EXIBIT 4.4
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INTERLINE BRANDS, INC., A NEW JERSEY CORPORATION
AS ISSUER
INTERLINE BRANDS, INC, A DELAWARE CORPORATION
AS GUARANTOR
EACH OF THE SUBSIDIARY GUARANTORS FROM TIME TO TIME PARTY HERETO,
AS SUBSIDIARY GUARANTORS
AND
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
AS TRUSTEE
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FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JUNE 23, 2006
TO INDENTURE DATED AS OF JUNE 23, 2006
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CREATING A SERIES OF SECURITIES DESIGNATED
$200,000,000 8 1/8% SENIOR SUBORDINATED NOTES DUE 2014
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TABLE OF CONTENTS
PAGE
PARTIES.......................................................................1
RECITALS OF THE COMPANY.......................................................1
ARTICLE ONE
APPLICATION OF FIRST SUPPLEMENTAL INDENTURE AND CREATION OF THE INITIAL NOTES
SECTION 1.01. Application of This First Supplemental Indenture................2
SECTION 1.02. Effect of First Supplemental Indenture..........................2
SECTION 1.03. Rules of Construction...........................................3
SECTION 1.04. Governing Law...................................................3
ARTICLE TWO
DEFINITIONS
SECTION 2.01. Definitions.....................................................3
SECTION 2.02. Other Definitions..............................................31
ARTICLE THREE
FORM OF NOTES
SECTION 3.01. Form and Dating................................................32
SECTION 3.02. Denominations..................................................33
SECTION 3.03. Registration, Transfer and Exchange............................33
SECTION 3.04. Additional Notes...............................................34
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 4.01. Repayment to Company...........................................35
SECTION 4.02. Reinstatement..................................................35
SECTION 4.03. Covenant Defeasance............................................35
ARTICLE FIVE
REMEDIES
SECTION 5.01. Events of Default..............................................36
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SECTION 5.02. Acceleration...................................................38
SECTION 5.03. Application of Money Collection................................39
ARTICLE SIX
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 6.01. When Company May Merge or Transfer Assets......................39
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.01. Without Consent of Holders.....................................41
SECTION 7.02. With Consent of Holders........................................42
SECTION 7.03. Compliance with Trust Indenture Act............................43
SECTION 7.04. Additional Sections............................................43
ARTICLE EIGHT
ADDITIONAL COVENANTS
SECTION 8.01. Payment of Notes...............................................44
SECTION 8.02. SEC Reports ...................................................44
SECTION 8.03. Limitation on Indebtedness.....................................45
SECTION 8.04. Limitation on Restricted Payments..............................47
SECTION 8.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries...................................50
SECTION 8.06. Limitation on Sales of Assets and Subsidiary Stock.............52
SECTION 8.07. Limitation on Affiliate Transactions...........................56
SECTION 8.08. Change of Control..............................................58
SECTION 8.09. Future Guarantors..............................................59
SECTION 8.10. Compliance Certificate.........................................59
SECTION 8.11. Further Instruments and Acts...................................60
ARTICLE NINE
SUBORDINATION
SECTION 9.01. Agreement To Subordinate.......................................60
SECTION 9.02. Liquidation, Dissolution, Bankruptcy...........................60
SECTION 9.03. Default on Senior Indebtedness of the Company..................61
SECTION 9.04. Acceleration of Payment of Notes...............................62
SECTION 9.05. When Distribution Must Be Paid Over............................62
SECTION 9.06. Subrogation ...................................................62
SECTION 9.07. Relative Rights................................................62
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SECTION 9.08. Subordination May Not Be Impaired by Company...................62
SECTION 9.09. Rights of Trustee and Paying Agent.............................63
SECTION 9.10. Distribution or Notice to Representative.......................63
SECTION 9.11. Article 14 Not To Prevent Events of Default or Limit
Right To Accelerate.......................................63
SECTION 9.12. Trust Moneys Not Subordinated..................................63
SECTION 9.13. Trustee Entitled To Rely.......................................63
SECTION 9.14. Trustee To Effectuate Subordination............................64
SECTION 9.15. Trustee Not Fiduciary for Holders of Senior Indebtedness
of the Company............................................64
SECTION 9.16. Reliance by Holders of Senior Indebtedness of the Company on
Subordination Provisions..................................64
ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. Guaranties....................................................65
SECTION 10.02. Limitation on Liability.......................................67
SECTION 10.03. Successors and Assigns........................................67
SECTION 10.04. No Waiver ....................................................67
SECTION 10.05. Modification..................................................67
SECTION 10.06. Release of Guarantor..........................................67
SECTION 10.07. Contribution..................................................69
ARTICLE ELEVEN
SUBORDINATION OF GUARANTIES
SECTION 11.01. Agreement to Subordinate......................................69
SECTION 11.02. Liquidation, Dissolution, Bankruptcy..........................69
SECTION 11.03. Default on Senior Indebtedness of Guarantor...................69
SECTION 11.04. Demand for Payment............................................71
SECTION 11.05. When Distribution Must Be Paid Over...........................71
SECTION 11.06. Subrogation ..................................................71
SECTION 11.07. Relative Rights...............................................71
SECTION 11.08. Subordination May Not Be Impaired by the Guarantors...........71
SECTION 11.09. Rights of Trustee and Paying Agent............................71
SECTION 11.10. Distribution or Notice to Representative......................72
SECTION 11.11. Article Eleven Not To Prevent Events of Default or
Limit Right To Demand Payment.............................72
SECTION 11.12. Trustee Entitled To Rely......................................72
SECTION 11.13. Trustee To Effectuate Subordination...........................73
SECTION 11.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Guarantor.................................73
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SECTION 11.15. Reliance by Holders of Senior Indebtedness of Guarantors on
Subordination Provisions..................................73
EXHIBITS
EXHIBIT A Form of Global Notes A-1
EXHIBIT B Form of Supplemental Indenture B-1
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FIRST SUPPLEMENTAL INDENTURE, dated as of June 23, 2006 (the "FIRST
SUPPLEMENTAL INDENTURE"), by INTERLINE BRANDS, INC., a New Jersey corporation
(the "COMPANY"), INTERLINE BRANDS, INC., a Delaware corporation ("INTERLINE
DELAWARE"), the SUBSIDIARY GUARANTORS listed on the signature pages hereto and
The Bank of New York Trust Company, N.A., as trustee (herein called the
"TRUSTEE"), to the Indenture dated as of June 23, 2006, among the Company,
Interline Delaware, the Subsidiary Guarantors and the Trustee (the "BASE
INDENTURE" and as supplemented by this First Supplemental Indenture, the
"INDENTURE").
RECITALS OF THE COMPANY
WHEREAS, the Company, Interline Delaware, the Subsidiary Guarantors
and the Trustee entered into the Base Indenture to provide for the issuance
from time to time of subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series (hereinafter called the
"SECURITIES") as the Base Indenture provides;
WHEREAS, Section 9.01 of the Base Indenture provides, among other
things, that the Company and the Trustee may enter into indentures supplemental
to the Base Indenture, without the consent of any Holders of Securities, to
establish the form of any Security, as permitted by Section 2.01 of the Base
Indenture, and to provide for the issuance of any series of Securities, as
permitted by Section 3.01 of the Base Indenture, and to set forth the terms
thereof;
WHEREAS, pursuant to Section 2.01 of the Base Indenture, the Company
desires to execute this First Supplemental Indenture to establish the form, and
pursuant to Section 3.01 of the Base Indenture to provide for the issuance, of
a series of its senior subordinated notes designated as 8 1/8% Senior
Subordinated Notes Due 2014 in an aggregate principal amount of $200,000,000
(the "INITIAL Notes");
WHEREAS, the Company may, if permitted to do so pursuant to the terms
of the Indenture, the Initial Notes and the terms of its other indebtedness
existing on such future date, authorize the issuance of, if and when issued,
Additional Notes which may be offered subsequent to the Issue Date in
accordance with this First Supplemental Indenture, pursuant to this First
Supplemental Indenture and the Company, the Guarantors and the Trustee have
agreed that the Company shall issue and deliver, and the Trustee shall
authenticate, the Notes pursuant to the terms of the Indenture and
substantially in the form set forth as EXHIBIT A, attached hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by the Base Indenture and this First Supplemental
Indenture;
WHEREAS, each of the Guarantors has duly authorized the execution and
delivery of this First Supplemental Indenture to provide for the guarantee of
the Notes by each such Guarantor;
WHEREAS, this First Supplemental Indenture shall be subject to and
governed by the provisions of the Trust Indenture Act;
WHEREAS, the execution of this First Supplemental Indenture has been
duly authorized by the Board of Directors of the Company and each of the
Guarantors and all things necessary to make this First Supplemental Indenture a
valid, binding and legal instrument according to its terms have been done and
performed; and
WHEREAS, all things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
First Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
APPLICATION OF FIRST SUPPLEMENTAL INDENTURE AND CREATION OF THE
INITIAL NOTES
SECTION 1.01. APPLICATION OF THIS FIRST SUPPLEMENTAL INDENTURE.
Notwithstanding any other provision of this First Supplemental
Indenture, the provisions and covenants of this First Supplemental Indenture,
including as provided in Section 1.02 below, and any amendments or
modifications to the terms of the Base Indenture made herein are expressly and
solely for the benefit of the Holders of the Notes and the Guaranties (and not
for the benefit of the Holders or any other series of Securities). The Notes
constitute a series of Securities (as defined in the Base Indenture) as
provided in Section 3.01 of the Base Indenture. Unless otherwise expressly
specified, references in this First Supplemental Indenture to specific Article
numbers or Section numbers refer to Articles and Sections contained in this
First Supplemental Indenture, and not the Base Indenture or any other document.
All the Notes issued under this First Supplemental Indenture shall be treated
as a single class for all purposes of the Indenture, including waivers,
amendments, redemptions and offers to purchase.
SECTION 1.02. EFFECT OF FIRST SUPPLEMENTAL INDENTURE. With respect to
the Notes (and any Guaranty thereof) only, the Base Indenture shall be
supplemented pursuant to Section 9.01 thereof to establish the terms of the
Notes (and any Guaranty thereof) as set forth in this First Supplemental
Indenture.
To the extent that the provisions of this First Supplemental Indenture
conflict with any provision of the Base Indenture, the provisions of this First
Supplemental Indenture shall govern and be controlling, solely with respect to
the Notes (and any Guaranty thereof).
The provisions contained herein shall apply to the Notes only and not
to any other series of Securities issued under the Base Indenture and any
covenants included herein are expressly being included solely in respect of the
Notes and not in respect of any other series of Securities issued under the
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Base Indenture. These amendments shall be effective for so long as there remain
any Notes Outstanding.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires, for purposes of this First Supplemental Indenture:
(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) "including" means including without limitation;
(E) words in the singular include the plural and words
in the plural include the singular;
(F) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(G) 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;
(H) the principal amount of any noninterest bearing or
other discount security at any date shall be the amount thereof that
would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(I) all references to the date the Notes were originally
issued shall refer to the Issue Date; and
(J) all references to Sections of the Base Indenture
shall refer to such sections as they have been revised pursuant to the
terms of this First Supplemental Indenture.
SECTION 1.04. GOVERNING LAW. This First Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
ARTICLE TWO
DEFINITIONS
SECTION 2.01. DEFINITIONS.
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(a) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed thereto in the Base
Indenture.
(b) For all purposes of this First Supplemental Indenture and the
terms of the Base Indenture to the extent they are not modified or superseded
by the terms of this First Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires, the following
terms shall have the following respective meanings:
"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
Company 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 NOTES" means Securities issued under this Indenture after
the Issue Date and in compliance with Sections 3.04 and 8.03, it being
understood that any Securities issued in exchange for or replacement of any
Initial Note issued on the Issue Date shall not be an Additional Note.
