Document:

Exhibit 4.2

 

Dated as of October 23, 2012

 

VALE OVERSEAS LIMITED,

as Company

 

and

 

VALE S.A.,

as Guarantor

 

and

 

THE BANK OF NEW YORK MELLON,

as Trustee

 

AMENDED AND RESTATED INDENTURE

 

 

TABLE OF CONTENTS

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1
    	
Definitions   and Other Provisions of General Application
    	
1
    
	
 
    	
1.1
    	
Definitions
    	
1
    
	
 
    	
1.2
    	
Compliance   Certificates and Opinions
    	
9
    
	
 
    	
1.3
    	
Form of   Documents Delivered to Trustee
    	
9
    
	
 
    	
1.4
    	
Acts of Holders;   Record Dates
    	
9
    
	
 
    	
1.5
    	
Notices, Etc.,   to Trustee, Company and Guarantor
    	
11
    
	
 
    	
1.6
    	
Notice   to Holders; Waiver
    	
12
    
	
 
    	
1.7
    	
Conflict   with Trust Indenture Act
    	
12
    
	
 
    	
1.8
    	
Effect of   Headings and Table of Contents
    	
12
    
	
 
    	
1.9
    	
Successors   and Assigns
    	
12
    
	
 
    	
1.10
    	
Separability   Clause
    	
12
    
	
 
    	
1.11
    	
Benefits   of Indenture
    	
13
    
	
 
    	
1.12
    	
Governing   Law/Waiver of Jury Trial
    	
13
    
	
 
    	
1.13
    	
Legal   Holidays
    	
13
    
	
 
    	
1.14
    	
Consent to   Service; Jurisdiction
    	
13
    
	
 
    	
1.15
    	
Language of   Notices, Etc.
    	
14
    
	
2
    	
Security   Forms
    	
14
    
	
 
    	
2.1
    	
Forms   Generally
    	
14
    
	
 
    	
2.2
    	
Form of   Face of Security
    	
14
    
	
 
    	
2.3
    	
Form of   Reverse of Security
    	
16
    
	
 
    	
2.4
    	
Form of   Trustee’s Certificate of Authentication
    	
21
    
	
3
    	
The   Securities
    	
22
    
	
 
    	
3.1
    	
Amount   Unlimited; Issuable in Series
    	
22
    
	
 
    	
3.2
    	
Denominations
    	
24
    
	
 
    	
3.3
    	
Execution,   Authentication, Delivery and Dating
    	
24
    
	
 
    	
3.4
    	
Registration,   Registration of Transfer and Exchange
    	
25
    
	
 
    	
3.5
    	
Mutilated,   Destroyed, Lost and Stolen Securities
    	
28
    
	
 
    	
3.6
    	
Payment of   Interest; Interest Rights Preserved
    	
28
    
	
 
    	
3.7
    	
Persons   Deemed Owners
    	
29
    
	
 
    	
3.8
    	
Cancellation
    	
29
    
	
 
    	
3.9
    	
Computation   of Interest
    	
30
    
	
 
    	
3.10
    	
CUSIP   or “ISIN” Numbers
    	
30
    
	
4
    	
Satisfaction And   Discharge
    	
30
    
	
 
    	
4.1
    	
Satisfaction   and Discharge of Indenture
    	
30
    
	
 
    	
4.2
    	
Application of   Trust Money
    	
31
    
	
5
    	
Remedies
    	
31
    
	
 
    	
5.1
    	
Events   of Default
    	
31
    
	
 
    	
5.2
    	
Acceleration   of Maturity; Rescission and Annulment
    	
32
    
	
 
    	
5.3
    	
Collection   of Indebtedness and Suits for Enforcement by Trustee
    	
33
    
	
 
    	
5.4
    	
Trustee   May File Proofs of Claim
    	
34
    
	
 
    	
5.5
    	
Trustee   May Enforce Claims Without Possession of Securities
    	
34
    
	
 
    	
5.6
    	
Application   of Money Collected
    	
34
    
	
 
    	
5.7
    	
Limitation   on Suits
    	
35
    
	
 
    	
5.8
    	
Unconditional   Right of Holders to Receive Principal, Premium and Interest
    	
35
    
	
 
    	
5.9
    	
Restoration   of Rights and Remedies
    	
35
    
	
 
    	
5.10
    	
Rights and   Remedies Cumulative
    	
36
    
	
 
    	
5.11
    	
Delay or   Omission Not Waiver
    	
36
    
	
 
    	
5.12
    	
Control   by Holders
    	
36
    
	
 
    	
5.13
    	
Waiver   of Past Defaults
    	
36
    
	
 
    	
5.14
    	
Undertaking   for Costs
    	
37
    
	
 
    	
5.15
    	
Waiver of   Usury, Stay or Extension Laws
    	
37
    
	
6
    	
The Trustee
    	
37
    

 

i

 

	
 
    	
6.1
    	
Certain   Duties and Responsibilities
    	
37
    
	
 
    	
6.2
    	
Notice of   Default; Potential Default
    	
37
    
	
 
    	
6.3
    	
Certain Rights of   Trustee
    	
38
    
	
 
    	
6.4
    	
Not   Responsible for Recitals or Issuance of Securities
    	
39
    
	
 
    	
6.5
    	
May Hold   Securities
    	
39
    
	
 
    	
6.6
    	
Money   Held in Trust
    	
39
    
	
 
    	
6.7
    	
Compensation   and Reimbursement
    	
39
    
	
 
    	
6.8
    	
Conflicting   Interests
    	
40
    
	
 
    	
6.9
    	
Corporate   Trustee Required; Eligibility
    	
40
    
	
 
    	
6.10
    	
Resignation   and Removal; Appointment of Successor
    	
41
    
	
 
    	
6.11
    	
Acceptance   of Appointment by Successor
    	
42
    
	
 
    	
6.12
    	
Merger,   Conversion, Consolidation or Succession to Business
    	
43
    
	
 
    	
6.13
    	
Preferential   Collection of Claims Against Company
    	
43
    
	
 
    	
6.14
    	
Appointment   of Authenticating Agent
    	
43
    
	
 
    	
6.15
    	
Appointment   of Luxembourg Transfer Agent
    	
44
    
	
 
    	
6.16
    	
Trustee’s   Application for Instructions from the Company
    	
44
    
	
7
    	
Holders’   Lists and Reports by Trustee and Company
    	
44
    
	
 
    	
7.1
    	
Company to   Furnish Trustee Names and Addresses of Holders
    	
44
    
	
 
    	
7.2
    	
Preservation   of Information; Communications to Holders
    	
45
    
	
 
    	
7.3
    	
Reports   by Trustee
    	
45
    
	
8
    	
Consolidation,   Merger, Conveyance, Transfer or Lease
    	
46
    
	
 
    	
8.1
    	
Company and   Guarantor May Consolidate, Etc. Only on Certain Terms
    	
46
    
	
 
    	
8.2
    	
Successor   Substituted
    	
46
    
	
 
    	
8.3
    	
Right   to Redemption
    	
46
    
	
 
    	
8.4
    	
Assumption   by Guarantor of Company’s Obligations
    	
47
    
	
9
    	
Supplemental   Indentures
    	
47
    
	
 
    	
9.1
    	
Supplemental   Indentures without Consent of Holders
    	
47
    
	
 
    	
9.2
    	
Supplemental   Indentures or Waiver with Consent of Holders
    	
48
    
	
 
    	
9.3
    	
Execution   of Supplemental Indentures
    	
49
    
	
 
    	
9.4
    	
Effect of   Supplemental Indentures
    	
49
    
	
 
    	
9.5
    	
Conformity   with Trust Indenture Act
    	
49
    
	
 
    	
9.6
    	
Reference   in Securities to Supplemental Indentures
    	
49
    
	
 
    	
9.7
    	
Effect   of Waiver
    	
50
    
	
 
    	
9.8
    	
Notice to   Luxembourg Stock Exchange
    	
50
    
	
10
    	
Covenants
    	
50
    
	
 
    	
10.1
    	
Payment of   Principal, Premium and Interest
    	
50
    
	
 
    	
10.2
    	
Maintenance   of Office or Agency
    	
50
    
	
 
    	
10.3
    	
Money for   Security Payments To Be Held in Trust
    	
51
    
	
 
    	
10.4
    	
Statement   by Officers as to Default
    	
51
    
	
 
    	
10.5
    	
Reports by   Company and Guarantor
    	
52
    
	
 
    	
10.6
    	
Limitation   on Liens
    	
52
    
	
 
    	
10.7
    	
Payment of   Additional Amounts
    	
52
    
	
 
    	
10.8
    	
Securities   held by the Company
    	
55
    
	
 
    	
10.9
    	
Securities   Issued or Outstanding
    	
55
    
	
 
    	
10.10
    	
Status of   Guaranty and Securities
    	
55
    
	
 
    	
10.11
    	
Maintenance   of Good Standing
    	
55
    
	
 
    	
10.12
    	
Payment   of Taxes
    	
55
    
	
11
    	
Redemption   of Securities
    	
55
    
	
 
    	
11.1
    	
Right   of Redemption
    	
55
    
	
 
    	
11.2
    	
Notice   of Redemption
    	
56
    
	
 
    	
11.3
    	
Deposit of   Redemption Price
    	
57
    
	
 
    	
11.4
    	
Securities   Payable on Redemption Date
    	
57
    
	
 
    	
11.5
    	
Securities   Redeemed in Part
    	
57
    
	
12
    	
Guaranty
    	
58
    
	
 
    	
12.1
    	
The   Guaranty
    	
58
    
	
 
    	
12.2
    	
Guaranty   Unconditional
    	
58
    

 

ii

 

	
 
    	
12.3
    	
Discharge;   Reinstatement
    	
59
    
	
 
    	
12.4
    	
Waiver   by the Guarantor
    	
59
    
	
 
    	
12.5
    	
Subrogation   and Contribution
    	
59
    
	
 
    	
12.6
    	
Stay   of Acceleration
    	
59
    
	
 
    	
12.7
    	
Execution   and Delivery of Guaranty
    	
59
    
	
13
    	
Defeasance   and Covenant Defeasance
    	
60
    
	
 
    	
13.1
    	
Company’s   Option to Effect Defeasance or Covenant Defeasance
    	
60
    
	
 
    	
13.2
    	
Defeasance and   Discharge
    	
60
    
	
 
    	
13.3
    	
Covenant   Defeasance
    	
60
    
	
 
    	
13.4
    	
Conditions   to Defeasance or Covenant Defeasance
    	
60
    
	
 
    	
13.5
    	
Deposited   Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous   Provisions
    	
62
    
	
 
    	
13.6
    	
Reinstatement
    	
62
    

 

Note: This table of contents shall not, for any purpose, be deemed to be a part of this Indenture.

 

iii

 

 

Amended and Restated Indenture, dated as of October 23, 2012, (the “Indenture”) among VALE OVERSEAS LIMITED, a Cayman Islands exempted company incorporated with limited liability (herein called the “Company”), having its registered office at Intertrust Corporate Services (Cayman) Limited, 87 Mary Street, George Town, Grand Cayman, KY1-9002, Cayman Islands, VALE S.A., a company duly organized and existing under the laws of the Federative Republic of Brazil (herein called the “Guarantor”), having its principal office at Avenida Graça Aranha, No. 26, 17th Floor, 20030-900 Rio de Janeiro, RJ, Brazil, and THE BANK OF NEW YORK MELLON, a banking corporation duly organized and existing under the laws of the State of New York, having its principal corporate trust office at 101 Barclay Street, New York, New York 10286, as Trustee (herein called the “Trustee”) supplementing, amending and restating, in its entirety, the Indenture, dated as of March 8, 2002, among the Company, the Guarantor and the Trustee (the “Original Indenture”).

 

W I T N E S S E T H:

 

Whereas, in connection with the filing by the Company and the Guarantor of a shelf registration statement on Form F-3, the Company and the Guarantor desire by this Indenture to amend and restate all of the provisions of the Original Indenture;

 

Whereas, such additions, changes and eliminations (i) shall apply only to Securities authorized and issued after the execution of this Indenture; and (ii) shall not modify the rights of the Holders of any Securities issued on or prior to the date of this Indenture;

 

Whereas, the Company and the Guarantor have duly authorized the execution and delivery of this Indenture to make such additions, changes and eliminations and to provide for the issuance from time to time of debt securities of the Company guaranteed by the Guarantor (herein called collectively the “Securities”), to be issued in one or more tranches of one or more series as in this Indenture provided; and

 

Whereas, all things necessary to make this Indenture a valid and binding legal obligation of the Company and the Guarantor according to its terms have been done.

 

Now, Therefore, This Indenture Witnesseth:

 

It is hereby covenanted and agreed that the terms and conditions upon which the Securities are issued, authenticated, delivered and accepted by all Persons (as defined below) who shall from time to time be or become the Holders thereof, and the terms and conditions upon which any property herein mortgaged and pledged is to be held and disposed of, which said terms and conditions the Trustee hereby accepts and agrees to discharge pursuant to the terms hereof, are as follows:

 

1                                         Definitions and Other Provisions of General Application

 

1.1                               Definitions

 

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

 

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

 

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

 

1.1.3                     all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with Reporting GAAP, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are consistent with Reporting GAAP at the date of such computation;

 

 

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

 

1.1.5                     unless the context otherwise requires, any reference to a statute, rule or regulation refers to the same (including any successor statute, rule or regulation thereto) as it may be amended from time to time; and

 

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

 

“Act”, when used with respect to any Holder, has the meaning specified in Section 1.4.

 

“Additional Amounts” has the meaning specified in Section 10.7.

 

“Affiliate” of any specified Person means (i) any other Person who directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with such specified Person or (ii) for the purposes of the definition of Indebtedness, any other Person in which such specified Person has a 20% or more holding of voting shares. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent Members” has the meaning specified in Section 3.4.5.

 

“Applicable Procedures” of the Depositary means, with respect to any matter at any time, the policies and procedures of the Depositary, if any, that are applicable to such matter at such time.

 

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.

 

“Board of Directors” means either the board of directors of the Company or the Guarantor, as applicable, or any committee of that board duly authorized to act for it in respect hereof.

 

“Board Resolution” means a copy of a resolution that has been duly adopted by the Board of Directors or the Executive Board of the Company or the Guarantor, as the case may be, duly certified by the Secretary or an Assistant Secretary of such body as being in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Brazil” means the Federative Republic of Brazil.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York or the City of Rio de Janeiro are authorized or obligated by law or executive order to close.

 

“Clearstream, Luxembourg” has the meaning specified in Section 3.4.5.

 

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

 

2

 

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

 

“Company Request” or “Company Order” means a written request or order signed on behalf of the Company by any two of its Directors or its attorneys in fact in accordance with its bylaws and delivered to the Trustee.

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered which office as of the date hereof is located at 101 Barclay Street, 4E, New York, New York 10286, Attention: Global Finance Americas, Fax: (212) 815-5550, Tel: (212) 815-5802.

 

“Corporation” means a corporation, association, company, limited liability company, joint-stock company or business trust.

 

“Defaulted Interest” has the meaning specified in Section 3.6.

 

“Default Rate of Interest” means the rate of interest otherwise payable on the principal of the Securities plus 1% per annum.

 

“Depositary” means The Depository Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean such successor Depositary.

 

“Dollar” and “$” mean a U.S. Dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts.

 

“Euroclear” has the meaning specified in Section 3.4.5.

 

“Event of Default” has the meaning specified in Section 5.1.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934 and any successor statute thereto.

 

“Executive Board” means the executive officers of the Guarantor that are responsible for day to day operations and the implementation of the general policies and guidelines set forth by the Board of Directors.

 

“Expiration Date” has the meaning specified in Section 1.4.7.

 

“Foreign Taxes” has the meaning specified in Section 10.7.

 

“Global Security” means a Security that evidences all or part of the Securities of any series and is authenticated and delivered to, and registered in the name of, the Depositary for such Securities or a nominee thereof.

 

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

 

“Guaranty” means the guaranty of the Securities by the Guarantor pursuant to this Indenture.

 

“Holder” means, with respect to any Security, a Person in whose name such Security is registered in the Security Register.

 

3

 

“Indebtedness” means with respect to any Person, any amount payable (whether as a direct obligation or indirectly through a guaranty by such Person) pursuant to (i) an agreement or instrument involving or evidencing money borrowed, (ii) a conditional sale or a transfer with recourse or with an obligation to repurchase or (iii) a lease with substantially the same economic effect as any such agreement or instrument and which, under Reporting GAAP, would constitute a capitalized lease obligation, provided, however, that as used in Section 5.1.3, “Indebtedness” shall not include any payment made by the Guarantor on behalf of an Affiliate, upon any Indebtedness of such Affiliate becoming immediately due and payable as a result of a default by such Affiliate, pursuant to a guarantee or similar instrument provided by the Guarantor in connection with such Indebtedness, provided that such payment made by the Guarantor is made within five Business Days of notice being provided to the Guarantor that payment is due under such guarantee or similar instrument.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1.

 

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

 

“Judgment Currency” has the meaning specified in Section 10.8.

 

“Lien” means any mortgage, charge, pledge, lien, hypothecation, security interest or other encumbrance, including, without limitation, any equivalent of the foregoing created under the laws of the Cayman Islands, Brazil or any other jurisdiction.

 

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

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Notice of Default” means a written notice of the kind specified in Section 6.2.

 

“Officers’ Certificate” means a certificate signed in the name of the Company or the Guarantor by any two of its Directors, executive officers or attorneys in fact in accordance with its bylaws, and delivered to the Trustee, provided  however that an Officers’ Certificate pursuant to Section 10.4 shall be signed in the name of the Company or the Guarantor by any two of the Company’s or the Guarantor’s, as applicable, principal executive, financial or accounting officers.

 

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company or the Guarantor, and who shall be reasonably acceptable to the Trustee.

 

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

 

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

 

4

 

	
(ii)
    	
Securities   for whose payment, redemption or repurchase money in the necessary amount has   been theretofore deposited with the Trustee or any Paying Agent (other than   the Company) in trust or set aside and segregated in trust by the Company (if   the Company shall act as its own Paying Agent) for the Holders of such   Securities; provided that, if   such Securities are to be redeemed, notice of such redemption shall have been   duly given pursuant to this Indenture or provision therefor satisfactory to   the Trustee shall have been made; and
    
	
 
    	
 
    
	
(iii)
    	
Securities   which have been paid pursuant to Section 3.5 or in exchange for or in   lieu of which other Securities have been authenticated and delivered pursuant   to this Indenture, other than any such Securities in respect of which there   shall have been presented to the Trustee proof satisfactory to it that such   Securities are held by a protected purchaser in whose hands such Securities   are valid obligations of the Company;
    

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the Dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1.11, of the principal amount of such Security, and (B) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

 

“Paying Agent” means any Person (i) having a combined capital and surplus of not less than $50,000,000, (ii) subject to supervision or examination by Federal or State authority and (iii) having a long-term unsecured debt rating with respect to U.S. dollar obligations of at least A2 or its equivalent rating by Moody’s, that is authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

 

“Permitted Lien” with respect to any series of Securities issued hereunder, means any Lien:

 

(i) granted upon or with regard to any Restricted Property acquired by the Guarantor after the date of the issuance of Securities of such series to secure the purchase price of such Restricted Property or to secure Indebtedness incurred solely for the purpose of financing the acquisition of such Restricted Property; provided, however, that the maximum sum secured by such Lien shall not exceed the purchase price of such Restricted Property or the Indebtedness incurred solely for the purpose of financing the acquisition of such Restricted Property;

 

(ii) granted upon or with regard to any Restricted Property (including any improvements on or to an existing Restricted Property) after the date of the issuance of Securities of such series to secure the payment of all or any part of the cost of development, expansion or construction of or improvement on or to such Restricted Property or to secure Indebtedness incurred solely for the purpose of financing all or any part of the cost of development, expansion or construction of or improvements on or to such Restricted Property; provided, however, that the maximum sum secured by such Lien shall not exceed the higher of cost or fair market value of that development, expansion, construction or improvement;

 

5

 

(iii) in existence on the date of the issuance of Securities of such series and any extension, renewal or replacement thereof; provided, however, that the total amount of Indebtedness so secured shall not exceed the amount so secured on the date of the issuance of Securities of such series;

 

(iv) arising by operation of law, such as tax, merchants’, maritime or other similar Liens arising in the ordinary course of the Guarantor’s business;

 

(v) arising in the ordinary course of business in connection with the financing of export, import or other trade transactions to secure Indebtedness of the Guarantor;

 

(vi) securing or providing for the payment of Indebtedness incurred for the purpose of financing all or a part of the ownership, acquisition, construction, development or operation of any project by the Guarantor, any Subsidiary of the Guarantor or any consortium or other venture in which the Guarantor has any ownership or other similar interest; provided that such Lien only extends to (a) Restricted Properties (which may include existing Restricted Properties at any pre-existing site selected for expansion and any concession, authorization or other legal right granted by any governmental authority) which are the subject of such project financing, (b) any revenues from such Restricted Properties, (c) any proceeds from claims belonging to the Guarantor, any Subsidiary of the Guarantor or any consortium or other venture in which the Guarantor has any ownership or other similar interest which arise from the operation, failure to meet specifications, failure to complete, exploitation, sale or loss of, or damage to, such Restricted Property, or (d) shares or other ownership interest in, and any subordinated debt claims against, the project entity whose principal assets and business are constituted by such project;

 

(vii) granted upon or with regard to any present or future Restricted Property of the Guarantor to secure borrowings from, or funded directly or indirectly by, or effected indirectly through intermediaries by, (i) any Brazilian governmental credit agency (including, but not limited to the Brazilian National Treasury, Banco Nacional de Desenvolvimento Econômico e Social, BNDES Participações S.A., Financiadora de Estudos e Projetos and Agência Especial de Financiamento Industrial); (ii) any Brazilian official financial institutions (including, but not limited to Banco da Amazônia S.A. — BASA and Banco do Nordeste do Brasil S.A. — BNB); (iii) any non-Brazilian official export-import bank or official export-import credit insurer; or (iv) the International Finance Corporation or any non-Brazilian multilateral or government-sponsored agency;

 

(viii) existing on any asset prior to the acquisition thereof by the Guarantor, whether by merger, consolidation, purchase of assets or otherwise, and not created in contemplation of such acquisition;

 

(ix) created over funds reserved for the payment of principal, interest and premium, if any, due in respect of Securities issued under this Indenture; or

 

(x) hereafter granted upon or in respect of any asset of the Guarantor other than those referred to in clauses (i) through (ix) above, provided that the aggregate amount of Indebtedness secured pursuant to this clause (x) shall not, on the date any such Indebtedness is incurred, exceed an amount equal to 10% of the Guarantor’s stockholders’ equity (calculated on the basis of the Guarantor’s latest quarterly unaudited or annual audited non-consolidated financial statements, whichever is the most recently prepared, in accordance with Reporting GAAP and currency exchange rates prevailing on the last day of the period covered by such financial statements).

 

6

 

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

 

“Place of Payment” when used with respect to the Securities of any series and subject to Section 10.2, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.6.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.5 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

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

 

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

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.5.

 

“Reporting GAAP” means generally accepted accounting principles in effect in the United States of America; provided, however, that for any period or date for which the Company uses International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board (“IASB”) as its primary reporting or accounting standard in its reports filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, “Reporting GAAP” means IFRS.

 

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

 

“Repurchase Price” when used with respect to any Security to be repurchased, means the price at which it is to be repurchased pursuant to this Indenture as set forth in such Security.

 

“Responsible Officer” when used with respect to the Trustee, means any officer of the Trustee having direct responsibility for the administration of this Indenture, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restricted Property” with respect to any series of Securities issued hereunder, means (a) the interest of the Guarantor in any (i) mineral property or concession, authorization or other legal right granted in respect of minerals by any governmental authority, (ii) manufacturing or processing plant, building, structure or other facility used in connection with the processing, refining or manufacturing of minerals, metals or fertilizer nutrients, together with the land upon which it is erected and fixtures comprising a part thereof, or (iii) railroad, marine terminal or port, whether owned as of the date of the issuance of Securities of such Series or thereafter acquired or constructed and (b) any shares of capital stock owned by the Guarantor of a Subsidiary that has interests in the kinds of property described in clauses (i), (ii) or (iii) of (a) above.

 

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“Securities” has the meaning stated in the third recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. All references herein to the Securities shall be deemed to include the Guaranty of the Securities, which is an integral part thereof.

 

“Securities Act” means the U.S. Securities Act of 1933 and any successor statute thereto.

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 3.4.

 

“Significant Subsidiary” shall mean, at any time, a Subsidiary of which the Guarantor’s and its other Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds 10% of the total assets of the consolidated group as of the end of the most recently completed fiscal year.

 

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.6.

 

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

 

“Subsidiary” shall mean any entity of which the Guarantor directly or indirectly owns more than 51% of the outstanding voting shares, and the Guarantor has the ability to elect a majority of the members of the board of directors or other governing body.

 

“Successor Corporation” has the meaning specified in Section 8.1.1.

 

“Successor Jurisdiction” means the jurisdiction, other than Brazil or the Cayman Islands, in which a Successor Corporation is incorporated or considered to be resident.

 

“Transfer” of any Security means any sale, pledge, transfer, hypothecation or other disposition of such Security or any interest therein.

 

“Trust Indenture Act” means the U.S. Trust Indenture Act of 1939 and any successor statute thereto.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. Each Trustee shall be a Person that (i) is eligible pursuant to the Trust Indenture Act to act as such, (ii) has a combined capital and surplus of at least $50,000,000, (iii) is subject to supervision or examination by Federal or State authority, (iv) has a long-term unsecured debt rating with respect to U.S. dollar obligations of at least A2 or its equivalent rating by Moody’s and (v) has its Corporate Trust Office in the United States.

 

“United States” or “U.S.” means the United States of America (including the States thereof and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.

 

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1.2                               Compliance Certificates and Opinions

 

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

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 10.4) shall include,

 

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

 

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

 

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

 

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

 

1.3                               Form of Documents Delivered to Trustee

 

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

 

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

 

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

 

1.4                               Acts of Holders; Record Dates

 

1.4.1                     Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by

 

9

 

agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company and the Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee, the Company and the Guarantor, if made in the manner provided in this Section.

 

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

 

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

 

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

 

1.4.5                     The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

 

1.4.6                     The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7.2 or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective

 

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hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action (whereupon the record date previously set shall automatically and without any action by any Person be canceled and of no effect), nor shall anything in this paragraph be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

 

1.4.7                     With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day, provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

 

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

 

1.5                               Notices, Etc., to Trustee, Company and Guarantor

 

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

 

1.5.1                     the Trustee by any Holder or by the Company or Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (which may be by facsimile) to or with the Trustee at its Corporate Trust Office, or

 

1.5.2                     (i) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to both the Company and the Guarantor and (ii) the Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to both the Guarantor and the Company, in either case addressed to it at the address specified below or at any other address previously furnished in writing to the Trustee by the Company or the Guarantor:

 

Avenida Graça Aranha, No. 26, 17° Andar

20030-900 Rio de Janeiro, RJ, Brazil

Attention: Financial Director

Fax:     011-5521-3814-4679

Tel:     011-5521-3814-4726

 

with a copy to:

 

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Attention: General Counsel

Fax:     011-5521-3814-9921

Tel:     011-5521-3814-4566

 

1.5.3                     The Trustee may rely upon and comply with instructions or directions sent via unsecured   facsimile or email transmission and the Trustee shall not be liable for any loss, liability or expense of any kind incurred by any Person due to the Trustee’s reliance upon and compliance with instructions or directions given by unsecured facsimile or email transmission, provided, however, that such losses have not arisen from the gross negligence or willful misconduct of the Trustee, it being understood that the failure of the Trustee to verify or confirm that the person providing the instructions or directions, is, in fact, an authorized person does not constitute negligence or willful misconduct.

 

1.6                               Notice to Holders; Waiver

 

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

 

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

 

Notwithstanding the provisions of this Section 1.6, in case any series of Securities are listed in any stock exchange, a notice to holders of such Securities given in accordance with the rules and procedures of such stock exchange shall be regarded as a valid notice under this Section 1.6.

 

1.7                               Conflict with Trust Indenture Act

 

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

 

1.8                               Effect of Headings and Table of Contents

 

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

 

1.9                               Successors and Assigns

 

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

 

1.10                        Separability Clause

 

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

 

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1.11                        Benefits of Indenture

 

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

 

1.12                        Governing Law/Waiver of Jury Trial

 

THIS INDENTURE, THE SECURITIES AND THE GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

EACH OF THE PARTIES HERETO AND EACH HOLDER OF A SECURITY BY ITS ACCEPTANCE THEREOF HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

1.13                        Legal Holidays

 

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date or at the Stated Maturity, as the case may be; provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

 

1.14                        Consent to Service; Jurisdiction

 

The Company, the Guarantor and the Trustee agree that any legal suit, action or proceeding arising out of or relating to this Indenture, and the Company and the Guarantor agree that any legal suit, action or proceeding arising out of or relating to the Securities, may be instituted in any federal or state court in the Borough of Manhattan, The City of New York, in respect of actions brought against each such party as a defendant, and each waives any objection which it may now or hereafter have to the laying of the venue of any such legal suit, action or proceeding, waives any immunity, to the extent permitted by law, from jurisdiction or to service of process in respect of any such suit, action or proceeding, waives any right to which it may be entitled on account of place of residence or domicile and irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding. The Company and the Guarantor further submit to the jurisdiction of the courts of their own corporate domiciles in any legal suit, action or proceeding arising out of or relating to this Indenture or the Securities. The Company and the Guarantor hereby designate and appoint CT Corporation System located at 111 Eighth Avenue, New York, New York, 10011, as their authorized agent upon which process may be served in any legal suit, action or proceeding arising out of or relating to this Indenture or the Securities which may be instituted in any federal or state court in the Borough of Manhattan, The City of New York, New York, and agree that service of process upon such agent, and written notice of said service to the Company or the Guarantor, as the case may be, by the Person serving the same, shall be deemed in every respect effective service of process upon the Company or the Guarantor in any such suit, action or proceeding and further designate the domicile of CT Corporation System specified above and any domicile CT Corporation System may have in the future as their domicile to receive service of process. If for any reason CT Corporation System (or any successor agent for this purpose) shall cease to act as agent for service of process as provided above, the Company and the Guarantor will promptly appoint a successor agent for this purpose reasonably acceptable to the Trustee. The Company and the

 

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Guarantor agree to take any and all actions as may be necessary to maintain such designation and appointment of such agent in full force and effect.

 

1.15                        Language of Notices, Etc.

 

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

 

2                                         Security Forms

 

2.1                               Forms Generally

 

The Securities and the Trustee’s certificates of authentication shall be in substantially the forms set forth in this Article or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereof or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of such board and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities.

 

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

 

2.2                               Form of Face of Security

 

The following legends shall appear on the face of each Global Security:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN SECTION 3.4.2. OF THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

The following legend shall appear on the face of each Global Security for which The Depository Trust Company is to be the Depositary:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION

 

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OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

VALE OVERSEAS LIMITED

[                                     ]

GUARANTEED BY VALE S.A.

 

No. [            ]

CUSIP No. [            ]                                                                                                                           $     [            ]

 

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

 

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

 

Payment of the principal of [(and premium, if any)] and [if applicable, insert — any such] interest on this Security will be made pursuant to the Applicable Procedures of the Depositary as permitted in the Indenture, provided, however, that if this Security is not a Global Security, payment may be made at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United States as at the time of payment 

 

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is legal tender for payment of public and private debts, upon surrender of this Security in the case of any payment due at the Maturity of the principal thereof (other than any payment of interest payable on an Interest Payment Date); and provided, further, that at the option of the Company, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

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

 

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

 

In Witness Whereof, the Company has caused this instrument to be duly executed.

 

Dated: [                    ]

 

VALE OVERSEAS LIMITED

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

The undersigned hereby irrevocably and unconditionally guarantees the full and punctual payment (whether at the Stated Maturity, upon redemption, purchase pursuant to an offer to purchase or acceleration or otherwise) of the principal, premium, interest, Additional Amounts and all other amounts that may come due and payable under this Security.

 

In Witness Whereof, the Guarantor has caused this instrument to be duly endorsed.

 

VALE S.A.

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

2.3                               Form of Reverse of Security

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more tranches of one or more series under an Indenture,  as of                            (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), among the Company, Vale S.A., as Guarantor (herein called the “Guarantor”) and The Bank of New York Mellon, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders

 

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of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The full and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under, this Security is guaranteed by the Guarantor. This Security is one of the series designated on the face hereof [if applicable, insert — , limited in aggregate principal amount to $[            ]].

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than [            ] days’ nor more than [            ] days’ notice, at any time [if applicable, insert — on or after [            ], 20[ ]], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before [            ], [        ]%, and if redeemed] during the 12-month period beginning [            ] of the years indicated,

 

	
Year
    	
 
    	
Redemption Price
    	
 
    	
Year
    	
 
    	
Redemption Price
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

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

 

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

 

[If the Security is not subject to redemption, insert—This Security is not redeemable prior to Stated Maturity.]

