 4.11 only, (x) a disposition that constitutes a Restricted Payment (or would constitute a Restricted Payment but for the exclusions from the definition thereof) and that is not prohibited by Section 4.09, (y) a disposition of all or substantially all the assets of the Issuer in accordance with Section 5.01 and (z) a disposition of all or any portion of the Issuer’s direct or indirect interest in, or assets relating, to, Buyers Access LLC;

 

(C)           a disposition of assets with a fair market value of less than $15.0 million;

 

(D)          the disposition of cash or Temporary Cash Investments;

 

(E)           the sale, lease or other transfer of inventory, products, byproducts, goods held for sale, services, accounts receivable in the ordinary course of business and the disposition of inventory or obsolete, damaged or worn out equipment or assets in the ordinary course of business (including the abandonment or other disposition of any assets, including intellectual property, that is no longer used or useful or no longer economically practical to maintain);

 

3

 

(F)           entering into Hedging Obligations or the transfer of assets related to any Hedging Obligations pursuant to the unwinding of any such Hedging Obligations;

 

(G)           the creation of any Lien permitted under this Indenture (but not the sale or other disposition of the property subject to such Lien);

 

(H)          any transfer or sale of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Subsidiary for the fair market value thereof, including cash in an amount at least equal to 75% of the book value thereof as determined in accordance with GAAP, it being understood that, for the purposes of this clause (H), investments received in exchange for the transfer of accounts receivable and related assets will be deemed to constitute cash if the Receivables Subsidiary or other payer is required to repay such investments as soon as practicable from available cash collections less amounts required to be established as reserves pursuant to contractual agreements with entities that are not Affiliates of the Issuer entered into as part of a Qualified Receivables Transaction;

 

(I)            the disposition of property or assets that is a surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

 

(J)            sales or grants of licenses or sublicenses to use the patents, trade secrets, know-how and other intellectual property, and licenses, leases or subleases of other assets, of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the business of the Issuer and the Restricted Subsidiaries;

 

(K)          any exchange of assets for assets (including a combination of assets and Temporary Cash Investments) related to a Related Business of comparable or greater market value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer, which in the event of an exchange of assets with a Fair Market Value in excess of (a) $5.0 million shall be evidenced by an Officer’s Certificate, and (b) $20.0 million shall be set forth in a resolution approved in good faith by at least a majority of the members of the Board of Directors of the Issuer;

 

(L)           dispositions of Investments in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between the joint venture parties set forth in joint venture agreements and similar binding agreements;

 

(M)         rights granted to others pursuant to leases or licenses in due course;

 

(N)          the sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof; and

 

4

 

(O)          any financing transaction, including a sale and leaseback transaction, with respect to any property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date.

 

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

 

(1)           the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of, or redemption or similar payment with respect to, such Indebtedness multiplied by the amount of such payment by

 

(2)           the sum of all such payments.

 

“Bank Indebtedness” means all Obligations pursuant to any Credit Agreement (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not post-filing interest is allowed in such proceeding).

 

“Board of Directors” with respect to a Person means the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board of Directors.

 

“Board Resolution” means, with respect to any Person, a duly adopted resolution or consent of the Board of Directors of such Person, which is in full force and effect on the date of such adoption or consent, and delivered to the Trustee.

 

“Borrowing Base” means, as of any date, an amount equal to:

 

(1)           85% of the book value of the accounts receivable of the Issuer and its Restricted Subsidiaries on a consolidated basis, plus

 

(2)           60% of the book value of the inventory of the Issuer and its Restricted Subsidiaries on a consolidated basis outstanding at any time.

 

“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

 

“Business Day” means each day which is not a Legal Holiday.

 

“Capital Lease Obligation” means an Obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such Obligation shall be the capitalized amount of such Obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

 

“Capital Stock” of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

 

5

 

“Clearstream” means Clearstream Banking, société anonyme, and its successors.

 

“Change of Control” means the occurrence of any of the following events:

 

(1)           any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of Interline Delaware (including, without limitation, pursuant to a merger or consolidation);

 

(2)           individuals who on the Issue Date constituted the Board of Directors of Interline Delaware (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of Interline Delaware was approved by a vote of a majority of the directors of Interline Delaware then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such Board of Directors then in office;

 

(3)           the adoption of a plan relating to the liquidation or dissolution of Interline Delaware;

 

(4)           the sale of all or substantially all the assets of Interline Delaware (determined on a consolidated basis) to another Person other than a transaction following which each transferee becomes an obligor or guarantor in respect of the Notes and a Subsidiary of the transferor of such assets; or

 

(5)           Interline Delaware, together with its wholly owned Subsidiaries, ceases to own 100% of the Voting Stock of the Issuer for any reason (other than the merger or consolidation of Interline Delaware and the Issuer with or into each other).

 

For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities that it has the right to acquire pursuant to a stock purchase agreement, merger agreement or other similar agreement until such time as such Person’s right to acquire such securities pursuant to such agreement is no longer subject to conditions that are beyond the control of such Person.

 

For purposes of this definition, (i) any direct or indirect holding company of the Issuer (including Interline Delaware) shall not itself be considered a “person” for purposes of clause (1) above, provided that no “person” beneficially owns, directly or indirectly, more than 50% of the Voting Stock of such holding company and (ii) no Change of Control pursuant to clause (4) above shall be deemed to have occurred solely as the result of a transfer of assets among the Issuer and the Guarantors.

 

Notwithstanding the foregoing, the occurrence of a transaction that would be considered a Change of Control but for the operation of clause (i) of the immediately preceding paragraph

 

6

 

shall be considered a Change of Control to the extent such transaction is accompanied by a Ratings Decline.

 

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

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Issuer as having a maturity comparable to the remaining term of the Notes from the Redemption Date to November 15, 2013, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to November 15, 2013.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Issuer, Reference Treasury Dealer Quotations for such Redemption Date.

 

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which internal financial statements are then available prior to the date of such determination (the “Reference Period”) to (y) Consolidated Interest Expense for the Reference Period; provided, however, that:

 

(1)           if the Issuer or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of the Reference Period that remains outstanding or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for the Reference Period shall be calculated after giving effect on a pro forma basis to such Incurrence of Indebtedness as if such Indebtedness had been Incurred on the first day of the Reference Period;

 

(2)           if the Issuer or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise discharged any Indebtedness since the beginning of the Reference Period or if any Indebtedness is to be repaid, repurchased, redeemed, defeased or otherwise discharged on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for the Reference Period shall be calculated after giving effect on a pro forma basis to such discharge as if it had occurred on the first day of the Reference Period and as if the Issuer or such Restricted Subsidiary had not earned the interest income, if any, actually earned during the Reference Period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

 

(3)           if since the beginning of the Reference Period the Issuer or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for the Reference Period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for the Reference Period, or increased by an amount equal to EBITDA (if negative), directly attributable thereto for the Reference Period and Consolidated Interest

 

7

 

Expense for the Reference Period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Issuer or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise discharged with respect to the Issuer and its continuing Restricted Subsidiaries in connection with such Asset Disposition for the Reference Period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Issuer and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

 

(4)           the EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the date of determination, will be excluded;

 

(5)           the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the date of determination, will be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the specified Person or any of its Restricted Subsidiaries following the date of determination;

 

(6)           if since the beginning of the Reference Period the Issuer or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit, division or line of business, EBITDA and Consolidated Interest Expense for the Reference Period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of the Reference Period; and

 

(7)           if since the beginning of the Reference Period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of the Reference Period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clauses (3) or (6) above if made by the Issuer or a Restricted Subsidiary during the Reference Period, EBITDA and Consolidated Interest Expense for the Reference Period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition occurred on the first day of the Reference Period.

 

For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise discharged in connection therewith, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Issuer (and may

 

8

 

include any applicable Pro forma Adjustments). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement or other Hedging Obligation applicable to such Indebtedness). If any Indebtedness is Incurred under a revolving credit facility and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation, to the extent that such Indebtedness was Incurred for working capital purposes.

 

“Consolidated Interest Expense” means, for any period, the total interest expense of the Issuer and its consolidated Restricted Subsidiaries determined in accordance with GAAP, plus, to the extent not included in such total interest expense, and to the extent incurred by the Issuer or its Restricted Subsidiaries, without duplication:

 

(1)           interest expense attributable to Capital Lease Obligations;

 

(2)           amortization of original issue discount;

 

(3)           non-cash interest expense;

 

(4)           commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

 

(5)           net payments pursuant to Hedging Obligations in respect of Indebtedness;

 

(6)           accrued dividends in respect of all Disqualified Stock of such Person and any Preferred Stock of any Restricted Subsidiary of the Issuer to the extent held by Persons other than the Issuer or a Wholly Owned Subsidiary; and

 

(7)           interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Issuer or any Restricted Subsidiary;

 

minus, to the extent included in such total interest expense, (i) amortization or write off of debt issuance costs, (ii) any financing fees, tender premiums, call premiums and other non-recurring expenses in connection with the Transactions or any refinancing of Indebtedness and (iii) the total interest income of the Issuer and its Restricted Subsidiaries for such period, whether received or accrued, to the extent such income was included in determining Consolidated Net Income. However, Consolidated Interest Expense shall be calculated excluding unrealized gains or losses with respect to Hedging Obligations and any dividends or accretion or liquidation preference on any Capital Stock of the Issuer that is not Disqualified Stock.

 

“Consolidated Net Income” means, for any period, the net income of the Issuer and its consolidated Subsidiaries determined in accordance with GAAP and without any reduction in respect of Preferred Stock dividends permitted pursuant to this Indenture; provided, however, that there shall not be included in such Consolidated Net Income:

 

9

 

(1)           any net income of any Person (other than the Issuer) if such Person is not a Restricted Subsidiary, except that:

 

(A)          subject to the exclusion contained in clause (3) below, the Issuer’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Issuer or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (3) below); and

 

(B)           the Issuer’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income, but only to the extent the Issuer or a Restricted Subsidiary funded such net loss with cash and such funding did not constitute a Restricted Payment that reduced the amount of permitted Restricted Payments under Section 4.09;

 

(2)           solely for the purpose of Section 4.09, any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Issuer (other than any restrictions permitted pursuant to Section 4.10(1)(H) and (I)), except that:

 

(A)          subject to the exclusion contained in clause (3) below, the Issuer’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Issuer or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

 

(B)           the Issuer’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

 

(3)           any gain or loss realized upon the sale or other disposition of any assets of the Issuer, its consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback arrangement) which are not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

 

(4)           extraordinary, non-recurring or unusual gains or losses;

 

(5)           non-cash compensation charges or other non-cash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity based awards or any amendment, modification, substitution or change of any such stock, stock options or other equity based awards;

 

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(6)           any non-cash goodwill impairment charges subsequent to the Issue Date resulting from the application of ASC 350;

 

(7)           any amortization or write-offs of debt issuance or deferred financing costs and premiums and prepayment penalties, in each case, to the extent attributable to the Indebtedness being Refinanced or Incurred in connection with the Transactions (as defined in the Offering Memorandum);

 

(8)           gains and losses realized upon the repayment or Refinancing of any Indebtedness of the Issuer or any Restricted Subsidiary;

 

(9)           gains and losses due solely to fluctuations in currency values and the related tax effects;

 

(10)         unrealized gains and losses with respect to Hedging Obligations;

 

(11)         the impact of any dividends or accretion of liquidation preference on any Capital Stock of the Issuer that is not Disqualified Stock;

 

(12)         the cumulative effect of a change in accounting principles;

 

(13)         so long as the Issuer is part of a consolidated group for tax purposes with Interline Delaware or another parent company, the excess (if any) of (a) the provision for income taxes of the Issuer and its consolidated Subsidiaries over (b) the sum of (x) the aggregate payments to Interline Delaware (or any other parent company) described in clause (2) of the definition of “Permitted Payments to Interline Delaware” and (y) the amount of any income taxes that the Issuer or its Subsidiaries paid directly to a taxing authority;

 

(14)         effects of adjustments (including the effects of such adjustments pushed down on the Issuer and Restricted Subsidiaries) in the Issuer’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of purchase accounting, as the case may be, in relation to any consummated transaction or the amortization or write-off of any amounts thereof, net of taxes;

 

(15)         (a)(i) the non-cash portion of “straight-line” rent expense less (ii) the cash portion of “straight-line” rent expense that exceeds the amount expensed in respect of such rent expense and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations; and

 

(16)         any expenses or charges related to any issuance of Capital Stock, Investments, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (including amortization or write offs of debt issuance or deferred financing costs, premiums and prepayment penalties),

 

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in each case, whether or not successful, including any such expenses or charges attributable to the issuance or and sale of the Notes;

 

in each case, for such period. Notwithstanding the foregoing (i) for the purposes of Section 4.09 only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Issuer or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such covenant pursuant to Section 4.09(a)(3)(D) and (ii) there shall be deducted from Consolidated Net Income in any period any Restricted Payments described in clause (1) of the definition of “Permitted Payments to Interline Delaware” and made during such period.

 

“Consolidated Tangible Assets” as of any date of determination, means the total amount of assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) which would appear on a consolidated balance sheet of the Issuer and its consolidated Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, and after deducting therefrom, to the extent otherwise included, the amounts of:

 

(1)           minority interests in consolidated Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary;

 

(2)           excess of cost over fair value of assets of businesses acquired, as determined in good faith by the Board of Directors of the Issuer;

 

(3)           any revaluation or other write-up in book value of assets subsequent to the Issue Date as a result of a change in the method of valuation in accordance with GAAP consistently applied;

 

(4)           unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items;

 

(5)           treasury stock;

 

(6)           cash set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock; and

 

(7)           Investments in and assets of Unrestricted Subsidiaries.

 

“Corporate Trust Office” means the corporate trust office of the Trustee located at 625 Marquette Ave., MAC N9311-110, 11th Floor Minneapolis, Minnesota, 55470, Attention: Corporate Trust Services, or such other office, designated by the Trustee by written notice to the Issuer, at which at any particular time its corporate trust business shall be principally administered.

 

“Credit Agreement” means the Credit Agreement dated as of the Issue Date by and among Interline Delaware, the Issuer, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A., as syndication agent, together with the related

 

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documents thereto (including any guarantees and security documents), in each case as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants or other provisions) from time to time (whether upon or after termination or otherwise), and any agreement (and related document or instrument) governing Indebtedness Incurred to Refinance (or increase), in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders, whether or not such Credit Agreement or successor Credit Agreement remains in effect.

 

“Credit Facilities” means one or more debt facilities (which may be outstanding at the same time and including any Credit Agreement) or commercial paper facilities, in each case, with banks or other lenders or investors, or indentures or other agreements providing for revolving credit loans, term loans, letters of credit, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), commercial paper or any form of debt securities (including convertible securities) or debt obligations and, in each case, as such agreements may be amended, amended and restated, supplemented, modified, extended, refinanced, replaced or otherwise restructured, in whole or in part from time to time (including successive amendments, amendments and restatements, supplements, modifications, extensions, refinancings, replacements or other restructurings and including increasing the amount of available borrowings thereunder or adding Subsidiaries of the Issuer as additional borrowers or guarantors thereunder) with respect to all or a portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders.

 

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement with respect to currency values and currency exchange rates.

 

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.15 or Section 2.16(c) hereof, substantially in the form of Exhibit A hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” shall mean The Depository Trust Company, New York, New York, its nominees, and their respective successors appointed as Depositary hereunder and having become such pursuant to the applicable provisions of this Indenture.

 

“Designated Non-cash Consideration” means any non-cash consideration received by the Issuer or one of its Restricted Subsidiaries in connection with an Asset Disposition that is designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate executed at the time of such Asset Disposition.

 

“Designated Senior Indebtedness,” with respect to a Person means:

 

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(1)           the Bank Indebtedness; and

 

(2)           any other Senior Indebtedness of such Person which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by such Person in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:

 

(1)           matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;

 

(2)           is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

 

(3)           is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

 

in each case on or prior to the 91st day after the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 91st day after the Stated Maturity of the Notes shall not constitute Disqualified Stock if:

 

(1)           the “change of control” or “asset sale” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the Notes and described under Sections 4.07 and 4.11, respectively;

 

(2)           any such requirement only becomes operative after compliance with such terms applicable to the Notes, including the purchase of any notes tendered pursuant thereto;

 

and provided, further, that (i) if Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because they may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability and (ii) any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as

 

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if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to this Indenture; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

 

“EBITDA” for any period means the sum of Consolidated Net Income, plus the following (without duplication) to the extent deducted in calculating such Consolidated Net Income:

 

(1)           all income tax expense of the Issuer and its consolidated Restricted Subsidiaries;

 

(2)           Consolidated Interest Expense;

 

(3)           depreciation and amortization expense of the Issuer and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid operating activity item that was paid in cash in a prior period);

 

(4)           all other non-cash charges of the Issuer and its consolidated Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period) less all non-cash items of income (other than accrual of revenue in the ordinary course of business) of the Issuer and its consolidated Restricted Subsidiaries;

 

(5)           non-recurring restructuring costs and non-recurring acquisition costs and fees, including integration costs and fees, expenses related to a facilities closing and any reconstruction, recommissioning or reconfiguration of fixed assets for alternate uses, any severance or relocation expenses, executive recruiting costs, curtailments or modifications to pension and post-retirement employee benefit plans, duplicative facilities closing charges, expenses and payments directly attributable to employee reduction or employee relocation (including cash severance payments) and expenses and payments directly attributable to the termination of real estate leases or real estate sales and the relocation of distribution and call center facilities or branch facilities; and

 

(6)           all adjustments used in the calculation of “Adjusted EBITDA” (as presented in the Offering Memorandum);

 

in each case, for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion, including by reason of minority interests) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income.

 

“Equity Offering” means any primary sale of Capital Stock (other than Disqualified Stock) of Interline Delaware (or other parent entity of the Issuer) (a) to the public pursuant to an effective registration statement under the Securities Act or (b) in a private placement pursuant to

 

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an exemption from the registration requirements of the Securities Act but only to the extent to which the net proceeds from such sale are contributed to the common equity of the Issuer.

 

“Euroclear” means Euroclear Bank S.A./N.A., as operator of the Euroclear system, and its successors.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Exchange Offer” has the meaning set forth in the Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights Agreement.

 

“Excluded Contributions” means the cash and Temporary Cash Investments received by the Issuer after the Issue Date from (1) contributions to its common equity capital, and (2) the sale (other than to a Subsidiary of the Issuer or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock) of the Issuer, in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be.

 

“Existing Notes” means the Issuer’s outstanding 81/8% Senior Subordinated Notes due 2014.

 

“Fair Market Value” means, with respect to any asset or property, the price (after taking into account any liabilities relating to such asset or property) which could be negotiated in an arm’s length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.  Fair Market Value in excess of $10.0 million will be determined in good faith by the Board of Directors of the Issuer, whose determination will be conclusive and evidenced by a Board Resolution.

 

“Foreign Subsidiary” means any Restricted Subsidiary of the Issuer that is not organized under the laws of the United States of America or any State thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in:

 

(1)           the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

 

(2)           statements and pronouncements of the Financial Accounting Standards Board and the Public Company Accounting Oversight Board; and

 

(3)           such other statements by such other entity as approved by a significant segment of the accounting profession.

 

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“Global Note” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto, issued in accordance with Article Two hereof.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

 

(1)           to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

 

(2)           entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

 

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” means Interline Delaware or any Subsidiary Guarantor.

 

“Guaranty” means the Interline Delaware Guaranty or any Subsidiary Guaranty.

 

“Guaranty Agreement” means a supplemental indenture, in a form reasonably satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees the Issuer’s obligations with respect to the Notes on the terms provided for herein.

 

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any (i) Interest Rate Agreement, (ii) Currency Agreement or (iii) other agreements or arrangements designed to protect such Person against fluctuations in commodity or fuel prices.

 

“Holder” or “Noteholder” means the Person in whose name a Note is registered on the Registrar’s books.

 

“IAI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

 

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The

 

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term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance Section 4.08:

 

(1)           amortization of debt discount or the accretion of principal or liquidation value with respect to a non-interest bearing or other discount security;

 

(2)           the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms (or the accretion or accumulation of such dividends on Capital Stock); and

 

(3)           the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness

 

will not be deemed to be the Incurrence of Indebtedness.

 

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

 

(1)           the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

 

(2)           all Capital Lease Obligations of such Person;

 

(3)           all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

 

(4)           all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);

 

(5)           the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or with respect to any Preferred Stock of any Restricted Subsidiary of such Person (but excluding, in each case, accrued dividends);

 

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(6)           all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

 

(7)           all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets and the amount of the obligation so secured; and

 

(8)           to the extent not otherwise included in this definition, Hedging Obligations of such Person.

 

Notwithstanding the foregoing, (i) in connection with the purchase by the Issuer or any Restricted Subsidiary of any business, the term “Indebtedness” will exclude post-closing payment adjustments or earn out or similar obligations to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter, (ii) Indebtedness shall not include any liability for Federal, state, local or other taxes owed or owing to any governmental entity or obligations of such Person with respect to performance and surety bonds and completion guarantees entered into in the ordinary course of business and (iii) Indebtedness shall be calculated without giving effect to the effects of ASC 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

 

In the case of Indebtedness of any Person sold at a discount, the amount of such Indebtedness at any time shall be the accreted value thereof at such time.

 

“Indenture” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.

 

“Independent Qualified Party” means an investment banking firm, accounting firm or appraisal firm of national standing; provided, however, that such firm is not an Affiliate of the Issuer.

 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

“Initial Purchasers” means (1) with respect to the Original Notes, Barclays Capital Inc., J.P. Morgan Securities LLC, BB&T Capital Markets, a division of Scott & Stringfellow, LLC, Goldman, Sachs & Co., Lazard Capital Markets LLC, SunTrust Robinson Humphrey, Inc. and U.S. Bancorp Investments, Inc. and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the applicable purchase agreement.

 

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“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

 

“interest” means, with respect to the Notes, interest and any Additional Interest on the Notes.

 

“Interest Payment Date” means each May 15 and November 15, commencing May 15, 2011.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement with respect to exposure to interest rates.

 

“Interline Delaware” means Interline Brands, Inc., a Delaware corporation, and its successors and assigns.

 

“Interline Delaware Guaranty” means the Guarantee by Interline Delaware of the Issuer’s obligations with respect to the Notes contained herein.

 

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for value of Capital Stock, Indebtedness or other similar instruments issued by such Person. Except as otherwise provided for herein, the amount of an Investment shall be its fair value at the time the Investment is made and without giving effect to subsequent changes in value.

 

For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and Section 4.09:

 

(1)           “Investment” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

 

(2)           any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Issuer.

 

“Issue Date” means November 16, 2010.

 

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“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. If an Interest Payment Date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

 

“Maturity Date” means November 15, 2018

 

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

“Net Available Cash” from an Asset Disposition means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other non-cash form), in each case net of:

 

(1)           all legal, title and recording tax expenses, underwriting discounts, commissions, investment banking fees and expenses, employee severance and termination costs, and other fees and expenses incurred (including, fees and expenses of counsel, brokers, finders, consultants, placement agents, accountants and investment advisors), and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Disposition;

 

(2)           all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;

 

(3)           all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition;

 

(4)           the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any adjustment in the sale price of such property or assets or any liabilities associated with the property or other assets disposed in such Asset Disposition and retained by the Issuer or any Restricted Subsidiary after such Asset Disposition, including tax liabilities, pensions or other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Disposition;

 

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(5)           payments of unassumed liabilities (not constituting Indebtedness) relating to assets sold at the time of, or within 30 days after the date of, such Asset Disposition; and

 

(6)           any portion of the purchase price from an Asset Disposition placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or otherwise in connection with that Asset Disposition; provided, however, that upon the termination of such escrow, Net Available Cash will be increased by any portion of funds in the escrow that are released to the Issuer or any Restricted Subsidiary.

 

“Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Obligations” means, with respect to any Indebtedness, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to the documentation governing such Indebtedness.

 

“Offering Memorandum” means the offering memorandum dated November 4, 2010 with respect to the Initial Notes.

 

“Officer” means the Chairman of the Board, the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, any Vice President, the Treasurer, any Assistant Treasurer or the Secretary of the Issuer.

 

“Officer’s Certificate” means a certificate signed by an Officer and delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

 

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to the Depositary, shall include Euroclear and Clearstream).