"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 June 15, 2010, 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
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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.
"AMERICAN SANITARY ACQUISITION" means the purchase by the Company of
substantially all of the assets of American Sanitary Incorporated.
"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 June 15, 2010 (exclusive of any accrued interest) plus
(ii) all required remaining scheduled interest payments due on such Note
through June 15, 2010 (but excluding accrued and unpaid interest to the
Redemption Date), computed using a discount 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 beneficiary interests in any Global Note, the rules and
procedures of the Depositary 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 Company 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 Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line
of business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company 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
Company or by the Company or a Restricted Subsidiary to another
Restricted Subsidiary;
(B) for purposes of Section 8.06 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 8.04, (y) a disposition of all
or substantially all the assets of the Company in accordance with
Section 8.01 of the Base Indenture and (z) a disposition of all or any
portion of the Company's direct or indirect interest in, or assets
relating to, Buyers Access LLC;
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(C) a disposition of assets with a fair market value of
less than $10.0 million;
(D) the disposition of cash or Temporary Cash
Investments;
(E) the disposition of inventory or obsolete, damaged or
worn out equipment or assets in the ordinary course of business;
(F) entering into 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 payor 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
Company 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 or
surrender of contract, tort or other claims of any kind; and
(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 Company or
any Restricted Subsidiary to the extent not materially interfering
with the business of the Company and the Restricted Subsidiaries.
"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 Company whether or not
post-filing interest is allowed in such proceeding).
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"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.
"BORROWING BASE" means, as of any date, an amount equal to:
(1) 85% of the book value of the accounts receivable of the
Company and its Restricted Subsidiaries on a consolidated basis, plus
(2) 60% of the book value of the inventory of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding at any time;
plus
(3) $100.0 million.
"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.
"CERTIFICATED NOTE" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 3.05 of the Base
Indenture 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
Increases or Decreases in Global Note" attached thereto.
"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), other than one or more Permitted Holders, 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;
(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
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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 merger or consolidation of Interline Delaware with or
into another Person or the merger of another Person with or into Interline
Delaware, or the sale of all or substantially all the assets of Interline
Delaware (determined on a consolidated basis) to another Person other than
(i) a transaction in which the survivor or transferee is a Person that is
controlled by the Permitted Holders; PROVIDED, HOWEVER, that the Permitted
Holders will be deemed to control such Person if the Permitted Holders
"beneficially own" 50% or more of the total voting power of the Voting
Stock of such Person; or (ii) a transaction following which (A) in the
case of a merger or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of Interline Delaware immediately
prior to such transaction (or other securities into which such securities
are converted as part of such merger or consolidation transaction) own
directly or indirectly at least a majority of the voting power of the
Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and in substantially the
same proportion as before the transaction and (B) in the case of a sale of
assets transaction, 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 Company for
any reason (other than the merger or consolidation of Interline Delaware
and the Company with or into each other).
For purposes of the "Change of Control" 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.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Trustee as having a maturity comparable to the remaining term
of the Notes from the Redemption Date to June 15, 2010, 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 June 15, 2010.
"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 Trustee, 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
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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 Company 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 Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the Reference Period or if any Indebtedness is to be repaid,
repurchased, 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 Company 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 Company 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 Expense for the Reference
Period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company 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 Company and
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of the Reference Period the Company 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
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(5) if since the beginning of the Reference Period any Person
(that subsequently became a Restricted Subsidiary or was merged with or
into the Company 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 (4) above if made by the Company 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 in connection therewith, the PRO FORMA calculations shall be
determined in good faith by a responsible financial or accounting Officer of
the Company (and may 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 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 Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication:
(1) interest expense attributable to Capital Lease Obligations;
(2) amortization of debt 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
Company to the extent held by Persons other than the Company or a Wholly
Owned Subsidiary;
(7) interest incurred in connection with Investments in
discontinued operations; and
10
(8) interest accruing on any Indebtedness of any other Person to
the extent such Indebtedness is Guaranteed by (or secured by the assets
of) the Company or any Restricted Subsidiary;
MINUS, to the extent included in such total interest expense, (i) amortization
or write off of debt issuance costs and (ii) any financing fees, tender
premiums, call premiums and other non-recurring expenses in connection with the
Transactions. 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 Company that is not Disqualified Stock.
"CONSOLIDATED NET INCOME" means, for any period, the net income of the
Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there shall
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (3)
below, the Company'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 Company 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 Company'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 Company 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 8.04;
(2) 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 Company (other than
any restrictions permitted pursuant to Section 8.05(1)(J)), except that:
(A) subject to the exclusion contained in clause (3)
below, the Company'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
Company 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 Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in determining
such Consolidated Net Income;
11
(3) any gain or loss realized upon the sale or other disposition
of any assets of the Company, 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 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;
(6) any non-cash goodwill impairment charges subsequent to the
Issue Date resulting from the application of SFAS No. 142;
(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 Refinancing Transactions;
(8) gains and losses realized upon the repayment or Refinancing
of any Indebtedness of the Company 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 Company that is not Disqualified
Stock;
(12) the cumulative effect of a change in accounting principles;
and
(13) so long as the Company 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 Company 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 Company or its Subsidiaries paid
directly to a taxing authority;
in each case, for such period. Notwithstanding the foregoing (i) for the
purposes of Section 8.04 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 Company or a
Restricted Subsidiary to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted Payments permitted
pursuant to Section 8.04(a)(3)(D) and (ii) there shall be deducted from
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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 Company 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 Company 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
Company;
(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.
"CREDIT AGREEMENT" means the Existing Credit Agreement or the New
Credit Agreement, as the case may be.
"CREDIT FACILITIES" means one or more debt facilities (which may be
outstanding at the same time and including any Credit Agreement) providing for
revolving credit loans, term loans, letters of credit, receivables financing,
commercial paper or any form of debt securities (including convertible
securities) 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 increasing the
amount of available borrowings thereunder or adding Subsidiaries of the Company
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 with respect to currency values.
13
"DEBT" has the meaning assigned to the term "Indebtedness" herein.
"DEPOSITARY" means The Depository Trust Company ("DTC").
"DESIGNATED SENIOR INDEBTEDNESS," with respect to a Person means:
(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 first anniversary of 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
first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if:
(1) the "asset sale" or "change of control" 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 in
Section 8.06 and Section 8.08; and
(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.
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 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,
14
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 Company and its consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation and amortization expense of the Company 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 Company 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
Company and its consolidated Restricted Subsidiaries; and
(5) non-recurring restructuring costs and non-recurring
acquisition costs and fees, including integration costs and fees,
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;
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 and
only if a corresponding amount would be permitted (but for any restrictions
permitted pursuant to Section 8.05(1)(J)) at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"EQUITY OFFERING" means any primary sale of Capital Stock (other than
Disqualified Stock) of Interline Delaware (a) to the public pursuant to an
effective registration statement under the Securities Act or (b) in a private
placement pursuant to 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 Company.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended.
15
"EXISTING CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement dated as of December 21, 2004, by and among Interline Delaware, the
Company, the lenders party thereto, Credit Suisse, Cayman Islands Branch
(formerly known as Credit Suisse First Boston, acting through its Cayman
Islands Branch), as administrative agent, and JPMorgan Chase Bank, N.A., as
syndication agent, 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, and any agreement (and related document or instrument) governing
Indebtedness incurred to Refinance, 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.
"EXISTING NOTES" means the Company's outstanding 11 1/2% Senior
Subordinated Notes due 2011.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price 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 $5.0 million will be determined in good faith by the
Board of Directors of the Company, whose determination will be conclusive and
evidenced by a resolution of the Board of Directors of the Company.
"FIRST SUPPLEMENTAL INDENTURE" means this first supplemental
indenture, as amended or supplemented from time to time.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of the Company
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;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) except as otherwise provided by the terms of this Indenture,
the rules and regulations of the SEC governing the inclusion of financial
statements (including PRO FORMA financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC.
16
"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 a Guarantee by Interline Delaware or a Subsidiary
Guarantor of the Company's obligations with respect to the Notes contained in
this Indenture.
"GUARANTY AGREEMENT" means a supplemental indenture, substantially in
the form of Exhibit B to this Indenture, pursuant to which a Subsidiary
Guarantor guarantees the Company's obligations with respect to the Notes on the
terms provided for in this Indenture.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"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
term "Incurrence" when used as a noun shall have a correlative meaning. Solely
for purposes of determining compliance with Section 8.03:
(1) amortization of debt discount or the accretion of principal
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
17
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);
(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 Company 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
18
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 and (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.
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 the Base Indenture as supplemented by the First
Supplemental Indenture.
"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 Company.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a participant.
"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 Company's obligations with respect to the Notes contained in
this Indenture.
"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 8.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary;
19
PROVIDED, HOWEVER, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary equal to an amount
(if positive) equal to (A) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (B) the portion (proportionate to
the Company'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 Company.
"ISSUE DATE" means June 23, 2006.
"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.
"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).
"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 Company or any Restricted Subsidiary after such Asset Disposition,
20
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;
(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 Company 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.
"NEW CREDIT AGREEMENT" means the Credit Agreement dated as of the
Issue Date by and among Interline Delaware, the Company, the lenders party
thereto, JPMorgan Chase Bank, N.A., as administrative agent, and ▇▇▇▇▇▇
Commercial Paper Incorporated, as syndication agent, together with the related
documents thereto (including any guarantees and security documents), 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, 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.
"NOTES" means the Initial Notes and the Additional Notes issued under
this Indenture.
"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.
"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 or the Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers.
"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 Company or the Trustee.
21
"PARTICIPANT" means with respect to the Depositary, a Person who has
an account with the Depositary.
"PERMITTED HOLDERS" means Parthenon Investors, L.P., PCIP Investors,
J&R Founders Fund and Parthenon Investors II, L.P., Sterling Investment
Partners L.P., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and any
Related Party of the foregoing. Except for a Permitted Holder specifically
identified by name, in determining whether Voting Stock is owned by a Permitted
Holder, only Voting Stock acquired by a Permitted Holder in its described
capacity will be treated as "BENEFICIALLY OWNED" by such Permitted Holder.
"PERMITTED INVESTMENT" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, 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;
(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 Company 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 Company 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
Company 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 Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company
or any Restricted Subsidiary or in satisfaction of judgments;
(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 8.06;
(9) any Person where such Investment was acquired by the Company
or any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company 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
22
Investment or accounts receivable or (b) as a result of a foreclosure by
the Company 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 Company or any Restricted
Subsidiary;
(11) any Person to the extent such Investments consist of
Guarantees of Indebtedness or Hedging Obligations otherwise permitted
under Section 8.03;
(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 suppliers, licensees, franchisees or customers of the
Company 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 $5.0 million at any time
outstanding;
(14) Persons to the extent such Investments are in existence on
the Issue Date;
(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 $15.0 million;
(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; and
(17) Persons to the extent such Investments, when taken together
with all other Investments made pursuant to this clause (17) outstanding
on the date such Investment is made, do not exceed the greater of (x)
$25.0 million and (y) 4% of Total Assets.
"PERMITTED PAYMENTS TO INTERLINE DELAWARE" means, without duplication
as to amounts:
(1) any Restricted Payment made to Interline Delaware (or any
other 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 of the
employees and directors, board activities, insurance, legal (including
litigation, judgments and settlements), accounting, corporate reporting,
administrative and other general operating expenses) incurred by Interline
23
Delaware (or such parent company) in the ordinary course of business and
(C) to pay expenses incurred in connection with offerings of securities,
debt financings or acquisition or disposition transactions; PROVIDED,
HOWEVER, that all such Restricted Payments pursuant to this clause (1)
shall not exceed in the aggregate $10.0 million per year; and
(2) payments to Interline Delaware (or any other parent company)
in respect of income taxes of the Company 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 Company 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 Company 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 Company and its Subsidiaries, less (ii) the
amount of any income taxes that the Company 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.