 

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

 

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

 

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

 

All payments in respect of the Securities shall be made without withholding or deduction for any present or future taxes, duties, assessments or other governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Cayman Islands, Brazil or any Successor Jurisdiction or any authority therein or thereof having power to tax (“Foreign Taxes”), except to the extent that such Foreign Taxes are required by the

 

17

 

 

Cayman Islands, Brazil, such Successor Jurisdiction or any such authority to be withheld or deducted. In the event of any withholding or deduction for any Foreign Taxes, the Company or the Guarantor, as the case may be, shall make such deduction or withholding, make payment of the amount so withheld to the appropriate governmental authority and pay such additional amounts (“Additional Amounts”) as are necessary to ensure that the net amounts received by the Holders of Securities after such withholding or deduction equals the respective amounts of principal, [premium] and interest which would have been receivable in respect of such Securities had no such withholding or deduction (including for any Foreign Taxes payable in respect of Additional Amounts) been required, except that no such Additional Amounts shall be payable with respect to any payment on a Security:

 

(i)         to, or to a third party on behalf of, a Holder who is liable for any such taxes, duties, assessments or other governmental charges in respect of such Security by reason of (A) a connection between the Holder and the Cayman Islands or Brazil other than the mere holding of such Security and the receipt of payments with respect to such Security or (B) failure by the Holder to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with the Cayman Islands, Brazil or a Successor Jurisdiction, or applicable political subdivision or authority thereof or therein having power to tax, of such Holder, if compliance is required by such Successor Jurisdiction, or any political subdivision or authority thereof or therein having power to tax as a precondition to exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and the Company has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or other requirement;

 

(ii)        in respect of any such taxes, duties, assessments or other governmental charges with respect to a Security surrendered (if surrender is required) more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for and notice thereof given to Holders, whichever occurs later, except to the extent that the Holder of such Security would have been entitled to such Additional Amounts on surrender of such Security for payment on the last day of such 30-day period;

 

(iii)       in respect of estate, inheritance, gift, sales, transfer, personal property or similar tax, assessment or governmental charge imposed with respect to a Security;

 

(iv)       in respect of any tax, assessment or other governmental charge payable otherwise than by deduction or withholding from payments on any series of Securities or by direct payment by the Company or the Guarantor in respect of claims made against the Company or the Guarantor;

 

(v)        where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or any law implementing or complying with, or introduced in order to conform to, such directive; or

 

(vi)       in respect of any combination of the above.

 

For purposes of the provisions described in clause (i) above, the term “Holder” of any Security means the direct nominee of any beneficial owner of such Security, which holds such beneficial owner’s interest in such Security. Notwithstanding the foregoing, the limitations on the Company’s or the Guarantor’s obligation to pay Additional Amounts set forth in clause (i) above shall not apply if the provision of information, documentation or other evidence described in such clause (i) would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a Holder or beneficial owner of a Security (taking into account any relevant differences between U.S. and Cayman Islands or Brazilian law, regulation or administrative practice) than comparable information or other reporting requirements 

 

18

 

imposed under U.S. tax law (including tax treaties between the United States and the Cayman Islands or Brazil), regulation (including proposed regulations) and administrative practice.

 

The Company or the Guarantor, as the case may be, shall promptly provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Foreign Taxes in respect of which the Company or the Guarantor has paid any Additional Amounts. Copies of such documentation shall be made available to the Holders of the Securities or the Paying Agent, as applicable, upon request therefor.

 

The Company or the Guarantor, as the case may be, shall pay all stamp, issue, registration, documentary or other similar duties, if any, which may be imposed by the Cayman Islands or Brazil or any governmental entity or political subdivision therein or thereof, or any taxing authority of or in any of the foregoing, with respect to the Indenture or the issuance of the Securities or the Guaranties.

 

All references herein or in the Indenture to principal, premium or interest in respect of any Security or Guaranty shall be deemed to include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

 

In the event that Additional Amounts actually paid with respect to the Securities pursuant to the preceding paragraph are based on rates of deduction or withholding of taxes in excess of the appropriate rate applicable to the Holder of such Securities, and, as a result thereof such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Securities, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Company and the Guarantor. However, by making such assignment, the Holder makes no representation or warranty that the Company or the Guarantor will be entitled to receive such claim for a refund or credit and incurs no other obligation with respect thereto.

 

All references in the Indenture and the Securities to principal in respect of any Security shall be deemed to mean and include any Redemption Price or Repurchase Price payable in respect of such Security pursuant to any redemption or repurchase right hereunder (and all such references to the Stated Maturity of the principal in respect of any Security shall be deemed to mean and include the Redemption Date or Repurchase Date with respect to any such Redemption Price or Repurchase Price), and all such references to principal, premium, interest or Additional Amounts shall be deemed to mean and include any amount payable in respect hereof pursuant to Section 10.7 of the Indenture, and express mention of the payment of any Redemption Price, or Repurchase Price or any such other amount in any provision hereof or of the Indenture shall not be construed as excluding reference to the payment of any Redemption Price or Repurchase Price, or any such other amounts in those provisions hereof where such express reference is not made.

 

The Company may redeem the Securities if, as a result of any amendment to, or change in, the laws (or any rules, or regulations thereunder) of the Cayman Islands or Brazil or any political subdivision or taxing authority thereof or therein affecting taxation or any amendment to or change in an official interpretation, administration or application of such laws, rules, or regulations (including a holding by a court of competent jurisdiction), which amendment or change of such laws, rules, or regulations or the interpretation thereof becomes effective on or after [Insert date specified therefor in Securities of the applicable series], the Company would be obligated, after taking measures the Company considers reasonable to avoid such requirement, to pay Additional Amounts in excess of the Additional Amounts that the Company would be obligated to pay if payments made on the Securities were subject to 

 

19

 

withholding or deduction of Foreign Taxes at the rate of 15%. In such event, the Securities are subject to redemption upon not less than 30 nor more than 60 days’ notice by mail, at any time, as a whole but not in part, at the election of the Company, at a cash price equal to the sum of (i) the principal amount of the Securities being redeemed, (ii) any accrued original issue discount thereon to the date fixed for redemption, (iii) accrued and unpaid current interest thereon to the date fixed for redemption, (iv) any premium applicable in the case of redemption prior to Maturity, and (v) any Additional Amounts (as defined in the Indenture) which would otherwise be payable.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture, on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any [premium or] interest hereon on or after the respective due dates expressed herein.

 

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

 

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

 

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The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

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

 

Prior to due surrender of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

 

[If this Security is a Global Security, insert - This Security is a Global Security and is subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 3.4 thereof on transfers and exchanges of Global Securities.]

 

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

 

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

 

Abbreviations

 

The following abbreviations, when used in the inscription of the face of this Security, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM-as tenants in common
 TEN ENT-as tenants by the [            ] entireties
 JT TEN -as joint tenants with right of
 survivorship and not as tenants in common

 

UNIF GIFT MIN ACT—                (Cust)
 Custodian                  under Uniform(Minor)
 Gifts to Minors Act                  (State)

 

Additional abbreviations may also be used though not in the above list.

 

2.4          Form of Trustee’s Certificate of Authentication

 

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

 

Dated: [                         ]

THE BANK OF NEW YORK MELLON,

as Trustee

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized Officer
    	
 
    

 

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3              The Securities

 

3.1          Amount Unlimited; Issuable in Series

 

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

 

The Securities may be issued in one or more tranches of one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

 

3.1.1       the title of the Securities, including CUSIP Numbers, of the series (which shall distinguish the Securities of the series from Securities of any other series);

 

3.1.2       any limit upon the aggregate principal amount of the Securities which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 9.6 or 11.5 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder);

 

3.1.3       the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

 

3.1.4       the date or dates on which the principal of the Securities of the series is payable;

 

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

 

3.1.6       the place or places where the principal of and any premium and interest on Securities of the series shall be payable and the manner in which any payment may be made;

 

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

 

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

 

3.1.9       the rights, if any, of the Holders of the series to demand exchange of their Securities for Securities subject to a registration statement under the Securities Act declared effective by the Commission;

 

3.1.10     if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

 

3.1.11     if other than the currency of the United States, the currency, currencies or currency units in which payment of the principal of and any premium and interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States for purposes of the definition of “Outstanding” in Section 1.1;

 

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3.1.12     if the amount of payments of principal of or any premium or interest on any Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined;

 

3.1.13     if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or a Holder thereof, in one or more currencies or currency units other than that or those in which the Securities are stated to be payable, the currency, currencies or currency units in which payment of the principal of and any premium and interest on Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;

 

3.1.14     if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

 

3.1.15     any collateral or other security pledged against payment of principal, interest or premium, if any, on the Securities;

 

3.1.16     the applicability, non-applicability, or variation, of Section 10.7 with respect to the Securities of such series;

 

3.1.17     if and as applicable, that the Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the Depositary or Depositaries for such Global Security or Global Securities and any circumstances other than those set forth in Section 3.4 in which any such Global Security may be transferred to, and registered and exchanged for Securities registered in the name of, a Person other than the Depositary for such Global Security or a nominee thereof and in which any such transfer may be registered;

 

3.1.18     the terms and conditions, if any, pursuant to which the Securities are convertible into or exchangeable for any other securities;

 

3.1.19     any addition to or change in the covenants set forth in Article 10 which applies to the Securities of the series;

 

3.1.20     the applicability of Article 13 with respect to the Securities of such series; and

 

3.1.21     any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1.5).

 

All Securities of any one series shall be substantially identical except as to issue price and first payment of interest.

 

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

 

Notwithstanding Section 3.1.2 herein and unless otherwise expressly provided with respect to a series of Securities, the aggregate principal amount of a series of Securities may be increased and additional Securities of such series may be issued up to the maximum aggregate principal amount authorized with respect to such series as increased.

 

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3.2          Denominations

 

The Securities shall be issuable only in registered form without coupons and, unless otherwise specified as contemplated by Section 3.1.10, only in denominations of $1,000 and any integral multiple thereof.

 

3.3          Execution, Authentication, Delivery and Dating

 

The Securities shall be executed on behalf of the Company by any two of its Directors or its attorneys in fact in accordance with its bylaws. The Guaranty on the Securities shall be endorsed on behalf of the Guarantor by any two of its officers or its attorneys in fact in accordance with its bylaws. The signature of any of these Directors or officers or attorneys in fact on the Securities or the Guaranty may be manual or facsimile.

 

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

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company and properly endorsed by the Guarantor to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

3.3.1       if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture;

 

3.3.2       if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture;

 

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

 

3.3.4       that the Guaranty, when the Securities upon which it shall have been endorsed shall have been authenticated and delivered by the Trustee and when properly endorsed by the Guarantor in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Guarantor enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar

 

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laws of general applicability relating to or affecting creditors’ rights and the general equity principles.

 

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if, in the opinion of counsel to the Trustee, the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture.

 

Notwithstanding the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued and in that case the Trustee may rely, as to the authorization by the Company and the Guarantor of any of such Securities and the Guaranty, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and the other documents delivered pursuant to Sections 2.1 and 3.1 and this Section, as applicable, in connection with the first authentication of Securities of such series.

 

Each Security shall be dated the date of its authentication.

 

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

 

Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.8, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

3.4          Registration, Registration of Transfer and Exchange

 

The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register for each series of Securities (the registers maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers and exchanges of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and registering transfers and exchanges of Securities as herein provided; provided, however, that the Company may appoint co-Security Registrars. Such Security Register shall be in written form or in any other form capable of being converted into written form within a reasonable period of time. At all reasonable times the Security Register shall be open for inspection by the Company.

 

Upon surrender for registration of transfer of any Security of any series at the office or agency of the Company maintained for such purpose, the Company shall execute and the Guarantor shall endorse, and the Trustee shall authenticate and deliver, in the name of the designated transferee, one or more new Securities of the same series of any authorized denomination or denominations of like tenor and aggregate principal amount.

 

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Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for the individual Securities represented thereby, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.

 

At the option of the Holder and subject to the other provisions of this Section, Securities of any series (other than a Global Security, except as set forth below) may be exchanged for other Securities of the same series of any authorized denomination or denominations of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at the office or agency of the Company maintained for such purpose.

 

Whenever any Securities are so surrendered for exchange, the Company shall execute and the Guarantor shall endorse, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 9.6 or 11.5 not involving any registration of transfer.

 

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

 

If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 11.2 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

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

 

The provisions of Sections 3.4.1, 3.4.2, 3.4.3, 3.4.4 and 3.4.5 below shall apply only to Global Securities:

 

3.4.1       Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

 

3.4.2       Notwithstanding any other provision in this Indenture or the Securities, no Global Security of a series may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security of a series in whole or in part may be registered, in the name of any Person other than the Depositary or a nominee thereof unless (A) the Depositary for the Securities of a series notifies the

 

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Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series ceases to be a clearing agency registered under the Exchange Act, at a time when such Depositary is required to be so registered in order to act as depositary, and in each case, a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility or (B) the Company in its sole discretion determines that individual Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute and the Guarantor will endorse, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Securities of such series, will authenticate and deliver, individual Securities of such series in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing Securities of such series in exchange for such Global Security or Securities. Any Global Security exchanged pursuant to clause (A) above shall be so exchanged in whole and not in part and any Global Security exchanged pursuant to clause (B) above may be exchanged in whole or from time to time in part as directed by the Depositary. Any Security issued in exchange for a Global Security or any portion thereof shall be a Global Security, provided that any such Security so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Security.

 

3.4.3                     In any exchange pursuant to Section 3.4.2 above, the Company will execute and the Guarantor will endorse and the Trustee will authenticate and deliver individual Securities in registered form in authorized denominations. Upon the exchange of a Global Security for individual Securities, such Global Security shall be canceled by the Trustee. Individual Securities issued in exchange for a Global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.

 

If specified by the Company pursuant to Section 3.4.2(B) with respect to a series of Securities, the Depositary for such series of Securities may surrender a Global Security for such series of Securities in exchange in whole or in part for individual Securities of such series on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Guarantor shall endorse, and the Trustee shall authenticate and deliver, without service charge, (i) to each Person specified by such Depositary a new individual Security or Securities of the same series, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Global Security; and (ii) to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of individual Securities delivered to Holders thereof.

 

3.4.4       In the event of the occurrence of any of the events specified in Section 3.4.2 above, the Company will promptly make available to the Trustee a reasonable supply of certificated Securities in definitive, fully registered form, without interest coupons.

 

3.4.5       Neither any members of, or participants in, the Depositary (“Agent Members”) nor any other Persons on whose behalf Agent Members may act (including Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) and account holders and participants therein) shall have any rights under this Indenture with respect to any Global Security, or under any Global Security, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other person on

 

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whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Security.

 

3.4.6                     None of the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

3.5                               Mutilated, Destroyed, Lost and Stolen Securities

 

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

 

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

 

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security upon compliance with the foregoing provisions.

 

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

 

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

 

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

 

3.6                               Payment of Interest; Interest Rights Preserved

 

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

 

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Section 3.6.1 or 3.6.2 below:

 

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3.6.1                     The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Section provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Section 3.6.2.

 

3.6.2                     The Company may make payment of any Defaulted Interest on the Securities of any series to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Section, such manner of payment shall be deemed practicable by the Trustee.

 

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

 

3.7                               Persons Deemed Owners

 

Prior to due surrender of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.6) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary.

 

3.8                               Cancellation

 

All Securities surrendered for payment, redemption, repurchase, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly

 

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permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of in accordance with its customary procedures, unless otherwise directed by a Company Order.

 

3.9                               Computation of Interest

 

Unless otherwise specified under Section 3.1 with respect to the Securities of a particular series, interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.

 

3.10                        CUSIP or “ISIN” Numbers

 

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

 

4                                         Satisfaction And Discharge

 

4.1                               Satisfaction and Discharge of Indenture

 

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

 

4.1.1                     either

 

(i)         all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.5 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or

 

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

 

(a)                                  have become due and payable, or

 

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

 

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

 

and the Company, in the case of (i) or (ii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity, Redemption Date or Repurchase Date, as the case may be;

 

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

 

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

 

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company and the Guarantor to the Trustee under Section 6.7, the obligations of the Company and the Guarantor to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to clause (ii) of Section 4.1.1 of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive such satisfaction and discharge.

 

4.2                               Application of Trust Money

 

Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee.

 

5                                         Remedies

 

5.1                               Events of Default

 

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

 

5.1.1                     a failure to pay any interest (or Additional Amounts, if any) on any of the Securities of the series on the date when due and such failure shall continue for a period of 30 days;

 

5.1.2                     a failure to pay any principal or premium, if any, (or Additional Amounts, if any) on any of the Securities of the series on the date when due;

 

5.1.3                     any default or event of default by the Company or the Guarantor or any Significant Subsidiary occurring and continuing under any agreement, instrument or other document evidencing outstanding Indebtedness in excess of $100,000,000 in aggregate (or its equivalent in other currencies) and such default or event of default results in the actual acceleration of such Indebtedness;

 

5.1.4                     the Company or the Guarantor shall fail to perform or observe any other covenant or agreement in respect of the Securities of the series issued under this Indenture or in a supplemental indenture (other than a covenant which has been expressly included in this Indenture solely for the benefit of series of Securities other than that series) and such failure shall continue for a period of 60 days after there has been given by registered or certified international air mail to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default and requiring it to be remedied and stating that such notice is a “Notice of Default;”

 

5.1.5                     the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company, the Guarantor or any Significant Subsidiary in an involuntary case or proceeding

 

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under any applicable bankruptcy, insolvency, suspension of payments, reorganization or other similar law, or (B) a decree or order adjudging the Company, the Guarantor or any Significant Subsidiary a bankrupt or insolvent, or suspending payments, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company, the Guarantor or any Significant Subsidiary under any applicable law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company, the Guarantor or any Significant Subsidiary or of any substantial part of the property of the Company, the Guarantor or any Significant Subsidiary, or ordering the winding up or liquidation of the affairs of the Company, the Guarantor or any Significant Subsidiary, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days;

 

5.1.6                     the commencement by the Company, the Guarantor or any Significant Subsidiary of a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization, winding-up or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company, the Guarantor or any Significant Subsidiary to the entry of a decree or order for relief in respect of the Company, the Guarantor or any Significant Subsidiary in an involuntary case or proceeding under any applicable bankruptcy, insolvency, suspension of payments, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company, the Guarantor or any Significant Subsidiary, or the filing by the Company, the Guarantor, or any Significant Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable law or the consent by the Company, the Guarantor or any Significant Subsidiary to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company, the Guarantor or any Significant Subsidiary or of any substantial part of the property of the Company, the Guarantor or any Significant Subsidiary, or the making by the Company, the Guarantor or any Significant Subsidiary of an assignment for the benefit of creditors, or the admission by the Company, the Guarantor or any Significant Subsidiary in writing of its inability to pay its debts generally as they become due or the taking of corporate action by the Company, the Guarantor or any Significant Subsidiary in furtherance of any such action (evidenced by the adoption of a corporate resolution in favor of any such actions or an action of any of the officers of the Company, the Guarantor or such Significant Subsidiary that similarly binds the Company, the Guarantor or such Significant Subsidiary, as the case may be), or the general inability of the Company, the Guarantor or any Significant Subsidiary to make payment of their obligations as they come due;

 

5.1.7                     any illegality event occurring and continuing under any of the Company’s Series A and Series B 8.625% Enhanced Guaranteed Notes due 2007, Series A and Series B 9% Guaranteed Notes due 2013, 6.25% Guaranteed Notes due 2016 or 8.25% Guaranteed Notes due 2034 (each “Prior Bonds”) outstanding in excess of $100,000,000 in aggregate and such illegality event results in the actual acceleration of such Prior Bonds; or

 

5.1.8                     a final judgment or judgments (not subject to appeal) determines the Guaranty to be unenforceable or invalid, or the Guaranty ceases for any reason to be valid and binding or enforceable against the Guarantor, or the Guarantor or any person acting on its behalf denies or disaffirms its obligations under the Guaranty.

 

5.2                               Acceleration of Maturity; Rescission and Annulment

 

If an Event of Default with respect to any series of Securities (other than those Events of Default in Sections 5.1.5 and 5.1.6 insofar as they relate to the Company and the Guarantor but not to a Significant Subsidiary of the Guarantor), occurs and is continuing, then and in every such case, including an Event of Default in Sections 5.1.5 and 5.1.6 relating to a Significant Subsidiary of the Guarantor, the Trustee shall, at the written request of the Holders of not less than 25% in principal amount of the Outstanding Securities of that series, by notice in writing to the Company, declare the principal of all the Securities of that series to be due and payable

 

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immediately, and upon any such declaration such principal and any accrued interest and any unpaid Additional Amounts thereon shall become immediately due and payable. If an Event of Default specified in Sections 5.1.5 and 5.1.6 occurs and is continuing with respect to the Company or the Guarantor (but not a Significant Subsidiary of the Guarantor), the principal and any accrued interest, together with any Additional Amounts thereon, on all of the Securities of that series then Outstanding shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

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

 

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

 

(i)         all overdue interest and any Additional Amounts thereon on all of the Securities of that series,

 

(ii)        the principal of any Securities of that series which have become due otherwise than by such declaration of acceleration,

 

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

 

(iv)       all sums paid or advanced by the Trustee hereunder and all amounts owing the Trustee under Section 6.7;

 

and

 

5.2.2                     all Events of Default with respect to such series of Securities, other than the non-payment of the principal of Securities which has become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.

 

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

 

5.3                               Collection of Indebtedness and Suits for Enforcement by Trustee

 

The Company covenants that if

 

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

 

5.3.2                     default is made in the payment of the principal (including any Redemption Price or Repurchase Price) of (or premium, if any, on) any Security at the Maturity thereof,

 

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate borne by (or prescribed therefor in) such Securities, together with any Additional Amounts thereon, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements

 

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and advances of the Trustee, its agents and counsel, and all amounts due the Trustee under Section 6.7.

 

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

 

5.4                               Trustee May File Proofs of Claim

 

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7.

 

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

 

5.5                               Trustee May Enforce Claims Without Possession of Securities

 

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

 

5.6                               Application of Money Collected

 

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

 

FIRST: To the payment of all amounts due the Trustee under Section 6.7;

 

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

 

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amounts due and payable on such Securities for principal and any premium and interest, respectively; and

 

THIRD: Any remaining amounts shall be repaid to the Company.

 

5.7                               Limitation on Suits

 

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

 

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

 

5.7.2                     the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

5.7.3                     such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

 

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

 

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

 

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

 

5.8                               Unconditional Right of Holders to Receive Principal, Premium and Interest

 

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.6) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption or repurchase, on the Redemption Date or Repurchase Date, as the case may be), and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

5.9                               Restoration of Rights and Remedies

 

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

 

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5.10                        Rights and Remedies Cumulative

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.5, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

5.11                        Delay or Omission Not Waiver

 

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

 

5.12                        Control by Holders

 

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

 

5.12.1              such direction shall not be in conflict with any rule of law or with this Indenture,

 

5.12.2              the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

 

5.12.3              subject to the provisions of Section 6.1, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability against which indemnity would not be satisfactory.

 

5.13                        Waiver of Past Defaults

 

Subject to Section 5.2, the Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past Event of Default hereunder with respect to such series and its consequences, except a default

 

5.13.1              in the payment of the principal of or any premium or interest on any Security of such series, or

 

5.13.2              in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

 

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

 

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5.14                        Undertaking for Costs

 

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

 

5.15                        Waiver of Usury, Stay or Extension Laws

 

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

 

6                                         The Trustee

 

6.1                               Certain Duties and Responsibilities

 

If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

Except during the continuance of an Event of Default the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

 

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Trustee shall not be liable for errors in judgment made in good faith unless the Trustee is negligent in ascertaining pertinent facts. The Trustee may act at the direction of the requisite Holders without liability. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

6.2                               Notice of Default; Potential Default

 

If the Trustee becomes aware of a default hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act (a “Notice of Default”). Specifically, the Trustee shall provide Notice of Default to each Holder promptly, but in no event later than within 15 days of being notified of the occurrence, and in the manner provided by Section 313(c) of the Trust Indenture Act or any successor section thereto, of any default of which the Trustee is aware. The Trustee shall also provide a notice to each Holder of any claim of default within 30 days of receiving a written assertion of such claim from Holders of no less than 10% of the aggregate principal amount of Securities then outstanding. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. If on the Business Day prior to an Interest Payment Date the Company has not deposited with the Trustee funds sufficient to pay the interest due on the next Interest Payment Date, then the Trustee shall provide written notice to the Guarantor of such failure.

 

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6.3                               Certain Rights of Trustee

 

Subject to the provisions of Section 6.1:

 

6.3.1                     the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

6.3.2                     any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution. Any request or direction of the Guarantor mentioned herein shall be sufficiently evidenced by a written request or direction signed on behalf of the Guarantor by any two of its officers or its attorneys in fact in accordance with its bylaws;

 

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

 

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

 

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

 

6.3.6                     the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document in connection with this Indenture, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;

 

6.3.7                     the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; provided that the Trustee shall be required to terminate any such agent if it has actual knowledge of any willful or negligent failure by such agent to perform its delegated duties;

 

6.3.8                     the Trustee shall not be deemed to have notice of any default or Event of Default unless written notice of any event which is in fact such a default or Event of Default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee from the Company, the Guarantor or any Holder, and such notice references the Securities and this Indenture;

 

6.3.9                     the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder;

 

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6.3.10              the Trustee may request that the Company or the Guarantor deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;

 

6.3.11              the permissive rights of the Trustee enumerated herein shall not be construed as duties;

 

6.3.12              in no event shall the Trustee be responsible or liable for special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and

 

6.3.13              the Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruption, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances.

 

6.4                               Not Responsible for Recitals or Issuance of Securities

 

Neither the Trustee nor any Authenticating Agent assume any responsibility for the correctness of the recitals contained herein and in the Securities, except the Trustee’s certificates of authentication. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company or the Guarantor of Securities or the proceeds thereof.

 

6.5                               May Hold Securities

 

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company and the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

6.6                               Money Held in Trust

 

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

 

6.7                               Compensation and Reimbursement

 

6.7.1                     The Company and the Guarantor, jointly and severally, agree to pay to the Trustee from time to time such compensation as shall be agreed in writing between the parties for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust).

 

6.7.2                     The Company and the Guarantor agree, except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable and itemized expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and

 

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counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct.

 

6.7.3                     The Guarantor agrees to fully indemnify each of the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all losses, liabilities, damages, claims or expenses incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the Company, a Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.

 

When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1.5 or Section 5.1.6, the expenses (including the reasonable and documented charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law.

 

As security for the performance of the obligations of the Company and the Guarantor under this Section, the Trustee shall have a claim prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (premium, if any) or interest on such Securities.

 

The provisions of this Section shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture.

 

6.8                               Conflicting Interests

 

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series.

 

6.9                               Corporate Trustee Required; Eligibility

 

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be a Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that (i) is eligible pursuant to the Trust Indenture Act to act as such, (ii) has a combined capital and surplus of at least $50,000,000, (iii) is subject to supervision or examination by Federal or State authority, (iv) has a long-term unsecured debt rating with respect to U.S. dollar obligations of at least A2 or its equivalent rating by Moody’s and (v) has its Corporate Trust Office in the United States. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

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6.10                        Resignation and Removal; Appointment of Successor

 

No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

 

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 45 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

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

 

If at any time:

 

6.10.1              the Trustee shall fail to comply with Section 6.8 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

6.10.2              the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

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

 

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

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The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

6.11                        Acceptance of Appointment by Successor

 

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

 

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

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

 

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

 

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6.12                        Merger, Conversion, Consolidation or Succession to Business

 

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

 

6.13                        Preferential Collection of Claims Against Company

 

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

 

6.14                        Appointment of Authenticating Agent

 

The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer, or partial redemption or pursuant to Section 3.5, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, have a combined capital and surplus of at least $100,000,000, be subject to supervision or examination by Federal or State authority and have a long-term unsecured debt rating with respect to U.S. dollar obligations of at least A2 or its equivalent rating by Moody’s. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

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

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time

 

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such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Company and the Guarantor agree to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

 

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

 

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

 

The Bank of New York Mellon, as Trustee

 

	
By:
    	
 
    	
 
    
	
 
    	
as   Authenticating Agent
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Officer
    	
 
    

 

6.15                        Appointment of Luxembourg Transfer Agent

 

For so long as the rules of the Luxembourg Stock Exchange so require, the Company and the Guarantor shall appoint and maintain a transfer agent located in Luxembourg with respect to Securities listed on the Luxembourg Stock Exchange.

 

The Company and the Guarantor agree to pay to each such agent from time to time reasonable compensation for its services under this Section.

 

6.16                        Trustee’s Application for Instructions from the Company

 

Any application by the Trustee for written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than five Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

 

7                                         Holders’ Lists and Reports by Trustee and Company

 

7.1                               Company to Furnish Trustee Names and Addresses of Holders

 

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

 

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7.1.1                     semi-annually, not more than 15 days after each Regular Record Date with respect to each series of Securities, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of such series as of such Regular Record Date, and

 

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

 

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

 

7.2                               Preservation of Information; Communications to Holders

 

7.2.1                     The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.

 

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

 

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

 

7.3                               Reports by Trustee

 

Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Securities remain outstanding, the Trustee will mail to the Holders of the Securities a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the 12 months preceding the reporting date, no report need be transmitted). The Trustee shall also comply with TIA Sections 313(b)(1) and 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

 

 

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8                                         Consolidation, Merger, Conveyance, Transfer or Lease

 

8.1                               Company and Guarantor May Consolidate, Etc. Only on Certain Terms

 

Neither the Company nor the Guarantor shall, without the consent of the Holders of a majority in aggregate principal amount of the Securities in accordance with this Indenture, consolidate with or merge into any other corporation or (x) in the case of the Company, convey or transfer all or substantially all of its properties or assets to any other Person or (y) in the case of the Guarantor, convey or transfer all or substantially all of its mining properties or assets to any other Person, unless:

 

8.1.1                     the corporation formed by such consolidation or into which the Company or Guarantor is merged or the Person which acquires by conveyance or transfer all or substantially all of the properties or assets of the Company or all or substantially all of the mining properties or assets of the Guarantor (the “Successor Corporation”) shall expressly assume, by a supplemental indenture pursuant to this Indenture, the due and punctual repayment of the principal and interest on all the Securities and all other obligations of the Company or the Guarantor, as applicable, under the Indenture and the Securities;

 

8.1.2                     immediately after giving effect to such transaction, no Event of Default with respect to any Security shall have occurred and be continuing;

 

8.1.3                     the Company and the Guarantor have delivered to the Trustee (a) a certificate signed by two executive officers of the Company and two executive officers of the Guarantor stating that such consolidation, merger, conveyance or transfer and such supplemental indenture, if any, comply with this Article and that all conditions precedent herein provided, which relate to such transaction, have been complied with and (b) an Opinion of Counsel of recognized standing stating that such consolidation, merger, conveyance or transfer and such supplemental indenture, if any, comply with this Article and that all conditions herein provided, which relate to such transaction, have been complied with; and

 

8.1.4                     the Successor Corporation shall expressly agree to withhold against any tax, duty, assessment or other governmental charge thereafter imposed or levied by Brazil, the Cayman Islands, a Successor Jurisdiction or any political subdivision or authority thereof or therein having power to tax as a consequence of such consolidation, merger, conveyance or transfer with respect to the payment of principal of or interest on the Securities, and to pay such Additional Amounts as may be necessary to ensure that the net amounts receivable by Holders after any withholding or deduction of any such tax, assessment, duty or other governmental charge shall equal the respective amounts of principal, premium (if any) and interest which would have been receivable in respect of the Securities in the absence of such consolidation, merger, conveyance or transfer; provided, however, that Holders will not be subject to the exceptions and limitations contained in Section 10.7 in relation to the Successor Jurisdiction.

 

8.2                               Successor Substituted

 

Upon any consolidation, merger, conveyance, or transfer in accordance with this Article, the Successor Corporation shall succeed to, and be substituted for, and may exercise every right and power of the Company or the Guarantor, as applicable, under the Securities with the same effect as if the Successor Corporation had been named as the issuer or guarantor of the Securities herein.

 

8.3          Right to Redemption

 

No Successor Corporation shall have the right to redeem the Securities unless the Company and the Guarantor would have been entitled to redeem the Securities in similar circumstances.