 

“Permitted Investment” means an Investment by the Issuer or any Restricted Subsidiary in:

 

(1)                                 the Issuer, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related Business;

 

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(2)                                 another Person if, as a result of such Investment, such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Issuer or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Related Business;

 

(3)                                 cash and Temporary Cash Investments;

 

(4)                                 receivables owing to the Issuer or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Issuer or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(5)                                 payroll, travel, commission, entertainment, relocation and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

 

(6)                                 loans or advances to employees made in the ordinary course of business of the Issuer or such Restricted Subsidiary;

 

(7)                                 stock, obligations or securities received in resolution, compromise or settlement of debts owing to the Issuer or any Restricted Subsidiary, including pursuant to any plan of reorganization or similar arrangement upon bankruptcy or insolvency of the obligor or in satisfaction of judgments or otherwise in resolution or compromise of litigation, arbitration or disputes;

 

(8)                                 any Person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Disposition as permitted pursuant to Section 4.11 or in any other asset sale not constituting an Asset Disposition;

 

(9)                                 any Person where such Investment was acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(10)                          any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Issuer or any Restricted Subsidiary;

 

(11)                          any Person to the extent such Investments consist of Guarantees of Indebtedness or Hedging Obligations otherwise permitted under Section 4.08;

 

23

 

(12)                          any Person to the extent such Investment consists of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(13)                          any Person to the extent such Investment consists of loans and advances to vendors, suppliers, licensees, franchisees or customers of the Issuer or any of the Restricted Subsidiaries made in the ordinary course of business; provided, however, that the amount of Investments made pursuant to this clause (13) do not exceed $7.5 million at any time outstanding;

 

(14)                          Persons to the extent such Investments are in existence on, or made pursuant to binding commitments in existence on the Issue Date and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the Issue Date; provided that the amount of any such Investment may be increased as required by the terms of such Investment as in existence on the Issue Date and in the ordinary course of business consistent with past practice or as described in the Offering Memorandum;

 

(15)                          any joint venture engaged in a Related Business, to the extent such Investments, when taken together with all other Investments made pursuant to this clause (15) outstanding on the date such Investment is made, do not exceed the greater of (x) $20.0 million and (y) 2.0% of Total Assets determined as of the most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date);

 

(16)                          a Receivables Subsidiary, or any Investment by a Receivables Subsidiary in another Person, in each case in connection with a Qualified Receivables Transaction; provided, however, that such Investment is in the form of a purchase money note, equity or residual interest or limited liability company interest;

 

(17)                          assets or Capital Stock solely in exchange for the issuance of Capital Stock (other than Disqualified Stock) of the Issuer;

 

(18)                          acquired after the Issue Date as a result of the acquisition by the Issuer or any Restricted Subsidiary of another Person, including by way of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation; and

 

(19)                          Persons to the extent such Investments, when taken together with all other Investments made pursuant to this clause (19) (in each case measured on the date each such Investment was made and without giving effect to subsequent changes in value) outstanding on the date such Investment is made, do not exceed the greater of (x) $40.0 million and (y) 4.0% of Total Assets determined as of the

 

24

 

most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date).

 

“Permitted Payments to Interline Delaware” means, without duplication as to amounts:

 

(1)                                 any Restricted Payment made to Interline Delaware (or any other direct or indirect parent company) to be used by Interline Delaware (or such parent company) solely (A) to pay its franchise taxes and other fees required to maintain its corporate existence, (B) to pay for general corporate and overhead expenses (including salaries and other compensation (including salary, bonus and benefits) of the employees and directors, board activities, insurance, legal (including litigation, judgments and settlements), accounting, corporate reporting and filing, administrative and other general operating expenses) incurred by Interline Delaware (or such parent company) in the ordinary course of business, (C) to pay expenses incurred in connection with offerings of securities, debt financings or acquisition or disposition transactions and (D) to satisfy principal, interest and other payment obligations of the Issuer on Indebtedness of Interline Delaware, the proceeds of which were contributed to the Issuer; provided, however, that all such Restricted Payments pursuant to this clause (1) shall not exceed in the aggregate $15.0 million per year; and

 

(2)                                 payments to Interline Delaware (or any other direct or indirect parent company) in respect of federal, state or local income, franchise or similar taxes of the Issuer and its any Subsidiaries (“Tax Payments”); provided, however, that the aggregate Tax Payments shall not exceed (i) the aggregate amount of the relevant tax (including any penalties and interest) that the Issuer would owe after the Issue Date for United States Federal, state and local income tax purposes filing a separate tax return (or a consolidated or combined return with any Subsidiaries of the Issuer that are members of a consolidated or combined group with Interline Delaware (or such parent company), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of the Issuer and its Subsidiaries, less (ii) the amount of any income taxes that the Issuer or its Subsidiaries pay directly to a taxing authority after the Issue Date.

 

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

 

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

 

“principal” of a note means the principal of the note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.

 

25

 

“Pro forma Adjustments” means, with respect to any period, the operating improvements, synergies, reduction in costs or other adjustments, as applicable, that are

 

(1)                                 directly attributable to a business or asset acquisition and calculated on a basis that is consistent with Regulation S-X under the Securities Act in effect and as applied as of the Issue Date;

 

(2)                                 implemented by the business that was the subject of any such asset acquisition within one year prior to the date of the business or asset acquisition and that are supportable and quantifiable (based on the Issuer’s good faith assumptions); or

 

(3)                                 subject to a plan being implemented or to be implemented by the Issuer or any Restricted Subsidiary in connection with the business being acquired and reasonably likely to be completed within one year following such acquisition and that are supportable and quantifiable (based on the Issuer’s good faith assumptions), such Restricted Subsidiary or such business as set forth in an officer’s certificate from the Chief Financial Officer of the Issuer;

 

in each case as if all such reductions in costs or other adjustments had been effected as of the beginning of such period.

 

“Qualified Institutional Buyer” or “QIB” has the meaning assigned to such term in Rule 144A.

 

“Qualified Receivables Transaction” means any transaction or series of transactions entered into by the Issuer or any of its Restricted Subsidiaries pursuant to which the Issuer or any of its Restricted Subsidiaries sells, conveys or otherwise transfers to (i) a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Restricted Subsidiaries) and (ii) any other Person (in the case of a transfer by a Receivables Subsidiary), or grants a security interest in, any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Restricted Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

 

“Quotation Agent” means the Reference Treasury Dealer selected by the Issuer.

 

“Ratings Decline” means the occurrence of a decrease in the rating of the Notes by one or more gradations by either Moody’s or S&P (including gradations within the rating categories, as well as between categories), within 90 days before or after the earlier of (x) the transaction giving rise to such potential Change of Control, (y) the date of public notice of the occurrence of the transaction giving rise to such potential Change of Control or (z) public notice of the intention of the Issuer to effect such transaction giving rise to such potential Change of Control (which 90-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moody’s or S&P).

 

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“Receivables Subsidiary” means a Subsidiary of the Issuer which engages in no activities other than in connection with the financing of accounts receivable or related assets (including contract rights) and which is designated by the Board of Directors of the Issuer (as provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is Guaranteed by the Issuer or any of its Restricted Subsidiaries (but excluding customary representations, warranties, covenants and indemnities entered into in connection with a Qualified Receivables Transaction), (ii) is recourse to or obligates the Issuer or any of its Restricted Subsidiaries in any way other than pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Qualified Receivables Transaction or (iii) subjects any property or asset (including contract rights) of the Issuer or any of its Restricted Subsidiaries (other than accounts receivable and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Qualified Receivables Transaction, (b) with which neither the Issuer nor any of its Restricted Subsidiaries has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Issuer, other than customary fees payable in connection with servicing accounts receivable and (c) with which neither the Issuer nor any of its Restricted Subsidiaries has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of the Issuer will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.

 

“Record Date” means each May 1 and November 1; however, if any such date is not a Business Day, the Record Date shall be the first day immediately preceding such specified day that is a Business Day.

 

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

 

“Redemption Price,” when used with respect to any Note to be redeemed, means the price fixed for such redemption, payable in immediately available funds, pursuant to this Indenture and the Notes.

 

“Reference Treasury Dealer” means Barclays Capital Inc., J.P. Morgan Securities LLC and their respective successors and assigns and one other nationally recognized investment banking firm selected by the Issuer that is a primary U.S. Government securities dealer.

 

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Issuer, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Issuer by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

 

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“Refinance” means, in respect of any Indebtedness, to refinance, extend, modify, renew, refund, repay, prepay, redeem, replace, supplement, defease, discharge or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Issuer or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with this Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:

 

(1)                                 such Refinancing Indebtedness has a Stated Maturity (A) no earlier than the Stated Maturity of the Indebtedness being Refinanced or (B) more than 91 days after the final maturity date of the Notes;

 

(2)                                 such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is (A) equal to or greater than the Average Life of the Indebtedness being Refinanced or (B) more than 91 days after the final maturity date of the Notes;

 

(3)                                 such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding or committed (plus (i) accrued interest and dividends on the Indebtedness being Refinanced and (ii) fees and expenses, including any premium and defeasance or discharge costs) under the Indebtedness being Refinanced; and

 

(4)                                 if the Indebtedness being Refinanced is subordinated in right of payment to the Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at least to the same extent as the Indebtedness being Refinanced;

 

provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Subsidiary that is not a Guarantor that Refinances Indebtedness of the Issuer or any Subsidiary that is a Guarantor or (B) Indebtedness of the Issuer or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

 

“Registration Rights Agreement” means (1) with respect to the Original Notes issued on the Issue Date, the Registration Rights Agreement dated as of the Issue Date among the Issuer, the Guarantors and the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time and (2) with respect to any Additional Notes, one or more registration rights agreements, if any, among the Issuer, the Guarantors and the Initial Purchasers, as such agreement(s) may be amended, modified or supplemented from time to time.

 

“Regulation S” means Regulation S under the Securities Act.

 

“Regulation S Global Note” means a permanent Global Note in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on

 

28

 

behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903.

 

“Related Business” means any business (including, without limitation, the maintenance, repair and operations products distribution business) in which the Issuer or any of its Restricted Subsidiaries was engaged on the Issue Date, any business related, ancillary or complementary to any business of the Issuer in which the Issuer was engaged on the Issue Date, any business that is a reasonable extension of, or is necessary or desirable to facilitate, any such business engaged in by the Issuer on the Issue Date or any business to the extent it is immaterial in size compared to the Issuer’s business as a whole.

 

“Representative” means, any trustee, agent or representative (if any) for an issue of Senior Indebtedness.

 

“Restricted Definitive Note” means a Definitive Note bearing, or that is required to bear, the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing, or that is required to bear, the Private Placement Legend.

 

“Restricted Payment” with respect to any Person means:

 

(1)                                 the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) or through accretion or accumulation of such dividends on such Capital Stock and dividends or distributions payable solely to the Issuer or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));

 

(2)                                 the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Issuer held by any Person or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Issuer (other than the Issuer or a Restricted Subsidiary), including in connection with any merger or consolidation and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Issuer that is not Disqualified Stock);

 

(3)                                 the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations of such Person (other than (A) intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries or among Restricted Subsidiaries and (B) the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity,

 

29

 

in each case due within one year of the date of such purchase, repurchase or other acquisition); or

 

(4)                                 the making of any Investment (other than a Permitted Investment) in any Person.

 

“Restricted Security” means a Note that constitutes a “Restricted Security” within the meaning of Rule 144(a)(3) under the Securities Act; provided, however, that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Note constitutes a Restricted Security.

 

“Restricted Subsidiary” means any Subsidiary of the Issuer that is not an Unrestricted Subsidiary.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the Securities Act.

 

“Rule 903” means Rule 903 promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or any successor to the rating agency business thereof.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Indebtedness” means any Indebtedness of the Issuer secured by a Lien.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Senior Indebtedness” means with respect to any Person:

 

(1)                                 Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred; and

 

(2)                                 all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above,

 

unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such Indebtedness or other obligations are subordinate or pari passu in right of payment to the Notes or the Subsidiary Guaranty of such Person, as the case may be; provided, however, that Senior Indebtedness shall not include:

 

(1)                                 any obligation of such Person to the Issuer or any Subsidiary of the Issuer;

 

30

 

(2)                                 any liability for Federal, state, local or other taxes owed or owing by such Person;

 

(3)                                 any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities);

 

(4)                                 any Indebtedness or other Obligation of such Person which is by its express terms subordinate or junior in right of payment to any other Indebtedness or other Obligation of such Person;

 

(5)                                 that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of this Indenture (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (5) if the holders of such obligation or their Representative shall have received an Officer’s Certificate of the Issuer to the effect that the Incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness, that the Incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture); or

 

(6)                                 any obligations of such Person with respect to any Capital Stock.

 

“Senior Subordinated Indebtedness” means, with respect to a Person, the Notes and the Existing Notes (in the case of the Issuer), the Subsidiary Guaranty and the guarantee of the Existing Notes (in the case of a Subsidiary Guarantor) and the Interline Delaware Guaranty and the guarantee by Interline Delaware of the Existing Notes (in the case of Interline Delaware) and any other Indebtedness of such Person that specifically provides that such Indebtedness is to rank pari passu with the Notes or such Subsidiary Guaranty or the Interline Delaware Guaranty, as the case may be, in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of such Person which is not Senior Indebtedness of such Person.

 

“Shelf Registration Statement” has the meaning set forth in the Registration Rights Agreement.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

 

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the Holder thereof upon the happening of any contingency unless such contingency has occurred).

 

“Subordinated Obligation” means, with respect to a Person, any Indebtedness of such Person (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the notes or a Subsidiary Guaranty or the Interline Delaware Guaranty, of such Person, as the case may be, pursuant to a written agreement to that effect.

 

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“Subsidiary” means, with respect to any Person, any corporation, association, partnership, limited liability company or other business entity of which more than 50% of the total voting power of shares of Voting Stock is at the time owned or controlled, directly or indirectly, by:

 

(1)                                 such Person;

 

(2)                                 such Person and one or more Subsidiaries of such Person; or

 

(3)                                 one or more Subsidiaries of such Person.

 

“Subsidiary Guarantor” means Wilmar Holdings, Inc., Wilmar Financial, Inc., Glenwood Acquisition LLC and each other Subsidiary of the Issuer that executes the Indenture on the Issue Date and each other Subsidiary of the Issuer that thereafter guarantees the Notes pursuant to the terms of this Indenture and executes a Guaranty Agreement.

 

“Subsidiary Guaranty” means a Guarantee by a Subsidiary Guarantor of the Issuer’s obligations with respect to the Notes.

 

“Tax Payments” has the meaning assigned to such term in the definition of “Permitted Payments to Interline Delaware.”

 

“Temporary Cash Investments” means any of the following:

 

(1)                                 United States dollars, pounds sterling, euros, the national currency of any participating member state of the European Union, Canadian dollars, or, in the case of any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

 

(2)                                 any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed or insured by the United States of America or any agency thereof having maturities of not more than twelve months from the date of acquisition;

 

(3)                                 bankers’ acceptances, investments in demand and time deposit accounts, certificates of deposit, eurodollar time deposits and money market deposits maturing within twelve months of the date of acquisition thereof and overnight bank deposits, in each case issued by a lender party to the Credit Agreement or issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital and surplus aggregating in excess of $500.0 million (or the foreign currency equivalent thereof) and has a Thomson Bank Watch Rating of “B” or better or any money market fund sponsored by a registered broker dealer or mutual fund distributor;

 

(4)                                 repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (3) above;

 

32

 

(5)                                 investments in commercial paper, maturing not more than 180 days after the date of acquisition, issued by a Person (other than an Affiliate of the Issuer) with a rating at the time as of which any investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P;

 

(6)                                 investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or A by Moody’s;

 

(7)                                 money market funds at least 95% of the assets of which constitute Temporary Cash Investments of the kinds described in clauses (1) through (6) of this definition; and

 

(8)                                 in the case of a Foreign Subsidiary, substantially similar investments, of comparable credit quality, denominated in the currency of any jurisdiction in which such Person conducts business.

 

“Total Assets” means the total consolidated assets of the Issuer and its Restricted Subsidiaries, as set forth on the Issuer’s consolidated balance sheet for the most recently ended fiscal quarter for which internal financial statements are available.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 (15 U.S.C.—77aaa-77bbbb) as in effect on the Issue Date, except as provided in Section 9.03.

 

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

 

“Trustee” means Wells Fargo Bank, National Association, until a successor replaces it and, thereafter, means the successor.

 

“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a permanent Global Note, substantially in the form of Exhibit A attached hereto, that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means:

 

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(1)                                 any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in the manner provided below; and

 

(2)                                 any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Issuer or any Restricted Subsidiary that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under Section 4.09.

 

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (A) the Issuer could Incur $1.00 of additional Indebtedness under Section 4.08(a) and (B) no Default shall have occurred and be continuing. Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

 

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

 

“U.S. Legal Tender” means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

 

“U.S.  Person” means a U.S. Person as defined in Rule 902(k) under the Securities Act.

 

“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

 

“Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Issuer or one or more other Wholly Owned Subsidiaries.

 

SECTION 1.02.                                   Other Definitions.

 

	
Term
  	
 
  	
Defined in Section
  
	
 
  	
 
  	
 
  
	
“Affiliate Transaction”
  	
 
  	
4.12(a)
  
	
 
  	
 
  	
 
  
	
“Asset Sale Offer”
  	
 
  	
4.11(b)
  
	
 
  	
 
  	
 
  
	
“Asset Sale Offer Amount”
  	
 
  	
4.11(c)
  

 

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Term
  	
 
  	
Defined in Section
  
	
 
  	
 
  	
 
  
	
“Asset Sale Offer Period”
  	
 
  	
4.11(c)
  
	
 
  	
 
  	
 
  
	
“Asset Sale Purchase Date”
  	
 
  	
4.11(c)
  
	
 
  	
 
  	
 
  
	
“Bankruptcy Law”
  	
 
  	
6.01
  
	
 
  	
 
  	
 
  
	
“Blockage Notice”
  	
 
  	
10.03
  
	
 
  	
 
  	
 
  
	
“Covenant Defeasance”
  	
 
  	
8.02(c)
  
	
 
  	
 
  	
 
  
	
“Custodian”
  	
 
  	
6.01
  
	
 
  	
 
  	
 
  
	
“Event of Default”
  	
 
  	
6.01
  
	
 
  	
 
  	
 
  
	
“Exchange Notes”
  	
 
  	
Recitals
  
	
 
  	
 
  	
 
  
	
“Global Note Legend”
  	
 
  	
Exhibit B
  
	
 
  	
 
  	
 
  
	
“Guaranteed Obligations”
  	
 
  	
11.01(a)
  
	
 
  	
 
  	
 
  
	
“Guaranty Blockage Notice”
  	
 
  	
12.03
  
	
 
  	
 
  	
 
  
	
“Guaranty Payment Blockage Period”
  	
 
  	
12.03
  
	
 
  	
 
  	
 
  
	
“Guarantor Payment Default”
  	
 
  	
12.03
  
	
 
  	
 
  	
 
  
	
“Initial Notes”
  	
 
  	
Recitals
  
	
 
  	
 
  	
 
  
	
“Legal Defeasance”
  	
 
  	
8.02(b)
  
	
 
  	
 
  	
 
  
	
“Non-Guarantor Payment Default”
  	
 
  	
12.03
  
	
 
  	
 
  	
 
  
	
“Non-Payment Default”
  	
 
  	
10.03
  
	
 
  	
 
  	
 
  
	
“Notes”
  	
 
  	
Recitals
  
	
 
  	
 
  	
 
  
	
“Original Notes”
  	
 
  	
Recitals
  
	
 
  	
 
  	
 
  
	
“pay its Guaranty”
  	
 
  	
12.03
  
	
 
  	
 
  	
 
  
	
“pay the Notes”
  	
 
  	
10.03
  
	
 
  	
 
  	
 
  
	
“Paying Agent”
  	
 
  	
2.03
  
	
 
  	
 
  	
 
  
	
“Payment Blockage Period”
  	
 
  	
10.03
  
	
 
  	
 
  	
 
  
	
“Payment Default”
  	
 
  	
10.03
  
	
 
  	
 
  	
 
  
	
“Prior Issue Date”
  	
 
  	
4.09(a)
  
	
 
  	
 
  	
 
  
	
“Private Placement Legend”
  	
 
  	
Exhibit B
  
	
 
  	
 
  	
 
  
	
“Registrar”
  	
 
  	
2.03
  
	
 
  	
 
  	
 
  
	
“Restricted Period”
  	
 
  	
2.16(b)
  
	
 
  	
 
  	
 
  
	
“Successor Company”
  	
 
  	
5.01(a)
  

 

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SECTION 1.03.                                   Incorporation by Reference of TIA.

 

Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in, and made a part of, this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

(a)           “indenture securities” means the Notes;

 

(b)           “indenture security holder” means a Holder or a Noteholder;

 

(c)           “indenture to be qualified” means this Indenture;

 

(d)           “indenture trustee” or “institutional trustee” means the Trustee; and

 

(e)           “obligor” on the indenture securities means the Issuer, any Guarantor or any other obligor on the Notes.

 

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them therein.

 

SECTION 1.04.                                   Rules of Construction.

 

Unless the context otherwise requires:

 

(a)           a term has the meaning assigned to it;

 

(b)           an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)           “or” is not exclusive;

 

(d)           words in the singular include the plural, and words in the plural include the singular;

 

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

 

(f)            the words “including,” “includes” and similar words shall be deemed to be followed by “without limitation”;

 

(g)           unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

 

(h)           secured Indebtedness shall not be deemed to be subordinate or junior to any other secured Indebtedness merely because it has a junior priority with respect to the same collateral or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in collateral held by them;

 

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(i)            the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer; and

 

(j)            all references to the date the Original Notes were originally issued shall refer to the Issue Date.

 

ARTICLE TWO

 

THE NOTES

 

SECTION 2.01.                                   Form and Dating.

 

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  The Issuer shall approve the form of the Notes and any notation, legend or endorsement on them.  Each Note shall be dated the date of its issuance and show the date of its authentication.  Any Note (whether a Global Note or a Definitive Note) that is a Restricted Security shall bear the Private Placement Legend set forth in Exhibit B.

 

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more Global Notes, substantially in the form set forth in Exhibit A, deposited with the Trustee, as custodian for the Depositary, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided and shall bear the legends relating to Global Notes set forth in Exhibit B.

 

Notes issued in definitive form shall be substantially in the form set forth in Exhibit A and shall, to the extent applicable, bear the legends set forth in Exhibit B and will not have a “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee in accordance with instructions given by the Holder thereof as required by Sections 2.15 and 2.16 hereof.

 

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Notes offered and sold in reliance on Regulation S shall be issued in the form of the Regulation S Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Regulation S Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

 

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.

 

SECTION 2.02.                                   Execution and Authentication.

 

One Officer of the Issuer (who shall have been duly authorized by all requisite corporate actions) shall sign the Notes by manual signature.

 

If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

 

A Note shall not be valid until an authorized signatory of the Trustee signs the certificate of authentication on the Note by manual, facsimile or electronic signature.  The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee shall authenticate (i) Original Notes on the Issue Date in the aggregate principal amount of $300,000,000 and (ii) Exchange Notes from time to time for issue in exchange for a like principal amount of Original Notes, in each case upon a written order of the Issuer in the form of an Officer’s Certificate.  In addition, the Trustee shall authenticate Additional Notes thereafter in unlimited amount (so long as not otherwise prohibited by the terms of this Indenture, including Section 4.08) and the same principal amount of Exchange Notes in exchange therefor upon a written order of the Issuer in the form of an Officer’s Certificate.  Each such Officer’s Certificate shall specify the amount of Notes to be authenticated, the date on which the Notes are to be authenticated and, in the case of Additional Notes, the issue price of the Notes.

 

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate Notes.  Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with the Issuer and Affiliates of the Issuer.

 

The Notes shall be issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

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SECTION 2.03.                                   Registrar and Paying Agent.

 

The Issuer shall maintain an office or agency where (a) Notes may be presented or surrendered for registration of transfer or for exchange (the “Registrar”), (b) Notes may be presented or surrendered for payment (the “Paying Agent”) and (c) notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.  Interline Delaware, the Issuer or any of its Subsidiaries may act as Registrar or Paying Agent, except that for purposes of Articles Three and Eight and Sections 4.09 and 4.13, neither the Issuer nor any Affiliate of the Issuer shall act as Paying Agent.  The Registrar shall keep a register of the Notes and of their transfer and exchange.  The Issuer, upon notice to the Trustee, may have one or more co-Registrars and one or more additional paying agents reasonably acceptable to the Trustee.  The term “Paying Agent” includes any additional paying agent.  The Issuer initially appoints the Trustee as Registrar and Paying Agent until such time as the Trustee has resigned or a successor has been appointed.  The Issuer may change the Paying Agent or Registrar without prior notice to Holders.