"PRO FORMA ADJUSTMENTS" means, with respect to any period, the
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 by the
underlying accounting records of such business; or
(3) subject to a plan being implemented or to be implemented by
the Company 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 by
the underlying accounting records of the Company, such Restricted
Subsidiary or such business as set forth in an officer's certificate from
the Chief Financial Officer of the Company;
24
in each case as if all such reductions in costs or other adjustments had been
effected as of the beginning of such period.
"PROSPECTUS" means the prospectus dated May 23, 2006, together with
the final prospectus supplement dated June 9, 2006 used in connection with the
offering of the Notes.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series of
transactions entered into by the Company or any of its Restricted Subsidiaries
pursuant to which the Company or any of its Restricted Subsidiaries sells,
conveys or otherwise transfers to (i) a Receivables Subsidiary (in the case of
a transfer by the Company 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 Company 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
Company.
"RECEIVABLES SUBSIDIARY" means a Subsidiary of the Company 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 Company (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 Company
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
Company 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 Company 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 Company nor any of its Restricted Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than customary fees payable in connection with servicing
accounts receivable and (c) with which neither the Company or 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 Company will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company
giving effect to such designation and an Officer's Certificate certifying that
such designation complied with the foregoing conditions.
25
"REFERENCE TREASURY DEALER" means ▇▇▇▇▇▇ Brothers Inc., ▇.▇. ▇▇▇▇▇▇
Securities Inc. and their respective successors and assigns and one other
nationally recognized investment banking firm selected by the Company 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 Trustee, 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 Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day immediately preceding such Redemption
Date.
"REFINANCE" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, replace, 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 Company 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 no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced;
(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 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 Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"REFINANCING TRANSACTIONS" has the meaning ascribed to such term in
the Prospectus under the section entitled "Summary - The Transactions."
26
"RELATED BUSINESS" means any business (including, without limitation,
the maintenance, repair and operations products distribution business) in which
the Company or any of its Restricted Subsidiaries was engaged on the Issue
Date, any business related, ancillary or complementary to any business of the
Company in which the Company 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 Company on the Issue Date or any business to
the extent it is immaterial in size compared to the Company's business as a
whole.
"RELATED PARTY" means (1) any controlling stockholder, controlling
member, general partner, majority owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of any Permitted Holder, (2) any
estate, trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons holding a controlling interest of
which consist solely of one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause (1), or (3) any executor,
administrator, trustee, manager, director or other similar fiduciary of any
Person referred to in the immediately preceding clause (2) acting solely in
such capacity.
"REPRESENTATIVE" means, any trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"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 Company 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 Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than the Company 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 Company 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 the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such purchase,
repurchase or other acquisition); or
27
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURED INDEBTEDNESS" means any Indebtedness of the Company secured
by a Lien.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SENIOR DEBT" has the meaning assigned to the term "Senior
Indebtedness".
"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 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 Company or any
Subsidiary of the Company;
(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 Officers' Certificate of the Company to the effect
28
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 Company), the Subsidiary
Guaranty and the guarantee of the Existing Notes (in the case of a Subsidiary
Guarantor) and the Interline Delaware Guaranty (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.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company 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.
"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 Company that
executes this Indenture as a guarantor on the Issue Date and each other
Subsidiary of the Company that thereafter guarantees the Notes pursuant to the
terms of this Indenture.
29
"SUBSIDIARY GUARANTY" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Notes.
"TEMPORARY CASH INVESTMENTS" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in demand and time deposit accounts, certificates
of deposit and money market deposits maturing within 180 days of the date
of acquisition thereof 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, surplus and undivided profits
aggregating in excess of $50.0 million (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money market fund sponsored by a registered broker
dealer or mutual fund distributor;
(3) 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
(2) above;
(4) investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a Person (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's
Ratings Group; and
(5) 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 Standard & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service,
Inc.
"TOTAL ASSETS" means the total consolidated assets of the Company and
its Restricted Subsidiaries, as set forth on the Company's consolidated balance
sheet for the most recently ended fiscal quarter for which internal financial
statements are available.
"TRANSACTIONS" has the meaning ascribed to such term in the Prospectus
under the section entitled "Summary - The Transactions."
"TRUSTEE" means The Bank of New York Trust Company, N.A., until a
successor replaces it and, thereafter, means the successor.
30
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C.
77aaa-77bbbb) as in effect on the Issue Date.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"UNRESTRICTED SUBSIDIARY" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board
of Directors of the Company in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary of
the Company (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
Company 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
8.04.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 8.03(a) and (B) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' 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.
"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 Company or one or more other Wholly Owned Subsidiaries.
SECTION 2.02. OTHER DEFINITIONS.
31
Term Defined in Section
------------------------------------------------------ ------------------
"Affiliate Transaction"............................... 8.07(a)
"Bankruptcy Law"...................................... 5.01
"Blockage Notice"..................................... 11.03
"Change of Control Offer"............................. 8.08(b)
"covenant defeasance"................................. 4.03
"Custodian"........................................... 5.01
"Event of Default".................................... 5.01
"Global Note Legend".................................. 3.01(a)
"Guaranteed Obligations".............................. 10.01
"Offer"............................................... 8.06(b)
"Offer Amount"........................................ 8.06(c)(2)
"Offer Period"........................................ 8.06(c)(2)
"Payment Blockage Period"............................. 9.03
"Payment Default"..................................... 9.03
"Purchase Date"....................................... 8.06(c)(1)
"Successor Company"................................... 6.01(a)(1)
ARTICLE THREE
FORM OF NOTES
SECTION 3.01. FORM AND DATING.
Sections 2.01, 2.02, 2.03 and 2.04 of the Base Indenture are hereby modified
and superceded as follows:
(a) Notes will be initially represented by one or more registered
global notes. The Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Note shall be
dated the date of its authentication. The terms of the Notes set forth in
Exhibit A are part of the terms of this Indenture.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the legend
indicated in Section 2.06 of the Base Indenture (the "Global Note Legend"
thereon and the "Schedule of Increases or Decreases in Global Note" attached
thereto). Notes issued in certificated form shall be substantially in the form
of Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Increases or Decreases in Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding 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
appropriate, 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 in
accordance with Section 2.05 of the Base Indenture.
32
SECTION 3.02. DENOMINATIONS.
Section 3.02 of the Base Indenture is hereby modified and superceded as follows
in respect of the Notes:
The Notes shall be issuable in denominations of $2,000 and any greater $1,000
multiples thereof.
SECTION 3.03. REGISTRATION, TRANSFER AND EXCHANGE.
Section 3.05 of the Base Indenture is hereby modified and superseded by the
addition of the following provisions:
(a) TRANSFERS OF INTERESTS IN GLOBAL NOTES FOR CERTIFICATED
NOTES. A Global Note may not be transferred as a whole except by the Depositary
to a nominee of the Depositary or by the Depositary to a successor Depositary
or a nominee of such successor Depositary. Global Notes shall be exchanged by
the Company for Certificated Notes if (i) the Depositary (a) notifies the
Company that it is unwilling or unable to continue as depositary for the 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; (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of the Certificated Notes; or (iii) there has occurred and is
continuing a Default or an Event of Default with respect to the Notes entitling
the Holder to accelerate the maturity of the Notes. Upon the occurrence of
either of the preceding events in (i), (ii) or (iii) above, Certificated Notes
shall be issued in such names as the Participants and Indirect Participants and
the Depositary shall instruct the Trustee. Global Notes also may be exchanged
or replaced, in whole or in part, as provided in Sections 3.04 and 3.06 of the
Base Indenture. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 3.05 or
Section 3.04 or 3.06 of the Base Indenture, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 3.05(a);
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 3.05(b) or (c) below.
(b) TRANSFER OF BENEFICIAL INTERESTS IN GLOBAL NOTES TO
CERTIFICATED NOTES. If any Holder of a beneficial interest in a Global Note
proposes to exchange such beneficial interest for a Certificated Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Certificated Note, then, the transferor of such beneficial interest
must deliver to the Registrar (l) 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 Certificated 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 Certificated Note shall be
registered to effect the transfer or exchange referred to in (1) above. Upon
satisfaction of the aforementioned conditions and confirmation that
Certificated Notes are permitted to be issued under this Indenture, the Trustee
shall cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 3.05(d) below, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person designated
in the instructions a Certificated Note in the appropriate principal amount.
Any Certificated Note issued in exchange for a beneficial interest pursuant to
this Section 3.05(b) shall be registered in such name or names and in such
authorized denomination or denominations as the Holder of such beneficial
33
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Certificated Notes to the Persons in whose names such Notes are so registered.
Any Certificated Note issued in exchange for a beneficial interest pursuant to
this Section 3.05(b) shall not bear the Global Note Legend.
(c) LEGENDS. Each Global Note issued under this First
Supplemental Indenture shall bear a legend in substantially the form as
specified in Section 2.06 of the Base Indenture.
(d) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Certificated Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note will be returned to
or retained and canceled by the Trustee in accordance with Section 3.09 of the
Base Indenture. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note or for Certificated 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 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.
SECTION 3.04. ADDITIONAL NOTES. After the Issue Date, the Company
shall be entitled, subject to its compliance with Section 8.03, to issue
Additional Notes under this Indenture, which Notes shall have identical terms
as the Initial Notes issued on the Issue Date, other than with respect to the
date of issuance, issue price and first interest payment date. All the Notes
issued under this Indenture shall be treated as a single class for all purposes
of this Indenture.
With respect to any Additional Notes, the Company shall set forth in a
resolution of the Board of Directors and an Officers' Certificate, a copy of
each which shall be delivered to the Trustee, the following information:
(A) the aggregate principal amount of such Additional
Notes to be authenticated and delivered pursuant to this Indenture and
the provision of Section 8.03 that the Company is relying upon to
issue such Additional Notes; and
(B) the issue price, the issue date and the CUSIP number
of such Additional Notes; PROVIDED, however, that no Additional Notes
may be issued at a price that would cause such Additional Notes to
have "original issue discount" within the meaning of Section 1273 of
the Code.
34
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
Article 4 of the Base Indenture is hereby modified by the addition of the
following sections:
SECTION 4.01. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
SECTION 4.02. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money in accordance with this Article 4 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
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Article 4 of the Base
Indenture and Article Four of the First Supplemental Indenture, until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Article 4 of the Base Indenture and Article Four of the First
Supplemental Indenture; PROVIDED, HOWEVER, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the
Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
SECTION 4.03. COVENANT DEFEASANCE.
Section 13.03 of the Base Indenture is hereby modified and superceded as
follows in respect of the Notes:
(a) Section 13.03. COVENANT DEFEASANCE. Upon the Company's
exercise of the option provided in Section 13.01 to obtain a covenant
defeasance with respect to the Outstanding Notes, the Company shall be released
from
(1) its obligations under the Base Indenture (except its
obligations under Sections 3.04, 3.05, 3.06, 5.06, 5.09, 6.10, 10.01,
10.02, 10.03, 10.04 and 10.05 of the Base Indenture);
(2) its obligations under Section 8.02, 8.03, 8.04, 8.05, 8.06,
8.07, 8.08 and 8.09 and the operation of Sections 5.01(4), 5.01(6),
5.01(7), 5.01(8) and 5.01(9) of the First Supplemental Indenture (but, in
the case of Sections 5.01(7) and (8), with respect only to Subsidiary
Guarantors and Significant Subsidiaries); and
(3) the limitations contained in Section 6.01(a)(3) of the First
Supplemental Indenture,
35
with respect to the Notes on and after the date the applicable
conditions set forth in Section 13.04 are satisfied (hereinafter, "covenant
defeasance"). Covenant defeasance shall mean that, with respect to the
Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in the Base
Indenture (except its obligations under Sections 3.04, 3.05, 3.06, 5.06, 5.09,
6.10, 10.01, 10.02, 10.03, 10.04 and 10.05) and the provisions set forth in
clauses (2) and (3) above, whether directly or indirectly by reason of any
reference elsewhere herein or by reason of any reference to any other provision
herein or in any other document, and such omission to comply shall not
constitute an Event of Default under Section 5.01, and the remainder of this
Indenture and of the Notes shall be unaffected thereby. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Sections 5.01(4),
5.01(6), 5.01(7), 5.01(8) and 5.01(9) of the First Supplemental Indenture (but,
in the case of Sections 5.01(7) and (8), with respect only to Subsidiary
Guarantors and Significant Subsidiaries) or because of the failure of the
Company to comply with Section 6.01(a)(3) of the First Supplemental Indenture.