 

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8.4                               Assumption by Guarantor of Company’s Obligations

 

8.4.1                                     The Guarantor may assume the obligations of the Company for the due and punctual payment of the principal of (and premium, if any), interest on and any other payments with respect to the Securities and the Indenture and for the performance of every covenant of this Indenture and the Securities on the part of the Company to be performed or observed, provided that:

 

(1) the Guarantor shall expressly assume, by an indenture supplemental hereto executed and delivered to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed. The Guarantor’s assumption of these obligations must include the obligation to pay the additional amounts described in Section 10.7 “Payment of Additional Amounts”;

 

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

 

(3) the Guarantor has delivered to the Trustee (x) a certificate signed by two executive officers of the Guarantor and (y) an Opinion of Counsel of recognized standing, each stating that the assumption and supplemental indenture comply with this Section 8.4.

 

Such assumption shall become automatically effective and immediately effective upon execution and delivery to the Trustee of the supplemental indenture as set out in subsection (1) herein.  Upon any such assumption, the Guarantor shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if the Guarantor had been named as the “Company”, and the Company or any successor Person which shall theretofore have become such in the manner prescribed in this Section 8 shall be released from its liability as obligor upon the Securities or any coupons appertaining thereto.

 

8.4.2                                     No vote by Holders of the Securities approving any of the actions set forth in this Section 8.4 is required, unless as part of the transaction the Company or the Guarantor make changes to the applicable indenture requiring approval of Holders of the Securities as set forth in Section 9.2 herein.

 

9                                         Supplemental Indentures

 

9.1                               Supplemental Indentures without Consent of Holders

 

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

 

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

 

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

 

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

 

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

 

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

 

9.1.6                     to secure the Securities pursuant to the requirements of Article 10 or otherwise; or

 

9.1.7                     to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

 

9.1.8                     to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or

 

9.1.9                     to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Section 9.1.9 shall not adversely affect the interests of the Holders of Securities of any series in any material respect.

 

9.2                               Supplemental Indentures or Waiver with Consent of Holders

 

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

 

9.2.1                     change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of any Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or modify in any way the Company’s or the Guarantor’s obligation to pay Additional Amounts pursuant to Section 10.7 or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, or repurchase on or after the Redemption Date or Repurchase Date), or

 

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9.2.2                     change the terms of payment from, or control over, or release or reduce any collateral or security interest that may be created or provided pursuant to Section 10.6 or any supplemental indenture to secure the payment of principal, interest or premium, if any, under any Security, except as allowed under the terms of any such supplemental indenture, or

 

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

 

9.2.4                     modify any of the provisions of this Section, Section 5.13 or Section 10.9, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 10.9, or the deletion of this proviso, in accordance with the requirements of Section 6.11.

 

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

 

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

 

9.3                               Execution of Supplemental Indentures

 

In executing, or accepting the additional trusts created by, any supplemental indenture or waiver permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, in addition to the documents required by Section 1.2, an Opinion of Counsel stating that the execution of such supplemental indenture or waiver is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture or waiver which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

9.4                               Effect of Supplemental Indentures

 

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

 

9.5                               Conformity with Trust Indenture Act

 

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

 

9.6                               Reference in Securities to Supplemental Indentures

 

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

 

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opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

9.7                               Effect of Waiver

 

A waiver shall be effective to waive compliance with the particular provision and for the particular instance for which the waiver was made and, until such waiver shall become effective, the obligations of the Company or the Guarantor and the duties of the Trustee in respect of any such provision shall remain in full force and effect.

 

9.8                               Notice to Luxembourg Stock Exchange

 

So long as any Securities of a series are listed on the Luxembourg Stock Exchange, the Company shall give notice to the Luxembourg Stock Exchange of any supplemental indenture or waiver of any covenant in regards such series effected pursuant to this Article 9.

 

10                                  Covenants

 

10.1                        Payment of Principal, Premium and Interest

 

The Company will duly and punctually pay the principal of and any premium and interest (together with any Additional Amounts payable thereon) on the Securities in accordance with the terms of the Securities and this Indenture.

 

10.2                        Maintenance of Office or Agency

 

With respect to any Global Security, and except as otherwise may be specified for such Global Security as contemplated by Section 3.1, the Corporate Trust Office of the Trustee shall be the Place of Payment where such Global Security may be presented or surrendered for payment or for registration of transfer or exchange, or where successor Securities may be delivered in exchange therefor; provided, however, that any such payment, presentation, surrender or delivery effected pursuant to the Applicable Procedures of the Depositary for such Global Security shall be deemed to have been effected at the Place of Payment for such Global Security in accordance with the provisions of this Indenture.

 

With respect to any Securities that are not in the form of a Global Security, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Company in respect of the Securities (in this case, without regard to the form of the Securities) and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Securities of one or more series, notices and other items may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes.

 

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The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

10.3                        Money for Security Payments To Be Held in Trust

 

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

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on the business day prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit in Dollars with a Paying Agent in New York, New York a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

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

 

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

 

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

 

10.4                        Statement by Officers as to Default

 

The Company and the Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company or the Guarantor is in default in the performance and observance of any of the terms, provisions and conditions of this

 

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Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company or the Guarantor shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

 

10.5                        Reports by Company and Guarantor

 

The Company (unless at the time no Outstanding Securities have been registered with the Commission pursuant to the Securities Act) and the Guarantor shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act.

 

Notwithstanding that the Guarantor may not be required to remain subject to the reporting requirements of Section 12, 13 or 15(d) of the Exchange Act, the Guarantor will continue to file with the Commission and provide the Trustee with such annual reports and such information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which are specified in Sections 12, 13 and 15(d) of the Exchange Act.

 

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 and the Guarantor’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

10.6                        Limitation on Liens

 

The Guarantor will not create, incur, issue or assume any Lien on or over any Restricted Property to secure Indebtedness, other than a Permitted Lien, without in any such case effectively providing that the Securities (together with, if the Guarantor shall so determine, any other Indebtedness of the Guarantor) shall be secured equally and ratably with or prior to such secured Indebtedness.

 

10.7                        Payment of Additional Amounts

 

10.7.1              All payments in respect of the Securities shall be made without withholding or deduction for any present or future taxes, duties, assessments or other governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Cayman Islands, Brazil or any Successor Jurisdiction or any authority therein or thereof having power to tax (“Foreign Taxes”), except to the extent that such Foreign Taxes are required by the Cayman Islands, Brazil, such Successor Jurisdiction or any such authority to be withheld or deducted. In the event of any withholding or deduction for any Foreign Taxes, the Company or the Guarantor, as the case may be, shall make such deduction or withholding, make payment of the amount so withheld to the appropriate governmental authority and pay such additional amounts (“Additional Amounts”) as are necessary to ensure that the net amounts received by the Holders of Securities after such withholding or deduction equals the respective amounts of principal, premium and interest which would have been receivable in respect of such Securities had no such withholding or deduction (including for any Foreign Taxes payable in respect of Additional Amounts) been required, except that no such Additional Amounts shall be payable with respect to any payment on a Security:

 

(i)                           to, or to a third party on behalf of, a Holder who is liable for any such taxes, duties, assessments or other governmental charges in respect of such Security by reason of (A) a connection between the Holder and the Cayman Islands or Brazil other than the mere holding of such Security and the receipt of payments with respect to such Security or (B) failure by the Holder to comply with any certification, identification or other reporting

 

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requirement concerning the nationality, residence, identity or connection with the Cayman Islands, Brazil or a Successor Jurisdiction, or applicable political subdivision or authority thereof or therein having power to tax, of such Holder, if compliance is required by such Successor Jurisdiction, or any political subdivision or authority thereof or therein having power to tax as a precondition to exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and the Company has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or other requirement;

 

(ii)                        in respect of any such taxes, duties, assessments or other governmental charges with respect to a Security surrendered (if surrender is required) more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for and notice thereof given to Holders, whichever occurs later, except to the extent that the Holder of such Security would have been entitled to such Additional Amounts on surrender of such Security for payment on the last day of such 30-day period;

 

(iii)                     in respect of estate, inheritance, gift, sales, transfer, personal property or similar tax, assessment or governmental charge imposed with respect to a Security;

 

(iv)                    in respect of any tax, assessment or other governmental charge payable otherwise than by deduction or withholding from payments on any series of Securities or by direct payment by the Company or the Guarantor in respect of claims made against the Company or the Guarantor;

 

(v)                       where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or any law implementing or complying with, or introduced in order to conform to, such directive; or

 

(vi)                    in respect of any combination of the above.

 

For purposes of the provisions described in clause (i) above, the term “Holder” of any Security means the direct nominee of any beneficial owner of such Security, which holds such beneficial owner’s interest in such Security. Notwithstanding the foregoing, the limitations on the Company’s or the Guarantor’s obligation to pay Additional Amounts set forth in clause (i) above shall not apply if the provision of information, documentation or other evidence described in such clause (i) would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a Holder or beneficial owner of a Security (taking into account any relevant differences between U.S. and Cayman Islands or Brazilian law, regulation or administrative practice) than comparable information or other reporting requirements imposed under U.S. tax law (including tax treaties between the United States and the Cayman Islands or Brazil), regulation (including proposed regulations) and administrative practice.

 

The Company or the Guarantor, as the case may be, shall promptly provide the Trustee with documentation, if any, (which may consist of certified copies of such documentation) reasonably satisfactory to the Trustee evidencing the payment of Foreign Taxes in respect of which the Company or the Guarantor has paid any Additional Amounts. Copies of such documentation shall be made available to the Holders of the Securities or the Paying Agent, as applicable, upon request therefor.

 

In respect of the Securities issued hereunder, at least 10 days prior to the first date of payment of interest on the Securities and at least 10 days prior to each date, if any, of payment of principal or interest thereafter if there has been any change with respect to the matters set forth in the below-mentioned Officers’ Certificate, the Company and the Guarantor shall furnish the

 

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Trustee and each Paying Agent with an Officers’ Certificate instructing the Trustee and such Paying Agent as to whether such payment of principal of or any interest on such Securities shall be made without deduction or withholding for or on account of any tax, duty, assessment or other governmental charge. If any such deduction or withholding shall be required by the Cayman Islands or Brazil or any Successor Jurisdiction or any authority therein having power to tax, then such certificate shall specify, by country, the amount, if any, required to be deducted or withheld on such payment to Holders of such Securities, and the Company or the Guarantor, as the case may be, (if payment is then due under the Guaranty) shall pay or cause to be paid to the Trustee or such Paying Agent Additional Amounts, if any, required by this Section. The Company and the Guarantor agree to indemnify the Trustee and each Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by them in reliance on any Officers’ Certificate furnished pursuant to this Section, the obligation of the Company and the Guarantor to so indemnify being joint and several.

 

10.7.2              The Company or the Guarantor, as the case may be, shall pay all stamp, issue, registration, documentary or other similar duties, if any, which may be imposed by the Cayman Islands or Brazil or any other governmental entity or political subdivision therein or thereof, or any taxing authority of or in any of the foregoing, with respect to the Indenture or the issuance of the Securities or the Guaranty.

 

10.7.3              The Company or the Guarantor, as the case may be, shall provide each Paying Agent and any withholding agent under relevant tax regulations with copies of each certificate received by the Company or the Guarantor from a Holder of a Security pursuant to the text of such Security. Each such Paying Agent and withholding agent shall retain each such certificate received by it for as long as any Security is outstanding and in no event for less than four years after its receipt, and for such additional period thereafter, as set forth in an Officers’ Certificate, as such certificate may become material in the administration of applicable tax laws.

 

10.7.4              In the event that Additional Amounts actually paid with respect to the Securities pursuant to the preceding paragraph are based on rates of deduction or withholding of withholding taxes in excess of the appropriate rate applicable to the Holder of such Securities, and, as a result thereof, such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Securities, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Company or the Guarantor. However, by making such assignment, the Holder makes no representation or warranty that the Company or the Guarantor will be entitled to receive such claim for a refund or credit and incurs no other obligation with respect thereto.

 

10.7.5              All references in this Indenture and the Securities to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made. All references in this Indenture and the Securities to principal in respect of any Security shall be deemed to mean and include any Redemption Price or Repurchase Price payable in respect of such Security pursuant to any redemption or repurchase right hereunder (and all such references to the Stated Maturity of the principal in respect of any Security shall be deemed to mean and include the Redemption Date or Repurchase Date with respect to any such Redemption Price or Repurchase Price), and all such references to principal, premium, interest or Additional Amounts shall be deemed to mean and include any amount payable in respect hereof pursuant to this Section 10.7, and express mention of the payment of any Redemption Price or Repurchase Price, or any such other amount in any provision hereof shall not be construed as excluding reference to the payment of any Redemption Price or Repurchase Price, or any such other amounts in those provisions hereof where such express reference is not made.

 

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10.8                        Securities held by the Company

 

So long as any Security is Outstanding, the Company will send to the Trustee, as soon as practicable after being so requested by the Trustee, an Officer’s Certificate of the Company stating the aggregate principal amount of Securities held or beneficially owned, at the date of such certificate by or on behalf of the Company, the Guarantor or any of its Subsidiaries.

 

10.9                        Securities Issued or Outstanding

 

So long as any Security is Outstanding, the Company will send to the Trustee within fourteen (14) days after any written request by the Trustee, an Officer’s Certificate confirming the aggregate principal amount of Securities issued and/or Outstanding under this Indenture.

 

10.10                 Status of Guaranty and Securities

 

The Guarantor will ensure that the Guaranty will rank at least pari passu with any current and future unsecured and unsubordinated Indebtedness of the Guarantor. The Company will ensure that the Securities will rank at least pari passu with any current and future unsecured and unsubordinated Indebtedness of the Company.

 

10.11                 Maintenance of Good Standing

 

The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and rights to conduct its business under Cayman Islands law as currently contemplated in its Memorandum and Articles of Association. The Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.

 

10.12                 Payment of Taxes

 

The Guarantor will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Guarantor or upon the income, profits or property of the Guarantor (the “Taxes”) which, if unpaid, might by law become a Lien upon the property of the Guarantor; provided, however, that (x) the Guarantor shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is then-currently being contested in good faith by appropriate proceedings and (y) the Guarantor shall be in compliance with this Section 10.12 if the individual or the aggregate amount of the Taxes not paid would not have a material adverse effect on the ability of the Guarantor to comply with its obligations under this Indenture.

 

11                                  Redemption of Securities

 

11.1                        Right of Redemption

 

11.1.1              The Securities of any series which are redeemable before their Stated Maturity may not be redeemed at the election of the Company except in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for such Securities) in accordance with the provisions of this Article.

 

11.1.2              The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company, notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities specified therefor in the Securities of a series to be redeemed.

 

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11.1.3              If, as a result of any amendment to, or change in, the laws (or any rules or regulation thereunder) of the Cayman Islands or Brazil or any political subdivision or taxing authority thereof or therein affecting taxation or any amendment to or change in an official interpretation, administration or application of such laws, rules or regulations (including a holding by a court of competent jurisdiction), which amendment or change of such laws, rules or regulations or the interpretation thereof becomes effective on or after the date specified therefor in the Securities of a series, the Company would be obligated to pay Additional Amounts in respect of the Securities of such series pursuant to the terms and conditions thereof in excess of those attributable to Cayman Islands or Brazilian withholding tax on the basis of a statutory rate of 15%, and if such obligation cannot be avoided by the Company after taking measures the Company considers reasonable to avoid it, then, at the Company’s option, the Securities of such series may be redeemed in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days’ notice to the Holders of such Securities, at a Redemption Price equal to 100% of the principal amount thereof and any premium applicable thereto, together with accrued interest up to but not including the Redemption Date and any Additional Amounts which would otherwise be payable; provided, however, that (1) no notice of such redemption may be given earlier than 90 days prior to the earliest date on which the Company would but for such redemption be obligated to pay such Additional Amounts were a payment on such Securities then due, and (2) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect.

 

11.1.4              Before any notice of redemption pursuant to Section 11.1.3 is given to the Trustee or the Holders of Securities of the relevant series, the Company shall deliver to the Trustee (i) an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the condition or conditions precedent to the right of the Company so to redeem have occurred or been satisfied and (ii) an Opinion of Counsel to the effect that the Company has or shall become obligated to pay such Additional Amounts as a result of such change or amendment. Such notice, once given to the Trustee, shall be irrevocable.

 

11.2                        Notice of Redemption

 

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

 

All notices of redemption shall state:

 

11.2.1              the Redemption Date,

 

11.2.2              the Redemption Price and amount of accrued interest, if any,

 

11.2.3              that on the Redemption Date the Redemption Price and any accrued interest shall become due and payable upon each Security to be redeemed and that interest thereon shall cease to accrue on and after said date,

 

11.2.4              the conversion rate (if applicable), the date on which the right to convert the Securities to be redeemed shall terminate and the place or places where such Securities may be surrendered for conversion,

 

11.2.5              the place or places where such Securities are to be surrendered for payment of the Redemption Price and any accrued interest, and

 

11.2.6              applicable CUSIP or ISIN Numbers.

 

56

 

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

 

11.3                        Deposit of Redemption Price

 

On the Business Day prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

11.4                        Securities Payable on Redemption Date

 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company to the Person in whose name such Security is registered at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.6.

 

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

 

11.5                        Securities Redeemed in Part

 

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

 

If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected less than 61 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot or, on a pro rata basis, all in accordance with the applicable procedures of the Depositary, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination which shall not be less than the minimum authorized denomination for such Security. If less than all of the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence, and the Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amounts thereof to be redeemed.

 

57

 

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

 

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

 

12                                  Guaranty

 

12.1                        The Guaranty

 

Subject to the provisions of this Article, the Guarantor hereby irrevocably and unconditionally guarantees to each Holder of a Security of each series authenticated and delivered by the Trustee and to the Trustee the full and punctual payment (whether at the Stated Maturity, upon redemption, purchase pursuant to an offer to purchase or acceleration or otherwise) of the principal, premium, interest, Additional Amounts and all other amounts that may come due and payable under each Security and the full and punctual payment of all other amounts payable by the Company under the Indenture as they come due. Upon failure by the Company to pay punctually any such amount, the Guarantor shall forthwith pay the amount not so paid at the place and time and in the manner specified in the Indenture.

 

12.2                        Guaranty Unconditional

 

The obligations of the Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by

 

12.2.1              any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Security, by operation of law or otherwise;

 

12.2.2              any modification or amendment of or supplement to the Indenture or any Security;

 

12.2.3              any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture or any Security;

 

12.2.4              the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

 

12.2.5              any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Security, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Security or any other amount payable by the Company under the Indenture; or

 

12.2.6              any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.

 

58

 

12.3                        Discharge; Reinstatement

 

The Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Securities and all other amounts payable by the Company under the Indenture have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Security or any other amount payable by the Company under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

 

12.4                        Waiver by the Guarantor

 

12.4.1              The Guarantor unconditionally and irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person. The Guaranty constitutes a guaranty of payment and not of collection.

 

12.4.2              The Guarantor unconditionally and irrevocably waives any and all rights provided under Articles 366, 827, 829, 835, 837 and 838 of the Brazilian Civil Code and Article 595 of the Brazilian Civil Procedure Code.

 

12.5                        Subrogation and Contribution

 

Upon making any payment with respect to any obligation of the Company under this Article, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of (and premium, if any) and interest on all Securities of the relevant series shall have been paid in full.

 

12.6                        Stay of Acceleration

 

If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Securities is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by the Guarantor forthwith on demand by the Trustee or the Holders.

 

12.7                        Execution and Delivery of Guaranty

 

The execution by the Guarantor of the Indenture or a supplemental indenture evidences the Guaranty of such Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Security. The delivery of any Security by the Trustee after authentication constitutes due delivery of the Guaranty set forth in the Indenture on behalf of the Guarantor.

 

59

 

13                                  Defeasance and Covenant Defeasance

 

13.1                        Company’s Option to Effect Defeasance or Covenant Defeasance

 

The Company may elect, at its option at any time, to have Section 13.2 or Section 13.3 applied to any Securities or any series of Securities designated pursuant to Section 3.1 as being defeasible pursuant to such Section 13.2 or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.

 

13.2                        Defeasance and Discharge

 

Upon the Company’s exercise of its option to have this Section applied to any Securities or any series of Securities, as the case may be, the Company and the Guarantor shall each be deemed to have been discharged from their respective obligations with respect to such Securities or series of Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.4 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (ii) the respective obligations of the Company and the Guarantor with respect to such Securities under Sections 3.4, 3.5, 10.2 and 10.3, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) the provisions set forth in this Article 13. Subject to compliance with this Article, the Company may exercise its option to have this Section 13.2 applied to any Securities notwithstanding the prior exercise of its option to have Section 13.3 applied to such Securities.

 

13.3                        Covenant Defeasance

 

Upon the Company’s exercise of its option to have this Section applied to any Securities or any series of Securities, as the case maybe, (i) the Company and the Guarantor shall each be released from any covenants provided pursuant to Section 3.1.17, 9.1.2 or 9.1.8 for the benefit of the Holders of such Securities, and (ii) the occurrence of any event specified in Section 5.1.4 shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company and the Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1.4), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

 

13.4                        Conditions to Defeasance or Covenant Defeasance.

 

The following shall be the conditions to the application of Section 13.2 or Section 13.3 to any Securities or any series of Securities, as the case may be:

 

13.4.1              The Company shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security

 

60

 

for, and dedicated solely to, the benefit of the Holders of such Securities, (i) money in an amount, or (ii) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (iii) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee to pay and discharge, the principal of and any premium, interest and Additional Amounts on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (A) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (B) an obligation of a Person controlled or supervised by and acting as any agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (A) or (B), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principle or interest evidenced by such depositary receipt.

 

13.4.2              In the event of any election to have Section 13.2 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this instrument, there has been a change in the applicable U.S. Federal income tax law, in either case (i) or (ii) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for U.S. Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

 

13.4.3              In the event of an election to have Section 13.3 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to the effected with respect to such Security and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

 

13.4.4              No event which is, or after notice or lapse of time both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.1.5 and 5.1.6, at any time on or prior to the day which is 90 days after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such day which is 90 days after the date of such deposit).

 

13.4.5              Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).

 

13.4.6              Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company or the Guarantor is a party or by which either is bound.

 

61

 

13.4.7              Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.

 

13.4.8              The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

 

13.5                        Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions.

 

Subject to the provisions of the last paragraph of Section 10.3, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 13.4 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law.

 

The Company and the Guarantor shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 13.4, or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Order any money or U.S. Government Obligations held by it as provided in Section 13.4 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

 

13.6                        Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order of judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company and the Guarantor have been discharged or released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities in accordance with this Article; provided, however, that if the Company or the Guarantor make any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company or the Guarantor (as the case may be) shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

 

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

 

62

 

In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, as of the day and year first above written.

 

	
 
    	
Executed as a DEED by
    
	
 
    	
 
    
	
 
    	
VALE OVERSEAS LIMITED,
    
	
 
    	
as   Issuer
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Marcelo Campos Habibe
    
	
 
    	
 
    	
Name:   Marcelo Campos Habibe
    
	
 
    	
 
    	
Title:   Attorney-in-Fact
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Juan Franco Merlini
    
	
 
    	
 
    	
Name:   Juan Franco Merlini
    
	
 
    	
 
    	
Title:   Attorney-in-Fact
    
	
 
    	
 
    
	
 
    	
In   the presence of:
    	
/s/   Bruna Braz Gonçalves Botelho
    
	
 
    	
 
    	
Witness
    
	
 
    	
 
    
	
 
    	
VALE S.A.,
    
	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Luciano Siani Pires
    
	
 
    	
 
    	
Name:   Luciano Siani Pires
    
	
 
    	
 
    	
Title:   Attorney-in-Fact
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Peter Poppinga
    
	
 
    	
 
    	
Name:   Peter Poppinga
    
	
 
    	
 
    	
Title:   Attorney-in-Fact
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK MELLON,
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Catherine F. Donohue
    
	
 
    	
 
    	
Name:   Catherine F. Donohue
    
	
 
    	
 
    	
Title:   Vice President
    
				

 

63

 

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

 

	
TRUST INDENTURE ACT SECTION
    	
 
    	
INDENTURE
   SECTION
    
	
 
    	
 
    	
 
    
	
§310(a)(1)
    	
 
    	
6.9
    
	
(a)(2)
    	
 
    	
6.9
    
	
(a)(3)
    	
 
    	
Not Applicable
    
	
(a)(4)
    	
 
    	
Not Applicable
    
	
(a)(5)
    	
 
    	
6.9
    
	
(b)
    	
 
    	
6.8
    
	
 
    	
 
    	
6.10
    
	
 
    	
 
    	
 
    
	
§311(a)
    	
 
    	
6.13
    
	
(b)
    	
 
    	
6.13
    
	
 
    	
 
    	
 
    
	
§312(a)
    	
 
    	
7.1
    
	
 
    	
 
    	
7.2
    
	
(b)
    	
 
    	
7.2
    
	
(c)
    	
 
    	
7.2
    
	
 
    	
 
    	
 
    
	
§313(a)
    	
 
    	
7.3
    
	
(b)
    	
 
    	
7.3
    
	
(c)(1)
    	
 
    	
7.3
    
	
(c)(2)
    	
 
    	
7.3
    
	
(c)(3)
    	
 
    	
7.3
    
	
(d)
    	
 
    	
7.3
    
	
 
    	
 
    	
 
    
	
§314(a)
    	
 
    	
10.5
    
	
(b)
    	
 
    	
10.5
    
	
(c)
    	
 
    	
10.5
    
	
(d)
    	
 
    	
10.5
    
	
 
    	
 
    	
 
    
	
§315(a)
    	
 
    	
6.1
    
	
(b)
    	
 
    	
6.2
    
	
(c)
    	
 
    	
6.1
    
	
(d)
    	
 
    	
6.1
    
	
(e)
    	
 
    	
5.14
    
	
 
    	
 
    	
 
    
	
§316(a)(1)(A)
    	
 
    	
5.12
    
	
(a)(1)(B)
    	
 
    	
5.13
    
	
(a)(2)
    	
 
    	
Not Applicable
    
	
(b)
    	
 
    	
5.8
    
	
(c)
    	
 
    	
1.4
    
	
 
    	
 
    	
 
    
	
§317(a)(1)
    	
 
    	
5.3
    
	
(a)(2)
    	
 
    	
5.4
    
	
(b)
    	
 
    	
10.3
    
	
§318(a)
    	
 
    	
1.7
    

 

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

 

64Exhibit 4.1

 

 

BOISE CASCADE, L.L.C.

 

BOISE CASCADE FINANCE CORPORATION

 

63/8% Senior Notes due 2020

 

 

INDENTURE

 

Dated as of October 22, 2012

 

U.S. Bank National Association,

 

as Trustee

 

 

 

 

CROSS-REFERENCE TABLE

 

	
TIA Section
    	
 
    	
Indenture Section
    
	
310(a)
    	
(1)
    	
 
    	
7.10
    	
 
    	
 
    	
 
    
	
(a)
    	
(2)
    	
 
    	
7.10
    	
 
    	
 
    	
 
    
	
(a)
    	
(3)
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(a)
    	
(4)
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
7.08;
    	
 7.10
    	
 
    	
 
    
	
(c)
    	
 
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
311(a)
    	
 
    	
 
    	
7.11
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
7.11
    	
 
    	
 
    	
 
    
	
(c)
    	
 
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
312(a)
    	
 
    	
 
    	
2.05
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
11.03
    	
 
    	
 
    	
 
    
	
(c)
    	
 
    	
 
    	
11.03
    	
 
    	
 
    	
 
    
	
313(a)
    	
 
    	
 
    	
7.06
    	
 
    	
 
    	
 
    
	
(b)
    	
(1)
    	
 
    	
7.06
    	
 
    	
 
    	
 
    
	
(b)
    	
(2)
    	
 
    	
7.06
    	
 
    	
 
    	
 
    
	
(c)
    	
 
    	
 
    	
7.06
    	
11.02
    	
 
    	
 
    
	
(d)
    	
 
    	
 
    	
7.06
    	
 
    	
 
    	
 
    
	
314(a)
    	
 
    	
 
    	
4.02;
    	
 4.09;
    	
4.14;
    	
11.02
    
	
(b)
    	
 
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(c)
    	
(1)
    	
 
    	
11.04
    	
 
    	
 
    	
 
    
	
(c)
    	
(2)
    	
 
    	
11.04
    	
 
    	
 
    	
 
    
	
(c)
    	
(3)
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(d)
    	
 
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(e)
    	
 
    	
 
    	
11.05
    	
 
    	
 
    	
 
    
	
(f)
    	
 
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
315(a)
    	
 
    	
 
    	
7.01
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
7.05;
    	
11.02
    	
 
    	
 
    
	
(c)
    	
 
    	
 
    	
7.01
    	
 
    	
 
    	
 
    
	
(d)
    	
 
    	
 
    	
7.01
    	
 
    	
 
    	
 
    
	
(e)
    	
 
    	
 
    	
6.11
    	
 
    	
 
    	
 
    
	
316(a)
    	
(last sentence)
    	
 
    	
11.06
    	
 
    	
 
    	
 
    
	
(a)
    	
(1)(A)
    	
 
    	
6.05
    	
 
    	
 
    	
 
    
	
(a)
    	
(1)(B)
    	
 
    	
6.04
    	
 
    	
 
    	
 
    
	
(a)
    	
(2)
    	
 
    	
N.A.
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
6.07
    	
 
    	
 
    	
 
    
	
317(a)
    	
(1)
    	
 
    	
6.08
    	
 
    	
 
    	
 
    
	
(a)
    	
(2)
    	
 
    	
6.09
    	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
 
    	
2.04
    	
 
    	
 
    	
 
    
	
318
    	
(a)
    	
 
    	
11.01
    	
 
    	
 
    	
 
    

 

N.A. means not applicable.

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

 

i

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article 1
    
	
 
    
	
DEFINITIONS AND INCORPORATION BY REFERENCE
    
	
 
    	
 
    	
 
    
	
SECTION 1.01.
    	
DEFINITIONS
    	
6
    
	
SECTION 1.02.
    	
OTHER   DEFINITIONS
    	
39
    
	
SECTION 1.03.
    	
INCORPORATION   BY REFERENCE OF TRUST INDENTURE ACT
    	
40
    
	
SECTION 1.04.
    	
RULES   OF CONSTRUCTION
    	
40
    
	
 
    	
 
    	
 
    
	
Article 2
    
	
 
    
	
THE NOTES
    
	
 
    	
 
    	
 
    
	
SECTION 2.01.
    	
FORM AND   DATING
    	
41
    
	
SECTION 2.02.
    	
EXECUTION   AND AUTHENTICATION
    	
41
    
	
SECTION 2.03.
    	
REGISTRAR   AND PAYING AGENT
    	
42
    
	
SECTION 2.04.
    	
PAYING   AGENT TO HOLD MONEY IN TRUST
    	
42
    
	
SECTION 2.05.
    	
NOTEHOLDER   LISTS
    	
43
    
	
SECTION 2.06.
    	
TRANSFER   AND EXCHANGE
    	
43
    
	
SECTION 2.07.
    	
REPLACEMENT   NOTES
    	
43
    
	
SECTION 2.08.
    	
OUTSTANDING   NOTES
    	
43
    
	
SECTION 2.09.
    	
TEMPORARY   NOTES
    	
44
    
	
SECTION 2.10.
    	
CANCELLATION
    	
44
    
	
SECTION 2.11.
    	
DEFAULTED   INTEREST
    	
44
    
	
SECTION 2.12.
    	
CUSIP   NUMBERS, ISINS, ETC.
    	
44
    
	
SECTION 2.13.
    	
ISSUANCE   OF ADDITIONAL NOTES
    	
44
    
	
SECTION 2.14.
    	
SERIES   OF NOTES
    	
45
    
	
 
    	
 
    	
 
    
	
Article 3
    
	
 
    
	
REDEMPTION
    
	
 
    	
 
    	
 
    
	
SECTION 3.01.
    	
NOTICES   TO TRUSTEE
    	
45
    
	
SECTION 3.02.
    	
SELECTION   OF NOTES TO BE REDEEMED
    	
45
    
	
SECTION 3.03.
    	
NOTICE   OF REDEMPTION
    	
45
    
	
SECTION 3.04.
    	
EFFECT   OF NOTICE OF REDEMPTION
    	
46
    
	
SECTION 3.05.
    	
DEPOSIT   OF REDEMPTION PRICE
    	
46
    
	
SECTION 3.06.
    	
NOTES   REDEEMED IN PART
    	
46
    
				

 

ii

 

	
Article 4
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    
	
SECTION 4.01.
    	
PAYMENT OF NOTES
    	
47
    
	
SECTION 4.02.
    	
SEC REPORTS
    	
47
    
	
SECTION 4.03.
    	
LIMITATION ON INDEBTEDNESS
    	
48
    
	
SECTION 4.04.
    	
LIMITATION ON RESTRICTED PAYMENTS
    	
53
    
	
SECTION 4.05.
    	
LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED   SUBSIDIARIES
    	
59
    
	
SECTION 4.06.
    	
LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK
    	
61
    
	
SECTION 4.07.
    	
LIMITATION ON AFFILIATE TRANSACTIONS
    	
64
    
	
SECTION 4.08.
    	