 

SECTION 2.04.                                   Paying Agent To Hold Assets in Trust.

 

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that, subject to Article Eight, that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all assets held by the Paying Agent for the payment of principal of, or interest on, the Notes (whether such assets have been distributed to it by the Issuer or any other obligor on the Notes), and shall notify the Trustee of any Default by the Issuer (or any other obligor on the Notes) in making any such payment.  The Issuer at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any Payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed.  Upon distribution to the Trustee of all assets that shall have been delivered by the Issuer to the Paying Agent, the Paying Agent shall have no further liability for such assets.  Upon any bankruptcy or reorganization process relating to the Issuer, the Trustee will serve as Paying Agent for the Notes.

 

SECTION 2.05.                                   Holder Lists.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders.  If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two (2) Business Days prior to each Interest Payment Date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders, which list may be conclusively relied upon by the Trustee.

 

SECTION 2.06.                                   Transfer and Exchange.

 

Subject to Sections 2.15 and 2.16, when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for

 

39

 

an equal principal amount of Notes of other authorized denominations, the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, that the Notes surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Registrar or co-Registrar, duly executed by the Holder thereof or his or her attorney duly authorized in writing.

 

Subject to Section 2.15, any Holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Notes may be effected only through a book-entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book-entry system.

 

SECTION 2.07.                                   Replacement Notes.

 

If a mutilated Note is surrendered to the Trustee or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the New York Uniform Commercial Code, as in effect from time to time, are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such written request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the New York Uniform Commercial Code, as in effect from time to time, and (c) satisfies any other reasonable requirements of the Trustee. Such Holder must provide an indemnity bond or other indemnity, sufficient in the judgment of the Issuer and the Trustee, to protect the Issuer, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced.  The Issuer may charge such Holder for their reasonable out-of-pocket expenses in replacing a Note pursuant to this Section 2.07, including reasonable fees and expenses of counsel and of the Trustee.

 

Every replacement Note is an additional obligation of the Issuer.

 

SECTION 2.08.                                   Outstanding Notes.

 

Notes outstanding at any time are all the Notes that have been authenticated by the Trustee except those cancelled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding.  A Note does not cease to be outstanding because the Issuer or any of its Affiliates holds the Note (subject to the provisions of Section 2.09).

 

If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless a Trust Officer of the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.  A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07.

 

If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest thereon ceases to accrue.  If on a Redemption Date or the Maturity Date the Trustee or Paying Agent (other than the Issuer or an Affiliate thereof) holds U.S.

 

40

 

Legal Tender or U.S. Government Obligations sufficient to pay all of the principal and interest due on the Notes payable on that date, then on and after that date such Notes cease to be outstanding and interest thereon ceases to accrue.

 

SECTION 2.09.              Treasury Notes.

 

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or any of its Affiliates shall be disregarded, except that, for the purposes of determining whether the Trustee shall be protected in conclusively relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be disregarded.

 

SECTION 2.10.              Temporary Notes.

 

Until definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes.  Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.  Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes.  Notwithstanding the foregoing, so long as the Notes are represented by a Global Note, such Global Note may be in typewritten form.

 

SECTION 2.11.              Cancellation.

 

The Issuer at any time may deliver Notes to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment.  The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent (other than the Issuer or any of its Subsidiaries), and no one else, shall cancel and, at the written direction of the Issuer, shall dispose of all Notes surrendered for transfer, exchange, payment or cancellation in accordance with its customary procedures.  Subject to Section 2.07, the Issuer may not issue new Notes to replace Notes that it has paid or delivered to the Trustee for cancellation. If the Issuer shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11.

 

SECTION 2.12.              Defaulted Interest.

 

If the Issuer defaults in a payment of interest on the Notes, it shall, unless the Trustee fixes another record date pursuant to Section 6.10, pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest, in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date, which date shall be the fifteenth day next preceding the date fixed by the Issuer for the payment of defaulted interest or the next succeeding Business Day if such date is not a Business Day.  At least 15 days before any such subsequent special record date, the Issuer shall mail to each Holder, with a copy to the Trustee, a notice that states the subsequent special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.

 

41

 

SECTION 2.13.              CUSIP Number.

 

The Issuer in issuing the Notes may use a “CUSIP” number, and if so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes.  The Issuer shall promptly notify the Trustee of any change in the CUSIP numbers.

 

SECTION 2.14.              Deposit of Moneys.

 

Prior to 12:00 p.m. (noon) New York City time on each Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and Asset Sale Purchase Date, the Issuer shall have deposited including by wire transfer with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and Asset Sale Purchase Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and Asset Sale Purchase Date, as the case may be.

 

SECTION 2.15.              Book-Entry Provisions for Global Notes.

 

(a)           The Global Notes initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear the legends relating to the Global Notes as set forth in Exhibit B.

 

Members of, or Participants in, the Depositary shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Note, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

 

(b)           Transfers of Global Notes shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Beneficial interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes in accordance with the rules and procedures of the Depositary and the provisions of Section 2.16.  In addition, a Global Note is exchangeable for a Definitive Note if (i) the Depository (A) notifies the Issuer that it is unwilling or unable to continue as depositary for the applicable Global Notes or (B) has ceased to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed or (ii) there has occurred and is continuing a Default or an Event of Default with respect to the Notes.

 

(c)           In connection with any transfer or exchange of a portion of the beneficial interest in a Global Note to beneficial owners pursuant to paragraph (b) of this Section 2.15, the

 

42

 

Registrar shall (if one or more Definitive Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and (i) the Issuer shall execute and (ii) the Trustee shall authenticate and deliver, one or more Definitive Notes of authorized denominations in an aggregate principal amount equal to the principal amount of the beneficial interest in the Global Note so transferred.

 

(d)           In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15, such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall upon written instructions from the Issuer authenticate and deliver to each beneficial owner identified by the Depositary in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.

 

(e)           Any Definitive Note constituting a Restricted Security delivered in exchange for an interest in a Global Note pursuant to paragraph (b), (c) or (d) of this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the Private Placement Legend.

 

(f)            The Holder in any Global Note may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which a Holder is entitled to take under this Indenture or the Notes.

 

SECTION 2.16.              Special Transfer Provisions.

 

(a)           Restrictions on Transfer and Exchange of Global Notes. Except as otherwise set forth in this Article Two, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

 

(b)           Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(i)   Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that on or prior to the end of the “distribution compliance period” (as defined in Regulation S, the “Restricted Period”), a beneficial interest in a Regulation S Global Note may be transferred to a Person who takes delivery in the form of an interest in the corresponding 144A Global Note or an IAI Global Note only upon receipt by the Trustee of a written

 

43

 

certification from the transferor to the effect that such transfer is being made (A) (I) to a Person that the transferor reasonably believes is a Qualified Institutional Buyer in a transaction meeting the requirements of Rule 144A or (II) pursuant to another exemption from the registration requirements under the Securities Act which is accompanied by an Opinion of Counsel regarding the availability of such exemption and (B) in accordance with all applicable securities laws of any state of the United States or any other jurisdiction. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.16(b)(i).  Beneficial interests in the 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a written certificate to the effect that such transfer is being made in accordance with Regulation S or Rule 144 (if available).

 

(ii)  All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.16(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above.  Upon consummation of an Exchange Offer by the Issuer in accordance with Section 2.16(f) hereof, the requirements of this Section 2.16(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes.  Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.16(g) hereof.

 

(iii) Transfer of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.16(b)(ii) hereof and the Registrar receives the following:

 

44

 

(A)          if the transferee shall take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (1) thereof;

 

(B)           if the transferee shall take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (2) thereof; or

 

(C)           if the transferee shall take delivery in the form of a beneficial interest in an IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (3) thereof.

 

(iv)       Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.16(b)(ii) hereof and:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as deemed in Rule 144) of the Issuer;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

(C)           such exchange or transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar receives the following:

 

(1)           if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit D hereto, including the certifications in item (1)(a) thereof; or

 

(2)           if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (4) thereof;

 

45

 

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

 

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

 

(c)           Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(i)         Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes.  If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in paragraph (i), (ii) or (iii) of Section 2.15(b) hereof and receipt by the Registrar of the following documentation:

 

(A)          if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit D hereto, including the certifications in item (2)(a) thereof;

 

(B)           if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (1) thereof;

 

(C)           if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (2) thereof;

 

(D)          if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(a) thereof;

 

(E)           if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through

 

46

 

(D) above, a certificate to the effect set forth in Exhibit C hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable;

 

(F)           if such beneficial interest is being transferred to Interline Delaware, the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(b) thereof; or

 

(G)           if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(c) thereof,

 

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.16(g) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount.  Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.16(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.  The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.16(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

(ii)        [Reserved.]

 

(iii)       Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in subsection (i), (ii) or (iii) of Section 2.15(b) hereof and if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

(C)           such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar receives the following:

 

47

 

(1)           if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit D hereto, including the certifications in item (1)(b) thereof; or

 

(2)           if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iv)          Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in subsection (i), (ii) or (iii) of Section 2.15(b) hereof and satisfaction of the conditions set forth in Section 2.16(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.16(g) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.16(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant.  The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.16(c)(iv) shall not bear the Private Placement Legend.

 

(d)           Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

(i)         Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)          if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate

 

48

 

from such Holder substantially in the form of Exhibit D hereto, including the certifications in item (2)(b) thereof;

 

(B)           if such Restricted Definitive Note is being transferred to a QIB, in accordance with Rule 144A, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (1) thereof;

 

(C)           if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (2) thereof;

 

(D)          if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(a) thereof;

 

(E)           if such Restricted Definitive Note is being transferred to Interline Delaware, the Issuer or any of its respective Subsidiaries, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(b) thereof; or

 

(F)           if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit C hereto, including the certifications in item (3)(c) thereof,

 

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.

 

(ii)        Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

49

 

(C)           such exchange or transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar receives the following:

 

(1)           if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit D hereto, including the certifications in item (1)(c) thereof; or

 

(2)           if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.16(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

 

(iii)       Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

 

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

(e)           Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.16(e), the Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly

 

50

 

authorized in writing.  In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.16(e):

 

(i)         Restricted Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

 

(A)          if the transfer shall be made pursuant to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit C hereto, including the certifications in item (1) thereof;

 

(B)           if the transfer shall be made pursuant to Rule 903 or Rule 904 then the transferor must deliver a certificate in the form of Exhibit C hereto including the certifications in item (2) thereof; or

 

(C)           if the transfer shall be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications required by item (3) thereof, if applicable.

 

(ii)        Restricted Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)           any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

(C)           any such exchange or transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar receives the following:

 

(1)           if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit D hereto, including the certifications in item (1)(d) thereof; or

 

51

 

(2)           if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)       Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note.  Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

(f)            Exchange Offer.  Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer.  Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuer shall execute and the Trustee shall authenticate and mail to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the applicable principal amount.  Any Notes that remain outstanding after the consummation of the Exchange Offer, and Exchange Notes issued in connection with the Exchange Offer, shall be treated as a single class of securities under this Indenture.

 

(g)           Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee

 

52

 

to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)           General Provisions Relating to Transfers and Exchanges.

 

(i)         To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

(ii)        No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer or the Trustee may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 4.07, 4.11 and 9.05 hereof).

 

(iii)       Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(iv)       All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(v)        The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

 

(vi)       Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

 

(vii)      Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or

 

53

 

transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

 

(viii)     At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

 

(ix)       All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.16 to effect a registration of transfer or exchange may be submitted by facsimile.

 

(x)        Notwithstanding anything to the contrary herein, the Issuer will not be required to transfer or exchange any Note (i) selected for redemption or (ii) for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed.

 

(i)            General.

 

(a)           The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.15 or this Section 2.16.  The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

 

(b)           The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary Participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

(c)           The Trustee shall have no responsibility for the actions or omissions of the Depositary, or the accuracy of the books and records of the Depositary.

 

SECTION 2.17.                                         Issuance of Additional Notes.

 

The Issuer shall be entitled, subject to its compliance with Section 4.08, to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes or the Exchange Notes, other than with respect to the date of issuance, issue price, first interest payment amount, first interest payment date and rights under a related Registration Rights Agreement, if any.

 

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ARTICLE THREE

 

REDEMPTION

 

SECTION 3.01.                                         Notices to Trustee.

 

If the Issuer elects to redeem Notes pursuant to Section 5 or Section 6 of the Notes, it shall notify the Trustee in writing of the Redemption Date, the Redemption Price and the principal amount of Notes to be redeemed.  The Issuer shall give notice of redemption to the Paying Agent and Trustee at least 5 Business Days prior to the last date for which Holders are entitled to receive notice of redemption as provided in Section 3.03 or 3.08 (unless a shorter notice period shall be agreed to by the Trustee), together with an Officer’s Certificate stating that such redemption will comply with the conditions contained herein.

 

SECTION 3.02.                                         Selection of Notes To Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

 

(i)         if the Notes are listed on a national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

 

(ii)        if the Notes are not so listed, on a pro rata basis, to the extent practicable, or by such method that is in accordance with the procedures of the Depositary and applicable legal requirements (but subject to the requirement that any remaining Notes be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof);

 

provided, however, that, in the case of a redemption pursuant to Section 6 of the Notes, the Trustee will select the Notes on a pro rata basis or on as nearly a pro rata basis as practicable (subject to the procedures of the Depositary).

 

No Notes of $2,000 or less shall be redeemed in part.

 

SECTION 3.03.                                         Notice of Redemption.

 

At least 30 days but not more than 60 days before a Redemption Date, the Issuer shall mail a notice of redemption by first class mail, postage prepaid, to each Holder whose Notes are to be redeemed at its registered address.  At the Issuer’s request, the Trustee shall forward the notice of redemption in the Issuer’s name and at the Issuer’s expense.  Each notice for redemption shall identify the Notes (including the CUSIP number) to be redeemed and shall state:

 

(i)         the Redemption Date;

 

(ii)        the Redemption Price and the amount of accrued and unpaid interest to be paid, if any;

 

55

 

(iii)       the name and address of the Paying Agent;

 

(iv)       that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price plus accrued and unpaid interest, if any;

 

(v)        that, unless the Issuer defaults in making payment of the Redemption Price or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price (including accrued and unpaid interest, if any) upon surrender to the Paying Agent of the Notes redeemed;

 

(vi)       if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date, and upon surrender of such Note, a new Note or Notes in aggregate principal amount equal to the unredeemed portion thereof will be issued upon cancellation of the redeemed portion;

 

(vii)      if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption; and

 

(viii)     the section of the Notes pursuant to which the Notes are to be redeemed.

 

Such notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice.  In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

 

SECTION 3.04.                                         Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price plus accrued and unpaid interest to the Redemption Date.  Upon surrender to the Trustee or Paying Agent, such Notes called for redemption shall be paid at the Redemption Price (which shall include accrued interest thereon, if any, to the Redemption Date), but installments of interest, the maturity of which is on or prior to the Redemption Date, shall be payable to Holders of record at the close of business on the relevant Record Date.  On and after the Redemption Date, interest shall cease to accrue on the Notes or portions thereof called for redemption.

 

SECTION 3.05.                                         Deposit of Redemption Price.

 

On or before 12:00 p.m. (noon) New York City time on the Redemption Date, the Issuer shall deposit with the Paying Agent, U.S. Legal Tender sufficient to pay the Redemption Price plus accrued and unpaid interest of all Notes to be redeemed on that date.

 

If the Issuer complies with the preceding paragraph, then, unless the Issuer defaults in the payment of such Redemption Price, plus accrued and unpaid interest, if any, interest

 

56

 

on the Notes to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Notes are presented for payment.

 

SECTION 3.06.                                         Notes Redeemed in Part.

 

If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed.  A new Note or Notes in principal amount equal to the unredeemed portion of the original Note or Notes shall be issued in the name of the Holder thereof upon cancellation of the original Note or Notes.

 

SECTION 3.07.                                         Mandatory Redemption.

 

The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

SECTION 3.08.                                         Optional Redemption.

 

(a)           Except as set forth below, the Notes are not subject to redemption prior to November 15, 2013.

 

(b)           Prior to November 15, 2013, the Issuer shall be entitled at its option to redeem all, but not less than all, of the Notes at a Redemption Price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date). Notice of such redemption must be mailed by first-class mail to each Holder’s registered address, not less than 30 days nor more than 60 days prior to the Redemption Date.

 

(c)           On and after November 15, 2013, the Issuer shall be entitled at its option to redeem all or a portion of the Notes upon not less than 30 days’ nor more than 60 days’ notice, at the Redemption Prices (expressed in percentages of principal amount on the Redemption Date), plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period commencing on November 15 of the years set forth below:

 

	
Period
  	
 
  	
Redemption
 Price
  	
 
  
	
2013 
  	
 
  	
105.250
  	
%
  
	
2014 
  	
 
  	
103.500
  	
%
  
	
2015 
  	
 
  	
101.750
  	
%
  
	
2016 and thereafter 
  	
 
  	
100.000
  	
%
  

 

(d)           Prior to November 15, 2013, the Issuer may at its option on one or more occasions redeem Notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) originally issued at a Redemption Price (expressed as a percentage of the principal amount) of 107.000%, plus accrued and unpaid interest, if any, to the Redemption Date

 

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(subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), with the Net Cash Proceeds from one or more Equity Offerings; provided, however, that

 

(i)         at least 65% of such aggregate principal amount of Notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than Notes held, directly or indirectly, by the Issuer or its Affiliates); and

 

(ii)        each such redemption occurs within 90 days after the date of consummation of the related Equity Offering.

 

ARTICLE FOUR

 

COVENANTS

 

SECTION 4.01.                                         Payment of Notes.

 

The Issuer shall pay the principal of (and premium, if any) and interest on the Notes in the manner provided in the Notes, the Registration Rights Agreement and this Indenture.  An installment of principal of or interest on the Notes shall be considered paid on the date it is due if the Trustee or Paying Agent (other than the Issuer or an Affiliate thereof) holds on that date U.S. Legal Tender designated for and sufficient to pay the installment then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to Holders on that date pursuant to the terms of this Indenture.  Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful.  The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

 

SECTION 4.02.                                         Maintenance of Office or Agency.

 

The Issuer shall maintain the office or agency required under Section 2.03.  The Issuer shall 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 Issuer 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 address of the Trustee set forth in Section 13.02.

 

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.  The Issuer 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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The Issuer hereby initially designates the Trustee, located at the Corporate Trust Office, as such office of the Issuer in accordance with Section 2.03.

 

SECTION 4.03.                                         [Reserved].

 

SECTION 4.04.                                         [Reserved].

 

SECTION 4.05.                                         Compliance Certificate; Notice of Default.

 

(a)           The Issuer shall deliver to the Trustee within 120 days after the end of the fiscal year of the Issuer an Officer’s Certificate signed by the principal executive officer, principal financial officer or principal accounting officer of the Issuer stating that in the course of performance by the signatory of such signatory’s duty as an Officer of the Issuer they would normally have knowledge of any Default and whether or not the signatory knows of any Default that occurred during such period.  If they do, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

(b)           The Issuer shall deliver to the Trustee as soon as possible, and in any event within the earlier of 90 days after the occurrence and 30 days after the Issuer becomes aware of the occurrence of any Default, an Officer’s Certificate specifying the Default and describing its status with particularity and the action proposed to be taken thereto.

 

SECTION 4.06.                                         Waiver of Stay, Extension or Usury Laws.

 

The Issuer and each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Issuer or such Guarantor from paying all or any portion of the principal of and/or interest on the Notes or the Guarantee of any such Guarantor as contemplated herein, wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture, and (to the extent that it may lawfully do so) each 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.

 

SECTION 4.07.                                         Change of Control.

 

(a)           Upon the occurrence of a Change of Control, each Holder shall have the right to require that the Issuer repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in Section 4.07(b).  In the event that at the time of such Change of Control the terms of any Senior Indebtedness of the Issuer restrict or prohibit the purchase of Notes pursuant to this Section 4.07, then prior to the mailing of the notice to Holders provided for in Section 4.07(b) below but in any event within 30 days following any Change of Control, the Issuer shall (1) repay in full all such Senior Indebtedness or (2) obtain the requisite consents under the 

 

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agreements governing all such Senior Indebtedness to permit the repurchase of the Notes as provided for in Section 4.07(b).

 

(b)           Within 45 days following any Change of Control, the Issuer shall mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

 

(A)          that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest on the relevant Interest Payment Date);

 

(B)           the circumstances and relevant facts regarding such Change of Control;

 

(C)           the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

 

(D)          the instructions, as determined by the Issuer, consistent with this Section 4.07, that a Holder must follow in order to have its Notes purchased.

 

(c)           Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the purchase date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased.

 

(d)           On the purchase date, all Notes purchased by the Issuer under this Section 4.07 shall be delivered by the Issuer to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto.

 

(e)           Notwithstanding the foregoing provisions of this Section 4.07, the Issuer shall not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.07 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer (it being understood that such third-party may make a Change of Control Offer that is conditioned on and prior to the occurrence of a Change of Control pursuant to this clause (1) or (2) notice of redemption has been given pursuant to this Indenture unless and until there is a default in payment of the applicable Redemption Price.

 

(f)            A Change of Control Offer may be made in advance of the Change of Control, conditional upon such Change of Control if a definitive agreement is in place for the Change of Control at the time of the making of the Change of Control Offer.

 

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(g)           The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.07. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.07, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.07 by virtue of its compliance with such securities laws or regulations.

 

SECTION 4.08.                                         Limitation on Indebtedness.

 

(a)           The Issuer shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Issuer and the Subsidiary Guarantors shall be entitled to Incur Indebtedness if, on the date of such Incurrence after giving effect thereto on a pro forma basis (including a pro forma application of the Net Cash Proceeds therefrom), the Consolidated Coverage Ratio exceeds 2.0 to 1.0.

 

(b)           Notwithstanding Section 4.08(a), the Issuer and the Restricted Subsidiaries shall be entitled to Incur any or all of the following Indebtedness:

 

(1)           Indebtedness Incurred by the Issuer or any Subsidiary Guarantor pursuant to any Credit Facility; provided, however, that, immediately after giving effect to any such Incurrence, the aggregate principal amount (and/or accreted value, as applicable) of all Indebtedness Incurred under this Section 4.08(b)(1) and then outstanding does not exceed the greater of (a) $325.0 million or (b) the Borrowing Base as of the date of such incurrence;

 

(2)           Indebtedness of the Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon; (B) if the Issuer is the obligor on such Indebtedness, such Indebtedness is preferred stock or unsecured and expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes; and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is preferred stock or unsecured and expressly subordinated to the prior payment in full in cash of all obligations of such obligor with respect to its Subsidiary Guaranty;

 

(3)           the Notes (other than any Additional Notes);

 

(4)           Indebtedness outstanding on the Issue Date, including any Existing Notes (other than Indebtedness described in clause (b)(1), (2) or (3) of this Section 4.08);

 

(5)           Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Issuer (other than Indebtedness Incurred in connection with, or to provide all or any portion of the funds or credit

 

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support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Issuer); provided, however, that (A) on the date of such acquisition after giving pro forma effect thereto, the Issuer would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a) or (B) the Consolidated Coverage Ratio would be equal to or greater than immediately prior to such acquisition;

 

(6)           Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to Section 4.08(a) or pursuant to clause (3), (4) or (5) or this clause (6) of Section 4.08(b);

 

(7)           Hedging Obligations entered into not for the purpose of speculation;

 

(8)           obligations in respect of one or more standby letters of credit, performance, bid and surety bonds, completion guarantees, bank guarantees, workers’ compensation claims, self-insurance obligations, bankers’ acceptances, statutory, appeal, completion, export or import, indemnities, customs, revenue bonds or similar instruments, including guarantees or obligations with respect thereto (in each case other than for an obligation for money borrowed), in each case provided by the Issuer or any Restricted Subsidiary in the ordinary course of business;

 

(9)           Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;

 

(10)         the Guarantee or co-issuance by any Subsidiary Guarantor of any Indebtedness otherwise permitted to be Incurred pursuant to this Indenture;

 

(11)         Indebtedness (including Capital Lease Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries to finance all or any part of the purchase price or cost of design, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), and any Refinancing Indebtedness Incurred to Refinance such Indebtedness, in an aggregate principal amount (or accreted value, as applicable) which, when taken together with all other Indebtedness Incurred pursuant to this clause (11) and outstanding on the date of such Incurrence, does not exceed the greater of (x) $25.0 million or (y) 5.0% of Consolidated Tangible Assets determined as of the most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date);

 

(12)         Indebtedness of a Receivables Subsidiary Incurred pursuant to a Qualified Receivables Transaction;

 

(13)         Indebtedness Incurred by Foreign Subsidiaries which, when taken together with all other Indebtedness Incurred pursuant to this clause (13) and outstanding on the date of such Incurrence, does not exceed the greater of (x) $25.0 million and (y) 4.5% of Consolidated Tangible Assets determined as of the most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date);

 

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(14)         Indebtedness representing indemnification, adjustment for purchase price or similar obligations relating to the acquisition of any business or assets or any disposition of any business or assets;

 

(15)         Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate principal amount which, when taken together with all other Indebtedness of the Issuer and the Restricted Subsidiaries Incurred pursuant to this clause (15) and outstanding on the date of such Incurrence, does not exceed the greater of (x) $60.0 million and (y) 10.5% of Consolidated Tangible Assets determined as of the most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date).