If the Company 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.
ARTICLE FIVE
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT.
Section 5.01 of the Base Indenture is hereby modified and superceded as
follows:
An "Event of Default" occurs if:
(1) the Company 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 Nine of the First Supplemental Indenture, and
such default continues for a period of 30 days;
(2) the Company (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 special mandatory redemption, upon
declaration of acceleration or otherwise, whether or not such payment
shall be prohibited by Article Nine of the First Supplemental Indenture,
or (ii) fails to purchase Notes when required pursuant to this Indenture
or the Notes, whether or not such purchase shall be prohibited by Article
Nine of the First Supplemental Indenture;
(3) the Company fails to comply with its obligations pursuant to
Section 6.01;
(4) the Company or any Restricted Subsidiary fails to comply with
Section 8.02, 8.03, 8.04, 8.05, 8.06, 8.07, 8.08 or 8.09 (other than a
failure to purchase Notes validly tendered when required under Section
8.06 or 8.08) and such failure continues for 30 days after the notice
specified below;
36
(5) the Company 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), (3) or (4) above) and such failure
continues for 60 days after the notice specified below;
(6) Indebtedness of the Company, 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 $20.0 million;
(7) the Company, 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; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company, a Subsidiary
Guarantor or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, a Subsidiary
Guarantor or any Significant Subsidiary or for any substantial part of
its property; or
(C) orders the winding up or liquidation of the Company,
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;
(9) any judgment or decree for the payment of money in excess of
$20.0 million is entered against the Company, 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
(10) 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 Interline Delaware or any Subsidiary Guarantor
37
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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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) or (5) 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 Company of the Default and the Company 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 Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4) or (5), its status and what action the Company is taking or proposes
to take with respect thereto.
SECTION 5.02. ACCELERATION.
Section 5.02 of the Base Indenture is hereby modified and superceded as
follows:
If an Event of Default (other than an Event of Default specified in Section
6.01(7) or (8) with respect to the Company) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the Notes by notice to the Company 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 Company 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 Nine and Article Eleven do not restrict payment at such time. If an
Event of Default specified in Section 5.01(7) or (8) with respect to the
Company 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.
38
Upon payment of all such principal and interest, all of the Company's
obligations under the Notes and the Indenture shall terminate, except
obligations under Section 6.07 of the Base Indenture.
SECTION 5.03. APPLICATION OF MONEY COLLECTION.
Section 5.06 of the Base Indenture is hereby modified and superceded as
follows:
If the Trustee collects any money or property pursuant to this Article 5, it
shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 6.07 of the Base
Indenture;
SECOND: to holders of Senior Indebtedness of the Company, Interline
Delaware and the Subsidiary Guarantors, to the extent required by Article
Nine and Article Eleven of the First Supplemental Indenture;
THIRD: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 5.06. At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
ARTICLE SIX
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 6.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.
Sections 8.01 and 8.02 of the Base Indenture are hereby modified and superceded
as follows:
Section 8.01. (a) The Company 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) 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 Company) 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
Company under the Notes and this Indenture;
39
(2) immediately after giving PRO FORMA effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by 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, the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 8.03(a) of the First
Supplemental Indenture; or (B) the Successor Company would have a
Consolidated Coverage Ratio that would be equal to or greater than the
Consolidated Coverage Ratio of the Company immediately prior to such
transaction; and
(4) the Company shall have delivered to the Trustee an Officers'
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 Section 8.01(a)(3) of the Base Indenture 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 Company or any
Restricted Subsidiary or (B) the Company merging with an Affiliate of the
Company solely for the purpose and with the sole effect of reincorporating the
Company in another jurisdiction or forming a holding company for the Company.
For purposes of this Section 8.01, 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 Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
(b) The Company 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 Company
or a Subsidiary of the Company) 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 Company provides an Officers'
Certificate to the Trustee to the effect that the Company will comply with
its obligations under Section 8.06 of the First Supplemental Indenture in
respect of such disposition, 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;
40
(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
(3) the Company delivers to the Trustee an Officers' 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 8.01(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 Company or another Subsidiary Guarantor.
Section 8.02. [Intentionally omitted.]
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.01. WITHOUT CONSENT OF HOLDERS.
Section 9.01 of the Base Indenture is hereby modified and superceded as
follows:
The Company, 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 Six of the First Supplemental
Indenture and Article 8 of the Base Indenture;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; PROVIDED, HOWEVER, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of the
Code or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Notes, including any
Subsidiary Guaranties, or to secure the Notes;
(5) to add to the covenants of the Company, Interline Delaware or
a Subsidiary Guarantor for the benefit of the Holders or to surrender any
right or power herein conferred upon the Company, Interline Delaware or a
Subsidiary Guarantor;
(6) to make any change that does not adversely affect the rights
of any Holder;
41
(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 Prospectus 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;
(8) 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
(9) to make any change in Article Nine of the First Supplemental
Indenture that would limit or terminate the benefits available to any
holder of Senior Indebtedness of the Company or of a Subsidiary Guarantor
(or Representatives therefor) under Article Nine or Article Eleven of the
First Supplemental Indenture.
An amendment under this Section 9.01 may not make any change that
adversely affects the rights under Article Nine or Article Eleven of the First
Supplemental Indenture of any holder of Senior Indebtedness of the Company or 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 9.01 becomes effective, the
Company 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 7.02. WITH CONSENT OF HOLDERS.
Section 9.02 of the Base Indenture is hereby modified and superceded as
follows:
The Company, the Guarantors and the Trustee may amend this Indenture or the
Notes without notice to any Holder but with the written 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 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 11 of the Base Indenture or paragraph 5 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;
42
(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 Nine or Article Eleven of the
First Supplemental Indenture that would adversely affect the Holders;
(8) make any change in Section 5.08 or 5.13 in the Base Indenture
or this second sentence of this Section 9.02; or
(9) make any change in, or release other than in accordance with
Section 13.01 of the Base Indenture or Section 10.06 of the First
Supplemental Indenture or, any Guaranty that would adversely affect the
Holders.
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 Nine or Article Eleven of the First
Supplemental Indenture of any holder of Senior Indebtedness of the Company 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
Company 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 7.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Section 9.05 of the Base Indenture is hereby modified and superceded as
follows:
Every amendment to this Indenture or the Notes shall comply with the TIA as
then in effect.
SECTION 7.04. ADDITIONAL SECTIONS. Article 9 of the Base Indenture is
hereby modified by the addition of the following sections:
(a) NOTATION ON OR EXCHANGE OF NOTES. If an amendment or waiver
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company 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 to issue a new Note
shall not affect the validity of such amendment.
(b) TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
43
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and shall be provided with, and (subject to Section 6.01 of the Base Indenture)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
Section 7.05. AMENDMENTS TO BASE INDENTURE AND OTHER SERIES OF
SECURITIES. For avoidance of doubt, it is understood and agreed that this First
Supplemental Indenture shall not restrict any amendment or modification or
revision to the Base Indenture or any series of Securities (other than the
Notes) that is permitted by the Base Indenture and the terms of such Securities
do not apply to the Notes and this First Supplemental Indenture.
ARTICLE EIGHT
ADDITIONAL COVENANTS
SECTION 8.01. PAYMENT OF NOTES.
Section 10.01 of the Base Indenture is hereby modified and superceded as
follows:
The Company shall promptly pay or cause to be paid the principal of an interest
on the Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal and interest shall be considered paid on the date due if
on such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Holders on that date pursuant to the terms of this Indenture.
SECTION 8.02. SEC REPORTS. (a) Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC (to the extent the SEC will
accept such filings) and provide the Trustee and Holders with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be
so filed and provided at the times specified for the filings of such
information, documents and reports under such Sections. Notwithstanding the
foregoing, the Company may satisfy such requirements to the extent Interline
Delaware (or any other parent company of the Company) files and provides such
information with respect to Interline Delaware (or such parent company, if
applicable), Interline Delaware (or such parent company, if applicable) owns
directly or indirectly all of the common stock of the Company and Interline
Delaware (or such parent company, if applicable) Guarantees the Notes. 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 Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
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(b) The Company shall comply with the applicable provisions of
ss. 314(a) of the Trust Indenture Act.
SECTION 8.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; PROVIDED, HOWEVER, that the Company 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, the
Consolidated Coverage Ratio exceeds 2.0 to 1.0.
(b) Notwithstanding Section 8.03(a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred by the Company or any Subsidiary
Guarantor pursuant to any Credit Facility; PROVIDED, HOWEVER, that,
immediately after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this Section 8.03(b)
(1) and then outstanding does not exceed the greater of (a) $355.0 million
or (b) the Borrowing Base as of the date of such incurrence, in each case
less the sum of all principal payments made with respect to such
Indebtedness pursuant to Section 8.06(a)(3)(A) (PROVIDED that in no event
shall the amount in this Section 8.03(b)(1) be reduced below $100.0
million);
(2) Indebtedness of the Company owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to
and held by the Company 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 Company or a Restricted Subsidiary) shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the
obligor thereon; (B) if the Company is the obligor on such Indebtedness,
such Indebtedness is 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 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 the
Existing Notes (other than Indebtedness described in clause (b)(1), (2) or
(3) of this Section 8.03);
(5) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary was acquired
by the Company (other than Indebtedness Incurred in connection with, 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 Subsidiary became a Subsidiary or was acquired by the Company);
PROVIDED, HOWEVER, that on the date of such acquisition after giving PRO
FORMA effect thereto, the Company would be entitled to Incur at least
$1.00 of additional Indebtedness pursuant to Section 8.03(a);
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(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 8.03(a) or pursuant to clause (3), (4) or (5) or this
clause (6) of Section 8.03(b);
(7) Hedging Obligations entered into in the ordinary course of
business of the Company and the Restricted Subsidiaries and not for the
purpose of speculation;
(8) obligations in respect of one or more standby letters of
credit, performance, bid and surety bonds and completion guarantees
provided by the Company 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 Company or any of its Restricted Subsidiaries to finance the
purchase, 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 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) $15.0 million or (y) 5% of
Consolidated Tangible Assets determined as of the most recent practical
date (as adjusted for any significant 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 $20.0 million;
(14) Indebtedness representing indemnification obligations
relating to the acquisition of any business or assets or any disposition
of any business or assets;
(15) Indebtedness of the Company or any Restricted Subsidiary in
an aggregate principal amount which, when taken together with all other
Indebtedness of the Company and the Restricted Subsidiaries Incurred
pursuant to this clause (15) and outstanding on the date of such
Incurrence, does not exceed $50.0 million.