LIMITATION ON LINE OF BUSINESS
    	
66
    
	
SECTION 4.09.
    	
CHANGE OF CONTROL
    	
66
    
	
SECTION 4.10.
    	
LIMITATION ON LIENS
    	
68
    
	
SECTION 4.11.
    	
LIMITATION ON SALE/LEASEBACK TRANSACTIONS
    	
68
    
	
SECTION 4.12.
    	
FUTURE GUARANTORS
    	
69
    
	
SECTION 4.13.
    	
LIMITATION ON THE CONDUCT OF BUSINESS OF BOISE FINANCE
    	
69
    
	
SECTION 4.14.
    	
COMPLIANCE CERTIFICATE
    	
69
    
	
SECTION 4.15.
    	
FURTHER INSTRUMENTS AND ACTS
    	
69
    
	
SECTION 4.16.
    	
COVENANT TERMINATION
    	
70
    
	
SECTION 4.17.
    	
INVESTMENT GRADE COVENANTS
    	
70
    
	
 
    	
 
    	
 
    
	
Article 5
    
	
 
    
	
SUCCESSOR COMPANY
    
	
 
    	
 
    
	
SECTION 5.01.
    	
MERGER OR TRANSFER OF ASSETS
    	
71
    
	
 
    	
 
    	
 
    
	
Article 6
    
	
 
    
	
DEFAULTS AND REMEDIES
    
	
 
    	
 
    
	
SECTION 6.01.
    	
EVENTS OF DEFAULT
    	
73
    
	
SECTION 6.02.
    	
ACCELERATION
    	
75
    
	
SECTION 6.03.
    	
OTHER REMEDIES
    	
76
    
	
SECTION 6.04.
    	
WAIVER OF PAST DEFAULTS
    	
76
    
	
SECTION 6.05.
    	
CONTROL BY MAJORITY
    	
76
    
	
SECTION 6.06.
    	
LIMITATION ON SUITS
    	
76
    
	
SECTION 6.07.
    	
RIGHTS OF HOLDERS TO RECEIVE PAYMENT
    	
77
    
	
SECTION 6.08.
    	
COLLECTION SUIT BY TRUSTEE
    	
77
    
	
SECTION 6.09.
    	
TRUSTEE MAY FILE PROOFS OF CLAIM
    	
77
    
	
SECTION 6.10.
    	
PRIORITIES
    	
77
    
	
SECTION 6.11.
    	
UNDERTAKING FOR COSTS
    	
78
    
	
SECTION 6.12.
    	
WAIVER OF STAY OR EXTENSION LAWS
    	
78
    

 

iii

 

	
Article 7
    
	
 
    
	
TRUSTEE
    
	
 
    	
 
    
	
SECTION 7.01.
    	
DUTIES OF TRUSTEE
    	
78
    
	
SECTION 7.02.
    	
RIGHTS OF TRUSTEE
    	
79
    
	
SECTION 7.03.
    	
INDIVIDUAL RIGHTS OF TRUSTEE
    	
80
    
	
SECTION 7.04.
    	
TRUSTEE’S DISCLAIMER
    	
80
    
	
SECTION 7.05.
    	
NOTICE OF DEFAULTS
    	
80
    
	
SECTION 7.06.
    	
REPORTS BY TRUSTEE TO HOLDERS
    	
80
    
	
SECTION 7.07.
    	
COMPENSATION AND INDEMNITY
    	
81
    
	
SECTION 7.08.
    	
REPLACEMENT OF TRUSTEE
    	
81
    
	
SECTION 7.09.
    	
SUCCESSOR TRUSTEE BY MERGER
    	
82
    
	
SECTION 7.10.
    	
ELIGIBILITY; DISQUALIFICATION
    	
82
    
	
SECTION 7.11.
    	
PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS
    	
82
    
	
 
    	
 
    	
 
    
	
Article 8
    
	
 
    
	
DISCHARGE OF INDENTURE; DEFEASANCE
    
	
 
    	
 
    
	
SECTION 8.01.
    	
DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE
    	
83
    
	
SECTION 8.02.
    	
CONDITIONS TO DEFEASANCE
    	
84
    
	
SECTION 8.03.
    	
APPLICATION OF TRUST MONEY
    	
85
    
	
SECTION 8.04.
    	
REPAYMENT TO ISSUERS
    	
85
    
	
SECTION 8.05.
    	
INDEMNITY FOR GOVERNMENT OBLIGATIONS
    	
85
    
	
SECTION 8.06.
    	
REINSTATEMENT
    	
85
    
	
 
    	
 
    	
 
    
	
Article 9
    
	
 
    
	
AMENDMENTS
    
	
 
    	
 
    
	
SECTION 9.01.
    	
WITHOUT CONSENT OF HOLDERS
    	
85
    
	
SECTION 9.02.
    	
WITH CONSENT OF HOLDERS
    	
86
    
	
SECTION 9.03.
    	
COMPLIANCE WITH TRUST INDENTURE ACT
    	
87
    
	
SECTION 9.04.
    	
REVOCATION AND EFFECT OF CONSENTS AND WAIVERS
    	
87
    
	
SECTION 9.05.
    	
NOTATION ON OR EXCHANGE OF NOTES
    	
88
    
	
SECTION 9.06.
    	
TRUSTEE TO SIGN AMENDMENTS
    	
88
    
	
SECTION 9.07.
    	
PAYMENT FOR CONSENT
    	
88
    
	
 
    	
 
    	
 
    
	
Article 10
    
	
 
    
	
NOTE GUARANTEES
    
	
 
    	
 
    
	
SECTION 10.01.
    	
GUARANTEES
    	
88
    
	
SECTION 10.02.
    	
LIMITATION ON LIABILITY
    	
90
    
				

 

iv

 

	
SECTION 10.03.
    	
SUCCESSORS AND ASSIGNS
    	
90
    
	
SECTION 10.04.
    	
NO WAIVER
    	
90
    
	
SECTION 10.05.
    	
MODIFICATION
    	
90
    
	
SECTION 10.06.
    	
RELEASE OF GUARANTOR
    	
91
    
	
SECTION 10.07.
    	
CONTRIBUTION
    	
91
    
	
SECTION 10.08.
    	
EXECUTION AND DELIVERY OF GUARANTEE
    	
92
    
	
 
    	
 
    	
 
    
	
Article 11
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    
	
SECTION 11.01.
    	
TRUST INDENTURE ACT CONTROLS
    	
92
    
	
SECTION 11.02.
    	
NOTICES
    	
92
    
	
SECTION 11.03.
    	
COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
    	
93
    
	
SECTION 11.04.
    	
CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
    	
93
    
	
SECTION 11.05.
    	
STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
    	
93
    
	
SECTION 11.06.
    	
WHEN NOTES DISREGARDED
    	
94
    
	
SECTION 11.07.
    	
RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR
    	
94
    
	
SECTION 11.08.
    	
LEGAL HOLIDAYS
    	
94
    
	
SECTION 11.09.
    	
GOVERNING LAW
    	
94
    
	
SECTION 11.10.
    	
NO RECOURSE AGAINST OTHERS
    	
94
    
	
SECTION 11.11.
    	
SUCCESSORS
    	
94
    
	
SECTION 11.12.
    	
MULTIPLE ORIGINALS
    	
94
    
	
SECTION 11.13.
    	
TABLE OF CONTENTS; HEADINGS
    	
94
    

 

Rule 144A/Regulation S Appendix

 

Exhibit 1 to Appendix                                                                         —                                   Form of Initial Note

 

Exhibit A                                                                                                                                             —                                   Form of Exchange Note

 

Exhibit B                                                                                                                                             —                                   Form of Notation of Guarantee

 

v

 

INDENTURE dated as of October 22, 2012 by and among Boise Cascade, L.L.C., a Delaware limited liability company (“Boise Cascade”), Boise Cascade Finance Corporation, a Delaware corporation (“Boise Finance” and, together with Boise Cascade, the “Issuers”), Boise Cascade Holdings, L.L.C., a Delaware limited liability company that owns all of the outstanding capital stock of Boise Cascade (“Boise Holdings”), each other Guarantor (defined below) from time to time party hereto and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Notes issued under this Indenture:

 

Article 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.           DEFINITIONS.

 

“Additional Assets” means:

 

(1)                                 any assets (other than working capital assets) used or useful in a Related Business;

 

(2)                                 the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Boise Cascade or a 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 Notes issued under this Indenture after the Issue Date and in compliance with Sections 2.13 and 4.03 hereof, it being understood that any Notes issued in exchange for or replacement of any Initial Note issued on the Issue Date shall not be an Additional Note, including any such Notes issued pursuant to a Registration Rights Agreement.

 

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

 

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by Boise Cascade 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:

 

6

 

(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 Boise Cascade or a Restricted Subsidiary);

 

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

 

(3)                                 any other assets of Boise Cascade or any Restricted Subsidiary outside of the ordinary course of business of Boise Cascade or such Restricted Subsidiary,

 

other than:

 

(A)                               a disposition between or among Boise Cascade and any Restricted Subsidiary;

 

(B)                               for purposes of Section 4.06 hereof only, (i) a disposition that constitutes a Restricted Payment (or would constitute a Restricted Payment but for the exclusions from the definition thereof) and that is not prohibited by Section 4.04 hereof and (ii) a disposition of all or substantially all the assets of Boise Cascade in accordance with Section 5.01 hereof;

 

(C)                               a disposition of assets or Capital Stock, as the case may be, with a fair market value of less than $10.0 million;

 

(D)                               a disposition of assets that are worn out, obsolete or damaged or no longer used or useful in the business of Boise Cascade or any Restricted Subsidiary, as the case may be, in the ordinary course of business;

 

(E)                                a disposition of cash or Temporary Cash Investments;

 

(F)                                 the creation of a Lien (but not the sale or other disposition of the property subject to such Lien);

 

(G)                               a transfer or sale of Receivables and Related Assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Subsidiary or to any other Person in connection with a Qualified Receivables Transaction or the creation of a Lien on any such Receivables or Related Assets in connection with a Qualified Receivables Transaction;

 

(H)                              the sale or lease of products, services or accounts receivable or the licensing of intellectual property, in each case in the ordinary course of business;

 

(I)                                   the sale of the Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;

 

(J)                                   the sale, transfer or other disposition of Hedging Obligations;

 

(K)                              any surrender or waiver of contract rights or settlement, release,

 

7

 

recovery on or surrender of contract, tort or other claims in the ordinary course of business;

 

(L)                                any transfers of property subject to casualty or condemnation proceedings (including in lieu thereof) upon the receipt of the net cash proceeds therefor;

 

(M)                            foreclosure on assets or transfers by reason of eminent domain; and

 

(N)                               disposition of an account receivable in connection with the collection or compromise thereof.

 

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capital Lease Obligation.”

 

“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.

 

“Board of Directors” means (i) with respect to a Person that is a corporation, the board of directors of such Person or any committee thereof duly authorized to act on behalf of such board of directors, (ii) with respect to a Person that is a limited liability company, the managing member or members or any controlling committee of members of such Person or (iii) with respect to any other Person, any equivalent governing body.

 

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

 

“Calculation Adjustments” means the adjustments described in the proviso to the first paragraph (including subparagraphs (1) through (7)), and the second and third paragraphs of the definition of “Consolidated Coverage Ratio.”

 

“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. For

 

8

 

purposes of Section 4.10 hereof, a Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased.

 

“Capital Stock” of any Person means any and all shares, interests (including partnership interests and limited liability company units), 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.

 

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

 

(1)                                 any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than the 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 or group shall be deemed to have beneficial ownership of all securities that such person or group has the right to acquire, whether presently or after the passage of time), directly or indirectly, of Capital Stock representing at least 50% of the aggregate Voting Stock of Boise Cascade or, prior to an initial public offering of Capital Stock of Boise Cascade or any of its direct or indirect parents, 50% of the aggregate Voting Stock of Boise Holdings;

 

(2)                                 the first day on which a majority of the members of the Board of Directors of Boise Cascade are not Continuing Directors;

 

(3)                                 the adoption of a plan relating to the liquidation or dissolution of Boise Cascade; or

 

(4)                                 the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Boise Cascade and the Restricted Subsidiaries on a Consolidated Basis, in each case, to any “person” (as defined in clause (1) above) other than a Wholly Owned Subsidiary or a Permitted Holder.

 

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

 

“Commodity Agreement” means any forward contract, swap, option, hedge or other similar financial instrument or arrangement designed to protect against or otherwise manage fluctuations in commodity prices and not entered into for speculative purposes.

 

“Consolidated Basis” means the consolidated financial data of Boise Cascade and its Subsidiaries prepared in accordance with GAAP.

 

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the aggregate amount of EBITDA for the Measurement Period to (b) Consolidated Interest Expense for such Measurement Period; provided, however, that:

 

(1)                                 if Boise Cascade or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an

 

9

 

Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period;

 

(2)                                 if Boise Cascade or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if Boise Cascade or such Restricted Subsidiary had not earned the interest income actually earned during such 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 such period Boise Cascade or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets that are the subject of such Asset Disposition for such period, or increased by an amount equal to EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of Boise Cascade or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to Boise Cascade and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such 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 Boise Cascade and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

 

(4)                                 if since the beginning of such period Boise Cascade 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, that constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition had occurred on the first day of such period;

 

(5)                                 if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into Boise Cascade or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by Boise Cascade or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such

 

10

 

period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the first day of such period;

 

(6)                                 if since the beginning of such period any Person was designated as an Unrestricted Subsidiary or redesignated as or otherwise became a Restricted Subsidiary, EBITDA and Consolidated Interest Expense shall be calculated as if such event had occurred on the first day of such period; and

 

(7)                                 the EBITDA and Consolidated Interest Expense of discontinued operations recorded on or after the date such operations are classified as discontinued in accordance with GAAP shall be excluded.

 

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 Boise Cascade. 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 such Interest Rate Agreement has a remaining term in excess of 12 months).

 

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.

 

“Consolidated Interest Expense” means, for any period, the total interest expense of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis, plus, to the extent not included in such total interest expense, and to the extent Incurred by Boise Cascade or its Restricted Subsidiaries, without duplication:

 

(1)                                 interest expense attributable to Capital Lease Obligations;

 

(2)                                 amortization of debt discount and debt issuance cost;

 

(3)                                 capitalized interest;

 

(4)                                 non-cash interest expense;

 

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

 

(6)                                 net payments or receipts (if any) pursuant to Interest Rate Agreements;

 

(7)                                 dividends accrued in respect of all Disqualified Stock of any Issuer or Subsidiary Guarantor and all Preferred Stock of any Restricted Subsidiary that is not a Guarantor, in each case held by Persons other than Boise Cascade or a Restricted

 

11

 

Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of Boise Cascade);

 

(8)                                 interest Incurred in connection with Investments in discontinued operations;

 

(9)                                 interest accruing on any Indebtedness of any Person (other than Boise Cascade and its Restricted Subsidiaries) to the extent such Indebtedness is Guaranteed by (or secured by the assets of) such Person or any Restricted Subsidiary of such Person; and

 

(10)                          the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than Boise Cascade or a Restricted Subsidiary) in connection with Indebtedness Incurred by such plan or trust.

 

“Consolidated Leverage Ratio” as of any date of determination means the ratio of (a) the Total Consolidated Indebtedness as of the date of determination to (b) the aggregate amount of EBITDA for the Measurement Period; provided, however, that the calculation of the Consolidated Leverage Ratio shall give effect to the Calculation Adjustments, as applicable.

 

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the net income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,

 

(1)                                 the cumulative effect of a change in accounting principles during such period shall be excluded,

 

(2)                                 any after-tax effect of extraordinary, non-recurring or unusual gains, losses charges or expenses shall be excluded,

 

(3)                                 any after-tax effect of gains or losses attributable to asset dispositions other than in the ordinary course of business and discontinued operations or disposal of discontinued operations, as determined in good faith by Boise Cascade, shall be excluded,

 

(4)                                 the net income for such period of any Person that is not a Subsidiary or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of Boise Cascade shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

 

(5)                                 solely for the purpose of determining the amount available for Restricted Payments under Section 4.04(a)(3)(A) hereof, the net income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary

 

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of its net income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that (x) the net loss of any such Restricted Subsidiary shall be included therein and (y) Consolidated Net Income of Boise Cascade shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or cash equivalents to Boise Cascade or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

 

(6)                                 any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

 

(7)                                 any non-cash impairment charge or asset write-off, including, without limitation, non-cash impairment charges or asset write-offs related to intangible assets, long-lived assets or investment in debt and equity securities, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded, and

 

(8)                                 any costs or expenses incurred pursuant to any management equity plan or stock option plan or other management or employee benefit plan or agreement or any stock subscription agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the common equity capital of Boise Cascade, shall be excluded; provided, however, that such cash proceeds shall not increase the amount available for Restricted Payments under Section 4.04(a)(3) hereof.

 

Notwithstanding the foregoing, for the purpose of the covenant described under Section 4.04(a) hereof only (other than Section 4.04(a)(3)(D) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by Boise Cascade and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from Boise Cascade and its Restricted Subsidiaries, any repayments of loans and advances that constitute Restricted Investments by Boise Cascade or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent that such amounts increase the amount of Restricted Payments permitted under Section 4.04(a)(3)(D) hereof.

 

“Continuing Director” means, as of any date of determination, any member of the Board of Directors of Boise Cascade who (i) was a member of the Board of Directors of Boise Cascade on the date of this Indenture or (ii) was nominated for election or elected to the Board of Directors of Boise Cascade with the approval of a majority of the Continuing Directors who were members of the Board of Directors of Boise Cascade at the time of the nomination or election or was otherwise designated by a Permitted Holder.

 

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“Credit Agreement” means the Credit Agreement dated as of July 13, 2011 by and among Boise Cascade, Boise Cascade Building Materials Distribution, L.L.C., Boise Cascade Wood Products, L.L.C., the lenders party thereto, Wells Fargo Capital Finance, LLC, as Administrative Agent, and Bank of America, N.A., as Syndication Agent, together with the related documents thereto (including the revolving loans thereunder and any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time (including by adding Subsidiaries of Boise Cascade as additional borrowers or Guarantors thereunder), and any agreement (and related document) governing Indebtedness Incurred to Refinance (including one or more debt facilities, receivables financing facilities or commercial paper facilities or indentures with banks or other institutional lenders or a trustee providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit or issuance of debt securities to institutional investors, or one or more Sale/Leaseback Transactions with counterparties thereto), 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.

 

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

 

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

 

“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by Boise Cascade or any Restricted Subsidiary in connection with an Asset Disposition that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock that 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 180 days after the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock

 

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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 under Sections 4.06 and 4.09 hereof; 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 shall 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, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price shall be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person. Boise Cascade may designate in an Officers’ Certificate delivered to the Trustee at the time of issuance any Preferred Stock of Boise Cascade or any Restricted Subsidiary that would not otherwise be “Disqualified Stock” to be Disqualified Stock for all purposes of this Indenture.

 

“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)                                 provision for taxes based on income or profits or capital gains, including, without limitation, foreign, federal, state and similar taxes and foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis paid or accrued during such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income;

 

(2)                                 Consolidated Interest Expense;

 

(3)                                 depreciation, depletion and amortization expense of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis (in each case excluding amortization expense attributable to a prepaid item that was paid in cash in a prior period);

 

(4)                                 any management fees paid to Madison Dearborn Partners, LLC and/or its Affiliates in such period, not to exceed $2.0 million for any four-quarter period;

 

(5)                                 any fees, costs, charges and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, disposition, recapitalization, Investment, Asset Disposition, issuance or repayment of Indebtedness, issuance of Capital Stock, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated on or prior to

 

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the Issue Date, any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction;

 

(6)                                 (A) all other non-cash charges of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis (in each case 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 (B) all non-cash items of income of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis (in each case other than accruals of revenue in the ordinary course of business and other than reversals (to the extent made without any payment in cash) of reserves previously excluded from clause (A));

 

(7)                                 the amount of any integration costs or other business optimization expenses or reserves deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and costs related to the closure and/or consolidation of facilities;

 

(8)                                 the amount of (i) net cost savings and synergies projected by Boise Cascade in good faith to be realized as a result of specified actions taken or with respect to which substantial steps have been taken (in the good faith determination of Boise Cascade) and that are expected to be realized within 12 months of the date thereof in connection with future acquisitions and cost saving, restructuring and other similar initiatives (which cost savings shall be added to EBITDA until fully realized and calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are reasonably identifiable and factually supportable (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Consolidated Coverage Ratio”), (ii) salary, benefit and other direct savings resulting from workforce reductions by Boise Cascade or its Restricted Subsidiaries implemented during or reasonably expected (in the good faith determination of Boise Cascade) to be implemented within the 12 months following such period and (iii) severance or relocation costs or expenses of Boise Cascade or its Restricted Subsidiaries during such period; and

 

(9)                                 any proceeds from business interruption, casualty or liability insurance received by Boise Cascade or its Restricted Subsidiaries during such period, to the extent the associated losses arising out of the event that resulted in the payment of such business interruption insurance proceeds were included in computing Consolidated Net Income and to the extent actually reimbursed (and not otherwise included in arriving at Consolidated Net Income), and any expenses incurred to the extent covered by indemnification provisions in any agreement in connection with any acquisition or merger involving Boise Cascade or any of its Subsidiaries;

 

in each case for such period; provided that the aggregate amount of such increases to EBITDA pursuant to clauses (7) and (8) above for any period shall not exceed the greater of $10.0 million or 10% of EBITDA for such period (calculated without giving effect to any adjustment pursuant

 

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to clauses (7) and (8)). Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation, amortization and depletion 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 or loss of such Restricted Subsidiary was included in calculating Consolidated Net Income for any purpose and, with respect to a Restricted Subsidiary that is not a Guarantor, only if a corresponding amount would be permitted at the date of determination to be dividended to an Issuer 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 Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Equity Offering” means a public or private primary offering of Capital Stock (other than Disqualified Stock) of Boise Cascade or of any direct or indirect parent company of Boise Cascade, the proceeds of which are contributed to the equity capital of Boise Cascade, other than (i) any public offering registered on Form S-8, (ii) issuances upon the exercise of options by the holders thereof and (iii) issuances to Boise Cascade or any Subsidiary of Boise Cascade.

 

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

 

“Exchange Notes” means the debt securities of the Issuers issued pursuant to this Indenture in exchange for, and in an aggregate principal amount equal to the Notes, in compliance with the terms of the Registration Rights Agreement.

 

“Excluded Contributions” means the net cash proceeds received by Boise Cascade after the Issue Date from (i) contributions (other than from Boise Cascade or any Subsidiary of Boise Cascade) to its common equity capital and (ii) the sale (other than to Boise Cascade or any Subsidiary of Boise Cascade or any management equity plan or stock option plan or any other management or employee benefit plan or agreement of Boise Cascade or any Subsidiary of Boise Cascade) of Capital Stock (other than Disqualified Stock) of Boise Cascade, in each case, designated as Excluded Contributions pursuant to an Officers’ Certificate.

 

“Existing Notes” means the 7 1/8 % Senior Subordinated Notes due 2014 issued pursuant to the indenture, dated October 29, 2004, by and among Boise Cascade, Boise Finance and U.S. Bank National Association, as trustee.

 

“Foreign Subsidiary” means any Restricted Subsidiary 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 which are in effect on the Issue Date, except with respect to any reports or financial information required to be delivered pursuant to Section 4.02 hereof, which shall be prepared in accordance

 

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with GAAP as in effect on the date thereof, except as provided below. At any time after adoption of IFRS by Boise Cascade for its financial statements and reports for all financial reporting purposes, Boise Cascade may elect to apply IFRS for all purposes of this Indenture, in lieu of United States GAAP, and, upon any such election, references herein to GAAP shall be construed to mean IFRS as in effect from time to time; provided that (1) any such election once made shall be irrevocable (and shall only be made once), (2) all financial statements and reports required to be provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS and (3) from and after any such election, all ratios, computations and other determinations (A) based on GAAP contained in this Indenture shall be computed in conformity with IFRS and (B) in this Indenture that require the application of GAAP for periods that include fiscal quarters ended prior to Boise Cascade’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP. Boise Cascade shall give notice of any election to the Trustee and the Holders of Notes with 15 days of such election. For the avoidance of doubt, solely making an election (without any other action) referred to in this definition shall not be treated as an incurrence of Indebtedness.

 

“Guarantee” means a guarantee of all the obligations under this Indenture and the Notes.

 

“Guarantee Agreement” means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Guarantor guarantees the Issuers’ obligations with respect to the Notes on the terms provided for in this Indenture.

 

“Guarantor” means any Person that issues a Guarantee of the Notes, either on the Issue Date or after the Issue Date, in accordance with the terms of this Indenture; provided that, upon the release and discharge of such Person from its Guarantee in accordance with this Indenture, such Person shall cease to be a Guarantor.

 

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.

 

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

 

“IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness 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 4.03 hereof:

 

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

 

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(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; and

 

(3)                                 the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, shall 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 and all Attributable Debt in respect of Sale/ Leaseback Transactions entered into by 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 any accounts payable or other liability to trade creditors 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 Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with this Indenture (but excluding, in each case, any 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

 

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obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the fair market 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 and Receivables Financings of such Person.

 

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time shall be the accreted value thereof at such time.

 

“Indenture” means this Indenture as amended or supplemented from time to time.

 

“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 Boise Cascade.

 

“Initial Notes” means the $250,000,000 aggregate principal amount of Notes issued on the Issue Date.

 

“Initial Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Barclays Capital Inc. and Wells Fargo Securities, LLC.

 

“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.

 

“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 of Capital Stock, Indebtedness or other similar instruments issued by such Person. If Boise Cascade or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by Boise Cascade or any Restricted Subsidiary in such Person remaining after giving effect thereto shall be deemed to be a new Investment at such time. The acquisition by Boise Cascade or any Restricted Subsidiary of a Person that holds an Investment in a third Person shall be deemed to be an Investment by Boise Cascade or such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be its fair market value at the time the Investment is made and without giving effect to subsequent changes in value.

 

For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and Section 4.04 hereof:

 

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

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by Standard & Poor’s, or if the applicable securities are not then rated by Moody’s or Standard & Poor’s an equivalent rating by any other Rating Agency.

 

“Issue Date” means October 22, 2012.

 

“Issuers” means, except as set forth in Section 4.13 hereof, each of the parties named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities.

 

“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).

 

“Make-Whole Amount” means in connection with any optional redemption of any Note prior to November 1, 2015, the greater of (1) 1.0% of the principal amount of such Note and (2) the excess, if any, of (A) the aggregate present value as of the date of such redemption of the redemption price of such Note on November 1, 2015 (as set forth in the table in paragraph 5(a) of the Note) and the amount of interest (exclusive of interest accrued to the redemption date) that would have been payable in respect of such Note through November 1, 2015 if such redemption had not been made, determined by discounting, on a semiannual basis, such redemption price and interest at the Treasury Rate (determined on the Business Day preceding the date of such redemption) plus 0.50%, from the respective dates on which such redemption price and interest would have been payable if such redemption had not been made, over (B) the principal amount of the Note being redeemed.

 

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“Management Investors” means those executive officers of Boise Cascade owning any Capital Stock directly or indirectly in Boise Cascade or any direct or indirect parent company of Boise Cascade on or prior to the Issue Date.

 

“Measurement Period” means, with respect to any date of determination, the period of the most recent four consecutive fiscal quarters ended prior to such date of determination for which internal financial statements are available.

 

“Members” means the holders of the Capital Stock of Boise Cascade.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

 

“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 or any Designated Non-cash 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 accounting, investment banking, legal, title and recording tax expenses, commissions and other fees and expenses Incurred, 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 that 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 that 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 liabilities associated with the property or other assets disposed in such Asset Disposition and retained by Boise Cascade or any Restricted Subsidiary after such Asset Disposition; and

 

(5)                                 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 shall be increased by any portion of funds in the escrow that is released to Boise Cascade or any Restricted Subsidiary.

 

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“Net Cash Proceeds” means the aggregate cash proceeds and cash equivalents received by Boise Cascade or any of its Restricted Subsidiaries in respect of any Asset Disposition, including any cash and cash equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Disposition but excluding the assumption of any Indebtedness by the acquiring Person or other consideration received in any non-cash form, net of the direct costs relating to such Asset Disposition and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on such assets (other than as required by Section 4.06(a)(3) hereof) and any deduction of appropriate amounts to be provided by Boise Cascade or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Boise Cascade or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction..

 

“Net Fair Market Value,” with respect to any non-cash property received by Boise Cascade in respect of the issuance or sale of its Capital Stock, means the fair market value of such property, determined as provided in Section 4.04(a) hereof, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

 

“Non-Public Indebtedness” means:

 

(1)                                 Indebtedness represented by promissory notes or similar evidence of Indebtedness under bank loans or similar financing agreements, including private placements to insurance companies, mezzanine lenders, strategic investors and private-equity sponsors; and

 

(2)                                 any other Indebtedness; provided that it (A) is not listed, quoted or tradeable on any exchange or market, including any market for securities eligible for resale pursuant to Rule 144A under the Securities Act; (B) is not issued or sold by means of any prospectus, offering memorandum (but not an information memorandum of the type used in a bank syndication); (C) is not marketed in an underwritten securities offering and (D) if placed with or through an agent, the agent does not place it with its high-yield bond accounts.

 

“Notes” means the 63/8% Senior Notes due 2020 issued pursuant to this Indenture, including the Initial Notes, any Additional Notes and any Exchange Notes, treated as a single class.

 

“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.

 

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“Offering Memorandum” means the final offering memorandum dated October 17, 2012 and used in connection with the offering of the Notes.

 

“Officer” means the Chairman of the Board, the President, the Chief Financial Officer, any Senior Vice President, any Vice President, the Treasurer or the Secretary of Boise Cascade and Boise Finance, as applicable.

 

“Officers’ Certificate” means a certificate signed by two Officers.

 

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

 

“Permitted Asset Swap” means any transfer of properties or assets by Boise Cascade or a Restricted Subsidiary in which at least 90% of the consideration received by the transferor consists of properties or assets (other than cash) that will be used in a Related Business; provided that (i) the aggregate fair market value of the property or assets being transferred (as determined in good faith by the Board of Directors of Boise Cascade if such fair market value exceeds $10.0 million, or an Officer of Boise Cascade if the fair market value is less than or equal to $10.0 million) by Boise Cascade or a Restricted Subsidiary is not greater than the aggregate fair market value of the property or assets received (as determined in good faith by the Board of Directors of Boise Cascade if such fair market value exceeds $10.0 million, or an Officer of Boise Cascade if the fair market value is less than or equal to $10.0 million) by Boise Cascade or such Restricted Subsidiary in such exchange and (ii) the aggregate fair market value of all property or assets transferred by Boise Cascade and any Restricted Subsidiary in any such transfer, together with the aggregate fair market value of property or assets transferred in all prior Permitted Asset Swaps, shall not exceed 10.0% of Total Assets at the time of such transfer.

 

“Permitted Bank Product Obligations” means all Obligations of Boise Cascade or any Restricted Subsidiary incurred in the ordinary course of business, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise, that may arise under, out of or in connection with any facilities or services related to cash management, including treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer and other cash management arrangements, to any person that is or was a lender (or an affiliate thereof) or the administrative agent (or an affiliate thereof) under a credit agreement at the time the agreements or arrangements in respect of such services were entered into.

 

“Permitted Holders” means (i) Madison Dearborn Partners, LLC and its Affiliates (other than portfolio companies), (ii) the Management Investors, (iii) any Related Party of a Person referred to in clauses (i) and (ii), and (iv) solely with respect to clause (1) of the definition of “Change of Control,” any party to the Securityholders Agreement; provided in the case of this clause (iv) that Madison Dearborn Partners, LLC or any Related Party of Madison Dearborn Partners, LLC is also a party to the Securityholders Agreement and any such other party to the Securityholders Agreement is not the beneficial owner (giving effect to any Voting Stock that may be deemed to be beneficially owned by any Person pursuant to Rule 13d-3 or 13d-5 under the Exchange Act) of more of the total voting power of the Voting Stock of Boise Cascade than

 

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Madison Dearborn Partners, LLC and its Related Parties (in each case without giving effect to any Voting Stock that may be deemed to be beneficially owned by any Person pursuant to Rules 13d-3 or 13d-5 under the Exchange Act as a result of the terms of the Securityholders Agreement). 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 shall be treated as “beneficially owned” by such Permitted Holder.