 

(c)           For purposes of determining compliance with this Section 4.08:

 

(1)           any Indebtedness outstanding under the Credit Agreement after the application of the Net Cash Proceeds from the sale of the Notes will be treated as Incurred on the Issue Date under Section 4.08(b)(1);

 

(2)           in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the types of Indebtedness described in Section 4.08(a) or (b), the Issuer, in its sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to include the amount and type of such Indebtedness in Section 4.08(a) or one of the clauses of Section 4.08(b);

 

(3)           the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.08(a) or (b); and

 

(4)           following the date of its Incurrence, any Indebtedness originally classified as Incurred pursuant to Section 4.08(a) or one of the clauses in Section 4.08(b) (other than Indebtedness described in clause (1) of Section 4.08(c)) may later be divided, classified or reclassified (based on circumstances in existence at the time of such reclassification or division) by the Issuer in its sole discretion such that it will be deemed as having been Incurred pursuant to Section 4.08(a) or another clause in Section 4.08(b), as applicable, to the extent that such reclassified Indebtedness could be Incurred pursuant to such new clause or paragraph at the time of such reclassification.

 

SECTION 4.09.                                         Limitation on Restricted Payments.

 

(a)           The Issuer shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at the time the Issuer or such Restricted Subsidiary makes such Restricted Payment:

 

(1)           a Default shall have occurred and be continuing (or would result therefrom);

 

(2)           the Issuer is not entitled to Incur an additional $1.00 of Indebtedness pursuant to Section 4.08(a); or

 

(3)           the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of (without duplication):

 

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(A)          50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter commencing July 1, 2006 (the “Prior Issue Date”) to the end of the most recent fiscal quarter for which internal financial statements are then available prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

 

(B)           the sum of (x) 100% of the aggregate Net Cash Proceeds received by the Issuer from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than (i) an issuance or sale to a Subsidiary of the Issuer, (ii) an issuance or sale to an employee stock ownership plan or to a trust established by the Issuer or any of its Subsidiaries for the benefit of their employees with respect to amounts funded or Guaranteed by the Issuer or any of its Subsidiaries, (iii) Excluded Contributions and (iv) an issuance or sale to an employee if such employee has received any loan or advance made pursuant to clause (6) under the definition of “Permitted Investment,” except, with respect to this clause (iv), to the extent such loan or advance is repaid by such employee in cash other than with the proceeds from a Permitted Investment), (y) 100% of the Fair Market Value of property or assets (other than cash, Indebtedness and Capital Stock, except that Capital Stock of a Person that is or becomes a Restricted Subsidiary shall be valued in accordance with the Issuer’s interest in the Fair Market Value of such Person’s property and assets) that is received by the Issuer subsequent to the Issue Date in exchange for Capital Stock (other than Disqualified Stock) of the Issuer (other than any such property or assets received from a Subsidiary of the Issuer) or as a capital contribution from its shareholders and (z) 100% of any cash capital contribution received by the Issuer from its shareholders subsequent to the Issue Date; plus

 

(C)           the amount by which Indebtedness of the Issuer or a Restricted Subsidiary is reduced on the Issuer’s consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of the Issuer) subsequent to the Issue Date of any Indebtedness of the Issuer convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Issuer (less the amount of any cash, or the fair value of any other property, distributed by the Issuer or a Restricted Subsidiary upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by the Issuer or any Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary of the Issuer or to an employee stock ownership plan or to a trust established by the Issuer or any of its Subsidiaries for the benefit of their employees); plus

 

(D)          an amount equal to the sum of (x) the net reduction in the Investments (other than Permitted Investments) made by the Issuer or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investments and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Issuer or any Restricted Subsidiary, and (y) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Issuer’s equity interest in such

 

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Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Issuer or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

 

(b)           The provisions of Section 4.09(a) shall not prohibit:

 

(1)           any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Issuer (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Issuer or an employee stock ownership plan or to a trust established by the Issuer or any of its Subsidiaries for the benefit of their employees with respect to amounts funded or Guaranteed by the Issuer or any of its Subsidiaries) or a substantially concurrent cash capital contribution received by the Issuer from its shareholders; provided, however, that any such Restricted Payment that occurs within 90 days of such sale or cash capital contribution shall be deemed to have occurred substantially concurrently with such sale or cash capital contribution; provided further, however,  that (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under Section 4.09(a)(3)(B) above;

 

(2)           any purchase, repurchase, redemption, defeasance, satisfaction, discharge or other acquisition or retirement for value of Subordinated Obligations of the Issuer or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of such Person which is permitted to be Incurred pursuant to Section 4.08; provided, however, that any purchase, repurchase, redemption, defeasance, satisfaction, discharge or other acquisition or retirement of the existing Subordinated Obligations that occurs within 90 days of the incurrence of new Subordinated Obligations shall be deemed to have occurred substantially concurrently with such incurrence; provided further, however, that such purchase, repurchase, redemption, defeasance, satisfaction, discharge or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;

 

(3)           dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this Section 4.09; provided, however, that such dividend shall be included in the calculation of the amount of Restricted Payments;

 

(4)           so long as no Default has occurred and is continuing, the repurchase, redemption, retirement or other acquisition of shares of Capital Stock of Interline Delaware, the Issuer or any of their Subsidiaries from employees, former employees, directors or former directors of Interline Delaware, the Issuer or any of their Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors),

 

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including, without limitation, their estates or beneficiaries under their estates), pursuant to the terms of the agreements (including employment, severance, compensation or shareholder agreements) or plans (or amendments thereto) approved by the Board of Directors of Interline Delaware or the Issuer, as the case may be, under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that (x)(i) the aggregate amount of such repurchases and other acquisitions shall not exceed $7.0 million plus (ii) the amount of any Net Cash Proceeds received by or contributed to the Issuer from the issuance and sale of since the Issue Date of Capital Stock (other than Disqualified Stock) of the Issuer, Interline Delaware or another direct or indirect parent of the Issuer to its officers, directors or employees that have not been applied to the payment of Restricted Payments pursuant to clause (3) of paragraph (a) above or this clause (4), plus (iii) the cash proceeds of key man life insurance policies received by the Issuer and the Restricted Subsidiaries after the Issue Date or (y) the aggregate amount of such repurchases and other acquisitions in any fiscal year shall not exceed $2.5 million; provided further, however, that the aggregate amount of Restricted Payments permitted (but not made) pursuant to this Section 4.09(b)(4) in any one fiscal year may be carried forward to any succeeding fiscal year; provided further, however, that such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments;

 

(5)           payments of dividends on Disqualified Stock issued pursuant to Section 4.08; provided, however, that such dividends shall be excluded in the calculation of the amount of Restricted Payments;

 

(6)           Restricted Payments made with Net Available Cash from Asset Dispositions remaining after application thereof as required by Section 4.11; provided, however, that such Restricted Payments shall be included in the calculation of the amount of Restricted Payments;

 

(7)           (A) repurchases of Capital Stock deemed to occur upon exercise of stock options or the vesting of restricted stock, restricted stock units, deferred stock units or any similar securities if such Capital Stock represents a portion of the exercise price of such options (or withholding of Capital Stock to pay related withholding taxes with regard to the exercise of such stock options or the vesting of any such restricted stock, restricted stock units, deferred stock units or any similar securities) and (B) payments of cash, dividends, distributions, advances or other Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants, (ii) the vesting or settlement of restricted stock, restricted stock units, deferred stock units or any similar securities or (iii) the conversion or exchange of Capital Stock of any such Person; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments;

 

(8)           payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under Section 4.08(b)(2); provided, however, that no Default has occurred and is continuing or would otherwise result therefrom; provided further, however,

 

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that such payments shall be excluded in the calculation of the amount of Restricted Payments;

 

(9)           Permitted Payments to Interline Delaware; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments;

 

(10)         so long as no Default or Event of Default has occurred and is continuing, the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount thereof in the event of a Change of Control pursuant to a provision no more favorable to the Holders thereof than the provisions described in Section 4.07; provided that, in each case, prior to the repurchase, the Issuer has made a Change of Control Offer and repurchased all Notes issued under this Indenture that were validly tendered for payment in connection with the offer to purchase; provided, however, that such Restricted Payments shall be included in the calculation of the amount of Restricted Payments;

 

(11)         Restricted Payments made with Excluded Contributions; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments;

 

(12)         Restricted Payments made to Interline Delaware to fund dividends on, or repurchases of, its common stock; provided, however, that the aggregate amount of such Restricted Payments in any year does not exceed $7.0 million in any twelve month period (with unused amounts being available to be used in any succeeding twelve month period up to a maximum aggregate amount used in any twelve month period of $14.0 million); provided further, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments; or

 

(13)         Restricted Payments in an amount which, when taken together with all Restricted Payments made pursuant to this Section 4.09(b)(13), does not exceed the greater of (x) $85.0 million or (y) 8.5% of Total Assets determined as of the most recent practical date (as adjusted for any significant acquisition or disposition of assets since such date); provided, however, that (A) at the time of each such Restricted Payment, no Default shall have occurred and be continuing (or result therefrom) and (B) such payments shall be excluded in the calculation of the amount of Restricted Payments.

 

For the avoidance of doubt, any “deemed dividend” resulting from the filing of a consolidated or combined tax return by any direct or indirect parent of the Issuer and not involving any cash distribution will not be a Restricted Payment.

 

For purposes of determining compliance with this Section 4.09, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (1) through (13) of Section 4.09(b), or is entitled to be made in reliance on Section 4.09(a), the Issuer will be entitled to classify or re-classify (based on circumstances existing on the date of such reclassification) such Restricted Payment or

 

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portion thereof in any manner that complies with this Section 4.09 and such Restricted Payment will be treated as having been made pursuant to only such clause or clauses of Section 4.09(a) or (b).

 

SECTION 4.10.                                         Limitation on Restrictions on Distributions from Restricted Subsidiaries.

 

The Issuer shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Issuer, (b) make any loans or advances to the Issuer or (c) transfer any of its property or assets to the Issuer, except:

 

(1)                                  with respect to clauses (a), (b) and (c),

 

(A)          any encumbrance or restriction pursuant to an agreement (including the indentures governing the Notes and the Existing Notes and the Credit Agreement) in effect at or entered into on the Issue Date;

 

(B)           any encumbrance any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement existing on or prior to the date on which such Restricted Subsidiary was acquired by the Issuer (other than Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Issuer) and outstanding on such date;

 

(C)           any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in Section 4.10(1)(A) or 4.10(1)(B) or this Section 4.10(1)(C) or contained in any amendment to an agreement referred to in Section 4.10(1)(A) or 4.10(1)(B) or this Section 4.10(1)(C); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are not materially more restrictive, taken as a whole, than encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;

 

(D)          any encumbrance or restriction consisting of any restriction on the sale or other disposition of assets or property securing Indebtedness solely as a result of a Lien on such asset;

 

(E)           any encumbrance or restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or a portion of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

 

(F)           any encumbrance or restriction pursuant to applicable law, rule, regulation or order;

 

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(G)           any encumbrance or restriction pursuant to the terms of Indebtedness Incurred under Section 4.08(b)(15);

 

(H)          any encumbrance or restriction pursuant to the terms of Indebtedness Incurred under Section 4.08(b)(11); provided, however, that such encumbrance or restriction is limited to the assets being financed and proceeds thereof;

 

(I)            any encumbrance or restriction pursuant to the terms of Indebtedness Incurred by a Foreign Subsidiary; provided, however, such encumbrance or restriction is limited to the Foreign Subsidiary Incurring such Indebtedness;

 

(J)            any encumbrance or restriction in any agreement that is not more restrictive than the restrictions under the Credit Agreement as in effect on the Issue Date;

 

(K)          any encumbrance or restriction pursuant to the terms of any agreement entered into in connection with any Qualified Receivables Transaction; provided, however, that such encumbrance or restriction applies only to a Receivables Subsidiary;

 

(L)           any encumbrance or restriction pursuant to an agreement with a governmental entity providing for developmental financing on terms which are more favorable (at the time such agreement is entered into) than those available from third party financing sources;

 

(M)         provisions with respect to the disposition or distribution of assets or property or the transfer of ownership interests in joint venture agreements, partnership, limited liability and other similar agreements (including any such agreements entered into in connection with a Restricted Investment);

 

(N)          non-assignment and non-transfer provisions of any contract, license or lease entered into in the ordinary course of business;

 

(O)          restrictions on cash or other deposits or net worth imposed by suppliers, customers or landlords under contracts entered into in the ordinary course of business;

 

(P)           any encumbrance or restriction pursuant to the terms of any agreements governing other Indebtedness permitted to be incurred under Section 4.08 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the restrictions therein will not materially adversely impact the ability of the Issuer to make required principal and interest payments on the Notes; and

 

(Q)          any encumbrance or restriction pursuant to the terms of any Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

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(2)           with respect to clause (c) only of this Section 4.10,

 

(A)          any encumbrance or restriction consisting of customary nonassignment or subletting provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder; and

 

(B)           any encumbrance or restriction contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements or mortgages.

 

SECTION 4.11.                                         Limitation on Sales of Assets and Subsidiary Stock.

 

(a)           The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:

 

(1)           the Issuer or such Restricted Subsidiary receives consideration at the time of such Asset Disposition (or at the time the Issuer or such Restricted Subsidiary becomes obligated to complete such Asset Disposition) at least equal to the Fair Market Value (including as to the value of all non-cash consideration), as determined in good faith by the Board of Directors of the Issuer or the chief financial or accounting officer of the Issuer, as evidenced by an Officer’s Certificate certifying compliance with the foregoing condition, of the shares and assets subject to such Asset Disposition;

 

(2)           at least 75% of the consideration thereof received by the Issuer or such Restricted Subsidiary is in the form of cash or cash equivalents; and

 

(3)           an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Issuer (or such Restricted Subsidiary, as the case may be):

 

(A)          First, to the extent the Issuer elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the Issuer or Indebtedness (other than any Preferred Stock or Disqualified Stock) of a Wholly Owned Subsidiary (in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer) within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

 

(B)           Second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A), to the extent the Issuer elects, to acquire Additional Assets within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that the Issuer or such Restricted Subsidiary shall be deemed to have applied Net Available Cash in accordance with this clause (B) within such 12-month period if, within such 12-month period, it has entered into a binding commitment or agreement to invest such Net Available Cash and continues to use all reasonable efforts to so apply such Net Available Cash as soon as practicable thereafter; provided  further, however, that such Net Available Cash is applied on the earlier of (x) a date which is 18 months from the later of the date of such Asset Disposition

 

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or the receipt of such Net Available Cash or (y) reasonably promptly upon any abandonment or termination of such commitment or agreement;

 

(C)           Third, to the extent of the balance of such Net Available Cash after application in accordance with Section 4.11(a)(3)(A) and (B), to make an offer to Holders (and to holders of other Senior Subordinated Indebtedness of the Issuer designated by the Issuer) to purchase Notes (and such other Senior Subordinated Indebtedness of the Issuer) pursuant to and subject to the conditions contained in this Indenture and the terms of such other Senior Subordinated Indebtedness; and

 

(D)          Fourth, to the extent of the balance of such Net Available Cash after application in accordance with Section 4.11(a)(3)(A), (B) and (C), for any purpose not prohibited by the terms of this Indenture;

 

provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to Section 4.11(a)(3)(A) or (C), the Issuer or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased.

 

Notwithstanding the foregoing provisions of this Section 4.11, the Issuer and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this Section 4.11 except to the extent that the aggregate Net Available Cash from all Asset Dispositions on or after the Issue Date which is not applied in accordance with this Section 4.11, exceeds $15.0 million.  Pending application of Net Available Cash pursuant to this Section 4.11, the Issuer (or the applicable Restricted Subsidiary) may temporarily reduce Senior Indebtedness or otherwise invest such Net Available Cash in any manner that is not prohibited by this Indenture. Following the entering into of a binding agreement with respect to an Asset Disposition and prior to the consummation thereof, cash or Temporary Cash Investments (whether or not actual Net Available Cash related to such Asset Disposition) used for the purposes described in clauses (A) through (C) above that are designated as used in accordance therewith, and not previously or subsequently so designated in respect of any other Asset Disposition, shall be deemed to be Net Available Cash applied in accordance therewith.

 

For the purposes of this Section 4.11, the following are deemed to be cash or cash equivalents:

 

(1)           the assumption of Indebtedness of the Issuer (other than obligations in respect of Disqualified Stock of the Issuer) or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock and Preferred Stock of a Subsidiary Guarantor) and the release of the Issuer or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition;

 

(2)           any Designated Non-cash Consideration received by the Issuer or any Restricted Subsidiaries in such Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (ii) that is at that time outstanding, not to exceed the greater of

 

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(x) $25.0 million and (y) 2.5% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value);

 

(3)           the Fair Market Value of any assets (other than securities, unless such securities represent Capital Stock in an entity engaged in a Related Business, such entity becomes a Restricted Subsidiary or the Issuer or a Restricted Subsidiary acquires voting and management control of such entity) received by the Issuer or any Restricted Subsidiary to be used by it in the business of the Issuer or such Restricted Subsidiary; and

 

(4)           securities received by the Issuer or any Restricted Subsidiary from the transferee that are converted within 90 days of receipt by the Issuer or such Restricted Subsidiary (subject to ordinary settlement periods) into cash, to the extent of the cash received in that conversion.

 

(b)           In the event of an Asset Disposition that requires the purchase of Notes (and other Senior Subordinated Indebtedness of the Issuer) pursuant to Section 4.11(a)(3)(C), the Issuer shall purchase Notes tendered pursuant to an offer (an “Asset Sale  Offer”) by the Issuer for the Notes (and such other Senior Subordinated Indebtedness) at a purchase price of 100% of their principal amount (or, in the event such other Senior Subordinated Indebtedness of the Issuer was issued with significant original issue discount, 100% of the accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such other Senior Subordinated Indebtedness of the Issuer, such lesser price, if any, as may be provided for by the terms of such Senior Subordinated Indebtedness) in accordance with the procedures (including prorating in the event of oversubscription) set forth in Section 4.11(c).  If the aggregate purchase price of the Notes (and any other Senior Subordinated Indebtedness of the Issuer) tendered exceeds the Net Available Cash allotted to their purchase, the Issuer will select the Notes and other Senior Subordinated Indebtedness to be purchased on a pro rata basis but in round denominations, which in the case of the Notes will be minimum denominations of $2,000 principal amount or $1,000 multiples thereof. If any Net Available Cash remains after consummation of such an Asset Sale Offer, such amounts shall no longer be considered Net Available Cash for purposes of this Indenture and the Issuer may use such Net Available Cash for any purpose not otherwise prohibited by this Indenture.  The Issuer shall not be required to make such an offer to purchase Notes (and other Senior Subordinated Indebtedness of the Issuer) pursuant to this Section 4.11 if the Net Available Cash available therefor is less than $10.0 million (which lesser amount shall be carried forward for purposes of determining whether such an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition).  Upon completion of such an Asset Sale Offer pursuant to this Section 4.11, Net Available Cash will be deemed to be reduced by the aggregate amount of such offer.

 

(c)           (1) Promptly, and in any event within 10 days after the Issuer becomes obligated to make an Asset Sale Offer, the Issuer shall deliver to the Trustee and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to have its Notes purchased by the Issuer either in whole or in part (subject to prorating as described in Section 4.11(b) in the event the Asset Sale Offer is oversubscribed) in integral multiples

 

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of $1,000 of principal amount, at the applicable purchase price. The notice shall specify a purchase date not less than 30 days nor more than 60 days after the date of such notice (the “Asset Sale  Purchase Date”) and shall state (A) that the Issuer has become obligated to make an Asset Sale Offer, (B) the aggregate principal amount of Notes that is subject to such Asset Sale Offer, (C) the purchase price, (D) the circumstances and relevant facts regarding such Asset Disposition, (E) the Asset Sale Purchase Date, (F) the instructions, as determined by the Issuer, consistent with this Section 4.11, that a Holder must follow in order to have its Notes purchased and (G) such other information as the Issuer may deem necessary.

 

(2)           Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided below, the Issuer shall deliver to the Trustee an Officer’s Certificate as to (A) the amount of the Asset Sale Offer (the “Asset Sale  Offer Amount”), including information as to any other Senior Subordinated Indebtedness included in the Asset Sale Offer, (B) the allocation of the Net Available Cash from the Asset Dispositions pursuant to which such Asset Sale Offer is being made and (C) the compliance of such allocation with the provisions of Section 4.11(a) and (b).  On or prior to each Asset Sale Purchase Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying Agent, segregate and hold in trust) an amount in cash equal to the applicable Asset Sale Offer Amount. If the Asset Sale Offer includes other Senior Subordinated Indebtedness, the deposit described in the preceding sentence may be made with any other paying agent pursuant to arrangements reasonably satisfactory to the Trustee. Upon the expiration of the period for which the Asset Sale Offer remains open (the “Asset Sale  Offer Period”), the Issuer shall deliver to the Trustee for cancellation the Notes or portions thereof which have been properly tendered to and are to be accepted by the Issuer.  The Trustee shall, on the Asset Sale Purchase Date, mail or deliver payment (or cause the delivery of payment) to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Notes delivered by the Issuer to the Trustee is less than the Asset Sale Offer Amount applicable to the Notes, the Trustee shall deliver the excess to the Issuer immediately after the expiration of the Asset Sale Offer Period for application in accordance with this Section 4.11.

 

(3)           Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the Asset Sale Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.

 

(4)           At the time the Issuer delivers Notes to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officer’s Certificate stating that such Notes are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.11. A Note shall be deemed to have been accepted for purchase at the time

 

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the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder.

 

(d)           The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.11. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.11, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.11 by virtue of its compliance with such securities laws or regulations.

 

SECTION 4.12.                                         Limitation on Affiliate Transactions.

 

(a)           The Issuer shall not, and shall not permit any Restricted Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the Issuer (an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $2.5 million unless:

 

(1)           the terms of the Affiliate Transaction are no less favorable to the Issuer or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s length dealings with a Person who is not an Affiliate; and

 

(2)           if such Affiliate Transaction involves an amount in excess of $10.0 million, the material terms of the Affiliate Transaction are set forth in writing and a majority of the directors of the Issuer disinterested with respect to such Affiliate Transaction have determined in good faith that the criteria set forth in Section 4.12(a)(1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a Board Resolution of the Issuer.

 

Notwithstanding Section 4.12(a)(2), in the event that there are no disinterested members of the Board of Directors in any Affiliate Transaction, such Affiliate Transaction shall be permitted to exist so long as an Independent Qualified Party has determined the terms of such Affiliate Transaction to be fair, from a financial standpoint, to the Issuer and its Restricted Subsidiaries or is not less favorable to the Issuer and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person who was not an Affiliate.