(c) For purposes of determining compliance with this Section 8.03:
(1) any Indebtedness remaining outstanding under the Existing
Credit Agreement (or the New Credit Agreement, if applicable) after the
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application of the net proceeds from the sale of the Notes will be treated
as Incurred on the Issue Date under Section 8.03(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 8.03(a) or (b), the Company, 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 8.03(a) or one of the clauses of
Section 8.03(b);
(3) the Company will be entitled to divide and classify an item
of Indebtedness in more than one of the types of Indebtedness described in
Section 8.03(a) or (b); and
(4) following the date of its Incurrence, any Indebtedness
originally classified as Incurred pursuant to one of the clauses in
Section 8.03(b) (other than pursuant to clause (1) of Section 8.03(b)) may
later be reclassified by the Company such that it will be deemed as having
been Incurred pursuant to Section 8.03(a) or another clause in Section
8.03(b), as applicable, to the extent that such reclassified Indebtedness
could be Incurred pursuant to such new paragraph or clause at the time of
such reclassification.
(d) Notwithstanding Sections 8.03(a) and (b), neither the Company
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 Company 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 Company 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.
SECTION 8.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 8.03(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):
(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 to the end of the most
recent fiscal quarter for which internal financial statements are then
47
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 Company 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
Company, (ii) an issuance or sale to an employee stock ownership plan
or to a trust established by the Company or any of its Subsidiaries
for the benefit of their employees with respect to amounts funded or
Guaranteed by the Company or any of its Subsidiaries and (iii) 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 clause (iii), 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
Company's interest in the Fair Market Value of such Person's property
and assets) that is received by the Company subsequent to the Issue
Date in exchange for Capital Stock (other than Disqualified Stock) of
the Company (other than any such property or assets received from a
Subsidiary of the Company) or as a capital contribution from its
shareholders and (z) 100% of any cash capital contribution received by
the Company from its shareholders subsequent to the Issue Date; PLUS
(C) the amount by which Indebtedness of the Company or a
Restricted Subsidiary is reduced on the Company's consolidated balance
sheet upon the conversion or exchange (other than by a Subsidiary of
the Company) subsequent to the Issue Date of any Indebtedness of the
Company convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash, or
the fair value of any other property, distributed by the Company 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 Company or any Restricted Subsidiary from the
sale of such Indebtedness (excluding Net Cash Proceeds from sales to a
Subsidiary of the Company or to an employee stock ownership plan or to
a trust established by the Company 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
Company 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 Company or any Restricted
Subsidiary, and (y) to the extent such Person is an Unrestricted
Subsidiary, the portion (proportionate to the Company's equity
interest in such 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,
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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 Company or any Restricted Subsidiary in
such Person or Unrestricted Subsidiary.
(b) The provisions of Section 8.04(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 Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees with respect to amounts
funded or Guaranteed by the Company or any of its Subsidiaries) or a
substantially concurrent cash capital contribution received by the Company
from its shareholders; PROVIDED, 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 8.04(a)(3)(B)
above;
(2) any purchase, repurchase, redemption, defeasance,
satisfaction, discharge or other acquisition or retirement for value of
Subordinated Obligations of the Company 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 8.03; PROVIDED, 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 8.04; 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 or other acquisition of shares of Capital Stock of Interline
Delaware, the Company or any of their Subsidiaries from employees, former
employees, directors or former directors of Interline Delaware, the
Company or any of their Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors), 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 Company, 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) the aggregate amount of such repurchases and other
acquisitions shall not exceed $7.0 million 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
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of Restricted Payments permitted (but not made) pursuant to this Section
8.04(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 8.03; 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
8.06; PROVIDED, HOWEVER, that such Restricted Payments shall be included
in the calculation of the amount of Restricted Payments; (7) repurchases
of Capital Stock deemed to occur upon exercise of stock options if such
Capital Stock represents a portion of the exercise price of such options;
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 8.03(b)(2); PROVIDED,
HOWEVER, that no Default has occurred and is continuing or would otherwise
result therefrom; PROVIDED FURTHER, HOWEVER, 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) Restricted Payments made to Interline Delaware to fund
dividends on its common stock; PROVIDED, HOWEVER, that the aggregate
amount of such Restricted Payments in any year does not exceed 3% of the
aggregate cash received by the Company from Interline Delaware from Equity
Offerings after the Issue Date; PROVIDED FURTHER, HOWEVER, that such
Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments; or
(11) Restricted Payments in an amount which, when taken together
with all Restricted Payments made pursuant to this Section 8.04(b), does
not exceed the greater of (x) $75.0 million or (y) 8.5% of Total Assets;
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.
SECTION 8.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company 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
50
Company, (b) make any loans or advances to the Company or (c) transfer any of
its property or assets to the Company, 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 Existing Credit Agreement) in effect at or
entered into on the Issue Date;
(B) any encumbrance or restriction pursuant to the New
Credit Agreement as in effect on the date of consummation of the
American Sanitary Acquisition;
(C) 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
Company (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 Company) and outstanding on such date;
(D) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in Section 8.05(1)(A), 8.05(1)(B) or
8.05(1)(C) or this Section 8.05(1)(D) or contained in any amendment to
an agreement referred to in Section 8.05(1)(A), 8.05(1)(B) or
8.05(1)(C) or this Section 8.05(1)(D); PROVIDED, HOWEVER, that the
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such refinancing agreement or amendment
are no less favorable taken as a whole to the Holders than
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements;
(E) 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;
(F) 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;
(G) any encumbrance or restriction pursuant to
applicable law, regulation or order;
(H) any encumbrance or restriction pursuant to the terms
of Indebtedness Incurred under Section 8.03(b)(15);
(I) any encumbrance or restriction pursuant to the terms
of Indebtedness Incurred under Section 8.03(b)(11); PROVIDED, HOWEVER,
that such encumbrance or restriction is limited to the assets being
financed and proceeds thereof;
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(J) 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;
(K) any encumbrance or restriction in any agreement that
is not more restrictive than the restrictions under the terms of the
Credit Agreement as in effect on the Issue Date; and
(L) 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;
(M) 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;
(N) 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;
(O) non-assignment provisions of any contract or any
lease entered into in the ordinary course of business; and
(P) restrictions on cash or other deposits or net worth
imposed by suppliers or landlords under contracts entered into in the
ordinary course of business;
(2) with respect to clause (c) only of this Section 8.05,
(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 8.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of 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
52
the Company or the chief financial or accounting officer of the Company,
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
Company 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 Company (or such Restricted
Subsidiary, as the case may be)
(A) FIRST, to the extent the Company elects (or is
required by the terms of any Indebtedness), to prepay, repay, redeem
or purchase Senior Indebtedness of the Company or Indebtedness (other
than any Preferred Stock or Disqualified Stock) of a Wholly Owned
Subsidiary (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) 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 Company 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
Company 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 or the receipt of such Net Available Cash or (y) 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
8.06(a)(3)(A) and Section 8.06(a)(3)(B), to make an offer to the
holders of the Notes (and to holders of other Senior Subordinated
Indebtedness of the Company designated by the Company) to purchase
Notes (and such other Senior Subordinated Indebtedness of the Company)
pursuant to and subject to the conditions contained in this Indenture;
and
(D) FOURTH, to the extent of the balance of such Net
Available Cash after application in accordance with Section 8.06(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 8.06(a)(3) (A) or (C), the Company
or such Restricted Subsidiary shall permanently retire such Indebtedness and
53
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 8.06, the
Company and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 8.06 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 8.06 exceeds
$10.0 million. Pending application of Net Available Cash pursuant to this
Section 8.06, such Net Available Cash shall be invested in Temporary Cash
Investments or applied to temporarily reduce Senior Indebtedness.
For the purposes of this Section 8.06(a), the following are deemed to
be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company (other than
obligations in respect of Disqualified Stock of the Company) or any
Restricted Subsidiary (other than obligations in respect of Disqualified
Stock and Preferred Stock of a Subsidiary Guarantor) and the release of
the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition;
(2) 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 and the
Company or a Restricted Subsidiary acquires voting and management control
of such entity) received by the Company or any Restricted Subsidiary to be
used by it in the business of the Company or such Restricted Subsidiary;
and
(3) securities received by the Company or any Restricted
Subsidiary from the transferee that are converted within 90 days of
receipt by the Company or such Restricted Subsidiary 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 Company)
pursuant to Section 8.06(a)(3)(C), the Company shall purchase Notes tendered
pursuant to an offer (an "Offer") by the Company 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 Company 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 Company, 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 8.06(c). If
the aggregate purchase price of the Notes (and any other Senior Subordinated
Indebtedness of the Company) tendered exceeds the Net Available Cash allotted
to their purchase, the Company 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. The Company shall not be
required to make such an offer to purchase Notes (and other Senior Subordinated
54
Indebtedness of the Company) pursuant to this Section 8.06 if the Net Available
Cash available therefor is less than $5.0 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 Offer pursuant to this Section 8.06, 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
Company becomes obligated to make an Offer, the Company 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 his Notes purchased by the Company either in
whole or in part (subject to prorating as described in Section 8.06(b) in the
event the Offer is oversubscribed) in integral multiples 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 "Purchase Date") and shall state (A) that the Company has become obligated
to make an Offer, (B) the aggregate principal amount of Notes that is subject
to such Offer, (C) the purchase price, (D) the circumstances and relevant facts
regarding such Asset Disposition, (E) the Purchase Date, (F) the instructions,
as determined by the Company, consistent with this Section, that a Holder must
follow in order to have its Notes purchased and (G) such other information as
the Company may deem necessary.
(2) Not later than the date upon which written notice of
an Offer is delivered to the Trustee as provided below, the Company
shall deliver to the Trustee an Officers' Certificate as to (A) the
amount of the Offer (the "Offer Amount"), including information as to
any other Senior Subordinated Indebtedness included in the Offer, (B)
the allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (C) the compliance of
such allocation with the provisions of Section 8.06(a) and (b). On or
prior to each Purchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust) an amount in cash equal
to the applicable Offer Amount. If the 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 Offer remains open (the "Offer
Period"), the Company 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 Company. The Trustee shall, on the 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
Company to the Trustee is less than the Offer Amount applicable to the
Notes, the Trustee shall deliver the excess to the Company immediately
after the expiration of the Offer Period for application in accordance
with this Section 8.06.
(3) Holders electing to have a Note purchased shall be
required to surrender the Note, with an appropriate form duly
completed, to the Company 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 Company
receives not later than one Business Day prior to the Purchase Date, a
telex, 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
55
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 Company delivers Note to the Trustee
which are to be accepted for purchase, the Company shall also deliver
an Officers' Certificate stating that such Notes are to be accepted by
the Company pursuant to and in accordance with the terms of this
Section 8.06. A Note shall be deemed to have been accepted for
purchase at the time the Trustee, directly or through an agent, mails
or delivers payment therefor to the surrendering Holder.
(d) The Company 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 8.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 8.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 8.06 by virtue of
its compliance with such securities laws or regulations.
SECTION 8.07. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Company
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 Company (an
"AFFILIATE TRANSACTION") unless:
(1) the terms of the Affiliate Transaction are no less favorable
to the Company 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;
(2) if such Affiliate Transaction involves an amount in excess of
$5.0 million, the material terms of the Affiliate Transaction are set
forth in writing and a majority of the directors of the Company
disinterested with respect to such Affiliate Transaction have determined
in good faith that the criteria set forth in Section 8.07(a)(1) are
satisfied and have approved the relevant Affiliate Transaction as
evidenced by a resolution of the Board of Directors of the Company; and
(3) if such Affiliate Transaction involves an amount in excess of
$20.0 million, the Board of Directors of the Company shall also have
received a written opinion from an Independent Qualified Party to the
effect that such Affiliate Transaction is fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or is not less
favorable to the Company 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.