 

“Permitted Investment” means:

 

(1)                                 any Investment in Boise Cascade, a Restricted Subsidiary or a Person that shall, 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)                                 an Investment in 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, Boise Cascade or a Restricted Subsidiary (other than Boise Finance); provided, however, that such Person’s primary business is a Related Business;

 

(3)                                 cash and Temporary Cash Investments;

 

(4)                                 receivables owing to Boise Cascade 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 Boise Cascade or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(5)                                 payroll, travel 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, Guarantees of loans, advances or other extensions of credit to officers, former officers, employees, former employees, directors, former directors or consultants of Boise Cascade or a Restricted Subsidiary for the purpose of permitting such Persons to purchase Capital Stock of Boise Cascade or any direct or indirect parent of Boise Cascade, as the case may be, not to exceed $20.0 million in the aggregate outstanding at any time;

 

(7)                                 stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to Boise Cascade or any Restricted Subsidiary or in satisfaction of judgments;

 

(8)                                 any Investment in any Person to the extent such Investment represents the non-cash portion of the consideration received for (A) an Asset Disposition as permitted pursuant to Section 4.06 hereof or (B) a disposition of assets not constituting an Asset Disposition;

 

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(9)                                 an Investment in any Person where such Investment was acquired by Boise Cascade or any Restricted Subsidiary (A) in exchange for any other Investment or accounts receivable held by Boise Cascade or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, (B) as a result of a foreclosure by Boise Cascade or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default or (C) in settlement, compromise or resolution of litigation, arbitration or other disputes;

 

(10)                          an Investment in any Person to the extent such Investment consists 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 Boise Cascade or any Restricted Subsidiary;

 

(11)                          Investments consisting of Hedging Obligations otherwise permitted under Section 4.03 hereof;

 

(12)                          Investments resulting from the acquisition of a Person that at the time of such acquisition held instruments constituting Investments that were not acquired in contemplation of the acquisition of such Person;

 

(13)                          any Investment acquired solely in exchange for the issuance of Capital Stock (other than Disqualified Stock) of Boise Cascade;

 

(14)                          any Investment to the extent such Investment exists on the Issue Date, and any extension, modification or renewal of any such Investments existing on the Issue Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date);

 

(15)                          any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness;

 

(16)                          loans and advances to officers, directors, members and employees for business-related travel expenses, moving expenses and other similar expenses, in each case, Incurred in the ordinary course of business not to exceed $3.0 million in the aggregate at any time; and

 

(17)                          Persons to the extent such Investments, when taken together with all other Investments made pursuant to this clause (17) and outstanding on the date such Investment is made, do not exceed the greater of (i) $35.0 million and (ii) 3.75% of Total Assets.

 

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For purposes of this definition, in the event that a proposed Investment (or portion thereof) meets the criteria of more than one of the categories of Permitted Investments described in clauses (1) through (17) above, or is otherwise entitled to be incurred or made pursuant to Section 4.04 hereof, Boise Cascade shall be entitled to classify, or later reclassify, such Investment (or portion thereof) in one or more of such categories set forth above or under Section 4.04 hereof.

 

“Permitted Liens” means, with respect to any Person:

 

(1)                                 pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

(2)                                 Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Issuers in excess of those set forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account is not intended by Boise Cascade or any Restricted Subsidiary to provide collateral to the depository institution;

 

(3)                                 Liens for taxes, assessments or other governmental charges not yet due and payable or subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings;

 

(4)                                 Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness;

 

(5)                                 minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

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(6)                                 Liens securing Purchase Money Indebtedness Incurred pursuant to Section 4.03(b)(14) hereof; provided, however, that any Lien arising in connection with any such Indebtedness shall be limited to the specific asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property on which such asset is attached;

 

(7)                                 Liens to secure Indebtedness equal to the greater of: (i) the amount of Indebtedness permitted under Section 4.03(b)(1) hereof or (ii) an amount equal to 3.50 times EBITDA for the most recent four consecutive fiscal quarters ended for which internal financial statements are available, giving effect to the Calculation Adjustments;

 

(8)                                 Liens existing on the Issue Date (other than under the Credit Agreement);

 

(9)                                 Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

 

(10)                          Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

 

(11)                          Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Restricted Subsidiary of such Person;

 

(12)                          Liens on the assets of a Foreign Subsidiary securing Indebtedness of such Foreign Subsidiary Incurred pursuant to Section 4.03(b)(16) hereof;

 

(13)                          Liens on Receivables and Related Assets of the type specified in the definition of “Qualified Receivables Transaction” Incurred in connection with a Qualified Receivables Transaction;

 

(14)                          Liens securing Hedging Obligations permitted under this Indenture;

 

(15)                          Liens on property that is the subject of a Sale/Leaseback Transaction securing Attributable Debt in respect of such Sale/Leaseback Transaction Incurred pursuant to Section 4.03(b)(18) hereof;

 

(16)                          Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(17)                          Liens imposed pursuant to licenses, sublicenses, leases and subleases (including, but not limited to, landlords’ Liens) that do not materially interfere with the ordinary conduct of the business of Boise Cascade or any of its Restricted Subsidiaries;

 

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(18)                          Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by Boise Cascade and its Restricted Subsidiaries in the ordinary course of business;

 

(19)                          Liens in favor of Boise Cascade or any Subsidiary Guarantor or Liens on assets of a Restricted Subsidiary of Boise Cascade that is not a Guarantor in favor solely of another Restricted Subsidiary of Boise Cascade that is not a Guarantor;

 

(20)                          judgment Liens not giving rise to an Event of Default, so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

 

(21)                          Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;

 

(22)                          Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by Boise Cascade or any of its Restricted Subsidiaries in the ordinary course of business;

 

(23)                          Liens securing Indebtedness in an amount which, together with the aggregate outstanding amount of all other Indebtedness secured by Liens Incurred pursuant to this clause (23), does not exceed $25.0 million;

 

(24)                          Liens incurred to secure cash management services in the ordinary course of business; and

 

(25)                          Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (8), (9) or (10); provided, however, that:

 

(A)                               such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to such property or proceeds or distributions thereof); and

 

(B)                               the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (8), (9) or (10) at the time that the original Lien became a Permitted Lien and (y) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement.

 

Notwithstanding the foregoing, “Permitted Liens” shall not include any Lien described in clause (6), (9) or (10) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly from Net Available Cash pursuant to Section 4.06 hereof. For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

 

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“Permitted Payments to Parent” means the declaration and payment of dividends by Boise Cascade to, or the making of loans to, any direct or indirect parent company of Boise Cascade in amounts required for such direct or indirect parent companies to pay, in each case, without duplication:

 

(1)                                 franchise and excise taxes and other fees, taxes and expenses, in each case to the extent required to maintain their corporate existence;

 

(2)                                 customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of Boise Cascade to the extent that such salaries, bonuses and other benefits are directly attributable to the ownership or operation of Boise Cascade and its Restricted Subsidiaries;

 

(3)                                 general corporate operating and overhead costs and expenses of any direct or indirect parent company of Boise Cascade to the extent that such costs and expenses are directly attributable to the ownership or operation of Boise Cascade and its Restricted Subsidiaries; and

 

(4)                                 fees and expenses (other than to Affiliates of Boise Cascade) related to any unsuccessful equity or debt offering of such parent company;

 

provided, however, that the aggregate amount of such payments made pursuant to clauses (2) through (4) above included as Permitted Payments to Parent shall not exceed $5.0 million in any fiscal year or, following any initial public offering of Capital Stock of Boise Holdings, $10.0 million in any fiscal year.

 

“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) that 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 that is due or overdue or is to become due at the relevant time.

 

“Principal Property” means the land, improvements, buildings, fixtures and equipment (including any leasehold interest therein) constituting Boise Cascade’s principal corporate office, any manufacturing plant, or any manufacturing, distribution or research facility (in each case, whether now owned or hereafter acquired) which is owned or leased by Boise Cascade or any Restricted Subsidiary, unless Boise Cascade’s Board of Directors has determined in good faith that such office, plant or facility is not of material importance to the total business conducted by Boise Cascade and its Subsidiaries taken as a whole.

 

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“Purchase Money Indebtedness” means Indebtedness (including Capital Lease Obligations) (1) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds or similar Indebtedness, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and (2) Incurred to finance the acquisition by Boise Cascade or a Restricted Subsidiary of such asset (whether through the direct purchase of such asset or the purchase of the Capital Stock of any Person owning such asset), including additions and improvements, in each case in the ordinary course of business; provided, however, that such Indebtedness is Incurred within 180 days after such acquisition of such assets.

 

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by Boise Cascade or any Restricted Subsidiary pursuant to which Boise Cascade or any Restricted Subsidiary may sell, convey, contribute to capital or otherwise transfer to a Receivables Subsidiary, or may grant a security interest in and/or pledge, any Receivables or interests therein and any assets related thereto, including, without limitation, all collateral securing such Receivables, all contracts and contract rights, purchase orders, security interests, financing statements or other documentation in respect of such Receivables, any Guarantees, indemnities, warranties or other obligations in respect of such Receivables, any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables similar to such Receivables and any collections or proceeds of any of the foregoing (collectively, the “Related Assets”), which transfer, grant of security interest or pledge is funded in whole or in part, directly or indirectly, by the Incurrence or issuance by the transferee or any successor transferee of Indebtedness, fractional undivided interests, or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such Receivables and Related Assets or interests in Receivables and Related Assets, it being understood that a Qualified Receivables Transaction may involve:

 

(1)                                 one or more sequential transfers or pledges of the same Receivables and Related Assets, or interests therein, and

 

(2)                                 periodic transfers or pledges of Receivables and/or revolving transactions in which new Receivables and Related Assets, or interests therein, are transferred or pledged upon collection of previously transferred or pledged Receivables and Related Assets, or interests therein, and provided that:

 

(A)                               the Board of Directors of Boise Cascade or any Restricted Subsidiary that is party to such Qualified Receivables Transaction shall have determined in good faith that such Qualified Receivables Transaction is economically fair and reasonable to Boise Cascade or such Restricted Subsidiary as applicable, and the Receivables Entity, and

 

(B)                               the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Board of Directors of Boise Cascade or any Restricted Subsidiary that is party to such Qualified Receivables Transaction).

 

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The grant of a security interest in any accounts receivable of Boise Cascade or any of Restricted Subsidiary to secure Indebtedness Incurred pursuant to the Credit Agreement shall not be deemed a Qualified Receivables Transaction.

 

“Rating Agency” means Standard & Poor’s and Moody’s or, if Standard & Poor’s or Moody’s or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuers (as certified by a resolution of the Board of Directors of Boise Cascade) that shall be substituted for Standard & Poor’s or Moody’s or both, as the case may be.

 

“Receivables Facility” means any of one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to Boise Cascade or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which Boise Cascade or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

 

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any accounts receivable or participation interest therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

 

“Receivables Subsidiary” means any Subsidiary formed for the purpose of engaging in, and that solely engages only in, one or more Receivables Facilities and other activities reasonably related thereto.

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, purchase, redeem, defease 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 Boise Cascade 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)                                 (a) if the Stated Maturity of the Indebtedness being Refinanced is earlier than the Stated Maturity of the Notes, such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the Notes, the Refinancing Indebtedness has a Stated Maturity later than the Stated Maturity of the Notes;

 

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(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 (plus fees and expenses, including any premium and defeasance 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 of Boise Cascade that is not a Guarantor or Issuer that Refinances Indebtedness of Boise Cascade or (B) Indebtedness of Boise Cascade or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

 

“Registration Rights Agreement” means (i) the Registration Rights Agreement dated October 22, 2012 by and among the Initial Purchasers, the Issuers and the Guarantors and (ii) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuers, the Guarantors and the initial purchasers of such Additional Notes.

 

“Related Business” means any business in which Boise Cascade or any of the Restricted Subsidiaries was engaged on the Issue Date and any business related, ancillary or complementary to such business.

 

“Related Party” means (a) with respect to Madison Dearborn Partners, LLC, (i) any investment fund controlled by or under common control with, Madison Dearborn Partners, LLC, and any officer, director or employee of Madison Dearborn Partners, LLC, and (ii) any spouse or lineal descendant (including by adoption and stepchildren) of the officers, directors and employees referred to in clause (a)(i) above; and (b) with respect to any officer or employee of Boise Holdings or any of its Subsidiaries, (i) any spouse or lineal descendant (including by adoption and stepchildren) of the officer or employee and (ii) any trust, corporation, partnership or other entity, of which an 80% or more controlling interest is held by beneficiaries, stockholders, partners or owners who are the officer or employee, any of the persons described in clause (b)(i) above or any combination of these identified relationships.

 

“Representative” means, with respect to a Person, any trustee, agent or representative (if any) for an issue of Senior Indebtedness of such Person.

 

“Restricted Investment” means any Investment other than a Permitted Investment.

 

“Restricted Payment” with respect to any Person means:

 

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(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 (A) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock), (B) dividends or distributions payable solely to Boise Cascade or a Restricted Subsidiary, (C) 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) and (D) dividends or distributions of shares of Capital Stock of, or Indebtedness owed to Boise Cascade or any Restricted Subsidiary by, Unrestricted Subsidiaries);

 

(2)                                 the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Capital Stock of Boise Cascade held by any Person (other than by 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 Boise Cascade 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 the Issuers or any Subsidiary Guarantor (other than (A) from Boise Cascade or a Restricted Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement 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, redemption, defeasance or other acquisition or retirement); or

 

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

 

“Restricted Subsidiary” means Boise Finance and any Subsidiary of Boise Cascade that is not an Unrestricted Subsidiary.

 

“Sale/Leaseback Transaction” means an arrangement relating to property owned by Boise Cascade or a Restricted Subsidiary on the Issue Date or thereafter acquired by Boise Cascade or a Restricted Subsidiary whereby Boise Cascade or a Restricted Subsidiary transfers such property to a Person and Boise Cascade or a Restricted Subsidiary leases it from such Person.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Secured Indebtedness” means any Indebtedness secured by a Lien.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

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“Securityholders Agreement” means the Securityholders Agreement dated October 29, 2004 by and among the holders of the Capital Stock of Boise Holdings, as in effect on the Issue Date and giving effect to any amendment thereto (including an amendment to add additional parties) that is not materially less favorable to the Holders.

 

“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 in right of payment to the Notes or the Guarantee of such Person; provided, however, that Senior Indebtedness shall not include:

 

(1)                                 any obligation of such Person to Boise Cascade or any of their Subsidiaries;

 

(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;

 

(4)                                 any Indebtedness or other Obligation of such Person that is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

 

(5)                                 that portion of any Indebtedness that at the time of Incurrence is Incurred in violation of this Indenture (provided that the lenders under the Credit Agreement may rely on a written representation of Boise Cascade made at the time of an Incurrence of Indebtedness thereunder (or deemed made at such time pursuant to the Credit Agreement) that the Indebtedness so Incurred shall constitute “Senior Indebtedness” for purposes of this Indenture, and the Indebtedness so Incurred under the Credit Agreement shall not fail to qualify as “Senior Indebtedness” pursuant to this clause (5) as a result of such reliance).

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of Boise Cascade within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC; provided that, solely for purposes of Section 4.02 hereof, 5% shall be substituted for 10% for purposes of such definition.

 

“Standard Securitization Undertakings” means all representations, warranties, covenants, indemnities, performance Guarantees and servicing obligations entered into by the

 

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Parent or any Subsidiary of the Parent (other than a Receivables Subsidiary) which are customary in connection with any Qualified Receivables Transaction.

 

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

 

“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).

 

“Statistical Release” means the statistical release “H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded U.S. government securities adjusted to constant maturities or, if such statistical release is not published at the time of any determination, then such other reasonably comparable index which shall be designated by the Trustee.

 

“Subordinated Obligation” means, with respect to a Person, and with respect to the Notes, 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 Guarantee of such Person pursuant to a written agreement to that effect.

 

“Subsidiary” means, with respect to any Person, any corporation, association, partnership 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 each Subsidiary of Boise Cascade that Guarantees the Notes pursuant to the terms of this Indenture.

 

“Tax Distributions” shall mean cash distributions by Boise Cascade to the Members in respect of its Capital Stock for the purpose of providing the Members with funds to pay the tax liability attributable to their shares of the taxable income of Boise Cascade and its Restricted Subsidiaries and, to the extent of the amount actually received from any Unrestricted Subsidiaries, an amount required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries.

 

“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;

 

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(2)                                 investments in demand and time deposit accounts, certificates of deposit and money market deposits maturing within 365 days of the date of acquisition thereof issued by a bank or trust company that is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital and surplus aggregating in excess of $500.0 million (or the foreign currency equivalent thereof) and has 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 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 365 days after the date of acquisition, issued by a corporation (other than an Affiliate of Boise Cascade) 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 Moody’s or “A-1” (or higher) according to Standard & Poor’s;

 

(5)                                 investments in securities with maturities of 365 days 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 or “A” by Moody’s;

 

(6)                                 Indebtedness issued by Persons (other than Madison Dearborn Partners, LLC or any of its Affiliates) with a rating of “A” or higher by Standard & Poor’s or “A-2” or higher by Moody’s with maturities not exceeding two years from the date of acquisition; and

 

(7)                                 investments in money market funds that invest at least 95% of their assets in securities of the types described in clauses (1) through (6) above.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date.

 

“Total Assets” as of any date of determination means the total consolidated assets, less applicable depreciation, amortization and other valuation reserves, as shown on the most recent balance sheet of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis.

 

“Total Consolidated Indebtedness” means, as of any date of determination, an amount equal to the aggregate amount of all Indebtedness (other than Indebtedness in respect of any Qualified Receivables Transaction, Attributable Debt and Hedging Obligations) of Boise Cascade and its Restricted Subsidiaries on a Consolidated Basis, in each case outstanding as of

 

37

 

such date of determination, after giving effect to any Incurrence of Indebtedness and the application of the proceeds therefrom giving rise to such determination.

 

“Treasury Rate” means, in connection with the calculation of any Make-Whole Amount with respect to any Note, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity, as compiled by and published in the most recent Statistical Release that has become publicly available at least two Business Days prior to the redemption date, equal to the period from the redemption date to November 1, 2015. If no maturity exactly corresponds to such period, yields for the published maturities occurring prior to and after such maturity most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Treasury Rate shall be interpolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month.

 

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

 

“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.

 

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

 

“Unrestricted Subsidiary” means:

 

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

 

(2)                                 any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of Boise Cascade may designate any Subsidiary of Boise Cascade (other than Boise Finance) (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 (except in the case of a Receivables Subsidiary) holds any Lien on any property of, Boise Cascade or any other Subsidiary of Boise Cascade that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under Section 4.04 hereof.

 

The Board of Directors of Boise Cascade may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (A) either (i) Boise Cascade could Incur $1.00 of additional Indebtedness under Section 4.03(a) hereof or (ii) the Consolidated Coverage Ratio would be greater immediately following such designation than immediately prior to such designation and (B) no Default shall have occurred and be continuing. Any such designation by the Board of Directors of Boise Cascade shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the

 

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resolution of the Board of Directors of Boise Cascade giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

 

“U.S. Dollar Equivalent” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two Business Days prior to such determination.

 

“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 that 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.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

(1)           the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2)                                 the then outstanding principal amount of such Indebtedness.

 

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

 

SECTION 1.02.           OTHER DEFINITIONS.

 

	
Term
    	
 
    	
Defined in
   Section
    
	
“Affiliate Transaction”
    	
 
    	
4.07
    	
(a)
    
	
“Appendix”
    	
 
    	
2.01
    	
 
    
	
“Bankruptcy Law”
    	
 
    	
6.01
    	
 
    
	
“Boise Finance”
    	
 
    	
Preamble
    	
 
    
	
“Boise Cascade”
    	
 
    	
Preamble
    	
 
    
	
“Boise Holdings”
    	
 
    	
Preamble
    	
 
    
	
“Change of Control Offer”
    	
 
    	
4.09
    	
(b)
    
	
“covenant defeasance option”
    	
 
    	
8.01
    	
(b)
    
	
“Covenant Termination Date”
    	
 
    	
4.16
    	
(b)
    

 

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Term
    	
 
    	
Defined in
   Section
    
	
“Custodian”
    	
 
    	
6.01
    	
 
    
	
“Event of Default”
    	
 
    	
6.01
    	
 
    
	
“Guaranteed Obligations”
    	
 
    	
10.01
    	
(a)
    
	
“Initial Lien”
    	
 
    	
4.10
    	
 
    
	
“Issuers”
    	
 
    	
Preamble
    	
 
    
	
“legal defeasance option”
    	
 
    	
8.01
    	
(b)
    
	
“Offer”
    	
 
    	
4.06
    	
(b)
    
	
“Offer Amount”
    	
 
    	
4.06
    	
(c)(1)
    
	
“Offer Period”
    	
 
    	
4.06
    	
(c)(1)
    
	
“Paying Agent”
    	
 
    	
2.03
    	
 
    
	
“Purchase Date”
    	
 
    	
4.06
    	
(c)
    
	
“Refinancing Disqualified Stock”
    	
 
    	
4.04
    	
(b)(9)(B)
    
	
“Registrar”
    	
 
    	
2.03
    	
 
    
	
“Successor Company”
    	
 
    	
5.01
    	
(a)(1)
    

 

SECTION 1.03.           INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.  This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

 

“Commission” means the SEC;

 

“indenture securities” means the Notes and the Guarantees;

 

“indenture security holder” means a Noteholder;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and

 

“obligor” on the indenture securities means the Issuers, each Guarantor and any other obligor on the indenture securities.

 

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

 

SECTION 1.04.           RULES OF CONSTRUCTION.  Unless the context otherwise requires:

 

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

 

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

 

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(3)                                 “or” is not exclusive;

 

(4)                                 “including” means including without limitation;

 

(5)                                 words in the singular include the plural and words in the plural include the singular;

 

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

 

(7)                                 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;

 

(8)                                 the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

 

(9)                                 the principal amount of any Preferred Stock shall be (A) the maximum liquidation value of such Preferred Stock or (B) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater; and

 

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

 

Article 2

 

THE NOTES

 

SECTION 2.01.           FORM AND DATING.  Provisions relating to the Initial Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix”), which is hereby incorporated in, and expressly made part of, this Indenture. The Initial Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix, which is hereby incorporated in, and expressly made a part of, this Indenture. The Exchange Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto, 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 Issuers are subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuers). Each Note shall be dated the date of its authentication. The terms of the Notes set forth in the Appendix and Exhibit A are part of the terms of this Indenture.

 

SECTION 2.02.           EXECUTION AND AUTHENTICATION.  Two Officers shall sign the Notes for the Issuers by manual or facsimile signature.  If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

 

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

 

On the Issue Date, the Trustee shall authenticate and deliver $250 million of Notes and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount specified in a written order of the Issuers signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Issuers. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of an issuance of Additional Notes pursuant to Section 2.13 hereof after the Issue Date, shall certify that such issuance is in compliance with Section 4.03 hereof.

 

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

SECTION 2.03.           REGISTRAR AND PAYING AGENT.  The Issuers shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent.

 

The Issuers shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuers shall notify the Trustee of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07 hereof. The Issuers or any Wholly Owned Subsidiary of an Issuer incorporated or organized within the United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.

 

The Issuers initially appoint the Trustee as Registrar and Paying Agent.

 

SECTION 2.04.           PAYING AGENT TO HOLD MONEY IN TRUST.  Prior to each due date of the principal and interest on any Note, the Issuers shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders of the Notes or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee of any default by the Issuers in making any such payment. If the Issuers or a Subsidiary of an Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuers at any time may require a Paying Agent to 

 

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pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.

 

SECTION 2.05.           NOTEHOLDER LISTS.  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders. If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Noteholders.

 

SECTION 2.06.           TRANSFER AND EXCHANGE.  The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer. When a Note is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture, including the Appendix hereto, and Section 8-401(1) of the Uniform Commercial Code are met. When Notes are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.

 

SECTION 2.07.           REPLACEMENT NOTES.  If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuers, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Note is replaced. The Issuers and the Trustee may charge the Holder for their expenses in replacing a Note.

 

Every replacement Note is an additional Obligation of the Issuers.

 

SECTION 2.08.           OUTSTANDING NOTES.  Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Note does not cease to be outstanding because an Issuer or an Affiliate of an Issuer holds the Note.

 

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).

 

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Noteholders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

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SECTION 2.09.           TEMPORARY NOTES.  Until definitive Notes are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuers consider appropriate for temporary Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.

 

SECTION 2.10.           CANCELLATION.  The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Issuers unless the Issuers direct the Trustee to deliver canceled Notes to the Issuers. The Issuers may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation.

 

SECTION 2.11.           DEFAULTED INTEREST.  If the Issuers default in a payment of interest on the Notes, the Issuers shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) on the Notes in any lawful manner. The Issuers may pay the defaulted interest on the Notes to the Noteholders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Noteholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

 

SECTION 2.12.           CUSIP NUMBERS, ISINS, ETC.  The Issuers in issuing the Notes may use “CUSIP” numbers, “ISINs” and “Common Code” numbers (in each case if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers, “ISINs” and “Common Code” numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee in writing of any change in any “CUSIP” numbers, “ISINs” or “Common Code” numbers applicable to the Notes.

 

SECTION 2.13.           ISSUANCE OF ADDITIONAL NOTES.  After the Issue Date, the Issuers shall be entitled, subject to its compliance with Section 4.03 hereof, 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 and issue price.

 

With respect to any Additional Notes, the Issuers 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:

 

(1)                                 the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture and the provision of Section 4.03 hereof that the Issuers are relying on to issue such Additional Notes;

 

44

 

(2)                                 the series, the issue price and the issue date 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; and

 

(3)                                 whether such Additional Notes shall be Initial Notes or shall be issued in the form of Exchange Note as set forth in Exhibit A hereto.

 

SECTION 2.14.           SERIES OF NOTES.  All of the Notes issued under this Indenture (including any Additional Notes) shall be treated as a single class for all purposes of this Indenture, including waivers, amendments, redemptions and offers to purchase.

 

Article 3

 

REDEMPTION

 

SECTION 3.01.           NOTICES TO TRUSTEE.  If the Issuers elect to redeem Notes pursuant to paragraph 5 of the Notes, they shall notify the Trustee in writing of the redemption date, the principal amount of Notes to be redeemed and the paragraph of the Notes pursuant to which the redemption will occur.

 

The Issuers shall give each notice to the Trustee provided for in this Section at least 60 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers’ Certificate and an Opinion of Counsel from the Issuers to the effect that such redemption will comply with the conditions herein.

 

SECTION 3.02.           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. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $1,000. Notes and portions of them the Trustee selects shall be in principal amounts of $1,000 or a whole multiple of $1,000.

 

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 Issuers promptly of the Notes or portions of Notes to be redeemed.

 

SECTION 3.03.           NOTICE OF REDEMPTION.  At least 30 days but not more than 60 days before a date for redemption of Notes, the Issuers shall mail a notice of redemption by first-class mail to each Holder of Notes to be redeemed at such Holder’s registered address.

 

The notice shall identify the Notes to be redeemed and shall state:

 

(1)                                 the redemption date;

 

(2)                                 the redemption price;

 

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

 

(4)                                 that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(5)                                 if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed;

 

(6)                                 that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

 

(7)                                 the paragraph of Section 5 of the Notes pursuant to which the Notes called for redemption are being redeemed;

 

(8)                                 the “CUSIP” number, “ISIN” or “Common Code” number, if any, printed on the Notes being redeemed; and

 

(9)                                 that no representation is made as to the correctness or accuracy of the “CUSIP” number, “ISIN” or “Common Code” number, if any, listed in such notice or printed on the Notes.

 

At the Issuers’ request, the Trustee shall give the notice of redemption in the Issuers’ name and at the Issuers’ expense. In such event, the Issuers shall provide the Trustee with the information required by this Section.

 

SECTION 3.04.           EFFECT OF NOTICE OF REDEMPTION.  Once notice of redemption is mailed, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date), and such Notes shall be canceled by the Trustee. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

 

SECTION 3.05.           DEPOSIT OF REDEMPTION PRICE.  Prior to the redemption date, the Issuers shall deposit with the Paying Agent (or, if an Issuer or a Subsidiary of an Issuer is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest, if any, on all Notes to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation.

 

SECTION 3.06.           NOTES REDEEMED IN PART.  Upon surrender of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the Holder (at the Issuers’ expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

 

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Article 4

 

COVENANTS

 

SECTION 4.01.           PAYMENT OF NOTES.  The Issuers shall promptly pay the principal of and 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 Noteholders on that date pursuant to the terms of this Indenture.

 

The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

SECTION 4.02.           SEC REPORTS.  Notwithstanding that Boise Cascade may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, Boise Cascade shall furnish to the Trustee and the Holders and, after the completion of any exchange offer (or, if in lieu thereof, the effectiveness of any shelf registration statement) in respect of the Notes, shall file with the SEC (to the extent the SEC will accept such filings) such annual reports and such information, documents and other reports as are specified in Section 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation that is a “non-accelerated filer” subject to such Sections (including, for avoidance of doubt, a quarterly report for the quarter ended September 30, 2012), 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; provided, however, that Boise Cascade shall not be required to furnish or file any such reports with the SEC until the later of 45 days following the issuance of the Notes and the date any such report is required to be filed; provided that such requirements shall be deemed satisfied prior to the commencement of the exchange offer or the effectiveness of the shelf registration statement by the filing with the SEC of the exchange offer registration statement and/or shelf registration statement, to the extent that any such registration statement contains substantially the same information as would be required to be filed by Boise Cascade if it were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and by providing the Trustee and the Holders with such registration statement (and any amendments thereto) promptly following the filing thereof.

 

At any time that any of Boise Cascade’s Subsidiaries (other than any Subsidiary of Boise Cascade that is not then consolidated with Boise Cascade under GAAP) are Unrestricted Subsidiaries that individually or collectively constitute a Significant Subsidiary, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s discussion and analysis of financial condition and results of operations,” of the financial condition and results of operations of Boise Cascade and its Restricted Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.

 

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Notwithstanding the foregoing, so long as Boise Holdings is a Guarantor and complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to holders of the Notes pursuant to this covenant may, at the option of Boise Cascade, be filed by and be those of Boise Holdings rather than Boise Cascade; provided that the same are accompanied by consolidating information that explains in reasonable detail the differences between the information relating to Boise Holdings, on the one hand, and the information relating to Boise Cascade and its Restricted Subsidiaries on a stand alone basis, on the other hand.

 

In addition, the Issuers shall furnish to the Holders of the Notes and to prospective investors, upon the requests of such Holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as any Notes are not freely transferable under the Securities Act.

 

To the extent applicable, the Issuers also shall comply with the other provisions of TIA Section 314(a).

 

SECTION 4.03.           LIMITATION ON INDEBTEDNESS.

 

(a)                                 Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, Incur, directly or indirectly, any Indebtedness; provided, however, that Boise Cascade and the Restricted Subsidiaries shall be entitled to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Coverage Ratio would be at least 2.0 to 1; provided  further that Restricted Subsidiaries that are not Guarantors may not Incur Indebtedness pursuant to this Section 4.03(a) if, after giving pro forma effect to such Incurrence, the aggregate amount of Indebtedness of Restricted Subsidiaries that are not Guarantors Incurred pursuant to this Section 4.03(a) would exceed $25.0 million.