 

(b)           The provisions of Section 4.12(a) shall not prohibit:

 

(1)           any Investment (other than a Permitted Investment (except for Permitted Investments described in clause (3) of the definition thereof)) or other Restricted Payment, in each case permitted to be made pursuant to Section 4.09 or any Investment in an Unrestricted Subsidiary constituting a Permitted Investment;

 

(2)           any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment, compensation or severance

 

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arrangements, stock options and stock ownership plans approved by the Board of Directors of the Issuer;

 

(3)           loans or advances (or cancellations thereof) to employees or consultants in the ordinary course of business of the Issuer or its Restricted Subsidiaries, but in any event not to exceed $5.0 million in the aggregate outstanding at any one time;

 

(4)           the payment of reasonable compensation, reimbursements or employee benefits to, and the provision of an indemnity for the benefit of, directors, officers or employees of the Issuer or its Restricted Subsidiaries in the ordinary course of business;

 

(5)           the payment of reasonable fees and reimbursements to directors of the Issuer and its Restricted Subsidiaries who are not employees of the Issuer or its Restricted Subsidiaries;

 

(6)           any transaction with a Restricted Subsidiary or joint venture or similar entity which would constitute an Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity;

 

(7)           the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Issuer or contribution to the common capital of the Issuer;

 

(8)           any agreement that provides registration rights to the securityholders of the Issuer (and the performance of such agreements);

 

(9)           any merger, consolidation or reorganization of the Issuer with (i) an Affiliate solely for the purpose and with the sole effect of forming a holding company or reincorporating the Issuer in a new jurisdiction or (ii) Interline Delaware;

 

(10)         any transaction with a Receivables Subsidiary pursuant to a Qualified Receivables Transaction;

 

(11)         the entering into of a tax sharing agreement, or payments pursuant thereto, between the Issuer and one or more Subsidiaries, on the one hand, and any other Person with which the Issuer and such Subsidiaries are required or permitted to file a consolidated tax return or with which the Issuer and such Subsidiaries are part of a consolidated group for tax purposes, on the other hand, which payments by the Issuer and the Restricted Subsidiaries are not in excess the payments described in clause (2) of the definition of Permitted Payments to Interline Delaware;

 

(12)         indemnification or similar agreements with, and the payment of the fees and indemnities to, directors, officers and employees of the Issuer and its Restricted Subsidiaries, in each case in the ordinary course of business;

 

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(13)         any employment, deferred compensation, consulting, noncompetition, confidentiality or similar agreement entered into by the Issuer and its Restricted Subsidiaries with its employees or directors in the ordinary course of business and payments and other benefits (including bonus, retirement, severance, health, stock option and other benefit plans) pursuant thereto;

 

(14)         transactions with customers, clients, suppliers, or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and which, in the reasonable determination of the Board of Directors of the Issuer are on terms at least as favorable as would reasonably have been obtained at such time from an unaffiliated party;

 

(15)         transactions between the Issuer or any Restricted Subsidiaries and any Person that is an Affiliate solely because one or more of its directors is also a director of the Issuer or any direct or indirect parent of the Issuer; provided that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

 

(16)         transactions entered into in good faith with any of the Issuer’s or Restricted Subsidiary’s Affiliates that provide for shared services and/or facilities arrangements and that provide cost savings and/or other operational efficiencies to the Issuer and the Restricted Subsidiaries, taken as a whole, as determined in good faith by Issuer’s Board of Directors, and payments related thereto;

 

(17)         transactions between or among the Issuer and/or any Restricted Subsidiaries;

 

(18)         Permitted Payments to Interline Delaware;

 

(19)         any transaction in which the Issuer or any Restricted Subsidiary, as the case may be, obtains a favorable written opinion from an Independent Qualified Party as to the fairness of such transaction to the Issuer and its Restricted Subsidiaries from a financial point of view; and

 

(20)         any agreement as in effect on the Issue Date and described in the Offering Memorandum or any renewals or extensions of any such agreement (so long as such renewals or extensions are not less favorable to the Issuer or the Restricted Subsidiaries) and the transactions evidenced thereby.

 

SECTION 4.13.                                         Future Guarantors.

 

The Issuer shall cause each domestic Restricted Subsidiary (other than a Receivables Subsidiary) that is not then a Subsidiary Guarantor and that Guarantees any Indebtedness under any Credit Facility (other than Indebtedness Incurred pursuant to Sections 4.08(b)(5), (b)(8), (b)(11), (b)(13) and (b)(15)) to, in each case at the same time, execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the Notes on the same terms and conditions as those set forth in this Indenture.

 

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SECTION 4.14.                                         SEC Reports.

 

(a)           Whether or not required by the SEC, so long as any Notes are outstanding, the Issuer will furnish to Holders, or file electronically with the SEC through the SEC’s EDGAR System (or any successor system), within the time periods that would be applicable to the Issuer under Section 13(a) or 15(d) of the Exchange Act and the rules and regulations of the SEC (giving effect to Rule 12h-5 and Rule 12b-25 under the Exchange Act):

 

(1)           all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuer were required to file these forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Issuer’s certified independent accountants; and

 

(2)           all current reports that would be required to be filed with the SEC on Form 8-K if the Issuer were required to file these reports.

 

(b)           In addition, whether or not required by the SEC, the Issuer will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (giving effect to Rule 12h-5 and Rule 12b-25 under the Exchange Act) (unless the SEC will not accept the filing) and make the information available to securities analysts and prospective investors upon request. The Issuer and the Guarantors have agreed that, for so long as any Notes remain outstanding, the Issuer will furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)           Notwithstanding anything herein to the contrary, the Issuer will be deemed to have complied with its obligations in the preceding two paragraphs following the filing of the Exchange Offer Registration Statement and prior to the effectiveness thereof if the Exchange Offer Registration Statement includes the information specified in clauses (1) and (2) above at the times it would otherwise be required to file such forms.

 

(d)           The Issuer shall comply with the applicable provisions of § 314(a) of the TIA.

 

(e)           Notwithstanding anything herein to the contrary, the Issuer may satisfy such requirements to the extent Interline Delaware (or any other parent company of the Issuer) files and provides such information with respect to the Interline Delaware (or such other parent company, if applicable), Interline Delaware (or such other parent company, if applicable) owns directly or indirectly all of the common stock of the Issuer and Interline Delaware (or such other parent company, if applicable) guarantees the Notes.

 

(f)            Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is

 

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entitled to rely exclusively on Officer’s Certificates).  The Trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been filed pursuant to EDGAR (or its successor) unless it has received actual knowledge of a potential failure to file.

 

SECTION 4.15.                                         Limitation on Layering.

 

Notwithstanding Sections 4.08(a) and (b), neither the Issuer nor any Subsidiary Guarantor will Incur (1) any Indebtedness if such Indebtedness is subordinate or junior in right of payment in any respect to any Senior Indebtedness of the Issuer or such Subsidiary Guarantor, as applicable, unless such Indebtedness is Senior Subordinated Indebtedness or is expressly subordinated in right of payment to Senior Subordinated Indebtedness of the Issuer or such Subsidiary Guarantor, as applicable, or (2) any Secured Indebtedness that is not Senior Indebtedness of such Person unless contemporaneously therewith such Person makes effective provision to secure the Notes or the relevant Subsidiary Guaranty, as applicable, equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to the Notes or the relevant Subsidiary Guaranty, as applicable) such Secured Indebtedness for so long as such Secured Indebtedness is secured by a Lien.

 

ARTICLE FIVE

 

SUCCESSOR CORPORATION

 

SECTION 5.01.                                         Merger, Consolidation or Sale of All or Substantially All Assets.

 

(a)           The Issuer shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, directly or indirectly, all or substantially all its assets to, any Person, unless:

 

(1)           either (A) the Issuer is the surviving Person or (B) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Issuer) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Issuer under the Notes and this Indenture;

 

(2)           immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Issuer, the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by the Issuer, such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

 

(3)           immediately after giving pro forma effect to such transaction, (A) the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.08(a); (B) the Successor Company would have a Consolidated Coverage Ratio that would be equal to or greater than the Consolidated Coverage Ratio of the Issuer immediately prior to such transaction; and

 

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(4)           the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture;

 

provided, however, that clause (3) will not be applicable to (A) a Restricted Subsidiary consolidating with, merging into or transferring all or part of its properties and assets to the Issuer or any Restricted Subsidiary or (B) the Issuer merging with an Affiliate of the Issuer solely for the purpose and with the sole effect of reincorporating the Issuer in another jurisdiction or forming a holding company for the Issuer.  This Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets (i) by the Issuer to any Subsidiary Guarantor or by any Subsidiary Guarantor to the Issuer, (ii) among Subsidiary Guarantors or (iii) by a Restricted Subsidiary to (x) another Restricted Subsidiary that is not a Subsidiary Guarantor or (y) the Issuer or any Subsidiary Guarantor.

 

For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

 

(b)           The Issuer shall not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Person unless:

 

(1)           except in the case of a Subsidiary Guarantor that has been disposed of in its entirety to another Person (other than to the Issuer or a Subsidiary of the Issuer) or otherwise ceases to be a Subsidiary Guarantor as a result of such transaction or series of transactions, whether through a merger, consolidation or sale of Capital Stock or assets, if in connection therewith the Issuer provides an Officer’s Certificate to the Trustee to the effect that the Issuer will comply with its obligations under Section 4.11 in respect of such disposition, either (A) such Subsidiary is the surviving Person or (B) the resulting, surviving or transferee Person (if not such Subsidiary) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of the United States of America, or any State thereof or the District of Columbia, and such Person shall expressly assume, by a Guaranty Agreement, in a form reasonably satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary Guaranty;

 

(2)           immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and

 

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(3)           the Issuer delivers to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guaranty Agreement, if any, complies with this Indenture;

 

provided, however, that this Section 5.01(b) shall not be applicable to any Subsidiary Guarantor that consolidates with, merges with or into or conveys, transfers or leases, in one transaction or a series of transactions, all or substantially all of its assets to the Issuer or another Subsidiary Guarantor.

 

SECTION 5.02.                                         Successor Corporation Substituted.

 

Upon any consolidation by the Issuer with or merger by the Issuer or Subsidiary Guarantor into any other corporation or other entity or any conveyance, transfer or lease of all or substantially all of the property and assets of the Issuer or Subsidiary Guarantor in accordance with Section 5.01, the successor corporation or other entity formed by such consolidation or into which the Issuer or Subsidiary Guarantor, as applicable, is merged or the successor corporation or entity or affiliated group of corporations or entities to which such lease, sale, assignment or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or Subsidiary Guarantor, as applicable, under this Indenture with the same effect as if such successor corporation or corporations or entity or entities had been named as the Issuer or Subsidiary Guarantor, as applicable herein, and thereafter, except in the case of a lease, the predecessor corporation or corporations or entity or entities shall be relieved of all obligations and covenants under this Indenture and the Notes and in the event such conveyance or transfer, except in the case of a lease, any such predecessor corporation may be dissolved and liquidated.

 

ARTICLE SIX

 

DEFAULT AND REMEDIES

 

SECTION 6.01.                                         Events of Default.

 

An “Event of Default” occurs if:

 

(1)           the Issuer defaults in any payment of interest on any Note when the same becomes due and payable, whether or not such payment shall be prohibited by Article Ten, and such default continues for a period of 30 days;

 

(2)           the Issuer (i) defaults in the payment of the principal of any Note when the same becomes due and payable at its Stated Maturity, upon optional redemption, upon declaration of acceleration or otherwise, whether or not such payment shall be prohibited by Article Ten, or (ii) fails to purchase Notes when required pursuant to this Indenture or the Notes (including the failure to make a payment to repurchase Notes tendered pursuant to a Change of Control Offer or through the application of any Net Available Cash), whether or not such purchase shall be prohibited by Article Ten;

 

(3)           the Issuer fails to comply with its obligations pursuant to Section 5.01;

 

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(4)           the Issuer or any Restricted Subsidiary fails to comply with any of its agreements in the Notes or this Indenture (other than those referred to in clause (1), (2) or (3) above) and such failure continues for 60 days after the notice specified below;

 

(5)           Indebtedness of the Issuer, any Subsidiary Guarantor or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million;

 

(6)           the Issuer, a Subsidiary Guarantor or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(A)          commences a voluntary case;

 

(B)           consents to the entry of an order for relief against it in an involuntary case;

 

(C)           consents to the appointment of a Custodian of it or for any substantial part of its property;

 

(D)          makes a general assignment for the benefit of its creditors; or

 

takes any comparable action under any foreign laws relating to insolvency;

 

(7)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)          is for relief against the Issuer, a Subsidiary Guarantor or any Significant Subsidiary in an involuntary case;

 

(B)           appoints a Custodian of the Issuer, a Subsidiary Guarantor or any Significant Subsidiary or for any substantial part of its property;

 

(C)           orders the winding up or liquidation of the Issuer, a Subsidiary Guarantor or any Significant Subsidiary; or

 

any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days;

 

(8)           any judgment or decree for the payment of money in excess of $25.0 million is entered against the Issuer, a Subsidiary Guarantor or any Significant Subsidiary, remains outstanding for a period of 60 consecutive days following the entry of such judgment or decree and is not discharged, waived or the execution thereof stayed; or

 

(9)           the Interline Delaware Guaranty or any Subsidiary Guaranty ceases to be in full force and effect (other than in accordance with the terms of such Interline Delaware Guaranty or such Subsidiary Guaranty) and such default continues for 10 days or

 

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Interline Delaware or any Subsidiary Guarantor denies or disaffirms its obligations under its Interline Delaware Guaranty or its Subsidiary Guaranty, as the case may be.

 

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is 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.

 

The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

A Default under clause (4) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer of the Default and the Issuer does not cure such Default within the time specified after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

 

The Issuer shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any Event of Default under clause (5) or (9) and any event which with the giving of notice or the lapse of time would become an Event of Default under clause (4), its status and what action the Issuer is taking or proposes to take with respect thereto.

 

SECTION 6.02.                                         Acceleration.

 

If an Event of Default (other than an Event of Default specified in Section 6.01(6) or (7) with respect to the Issuer) occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of at least 25% in principal amount of the Notes by notice to the Issuer and the Trustee, may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately, provided that if any Bank Indebtedness is outstanding at such time, neither the Issuer nor any Guarantor shall make any payment with respect to the Notes until five Business Days after the Representatives of all the issues of Bank Indebtedness receive written notice of such acceleration and, thereafter any such payment shall be made only if the provisions of Article Ten and Article Twelve do not restrict payment at such time. If an Event of Default specified in Section 6.01(6) or (7) with respect to the Issuer occurs, the principal of and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the Notes by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

Upon payment of all such principal and interest, all of the Issuer’s obligations under the Notes and this Indenture shall terminate, except obligations under Section 7.07.

 

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SECTION 6.03.                                         Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Noteholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by law.

 

SECTION 6.04.                                         Waiver of Past Defaults.

 

Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in principal amount of the outstanding Notes by notice to the Trustee may waive an existing Default and its consequences, except a Default in the payment of principal of or premium, if any, or interest on any Note as specified in Section 6.01(a) or (b).  When a Default is waived, it is deemed cured.

 

SECTION 6.05.                                         Control by Majority.

 

The Holders of a majority in principal amount of the outstanding Notes may 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 it; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.  Subject to Section 7.01, however, the Trustee may refuse to follow any direction that conflicts with any law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of another Noteholder, or that may involve the Trustee in personal liability.  Prior to the Trustee taking any action or following any direction pursuant to this Indenture, the Trustee shall have received indemnification on terms satisfactory to it in its sole discretion against any loss liability, claim or expense caused by taking or not taking such action or following or not following such direction.

 

SECTION 6.06.                                         Limitation on Suits.

 

(a)           Except with respect to a Default in the payment of principal of, premium, if any, or interest on any Note as specified in Section 6.01(1) or (2), a Noteholder may not pursue any remedy with respect to this Indenture or the Notes unless:

 

(i)            such Holder has previously given written notice to the Trustee of a continuing Event of Default;

 

(ii)           the Holders of at least 25% of the outstanding principal amount of the outstanding Notes 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;

 

(iii)          such Holder or Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

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

 

(v)           no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority of the outstanding principal amount of Notes;

 

it being understood and intended that no one or more of Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture 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, except in the manner herein provided and for the equal and ratable benefit of all Holders.

 

SECTION 6.07.                                         Rights of Holders To Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and premium and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

SECTION 6.08.                                         Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount of principal and accrued interest and fees remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case as provided in Section 4.01 and the Notes and such further amount as shall be sufficient to cover the reasonable costs and expenses of collection, including the reasonable and documented compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

SECTION 6.09.                                         Trustee May File Proofs of Claim.

 

The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable and documented compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Noteholders allowed in any judicial proceedings relating to the Issuer, its creditors or its property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same, and any Custodian in any such judicial proceedings is hereby authorized by each Noteholder 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 Noteholders, to pay to the Trustee any amount due to it for the reasonable and documented compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee under Section 7.07.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such proceeding.

 

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SECTION 6.10.                                         Priorities.

 

If the Trustee collects any money or property pursuant to this Article Six, it shall pay out the money or property in the following order:

 

First:  to the Trustee for amounts due under Section 7.07;

 

Second:  to holders of Senior Indebtedness of the Issuer and, if such money or property has been collected from a Guarantor, to holders of Senior Indebtedness of such Guarantor, in each case to the extent required by Article Ten and/or Article Twelve of this Indenture, as applicable;

 

Third:  to Holders for interest accrued on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest;

 

Fourth:  to Holders for principal and premium due and unpaid on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and premium; and

 

Fifth:  to the Issuer or to the Guarantors, if any, as their respective interests may appear.

 

The Trustee, upon prior notice to the Issuer, may fix a record date and payment date for any payment to Noteholders pursuant to this Section 6.10.

 

SECTION 6.11.                                        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 or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of then outstanding Notes.

 

ARTICLE SEVEN

 

TRUSTEE

 

SECTION 7.01.                                         Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of his or her own affairs.

 

(b)           Except during the continuance of an Event of Default:

 

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(i)         the Trustee need perform only those duties as are specifically set forth herein or in the TIA and no duties, covenants, responsibilities or obligations shall be implied in this Indenture against the Trustee; and

 

(ii)        in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates (including Officer’s Certificates) or opinions (including Opinions of Counsel) furnished to the Trustee and conforming to the requirements of this Indenture.  However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)           Notwithstanding anything to the contrary herein, the Trustee may not be relieved from liability for bad faith, willful misconduct and its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(i)         This paragraph does not limit the effect of paragraph (b) of this Section 7.01.

 

(ii)        The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

 

(iii)       The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

 

(d)           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 to take or omit to take any action under this Indenture or take any action at the request or direction of Holders if it shall have reasonable grounds for believing that repayment of such funds is not assured to it.

 

(e)           Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

 

(f)            The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)           In the absence of bad faith, negligence or willful misconduct on the part of the Trustee, the Trustee shall not be responsible for the application of any money by any Paying Agent other than the Trustee.

 

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SECTION 7.02.                                         Rights of Trustee.

 

Subject to Section 7.01:

 

(a)           The Trustee may rely conclusively and shall be protected in acting or refraining from acting on any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)           Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate and an Opinion of Counsel, which shall conform to the provisions of Section 13.05.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

 

(c)           The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent (other than an agent who is an employee of the Trustee) appointed with due care.

 

(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers.

 

(e)           The Trustee may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)            The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby.

 

(g)           The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officer’s Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, 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, upon reasonable notice to the Issuer, to examine the books, records, and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

 

(h)           The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

 

(i)            The Trustee shall not be deemed to have notice of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any

 

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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 Notes and this Indenture.

 

(j)            The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

 

(k)           The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as to authorized in any such certificate previously delivered and not superseded.

 

(l)            Except in connection with its bad faith, willful misconduct or negligence, in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

SECTION 7.03.                                         Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates with the same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) or resign.  Any Agent may do the same with like rights.  However, the Trustee must comply with Sections 7.10 and 7.11.

 

SECTION 7.04.                                         Trustee’s Disclaimer.

 

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in this Indenture or any document issued in connection with the sale of Notes or any statement in the Notes other than the Trustee’s certificate of authentication.  The Trustee makes no representations with respect to the effectiveness or adequacy of this Indenture.

 

SECTION 7.05.                                         Notice of Default.

 

If a Default occurs and is continuing and the Trustee receives actual notice of such Default, the Trustee shall mail to each Noteholder notice of the uncured Default within the earlier of 90 days after such Default occurs or 30 days after such Default is actually known to a Trust Officer or written notice of such Default is received by the Trustee. Except in the case of a Default in payment of principal of, premium, if any, or interest on, any Note, including an accelerated payment and the failure to make payment on the Change of Control Payment Date pursuant to a Change of Control Offer or the Asset Sale Purchase Date pursuant to an Asset Sale

 

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Offer, the Trustee may withhold the notice if and so long as it in good faith determines that withholding the notice is in the interest of the Holders of the Notes.

 

SECTION 7.06.                                         Reports by Trustee to Holders.

 

Within 60 days after each May 15 beginning with May 15, 2011, the Trustee shall, to the extent that any of the events described in TIA § 313(a) occurred within the previous twelve months, but not otherwise, mail to each Noteholder a brief report dated as of such date that complies with TIA § 313(a).  The Trustee also shall comply with TIA §§ 313(b), 313(c) and 313(d). A copy of each report at the time of its mailing to Noteholders shall be mailed to the Issuer and filed with the SEC and each securities exchange, if any, on which the Notes are listed.  The Issuer shall promptly notify the Trustee if the Notes become listed on any securities exchange or of any delisting thereof and the Trustee shall comply with TIA § 313(d).

 

SECTION 7.07.                                        Compensation and Indemnity.

 

(a)           The Issuer shall pay to the Trustee from time to time such compensation as the Issuer and the Trustee shall from time to time agree in writing for its services hereunder.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall reimburse the Trustee upon request for all reasonable and documented disbursements, expenses and advances (including reasonable fees and expenses of counsel) incurred or made by it in addition to the compensation for its services, except any such disbursements, expenses and advances as may be attributable to the Trustee’s negligence, bad faith or willful misconduct.  Such expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel.

 

(b)           The Issuer shall indemnify each of the Trustee or any predecessor Trustee and its agents, employees, officers, stockholders and directors for, and hold them harmless against, any and all loss, damage, claims including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), liability or expense incurred by them except for such actions to the extent caused by any negligence, bad faith or willful misconduct on their part, arising out of or in connection with the acceptance or administration of this trust including the reasonable costs and expenses of defending themselves against or investigating any claim (whether asserted by the Issuer or Noteholders or any other Person) or liability in connection with the exercise or performance of any of the Trustee’s rights, powers or duties hereunder.  The Trustee shall notify the Issuer promptly of any claim asserted against the Trustee or any of its agents, employees, officers, stockholders and directors for which it may seek indemnity.  The Issuer may, subject to the approval of the Trustee (which approval shall not be unreasonably withheld), defend the claim and the Trustee shall cooperate in the defense.  The Trustee and its agents, employees, officers, stockholders and directors subject to the claim may have separate counsel and the Issuer shall pay the reasonable and documented fees and expenses of such counsel; provided, however, that the Issuer will not be required to pay such fees and expenses if, subject to the approval of the Trustee (which approval shall not be unreasonably withheld), it assumes the Trustee’s defense and there is no conflict of interest between the Issuer and the Trustee and its agents, employees, officers, stockholders and directors subject to the claim in connection with such defense as reasonably determined by the Trustee.  The Trustee shall not agree to or effect any settlement without the prior written consent of the Issuer, which consent shall not

 

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be unreasonably withheld.  The Issuer need not pay for any settlement made without their written consent, which consent shall not be unreasonably withheld.  The Issuer need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through its negligence, bad faith or willful misconduct.

 

(c)           When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) occurs, such expenses and the compensation for such services shall be paid to the extent allowed under any Bankruptcy Law.

 

(d)           Notwithstanding any other provision in this Indenture, the foregoing provisions of this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the appointment of a successor Trustee.

 

SECTION 7.08.                                         Replacement of Trustee.

 

(a)           The Trustee may resign at any time by so notifying the Issuer in writing. The Holders of a majority in principal amount of then outstanding Notes may remove the Trustee by so notifying the Issuer and the Trustee and may appoint a successor Trustee.  The Issuer may remove the Trustee if:

 

(i)         the Trustee fails to comply with Section 7.10;

 

(ii)        the Trustee is adjudged a bankrupt or an insolvent;

 

(iii)       a receiver, custodian or other public officer takes charge of the Trustee or its property; or

 

(iv)       the Trustee becomes incapable of acting.

 

(b)           If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall notify each Holder of such event and shall promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

 

(c)           A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer.  Immediately after that, the retiring Trustee shall transfer, after payment of all sums then owing to the Trustee pursuant to Section 7.07, all property held by it as Trustee to the successor Trustee, subject to the Lien provided in Section 7.07, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  A successor Trustee shall mail notice of its succession to each Noteholder.

 

(d)           If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders of at least 10% in principal amount of then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee at the expense of the Issuer.

 

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(e)           If the Trustee fails to comply with Section 7.10, any Noteholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)            Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.09.                                   Successor Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall, if such resulting, surviving or transferee corporation is otherwise eligible hereunder, be the successor Trustee; provided, however, that such corporation shall be otherwise qualified and eligible under this Article Seven.

 

SECTION 7.10.                                   Eligibility; Disqualification.

 

This Indenture shall always have a Trustee who satisfies the requirement of TIA §§ 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Issuer are outstanding, if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.  The provisions of TIA § 310 shall apply to the Issuer and any other obligor of the Notes.

 

SECTION 7.11.                                   Preferential Collection of Claims Against the Issuer.

 

The Trustee, in its capacity as Trustee hereunder, shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

ARTICLE EIGHT

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.                                   Satisfaction and Discharge; Termination of the Issuer’s Obligations.

 

(a)           The Issuer may terminate their obligations under the Notes and this Indenture, except those obligations referred to in the penultimate paragraph of this Section 8.01, if all Notes previously authenticated and delivered (other than destroyed, lost or stolen Notes which have been replaced or paid) have been delivered to the Trustee for cancellation and the Issuer have paid all sums payable by it hereunder, or if:

 

(i)      either (A) pursuant to Article Three, the Issuer shall have given notice to the Trustee and mailed a notice of redemption to each Holder of the redemption of all of the Notes in accordance with the provisions hereof, (B) all Notes have otherwise become or will become due and payable within one year or (C) all Notes are to be called for redemption

 

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within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name of, and at the expense of, the Issuer;

 

(ii)           the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee or a trustee satisfactory to the Trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust solely for the benefit of the Holders of that purpose, U.S. Legal Tender or U.S. Government Obligations, or a combination thereof, in such amount as is sufficient without consideration of reinvestment of such interest, to pay principal of, premium, if any, and interest on the outstanding Notes to maturity or redemption;

 

(iii)          the Issuer shall have paid all other sums payable by each of them hereunder; and

 

(iv)          the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent providing for or relating to the satisfaction and discharge of this Indenture have been complied with.

 

After such delivery or irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Issuer’s obligations under the Notes and this Indenture except for those surviving obligations specified in clause (b) below.

 

(b)           Subject to the next sentence and notwithstanding the foregoing paragraph, the Issuer’s and the Trustee’s obligations in Sections 7.07, 8.04, 8.05 and 8.06 shall survive until the Notes are no longer outstanding pursuant to the last paragraph of Section 2.08.  After the Notes are no longer outstanding, the Issuer’s and the Trustee’s obligations in Sections 7.07, 8.05 and 8.06 shall survive.

 

SECTION 8.02.                                   Legal Defeasance and Covenant Defeasance.

 

(a)           The Issuer may, at its option by Board Resolution of the Board of Directors of the Issuer, at any time, elect to have either paragraph (b) or (c) below applied to all outstanding Notes upon compliance with the conditions set forth in Section 8.03.

 

(b)           Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this paragraph (b), the Issuer shall, subject to the satisfaction of the conditions set forth in Section 8.03, be deemed to have been discharged from their obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.04 hereof and the other Sections of this Indenture referred to in (i) and (ii) below, and to have satisfied all their other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

 

(i)            the rights of Holders of outstanding Notes to receive, solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section 8.04,

 

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payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due;

 

(ii)           the Issuer’s obligations with respect to such Notes under Article Two and Section 4.02 hereof;

 

(iii)          the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s obligations in connection therewith; and

 

(iv)          this Article Eight.

 

Subject to compliance with this Article Eight, the Issuer may exercise its option under this Section 8.02(b) notwithstanding the prior exercise of its option under Section 8.02(c) hereof.

 

(c)           Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this paragraph (c), the Issuer shall, subject to the satisfaction of the conditions set forth in Section 8.03 hereof, be released from its obligations under the covenants contained in Sections 4.02 through 4.15, the limitations contained in Section 5.01(a)(3) and Section 6.01(5), (6) and (7) (but in the case of Section 6.01(6) and (7), with respect only to Subsidiary Guarantors and Significant Subsidiaries), with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.03 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby.  If the Issuer exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Sections 6.01(5), (6), (7) and (8) (but, in the case of Sections 6.01(6) and (7), with respect only to Subsidiary Guarantors and Significant Subsidiaries) or because of the failure of the Issuer to comply with Section 5.01(a)(3).  If the Issuer exercises its legal defeasance option or its covenant defeasance option, each Guarantor, if any, shall be released from all its obligations with respect to its Guaranty simultaneously with the exercise of either such option.

 

SECTION 8.03.                                   Conditions to Legal Defeasance or Covenant Defeasance.

 

The following shall be the conditions to the application of either Section 8.02(b) or 8.02(c) hereof to the outstanding Notes:

 

In order to exercise either Legal Defeasance or Covenant Defeasance:

 

(a)           the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, U.S. Legal Tender, U.S. Government Obligations, or a

 

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combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Issuer must specify whether the Notes are being defeased to maturity or to a particular redemption date;

 

(b)           in the case of an election under Section 8.02(b) hereof, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (i) the Issuer 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 to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(c)           in the case of an election under Section 8.02(c) hereof, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(d)           no Event of Default shall have occurred and be continuing either: (a) on the date of such deposit (other than an Event of Default resulting from the borrowing of funds to be applied to such deposit), or (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; provided, however, that such Legal Defeasance or Covenant Defeasance, as the case may be, shall be deemed to have occurred on the date of such deposit, subject to an Event of Default from bankruptcy or insolvency within such 91-day period;

 

(e)           such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, the Credit Agreement, or any other material agreement or instrument (other than this Indenture) to which the Issuer is a party or by which the Issuer is bound; and

 

(f)            the Issuer must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel satisfactory to it stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

SECTION 8.04.                                   Application of Trust Money.

 

The Trustee or Paying Agent shall hold in trust U.S. Legal Tender and U.S. Government Obligations deposited with it pursuant to this Article Eight, and shall apply the deposited U.S. Legal Tender and the money from U.S. Government Obligations in accordance with this Indenture to the payment of principal of and interest on the Notes.  The Trustee shall be under

 

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no obligation to invest said U.S. Legal Tender and U.S. Government Obligations except as it may agree with the Issuer. Money and securities so held in trust are not subject to Article Ten.

 

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Legal Tender and U.S. Government Obligations deposited pursuant to Section 8.03 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 the outstanding Notes.

 

Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the Issuer’s written request any U.S. Legal Tender and U.S. Government Obligations held by it as provided in Section 8.03 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

SECTION 8.05.                                   Repayment to the Issuer.

 

The Trustee and the Paying Agent shall promptly pay to the Issuer upon written request any excess U.S. Legal Tender and U.S. Government Obligations held by them at any time and thereupon shall be relieved from all liability with respect to such money.  The Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years; provided, however, that the Trustee or such Paying Agent, before being required to make any payment, shall at the expense of the Issuer cause to be published once in a newspaper of general circulation in The City of New York or mail to each Holder entitled to such money notice that such money remains unclaimed and that after a date specified therein which shall be at least 30 days from the date of such publication or mailing any unclaimed balance of such money then remaining will be repaid to the Issuer.

 

SECTION 8.06.                                   Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or U.S. Government Obligations in accordance with this Article Eight by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article Eight until such time as the Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender and U.S. Government Obligations in accordance with this Article Eight; provided, however, that if the Issuer has made any payment of interest on or principal of any Notes because of the reinstatement of their obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the U.S. Legal Tender and U.S. Government Obligations held by the Trustee or Paying Agent.

 

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ARTICLE NINE

 

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 9.01.                                   Without Consent of Holders.

 

The Issuer, the Guarantors and the Trustee may amend this Indenture or the Notes without notice to or consent of any Holder:

 

(1)           to cure any ambiguity, omission, defect or inconsistency;

 

(2)           to comply with Article Five;

 

(3)           to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(4)           to add Guarantees with respect to the Notes, including any Subsidiary Guaranty, or to secure the Notes;

 

(5)           to add to the covenants of the Issuer, Interline Delaware or a Subsidiary Guarantor for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuer, Interline Delaware or a Subsidiary Guarantor;

 

(6)           to make any change that does not adversely affect the rights of any Holder under this Indenture;

 

(7)           to conform the text of this Indenture, the Notes, the Interline Delaware Guaranty and the Subsidiary Guaranties to any provision of the “Description of the Notes” section of the Offering Memorandum to the extent that such provision in the “Description of the Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Notes, the Interline Delaware Guaranty and the Subsidiary Guaranties as provided in an Officer’s Certificate from the Issuer;

 

(8)           to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date of this Indenture;

 

(9)           to evidence and provide for the acceptance of the appointment of a successor trustee;

 

(10)         to comply with any requirements of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the Trust Indenture Act; or

 

(11)         to make any change in Article Ten that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Issuer or of a Subsidiary Guarantor (or Representatives therefor) under Article Ten or Article Twelve.

 

An amendment under this Section 9.01 may not make any change that adversely affects the rights under Article Ten or Article Twelve of any holder of Senior Indebtedness of the

 

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Issuer or a Guarantor then outstanding unless the holders of such Senior Indebtedness (or any Representatives therefor) consent to such change.  After an amendment under this Section 9.01 becomes effective, the Issuer shall mail to Holders a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.

 

SECTION 9.02.                                   With Consent of Holders.

 

The Issuer, the Guarantors and the Trustee may amend this Indenture or the Notes without notice to any Holder but with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or Exchange Offer for the Notes).  However, without the consent of each Holder affected thereby, an amendment may not:

 

(1)           reduce the amount of Notes whose Holders must consent to an amendment;

 

(2)           reduce the rate of or extend the time for payment of interest on any Note;

 

(3)           reduce the principal amount of or extend the Stated Maturity of any Note;

 

(4)           change the provisions applicable to the redemption of any Note contained in Article Three or paragraph 5 or 6 of the Notes (other than the notice provisions with respect thereto);

 

(5)           make any Note payable in money other than that stated in the Note;

 

(6)           impair the right of any Holder to receive payment of principal of and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

 

(7)           make any changes in Article Ten or Article Twelve (other than with respect to clause (4) of the definition of Senior Indebtedness as used therein) that would adversely affect the Holders;

 

(8)           make any change in Section 6.04 or 6.07; or

 

(9)           make any change in, or release other than in accordance with this Indenture, the Interline Delaware Guaranty or any Subsidiary Guaranty that would adversely affect the Holders of the Notes.

 

It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

 

An amendment under this Section 9.02 may not make any change that adversely affects the rights under Article Ten or Article Twelve of any holder of Senior Indebtedness of the

 

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Issuer or of a Guarantor then outstanding unless the holders of such Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change.

 

After an amendment under this Section 9.02 becomes effective, the Issuer shall mail to Holders a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

 

SECTION 9.03.                                   Compliance with TIA.

 

From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement of this Indenture, the Notes or any Guarantee shall comply with the TIA as then in effect.

 

SECTION 9.04.                                   Revocation and Effect of Consents.

 

(a)           Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder or subsequent Holder may revoke the consent as to his Note or portion of his Note by notice to the Trustee or the Issuer received before the date on which the Trustee receives an Officer’s Certificate certifying that the Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such consent) to the amendment, supplement or waiver.  After an amendment, supplement or waiver becomes effective, it shall bind every Noteholder, unless it makes a change described in any of clauses (1) through (9) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided, however, that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of and interest on a Note, on or after the respective due dates therefor, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

 

(b)           The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver which record date shall be at least 30 days prior to the first solicitation of such consent.  If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective for more than 90 days after such record date.  The Issuer shall inform the Trustee in writing of the fixed record date if applicable.

 

SECTION 9.05.                                   Notation on or Exchange of Notes.

 

If an amendment, supplement or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Trustee.  The Issuer shall provide the Trustee with an appropriate notation on the Note about the changed terms and cause the Trustee to

 

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return it to the Holder at the Issuer’s expense. Alternatively, if the Issuer or the Trustee so determine, the Issuer in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

SECTION 9.06.                                   Trustee To Sign Amendments, Etc.

 

The Trustee shall execute any amendment, supplement or waiver authorized pursuant to this Article Nine; provided, however, that the Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects the Trustee’s own rights, duties or immunities under this Indenture.  The Trustee shall be provided with, and shall be fully protected in conclusively relying upon, an Opinion of Counsel and an Officer’s Certificate each stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article Nine is authorized or permitted by this Indenture and constitutes the legal, valid and binding obligations of the Issuer enforceable in accordance with its terms (subject to customary enforceability exceptions). Such Opinion of Counsel shall be at the expense of the Issuer.

 

ARTICLE TEN

 

SUBORDINATION

 

SECTION 10.01.                            Agreement To Subordinate.

 

The Issuer agrees, and each Holder by accepting a Note agrees, that the payment of all Obligations owing in respect of the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article Ten, to the prior payment in full of all existing and future Senior Indebtedness of the Issuer and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness.  The Notes and the Guarantees shall in all respects rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of the Issuer, and will be senior in right of payment to all existing and future Subordinated Indebtedness of the Issuer; and only Indebtedness of the Issuer that is Senior Indebtedness shall rank senior to the Notes and the Guarantees in accordance with the provisions set forth herein.  All provisions of this Article Ten shall be subject to Section 10.12.

 

SECTION 10.02.                            Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of the Issuer upon a total or partial liquidation or dissolution or reorganization or similar proceeding relating to the Issuer or its property:

 

(i)            the holders of Senior Indebtedness of the Issuer shall be entitled to receive payment in full in cash of such Senior Indebtedness before Holders shall be entitled to receive any payment of any kind or character with respect to any Obligations on, or relating to, the Notes;

 

(ii)           until the Senior Indebtedness of the Issuer is paid in full in cash, any payment or distribution to which Holders would be entitled but for the subordination provisions of this Indenture shall be made to holders of such Senior Indebtedness as their interests

 

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may appear, except that Holders of Notes may receive certain Capital Stock and subordinated debt obligations that are subordinated to all securities issued in respect of claims of such Senior Indebtedness; and

 

(iii)          if a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the Issuer and pay it over to them as their interests may appear.

 

SECTION 10.03.                            Default on Designated Senior Indebtedness of the Issuer.

 

The Issuer shall not pay principal of, premium, if any, or interest on the Notes (or pay any other Obligations relating to the Notes, including fees, costs, expenses, indemnities and rescission or damage claims) or make any deposit pursuant to Article Eight hereof and may not purchase, redeem or otherwise retire any Notes (collectively, “pay the Notes”) if either of the following occurs (a “Payment Default”):

 

(i)            any Obligation on any Designated Senior Indebtedness of the Issuer is not paid in full in cash when due (after giving effect to any applicable grace period); or

 

(ii)           any other default on Designated Senior Indebtedness of the Issuer occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms;

 

unless, in either case, the Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash.  Regardless of the foregoing, the Issuer is permitted to make payments on the Notes if the Issuer and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Payment Default has occurred and is continuing.

 

During the continuance of any default (other than a Payment Default) (a “Non-Payment Default”) with respect to any Designated Senior Indebtedness of the Issuer pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuer is not permitted to pay the Notes for a period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to the Issuer) of written notice (a “Blockage Notice”) of such Non-Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter. The Payment Blockage Period shall end earlier if such Payment Blockage Period is terminated:

 

(i)            by written notice to the Trustee and the Issuer from the Person or Persons who gave such Blockage Notice;

 

(ii)           because the default giving rise to such Blockage Notice is cured, waived or otherwise no longer continuing; or

 

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(iii)          because such Designated Senior Indebtedness has been discharged or repaid in full in cash.

 

Notwithstanding the provisions described in the immediately preceding two sentences (but subject to the provisions contained in the first sentence of this Section 10.03 and Section 10.02 hereof), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness, the Issuer is permitted to resume making payments on the Notes after the end of such Payment Blockage Period.  The Notes shall not be subject to more than one Payment Blockage Period in any consecutive 360-day period irrespective of the number of defaults with respect to Designated Senior Indebtedness of the Issuer during such period; provided that if any Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of the Issuer (other than the holders of Bank Indebtedness of the Issuer), a Representative of holders of Bank Indebtedness of the Issuer may give another Blockage Notice within such period. However, in no event shall the total number of days during which any Payment Blockage Period or Periods on the Notes is in effect exceed 179 days in the aggregate during any consecutive 360-day period, and there must be at least 181 days during any consecutive 360-day period during which no Payment Blockage Period is in effect.

 

Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Blockage Notice unless such default shall have been waived for a period of not less than 90 days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Blockage Notice, that, in either case, would give rise to a Non-Payment Default pursuant to any provisions under which a Non-Payment Default previously existed or was continuing shall constitute a new Non-Payment Default for this purpose).

 

SECTION 10.04.                            Acceleration of Payment of Notes.

 

If payment of the Notes is accelerated because of an Event of Default, the Issuer shall promptly notify the holders of the Designated Senior Indebtedness of the Issuer or the Representative of such Designated Senior Indebtedness of the acceleration; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article Ten.  If any Designated Senior Indebtedness of the Issuer is outstanding, the Issuer may not pay the Notes until five Business Days after the Representatives of all the Issuer of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the Notes only if this Indenture otherwise permits payment at that time.

 

SECTION 10.05.                            When Distribution Must Be Paid Over.

 

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold such distribution in trust for the holders of Senior Indebtedness of the Issuer and pay such distribution to the holders of Senior Indebtedness as their interests may appear.

 

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SECTION 10.06.                            Subrogation.

 

After all Senior Indebtedness of the Issuer is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness.  A distribution made under this Article Ten to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on such Senior Indebtedness.

 

SECTION 10.07.                            Relative Rights.

 

This Article Ten defines the relative rights of Holders and holders of Senior Indebtedness of the Issuer.  Nothing in this Indenture shall:

 

(i)            impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal (and any accretion) of and interest on the Notes in accordance with their terms;

 

(ii)           prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness of the Issuer to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

 

(iii)          affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Indebtedness.

 

SECTION 10.08.                            Subordination May Not Be Impaired by Issuer.

 

No right of any holder of Senior Indebtedness of the Issuer to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Issuer or by their failure to comply with this Indenture.

 

SECTION 10.09.                            Rights of Trustee and Paying Agent.

 

Notwithstanding Section 10.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives notice satisfactory to him that payments may not be made under this Article Ten.  The Issuer, the Registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness of the Issuer shall be entitled to give the notice; provided, however, that, if an issue of Senior Indebtedness of the Issuer has a Representative, only the Representative shall be entitled to give the notice.

 

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of the Issuer with the same rights it would have if it were not Trustee.  The Registrar and the Paying Agent shall be entitled to do the same with like rights.  The Trustee shall be entitled to all the rights set forth in this Article Ten with respect to any Senior Indebtedness of the Issuer which may at any time be held by it, to the same extent as any other holder of such Senior

 

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Indebtedness; and nothing in Article Seven shall deprive the Trustee of any of its rights as such holder.  Nothing in this Article Ten shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

SECTION 10.10.                           Distribution or Notice to Representative.

 

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of the Issuer, the distribution may be made and the notice given to their Representative, if any.

 

SECTION 10.11.                            Not To Prevent Events of Default or Limit Right To Accelerate.

 

The failure to make a payment pursuant to the Notes by reason of any provision in this Article Ten shall not be construed as preventing the occurrence of a Default.  Nothing in this Article Ten shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes in accordance with Section 6.02.

 

SECTION 10.12.                            Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article Eight hereof shall not be subordinated to the prior payment of any Senior Indebtedness of the Issuer or subject to the restrictions set forth in this Article Ten, and none of the Holders shall be obligated to pay over any such amount to the Issuer or any holder of Senior Indebtedness of the Issuer or any other creditor of the Issuer, provided that the subordination provisions of this Article Ten were not violated at the time the applicable amounts were deposited in trust pursuant to Article Eight hereof.

 

SECTION 10.13.                            Trustee Entitled To Rely.

 

Upon any payment or distribution pursuant to this Article Ten, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of the Issuer for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Ten.  In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Issuer to participate in any payment or distribution pursuant to this Article Ten, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article Ten, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.  The provisions of Sections

 

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7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article Ten.

 

SECTION 10.14.                            Trustee To Effectuate Subordination.

 

A Holder by its acceptance of a Note agrees to be bound by this Article Ten and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of the Issuer as provided in this Article Ten and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

SECTION 10.15.                            Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer.

 

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Issuer and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Issuer or any other Person, money or assets to which any holders of Senior Indebtedness of the Issuer shall be entitled by virtue of this Article Ten or otherwise.

 

SECTION 10.16.                            Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions.

 

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of the Issuer, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Issuer may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article Ten or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of the Issuer, do any one or more of the following:  (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of the Issuer, or otherwise amend or supplement in any manner Senior Indebtedness of the Issuer, or any instrument evidencing the same or any agreement under which Senior Indebtedness of the Issuer is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of the Issuer; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of the Issuer; and (iv) exercise or refrain from exercising any rights against the Issuer and any other Person.

 

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ARTICLE ELEVEN

 

GUARANTY

 

SECTION 11.01.                            Unconditional Guaranty.

 

(a)           Subject to the provisions of this Article Eleven, each Guarantor hereby, jointly and severally, fully and unconditionally guarantees, on a senior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer or any other Guarantors to the Holders or the Trustee hereunder or thereunder:  (i) (A) the due and punctual payment of the principal of, premium, if any, and interest on the Notes when and as the same shall become due and payable, whether at maturity, upon redemption or repurchase, by acceleration or otherwise, (B) the due and punctual payment of interest on the overdue principal and (to the extent permitted by law) interest, if any, on the Notes and (C) the due and punctual payment and performance (within applicable grace periods hereunder) of all other obligations of the Issuer and all other obligations of the other Guarantors (including under the Guaranties), in each case, to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee under Section 7.07 hereof), all in accordance with the terms hereof and thereof (collectively, the “Guaranteed Obligations”); and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the due and punctual payment and performance of the Guaranteed Obligations in accordance with the terms of the extension or renewal, whether at maturity, upon redemption or repurchase, by acceleration or otherwise.  Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Issuer to the Holders under this Indenture or under the Notes, for whatever reason, each Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately.  An Event of Default under this Indenture or the Notes shall constitute an event of default under the Guaranties, and shall entitle the Holders of Notes to accelerate the obligations of the Guarantors thereunder in the same manner and to the same extent as the obligations of the Issuer under the Indenture.

 

(b)           Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, any release of any other Guarantor, the recovery of any judgment against the Issuer, any action to enforce the same, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor.  To the fullest extent permitted by law, each Guarantor hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that its Guaranty shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and its Guaranty.  Each Guaranty is a guarantee of payment and not of collection.  If any Holder or the Trustee is required by any court or otherwise to return to the Issuer or to any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer or such Guarantor, any amount paid by the Issuer or such Guarantor to the Trustee or such Holder, its Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.  Each Guarantor hereby

 

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further agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (i) subject to this Article Eleven, the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 6.02 for the purposes of its Guaranty, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (ii) in the event of any acceleration of such obligations as provided in Section 6.02 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of its Guaranty.

 

(c)           Each Guaranty is, to the extent and in the manner set forth in Article Twelve, subordinated and subject in right of payment to the prior payment in full of the principal of and premium, if any, and interest on all Senior Indebtedness of the relevant Guarantor and is made subject to such provisions of this Indenture.

 

SECTION 11.02.                            Limitation on Guarantor Liability.

 

Each Guarantor and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that its Guaranty not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guaranty.  To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Guaranty and this Article Eleven shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article Eleven, result in the obligations of such Guarantor under its Guaranty not constituting a fraudulent transfer or conveyance.

 

SECTION 11.03.                            [Intentionally Omitted].

 

SECTION 11.04.                            Release of a Guarantor.

 

(a)           A Subsidiary Guarantor will be released from its obligations under this Article Eleven without any further action required on the part of the Trustee or any Holder,

 

(1)           upon the sale (including any sale pursuant to any exercise of remedies by a holder of Senior Indebtedness of the Issuer or of such Subsidiary Guarantor) or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor in its entirety,

 

(2)           upon the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor,

 

(3)           upon the designation of a Subsidiary Guarantor as an Unrestricted Subsidiary pursuant to the terms of this Indenture,

 

(4)           in connection with any sale or other disposition (including by way of a merger or consolidation) of Capital Stock of a Subsidiary Guarantor to a Person in accordance

 

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with this Indenture that results in the Subsidiary Guarantor no longer being a Restricted Subsidiary,

 

(5)           at such time as a Subsidiary Guarantor does not have any Guarantees outstanding that would have required it to become a Subsidiary Guarantor under Section 4.13,

 

(6)           upon defeasance of the Notes pursuant to Section 8.02 or 8.03, or

 

(7)           upon the full satisfaction of the Issuer’s obligations under this Indenture pursuant to Section 8.01;

 

provided, however, that in the case of clauses (1), (2) and (4) above, (i) such sale or other disposition is made to a Person other than the Issuer or a Subsidiary of the Issuer, (ii) such sale or disposition is otherwise permitted by this Indenture and (iii) the Issuer provides an Officer’s Certificate to the Trustee to the effect that the Issuer will comply with its obligations under Section 4.11 with respect to such sale or disposition.  At the request of the Issuer, the Trustee shall execute and deliver an appropriate instrument evidencing such release.