Notwithstanding Section 8.07(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
56
Transaction to be fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries or is not less favorable to the Company 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 8.07(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 8.04 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 arrangements, stock
options and stock ownership plans approved by the Board of Directors
of the Company;
(3) loans or advances to employees in the ordinary
course of business of the Company 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 or employee
benefits to, and the provision of an indemnity for the benefit of,
directors, officers or employees of the Company or its Restricted
Subsidiaries in the ordinary course of business;
(5) the payment of reasonable fees to directors of the
Company and its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries;
(6) any commercial banking, commercial lending,
investment banking, brokerage, securities trading, market making,
money management, financial advisory or other similar transaction,
including the payment of customary fees with respect thereto, with an
Affiliate of ▇.▇. ▇▇▇▇▇▇ Partners, LLC that is approved by a majority
of the directors of the Company disinterested with respect to such
transaction;
(7) any transaction with a Restricted Subsidiary or
joint venture or similar entity which would constitute an Affiliate
Transaction solely because the Company or a Restricted Subsidiary owns
an equity interest in or otherwise controls such Restricted
Subsidiary, joint venture or similar entity;
(8) the issuance or sale of any Capital Stock (other
than Disqualified Stock) of the Company;
(9) any agreement that provides registration rights to
the shareholders of the Company;
(10) any merger, consolidation or reorganization of the
Company with (i) an Affiliate solely for the purpose and with the sole
effect of forming a holding company or reincorporating the Company in
a new jurisdiction or (ii) Interline Delaware;
57
(11) any transaction with a Receivables Subsidiary
pursuant to a Qualified Receivables Transaction;
(12) the entering into of a tax sharing agreement, or
payments pursuant thereto, between the Company and one or more
Subsidiaries, on the one hand, and any other Person with which the
Company and such Subsidiaries are required or permitted to file a
consolidated tax return or with which the Company and such
Subsidiaries are part of a consolidated group for tax purposes, on the
other hand, which payments by the Company and the Restricted
Subsidiaries are not in excess the payments described in clause (2) of
the definition of Permitted Payments to Interline Delaware;
(13) indemnification agreements with, and the payment of
the fees and indemnities to, directors, officers and employees of the
Company and its Restricted Subsidiaries, in each case in the ordinary
course of business;
(14) any employment, deferred compensation, consulting,
noncompetition, confidentiality or similar agreement entered into by
the Company and its Restricted Subsidiaries with its employees or
directors in the ordinary course of business; and
(15) any agreement as in effect on the Issue Date and
described in the Prospectus or any renewals or extensions of any such
agreement (so long as such renewals or extensions are not less
favorable to the Company or the Restricted Subsidiaries) and the
transactions evidenced thereby.
SECTION 8.08. CHANGE OF CONTROL. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Company
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
8.08(b). In the event that at the time of such Change of Control the terms of
any Senior Indebtedness of the Company restrict or prohibit the purchase of
Notes pursuant to this Section 8.08, then prior to the mailing of the notice to
Holders provided for in Section 8.08(b) below but in any event within 30 days
following any Change of Control, the Company shall (1) repay in full all such
Senior Indebtedness or (2) obtain the requisite consents under the agreements
governing all such Senior Indebtedness to permit the repurchase of the Notes as
provided for in Section 8.08(b).
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee (the "CHANGE OF
CONTROL OFFER") stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company 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);
(2) the circumstances and relevant facts regarding such Change of
Control;
58
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent
with this Section 8.08, 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 Company
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 Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, 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 Company
under this Section 8.08 shall be delivered by the Company to the Trustee for
cancellation, and the Company 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
8.08, the Company shall not be required to make a Change of Control Offer upon
a Change of Control if 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 8.08 applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
(f) The Company 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 8.08. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 8.08, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 8.08 by virtue of
its compliance with such securities laws or regulations.
SECTION 8.09. FUTURE GUARANTORS. The Company 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 8.03(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.
SECTION 8.10. COMPLIANCE CERTIFICATE.
The first two sentences of Section 10.03(a) of the Base Indenture are hereby
modified and superceded as follows:
59
The Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company an Officers' Certificate stating that in the course
of the performance by the signers of their duties as Officers of the Company
they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period.
SECTION 8.11. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee or otherwise as necessary, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE NINE
SUBORDINATION
Article 14 of the Base Indenture is hereby modified and superceded as follows:
SECTION 9.01. AGREEMENT TO SUBORDINATE. The Company agrees, and each
Holder by accepting a Note agrees, that the Indebtedness and other Obligations
evidenced by the Notes is subordinated in right of payment, to the extent and
in the manner provided in this Article 14, to the prior payment of all
Obligations with respect to Senior Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred) and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Notes shall in all respects rank pari passu with all
other Senior Subordinated Indebtedness of the Company and only Indebtedness of
the Company that is Senior Indebtedness of the Company shall rank senior to the
Notes in accordance with the provisions set forth herein. All provisions of
this Article 14 shall be subject to Section 9.12 of the First Supplemental
Indenture.
SECTION 9.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of the Company of any kind or character, whether
in cash, property or securities, to creditors upon any total or partial
liquidation or any total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership, winding-up, assignment
for the benefit of creditors, marshalling of assets or similar proceeding
relating to the Company or its property, whether voluntary or involuntary:
(1) the holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of all Obligations with respect to all
such Senior Indebtedness before Holders shall be entitled to receive any
payment with respect to the Notes;
(2) until all such Senior Indebtedness is paid in full, any
payment or distribution to which Holders would be entitled but for this
Article 14 shall be made to holders of such Senior Indebtedness as their
interests may appear, except that Holders may receive shares of stock and
any debt securities that are subordinated to such Senior Indebtedness to
at least the same extent as the Notes; and
(3) if a distribution is made to holders of the Notes that, due
to the subordination provisions, should not have been made to them, such
Holders of the Notes are required to hold in trust for the holders of the
Senior Indebtedness of the Company and pay it over to them as their
interests may appear.
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SECTION 9.03. DEFAULT ON SENIOR INDEBTEDNESS OF THE COMPANY. The
Company shall not pay (in cash, property, securities or other assets), the
principal of, interest on or other Obligations owing with respect to the Notes
or make any deposit pursuant to Article 13 of the Base Indenture and Section
4.03 of the First Supplemental Indenture and may not purchase, redeem or
otherwise retire or acquire any Notes (collectively, "pay the Notes") if either
of the following (a "Payment Default") occurs (1) any Obligations with respect
to Designated Senior Indebtedness of the Company are not paid in full when due
or (2) any other default on Designated Senior Indebtedness of the Company
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; PROVIDED, HOWEVER, that
the Company shall be entitled to pay the Notes without regard to the foregoing
if the Company 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)
with respect to any Designated Senior Indebtedness of the Company pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, the Company shall not pay the
Notes for a period (a "Payment Blockage Period") commencing upon the receipt by
the Trustee (with a copy to the Company) of written notice (a "Blockage
Notice") of such 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
(1) by written notice to the Trustee and the Company from the
Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice is
cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of
this Section 14.03), unless the holders of such Designated Senior Indebtedness
giving such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of the Designated Senior
Indebtedness, the Company shall be entitled to resume payments on the Notes
after termination 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 Company during such period; PROVIDED, HOWEVER, that
if any Blockage Notice within such 360-day period is given by or on behalf of
any holders of Designated Senior Indebtedness of the Company (other than the
Bank Indebtedness), the Representative of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; PROVIDED FURTHER,
HOWEVER, that in no event shall the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the
61
aggregate during any 360 consecutive day period, and there must be 181 days
during any consecutive 360-day period during which no Payment Blockage Period
is in effect.
For purposes of this Section 14.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness of the
Company initiating such Payment Blockage Period shall be, or be made, the basis
of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 9.04. ACCELERATION OF PAYMENT OF NOTES. If payment of the
Notes is accelerated because of an Event of Default, the Company or the Trustee
shall promptly notify in writing the holders of the Designated Senior
Indebtedness of the Company (or their Representatives) of the acceleration
(although the failure to give any such notice shall not affect the
subordination provisions of this Article 14). If any Bank Indebtedness of the
Company is outstanding, neither the Company nor any Guarantor shall pay the
Notes until five Business Days after the Representatives of all such Bank
Indebtedness of the Company receive written notice of such acceleration and,
thereafter, the Company and the Guarantors shall be entitled to pay the Notes
(and the Holders may accept and retain such payment) only if this Article 14
otherwise permits payment (and the acceptance and retention) at that time.
SECTION 9.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
or payment is made to the Trustee or Holders that because of this Article 14
should not have been made to (or received by) them, the Trustee or Holders who
receive the distribution or payment shall hold it in trust for holders of
Senior Indebtedness of the Company and pay it over to them or their
Representatives as their interests may appear.
SECTION 9.06. SUBROGATION. After all Senior Indebtedness of the
Company is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. A distribution made under
this Article 14 to holders of Senior Indebtedness which otherwise would have
been made to Holders is not, as between the Company and Holders, a payment by
the Company on such Senior Indebtedness.
SECTION 9.07. RELATIVE RIGHTS. This Article 14 defines the relative
rights of Holders and holders of Senior Indebtedness of the Company. Nothing in
this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms; or
(2) 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 Company to receive distributions or payments
otherwise payable to Holders.
SECTION 9.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness of the Company to enforce the
62
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
SECTION 9.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 9.03, the Trustee or Paying Agent shall continue to make payments on
the Notes and shall not be charged with knowledge of the existence of facts
that under this Article 14 would prohibit the making of any such 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 it that such
payments are prohibited by this Article 14. The Company, the Registrar, the
Paying Agent, a Representative or a holder of Senior Indebtedness of the
Company shall be entitled to give the notice; PROVIDED, HOWEVER, that, if an
issue of Senior Indebtedness of the Company 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 Company with the same rights it would have
if it were not Trustee. The Registrar and co-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 14 with respect to any
Senior Indebtedness of the Company 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 6 of the Base Indenture shall deprive the Trustee of any of its rights
as such holder. Nothing in this Article 14 shall apply to claims of, or
payments to, the Trustee (in its capacity as such) under or pursuant to Section
6.07 of the Base Indenture.
SECTION 9.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever any
Person is to make a distribution or give a notice to holders of Senior
Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 9.11. ARTICLE 14 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 14 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 14 shall have any effect
on the right of the Holders or the Trustee to accelerate the maturity of the
Notes in accordance with Section 5.02.
SECTION 9.12. 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 in accordance with Article 4 or Article 13
of the Base Indenture by the Trustee for the payment of principal of and
interest on the Notes shall not be subordinated to the prior payment of any
Senior Indebtedness of the Company or subject to the restrictions set forth in
this Article 14, and none of the Holders shall be obligated to pay over any
such amount to the Company or any holder of Senior Indebtedness of the Company
or any other creditor of the Company.
SECTION 9.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 14, the Trustee and the Holders shall be
entitled to rely
63
(1) upon any order or decree of a court of competent jurisdiction
in which any proceedings of the nature referred to in Section 9.02 are
pending,
(2) 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
(3) upon the Representatives of Senior Indebtedness of the
Company
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 Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 14.
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 Company to participate in any payment or distribution
pursuant to this Article 14, 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 14, 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 Section 6.01 of the Base
Indenture shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 14.
SECTION 9.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by
accepting a Note authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article 14 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 9.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS
OF THE COMPANY. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness of the Company and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to Holders or
the Company or any other Person, money or assets to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article 14 or
otherwise.
SECTION 9.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF THE
COMPANY ON SUBORDINATION Provisions. Each Holder by accepting a Note (whether
upon original issue or upon transfer, assignment or exchange thereof)
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 Company, 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.
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ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. GUARANTIES.