 

(b)                                 Paragraph (a) shall not prohibit the Incurrence by any of Boise Cascade or its Restricted Subsidiaries of any or all of the following Indebtedness:

 

(1)                                 Indebtedness Incurred by Boise Cascade and the Restricted Subsidiaries pursuant to the Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed the greater of:

 

(A)                               $300 million, and

 

(B)                               the sum of (x) 85% of the amounts of all accounts receivable owned by Boise Cascade and its Restricted Subsidiaries at the end of the most recent fiscal quarter and (y) 70% of the amounts of all inventory owned by Boise Cascade and its Restricted Subsidiaries at the end of the most recent fiscal quarter,

 

in each case plus (in the case of any Refinancing) the aggregate amount of fees, underwriting discounts, premiums, prepayment penalties and other costs and expenses Incurred in connection with the Refinancing, less (x) the sum of all permanent repayments of principal with respect to such Indebtedness pursuant to Section

 

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4.06(a)(3)(A) hereof and (y) the aggregate principal amount of Indebtedness Incurred under Section 4.03(b)(15) hereof then outstanding;

 

(2)                                 Indebtedness owed to and held by Boise Cascade or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon, (B) if an Issuer is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (C) if a Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Guarantor with respect to its Guarantee;

 

(3)                                 the Notes and the Exchange Notes (other than any Additional Notes), including in each case any Guarantee thereof by a Subsidiary Guarantor;

 

(4)                                 Indebtedness outstanding on the Issue Date (other than Indebtedness described in clause (1), (2) or (3) of this Section 4.03(b));

 

(5)                                 Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by Boise Cascade or a Restricted Subsidiary (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 Boise Cascade or a Restricted Subsidiary); provided that, on the date of such acquisition and after giving pro forma effect thereto, (A) Boise Cascade would have been entitled to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a) hereof or (B) the Consolidated Coverage Ratio of Boise Cascade and the Restricted Subsidiaries would have been equal to or greater than the Consolidated Coverage Ratio immediately prior to such acquisition or merger;

 

(6)                                 Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to Section 4.03(a) hereof or pursuant to clause (3), (4), (5) or (19) of this Section 4.03(b) or this clause (6); provided, however, that to the extent such Refinancing Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary Incurred pursuant to clause (5), such Refinancing Indebtedness shall be Incurred only by such Subsidiary;

 

(7)                                 Hedging Obligations that are Incurred for bona fide hedging purposes of Boise Cascade and its Restricted Subsidiaries (and not for speculative purposes) and Permitted Bank Product Obligations;

 

(8)                                 Obligations in respect of customs, stay, appeal, performance, bid and surety bonds and other similar types of bonds and performance and completion guarantees and other obligations of a like nature provided by or on behalf of Boise Cascade or any Restricted Subsidiary or obligations in respect of letters of credit related thereto, in each case in the ordinary course of business;

 

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(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)                          Indebtedness consisting of the Guarantee of a Guarantor (including any Guarantee with respect to the Exchange Notes) and any Guarantee by Boise Cascade or any Guarantor of Indebtedness (other than any Indebtedness Incurred by a Restricted Subsidiary that is not a Guarantor pursuant to Section 4.03(b) (5), (15), (16) or (18) hereof) of any of Boise Cascade or its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Boise Cascade or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Senior Indebtedness of the borrower then any such Guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Senior Indebtedness of the Person Guaranteeing such Indebtedness;

 

(11)                          the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock;

 

(12)                          Indebtedness arising from agreements of Boise Cascade or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (a) such Indebtedness is not reflected on the balance sheet of Boise Cascade or any Restricted Subsidiary (contingent obligations referred to in a note to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (a)) and (b) in the case of a disposition, the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Boise Cascade and the Restricted Subsidiaries in connection with such disposition;

 

(13)                          Indebtedness consisting of Guarantees of loans or other extensions of credit made to or on behalf of officers, directors, employees or consultants of Boise Cascade or a Restricted Subsidiary for the purpose of permitting such Persons to purchase Capital Stock of Boise Cascade or any direct or indirect parent of Boise Cascade, as the case may be, in an amount not to exceed $5.0 million at any one time outstanding;

 

(14)                          Purchase Money Indebtedness Incurred by Boise Cascade or a Restricted Subsidiary, and any Refinancing Indebtedness Incurred to Refinance such Indebtedness, in an aggregate principal amount that, when added together with the amount of

 

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Indebtedness Incurred pursuant to this clause (14) and then outstanding, does not exceed the greater of (A) $50.0 million or (B) 5% of Total Assets at the date of determination;

 

(15)                          Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Transaction that is not recourse to Boise Cascade or any other Restricted Subsidiary (except for Standard Securitization Undertakings); provided, however, that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (15) and then outstanding does not exceed, when aggregated with all Indebtedness outstanding under clause (1) of this Section 4.03(b), the maximum amount permitted under clause (1) of this Section 4.03(b);

 

(16)                          Indebtedness Incurred by a Foreign Subsidiary in an aggregate principal amount that, when added together with the amount of Indebtedness Incurred pursuant to this clause (16) and then outstanding, does not exceed $25.0 million;

 

(17)                          Indebtedness of an Issuer or of any Subsidiary Guarantor in an aggregate principal amount that, when taken together with all other Indebtedness Incurred pursuant to this clause (17) and then outstanding, does not exceed the greater of (A) $75.0 million or (B) 5% of Total Assets at the date of determination;

 

(18)                          Attributable Debt in an aggregate principal amount that, when taken together with all other Attributable Debt Incurred pursuant to this clause (18) and then outstanding, does not exceed $50.0 million; provided that on the date of each Incurrence of such Attributable Debt, after giving pro forma effect thereto the Consolidated Coverage Ratio would be equal to or greater than the Consolidated Coverage Ratio immediately prior to the Incurrence of such Attributable Debt;

 

(19)                          Indebtedness of Boise Cascade or Non-Public Indebtedness of any Restricted Subsidiary Incurred in connection with the acquisition of all of the Capital Stock of a Person that becomes a Restricted Subsidiary or all or substantially all of the assets of an entity, in each case engaged in a Related Business, up to an amount equal to 100% of the Net Cash Proceeds received by Boise Cascade from the issuance or sale (other than to a Subsidiary) of its Capital Stock (other than Disqualified Stock) since the Issue Date; provided, however, that any such Net Cash Proceeds that are so received (i) shall be excluded for purposes of making Restricted Payments under Section 4.04(a)(3)(B) hereof and Sections 4.04(b)(1) and (b)(3) hereof and (ii) shall not constitute Excluded Contributions;

 

(20)                          Indebtedness incurred by Boise Cascade or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

 

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(21)                          Indebtedness of Boise Cascade or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to a Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;

 

(22)                          Indebtedness of Boise Cascade or any Restricted Subsidiary to the extent the proceeds of such Indebtedness are deposited and used to defease all of the Notes pursuant to Article 8; and

 

(23)                          Indebtedness of Boise Cascade or any Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business.

 

(c)                                  For purposes of determining compliance with this Section 4.03:

 

(1)                                 any Indebtedness Incurred under the Credit Agreement on the Issue Date shall be treated as Incurred under clause (1) of paragraph (b) above;

 

(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 above, Boise Cascade, in its sole discretion, shall classify such item of Indebtedness or any portion thereof at the time of Incurrence, and may later reclassify such item of Indebtedness or any portion thereof (other than as set forth in clause (c)(1) above), and shall only be required to include the amount and type of such Indebtedness in one of the above clauses; and

 

(3)                                 Boise Cascade shall be entitled to divide and classify (and reclassify) an item of Indebtedness in more than one of the types of Indebtedness described above.

 

(d)                                 For purposes of determining compliance with any U.S. dollar denominated restriction on the Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a different currency, the amount of such Indebtedness shall be the U.S. Dollar Equivalent determined on the date of the Incurrence of such Indebtedness; provided, however, that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars shall be as provided in such Currency Agreement. The principal amount of any Refinancing Indebtedness Incurred in the same currency as the Indebtedness being Refinanced shall be the U.S. Dollar Equivalent of the Indebtedness Refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the Refinancing Indebtedness shall be determined in accordance with the preceding sentence, and (2) the principal amount of the Refinancing Indebtedness exceeds the principal amount of the Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent of such excess shall be determined on the date such Refinancing Indebtedness is Incurred.

 

(e)                                  For purposes of determining any particular amount of Indebtedness under this Section 4.03, Guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as they were Incurred by a Person that could have Incurred such Indebtedness pursuant to this Section 4.03.

 

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SECTION 4.04.           LIMITATION ON RESTRICTED PAYMENTS.

 

(a)                                 Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make a Restricted Payment if at the time Boise Cascade or such Restricted Subsidiary makes such Restricted Payment:

 

(1)                                 a Default shall have occurred and be continuing (or would result therefrom);

 

(2)                                 Boise Cascade is not entitled to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a) hereof; 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 October 1, 2012 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal financial statements are available (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

 

(B)                               100% of the aggregate Net Cash Proceeds, and 100% of the aggregate Net Fair Market Value of property other than cash, in each case received by Boise Cascade from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than (i) Excluded Contributions, (ii) an issuance or sale to Boise Cascade or a Subsidiary of Boise Cascade and (iii) an issuance or sale to an employee stock ownership plan or to a trust established by Boise Cascade or any of its Subsidiaries for the benefit of their employees) and 100% of any cash capital contribution (other than Excluded Contributions), and 100% of the fair market value of a capital contribution of property other than cash, in each case received by Boise Cascade from its equity holders subsequent to the Issue Date; plus

 

(C)                               the amount by which Indebtedness (other than Indebtedness owed to Boise Cascade or any of its Subsidiaries) of Boise Cascade is reduced on Boise Cascade’s balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of Boise Cascade for Capital Stock (other than Disqualified Stock) of Boise Cascade (less the amount of any cash, or the fair market value of any other property, distributed by Boise Cascade upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by Boise Cascade or any Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from sales to Boise Cascade or to a Subsidiary of Boise Cascade or to an employee stock ownership plan or to a trust established by Boise Cascade or any of its Subsidiaries for the benefit of their employees); plus

 

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(D)                               100% of the aggregate amount received in cash by Boise Cascade or any Restricted Subsidiary and the fair market value of property other than cash received by Boise Cascade or any Restricted Subsidiary, in each case subsequent to the Issue Date, from:

 

(i)                                     the sale or other disposition (other than to Boise Cascade or any of its Subsidiaries) of Investments (other than Permitted Investments) made by Boise Cascade or any of its Restricted Subsidiaries and from repurchases and redemptions of such Investments (other than Permitted Investments) from Boise Cascade or any of its Restricted Subsidiaries by any Person (other than Boise Cascade or any of its Subsidiaries) and from repayments of loans or advances that constituted Investments (other than Permitted Investments) (except in each case to the extent the Investment was made pursuant to Section 4.04(b) hereof); and

 

(ii)                                  a dividend or distribution from an Unrestricted Subsidiary (solely to the extent not otherwise included in Consolidated Net Income); plus

 

(E)                                in the event any Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Boise Cascade or a Restricted Subsidiary, in each case subsequent to the Issue Date, the fair market value of the Investment of Boise Cascade or such Restricted Subsidiary in such Unrestricted Subsidiary at the time of such re-designation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (except in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to Section 4.04(b) hereof or constituted a Permitted Investment).

 

The fair market value of property other than cash covered by clauses (3)(B), (C), (D) and (E) above shall be determined in good faith by Boise Cascade and

 

(i)                                     in the event of property with a fair market value in excess of $5.0 million, shall be set forth in an Officers’ Certificate; and

 

(ii)                                  in the event of property with a fair market value in excess of $10.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of Boise Cascade.

 

(b)                                 The provisions of Section 4.04(a) hereof 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 Boise Cascade (other than Disqualified Stock and other than Capital Stock issued or sold to

 

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Boise Cascade or a Subsidiary of Boise Cascade or an employee stock ownership plan or to a trust established by Boise Cascade or any of its Subsidiaries for the benefit of their employees) or a substantially concurrent cash capital contribution received by Boise Cascade from its equity holders; provided, however, that (A) such Restricted Payment shall be excluded from the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under Section 4.03(a)(3)(B) hereof shall not constitute Excluded Contributions or be used to Incur Indebtedness pursuant to Section 4.03(b)(19) hereof;

 

(2)                                 dividends or other distributions paid within 60 days after the date of declaration thereof if at such date of declaration such dividend or other distribution would have complied with this Section 4.04; provided, however, that such dividend or other distribution shall be included in the calculation of the amount of Restricted Payments;

 

(3)                                 so long as no Default has occurred and is continuing, the purchase, redemption or other acquisition of shares of Capital Stock of Boise Cascade, any direct or indirect parent of Boise Cascade or any of its Subsidiaries from any of their employees, former employees, officers, former officers, directors, former directors, consultants or former consultants (or permitted transferees of such employees, former employees, officers, former officers, directors, former directors, consultants or former consultants), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of Boise Cascade or any direct or indirect parent of Boise Cascade, 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 the aggregate amount of such Restricted Payments (excluding amounts representing cancelation of Indebtedness) shall not exceed $5.0 million in any calendar year; provided  further that (a)(i) Boise Cascade may make in any calendar year, in addition to the amounts permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions that otherwise would be permitted to be made pursuant to this clause (3) in any subsequent two years that end prior to the maturity of the Notes up to a maximum, together with any amounts carried forward in accordance with clause (a)(ii), of $15.0 million in any calendar year (and the amounts available in such subsequent years shall be correspondingly reduced) and (ii) Boise Cascade may carry forward and make in a subsequent calendar year, in addition to the amounts permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions permitted to have been made but not made in any preceding calendar year up to a maximum, together with amounts for subsequent years described in clause (a)(i), of $15.0 million in any calendar year pursuant to this clause (3) and (b) such amount in any calendar year may be increased by (i) the cash proceeds of key man life insurance policies received by Boise Cascade and its Restricted Subsidiaries after the Issue Date and (ii) the aggregate cash proceeds received by Boise Cascade (or any direct or indirect parent of Boise Cascade to the extent the proceeds are contributed to the common equity capital of Boise Cascade) during that calendar year from any re-issuance of Capital Stock by Boise Cascade (or any direct or indirect parent of Boise Cascade) to employees, officers, directors or consultants of Boise Cascade and its Restricted

 

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Subsidiaries (provided that such aggregate cash proceeds received upon re-issuance shall be excluded for purposes of making Restricted Payments under Section 4.04(a)(3)(B) and Section 4.04(b)(1) hereof and shall not constitute Excluded Contributions or be used to Incur Indebtedness under Section 4.03(b)(19) hereof, less any amount previously applied to the payment of Restricted Payments pursuant to this Section 4.04(b)(3) ; provided  further, however, that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(4)                                 the declaration and payments of dividends on Disqualified Stock issued pursuant to Section 4.03 hereof; provided, however, that at the time of payment of such dividend, no Default shall have occurred and be continuing (or result therefrom); provided  further, however, that such dividends shall be excluded from the calculation of the amount of Restricted Payments;

 

(5)                                 repurchases of Capital Stock deemed to occur upon exercise of stock options or warrants or similar stock-based instruments if such Capital Stock represents a portion of the exercise price of such options or in connection with a gross-up or tax withholding related to such Capital Stock; provided, however, that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(6)                                 cash payments in lieu of the issuance of fractional shares or limited liability company units in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of Boise Cascade or any direct or indirect parent of Boise Cascade or in connection with a merger, consolidation, amalgamation or other combination involving Boise Cascade or any direct or indirect parent of Boise Cascade; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.04 (as determined in good faith by the Board of Directors of Boise Cascade); provided  further, however, that such payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(7)                                 in the event of a Change of Control, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of an Issuer or any Subsidiary Guarantor, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Obligations, plus any accrued and unpaid interest thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuers (or a third party to the extent permitted by this Indenture) have made a Change of Control Offer with respect to the Notes as a result of such Change of Control and have repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer; provided  further, however, that such payments, purchases, redemptions, defeasances or other acquisitions or retirements shall be included in the calculation of the amount of Restricted Payments;

 

(8)                                 payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under Section 4.03(b)(2) hereof; provided, however, that no Default has occurred and is continuing or otherwise would result therefrom; provided  further,

 

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however, that such payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(9)                                 the acquisition or retirement of Disqualified Stock of Boise Cascade (other than from Boise Cascade or any of its Subsidiaries), either:

 

(A)                               solely in exchange for shares of Disqualified Stock of such Person; or

 

(B)                               through the application of net proceeds of a substantially concurrent sale of shares of Disqualified Stock of such Person (other than Disqualified Stock issued or sold to Boise Cascade or any of its Subsidiaries, or an employee stock ownership plan or a trust established by Boise Cascade or any of its Subsidiaries for the benefit of their employees or another Person to the extent such sale is financed by loans to such Person from or guaranteed by Boise Cascade or any of its Subsidiaries, unless such loans have been repaid with cash on or prior to the date of determination) (“Refinancing Disqualified Stock”); provided that:

 

(i)                                     the Refinancing Disqualified Stock does not mature or become mandatorily redeemable or subject to purchase pursuant to a sinking fund obligation, upon the occurrence of certain events or otherwise, earlier than the Disqualified Stock being acquired;

 

(ii)                                  the amount of all obligations with respect to the redemption, repayment or other repurchase of such Refinancing Disqualified Stock does not exceed the amount of all obligations with respect to the redemption, repayment or other repurchase of the Disqualified Stock being acquired (calculated in each case in accordance with the definition of “Indebtedness”); and

 

(iii)                               if the Disqualified Stock being acquired or retired is issued by a Restricted Subsidiary, such Refinancing Disqualified Stock shall be issued only by such Restricted Subsidiary;

 

and provided, further, that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(10)                          for so long as Boise Cascade is a pass-through or disregarded entity for United States Federal income tax purposes, Tax Distributions in respect of any taxable year of Boise Cascade equal to the product of (i) the amount of taxable income allocated to the Members for such taxable year, less the amount of taxable loss allocated to the Members for all prior taxable years beginning on or after January 1, 2012 (except to the extent such taxable losses have previously been taken into account under this provision), times (ii) the highest aggregate marginal statutory Federal, state and local income tax rate (determined taking into account the deductibility of state and local income taxes for Federal income tax purposes) to which any of the direct or indirect Members of Boise

 

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Cascade who is an individual is subject for such year; and Boise Cascade shall be permitted to make such payments on a quarterly basis during such taxable year based on the best estimate of the chief financial officer of Boise Cascade of the amounts specified in clauses (i) and (ii) above; provided that, if the aggregate amount of the estimated Tax Distributions made in any taxable year of Boise Cascade exceeds the actual maximum amount of Tax Distributions for that year as finally determined, the amount of any Tax Distributions in the succeeding taxable year (or, if necessary, any subsequent taxable years) shall be reduced by the amount of such excess, and provided  further that 50% of all Tax Distributions made shall be excluded, and 50% shall be included, in the calculation of the amount of Restricted Payments;

 

(11)                          Restricted Payments that are made with Excluded Contributions; provided, however, that such Restricted Payments shall be excluded from the calculation of the amount of Restricted Payments;

 

(12)                          Permitted Payments to Parent; provided, however, that such Restricted Payments shall be included in the calculation of the amount of Restricted Payments;

 

(13)                          the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Obligations of Boise Cascade or a Subsidiary Guarantor made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Boise Cascade or a Subsidiary Guarantor, as the case may be, Incurred in accordance with this Indenture so long as:

 

(A)                               the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Obligations being so redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium to be paid, defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness;

 

(B)                               such new Indebtedness is subordinated to the Notes or the applicable Guarantee at least to the same extent as such Subordinated Obligations so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value;

 

(C)                               such new Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Obligations being so redeemed, repurchased, defeased, acquired or retired; and

 

(D)                               such new Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Obligations being so redeemed, repurchased, defeased, acquired or retired;

 

(14)                          Restricted Payments in an amount that, when taken together with all Restricted Payments made pursuant to this clause (14), does not exceed $100.0 million;

 

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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 Restricted Payments shall be included in the calculation of the amount of Restricted Payments;

 

(15)                          any Restricted Payments so long as the Consolidated Leverage Ratio, at the time of each such Restricted Payment, after giving pro forma effect to such Restricted Payment, is no greater than 3.50 to 1.00; 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 Restricted Payments shall be included in the calculation of the amount of Restricted Payments; and

 

(16)                          the payment, purchase, redemption, defeasance or other acquisition of Existing Notes.

 

For purposes of Sections 4.04(b)(1) and (b)(9)(B) hereof, a Restricted Payment shall be deemed to have been made substantially concurrently with a sale, contribution or Incurrence, as the case may be, if made or irrevocably committed to within 30 days of such sale, contribution or Incurrence.

 

For purposes of determining compliance with this Section 4.04, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in clauses (1) through (16) above, or is permitted pursuant to Section 4.04(a), Boise Cascade shall be entitled to classify such Restricted Payment (or portion thereof) on the date of its payment or later reclassify such Restricted Payment (or portion thereof) in any manner that complies with this covenant.

 

SECTION 4.05.           LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES.  Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any such Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to Boise Cascade or any Restricted Subsidiary or pay any Indebtedness owed to Boise Cascade or any Restricted Subsidiary, (b) make any loans or advances to Boise Cascade or any Restricted Subsidiary or (c) transfer any of its property or assets to Boise Cascade or any Restricted Subsidiary, except:

 

(1)                                 any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date (including the Credit Agreement);

 

(2)                                 any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred or Capital Stock issued by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by Boise Cascade or any Restricted Subsidiary (other than Indebtedness Incurred or Capital Stock issued 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

 

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or was acquired by Boise Cascade or any Restricted Subsidiary) and outstanding on such date;

 

(3)                                 any encumbrance or restriction existing under or by reason of Indebtedness or other contractual requirements of a Receivables Subsidiary or any Standard Securitization Undertaking, in each case in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Subsidiary and Receivables and Related Assets;

 

(4)                                 any encumbrance or restriction arising by reason of applicable law, rule, regulation or order;

 

(5)                                 restrictions on cash or other deposits or net worth imposed by customers, suppliers or landlords under contracts entered into in the ordinary course of business;

 

(6)                                 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 substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

 

(7)                                 any encumbrance or restriction consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions impose restrictions of the type described in clause (c) above on the lease or the property leased thereunder;

 

(8)                                 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;

 

(9)                                 Purchase Money Indebtedness Incurred in compliance with Section 4.03 hereof;

 

(10)                          customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such joint venture or similar Person;

 

(11)                          any encumbrance or restriction contained in any Indebtedness Incurred by a Foreign Subsidiary in compliance with this Indenture that applies only to such Foreign Subsidiary;

 

(12)                          any encumbrance or restriction contained in any Indebtedness Incurred by Boise Cascade or a Restricted Subsidiary subsequent to the Issue Date pursuant to Section 4.03(b)(5), (7), (12), (17), (19) or (22) hereof; and

 

(13)                          any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above; provided that such

 

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amendments or refinancings are, in the good faith judgment of the Board of Directors of Boise Cascade, no more restrictive with respect to such dividend and other restrictions than those contained in the dividend or other restrictions prior to such amendment or refinancing.

 

SECTION 4.06.           LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.

 

(a)                                 Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate any Asset Disposition unless:

 

(1)                                 Boise Cascade 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) of the shares and assets subject to such Asset Disposition, (i) if such fair market value exceeds $10.0 million, as determined in good faith by the Board of Directors of Boise Cascade or (ii), if such fair market value is equal to or less than $10.0 million, as determined in good faith by an Officer of Boise Cascade;

 

(2)                                 in the case of Asset Dispositions that are not Permitted Asset Swaps, at least 75% of the consideration thereof received by Boise Cascade 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 Boise Cascade or such Restricted Subsidiary, as the case may be:

 

(A)                               to the extent Boise Cascade or such Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness) to prepay, repay, redeem or purchase Indebtedness under any Credit Agreement and Indebtedness (other than any Disqualified Stock) of a Restricted Subsidiary other than Indebtedness owed to Boise Cascade or an Affiliate of Boise Cascade) within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

 

(B)                               to the extent Boise Cascade or such Restricted Subsidiary, as the case may be, 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; and

 

(C)                               to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an offer to the Holders of the Notes to purchase Notes pursuant to and subject to the conditions contained in this Indenture;

 

provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, Boise Cascade or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any)

 

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to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased.

 

Notwithstanding the foregoing provisions of this Section 4.06, Boise Cascade and its Restricted Subsidiaries shall not be required to apply any Net Available Cash in accordance with this Section 4.06 except to the extent that the aggregate Net Available Cash from all Asset Dispositions that is not applied in accordance with this Section 4.06 exceeds $20.0 million.

 

Pending application of Net Available Cash pursuant to this Section 4.06, such Net Available Cash shall be invested in Temporary Cash Investments or applied to temporarily reduce revolving credit indebtedness.

 

For the purposes of this Section 4.06(a), the following are deemed to be cash or cash equivalents:

 

(1)                                 the assumption or discharge of Indebtedness of Boise Cascade or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock or Preferred Stock of Boise Cascade or a Subsidiary Guarantor) and the release of Boise Cascade or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition;

 

(2)                                 securities received by Boise Cascade or any Restricted Subsidiary from the transferee that are converted within 90 days by Boise Cascade or such Restricted Subsidiary into cash, to the extent of cash received in that conversion; and

 

(3)                                 any Designated Non-cash Consideration received by Boise Cascade or any Restricted Subsidiary in an Asset Disposition having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (3) (unless such Designated Non-cash Consideration has been converted into cash, which cash shall be treated after such conversion as Net Available Cash), not to exceed 7.5% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

 

(b)                                 In the event of an Asset Disposition that requires the purchase of Notes pursuant to Section 4.06(a)(3)(C) hereof, the Issuers shall purchase Notes tendered pursuant to an offer by the Issuers for the Notes (the “Offer”) at a purchase price of 100% of their principal amount without premium, plus accrued but unpaid, in accordance with the procedures (including prorating in the event of oversubscription) set forth in Section 4.06(c) hereof. If the aggregate purchase price of the Notes tendered exceeds the Net Available Cash allotted to their purchase, the Issuers shall select the securities to be purchased on a pro rata basis but in round denominations, which shall be denominations of $1,000 principal amount or multiples thereof. If the aggregate purchase price of the securities purchased pursuant to such offer in accordance with this Section 4.06 is less than the Net Available Cash offered therefor, the Issuers may use any such excess Net Available Cash for general corporate purposes or any other purpose, in each case not prohibited by this Indenture. The Issuers shall not be required to make such an offer to

 

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purchase Notes pursuant to this Section 4.06 if the Net Available Cash available therefor is less than $20.0 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, Net Available Cash shall be deemed to be reduced by the aggregate amount of such Offer (regardless of the amount of Notes tendered in such offer).

 

(c)                                  Promptly, and in any event within 10 days after the Issuers become obligated to make an Offer, the Issuers 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 Issuers either in whole or in part (subject to prorating as described in Section 4.06(b) hereof 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 contain such information concerning the business of Boise Cascade and the Restricted Subsidiaries which the Issuers in good faith believe will enable such Holders to make an informed decision and all instructions and materials necessary to tender Notes pursuant to the Offer, together with the information contained in clause (3).

 

(1)                                 Not later than the date upon which written notice of an Offer is delivered to the Trustee as provided below, the Issuers 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 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 4.06(a) and (b) hereof. On such date, the Issuers shall also irrevocably deposit with the Trustee or with a Paying Agent (or, if an Issuer is acting as its own Paying Agent, segregate and hold in trust) in Temporary Cash Investments, maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. If the Offer includes other Senior Indebtedness, the deposit described in the preceding sentence may be made with any other paying agent pursuant to arrangements satisfactory to the Trustee. Upon the expiration of the period for which the Offer remains open (the “Offer Period”), the Issuers 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 Issuers. 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 Issuers to the Trustee is less than the Offer Amount applicable to the Notes, the Trustee shall deliver the excess to the Issuers immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.

 

(2)                                 Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers 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 an Issuer receives not later than one

 

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Business Day prior to the Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing such Holder’s 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.

 

(3)                                 At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, the Issuers shall also deliver an Officers’ Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.06. 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 Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.06. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.06, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section 4.06 by virtue of their compliance with such securities laws or regulations.

 

SECTION 4.07.           LIMITATION ON AFFILIATE TRANSACTIONS.

 

(a)                                 Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries 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 Boise Cascade (an “Affiliate Transaction”) unless:

 

(1)                                 the terms of the Affiliate Transaction are no less favorable to Boise Cascade 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 that is not an Affiliate; and

 

(2)                                 if such Affiliate Transaction involves an amount in excess of $10.0 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the Board of Directors of Boise Cascade (and, if any, a majority of the directors of Boise Cascade who are disinterested with respect to such Affiliate Transaction), have determined in good faith that the criteria set forth in clause (1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors.

 

(b)                                 The provisions of Section 4.07(a) hereof shall not prohibit:

 

(1)                                 any Permitted Investment or Restricted Payment, in each case permitted to be made pursuant to Section 4.04 hereof;

 

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(2)                                 any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment or compensation arrangements, stock options and stock ownership plans approved by the Board of Directors of Boise Cascade;

 

(3)                                 the payment of reasonable fees to directors of Boise Cascade and its Restricted Subsidiaries or any direct or indirect parent of Boise Cascade who are not employees of Boise Cascade or its Restricted Subsidiaries and reasonable payments for indemnification to directors and officers of Boise Cascade and its Restricted Subsidiaries or any direct or indirect parent of Boise Cascade;

 

(4)                                 any transaction with Boise Cascade, a Restricted Subsidiary or joint venture or similar entity that would constitute an Affiliate Transaction solely because Boise Cascade or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity;

 

(5)                                 the issuance or sale of any Capital Stock (other than Disqualified Stock) of Boise Cascade or any contribution to the capital of Boise Cascade;

 

(6)                                 any agreement as in effect on the Issue Date and described in the Offering Memorandum under the heading “Certain Relationships and Related Party Transactions” or any renewals or extensions of any such agreement (so long as such renewals or extensions are not, taken as a whole, materially less favorable to the Holders as determined by the Board of Directors of Boise Cascade in its reasonable good faith judgment) and the transactions contemplated thereby;

 

(7)                                 transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are on terms no less favorable than those that would have been obtained in a comparable transaction with an unrelated party;

 

(8)                                 any transaction effected as part of a Qualified Receivables Transaction;

 

(9)                                 so long as no Default or Event of Default has occurred and is continuing, the payment of customary annual fees and related expenses to Madison Dearborn Partners, LLC and its Affiliates; provided that such fees shall not, in the aggregate, exceed $2.0 million (plus out-of-pocket expenses) in any twelve-month period commencing after the Issue Date;

 

(10)                          so long as no Default or Event of Default has occurred and is continuing, the payment of customary transaction, management, consulting and advisory fees and related expenses to Madison Dearborn Partners, LLC and its Affiliates made pursuant to financial advisory, financing or underwriting agreements or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, in each case, which payments are (a) reasonably related to the services performed and (b) approved by a majority of the members of the Board of Directors of Boise Cascade not affiliated with Madison Dearborn Partners, LLC acting in good faith;

 

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(11)                          any Affiliate Transaction in which Boise Cascade receives a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to Boise Cascade and its Restricted Subsidiaries or is not less favorable to Boise Cascade and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person that was not an Affiliate;

 

(12)                          investments by an Affiliate in securities of Boise Cascade or any of its Subsidiaries so long as (a) the investment is being offered generally to other investors on the same or more favorable terms and (b) the investments by all Affiliates in the aggregate constitute less than 5.0% of the proposed issue amount of such securities;

 

(13)                          transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business that are no less favorable to Boise Cascade or such Restricted Subsidiary than those that could be obtained at the time of the transaction in arm’s-length dealings with a Person that is not an Affiliate;

 

(14)                          any contributions to the common equity capital of Boise Cascade;

 

(15)                          Permitted Payments to Parent; and

 

(16)                          transactions between Boise Cascade or any of its Restricted Subsidiaries and any Person, the sole affiliation with Boise Cascade or any of its Restricted Subsidiaries of which is that a director of such Person is also a director of Boise Cascade or any direct or indirect parent of Boise Cascade; provided, however, that such director abstains from voting as a director of Boise Cascade or such direct or indirect parent of Boise Cascade on any matter involving such other Person.

 

For purposes of this Section 4.07, so long as Boise Holdings is a Guarantor, any reference to the Board of Directors of Boise Cascade shall be deemed to refer to the Board of Directors of Boise Holdings and not to the Board of Directors of Boise Cascade (other than with respect to the approval on behalf of Boise Cascade of transactions between Boise Holdings and Boise Cascade).

 

SECTION 4.08.           LIMITATION ON LINE OF BUSINESS.  Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than a Related Business.

 

SECTION 4.09.           CHANGE OF CONTROL.

 

(a)                                 Upon the occurrence of a Change of Control, each Holder shall have the right to require that the Issuers repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in Section 4.09(b) hereof. In the event that at the time of such Change of Control the terms of the Credit Agreement restrict or prohibit the purchase of Notes following such

 

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Change of Control, then prior to the mailing of the notice to Holders provided for in Section 4.09(b) below but in any event within 30 days following any Change of Control, the Issuers shall (1) repay in full all such Indebtedness or (2) obtain the requisite consents under the agreements governing such Indebtedness to permit the repurchase of the Notes as provided in Section 4.09(b) hereof.  If the Issuers cannot repay such Indebtedness or obtain such consents, the Issuers will remain prohibited from purchasing the Notes under this Section 4.09.

 

(b)                                 Within 30 days following any Change of Control, the Issuers 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 Issuers 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 (including information with respect to pro forma historical income, cash flow and capitalization, in each case after giving effect to such Change of Control);

 

(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 Issuers, consistent with this Section 4.09, 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 Issuers 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 receives or the Issuers receive, 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 such Holder’s election to have such Note purchased.

 

(d)                                 On the purchase date, all Notes purchased by the Issuers under this Section 4.09 shall be delivered by the Issuers to the Trustee for cancellation, and the Issuers 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, the Issuers shall not be required to make a Change of Control Offer the Notes following a Change of Control if (1) a third party makes the Change of Control Offer with respect to the Notes in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.09 applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer, (2) a notice of redemption of all of the Notes has been given pursuant to this Indenture in accordance with paragraph 5 of the Notes, unless and until there has been a default in payment of the applicable redemption price, or

 

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(3) Boise Cascade’s obligations under this Indenture are defeased or discharged pursuant to Article 8 on or promptly following a Change of Control.  A Change of Control Offer may be made in advance of a Change of Control, conditional upon the Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

 

(f)                                   The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.09. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.09, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Section 4.09 by virtue of their compliance with such securities laws or regulations.

 

SECTION 4.10.           LIMITATION ON LIENS.  Prior to the Covenant Termination Date, Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur or permit to exist any Lien (the “Initial Lien”) of any nature whatsoever on any of their respective properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, securing any Indebtedness, other than Permitted Liens, without effectively providing that the Notes shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured.