 

(b)           Interline Delaware will be released from its obligations under this Article Eleven without an further action required on the part of the Trustee or any Holder,

 

(1)           upon defeasance of the Notes pursuant to Section 8.02 or 8.03, or

 

(2)           upon the full satisfaction of the Issuer’s obligations under this Indenture pursuant to Section 8.01.

 

SECTION 11.05.                            Waiver of Subrogation.

 

Until this Indenture is discharged and all of the Notes and all obligations to which the Guaranteed Obligations are subordinate as provided in Article Twelve are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Issuer that arise from the existence, payment, performance or enforcement of the Issuer’s obligations under the Notes or this Indenture and such Guarantor’s obligations under its Guaranty and this Indenture, in any such instance including any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders against the Issuer, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from the Issuer, directly or indirectly, in cash or other assets or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of Notes under the Notes, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or the Holders, as the case may be, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges

 

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that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 11.05 is knowingly made in contemplation of such benefits.

 

SECTION 11.06.                            Immediate Payment.

 

Each Guarantor hereby agrees to make immediate payment to the Trustee on behalf of the Holders of all Guaranteed Obligations owing or payable to the respective Holders upon receipt of a demand for payment therefor by the Trustee to such Guarantor in writing.

 

SECTION 11.07.                            No Set-Off.

 

Each payment to be made by a Guarantor hereunder in respect of the Guaranteed Obligations shall be payable in the currency or currencies in which such Guaranteed Obligations are denominated, and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

 

SECTION 11.08.                            Guarantee Obligations Absolute.

 

The obligations of each Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by each Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a Guaranty shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof.

 

SECTION 11.09.                            Guaranteed Obligations Continuing.

 

The obligations of each Guarantor hereunder shall be continuing and shall remain in full force and effect until all such obligations have been paid and satisfied in full.

 

SECTION 11.10.                            [Reserved.]

 

SECTION 11.11.                            Guaranteed Obligations Reinstated.

 

The obligations of each Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of any Guarantor hereunder (whether such payment shall have been made by or on behalf of the Issuer or by or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Issuer or any Guarantor or otherwise, all as though such payment had not been made.  If demand for, or acceleration of the time for, payment by the Issuer or any other Guarantor is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Issuer or such Guarantor, all such Indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein.

 

SECTION 11.12.                            Guaranteed Obligations Not Affected.

 

To the fullest extent permitted by law, the obligations of each Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing

 

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whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by any Guarantor or any of the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against any Guarantor hereunder or might operate to release or otherwise exonerate any Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including:

 

(a)           any limitation of status or power, disability, incapacity or other circumstance relating to the Issuer or any other Person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding-up or other proceeding involving or affecting the Issuer or any other Person;

 

(b)           any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Issuer or any other Person under this Indenture, the Notes or any other document or instrument;

 

(c)           any failure of the Issuer or any other Guarantor, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Notes, or to give notice thereof to a Guarantor;

 

(d)           the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Issuer or any other Person or their respective assets or the release or discharge of any such right or remedy;

 

(e)           the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Issuer or any other Person;

 

(f)            any change in the time, manner or place of payment of, or in any other term of, any of the Notes, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Notes or this Indenture, including any increase or decrease in the principal amount of or premium, if any, or interest on any of the Notes;

 

(g)           any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Issuer or a Guarantor;

 

(h)           any merger or amalgamation of the Issuer or a Guarantor with any Person or Persons; and

 

(i)            the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Guaranteed Obligations or the obligations of a Guarantor under its Guaranty.

 

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SECTION 11.13.                            Waiver.

 

Without in any way limiting the provisions of Section 11.01, each Guarantor hereby waives notice of acceptance hereof, notice of any liability of any Guarantor hereunder, notice or proof of reliance by the Holders upon the obligations of any Guarantor hereunder, and diligence, presentment, demand for payment on the Issuer, protest, notice of dishonor or non-payment of any of the Guaranteed Obligations, or other notice or formalities to the Issuer or any Guarantor of any kind whatsoever.

 

SECTION 11.14.                            No Obligation To Take Action Against the Issuer.

 

Neither the Trustee nor any other Person shall have any obligation to enforce or exhaust any rights or remedies against the Issuer or any other Person or any property of the Issuer or any other Person before the Trustee is entitled to demand payment and performance by any or all Guarantors of their liabilities and obligations in respect of their Guaranties under this Indenture.

 

SECTION 11.15.                            Dealing with the Issuer and Others.

 

The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Guarantor hereunder and without the consent of or notice to any Guarantor, may

 

(a)           grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Issuer or any other Person;

 

(b)           take or abstain from taking security or collateral from the Issuer or from perfecting security or collateral of the Issuer;

 

(c)           release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Issuer or any third party with respect to the obligations or matters contemplated by this Indenture or the Notes;

 

(d)           accept compromises or arrangements from the Issuer;

 

(e)           apply all monies at any time received from the Issuer or from any security upon such part of the Guaranteed Obligations as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and

 

(f)            otherwise deal with, or waive or modify their right to deal with, the Issuer and all other Persons and any security as the Holders or the Trustee may see fit.

 

SECTION 11.16.                            Default and Enforcement.

 

If any Guarantor fails to pay in accordance with Section 11.06 hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of the Guaranty of any such

 

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Guarantor under this Indenture by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from such Guarantor the obligations.

 

SECTION 11.17.                            Amendment, Etc.

 

No amendment, modification or waiver of any provision of this Indenture relating to any Guarantor or consent to any departure by any Guarantor or any other Person from any such provision will in any event be effective unless it is signed by such Guarantor and the Trustee.

 

SECTION 11.18.                            Acknowledgment.

 

Each Guarantor hereby acknowledges communication of the terms of this Indenture and the Notes and consents to and approves of the same.

 

SECTION 11.19.                            Costs and Expenses.

 

Each Guarantor shall pay on demand by the Trustee any and all reasonable and documented costs, fees and expenses (including legal fees and expenses on a solicitor and client basis) incurred by the Trustee, its agents, advisors and counsel or any of the Holders in enforcing any of their rights under any Guaranty.

 

SECTION 11.20.                            No Merger or Waiver; Cumulative Remedies.

 

No Guaranty shall operate by way of merger of any of the obligations of a Guarantor under any other agreement, including this Indenture.  No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under this Indenture or the Notes, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges under this Indenture, the Notes and any other document or instrument between a Guarantor and/or the Issuer and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law.

 

SECTION 11.21.                            Survival of Guaranteed Obligations.

 

To the fullest extent permitted by law, without prejudice to the survival of any of the other obligations of each Guarantor hereunder, the obligations of each Guarantor under Section 11.01 shall be enforceable against such Guarantor without regard to and without giving effect to any defense, right of offset or counterclaim available to or which may be asserted by the Issuer or any Guarantor.

 

SECTION 11.22.                            Guaranty in Addition to Other Guaranteed Obligations.

 

The obligations of each Guarantor under its Guaranty are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this

 

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Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them.

 

SECTION 11.23.                            Severability.

 

Any provision of this Article Eleven which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Indenture and this Article Eleven.

 

SECTION 11.24.                            Successors and Assigns.

 

Each Guaranty shall be binding upon and inure to the benefit of each Guarantor and the Trustee and the other Holders and their respective successors and permitted assigns, except that no Guarantor may assign any of its obligations hereunder or thereunder.

 

SECTION 11.25.                            Contribution.

 

Each Subsidiary Guarantor that makes a payment under its Guaranty shall be entitled upon payment in full of all guarantied obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

 

ARTICLE TWELVE

 

SUBORDINATION OF GUARANTIES

 

SECTION 12.01.                            Agreement To Subordinate.

 

Each Guarantor agrees, and each Holder by accepting a Note agrees, that the Obligations of such Guarantor under its Guaranty are subordinated in right of payment, to the extent and in the manner provided in this Article Twelve, to the prior payment in full of all existing and future Senior Indebtedness of such Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. A Guarantor’s Obligations under its Guarantee shall in all respects rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of such Guarantor, and will be senior in right of payment to all existing and future Subordinated Indebtedness of such Guarantor; and only Indebtedness of such Guarantor that is Senior Indebtedness shall rank senior to the obligations of such Guarantor under its Guaranty in accordance with the provisions set forth herein.  All provisions of this Article Twelve shall be subject to Section 12.12.

 

SECTION 12.02.                            Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of a Guarantor upon a total or partial liquidation or dissolution or reorganization, insolvency or bankruptcy or similar proceeding relating to such Guarantor or its property:

 

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(1)           the holders of Senior Indebtedness of such Guarantor shall be entitled to receive payment in full in cash of such Senior Indebtedness before Holders shall be entitled to receive any payment or distribution of any kind or character with respect to any Obligations on, or relating to, the Guaranty;

 

(2)           until the Senior Indebtedness of such Guarantor is paid in full in cash, any payment or distribution to which Holders would be entitled but for the subordination provisions of this Indenture shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders of Notes may receive certain Capital Stock and subordinated debt obligations that are subordinated to all securities issued in respect of claims of such Senior Indebtedness; and

 

(3)           if a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the Guarantor and pay it over to them as their interests may appear.

 

SECTION 12.03.                            Default on Senior Indebtedness of a Guarantor.

 

A Guarantor shall not make any payment pursuant to its Guaranty (or pay any other Obligations relating to its Guaranty, including fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire or acquire for cash or property any Notes (collectively, “pay its Guaranty”) if either of the following occurs (a “Guarantor Payment Default”):

 

(1)           any Obligation on any Designated Senior Indebtedness of such Guarantor is not paid in full in cash when due (after giving effect to any applicable grace period); or

 

(2)           any other default on Designated Senior Indebtedness of such Guarantor occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms;

 

unless, in either case, the Guarantor Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash. Regardless of the foregoing, such Guarantor is permitted to make payments on its Guaranty if such Guarantor and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Guarantor Payment Default has occurred and is continuing.

 

During the continuance of any default (other than a Guarantor Payment Default) (a “Non-Guarantor Payment Default”) with respect to any Designated Senior Indebtedness of a Guarantor pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, such Guarantor is not permitted to pay its Guaranty for a period (a “Guaranty Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to such Guarantor and the Issuer) of written notice (a “Guaranty Blockage Notice”) of such Non-Guarantor Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Guaranty Payment Blockage Period and ending 179 days thereafter.

 

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The Guaranty Payment Blockage Period shall end earlier if such Guaranty Payment Blockage Period is terminated (i) by written notice to the Trustee, the relevant Guarantor and the Issuer from the Person or Persons who gave such Guaranty Blockage Notice; (ii) because the default giving rise to such Guaranty Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Designated Senior Indebtedness has been discharged or repaid in full in cash.

 

Notwithstanding the provisions described in the immediately preceding two sentences (but subject to the provisions contained in the first sentence of this Section 12.03 and Section 12.02 hereof), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness, the relevant Guarantor is permitted to resume making payments on its Guaranty after the end of such Guaranty Payment Blockage Period.  Each Guaranty shall not be subject to more than one Guaranty Payment Blockage Period in any consecutive 360-day period irrespective of the number of defaults with respect to Designated Senior Indebtedness of the relevant Guarantor during such period; provided that if any Guaranty Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of such Guarantor (other than the holders of Bank Indebtedness), a Representative of holders of Bank Indebtedness may in the aggregate give one other Guaranty Blockage Notice within such period.  However, in no event shall the total number of days during which any Guaranty Payment Blockage Period or Periods on a Guaranty is in effect exceed 179 days in the aggregate during any consecutive 360-day period, and there must be at least 181 days during any consecutive 360 day period during which no Guaranty Payment Blockage Period is in effect.  Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Guaranty Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Guaranty Blockage Notice unless such default shall have been waived for a period of not less than 90 days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Guaranty Blockage Notice, that, in either case, would give rise to a Non-Guarantor Payment Default pursuant to any provisions under which a Non-Guarantor Payment Default previously existed or was continuing shall constitute a new Non-Guarantor Payment Default for this purpose).

 

SECTION 12.04.                            Demand for Payment.

 

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on a Guarantor pursuant to Article Eleven hereof, the Issuer or such Guarantor shall promptly notify the holders of the Designated Senior Indebtedness of such Guarantor or the Representative of such Designated Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article Twelve. If any Designated Senior Indebtedness of a Guarantor is outstanding, such Guarantor may not pay its Guaranty until five Business Days after the Representatives of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Guaranty only if this Indenture otherwise permits payment at that time.

 

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SECTION 12.05.                            When Distribution Must Be Paid Over.

 

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the relevant Guarantor and pay it over to them as their interests may appear.

 

SECTION 12.06.                            Subrogation.

 

After all Senior Indebtedness of a Guarantor is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness.  A distribution made under this Article Twelve to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the relevant Guarantor and Holders, a payment by such Guarantor on such Senior Indebtedness.

 

SECTION 12.07.                            Relative Rights.

 

This Article Twelve defines the relative rights of Holders and holders of Senior Indebtedness of a Guarantor. Nothing in this Indenture shall:

 

(1)           impair, as between such Guarantor and Holders, the obligation of such Guarantor, which is absolute and unconditional, to make payments under its Guaranty in accordance with its terms;

 

(2)           prevent the Trustee or any Holder from exercising its available remedies upon a default by such Guarantor under its obligations with respect to its Guaranty, subject to the rights of holders of Senior Indebtedness of such Guarantor to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

 

(3)           affect the relative rights of Holders and creditors of such Guarantor other than their rights in relation to holders of Senior Indebtedness.

 

SECTION 12.08.                           Subordination May Not Be Impaired by a Guarantor.

 

No right of any holder of Senior Indebtedness of a Guarantor to enforce the subordination of the obligations of such Guarantor under its Guaranty shall be impaired by any act or failure to act by such Guarantor or by its failure to comply with this Indenture.

 

SECTION 12.09.                            Rights of Trustee and Paying Agent.

 

Notwithstanding Section 12.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives notice satisfactory to him that payments may not be made under this Article Twelve.  A Guarantor, the Registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness of such Guarantor shall be

 

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entitled to give the notice; provided, however, that, if an issue of Senior Indebtedness of such Guarantor has a Representative, only the Representative shall be entitled to give the notice.

 

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of a Guarantor with the same rights it would have if it were not Trustee.  The Registrar and the Paying Agent shall be entitled to do the same with like rights.  The Trustee shall be entitled to all the rights set forth in this Article Twelve with respect to any Senior Indebtedness of a Guarantor which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article Seven shall deprive the Trustee of any of its rights as such holder.  Nothing in this Article Twelve shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of Notes or to the Issuer or to any other person cash, property or notes to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.

 

SECTION 12.10.                            Distribution or Notice to Representative.

 

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of a Guarantor, the distribution may be made and the notice given to their Representative (if any).

 

SECTION 12.11.                            Article Twelve Not To Prevent Events of Default or Limit Right To Demand Payment.

 

The failure of a Guarantor to make a payment pursuant its Guaranty by reason of any provision in this Article Twelve shall not be construed as preventing the occurrence of a default by such Guarantor under its Guaranty.  Nothing in this Article Twelve shall have any effect on the right of the Holders or the Trustee to make a demand for payment on a Guarantor pursuant to Article Eleven hereof.

 

SECTION 12.12.                            Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article Eight hereof shall not be subordinated to the prior payment of any Senior Indebtedness of any Guarantor or subject to the restrictions set forth in this Article Twelve, and none of the Holders shall be obligated to pay over any such amount to such Guarantor or any holder of Senior Indebtedness of such Guarantor or any other creditor of such Guarantor, provided that the subordination provisions of this Article Twelve were not violated at the time the applicable amounts were deposited in trust pursuant to Article Eight.

 

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SECTION 12.13.                            Trustee Entitled To Rely.

 

Upon any payment or distribution pursuant to this Article Twelve, the Trustee and the Holders shall be entitled to rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of a Guarantor for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Twelve.  In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of a Guarantor to participate in any payment or distribution pursuant to this Article Twelve, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article Twelve, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.  The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article Twelve.

 

SECTION 12.14.                            Trustee To Effectuate Subordination.

 

A Holder by its acceptance of a Note agrees to be bound by this Article Twelve and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of a Guarantor as provided in this Article Twelve and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

SECTION 12.15.                           Trustee Not Fiduciary for Holders of Senior Indebtedness of Guarantors.

 

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a Guarantor and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or such Guarantor or any other Person, money or assets to which any holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of this Article Twelve or otherwise.

 

SECTION 12.16.                            Reliance by Holders of Senior Indebtedness of a Guarantor on Subordination Provisions.

 

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of a Guarantor, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be

 

117

 

deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of a Guarantor may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and with-out impairing or releasing the subordination provided in this Article Twelve or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of such Guarantor, do any one or more of the following:  (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of such Guarantor, or otherwise amend or supplement in any manner Senior Indebtedness of such Guarantor, or any instrument evidencing the same or any agreement under which Senior Indebtedness of such Guarantor is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of such Guarantor; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of such Guarantor; and (iv) exercise or refrain from exercising any rights against such Guarantor and any other Person.

 

ARTICLE THIRTEEN

 

MISCELLANEOUS

 

SECTION 13.01.                            TIA Controls.

 

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

 

SECTION 13.02.                            Notices.

 

Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by nationally recognized overnight courier service, by telecopier or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

if to the Issuer:

 

c/o Interline Brands, Inc. 

701 San Marco Blvd.,

Jacksonville, FL 32207

Attention:  John A. Ebner
 Facsimile:  (856) 533-3443

 

and a copy to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

 

118

 

New York, New York 10019-6064

Attention: John C. Kennedy, Esq.

Facsimile: (212) 757-3990

 

if to the Trustee:

 

Wells Fargo Bank, National Association
 625 Marquette Avenue
 MAC N9311-110, 11th Floor
 Minneapolis, Minnesota 55470
 Attention:  Richard H. Prokosch
 Facsimile:  (612) 667-9825

 

The Issuer and the Trustee by written notice to each other such Person may designate additional or different addresses for notices to such Person.  Any notice or communication to the Issuer and the Trustee shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee); and next Business Day if by nationally recognized overnight courier service.

 

Any notice or communication mailed to a Noteholder shall be mailed to him or her by first class mail or other equivalent means at his or her address as it appears on the registration books of the Registrar and shall be sufficiently given to him or her if so mailed within the time prescribed.

 

Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

SECTION 13.03.                            Communications by Holders with Other Holders.

 

Noteholders may communicate pursuant to TIA § 312(b) with other Holders of the Notes with respect to their rights under this Indenture or the Notes.  The Issuer, the Trustee, the Registrar and any other Person shall have the protection of TIA § 312(c).

 

SECTION 13.04.                            Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuer to the Trustee to take any action under this Indenture the Issuer shall furnish to the Trustee at the request of the Trustee:

 

(a)           an Officer’s Certificate, in form and substance reasonably satisfactory to the Trustee, stating that, in the opinion of the signer, all conditions precedent to be performed or effected by the Issuer, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

119

 

(b)           other than with respect to actions taken on the Issue Date, an Opinion of Counsel stating that, in the opinion of such counsel, any and all such conditions precedent have been complied with.

 

SECTION 13.05.                            Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, other than the Officer’s Certificate required by Section 4.06, shall include:

 

(a)           a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(b)           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;

 

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

 

(d)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

 

SECTION 13.06.                            Rules by Trustee, Paying Agent, Registrar.

 

The Trustee, Paying Agent or Registrar may make reasonable rules for its functions.

 

SECTION 13.07.                            Governing Law.

 

This Indenture, the Notes and the Guaranties, if any, will be governed by and construed in accordance with the laws of the State of New York without giving effect to applicable principles of conflicts of laws to the extent that the application of the laws of another jurisdiction would be required thereby.

 

SECTION 13.08.                            No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuer or any of its Subsidiaries.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 13.09.                            No Recourse Against Others.

 

No director, officer, employee, incorporator or stockholder of the Issuer or of any Guarantor, if any, as such, shall have any liability for any obligations of the Issuer or the Guarantors,

 

120

 

if any, under the Notes, this Indenture, the Guarantors’ Guaranties or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waives and releases all such liability.  Such waiver and release are part of the consideration for issuance of the Notes.

 

SECTION 13.10.                            Successors.

 

All agreements of the Issuer and the Guarantors, if any, in this Indenture, the Notes and the Guaranties shall bind their respective successors.  All agreements of the Trustee in this Indenture shall bind its successor.

 

SECTION 13.11.                            Duplicate Originals.

 

All parties may sign any number of copies of this Indenture.  Each signed copy or counterpart shall be an original, but all of them together shall represent the same agreement.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

SECTION 13.12.                            Severability.

 

In case any one or more of the provisions in this Indenture, in the Notes or in the Guaranties shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

 

SECTION 13.13.                            U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

SECTION 13.14.                            Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

121

 

SIGNATURES

 

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

 

	
 
  	
 
  	
INTERLINE BRANDS, INC.,
  
	
 
  	
 
  	
a New Jersey corporation
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
/s/ John A. Ebner
  
	
 
  	
 
  	
 
  	
Name:
  	
John A. Ebner
  
	
 
  	
 
  	
 
  	
Title:
  	
Chief Financial Officer
  

 

Interline - Indenture

 

 

	
 
  	
INTERLINE BRANDS, INC.,
  
	
 
  	
a Delaware corporation
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ John A. Ebner
  
	
 
  	
 
  	
Name:
  	
John A. Ebner
  
	
 
  	
 
  	
Title:
  	
Chief Financial Officer
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
WILMAR FINANCIAL, INC.,
  
	
 
  	
a Delaware corporation
  
	
 
  	
WILMAR HOLDINGS, INC.,
  
	
 
  	
a Delaware corporation
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ John A. Ebner
  
	
 
  	
 
  	
Name:
  	
John A. Ebner
  
	
 
  	
 
  	
Title:
  	
President and Chief Financial Officer
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
GLENWOOD ACQUISITION LLC,
  
	
 
  	
a Delaware limited liability company
  
	
 
  	
By Interline Brands, Inc., its sole member
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ John A. Ebner
  
	
 
  	
 
  	
Name:
  	
John A. Ebner
  
	
 
  	
 
  	
Title:
  	
Chief Financial Officer
  

 

S-1

 

	
 
  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Richard Prokosch
  
	
 
  	
 
  	
Name:
  	
Richard Prokosch
  
	
 
  	
 
  	
Title:
  	
Vice President
  

 

S-1

 

EXHIBIT A

 

FORM OF NOTE

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

 

INTERLINE BRANDS, INC.
 7.00% Senior Subordinated Notes due 2018

 

	
 
  	
CUSIP No.(a)                       
  
	
 
  	
ISIN(b)                       
  
	
No. [        ]
  	
$[            ]
  

 

INTERLINE BRANDS, INC., a New Jersey corporation (the “Issuer”), for value received promises to pay to CEDE & CO. or its registered assigns, the principal sum [set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto] of [                         ] on November 15, 2018.

 

Interest Payment Dates:  May 15 and November 15, commencing May 15, 2011.

 

Record Dates:  May 1 and November 1.

 

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

 

(a)                   144A CUSIP:  45874Q AA8
 Reg. S CUSIP:  U4586G AA3
 IAI CUSIP: 45874Q AC4

 

(b)                   144A ISIN:  US45874QAA85
 Reg. S ISIN:  USU4586GAA32
 IAI CUSIP: US45874QAC42

 

A-1

 

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officer.

 

	
 
  	
INTERLINE BRANDS, INC., a New Jersey corporation
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:   Authorized Agent
  

 

A-2

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

 

This is one of the 7.00% Senior Subordinated Notes due 2018 described in the within-mentioned Indenture.

 

Dated: [          ]

	
 
  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Authorized Signatory
  

 

A-3

 

(Reverse of Note)

 

7.00% Senior Subordinated Notes due 2018

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

SECTION 1.  Interest.  INTERLINE BRANDS, INC., a New Jersey corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, the “Issuer”), promises to pay interest on the principal amount of this Note at 7.00% per annum from the date of the original issuance of the Notes until maturity.  The Issuer will pay interest semi-annually on May 15 and November 15 of each year (each, an “Interest Payment Date”), commencing May 15, 2011.  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided, however, that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date.  The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful.  The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

SECTION 2.  Method of Payment.  The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture (as defined below) with respect to defaulted interest.  The Notes will be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The Issuer shall pay principal, premium, if any, and interest on the Notes 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 (“U.S. Legal Tender”).  Principal, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders of the Notes not issued in global form at their respective addresses set forth in the register of Holders of Notes.  Until otherwise designated by the Issuer, the Issuer’s office or agency for payment will be the office of the Trustee maintained for such purpose.  Any payment required to be made with respect to this Note on a day that is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such day, and interest shall not accrue for the period from and after such date to the date of payment.

 

SECTION 3.  Paying Agent and Registrar.  Initially, Wells Fargo Bank, National Association (the “Trustee”), will act as Paying Agent and Registrar.  The Issuer may change any Paying Agent or Registrar without notice to any Holder.  The Issuer or any of its Subsidiaries may act in any such capacity.

 

A-4

 

SECTION 4.  Indenture.  The Issuer issued the Notes under an Indenture dated as of November 16, 2010 (the “Indenture”) by and among the Issuer, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”).  The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several senior subordinated basis by each of the Guarantors to the extent set forth in the Indenture.

 

SECTION 5.  Optional Redemption.  Prior to November 15, 2013, the Issuer shall be entitled at its option to redeem all, but not less than all, of the Notes at a Redemption Price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date). Notice of such redemption must be mailed by first-class mail to each Holder’s registered address, not less than 30 days nor more than 60 days prior to the Redemption Date.

 

On and after November 15, 2013, the Issuer shall be entitled at its option to redeem all or a portion of the Notes upon not less than 30 days’ nor more than 60 days’ notice, at the Redemption Prices (expressed in percentages of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period commencing on November 15 of the years set forth below:

 

	
Period
  	
 
  	
Redemption
 Price
  	
 
  
	
2013 
  	
 
  	
105.250
  	
%
  
	
2014 
  	
 
  	
103.500
  	
%
  
	
2015 
  	
 
  	
101.750
  	
%
  
	
2016 and thereafter 
  	
 
  	
100.000
  	
%
  

 

SECTION 6.  Optional Redemption upon Public Offering.  Prior to November 15, 2013, the Issuer may at its option on one or more occasions redeem Notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) originally issued at a Redemption Price (expressed as a percentage of the principal amount) of 107.000%, plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), with the Net Cash Proceeds from one or more Equity Offerings; provided, however, that

 

(i)            at least 65% of such aggregate principal amount of Notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each

 

A-5

 

such redemption (other than Notes held, directly or indirectly, by the Issuer or its Affiliates); and

 

(ii)           each such redemption occurs within 90 days after the date of consummation of the related Equity Offering.

 

SECTION 7.  Mandatory Redemption.  For the avoidance of doubt, an offer to purchase pursuant to Section 8 hereof shall not be deemed a redemption.  The Issuer shall not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes.

 

SECTION 8.  Repurchase at Option of Holder.  Upon the occurrence of a Change of Control, and subject to certain conditions set forth in the Indenture, the Issuer will be required to offer to purchase all of the outstanding Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the date of repurchase (subject to the right of Holders to receive interest due on the relevant Interest Payment Date).

 

The Issuer is, under certain circumstances, obligated to make an offer to purchase Notes at 100% of their principal amount, plus accrued and unpaid interest, if any, thereon to the date of repurchase, with certain net cash proceeds of certain sales or other dispositions of assets in accordance with the Indenture.

 

SECTION 9.  Notice of Redemption.  Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at its registered address.  Notes in denominations larger than $2,000 may be redeemed in part.  If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed.  A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption.

 

SECTION 10.  Denominations, Transfer, Exchange.  The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer or the Registrar are not required to transfer or exchange any Note selected for redemption.  Also, the Issuer or the Registrar are not required to transfer or exchange any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed.

 

SECTION 11.  Subordination.  The Notes and the Guaranties are subordinated to Senior Indebtedness of the Issuer and the Guarantors on the terms and subject to the conditions set forth in the Indenture.  To the extent provided in the Indenture, Senior Indebtedness must be paid before the Notes and Guaranties may be paid.  The Issuer and the Guarantors agree, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture

 

A-6

 

and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose.

 

SECTION 12.  Persons Deemed Owners.  The registered Holder of a Note may be treated as its owner for all purposes.

 

SECTION 13.  Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or compliance with any provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Notes, to, among other things, cure any ambiguity, defect or inconsistency in the Indenture, provide for uncertificated Notes in addition to certificated Notes, comply with any requirements of the SEC in connection with the qualification of the Indenture under the TIA, or make any change that does not adversely affect the rights of any Holder of a Note.

 

SECTION 14.  Defaults and Remedies.  If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes generally may declare by notice to the Issuer all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency as set forth in the Indenture, with respect to the Issuer or any Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice.  Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.  The Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in the payment of principal of, premium, if any, or interest on the Notes.

 

SECTION 15.  Restrictive Covenants.  The Indenture contains certain covenants that, among other things, limit the ability of the Issuer and its Restricted Subsidiaries to Incur indebtedness, to make restricted payments, to sell assets, to permit restrictions on dividends and other payments by Restricted Subsidiaries of the Issuer, to consolidate, merge or sell all or substantially all of its assets or to engage in transactions with affiliates.  The limitations are subject to a number of important qualifications and exceptions. The Issuer must annually report to the Trustee on compliance with such limitations.

 

SECTION 16.  Discharge and Defeasance.  Subject to certain conditions, the Issuer at any time shall be entitled to terminate some or all of its obligations under the Notes and the Indenture, and the obligations of the Guarantors under their Guaranties, if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.

 

A-7

 

SECTION 17.  No Recourse Against Others.  No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor, if any, as such, shall have any liability for any obligations of the Issuer or the Guarantors, if any, under the Notes, the Indenture, the Guarantors’ Guaranties or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

SECTION 18.  Trustee Dealings with the Issuer.  The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates as if it were not the Trustee.

 

SECTION 19.  Authentication.  This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

SECTION 20.  Abbreviations.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

SECTION 21.  Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.  Pursuant to, but subject to the exceptions in, the Registration Rights Agreement, the Issuer will be obligated to consummate an exchange offer pursuant to which the Holder of this Note shall have the right to exchange this Note for a 7.00% Senior Subordinated Note due 2018 of the Issuer which shall have been registered under the Securities Act, in like principal amount and having terms identical in all material respects to this Note (except that such Note shall not be entitled to Additional Interest).  The Holders shall be entitled to receive certain Additional Interest in the event such exchange offer is not consummated and under certain other circumstances, all pursuant to and in accordance with the terms of the Registration Rights Agreement.(a)

 

SECTION 22.  CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

SECTION 23.  Governing Law.  This Note shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable

 

(a)                                 This Section not to appear on Exchange Notes or on Notes the Holder of which is not a party to the Registration Rights Agreement.

 

A-8

 

principles of conflicts of laws to the extent that the application of the laws of another jurisdiction would be required thereby.

 

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture.

 

A-9

 

ASSIGNMENT FORM

 

I or we assign and transfer this Note to                                                                                                                                 

 

	
 
  
	
(Print or type name, address and zip code of assignee or transferee)
  
	
 
  
	
 
  
	
(Insert Social Security or other identifying number of assignee or transferee)
  

 

and irrevocably appoint                                                                                agent to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.

 

	
Dated:
  	
 
  	
 
  	
Signed:
  	
 
  
	
 
  	
 
  	
 
  	
(Sign exactly as name appears on
 the other side of this Note)
  
	
 
  	
 
  	
 
  
	
Signature Guarantee:
  	
 
  	
 
  
	
 
  	
 
  	
Participant in a recognized Signature Guarantee
 Medallion Program (or other signature guarantor
 program reasonably acceptable to the Trustee)
  

 

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of the declaration by the SEC of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering resales of this Note (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the date following the second anniversary of the original issuance of this Note, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer:

 

Check One

 

	
(1)
  	
o
  	
to Interline Delaware, the Issuer or a subsidiary thereof; or
  
	
 
  	
 
  	
 
  
	
(2)
  	
o
  	
pursuant to and in compliance with Rule 144A under the Securities Act; or
  
	
 
  	
 
  	
 
  
	
(3)
  	
o
  	
outside the United States to a non-U.S. person in compliance with Rule 904 of Regulation S under the Securities Act; or
  
	
 
  	
 
  	
 
  
	
(4)
  	
o
  	
pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or
  
	
 
  	
 
  	
 
  
	
(5)
  	
o
  	
pursuant to an effective registration statement under the Securities Act;
  
	
 
  	
 
  	
 
  
	
(6)
  	
o
  	
to an Institutional Accredited Investor and pursuant to another available exemption from the registration statement requirements of the Securities Act of 1933; or
  

 

A-10

 

	
(7)
  	
o
  	
pursuant to another available exemption from the registration statement requirements of the Securities Act of 1933;
  

 

and unless the box below is checked, the undersigned confirms that such Note is not being transferred to an “affiliate” of the Issuer as defined in Rule 144 under the Securities Act (an “Affiliate”):

 

o            The transferee is an Affiliate of the Issuer.

 

Unless one of items (1) through (7) is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if item (3), (4) or (7) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions (in the case of item (4) or (7)), certifications (including an investment letter in the case of item (4)) and other information as the Trustee or the Issuer have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

 

If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied.

 

	
Dated:
  	
 
  	
 
  	
Signed:
  	
 
  
	
 
  	
 
  	
 
  	
(Sign exactly as name appears on
  
	
 
  	
 
  	
 
  	
the other side of this Note)
  
	
 
  	
 
  	
 
  	
 
  
	
Signature Guarantee:
  	
 
  
						

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
Dated:
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
NOTICE:  To be executed by an executive officer 
  

 

A-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.07 or Section 4.11 of the Indenture, check the appropriate box:

 

	
Section 4.07 o
  	
Section 4.11 o
  

 

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.07 or Section 4.11 of the Indenture, state the amount:  $                    

 

	
Dated:
  	
 
  	
 
  	
Signed:
  	
 
  
	
 
  	
 
  	
 
  	
(Sign exactly as name appears on
  
	
 
  	
 
  	
 
  	
the other side of this Note)
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
Signature Guarantee:
  	
 
  	
 
  
	
 
  	
 
  	
Participant in a recognized Signature Guarantee
  
	
 
  	
 
  	
Medallion Program (or other signature guarantor
  
	
 
  	
 
  	
program reasonably acceptable to the Trustee)
  

 

A-12

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

 

The initial outstanding principal amount of this Global Note is $                      .  The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of Exchange
  	
 
  	
Amount of
 decrease in
 Principal Amount
  	
 
  	
Amount of
 increase in
 Principal Amount
 of this Global Note
  	
 
  	
Principal Amount
 of this Global Note
 following such
 decrease or
 increase
  	
 
  	
Signature of
 authorized
 signatory of
 Trustee or
 custodian
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  

 

*  This schedule should be included only if the Note is issued in global form.

 

A-13

 

EXHIBIT B

 

FORM OF LEGENDS

 

Each Global Note and Definitive Note that constitutes a Restricted Security or is sold in compliance with Regulation S shall bear the following legend (the “Private Placement Legend”) on the face thereof, unless otherwise agreed by the Issuer and the Holder thereof:

 

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE ‘‘SECURITIES ACT’’) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) TO US, ANY OF THE GUARANTORS OR ANY OF THEIR SUBSIDIARIES AND (C) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED STATES, AND ANY SELLER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

Each Global Note authenticated and delivered hereunder shall also bear the following legend (the “Global Note Legend”):

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY.  THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE FOR THE NOTES.

 

B-1

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER 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.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE FOR THE NOTES.

 

B-2

 

EXHIBIT C

 

FORM OF CERTIFICATE OF TRANSFER

 

Interline Brands, Inc. 
 701 San Marco Blvd.,

Jacksonville, FL 32207

Attention:  John A. Ebner
 Facsimile:  (856) 533-3443

 

Wells Fargo Bank, as Trustee — DAPS Reorg.
 MAC N9303-121
 608 2nd Avenue South
 Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.:  (866) 969-1290

Email:   DAPSReorg@wellsfargo.com

 

Re:                             7.00% Senior Subordinated Notes due 2018

 

Reference is hereby made to the Indenture, dated as of November 16, 2010 (the “Indenture”), among Interline Brands, Inc., a New Jersey corporation, as Issuer, the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

                                       (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                       in such Note[s] or interests (the “Transfer”), to                                (the “Transferee”), as further specified in Annex A hereto.  In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.                                      o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

 

2.                                      o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE

 

C-1

 

NOTE PURSUANT TO REGULATION S.  The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser).  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

 

3.                                      o CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S.  The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

 

(a)                                 o such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)                                 o such Transfer is being effected to Interline Delaware, the Issuer or a subsidiary thereof;

 

or

 

(c)                                  o such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

 

or

 

(d)                                 o such Transfer is being effected to an Institutional Accredited Investor in a minimum denomination of $250,000 and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted

 

C-2

 

Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit F to the Indenture and (2) if requested by the Trustee or an Issuer, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

 

4.                                      o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

 

(a)                                 o CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b)                                 o CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(c)                                  o CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

C-3

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

	
 
  	
 
  	
[Insert Name of Transferor]
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
 
  
	
 
  	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
 
  	
Title:
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
Dated:
  	
 
  	
 
  	
 
  
					

 

C-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.                                      The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)                                 o a beneficial interest in the:

 

(i)                                     o 144A Global Note (CUSIP 45874Q AA8), or

 

(ii)                                  o Regulation S Global Note (CUSIP U4586G AA3), or

 

(iii)                               o IAI Global Note (CUSIP 45874Q AC4), or

 

(b)                                 o a Restricted Definitive Note.

 

2.                                      After the Transfer the Transferee shall hold:

 

[CHECK ONE]

 

(a)                                 o a beneficial interest in the:

 

(i)                                     o 144A Global Note (CUSIP 45874Q AA8), or

 

(ii)                                  o Regulation S Global Note (CUSIP U4586G AA3), or

 

(iii)                               o IAI Global Note (CUSIP 45874Q AC4), or

 

(iv)                              o Unrestricted Global Note; or

 

(b)                                 o a Restricted Definitive Note; or

 

(c)                                  o an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

C-5

 

EXHIBIT D

 

FORM OF CERTIFICATE OF EXCHANGE

 

Interline Brands, Inc. 
 701 San Marco Blvd.,

Jacksonville, FL 32207

Attention:  John A. Ebner
 Facsimile:  (856) 533-3443

 

Wells Fargo Bank, as Trustee — DAPS Reorg.
 MAC N9303-121
 608 2nd Avenue South
 Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

Re:                             7.00% Senior Subordinated Notes due 2018

 

Reference is hereby made to the Indenture, dated as of November 16, 2010 (the “Indenture”), among Interline Brands, Inc., a New Jersey corporation, as Issuer, the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture

 

                           (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                     in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner hereby certifies that:

 

1)                                     EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

 

a)                                     o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

D-1

 

b)                                     o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

c)                                      o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.  In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

d)                                     o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE.  In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

2)                                     EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

 

a)                                     o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued shall continue to be subject

 

D-2

 

to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

b)                                     o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE.  In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] o 144A Global Note o Regulation S Global Note o IAI Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued shall be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated                                             .

 

	
 
  	
 
  	
[Insert Name of Transferor]
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
 
  
	
 
  	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
 
  	
Title:
  
	
 
  	
 
  	
 
  
	
Dated:
  	
 
  	
 
  	
 
  
					

 

D-3

 

EXHIBIT E

 

[FORM OF SUPPLEMENTAL INDENTURE TO BE
 DELIVERED BY SUBSIDIARY GUARANTOR[S]]

 

SUPPLEMENTAL INDENTURE, by INTERLINE BRANDS, INC., a New Jersey corporation (the “Company”), INTERLINE BRANDS, INC., a Delaware corporation (“Interline Delaware”), the SUBSIDIARY GUARANTOR[S] listed on the signature pages hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association as trustee (herein called the “Trustee”), to the Indenture dated as of [             ], 201[  ], between the Company and the Trustee (the “Indenture”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee the Indenture, providing for the issuance of 7.00% Senior Subordinated Notes due 2018 (the “Notes”);

 

WHEREAS, pursuant to Section 4.13 of the Indenture, the Company may cause a domestic Restricted Subsidiary (other than a Receivables Subsidiary) that is not then a Subsidiary Guarantor and that Guarantees any Indebtedness under any Credit Facility (other than Indebtedness Incurred pursuant to Sections 4.08(b)(5), (b)(8), (b)(11), (b)(13) and (b)(15)), to execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the Notes on the same terms and conditions as those set forth in the Indenture; and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Subsidiary Guarantor, the other Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

SECTION 1.  CAPITALIZED TERMS.  Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture.

 

SECTION 2.  GUARANTIES.  Subject to the provisions hereof and the Indenture, the Subsidiary Guarantor hereby fully and unconditionally guarantees, jointly and severally with the other Guarantors, to each Holder and to the Trustee and its successors and assigns (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes when due, whether at maturity, by acceleration, by redemption, repurchase or otherwise, and all other monetary obligations of the Company under the Indenture and the Notes and (b) the due and punctual performance within applicable grace periods of all other obligations of the Company under the Indenture and the Notes (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”).  The Subsidiary Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from

 

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the Subsidiary Guarantor and that the Subsidiary Guarantor will remain bound under this Supplemental Indenture notwithstanding any extension or renewal of any Guaranteed Obligation.

 

To the fullest extent permitted by law, the Subsidiary Guarantor waives presentation to, demand of, payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment.  To the fullest extent permitted by law, the Subsidiary Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of the Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under the Indenture, this Supplemental Indenture, the Notes or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of the Indenture, this Supplemental Indenture, the Notes or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (f) except as set forth in Section 11.04 of the Indenture and Section 7 of this Supplemental Indenture, any change in the ownership of the Subsidiary Guarantor.

 

The Subsidiary Guarantor further agrees that its Subsidiary Guaranty herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

 

The Subsidiary Guaranty is, to the extent and in the manner set forth in Article Twelve of the Indenture, subordinated and subject in right of payment to the prior payment in full of the principal of and premium, if any, and interest on all Senior Indebtedness of the Subsidiary Guarantor and the Subsidiary Guaranty is made subject to the provisions of the Indenture.

 

Except as expressly set forth in Sections 8.02(c), 11.02 and 11.04 of the Indenture and Section 7 of this Supplemental Indenture, to the fullest extent permitted by law, the obligations of the Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and, to the fullest extent permitted by law, shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of the Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under the Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, wilful or otherwise, in the performance of the Guaranteed Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Subsidiary Guarantor or would otherwise operate as a discharge of the Subsidiary Guarantor as a matter of law or equity.

 

The Subsidiary Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of

 

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principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.

 

In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against the Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, the Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (1) the unpaid amount of such Guaranteed Obligations, (2) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by law) and (3) all other monetary Guaranteed Obligations of the Company to the Holders and the Trustee.

 

The Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations and all obligations to which the Guaranteed Obligations are subordinated as provided in Article Twelve of the Indenture.  The Subsidiary Guarantor agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations may be accelerated as provided in Section 6.02 of the Indenture for the purposes of the Subsidiary Guarantor’s Subsidiary Guaranty herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Section 6.02 of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantor for the purposes of this Supplemental Indenture.

 

The Subsidiary Guarantor also agrees to pay any and all reasonable and documented costs and expenses (including attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 2.

 

SECTION 3.  LIMITATION ON LIABILITY.  Any term or provision of this Supplemental Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations by the Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Supplemental Indenture, as it relates to the Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance, fraudulent transfer or similar laws affecting the rights of creditors generally.

 

SECTION 4.  SUCCESSORS AND ASSIGNS.  This Supplemental Indenture shall be binding upon the Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Supplemental Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Supplemental Indenture.

 

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SECTION 5.  NO WAIVER.  Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Supplemental Indenture shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege.  The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Supplemental Indenture at law, in equity, by statute or otherwise.

 

SECTION 6.  MODIFICATION.  No modification, amendment or waiver of any provision of this Supplemental Indenture, nor the consent to any departure by the Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on the Subsidiary Guarantor in any case shall entitle the Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances.

 

SECTION 7.  RELEASE.  The Subsidiary Guarantor will be released from its obligations under this Supplemental Indenture without any further action required on the part of the Trustee or any Holder (other than any obligation that may have arisen under Section 8 prior to such release)

 

(i)                                     upon the sale or other disposition (including by way of consolidation or merger) of the Subsidiary Guarantor in its entirety;

 

(ii)                                  upon the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor;

 

(iii)                               upon the designation of the Subsidiary Guarantor as an Unrestricted Subsidiary pursuant to the terms of the Indenture;

 

(iv)                              in connection with any sale or other disposition (including by way of merger or consolidation) of Capital Stock of a Subsidiary Guarantor to a Person in accordance with the Indenture that results in the Subsidiary Guarantor no longer being a Restricted Subsidiary;

 

(v)                                 at such time as the Subsidiary Guarantor does not have any Guarantees outstanding that would have required it to become a Subsidiary Guarantor under Section 4.13 of the Indenture;

 

(vi)                              upon defeasance of the Notes pursuant to Section 8.02 or 8.03 of the Indenture; or

 

(vii)                           upon the satisfaction of the conditions set forth in Section 8.01 of the Indenture;

 

provided, however, that in the case of clauses (i), (ii) and (iv) above, (A) such sale or other disposition is made to a Person other than the Company or a Subsidiary of the Company, (B) such sale or disposition is otherwise permitted by the Indenture and (C) the Company provides an

 

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Officer’s Certificate to the Trustee to the effect that the Company will comply with its obligations under Section 4.13 of the Indenture in respect to such disposition.

 

SECTION 8.  CONTRIBUTION.  The Subsidiary Guarantor shall be entitled upon payment in full of all guarantied obligations under this Supplemental Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

 

SECTION 9.  GOVERNING LAW.  This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of laws to the extent the application of the laws of another jurisdiction would be required thereby.

 

SECTION 10.  NO RECOURSE AGAINST OTHERS.  A director, officer, employee, incorporator, partner, stockholder, member or manager, as such, of the Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Notes or the Indenture or of the Subsidiary Guarantor under its Subsidiary Guaranty, the Indenture or this Supplemental Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release shall be part of the consideration for the issue of the Notes.

 

SECTION 11.  MULTIPLE ORIGINALS.  The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Supplemental Indenture.

 

SECTION 12.  HEADINGS.  The headings of the Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

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IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.

 

	
 
  	
INTERLINE BRANDS, INC.,
  
	
 
  	
a New Jersey corporation,
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
[Subsidiary Guarantor]
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
Title:
  

 

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EXHIBIT F

 

FORM OF CERTIFICATE FROM
 ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

Interline Brands, Inc. 
 701 San Marco Blvd.,

Jacksonville, FL 32207

Attention:  John A. Ebner
 Facsimile:  (856) 533-3443

 

Wells Fargo Bank, as Trustee — DAPS Reorg.
 MAC N9303-121
 608 2nd Avenue South
 Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

Re:                             7.00% Senior Subordinated Notes due 2018

 

Reference is hereby made to the Indenture, dated as of November 16, 2010 (the “Indenture”), among Interline Brands, Inc., a New Jersey corporation, as Issuer, the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture

 

In connection with our proposed purchase of $                         aggregate principal amount of:

 

(a)                                 o                                    a beneficial interest in a Global Note, or

 

(b)                                 o                                    a Definitive Note,

 

we confirm that:

 

1.                                      We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

 

2.                                      We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence.  We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Issuer or any subsidiary of the Issuer, (B) in

 

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accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) in a minimum principal amount of $250,000 to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter substantially in the form of this letter and, if requested by the Trustee or an Issuer, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

 

3.                                      We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Issuer such certifications, legal opinions and other information as you and the Issuer may reasonably require to confirm that the proposed sale complies with the foregoing restrictions.  We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

 

4.                                      We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

 

5.                                      We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

 

You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

	
 
  	
 
  	
 
  
	
 
  	
 
  	
[Insert Name of Accredited Investor]
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
 
  
	
 
  	
 
  	
 
  	
Name:
  
	
 
  	
 
  	
 
  	
Title:
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
Dated:
  	
 
  	
 
  	
 
  
					

 

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