Each Guarantor hereby unconditionally and irrevocably guarantees, jointly and
severally, to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of and interest on the Notes when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture and the Notes
and (b) the full and punctual performance within applicable grace periods of
all other obligations of the Company under this Indenture and the Notes (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Guarantor further agrees that the Guaranteed Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from such Guarantor and that such Guarantor will remain bound under this
Article Ten notwithstanding any extension or renewal of any Guaranteed
Obligation.
To the fullest extent permitted by law, each 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, each Guarantor waives notice of any
default under the Notes or the Guaranteed Obligations. The obligations of each
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 (including any Guarantor) under this Indenture, the Notes or any other
agreement or otherwise;
(b) any extension or renewal of any such claim, demand, right or
remedy;
(c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Notes or any other agreement;
(d) the release of any security held by any Holder or the Trustee
for the Notes 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 10.06, any change in the
ownership of such Guarantor.
Each Guarantor further agrees that its 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.
Each Guaranty is, to the extent and in the manner set forth in Article
11, subordinated and subject in right of payment to the prior payment in full
65
of the principal of and premium, if any, and interest on all Senior
Indebtedness of the Guarantor giving such Guaranty and each Guaranty is made
subject to such provisions of this Indenture.
Except as expressly set forth in Section 13.01 of the Base Indenture,
and Sections 10.02 and 10.06 of the First Supplemental Indenture, to the
fullest extent permitted by law, the obligations of each Guarantor hereunder
shall not be subject to any reduction, limitation, impairment or termination
for any reason, including any claim of waiver, release, surrender, alteration
or compromise, and, 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 each 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 this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
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
such Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each 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 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 any
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, each
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.
Each 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 Eleven. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand,
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(x) the maturity of the Guaranteed Obligations Guaranteed hereby
may be accelerated as provided in Article 5 of the Base Indenture for the
purposes of such Subsidiary Guarantor's Guaranty herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Guaranteed Obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such
Guaranteed Obligations as provided in Article 5 of the Base Indenture,
such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of
this Section 10.01.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 10.01.
SECTION 10.02. LIMITATION ON LIABILITY. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 10.03. SUCCESSORS AND ASSIGNS. This Article Ten shall be
binding upon each Guarantor and its successors and assigns and shall enure 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 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 Indenture.
SECTION 10.04. 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 Article Ten 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 Article Ten
at law, in equity, by statute or otherwise.
SECTION 10.05. MODIFICATION. No modification, amendment or waiver of
any provision of this Article Ten, nor the consent to any departure by any
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 any Guarantor in any case shall entitle such
Guarantor to any other or further notice or demand in the same, similar or
other circumstances.
SECTION 10.06. RELEASE OF GUARANTOR. (a) A Subsidiary Guarantor will
be released from its obligations under this Article Ten without any further
67
action required on the part of the Trustee or any Holder (other than any
obligation that may have arisen under Section 10.07 prior to such release),
(1) upon the sale (including any sale pursuant to any exercise of
remedies by a holder of Senior Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of
consolidation or merger) of a Subsidiary Guarantor,
(2) upon the sale or disposition of all or substantially all the
assets of such Subsidiary Guarantor,
(3) upon the designation of such 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 with this Indenture that results in
the Subsidiary Guarantor no longer being a Restricted Subsidiary,
(5) at such time as such Subsidiary Guarantor does not have any
Guarantees outstanding that would have required it to become a Subsidiary
Guarantor under Section 8.09,
(6) upon defeasance of the Notes pursuant to Article 13 of the
Base Indenture, or
(7) upon the full satisfaction of the Company's obligations under
this Indenture pursuant to Article 4 of the Base Indenture and Article
Four of the First Supplemental Indenture;
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 Company or a
Subsidiary of the Company, (ii) such sale or disposition is otherwise permitted
by this Indenture and (iii) the Company provides an Officers' Certificate to
the Trustee to the effect that the Company will comply with its obligations
under Section 8.06 with respect to such sale or disposition. At the request of
the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
(b) Interline Delaware will be released from its obligations
under this Article Ten without an further action required on the part of the
Trustee or any Holder (other than any obligation that may have arisen under
Section 10.07 prior to such release),
(1) upon defeasance of the Notes pursuant to Article 13 of the
Base Indenture and Section 4.03 of the First Supplemental Indenture, or
(2) upon the full satisfaction of the Company's obligations under
this Indenture pursuant to Article 4 of the Base Indenture and Article
Four of the First Supplemental Indenture.
68
SECTION 10.07. 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 ELEVEN
SUBORDINATION OF GUARANTIES
SECTION 11.01. AGREEMENT TO SUBORDINATE. Each Guarantor agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by such
Guarantor's Guaranty is subordinated in right of payment, to the extent and in
the manner provided in this Article Eleven, to the prior payment of all Senior
Indebtedness of such Guarantor (whether outstanding on the Issue Date or
thereafter incurred) and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Guaranteed
Obligations of a Guarantor shall in all respects rank pari passu with all other
Senior Subordinated Indebtedness of such Guarantor and only Senior Indebtedness
of such Guarantor (including such Guarantor's Guarantee of Senior Indebtedness
of the Company) shall rank senior to the Guaranteed Obligations of such
Guarantor in accordance with the provisions set forth herein.
SECTION 11.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of any Guarantor of any kind or character,
whether in cash, property or securities, to creditors upon a total or partial
liquidation or a total or partial dissolution of such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership, winding-up, assignment
for the benefit of creditors, marshalling of assets or similar proceeding
relating to such Guarantor or its property whether voluntary or involuntary:
(a) the holders of Senior Indebtedness of such Guarantor shall be
entitled to receive payment in full of all Obligations with respect to all such
Senior Indebtedness before Holders shall be entitled to receive any payment
with respect to any Obligations of such Guarantor; and
(b) until the Senior Indebtedness of such Guarantor is paid in
full, any payment or distribution to which Holders would be entitled but for
this Article Eleven shall be made to holders of such Senior Indebtedness as
their interests may appear, except that Holders may receive shares of stock and
any debt securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Notes.
SECTION 11.03. DEFAULT ON SENIOR INDEBTEDNESS OF GUARANTOR. No
Guarantor shall make any payment (in cash, property, securities or other
assets) with respect to its Guaranty or purchase, redeem or otherwise retire,
acquire or defease any Notes or other Guaranteed Obligations (collectively,
"pay its Guaranty") if either of the following (a "Payment Default") occurs (1)
any Designated Senior Indebtedness of such Guarantor is not paid in full when
due 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 Payment
69
Default has been cured or waived and any such acceleration has been rescinded
or such Designated Senior Indebtedness has been paid in full; PROVIDED,
HOWEVER, that any Guarantor shall be entitled to make any payment with respect
to its Guaranty without regard to the foregoing 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 Payment Default
has occurred and is continuing.
During the continuance of any default (other than a Payment Default)
with respect to any Designated Senior Indebtedness of such Guarantor pursuant
to which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, such Guarantor shall not pay
its Guaranty for a period (a "Payment Blockage Period") commencing upon the
receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such 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
(1) by written notice to the Trustee and such Guarantor from the
Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice is
cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of
this Section 11.03), unless the holders of such Designated Senior Indebtedness
giving such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of such Designated Senior
Indebtedness, any Guarantor shall be entitled to resume payments pursuant to
its Guaranty after termination of such Payment Blockage Period. No Guaranty
shall be subject to more than one Blockage Period in any consecutive 360-day
period, irrespective of the number of defaults with respect to Designated
Senior Indebtedness of such Guarantor during such period; PROVIDED, HOWEVER,
that if any Blockage Notice within such 360-day period is given by or on behalf
of any holders of Designated Senior Indebtedness of such Guarantor (other than
the Bank Indebtedness), the Representative of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; PROVIDED FURTHER,
HOWEVER, that in no event shall the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the
aggregate during any 360 consecutive day period, and there must be 181 days
during any consecutive 360-day period during which no Payment Blockage Period
is in effect.
For purposes of this Section 11.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness of such
Guarantor initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
70
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 11.04. DEMAND FOR PAYMENT. If a demand for payment is made on
a Guarantor pursuant to Article Ten, the Trustee shall promptly notify in
writing the holders of the Designated Senior Indebtedness of such Guarantor (or
their Representatives) of such demand.
SECTION 11.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to the Trustee as the Holders that because of this Article Eleven
should not have been made to (or received by) them, the Trustee or the Holders
who receive the distribution or payment shall hold it in trust for holders of
Senior Indebtedness of the applicable Guarantor and pay it over to them or
their Representatives as their interests may appear.
SECTION 11.06. 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 Senior Indebtedness to receive
distributions applicable to Senior Indebtedness of such Guarantor. A
distribution made under this Article Eleven to holders of 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 11.07. RELATIVE RIGHTS. This Article Eleven defines the
relative rights of Holders and holders of Senior Indebtedness of a Guarantor.
Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Holders, the obligation of
such Guarantor, which is absolute and unconditional, to pay its Guaranty
to the extent set forth in Article Ten; or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a default by such Guarantor under its Guaranty,
subject to the rights of holders of Senior Indebtedness of such Guarantor
to receive distributions otherwise payable to Holders.
SECTION 11.08. SUBORDINATION MAY NOT BE IMPAIRED BY THE GUARANTORS. No
right of any holder of Senior Indebtedness of any Guarantor to enforce the
subordination of the Guaranty of such Guarantor shall be impaired by any act or
failure to act by such Guarantor or by such Guarantor's failure to comply with
this First Supplemental Indenture.
SECTION 11.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 11.03, the Trustee or Paying Agent shall continue to make payments on
any Guaranty and shall not be charged with knowledge of the existence of facts
under this Article Eleven that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives written notice satisfactory to it that
such payments are prohibited by this Article Eleven. The Company, the relevant
Guarantor, the Registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of such Guarantor shall be entitled to give the notice;
PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness of any Guarantor
has a Representative, only the Representative shall be entitled to give the
notice.
71
The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of any Guarantor with the same rights it would have
if it were not the Trustee. The Registrar and co-registrar and the Paying Agent
may do the same with like rights. The Trustee shall be entitled to all the
rights set forth in this Article Eleven with respect to any Senior Indebtedness
of any 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 6 of the Base
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article Eleven shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07 of the Base Indenture.
SECTION 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever any
Person is to make a distribution or give a notice to holders of Senior
Indebtedness of any Guarantor, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 11.11. ARTICLE ELEVEN NOT TO PREVENT EVENTS OF DEFAULT OR
LIMIT RIGHT TO DEMAND PAYMENT. The failure to make a payment pursuant to a
Guaranty by reason of any provision in this Article Eleven shall not be
construed as preventing the occurrence of a Default. Nothing in this Article
Eleven shall have any effect on the right of the Holders or the Trustee to make
a demand for payment on any Guarantor pursuant to its Guaranty.
SECTION 11.12. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article Eleven, the Trustee and the Holders shall
be entitled to rely
(1) upon any order or decree of a court of competent jurisdiction
in which any proceedings of the nature referred to in Section 11.02 are
pending,
(2) 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
(3) upon the Representatives for the holders of Senior
Indebtedness of any 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 Eleven.
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 any Guarantor to participate in any payment or distribution
pursuant to this Article Eleven, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness of such Guarantor 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 Eleven, 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
6.01 of the Base Indenture shall be applicable to all actions or omissions of
actions by the Trustee pursuant to this Article Eleven.
72
SECTION 11.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by
accepting a Note authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of any
Guarantor as provided in this Article Eleven and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 11.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF GUARANTOR. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness of any Guarantor and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Holders or the Company or any other Person, money or assets to which any
holders of such Senior Indebtedness shall be entitled by virtue of this Article
Eleven or otherwise.
SECTION 11.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF
GUARANTORS 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 any 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 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.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and attested, as of the date first
above written.