 

Any Lien created for the benefit of the Holders of the Notes pursuant to the preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.

 

SECTION 4.11.           LIMITATION ON SALE/LEASEBACK TRANSACTIONS.  Boise Cascade shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any Sale/Leaseback Transaction with respect to any property unless:

 

(1)                                 Boise Cascade or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to Section 4.03 hereof and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to Section 4.10 hereof;

 

(2)                                 the consideration received by Boise Cascade or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction is at least equal to the fair market value (as determined by the Board of Directors of Boise Cascade if such fair market value exceeds $10.0 million, or an Officer of Boise Cascade, as the case may be, if such fair market value is equal to or less than $10.0 million) of such property; and

 

(3)                                 the Net Available Cash from such transaction is applied in compliance with Section 4.06 hereof.

 

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SECTION 4.12.           FUTURE GUARANTORS.  At any time that any Indebtedness under any Credit Agreement is outstanding, Boise Cascade shall cause each of its Restricted Subsidiaries (other than Boise Finance) that Incurs (including by Guarantee) any Indebtedness under any Credit Agreement, in each case, within five Business Days of such Incurrence, to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary shall Guarantee payment of the Notes on the same terms and conditions as those set forth in this Indenture. At any time that no Indebtedness under any Credit Agreement is outstanding, Boise Cascade shall cause each of its domestic Restricted Subsidiaries (other than Boise Finance, for so long as Boise Finance is an Issuer), that Incurs (including by Guarantee) any Indebtedness in a principal amount outstanding in excess of $25.0 million (other than Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(2), (3), (7), (8), (9), (11), (12), (13), (15) or (18) hereof), and each Foreign Subsidiary that enters into a Guarantee of any Senior Indebtedness in a principal amount outstanding in excess of $25.0 million (other than a Foreign Subsidiary that Guarantees Senior Indebtedness Incurred by another Foreign Subsidiary), in each case, within five Business Days of such Incurrence, to execute and deliver to the Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary shall Guarantee payment of the Notes on the same terms and conditions as those set forth in this Indenture. Notwithstanding the foregoing, this Section 4.12 shall not apply to any Receivables Subsidiary.

 

SECTION 4.13.           LIMITATION ON THE CONDUCT OF BUSINESS OF BOISE FINANCE.  Boise Finance shall not hold any material assets, become liable for any material obligations or engage in any significant business activities other than in connection with serving as an Issuer with respect to the Notes.

 

Boise Cascade shall not sell or otherwise dispose of any shares of Capital Stock of Boise Finance and shall not permit Boise Finance, directly or indirectly, to issue or sell or otherwise dispose of any shares of its Capital Stock. In the event that Boise Cascade reorganizes as a corporation in connection with an initial public offering of its Capital Stock or otherwise, Boise Cascade shall be able to merge or otherwise liquidate Boise Finance with or into itself or another Subsidiary Guarantor, at which time Boise Finance shall cease to be an Issuer of the Notes.

 

SECTION 4.14.           COMPLIANCE CERTIFICATE.  The Issuers shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuers, an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuers are taking or propose to take with respect thereto.  To the extent applicable, the Issuers also shall comply with TIA Section 314(a)(4).

 

SECTION 4.15.           FURTHER INSTRUMENTS AND ACTS.  Upon the reasonable request of the Trustee, the Issuers 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.

 

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SECTION 4.16.           COVENANT TERMINATION.  If at any time:

 

(a)                                 the Notes are rated Baa3 or better by Moody’s and BBB- or better by Standard & Poor’s (or, if either such entity ceases to rate the Notes for reasons outside of the control of Boise Cascade, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by Boise Cascade as a replacement agency); and

 

(b)                                 no Default or Event of Default shall have occurred and be continuing,

 

then, beginning on that day (the “Covenant Termination Date”), Boise Cascade and its Restricted Subsidiaries shall no longer be subject to the following provisions of this Indenture:

 

(1)                                 Section 4.03;

 

(2)                                 Section 4.04;

 

(3)                                 Section 4.05;

 

(4)                                 Section 4.06;

 

(5)                                 Section 4.07;

 

(6)                                 Section 4.11;

 

(7)                                 Section 4.12;

 

(8)                                 Section 4.13; and

 

(9)                                 Section 5.01(a)(3).

 

SECTION 4.17.           INVESTMENT GRADE COVENANTS.  On and following the Covenant Termination Date, the covenant set forth in Section 4.10 hereof shall be replaced with the one set forth in this Section 4.17.  Accordingly, on and after the Covenant Termination Date, Boise Cascade shall not, nor shall Boise Cascade permit any Restricted Subsidiary to, directly or indirectly, issue, assume or guarantee any Indebtedness secured by a Lien upon any Principal Property or upon any shares of capital stock or Indebtedness of any Significant Subsidiary (whether such Principal Property, shares or Indebtedness is now existing or owed or is hereafter created or acquired), without in any such case effectively providing that all of the Notes issued under this Indenture are secured equally and ratably. Notwithstanding the restrictions in the preceding sentence, Boise Cascade and the Restricted Subsidiaries shall be permitted to incur:

 

(1)                                 Indebtedness secured by Liens existing on the date this Section 4.17 becomes effective;

 

(2)                                 Indebtedness secured by Liens in an amount equal to the greater of: (i) the amount of Indebtedness permitted under Section 4.03(b)(1) hereof (assuming for purposes of this calculation that such covenant was still in effect); or (ii) an amount equal

 

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to 3.50 times EBITDA for the most recent four consecutive fiscal quarters ended for which internal financial statements are available, giving effect to the Calculation Adjustments;

 

(3)                                 Indebtedness secured by Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

 

(4)                                 Indebtedness secured by Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

 

(5)                                 Indebtedness secured by Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Restricted Subsidiary of such Person;

 

(6)                                 Indebtedness secured by Liens incurred with respect to any environmental remediation program;

 

(7)                                 Indebtedness securing Liens that would have been permitted under clauses (12), (13), (14) or (19) of the definition of Permitted Liens in Section 1.01 hereof;

 

(8)                                 Indebtedness secured by Liens in connection with the Refinancing of Indebtedness referred to in any of clauses (1) through (7) above; and

 

(9)                                 Indebtedness secured by Liens securing Purchase Money Indebtedness Incurred pursuant to Section 4.03(b)(14) hereof; provided, however, that any Lien arising in connection with any such Indebtedness shall be limited to the specific asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property on which such asset is attached (assuming for purposes of this calculation that such covenant was still in effect).

 

Article 5

 

SUCCESSOR COMPANY

 

SECTION 5.01.           MERGER OR TRANSFER OF ASSETS.

 

(a)                                 Neither of the Issuers shall 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 of the assets of Boise Cascade and the Restricted Subsidiaries determined on a Consolidated Basis, to, any Person, unless:

 

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(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 Boise Cascade or Boise Finance, as applicable) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of Boise Cascade or Boise Finance, as applicable, under the Guarantees or the Notes, as applicable, and this Indenture;

 

(2)                                 immediately after giving pro forma effect to such transaction (and treating any Indebtedness that 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, either (A) the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a) hereof or (B) the Consolidated Coverage Ratio for the Successor Company would be equal to or greater than the Consolidated Coverage Ratio immediately prior to such transaction; and

 

(4)                                 the Issuers 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 clause (3) shall not be applicable to (A) Boise Cascade or any Restricted Subsidiary consolidating with, merging into or transferring all or part of its properties and assets to Boise Cascade or a Wholly Owned Subsidiary (so long as no Capital Stock of Boise Cascade or such Wholly Owned Subsidiary is distributed to any Person) or (B) Boise Finance or Boise Cascade merging with an Affiliate of Boise Cascade solely for the purpose and with the sole effect of reincorporating Boise Finance or Boise Cascade in another jurisdiction or converting Boise Cascade into a corporation.

 

For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of Boise Cascade, which properties and assets, if held by Boise Cascade instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of Boise Cascade and the Restricted Subsidiaries determined on a Consolidated Basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of Boise Cascade and the Restricted Subsidiaries.

 

The Successor Company shall be the successor to Boise Cascade or Boise Finance, as applicable, and shall succeed to, and be substituted for, and may exercise every right and power of, such Person under this Indenture, and the predecessor Person, except in the case of a lease, shall be released from the obligation to pay the principal of and interest on the Notes.

 

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(b)                                 Boise Cascade 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)                                 the Subsidiary Guarantor (A) has been disposed of in its entirety to another Person (other than to Boise Cascade or an Affiliate of Boise Cascade), whether through a merger, consolidation or sale of Capital Stock or assets or (B) as a result of the disposition of all or a portion of its Capital Stock, has ceased to be a Subsidiary of Boise Cascade, in both cases, if in connection therewith the Issuers provide an Officers’ Certificate to the Trustee to the effect that Boise Cascade shall comply with its obligations under Section 4.06 hereof in respect of such disposition; or

 

(2)                                 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, (B) such Person shall expressly assume, by a Guarantee Agreement, in a form satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Guarantees; (C) 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 (D) the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guarantee Agreement, if any, comply with this Indenture;

 

provided, however, that this Section 5.01 shall not be applicable to any Guarantor consolidating with, merging into or transferring all or part of its properties and assets to any Issuer or Guarantor.

 

Article 6

 

DEFAULTS AND REMEDIES

 

SECTION 6.01.           EVENTS OF DEFAULT.  An “Event of Default” occurs if:

 

(1)                                 the Issuers default in the payment of interest on the Notes when due, and such default continues for 30 days;

 

(2)                                 the Issuers default in the payment of the principal of any Note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;

 

(3)                                 Boise Cascade or Boise Finance fails to comply with its obligations under Section 5.01;

 

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(4)                                 Boise Cascade or Boise Finance fails to comply for 30 days after the notice specified below with any of its obligations under Section 4.09 hereof (other than a failure to purchase the Notes);

 

(5)                                 the Issuers fail or any Guarantor fails to comply for 60 days after the notice specified below with its other agreements with respect to the Notes contained in this Indenture;

 

(6)                                 Indebtedness of an Issuer, any Guarantor or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million;

 

(7)                                 an Issuer 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 an Issuer or any Significant Subsidiary, in an involuntary case;

 

(B)                               appoints a Custodian of an Issuer, any Significant Subsidiary or for any substantial part of its property; or

 

(C)                               orders the winding up or liquidation of an Issuer 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 $25.0 million is entered against an Issuer, a Guarantor or any Significant Subsidiary, and remains outstanding for a period of 60 consecutive days following the entry of such judgment or decree and is not discharged, waived or stayed; or

 

(10)                          any Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Guarantee) or any Guarantor denies or disaffirms its obligations under its Guarantee.

 

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The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

The term “Bankruptcy Law” means Title 11, UNITED STATES CODE, or any similar Federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

A Default under clauses (4) and (5) shall not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuers of the Default and the Issuers do 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 Issuers 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), (9) 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), (5) or (9), its status and what action the Issuers are taking or propose to take with respect thereto.

 

SECTION 6.02.           ACCELERATION.

 

(a)                                 If an Event of Default (other than an Event of Default specified in Section 6.01(7) or (8) hereof with respect to an Issuer) occurs and is continuing, the Trustee, by notice to the Issuers, or the Holders of at least 25% in principal amount of the outstanding Notes, by notice to the Issuers 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 of acceleration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(7) or (8) hereof with respect to an Issuer occurs and is continuing, 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 of the Notes. 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 of a court of competent jurisdiction and if all existing Events of Default have been cured or waived except nonpayment of principal of, premium, if any, and interest on the Notes that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

(b)                                 In the event of a declaration of acceleration of the Notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in Section 6.01(6) hereof (excluding any resulting payment default under this Indenture or the Notes), the declaration of acceleration of the Notes shall be automatically annulled if the holders of all Indebtedness described in Section 6.01(6) hereof have rescinded the declaration of acceleration in respect of such Indebtedness within 20 days of the date of such declaration, and if the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction, and all existing Events of Default,

 

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except non-payment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

 

SECTION 6.03.           OTHER REMEDIES.  If an Event of Default occurs and is continuing and has not otherwise been waived in accordance with Section 6.04 or 9.02, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of such Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Noteholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.

 

SECTION 6.04.           WAIVER OF PAST DEFAULTS.  The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences under this Indenture except (i) a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes, (ii) a Default arising from the failure to redeem or purchase any Notes when required pursuant to this Indenture or (iii) a Default in respect of a provision that under Section 9.02 hereof cannot be amended without the consent of each Holder affected. When a Default is waived it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

 

SECTION 6.05.           CONTROL BY MAJORITY.  The Holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01 hereof, that the Trustee determines is unduly prejudicial to the rights of other Noteholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under this Article 6, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

 

SECTION 6.06.           LIMITATION ON SUITS.  Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Noteholder may pursue any remedy with respect to this Indenture or the Notes unless:

 

(1)                                 such Holder has previously given to the Trustee written notice that an Event of Default is continuing;

 

(2)                                 the Holders of at least 25% in principal amount of the outstanding Notes have made a written request to the Trustee to pursue the remedy;

 

(3)                                 such Holder or Holders have offered to the Trustee reasonable security or indemnity against any loss, liability or expense;

 

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(4)                                 the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

 

(5)                                 Holders of a majority in principal amount of the outstanding Notes do not give the Trustee a direction inconsistent with such request during such 60-day period.

 

A Noteholder may not use this Indenture to prejudice the rights of another Noteholder or to obtain a preference or priority over another Noteholder. In the event that the Definitive Notes are not issued to any beneficial owner promptly after the Registrar has received a request from the Holder of a Global Note to issue such Definitive Notes to such beneficial owner or its nominee, the Issuers expressly agree and acknowledge, with respect to the right of any Holder to pursue a remedy pursuant to this Indenture, the right of such beneficial holder of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial holder’s Notes as if such Definitive Notes had been issued.

 

SECTION 6.07.           RIGHTS OF HOLDERS TO RECEIVE PAYMENT.  Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

SECTION 6.08.           COLLECTION SUIT BY TRUSTEE.  If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07 hereof.

 

SECTION 6.09.           TRUSTEE MAY FILE PROOFS OF CLAIM.  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Noteholders allowed in any judicial proceedings relative to the Issuers, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07 hereof.

 

SECTION 6.10.           PRIORITIES.  If the Trustee collects any money or property with respect the Notes pursuant to this Article 6, it shall pay out the money or property in the following order:

 

FIRST:             to the Trustee for amounts due under Section 7.07 hereof;

 

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SECOND:        to Holders of Notes 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

 

THIRD:            to the Issuers.

 

The Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section. At least 15 days before such record date, the Issuers shall mail to each Noteholder and the Trustee a notice that states the record date, the payment date and amount to be paid.

 

SECTION 6.11.           UNDERTAKING FOR COSTS.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in aggregate principal amount of the Notes.

 

SECTION 6.12.           WAIVER OF STAY OR EXTENSION LAWS.  The Issuers (to the extent they may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuers (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

 

Article 7

 

TRUSTEE

 

SECTION 7.01.           DUTIES OF TRUSTEE.

 

(a)                                 If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(1)                                 the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

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(2)                                 in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(1)                                 this paragraph does not limit the effect of paragraph (b) of this Section;

 

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

 

(3)                                 the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

 

(d)                                 Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

 

(e)                                  The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers.

 

(f)                                   Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)                                  No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(h)                                 Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

 

SECTION 7.02.           RIGHTS OF TRUSTEE.

 

(a)                                 The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

 

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(c)                                  The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct or negligence.

 

(e)                                  The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

SECTION 7.03.           INDIVIDUAL RIGHTS OF TRUSTEE.  The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11 hereof.

 

SECTION 7.04.           TRUSTEE’S DISCLAIMER.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication. The Trustee shall have no responsibility or liability with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Notes. The Issuers shall not be deemed agents of the Trustee, Registrar or Paying Agent for any purpose, and the Trustee, Registrar and Paying Agent shall not be responsible for the compliance of any of them with their respective duties hereunder in connection with the transactions contemplated herein.

 

SECTION 7.05.           NOTICE OF DEFAULTS.  If a Default occurs, is continuing and is known to the Trustee, the Trustee shall mail to each Noteholder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of or interest, if any, on any Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is not opposed to the interests of the Noteholders.

 

SECTION 7.06.           REPORTS BY TRUSTEE TO HOLDERS.  As promptly as practicable after each November 1 beginning November 1, 2012, and in any event prior to December 31 in each such year, the Trustee shall mail to each Noteholder a brief report dated as of November 1 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).

 

A copy of each report at the time of its mailing to Noteholders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed. The Issuers agree to

 

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notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof.

 

SECTION 7.07.           COMPENSATION AND INDEMNITY.  The Issuers shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Issuers shall indemnify the Trustee against any and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Issuers promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of their obligations hereunder. The Issuers shall defend the claim and the Trustee may have separate counsel and the Issuers shall pay the fees and expenses of such counsel. The Issuers need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

 

To secure the Issuers’ payment obligations in this Section, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.

 

The Issuers’ payment obligations pursuant to this Section shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(7) or (8) hereof with respect to an Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

 

SECTION 7.08.           REPLACEMENT OF TRUSTEE.  The Trustee may resign at any time by so notifying the Issuers. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuers shall remove the Trustee if:

 

(1)                                 the Trustee fails to comply with Section 7.10 hereof;

 

(2)                                 the Trustee is adjudged bankrupt or insolvent;

 

(3)                                 a receiver or other public officer takes charge of the Trustee or its property; or

 

(4)                                 the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal amount of the Notes, and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.

 

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A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Noteholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07 hereof.

 

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee fails to comply with Section 7.10 hereof, any Noteholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuers’ obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

 

SECTION 7.09.           SUCCESSOR TRUSTEE BY MERGER.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

 

SECTION 7.10.           ELIGIBILITY; DISQUALIFICATION.  The Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

 

SECTION 7.11.           PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.  The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

 

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Article 8

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.           DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE.

 

(a)                                 When (1) the Issuers deliver to the Trustee all outstanding Notes (other than Notes replaced pursuant to Section 2.07 hereof) for cancellation or (2) all Notes that have not been delivered to the Trustee for cancellation (i) have become due and payable by reason of the mailing of a notice of redemption or otherwise or (ii) will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of the notice of redemption pursuant to Article 3 hereof, and, in the case of clause (2), the Issuers irrevocably deposit with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes, including interest thereon to maturity or such redemption date (other than Notes replaced pursuant to Section 2.07 hereof), and if in either case the Issuers pay all other sums payable hereunder by the Issuers with respect to the Notes, then this Indenture shall, subject to Section 8.01(c) hereof, cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuers accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Issuers.

 

(b)                                 Subject to Sections 8.01(c) and 8.02 hereof, the Issuers at any time may terminate (1) all their obligations under the Notes and this Indenture (“legal defeasance option”) or (2) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.17 and the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries and Guarantors) and the limitations contained in Section 5.01(a)(3) (“covenant defeasance option”). The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option.

 

If the Issuers exercise their legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Issuers exercise their covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) or 6.01(9) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or because of the failure of an Issuer to comply with Section 5.01(a)(3). If the Issuers exercise their legal defeasance option or their covenant defeasance option, each Guarantor, if any, shall be released from all its obligations with respect to its Guarantee of the Notes.

 

Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.

 

(c)                                  Notwithstanding clauses (a) and (b) above, the Issuers’ obligations with respect to the Notes in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 hereof and in this

 

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Article 8 shall survive until the Notes have been paid in full. Thereafter, the Issuers’ obligations in Sections 7.07, 8.04 and 8.05 shall survive.

 

SECTION 8.02.           CONDITIONS TO DEFEASANCE.  The Issuers may exercise their legal defeasance option or their covenant defeasance option only if:

 

(1)                                 the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government Obligations or a combination thereof for the payment of principal and interest on the Notes to maturity or redemption, as the case may be;

 

(2)                                 the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Notes to maturity or redemption, as the case may be;

 

(3)                                 the Issuers deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders over the other creditors of the Issuers or any Guarantor or with the intent of defeating hindering, delaying or defrauding creditors of the Issuers or any Guarantor or others;

 

(4)                                 the deposit does not constitute a default under any other agreement binding on the Issuers;

 

(5)                                 the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;

 

(6)                                 in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (B) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and legal defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and legal defeasance had not occurred;

 

(7)                                 in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred; and

 

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(8)                                 the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes as contemplated by this Article 8 have been complied with.

 

Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article 3.

 

SECTION 8.03.           APPLICATION OF TRUST MONEY.  The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes.

 

SECTION 8.04.           REPAYMENT TO ISSUERS.  The Trustee and the Paying Agent shall promptly turn over to the Issuers 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 Issuers upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Noteholders entitled to the money must look to the Issuers for payment as general creditors.

 

SECTION 8.05.           INDEMNITY FOR GOVERNMENT OBLIGATIONS.  The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

SECTION 8.06.           REINSTATEMENT.  If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 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 Issuers’ and each Guarantor’s obligations under this Indenture with respect to the Notes, each Guarantee of the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the Issuers have made any payment of interest on or principal of any Notes because of the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

Article 9

 

AMENDMENTS

 

SECTION 9.01.           WITHOUT CONSENT OF HOLDERS.  The Issuers, the Guarantors and the Trustee may amend this Indenture or the Notes without notice to or consent of any Holder of Notes:

 

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(1)                                 to cure any ambiguity, omission, defect or inconsistency (including conforming this Indenture to the description contained in the Offering Memorandum under the heading “Description of Notes”);

 

(2)                                 to provide for the assumption by a successor corporation of the obligations of an Issuer or any Guarantor under this Indenture to comply with Article 5;

 

(3)                                 to provide for uncertificated Notes in addition to or in place of certificated Notes (provided 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 Guarantees, or to secure the Notes;

 

(5)                                 to add to the covenants of the Issuers or a Guarantor for the benefit of the Holders of the Notes or to surrender any right or power herein conferred upon the Issuers or a Guarantor;

 

(6)                                 to make any change that does not adversely affect the rights of any Holder of the Notes;

 

(7)                                 to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of this Indenture under the TIA; or

 

(8)                                 to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes; provided, however, that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.

 

After an amendment under this Section becomes effective, the Issuers shall mail to the Noteholders a notice briefly describing such amendment. The failure to give such notice to all Noteholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.

 

SECTION 9.02.           WITH CONSENT OF HOLDERS.  The Issuers, the Guarantors and the Trustee may amend this Indenture or the Notes 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) and any past default or compliance with any provisions of the Notes may also be waived with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding. However, without the consent of each Holder of an outstanding Note affected thereby, an amendment or waiver may not:

 

(1)                                 reduce the amount of such Notes whose Holders must consent to an amendment;

 

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(2)                                 reduce the rate of or extend the time for payment of interest on any such Note;

 

(3)                                 reduce the principal of or change the Stated Maturity of any such Note;

 

(4)                                 change the provisions applicable to the redemption of any such Note as described under Article 3 hereof, paragraph 5 of such Note or Section 4.09 hereof;

 

(5)                                 make any such Note payable in money other than that stated in the Note;

 

(6)                                 impair the right of any Holder of such Notes 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 change in the amendment provisions that require each Holder’s consent or in the waiver provisions;

 

(8)                                 make any change in the ranking or priority of any such Note that would adversely affect the Holders of Notes; or

 

(9)                                 make any change in, or release other than in accordance with this Indenture, any Guarantee that would adversely affect the Holders.

 

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

 

SECTION 9.03.           COMPLIANCE WITH TRUST INDENTURE ACT.  Every amendment to this Indenture or the Notes shall comply with the TIA as then in effect.

 

SECTION 9.04.           REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.

 

(a)                                 A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Noteholder. An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee.

 

(b)                                 The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Noteholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Noteholders at such record date (or their duly designated proxies), and only those Persons, shall

 

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be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.

 

SECTION 9.05.           NOTATION ON OR EXCHANGE OF NOTES.  If an amendment 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 Issuers so determine or the Trustee so determines, the Issuers 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.

 

SECTION 9.06.           TRUSTEE TO SIGN AMENDMENTS.  The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely 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 to receive, and (subject to Section 7.01 hereof) 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 9.07.           PAYMENT FOR CONSENT.  Neither Boise Cascade nor any Affiliate of Boise Cascade shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to all Holders of Notes and is paid to all Holders of Notes that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

 

Article 10

 

NOTE GUARANTEES

 

SECTION 10.01.    GUARANTEES.

 

(a)                                 Each Guarantor hereby unconditionally and irrevocably guarantees, jointly and severally, to each Holder of Notes 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 Issuers under this Indenture with respect to the Notes and (b) the full and punctual performance within applicable grace periods of all other obligations of the Issuers under this Indenture with respect to 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 shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.

 

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(b)                                 Each Guarantor waives presentation to, demand of, payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. 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 (1) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person (including any Guarantor) under this Indenture, the Notes or any other agreement or otherwise; (2) any extension or renewal of any thereof; (3) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (4) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations; (5) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (6) except as set forth in Section 10.06 hereof, any change in the ownership of such Guarantor.

 

Each Guarantor further agrees that its Guarantee in respect of the Notes 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.

 

(c)                                  Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06 hereof, the obligations of each Guarantor of Notes hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense 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 in respect of Notes 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 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 such Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law or equity.

 

(d)                                 Each Guarantor further agrees that its Guarantee in respect of the Notes 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 Issuers or otherwise.

 

(e)                                  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 Issuers 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 (A) the unpaid amount of such Guaranteed Obligations, (B) accrued and unpaid interest on such

 

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Guaranteed Obligations (but only to the extent not prohibited by law) and (C) all other monetary Guaranteed Obligations of the Issuers to the Holders of the Notes and the Trustee.

 

(f)                                   Each Guarantor of Notes agrees that it shall not be entitled to any right of subrogation in respect of any Obligations guaranteed hereby until payment in full of all Guaranteed Obligations.  Each Guarantor of Notes further agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations may be accelerated as provided in Article 6 for the purposes of such Guarantor’s Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section.

 

(g)                                  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.

 

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 by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such 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 10 shall be binding upon each 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 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 10 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 10 at law, in equity, by statute or otherwise.

 

SECTION 10.05.    MODIFICATION.  No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any 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.

 

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SECTION 10.06.    RELEASE OF GUARANTOR.  A Subsidiary Guarantor shall be released automatically from its obligations under this Article 10 (other than any obligation that may have arisen under Section 10.07 hereof) upon:

 

(1)                                 the sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor, including the sale or disposition of Capital Stock of a Subsidiary Guarantor, following which such Subsidiary Guarantor is no longer a Subsidiary of Boise Cascade; or

 

(2)                                 the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor;

 

provided, however, that in the case of clauses (1) and (2) above, (i) such sale or other disposition is made to a Person other than the Boise Cascade or another Subsidiary of Boise Cascade, (ii) such sale or disposition is otherwise permitted by this Indenture and (iii) the Issuers provide an Officers’ Certificate to the Trustee to the effect that the Issuers shall comply with their obligations under Section 4.06 hereof in respect of such disposition. The Guarantee of a Subsidiary Guarantor also shall be automatically released:

 

(1)                                 upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary;

 

(2)                                 at such time as such Subsidiary Guarantor does not have any Indebtedness outstanding that would have required such Subsidiary Guarantor to enter into a Guarantee Agreement pursuant to Section 4.12 hereof (other than the Notes and Guarantees thereof); or

 

(3)                                 if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture or the Issuers exercise their covenant defeasance option or legal defeasance option in accordance with this Indenture.

 

The Guarantee of Boise Holdings shall be automatically released in the event that (i) any Capital Stock of Boise Cascade is registered under the Exchange Act and listed on a national securities exchange or (ii) the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture or the Issuers’ exercise their covenant defeasance option or legal defeasance option in accordance with this Indenture.

 

At the request of the Issuers, the Trustee shall execute and deliver an appropriate instrument evidencing such release.

 

SECTION 10.07.    CONTRIBUTION.  Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

 

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SECTION 10.08.    EXECUTION AND DELIVERY OF GUARANTEE.  To evidence its Guarantee set forth in Article 10 hereof, each Guarantor hereby agrees that a notation of such Guarantee in substantially the form included in Exhibit B hereto shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee.  Subject to Section 10.06 hereof, each Guarantor hereby agrees that its Guarantee set forth in Article 10 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee.

 

Article 11

 

MISCELLANEOUS

 

SECTION 11.01.    TRUST INDENTURE ACT CONTROLS.  If any provision of this Indenture limits, qualifies or conflicts with another provision that is required to be included in this Indenture by the TIA, the required provision shall control.

 

SECTION 11.02.    NOTICES.  Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows:

 

if to the Issuers or any Guarantor:

 

1111 West Jefferson Street
 Boise, Idaho 83728
 (fax: (208) 384-7189)
 Attention: Wayne Rancourt, Chief Financial Officer

 

with a copy to:

 

Dennis M. Myers, P.C.
 Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, IL 60654
 (fax: (312) 862-2200)

 

if to the Trustee:

 

U.S. Bank National Association
 170 South Main Street, Suite 200
 Salt Lake City, UT 84101
 (fax: 801-534-6013)
 Attention: Kim R. Galbraith, VP

 

with a copy to:

 

U.S. Bank National Association
 1420 Fifth Avenue, 7th Floor
 Seattle, WA 98101

 

92

 

(fax: 206-344-4630)
 Attention: Vivian Yuk, TR

 

The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Noteholder shall be mailed to the Noteholder at the Noteholder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

 

Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

SECTION 11.03.    COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.  Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture. The Issuers, any Guarantor, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

SECTION 11.04.    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.  Upon any request or application by the Issuers to the Trustee to take or refrain from taking any action under this Indenture, the Issuers shall furnish to the Trustee:

 

(1)                                 an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(2)                                 an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

SECTION 11.05.    STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

 

(1)                                 a statement that the individual making such certificate or opinion has read such covenant or condition;

 

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

 

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

 

93

 

(4)                                 a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

 

SECTION 11.06.    WHEN NOTES DISREGARDED.  In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.

 

SECTION 11.07.    RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.  The Trustee may make reasonable rules for action by or a meeting of Noteholders. The Registrar and the Paying Agent may make reasonable rules for their functions.

 

SECTION 11.08.    LEGAL HOLIDAYS.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

 

SECTION 11.09.    GOVERNING LAW.  This Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

 

SECTION 11.10.    NO RECOURSE AGAINST OTHERS.  A director, officer, employee or stockholder, as such, of either Issuer or any Guarantor shall not have any liability for any obligations of the Issuers under the Notes or this Indenture or of such Guarantor under its Guarantee 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 Noteholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes.

 

SECTION 11.11.    SUCCESSORS.  All agreements of the Issuers and the Guarantors in this Indenture and the Notes shall bind their successors and assigns. All agreements of the Trustee in this Indenture shall bind its successors and assigns.

 

SECTION 11.12.    MULTIPLE ORIGINALS.  The parties may sign any number of copies of this 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 Indenture.

 

SECTION 11.13.    TABLE OF CONTENTS; HEADINGS.  The table of contents, cross-reference table and headings of the Articles and Sections of this 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.

 

[Signature Pages Follows]

 

94

 

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

 

	
 
    	
BOISE   CASCADE, L.L.C.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Wayne R. Rancourt
    
	
 
    	
 
    	
Name:   Wayne R. Rancourt
    
	
 
    	
 
    	
Title: Senior Vice   President, Chief Financial Officers and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BOISE   CASCADE FINANCE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Wayne R. Rancourt
    
	
 
    	
 
    	
Name:   Wayne R. Rancourt
    
	
 
    	
 
    	
Title: Senior Vice   President, Chief Financial Officers and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   GUARANTORS:
    
	
 
    	
 
    
	
 
    	
BC   CHILE INVESTMENT CORPORATION
    
	
 
    	
BOISE CASCADE BUILDING MATERIALS DISTRIBUTION,   L.L.C.
    
	
 
    	
BOISE   CASCADE HOLDINGS, L.L.C.
    
	
 
    	
BOISE   CASCADE WOOD PRODUCTS, L.L.C.
    
	
 
    	
BOISE   CASCADE WOOD PRODUCTS HOLDINGS CORP.
    
	
 
    	
STACK   ROCK CAPITAL, L.L.C.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Wayne R. Rancourt
    
	
 
    	
 
    	
Name:   Wayne R. Rancourt
    
	
 
    	
 
    	
Title: Senior Vice   President, Chief Financial Officers and Treasurer
    

 

95

 

	
U.S.   BANK NATIONAL ASSOCIATION, as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Kelly R. Galbraith
    	
 
    	
 
    
	
 
    	
Name:   Kelly R. Galbraith
    	
 
    	
 
    
	
 
    	
Title:   Vice President
    	
 
    	
 
    

 

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RULE 144A/REGULATION S APPENDIX

 

PROVISIONS RELATING TO INITIAL NOTES
 AND EXCHANGE NOTES

 

1.                                      Definitions

 

1.1                               DEFINITIONS

 

For the purposes of this Appendix the following terms shall have the meanings indicated below:

 

“Applicable Procedures” means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time.

 

“Definitive Note” means a certificated Initial Note or Exchange Note bearing, if required, the appropriate restricted securities legend set forth in Section 2.3(e).

 

“Depositary” means The Depository Trust Company, its nominees and their respective successors.

 

“Distribution Compliance Period” means, with respect to any Notes, the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes.

 

“Exchange Notes” means (1) the 6 3/8% Senior Notes due 2020 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Securities Act.

 

“Initial Purchasers” means (1) with respect to the Initial Notes issued on the Issue Date, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Barclays Capital Inc. and Wells Fargo Securities, LLC, and (2) with respect to each issuance of Additional Notes, the Persons purchasing or underwriting such Additional Notes under the related Purchase Agreement.

 

“Initial Notes” means (1) $250,000,000 aggregate principal amount of the Notes issued on the Issue Date and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

 

“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depositary), or any successor Person thereto, and shall initially be the Trustee.

 

“Purchase Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the Purchase Agreement dated October 17, 2012 among the Issuers, the Guarantors

 

i

 

and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Issuers, the guarantors party thereto and the Persons purchasing or underwriting such Additional Notes.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Registered Exchange Offer” means the offer by the Issuers, pursuant to a Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.

 

“Registration Rights Agreements” means (1) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated October 22, 2012 among the Initial Purchasers, the Issuers and the Guarantors and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuers, the Guarantors and the initial purchasers of such Additional Notes.

 

“Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

“Shelf Registration Statement” means a registration statement filed by the Issuers in connection with the offer and sale of Initial Notes pursuant to a Registration Rights Agreement.

 

“Transfer Restricted Notes” means Notes that bear or are required to bear the legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e) hereto.

 

1.2                               OTHER DEFINITIONS

 

	
Term
    	
 
    	
Defined in Section:
    
	
“Agent   Members”
    	
 
    	
2.1(b)
    
	
“Global   Notes”
    	
 
    	
2.1(a)
    
	
“Permanent   Regulation S Global Note”
    	
 
    	
2.1(a)
    
	
“Regulation   S”
    	
 
    	
2.1(a)
    
	
“Regulation   S Global Note”
    	
 
    	
2.1(a)
    
	
“Rule 144A”
    	
 
    	
2.1(a)
    
	
“Rule 144A   Global Note”
    	
 
    	
2.1(a)
    
	
“Temporary   Regulation S Global Note”
    	
 
    	
2.1(a)
    

 

2.                                      THE NOTES.

 

2.1                     (a) FORM AND DATING. The Initial Notes will be offered and sold by the Issuers pursuant to a Purchase Agreement. The Initial Notes will be resold initially only to (i)

 

ii

 

QIBs in reliance on Rule 144A under the Securities Act (“Rule 144A”) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (“Regulation S”). Initial Notes may thereafter be transferred to, among others, QIBs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (each, a “Rule 144A Global Note”); Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global securities in fully registered form (each, a “Temporary Regulation S Global Note”), in each case without interest coupons and with the global securities legend and the restricted securities legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuers and authenticated by the Trustee as provided in this Appendix and the Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in a Temporary Regulation S Global Note will not be exchangeable for interests in a Rule 144A Global Note, a permanent global Note (a “Permanent Regulation S Global Note” and, together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note or a Permanent Regulation S Global Note only upon certification in form reasonably satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act.

 

Beneficial interests in Temporary Regulation S Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation S Global Note is being transferred to a Person (a) that the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A and (c) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.

 

Beneficial interests in a Rule 144A Global Note may be transferred to a Person that takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form of the “Assignment Form” included in Exhibit 1 to this Appendix) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).

 

The Rule 144A Global Notes, the Temporary Regulation S Global Notes and the Permanent Regulation S Global Notes are collectively referred to herein as “Global Notes.” The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided.

 

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(b)                                 BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depositary.

 

The Issuers shall execute and the Trustee shall, in accordance with this Section 2.1(b) and Section 2.2 hereof, authenticate and deliver initially one or more Global Notes in respect of Initial Notes that (a) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (b) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as custodian for the Depositary.

 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as the custodian of the Depositary or under such Global Note, and the Issuers, the Trustee and any agent of the Issuers or the Trustee shall be entitled to treat the Depositary as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

 

(c)                                  DEFINITIVE NOTES.  Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Definitive Notes.

 

2.2                                                  AUTHENTICATION.  The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $250 million of the Notes, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Issuers pursuant to Section 2.02 of the Indenture and this Appendix and (3) Exchange Notes for issue only in a Registered Exchange Offer pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes of the same series, in each case upon a written order of the Issuers signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Issuers. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such issuance is in compliance with Section 4.03 of the Indenture.

 

2.3                                                  TRANSFER AND EXCHANGE.

 

(a)                                 TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive Notes are presented to the Registrar with a request:

 

(x)                                 to register the transfer of such Definitive Notes; or

 

(y)                                 to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

 

iv

 

the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange:

 

(i)                                     shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuers and the Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and

 

(ii)                                  if such Definitive Notes are required to bear a restricted securities legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:

 

(A)                               if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or

 

(B)                               if such Definitive Notes are being transferred to the Issuers, a certification to that effect; or

 

(C)                               if such Definitive Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act or (y) in reliance upon another exemption from the registration requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Issuers so request, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i) hereof.

 

(b)                                 RESTRICTIONS ON TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN A GLOBAL NOTE. A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:

 

(i)                                     certification, in the form set forth on the reverse of the Note, that such Definitive Note is either (A) being transferred to a QIB in accordance with Rule 144A or (B) being transferred after expiration of the Distribution Compliance Period by a Person that initially purchased such Note in reliance on Regulation S to a buyer that elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; and

 

(ii)                                  written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(B)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A

 

v

 

Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depositary account to be credited with such increase,

 

then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Definitive Note so canceled. If no Rule 144A Global Notes or Permanent Regulation S Global Notes, as applicable, are then outstanding, the Issuers shall issue and the Trustee shall authenticate, upon written order of the Issuers in the form of an Officers’ Certificate of the Issuers, a new Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.

 

(c)                                  TRANSFER AND EXCHANGE OF GLOBAL NOTES.

 

(i)                                     The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with the Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions instruct the Depositary to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.

 

(ii)                                  If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.

 

(iii)                               Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4 hereof), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

 

(iv)                              In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 hereof, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes

 

vi

 

may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuers.

 

(d)                                 RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S GLOBAL NOTES. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (1) to the Issuers, (2) so long as such Note is eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to which notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act, or (5) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Upon the expiration of the Distribution Compliance Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of this Indenture.

 

(e)                                  LEGEND.

 

(i)                                     Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form:

 

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITY EVIDENCED HEREBY (OR ANY INTEREST OR PARTICIPATION THEREIN) MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OF OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

 

EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR

 

vii

 

THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OF OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

 

BY ACCEPTANCE OF THIS NOTE OR ANY INTEREST HEREIN, EACH PURCHASER AND SUBSEQUENT TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS USED BY SUCH PURCHASER OR TRANSFEREE TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”), ANY PLAN SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986 (“CODE”) OR ANY OTHER RETIREMENT ACCOUNT OR ARRANGEMENT SUBJECT TO ANY

 

viii

 

SUBSTANTIALLY SIMILAR APPLICABLE STATE, LOCAL OR OTHER LAW (“SIMILAR LAWS”) OR (II) THE ACQUISITION AND HOLDING OF THIS NOTE BY SUCH PURCHASER OR TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAWS.

 

Each Definitive Note shall also bear the following additional legend:

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

(ii)                                  Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).

 

(iii)                               After a transfer of any Initial Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all requirements pertaining to legends on such Initial Note will cease to apply, the requirements requiring any such Initial Note issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Notes upon exchange of such transferring Holder’s certificated Initial Note or directions to transfer such Holder’s interest in the Global Note, as applicable.

 

(iv)                              Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the restricted securities legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.

 

(v)                                 Upon a sale or transfer after the expiration of the Distribution Compliance Period of any Initial Note acquired pursuant to Regulation S, all requirements that such

 

ix

 

Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.

 

(f)                                   CANCELLATION OR ADJUSTMENT OF GLOBAL NOTE. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depositary for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

 

(g)                                  NO OBLIGATION OF THE TRUSTEE.

 

(i)                                     The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

 

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

 

2.4                               DEFINITIVE NOTES.

 

(a)                                 A Global Note deposited with the Depositary or with the Trustee as Notes Custodian for the Depositary pursuant to Section 2.1 hereof shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 hereof and (i) the Depositary notifies the Issuers that it is unwilling or unable to continue as Depositary for such Global Note and the Depositary fails to appoint a

 

x

 

successor depositary or if at any time such Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in either case, a successor depositary is not appointed by the Issuers within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuers, in their sole discretion, notify the Trustee in writing that they elect to cause the issuance of Definitive Notes under the Indenture.

 

(b)                                 Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee located at its principal corporate trust office in the Borough of Manhattan, The City of New York, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depositary shall direct. Any Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted securities legend and definitive securities legend set forth in Exhibit 1 hereto.

 

(c)                                  Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under the Indenture or the Notes.

 

(d)                                 In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Issuers shall promptly make available to the Trustee a reasonable supply of Definitive Notes in definitive, fully registered form without interest coupons. In the event that such Definitive Notes are not issued, the Issuers expressly acknowledge, with respect to the right of any Holder to pursue a remedy pursuant to Article 6 of the Indenture, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owner’s Notes as if such Definitive Notes had been issued.

 

xi

 

EXHIBIT 1
 to
 RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF INITIAL NOTE]

 

[Global Notes Legend]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR 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) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

 

[Restricted Notes Legend]

 

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITY EVIDENCED HEREBY (OR ANY INTEREST OR PARTICIPATION THEREIN) MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OF OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

 

EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY

 

xii

 

AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OF OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

 

BY ACCEPTANCE OF THIS NOTE OR ANY INTEREST HEREIN, EACH PURCHASER AND SUBSEQUENT TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS USED BY SUCH PURCHASER OR TRANSFEREE TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”), ANY PLAN SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986 (“CODE”) OR ANY OTHER RETIREMENT ACCOUNT OR ARRANGEMENT SUBJECT TO ANY SUBSTANTIALLY SIMILAR APPLICABLE STATE, LOCAL OR OTHER LAW (“SIMILAR LAWS”) OR (II) THE ACQUISITION AND HOLDING OF THIS NOTE BY SUCH PURCHASER OR TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION OF SIMILAR LAWS.

 

[Temporary Regulation S Global Note Legend]

 

EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY

 

xiii

 

DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE SOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OF OR OTHERWISE TRANSFERRED ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. IN EACH OF CASES (A) THROUGH (E) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

 

BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON THAT IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

 

BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN

 

xiv

 

INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).

 

[Definitive Notes Legend]

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

xv

 

CUSIP No.

 

[ISIN                 ]

 

	
No.
    	
$          
    

 

BOISE CASCADE, L.L.C.

 

BOISE CASCADE FINANCE CORPORATION

 

63/8% Senior Note due 2020

 

Boise Cascade, L.L.C., a Delaware limited liability company, and Boise Cascade Finance Corporation, a Delaware corporation, promise to pay to [-], or registered assigns, the principal sum of [-] Dollars, or such other sum as shall be set forth in the Schedule of Increases or Decreases in the Global Note attached hereto, on November 1, 2020.

 

Interest Payment Dates: May 1 and November 1, beginning on May 1, 2013.

 

Record Dates: April 15 and October 15.

 

Additional provisions of this Note are set forth on the other side of this Note.

 

Dated:

 

xvi

 

	
 
    	
BOISE   CASCADE, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BOISE   CASCADE FINANCE CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

xvii

 

	
TRUSTEE’S CERTIFICATE OF
    	
 
    
	
AUTHENTICATION
    	
 
    
	
 
    	
 
    
	
U.S. BANK NATIONAL   ASSOCIATION
    	
 
    
	
as   Trustee, certifies that this is one of
    	
 
    
	
the   Notes referred to in the Indenture.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Dated:

 

xviii

 

[FORM OF REVERSE SIDE OF INITIAL NOTE]

 

63/8% Senior Note due 2020

 

1.                                      INTEREST

 

Boise Cascade, L.L.C., a Delaware limited liability company, and Boise Cascade Finance Corporation, a Delaware corporation (together, and with their successors and assigns under the Indenture hereinafter referred to, the “Issuers”), promise to pay interest on the principal amount of this Note at a rate per annum, equal to 6.375%.

 

The Issuers will pay interest semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2013. 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 October 22, 2012.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months. In addition, if a Registration Default (as defined in the Registration Rights Agreement in respect of the Notes) occurs, additional interest will accrue on this Note at a rate of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which such Registration Default occurs, up to a maximum additional interest rate of 1.0%) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

 

2.                                      METHOD OF PAYMENT

 

The Issuers will pay interest on the Notes (except defaulted interest) to the Persons that are registered holders of Notes at the close of business on the April 15 or October 15 immediately 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 Issuers 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 and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Issuers will make all payments in respect of a certificated Note (including principal, premium 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).

 

3.                                      PAYING AGENT AND REGISTRAR

 

Initially, U.S. Bank National Association, a national banking association (the “Trustee”), will act as Paying Agent and Registrar. The Issuers may appoint and change any

 

xix

 

Paying Agent, Registrar or co-registrar without notice. The Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

 

4.                                      INDENTURE

 

The Issuers issued the Notes under an Indenture dated as of October 22, 2012 (the “Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “TIA”). 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 Noteholders are referred to the Indenture and the TIA for a statement of those terms.

 

The Notes are general unsecured obligations of the Issuers. The Issuers shall be entitled, subject to their compliance with Section 4.03 of the Indenture, to issue Additional Notes pursuant to Section 2.13 of the Indenture. The Initial Notes issued on the Issue Date, any Additional Notes and all Exchange Notes issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of Boise Cascade and its Restricted 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; consolidate, merge or transfer all or substantially all of their assets and the assets of their subsidiaries; incur liens; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications.

 

5.                                      OPTIONAL REDEMPTION

 

(a)                                 On and after November 1, 2015, the Issuers shall be entitled at their option at any time and from time to time to redeem all or a portion of the Notes 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 November 1 of the years set forth below:

 

	
Period
    	
 
    	
Redemption
   Price
    	
 
    
	
2015
    	
 
    	
104.781
    	
%
    
	
2016
    	
 
    	
103.188
    	
%
    
	
2017
    	
 
    	
101.594
    	
%
    
	
2018 and thereafter
    	
 
    	
100.000
    	
%
    

 

(b)                                 Prior to November 1, 2015, the Issuers shall be entitled at their option on one or more occasions to redeem the Notes (including Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes (including Additional Notes, if any) originally issued at a redemption price (expressed as a percentage of

 

xx

 

principal amount) of 106.375%, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from one or more Equity Offerings; provided, however, that:

 

(1)                                 at least 65% of such aggregate principal amount of the Notes (including Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption; and

 

(2)                                 each such redemption occurs within 90 days of the date of the closing of such Equity Offering.

 

(c)                                  Prior to November 1, 2015, the Issuers shall be entitled on one or more occasions 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 a redemption price equal to the sum of:

 

(1)                                 100% of the principal amount thereof, plus accrued and unpaid interest thereon 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); plus

 

(2)                                 the applicable Make-Whole Amount, if any.

 

(d)                                 If a Change of Control occurs at any time prior to May 1, 2014, the Issuers may, at their option, redeem all, but not less than all, of the Notes upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 109% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). If the Issuers elect to exercise this redemption right, the Issuers must do so by mailing a redemption notice to each Holder at its registered address with a copy to the Trustee within 60 days following the Change of Control (or, at the Issuers’ option, prior to such Change of Control but after the transaction giving rise to such Change of Control is publicly announced). Any such redemption may be conditioned upon the Change of Control occurring if the notice is mailed prior to the Change of Control. If the Change of Control does not occur, the Issuers will provide prompt written notice to the Trustee rescinding such redemption, and such redemption and notice of redemption shall be rescinded and of no force or effect. Upon receipt of such notice, the Trustee will promptly send a copy of such notice to the Holders of the Notes in the same manner in which the notice of redemption was given. If the Issuers exercise the Change of Control redemption right, Boise Cascade will not be required to make the Change of Control Offer described in paragraph 7 of the Notes unless or until there is a default in payment of the redemption price.

 

6.                                      NOTICE OF REDEMPTION

 

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 his registered address. Notes in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000 in excess thereof. 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

 

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are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.

 

7.                                      PUT PROVISIONS

 

Upon a Change of Control, any Holder of Notes will have the right to cause the Issuers to repurchase all or any part 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, if any, 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.

 

8.                                      GUARANTEE

 

The payment by the Issuers of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several senior basis by each of the Guarantors to the extent set forth in the Indenture; provided that the Guarantee of Boise Holdings shall be automatically released in the event that (i) any Capital Stock of Boise Cascade is registered under the Exchange Act and listed on a national securities exchange or (ii) the Issuers’ obligations under the Indenture are discharged in accordance with the terms of the Indenture or the Issuers exercise their covenant defeasance option or legal defeasance option in accordance with the Indenture.

 

9.                                      DENOMINATIONS; TRANSFER; EXCHANGE

 

The Notes are in registered form without coupons in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note 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.

 

10.                               PERSONS DEEMED OWNERS

 

The registered Holder of this Note may be treated as the owner of it for all purposes.

 

11.                               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 Issuers at their request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuers and not to the Trustee for payment.

 

xxii

 

12.                               AMENDMENT, WAIVER

 

Subject to certain exceptions set forth in the Indenture, (a) 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 (b) 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 of Notes, the Issuers, the Guarantors and the Trustee shall be entitled to amend the Indenture to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the 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 Guarantees, or to secure the Notes, or to add additional covenants or surrender rights and powers conferred on the Issuers or a Guarantor, or to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act, or to make any change that does not adversely affect the rights of any Holder of Notes, or to make amendments to provisions of the Indenture relating to the form and legending of the Notes.

 

13.                               DEFAULTS AND REMEDIES

 

Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Notes; (b) 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 Issuers to purchase Notes when required; (c) failure by the Issuers or any Guarantor to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of an Issuer, any Guarantor or any Significant Subsidiary if the amount accelerated (or so unpaid) exceeds $25 million; (e) certain events of bankruptcy or insolvency with respect to an Issuer or any Significant Subsidiary; (f) certain judgments or decrees for the payment of money in excess of $25 million; and (g) any Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms thereof) or any Guarantor denies or disaffirms its obligations under its Guarantee. 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 that will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.

 

Noteholders 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 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 Noteholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.

 

14.                               TRUSTEE DEALINGS WITH THE ISSUERS

 

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 Issuers or their Affiliates and may

 

xxiii

 

otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.

 

15.                               NO RECOURSE AGAINST OTHERS

 

A director, officer, employee or stockholder, as such, of the Issuers, the Guarantors or the Trustee shall not have any liability for any obligations of the Issuers under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.

 

16.                               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.

 

17.                               ABBREVIATIONS

 

Customary abbreviations may be used in the name of a Noteholder 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).

 

18.                               CUSIP NUMBERS

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuers have caused CUSIP numbers to be printed on the Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. 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.

 

19.                               HOLDERS’ COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.

 

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement in respect of the Notes, including the obligations of the Holders with respect to a registration and the indemnification of the Issuers to the extent provided therein.

 

20.                               GOVERNING LAW.

 

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

 

The Issuers will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture.  Requests may be made to:

 

xxiv

 

1111 West Jefferson Street, Suite 300, Boise, Idaho 83728, (fax: (208) 384-7189); Attention: Chief Financial Officer.

 

xxv

 

ASSIGNMENT FORM

 

To assign this Note, 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 Issuers. 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.

 

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(d)(1)(ii) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuers or any Affiliate of the Issuers, the undersigned confirms that such Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

o                                    to the Issuers; or

 

	
(1)
    	
 
    	
 ̈
    	
 
    	
pursuant to an effective   registration statement under the Securities Act of 1933; or
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(2)
    	
 
    	
 ̈
    	
 
    	
inside the United States   to a “qualified institutional buyer” (as defined in Rule 144A under the   Securities Act of 1933) that purchases for its own account or for the account   of a qualified institutional buyer to which notice is given that such   transfer is being made in reliance on Rule 144A, in each case pursuant to and   in compliance with Rule 144A under the Securities Act of 1933; or
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(3)
    	
 
    	
 ̈
    	
 
    	
outside the United States   in an offshore transaction within the meaning of Regulation S under the   Securities Act in compliance with Rule 904 under the Securities Act of   1933; or
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(4)
    	
 
    	
 ̈
    	
 
    	
pursuant to the exemption   from registration provided by
    

 

xxvi

 

	
 
    	
 
    	
 
    	
 
    	
Rule 144 under the   Securities Act of 1933.
    

 

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Signature Guarantee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature must be   guaranteed
    	
 
    	
Signature
    

 

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.

 

xxvii

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Notice:
    	
To be executed by
    
	
 
    	
 
    	
an executive officer
    

 

xxviii

 

[TO BE ATTACHED TO GLOBAL NOTES]

 

SCHEDULE OF INCREASES OR DECREASES IN THE GLOBAL NOTE

 

The following increases or decreases in this Global Note have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of
   decrease in
   Principal amount
   of this Global
   Note
    	
 
    	
Amount of
   increase in
   Principal amount
   of this Global
   Note
    	
 
    	
Principal amount
   of this Global
   Note following
   such decrease or
   increase
    	
 
    	
Signature of
   authorized officer
   of Trustee or
   Notes Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

xxix

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, check the box: o

 

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 or 4.09 of the 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.

 

xxx

 

EXHIBIT A

 

[FORM OF FACE OF SENIOR EXCHANGE NOTE]*

 

CUSIP No.

 

	
No.
    	
$                   
    

 

BOISE CASCADE, L.L.C.

 

BOISE CASCADE FINANCE CORPORATION

 

63/8% Senior Note due 2020

 

Boise Cascade, L.L.C., a Delaware limited liability company, and Boise Cascade Finance Corporation, a Delaware corporation, promise to pay to [-], or registered assigns, the principal sum of [-] Dollars, or such other sum as shall be set forth in the Schedule of Increases or Decreases in the Global Note attached hereto, on November 1, 2020.

 

Interest Payment Dates: May 1 and November 1, beginning on May 1, 2013.

 

Record Dates: April 15 and October 15.

 

Additional provisions of this Note are set forth on the other side of this Note.

 

Dated:

 

* [If the Security is to be issued in global form add the Global Notes Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN THE GLOBAL NOTE.”]

 

A-1

 

	
 
    	
BOISE   CASCADE, L.L.C.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BOISE   CASCADE FINANCE CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-2

 

	
TRUSTEE’S CERTIFICATE OF
    	
 
    
	
AUTHENTICATION
    	
 
    
	
 
    	
 
    
	
U.S. BANK NATIONAL   ASSOCIATION
    	
 
    
	
as   Trustee, certifies that this is one of
    	
 
    
	
the   Notes referred to in the Indenture.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Dated:

 

A-3

 

[FORM OF REVERSE SIDE OF SENIOR EXCHANGE NOTE]

 

63/8% Senior Note due 2020

 

1.                                      INTEREST

 

Boise Cascade, L.L.C., a Delaware limited liability company, and Boise Cascade Finance Corporation, a Delaware corporation (together, and with their successors and assigns under the Indenture hereinafter referred to, the “Issuers”), promise to pay interest on the principal amount of this Note at a rate per annum, equal to 6.375%.

 

The Issuers will pay interest semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2013. 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 October 22, 2012.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months. [IN ADDITION, IF A REGISTRATION DEFAULT (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT IN RESPECT OF THE NOTES) HAS OCCURRED, ADDITIONAL INTEREST WILL ACCRUE ON THIS NOTE AT A RATE OF 0.25% PER ANNUM (INCREASING BY AN ADDITIONAL 0.25% PER ANNUM AFTER EACH CONSECUTIVE 90-DAY PERIOD THAT OCCURRED AFTER THE DATE ON WHICH SUCH REGISTRATION DEFAULT OCCURRED, UP TO A MAXIMUM ADDITIONAL INTEREST RATE OF 1.0%) FROM AND INCLUDING THE DATE ON WHICH ANY SUCH REGISTRATION DEFAULT OCCURRED TO BUT EXCLUDING THE DATE ON WHICH ALL REGISTRATION DEFAULTS WERE CURED.] * The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

 

2.                                      METHOD OF PAYMENT

 

The Issuers will pay interest on the Notes (except defaulted interest) to the Persons that are registered holders of Notes at the close of business on the April 15 or October 15 immediately 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 Issuers 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 and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Issuers will make all payments in respect of a certificated Note (including principal, premium 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).

 

* Insert if at the date of issuance of the Exchange Note any Registration Default has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs.

 

A-4

 

3.                                      PAYING AGENT AND REGISTRAR

 

Initially, U.S. Bank National Association, a national banking association (the “Trustee”), will act as Paying Agent and Registrar. The Issuers may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Issuers or any of their domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

 

4.                                      INDENTURE

 

The Issuers issued the Notes under an Indenture dated as of October 22, 2012 (the “Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “TIA”). 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 Noteholders are referred to the Indenture and the TIA for a statement of those terms.

 

The Notes are general unsecured obligations of the Issuers. The Issuers shall be entitled, subject to their compliance with Section 4.03 of the Indenture, to issue Additional Notes pursuant to Section 2.13 of the Indenture. The Initial Notes issued on the Issue Date, any Additional Notes and all Exchange Notes issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of Boise Cascade and its Restricted 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; consolidate, merge or transfer all or substantially all of their assets and the assets of their subsidiaries; incur liens; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications.

 

5.                                      OPTIONAL REDEMPTION

 

(e)                                  On and after November 1, 2015, the Issuers shall be entitled at their option at any time and from time to time to redeem all or a portion of the Notes 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 November 1 of the years set forth below:

 

	
Period
    	
 
    	
Redemption
   Price
    	
 
    
	
2015
    	
 
    	
104.781
    	
%
    
	
2016
    	
 
    	
103.188
    	
%
    
	
2017
    	
 
    	
101.594
    	
%
    
	
2018 and thereafter
    	
 
    	
100.000
    	
%
    

 

A-5

 

(f)                                   Prior to November 1, 2015, the Issuers shall be entitled at their option on one or more occasions to redeem the Notes (including Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes (including Additional Notes, if any) originally issued at a redemption price (expressed as a percentage of principal amount) of 106.375%, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from one or more Equity Offerings; provided, however, that:

 

(1)                                 at least 65% of such aggregate principal amount of the Notes (including Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption; and

 

(2)                                 each such redemption occurs within 90 days of the date of the closing of such Equity Offering.

 

(g)                                  Prior to November 1, 2015, the Issuers shall be entitled on one or more occasions 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 a redemption price equal to the sum of:

 

(1)                                 100% of the principal amount thereof, plus accrued and unpaid interest thereon 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); plus

 

(2)                                 the applicable Make-Whole Amount, if any.

 

(h)                                 If a Change of Control occurs at any time prior to May 1, 2014, the Issuers may, at their option, redeem all, but not less than all, of the Notes upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 109% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). If the Issuers elect to exercise this redemption right, the Issuers must do so by mailing a redemption notice to each Holder at its registered address with a copy to the Trustee within 60 days following the Change of Control (or, at the Issuers’ option, prior to such Change of Control but after the transaction giving rise to such Change of Control is publicly announced). Any such redemption may be conditioned upon the Change of Control occurring if the notice is mailed prior to the Change of Control. If the Change of Control does not occur, the Issuers will provide prompt written notice to the Trustee rescinding such redemption, and such redemption and notice of redemption shall be rescinded and of no force or effect. Upon receipt of such notice, the Trustee will promptly send a copy of such notice to the Holders of the Notes in the same manner in which the notice of redemption was given. If the Issuers exercise the Change of Control redemption right, Boise Cascade will not be required to make the Change of Control Offer described in paragraph 7 of the Notes unless or until there is a default in payment of the redemption price.

 

6.                                      NOTICE OF REDEMPTION

 

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 his registered address. Notes in denominations larger than $1,000 principal amount may be redeemed in part but only in

 

A-6

 

whole multiples of $1,000 in excess thereof. 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.

 

7.                                      PUT PROVISIONS

 

Upon a Change of Control, any Holder of Notes will have the right to cause the Issuers to repurchase all or any part 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, if any, 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.

 

8.                                      GUARANTEE

 

The payment by the Issuers of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several senior basis by each of the Guarantors to the extent set forth in the Indenture; provided that the Guarantee of Boise Holdings shall be automatically released in the event that (i) any Capital Stock of Boise Cascade is registered under the Exchange Act and listed on a national securities exchange or (ii) the Issuers’ obligations under the Indenture are discharged in accordance with the terms of the Indenture or the Issuers exercise their covenant defeasance option or legal defeasance option in accordance with the Indenture.

 

9.                                      DENOMINATIONS; TRANSFER; EXCHANGE

 

The Notes are in registered form without coupons in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note 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.

 

10.                               PERSONS DEEMED OWNERS

 

The registered Holder of this Note may be treated as the owner of it for all purposes.

 

11.                               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 Issuers at their request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuers and not to the Trustee for payment.

 

A-7

 

12.                               AMENDMENT, WAIVER

 

Subject to certain exceptions set forth in the Indenture, (a) 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 (b) 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 of Notes, the Issuers, the Guarantors and the Trustee shall be entitled to amend the Indenture to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the 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 Guarantees, or to secure the Notes, or to add additional covenants or surrender rights and powers conferred on the Issuers or a Guarantor, or to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act, or to make any change that does not adversely affect the rights of any Holder of Notes, or to make amendments to provisions of the Indenture relating to the form and legending of the Notes.

 

13.                               DEFAULTS AND REMEDIES

 

Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Notes; (b) 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 Issuers to purchase Notes when required; (c) failure by the Issuers or any Guarantor to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of an Issuer, any Guarantor or any Significant Subsidiary if the amount accelerated (or so unpaid) exceeds $25 million; (e) certain events of bankruptcy or insolvency with respect to an Issuer or any Significant Subsidiary; (f) certain judgments or decrees for the payment of money in excess of $25 million; and (g) any Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms thereof) or any Guarantor denies or disaffirms its obligations under its Guarantee. 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 that will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.

 

Noteholders 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 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 Noteholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.

 

A-8

 

14.                               TRUSTEE DEALINGS WITH THE ISSUERS

 

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 Issuers or their Affiliates and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee.

 

15.                               NO RECOURSE AGAINST OTHERS

 

A director, officer, employee or stockholder, as such, of the Issuers, the Guarantors or the Trustee shall not have any liability for any obligations of the Issuers under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.

 

16.                               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.

 

17.                               ABBREVIATIONS

 

Customary abbreviations may be used in the name of a Noteholder 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).

 

18.                               CUSIP NUMBERS

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuers have caused CUSIP numbers to be printed on the Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. 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.

 

19.                               HOLDERS’ COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.

 

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement in respect of the Notes, including the obligations of the Holders with respect to a registration and the indemnification of the Issuers to the extent provided therein.

 

20.                               GOVERNING LAW.

 

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

 

A-9

 

The Issuers will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture. Requests may be made to:

 

1111 West Jefferson Street, Suite 300, Boise, Idaho 83728, (fax: (208) 384-7189); Attention: Chief Financial Officer.

 

A-10

 

ASSIGNMENT FORM

 

To assign this Note, 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 Issuers. 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.
    
						

 

A-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, check the box:   o

 

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 or 4.09 of the 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.

 

A-12

 

EXHIBIT B

 

FORM OF NOTATION OF GUARANTEE

 

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in and subject to the provisions in the Indenture dated as of October 22, 2012 (the “Indenture”) by and among Boise Cascade, L.L.C., Boise Cascade Finance Corporation, the guarantors named on the signature pages thereof, and U.S. Bank National Association, as trustee (the “Trustee”), (a) prompt payment of the principal of, premium, if any, and accrued and unpaid interest and defaulted interest, if any, on the Notes (as defined in the Indenture) when due, whether at maturity, by acceleration, redemption or otherwise, and the prompt payment of interest on overdue principal, premium, if any, and interest and defaulted interest, if any, on the Notes (pursuant to Section 2.11 of the Indenture), if lawful (subject in all cases to any applicable grace periods provided in the Indenture and the Notes) when due, and all other obligations of the Issuers to the Holders or the Trustee under the Indenture and the Notes will be promptly paid in full, all in accordance with the terms of the Indenture and the Notes and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.  Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

 

B-1

 

IN WITNESS HEREOF, each Guarantor has caused this Notation of Guarantee to be signed manually or by facsimile by its duly authorized officer.

 

 

	
 
    	
THE GUARANTORS LISTED ON
    
	
 
    	
SCHEDULE I ATTACHED HERETO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

B-2

 

SCHEDULE I

 

GUARANTORS

 

[                      ]

 

B-3

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