INTERLINE BRANDS, INC.,
a New Jersey corporation,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
INTERLINE BRANDS, INC.,
a New Jersey corporation,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
WILMAR HOLDINGS, INC.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
WILMAR FINANCIAL, INC.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
74
GLENWOOD ACQUISITION LLC,
BY: INTERLINE BRANDS, INC.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
75
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Notes Legend]
THIS NOTE IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR 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).
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, THIS SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DTC TO A NOMINEE OF THE DTC OR BY A
NOMINEE OF THE DTC TO THE DTC OR ANOTHER NOMINEE OF THE DTC OR BY THE DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
CUSIP No. [ ]
ISIN No. [ ]
No. 001 $[ ]
---
8 1/8% Senior Subordinated Note Due 2014
INTERLINE BRANDS, INC., a New Jersey corporation, promises to pay to
CEDE & CO., or registered assigns, the principal sum of [ ] Dollars on June 15,
2014.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated:
INTERLINE BRANDS, INC.,
by ________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: _______________
The Bank of New York Trust Company, N.A., as Trustee, certifies that this is
one of the Notes of the series designated therein referred to in the
within-mentioned Indenture.
______________________
As Trustee
By:___________________
Authorized
Signatory
[FORM OF REVERSE SIDE OF NOTE]
8 1/8% Senior Subordinated Note Due 2014
INTEREST
Interline Brands, Inc., a New Jersey corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Note at the rate per annum shown above. The Company will pay
interest semiannually on June 15 and December 15 of each year, commencing
December 15, 2006.
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 June 23, 2006.
Interest on overdue principal will be paid by the Company at 1% per annum in
excess of the rate shown above and the Company will pay interest on overdue
installments of interest at such higher rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
METHOD OF PAYMENT
The Company 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 December 1 or June 1 next preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the Depository. The
Company will make all payments in respect of a Certificated Note (including
principal, premium, if any, and interest) by mailing a check to the registered
address of each Holder thereof; PROVIDED, HOWEVER, that payments on a
Certificated Note will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion). 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.
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PAYING AGENT AND REGISTRAR
Initially, The Bank of New York Trust Company, N.A. (the "Trustee"),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent or Registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
INDENTURE
The Company issued the Notes under an indenture dated as of June 23,
2006 (the "Base Indenture"), among the Company, the guarantors party thereto
and the Trustee, as amended solely in respect of the Notes (including any
Additional Notes) by the first supplemental indenture dated as of June 23,
2006, among the Company, the guarantors party thereto and the Trustee (the
"First Supplemental Indenture" and, together with the Base Indenture, the
"Indenture"). 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 (15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb) (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the Act for a statement of those terms.
The Notes are general unsecured obligations of the Company. The Notes
issued on the Issue Date and any Additional Notes will be treated as a single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its subsidiaries to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase
capital stock; make investments; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be entitled to redeem
the Notes.
On and after June 15, 2010, the Company shall be entitled at its
option to redeem all or a portion of the Notes (which includes Additional
Notes, if any) upon not less than 30 nor more than 60 days' notice, at the
Redemption Prices (expressed in percentages of principal amount on the
Redemption Date), plus accrued interest 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 12-month period
commencing on June 15 of the years set forth below:
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Redemption
Period Price
-------------------------------------- -----------
2010 104.063%
2011 102.031%
2012 and thereafter 100.000%
In addition, prior to June 15, 2009, the Company shall be entitled at
its option on one or more occasions to 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
principal amount) of 108.125%, plus accrued and unpaid interest to the
Redemption Date, with the net cash proceeds received by the Company from one or
more Equity Offerings; PROVIDED, HOWEVER, that (1) 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 Company or its
Affiliates); and (2) each such redemption occurs within 90 days after the date
of the related Equity Offering.
Prior to June 15, 2010, the Company 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 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). The Company shall cause notice of such redemption to be
mailed by first-class mail to each Holder's registered address, not less than
30 nor more than 60 days prior to the Redemption Date.
SELECTION OF NOTES TO BE REDEEMED.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata, to the extent practicable (but
subject to the requirement that any remaining Notes only being minimum
denominations of $2,000 and any greater $1,000 multiples), and otherwise by a
method that complies with applicable legal and securities exchange
requirements, if any, and that the Trustee in its sole discretion shall deem to
be fair and appropriate and in accordance with methods generally used at the
time of selection by fiduciaries in similar circumstances. The Trustee shall
make the selection from outstanding Notes not previously called for redemption.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be redeemed.
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NOTICE OF REDEMPTION
Notwithstanding the terms of the Base Indenture, notice of redemption
will be mailed 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 principal amount may be redeemed in part but
only in whole multiples of $1,000. Notes in denominations of $2,000 principal
amount or less may be redeemed in whole but not in part. If money sufficient to
pay the Redemption Price of and accrued interest on all Notes (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.
CHANGE OF CONTROL PUT PROVISION
Upon a Change of Control, any Holder of Notes will have the right to
cause the Company to repurchase all of the Notes of such Holder at a repurchase
price equal to 101% of the principal amount of the Notes to be repurchased plus
accrued and unpaid interest to the date of repurchase (subject to the right of
holders of record on the relevant record date to receive interest due on the
related interest payment date) as provided in, and subject to the terms of, the
Indenture.
GUARANTY
The payment by the Company 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.
SUBORDINATION
The Notes are subordinated to Senior Indebtedness of the Company and
the Guarantors as set forth in the Indenture. To the extent provided in the
Indenture, Senior Indebtedness must be paid before the Notes may be paid. Each
Holder by accepting a Note agrees to the subordination provisions contained in
the Indenture and authorizes the Trustee to give it effect and appoints the
Trustee as attorney-in-fact for such purpose.
DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in denominations of
$2,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Notes in accordance with the Indenture. The Company or the Registrar
may require a Holder, among other things, to furnish appropriate endorsements
or transfer documents and, in certain cases, to pay a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Notes selected for redemption (except, in the case of Notes to be redeemed in
part, the portion thereof not to be redeemed) or any Notes for a period of 15
days before a selection of Notes to be redeemed or 15 days before an interest
payment date.
5
PERSONS DEEMED OWNERS
The registered Holder of this Notes may be treated as the owner of it
for all purposes.
UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company 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
Company 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.
AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount outstanding of the Notes and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Guarantors and the Trustee shall be
entitled to amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article 9 of the Base Indenture, as
amended and superceded by Article Seven of the First Supplemental Indenture, or
to provide for uncertificated Notes in addition to or in place of certificated
Notes, or to add guarantees with respect to the Notes, including Subsidiary
Guaranties, or to secure the Notes, or to add additional covenants or surrender
rights and powers conferred on the Company or the Guarantors, or to conform the
text of the Indenture, the Notes and the Guaranties to any provision of the
Prospectus, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make certain changes in the
subordination provisions, or to make any change that does not adversely affect
the rights of any Holder.
6
DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Notes; (ii) default in payment of principal on
the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes,
upon acceleration or otherwise, or failure by the Company to redeem or purchase
Notes when required; (iii) failure by the Company or any Restricted Subsidiary
to comply with other agreements in the Indenture or the Notes, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company, any Subsidiary Guarantor or any Significant
Subsidiary if the amount accelerated (or so unpaid) exceeds $20.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company, a
Subsidiary Guarantor or any Significant Subsidiary; (vi) certain judgments or
decrees for the payment of money in excess of $20.0 million; and (vii) certain
defaults with respect to the Guaranties. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes may declare all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives indemnity or security reasonably satisfactory to it. Subject
to certain limitations, Holders of a majority in principal amount of the Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is
not opposed to the interest of the Holders.
TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, 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 and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
NO RECOURSE AGAINST OTHERS
A director, officer, manager, employee, incorporator, member, partner
or stockholder, as such, of the Company, any Guarantor or the Trustee shall not
have any liability for any obligations of the Company under the Notes or the
Indenture or any Guarantor under any Guaranty, as the case may be, or this
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 are part of the
consideration for the issue of the Notes.
7
AUTHENTICATION
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
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
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to 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.
GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of this Note in larger type. Requests may be made to:
Interline Brands, Inc.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
ASSIGNMENT FORM
To assign this Notes, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
___________________________________________________________
Date: ________________ Your Signature: ____________________
___________________________________________________________
Sign exactly as your name appears on the other side of this Note.
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal amount in Principal amount this Global Note authorized officer
of this Global Note of this Global Note following such of Trustee or
decrease or increase) Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 8.06 or 8.08 of the First Supplemental Indenture, check the
box:
[________]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 8.06 or 8.08 of the First Supplemental Indenture,
state the amount in principal amount: $___________
Date: _______________ Your Signature: ___________________________________
(Sign exactly as your name
appears on the other side
of this Note.)
Signature Guarantee: _____________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE, by INTERLINE BRANDS, INC., a New Jersey
corporation (the "COMPANY"), INTERLINE BRANDS, INC., a Delaware corporation
("INTERLINE DELAWARE"), the SUBSIDIARY GUARANTORS listed on the signature pages
hereto and The Bank of New York Trust Company, N.A., as trustee (herein called
the "TRUSTEE"), to the Indenture dated as of June 23, 2006, between the Company
and the Trustee (the "BASE INDENTURE"), as supplemented by the First
Supplemental Indenture, dated as of June 23, 2006 ("FIRST SUPPLEMENTAL
INDENTURE", and together with the Base Indenture, the "INDENTURE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee the Base Indenture dated as of June 23, 2006, as supplemented by the
First Supplemental Indenture, dated June 23, 2006, providing for the issuance
of 8 1/8% Senior Subordinated Notes due 2014 (the "NOTES");
WHEREAS, pursuant to Section 8.09 of the First Supplemental 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 8.03(b)(5), (b)(8), (b)(11), (b)(13) and (b)(15)
of the First Supplemental Indenture), 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 Base Indenture, as amended by
Section 7.01(4) of the First Supplemental 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. The Subsidiary Guarantor hereby unconditionally
and irrevocably guarantees, jointly and severally with the other Guarantors, to
each Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under the Indenture and the Notes and (b) the full
2
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 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 10.06 of the
First Supplemental 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 Eleven of the First Supplemental 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 Section 13.01(b) of the Base
Indenture and Sections 10.02 and 10.06 of the First Supplemental 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
3
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 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 Eleven
of the First Supplemental 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 Article 5 of the Base Indenture, as amended by Article Five of the
First Supplemental 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 Article 5 of the Base Indenture, as
amended by Article Five of the First Supplemental 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 costs and
expenses (including attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 2.
4
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.
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 (including any sale pursuant to any exercise of
remedies by a holder of Senior Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of
consolidation or merger) of the Subsidiary Guarantor,
(ii) upon the sale or disposition of all or substantially all the
assets of the Subsidiary Guarantor,
5
(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 a 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 such Subsidiary Guarantor does not have any
Guarantees outstanding that would have required it to become a
Subsidiary Guarantor under Section 8.09 of the First Supplemental
Indenture,
(vi) upon defeasance of the Notes pursuant to Article 13 of the
Base Indenture and Section 4.03 of the First Supplemental Indenture,
or
(vii) upon the full satisfaction of the Company's obligations under
the Indenture pursuant to Article 4 of the Base Indenture and Article
Four of the First Supplemental 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 Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 8.06 of the First Supplemental Indenture with respect to such sale or
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.
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.
6
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.
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:
THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
Name:
Title:
INTERLINE BRANDS, INC.,
a Delaware corporation,
By:
-------------------------------
Name:
Title:
WILMAR HOLDINGS, INC.,
By:
-------------------------------
Name:
Title:
WILMAR FINANCIAL, INC.,
By:
-------------------------------
Name:
Title:
GLENWOOD ACQUISITION LLC,
BY: INTERLINE BRANDS, INC.,
By:
-------------------------------
Name:
Title: