Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) HTML 1.51M
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, 109 441K
Liquidation or Succession
3: EX-2.2 Plan of Acquisition, Reorganization, Arrangement, 44 179K
Liquidation or Succession
4: EX-4.3 Instrument Defining the Rights of Security Holders 204 690K
5: EX-4.4 Instrument Defining the Rights of Security Holders 29 100K
6: EX-4.5 Instrument Defining the Rights of Security Holders 30 98K
7: EX-10.1 Material Contract 7 29K
16: EX-10.10 Material Contract 24 81K
17: EX-10.11 Material Contract 13 69K
18: EX-10.12 Material Contract 13 58K
19: EX-10.13 Material Contract 13 57K
20: EX-10.14 Material Contract 7 28K
21: EX-10.15 Material Contract 10 44K
22: EX-10.16 Material Contract 10 42K
23: EX-10.17 Material Contract 18 73K
24: EX-10.18 Material Contract 8 30K
25: EX-10.19 Material Contract 5 21K
8: EX-10.2 Material Contract 37 149K
26: EX-10.20 Material Contract 8 36K
9: EX-10.3 Material Contract 21 88K
10: EX-10.4 Material Contract 7 32K
11: EX-10.5 Material Contract 19 82K
12: EX-10.6 Material Contract 160 522K
13: EX-10.7 Material Contract 78 246K
14: EX-10.8 Material Contract 4 17K
15: EX-10.9 Material Contract 4 18K
27: EX-21.1 Subsidiaries of the Registrant 2± 10K
28: EX-23.1 Consent of Experts or Counsel 1 10K
EX-4.3 — Instrument Defining the Rights of Security Holders
Exhibit Table of Contents
Exhibit 4.3
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BOISE CASCADE, L.L.C.
BOISE CASCADE FINANCE CORPORATION
Senior Floating Rate Notes due 2012
7-1/8% Senior Subordinated Notes due 2014
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INDENTURE
Dated as of October 29, 2004
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U.S. Bank National Association,
as Trustee
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CROSS-REFERENCE TABLE
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TIA Indenture
Section 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) ............................................. 13.03
(c) ............................................. 13.03
313(a) ............................................. 7.06
(b)(1) ............................................. N.A.
(b)(2) ............................................. 7.06
(c) ............................................. 11.02
(d) ............................................. 7.06
314(a) ............................................. 4.02; 4.09; 13.02
(b) ............................................. N.A.
(c)(1) ............................................. 13.04
(c)(2) ............................................. 13.04
(c)(3) ............................................. N.A.
(d) ............................................. N.A.
(e) ............................................. 13.05
(f) ............................................. 4.09
315(a) ............................................. 7.01
(b) ............................................. 7.05; 13.02
(c) ............................................. 7.01
(d) ............................................. 7.01
(e) ............................................. 6.11
316(a)(last sentence) ............................................. 13.06
(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) ............................................. 13.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
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Page
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Article 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.......................................................................1
SECTION 1.02. Other Definitions................................................................42
SECTION 1.03. Incorporation by Reference of Trust Indenture Act................................42
SECTION 1.04. Rules of Construction............................................................43
Article 2
The Securities
SECTION 2.01. Form and Dating..................................................................44
SECTION 2.02. Execution and Authentication.....................................................44
SECTION 2.03. Registrar and Paying Agent.......................................................45
SECTION 2.04. Paying Agent To Hold Money in Trust..............................................45
SECTION 2.05. Securityholder Lists.............................................................45
SECTION 2.06. Transfer and Exchange............................................................46
SECTION 2.07. Replacement Securities...........................................................46
SECTION 2.08. Outstanding Securities...........................................................46
SECTION 2.09. Temporary Securities.............................................................46
SECTION 2.10. Cancellation.....................................................................47
SECTION 2.11. Defaulted Interest...............................................................47
SECTION 2.12. CUSIP Numbers, ISINs, etc........................................................47
SECTION 2.13. Issuance of Additional Securities................................................47
SECTION 2.14. Series of Securities.............................................................48
Article 3
Redemption
SECTION 3.01. Notices to Trustee...............................................................48
SECTION 3.02. Selection of Securities to Be Redeemed...........................................48
SECTION 3.03. Notice of Redemption.............................................................49
SECTION 3.04. Effect of Notice of Redemption...................................................49
SECTION 3.05. Deposit of Redemption Price......................................................50
SECTION 3.06. Securities Redeemed in Part......................................................50
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Article 4
Covenants
SECTION 4.01. Payment of Securities............................................................50
SECTION 4.02. SEC Reports......................................................................50
SECTION 4.03. Limitation on Indebtedness.......................................................52
SECTION 4.04. Limitation on Restricted Payments................................................57
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries.........65
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock...............................67
SECTION 4.07. Limitation on Affiliate Transactions.............................................71
SECTION 4.08. Limitation on Line of Business...................................................73
SECTION 4.09. Change of Control................................................................73
SECTION 4.10. Limitation on Liens..............................................................75
SECTION 4.11. Limitation on Sale/Leaseback Transactions........................................75
SECTION 4.12. Future Guarantors................................................................76
SECTION 4.13. Limitation on the Conduct of Business of Boise Finance...........................76
SECTION 4.14. Compliance Certificate...........................................................76
SECTION 4.15. Further Instruments and Acts.....................................................77
SECTION 4.16. Timber Fall-away of Covenants....................................................77
Article 5
Successor Company
SECTION 5.01. Merger or Transfer of Assets.....................................................77
Article 6
Defaults and Remedies
SECTION 6.01. Events of Default................................................................79
SECTION 6.02. Acceleration.....................................................................82
SECTION 6.03. Other Remedies...................................................................82
SECTION 6.04. Waiver of Past Defaults..........................................................83
SECTION 6.05. Control by Majority..............................................................83
SECTION 6.06. Limitation on Suits..............................................................83
SECTION 6.07. Rights of Holders to Receive Payment.............................................84
SECTION 6.08. Collection Suit by Trustee.......................................................84
SECTION 6.09. Trustee May File Proofs of Claim.................................................84
SECTION 6.10. Priorities.......................................................................84
SECTION 6.11. Undertaking for Costs............................................................85
SECTION 6.12. Waiver of Stay or Extension Laws.................................................85
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Article 7
Trustee
SECTION 7.01. Duties of Trustee................................................................85
SECTION 7.02. Rights of Trustee................................................................87
SECTION 7.03. Individual Rights of Trustee.....................................................87
SECTION 7.04. Trustee's Disclaimer.............................................................87
SECTION 7.05. Notice of Defaults...............................................................87
SECTION 7.06. Reports by Trustee to Holders....................................................88
SECTION 7.07. Compensation and Indemnity.......................................................88
SECTION 7.08. Replacement of Trustee...........................................................88
SECTION 7.09. Successor Trustee by Merger......................................................89
SECTION 7.10. Eligibility; Disqualification....................................................90
SECTION 7.11. Preferential Collection of Claims Against Issuers................................90
Article 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.................................90
SECTION 8.02. Conditions to Defeasance.........................................................91
SECTION 8.03. Application of Trust Money.......................................................92
SECTION 8.04. Repayment to Issuers.............................................................92
SECTION 8.05. Indemnity for Government Obligations.............................................93
SECTION 8.06. Reinstatement....................................................................93
Article 9
Amendments
SECTION 9.01. Without Consent of Holders.......................................................93
SECTION 9.02. With Consent of Holders..........................................................94
SECTION 9.03. Compliance with Trust Indenture Act..............................................95
SECTION 9.04. Revocation and Effect of Consents and Waivers....................................96
SECTION 9.05. Notation on or Exchange of Securities............................................96
SECTION 9.06. Trustee To Sign Amendments.......................................................96
SECTION 9.07. Payment for Consent..............................................................96
Article 10
Subordination
SECTION 10.01. Agreement To Subordinate.........................................................97
SECTION 10.02. Liquidation, Dissolution, Bankruptcy.............................................97
SECTION 10.03. Default on Senior Indebtedness of the Issuers....................................97
SECTION 10.04. Acceleration of Payment of Securities............................................99
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SECTION 10.05. When Distribution Must Be Paid Over..............................................99
SECTION 10.06. Subrogation......................................................................99
SECTION 10.07. Relative Rights..................................................................99
SECTION 10.08. Subordination May Not Be Impaired by Issuers.....................................99
SECTION 10.09. Rights of Trustee and Paying Agent..............................................100
SECTION 10.10. Distribution or Notice to Representative........................................100
SECTION 10.11. Not To Prevent Events of Default or Limit Right To Accelerate...................100
SECTION 10.12. Trust Moneys Not Subordinated...................................................100
SECTION 10.13. Trustee Entitled To Rely........................................................100
SECTION 10.14. Trustee To Effectuate Subordination.............................................101
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuers.........101
SECTION 10.16. Reliance by Holders of Senior Indebtedness of the Issuers on Subordination
Provisions..................................................................101
Article 11
Note Guaranties
SECTION 11.01. Guaranties......................................................................102
SECTION 11.02. Limitation on Liability.........................................................104
SECTION 11.03. Successors and Assigns..........................................................104
SECTION 11.04. No Waiver.......................................................................104
SECTION 11.05. Modification....................................................................104
SECTION 11.06. Release of Note Guarantor.......................................................105
SECTION 11.07. Contribution....................................................................106
Article 12
Subordination of Note Guaranties
SECTION 12.01. Agreement To Subordinate........................................................106
SECTION 12.02. Liquidation, Dissolution, Bankruptcy............................................106
SECTION 12.03. Default on Senior Indebtedness of Note Guarantor................................107
SECTION 12.04. Demand for Payment..............................................................108
SECTION 12.05. When Distribution Must Be Paid Over.............................................108
SECTION 12.06. Subrogation.....................................................................108
SECTION 12.07. Relative Rights.................................................................109
SECTION 12.08. Subordination May Not Be Impaired by Note Guarantors............................109
SECTION 12.09. Rights of Trustee and Paying Agent..............................................109
SECTION 12.10. Distribution or Notice to Representative........................................110
SECTION 12.11. Not To Prevent Events of Default or Limit Right To Demand Payment...............110
SECTION 12.12. Trustee Entitled To Rely........................................................110
SECTION 12.13. Trustee To Effectuate Subordination.............................................110
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of Note Guarantor......110
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SECTION 12.15. Reliance by Holders of Senior Indebtedness of Note Guarantors on Subordination
Provisions..................................................................111
Article 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls....................................................111
SECTION 13.02. Notices.........................................................................111
SECTION 13.03. Communication by Holders with Other Holders.....................................112
SECTION 13.04. Certificate and Opinion as to Conditions Precedent..............................112
SECTION 13.05. Statements Required in Certificate or Opinion...................................112
SECTION 13.06. When Securities Disregarded.....................................................113
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar....................................113
SECTION 13.08. Legal Holidays..................................................................113
SECTION 13.09. Governing Law...................................................................113
SECTION 13.10. No Recourse Against Others......................................................113
SECTION 13.11. Successors......................................................................113
SECTION 13.12. Multiple Originals..............................................................114
SECTION 13.13. Table of Contents; Headings.....................................................114
Rule 144A/Regulation S Appendix
Exhibit 1 to Appendix - Form of Initial Senior Floating Rate Note
Exhibit 2 to Appendix - Form of Initial Senior Subordinated Note
Exhibit A - Form of Senior Floating Rate Exchange Note
Exhibit B - Form of Senior Subordinated Exchange Note
Exhibit C - Form of Transferee Letter of Representation
INDENTURE dated as of October 29, 2004, among Boise Cascade,
L.L.C., a Delaware limited liability company ("BOISE LLC"), Boise
Cascade Finance Corporation, a Delaware corporation ("BOISE
FINANCE" and, together with Boise LLC, the "ISSUERS"), Boise
Cascade Holdings, L.L.C., a Delaware limited liability company
which owns all of the outstanding capital stock of Boise LLC
("BOISE HOLDINGS"), Boise Land & Timber Holdings Corp., a
Delaware corporation under common control with Boise Holdings
("TIMBER HOLDINGS"), Boise Land & Timber Corp., a Delaware
corporation wholly owned by Timber Holdings ("TIMBER"), each
other Note Guarantor 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 Securities issued under
this Indenture:
Article 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquisition" means, pursuant to the Asset Purchase Agreement dated as
of July 26, 2004, the acquisition by Boise Holdings, Timber Holdings and their
Subsidiaries of the Timberlands Assets and all of the assets comprising Boise
Cascade Corporation's white paper manufacturing and distribution, packaging and
newsprint, building solutions and manufacturing and building solutions
distribution businesses.
"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
Holdings, Timber Holdings or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary;
PROVIDED, HOWEVER, that any such Restricted Subsidiary described in clause (2)
or (3) above is primarily engaged in a Related Business.
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"Additional Consideration Agreement" means the Additional
Consideration Agreement, dated the Issue Date, by and between Boise Cascade
Corporation, a Delaware corporation, and Boise LLC.
"Additional Securities" means, collectively, the Additional Senior
Notes and the Additional Senior Subordinated Notes, if any.
"Additional Senior Notes" means Senior Notes issued under this
Indenture after the Issue Date and in compliance with Sections 2.13 and 4.03, it
being understood that any Senior Notes issued in exchange for or replacement of
any Initial Senior Note issued on the Issue Date shall not be an Additional
Senior Note, including any such Senior Notes issued pursuant to a Registration
Rights Agreement.
"Additional Senior Subordinated Notes" means Senior Subordinated Notes
issued under this Indenture after the Issue Date and in compliance with Sections
2.13 and 4.03, it being understood that any Senior Subordinated Notes issued in
exchange for or replacement of any Initial Senior Subordinated Note issued on
the Issue Date shall not be an Additional Senior Subordinated Note, including
any such Senior Subordinated 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. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of Boise Holdings, Timber
Holdings or an Issuer or of rights or warrants to purchase such Capital Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
Boise Holdings, Timber Holdings or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than Boise Holdings, Timber Holdings or a
Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of Boise Holdings, Timber Holdings or any Restricted Subsidiary;
or
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(3) any other assets of Boise Holdings, Timber Holdings or any
Restricted Subsidiary outside of the ordinary course of business of Boise
Holdings, Timber Holdings or such Restricted Subsidiary
other than,
(A) a disposition between or among Boise Holdings, Timber Holdings
and any Restricted Subsidiary;
(B) for purposes of Section 4.06 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 and (ii) a disposition of all or substantially
all the assets of Boise Holdings, Timber Holdings, Boise LLC or Boise
Finance in accordance with Section 5.01;
(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 Holdings, Timber
Holdings 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 Entity 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; and
(I) the sale of the Capital Stock, Indebtedness or other securities
of an Unrestricted Subsidiary.
"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 Securities, 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".
4
"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, (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 which is not a Legal Holiday.
"Calculation Adjustments" means the adjustments described in the
proviso to the first paragraph (including subparagraphs (1) through (8)), and
the second and third paragraphs of the definition of "Consolidated Coverage
Ratio".
"Calculation Agent" means a financial institution appointed by the
Issuers to calculate the interest rate payable on the Senior Notes in respect of
each Interest Period, which shall initially be the Trustee.
"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 purposes of Section 4.10, 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) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as that term is used in Section 13(d) and Section 14(d) of the
Exchange Act),
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other than one or more Permitted Holders, is or becomes the "beneficial
owner" (as that term is defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating beneficial ownership for purposes
of this clause, such person shall be deemed to have "beneficial ownership"
of all securities that person has the right to acquire, whether such right
is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Parent, Boise Holdings or, at
any time that Timber Holdings owns or controls, together with its
Restricted Subsidiaries, any material assets or operations other than
Timberlands Assets, Timber Holdings;
(2) Boise Holdings ceases to be the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly,
of 51% of the aggregate of the total voting power of the Voting Stock of
each of the Issuers;
(3) the first day on which a majority of the members of the Board
of Directors of the Parent, Boise Holdings or, at any time that Timber
Holdings owns or controls, together with its Restricted Subsidiaries, any
material assets or operations other than Timberlands Assets, Timber
Holdings, are not Continuing Directors;
(4) the adoption of a plan relating to the liquidation or
dissolution of Boise Holdings, Timber Holdings or either Issuer; PROVIDED
that the liquidation or dissolution of Timber Holdings shall not constitute
a Change of Control if (i) all of the Timberlands Assets have been sold
prior to such liquidation or dissolution, (ii) Timber Holdings and its
Restricted Subsidiaries do not own or control any material assets or
operations other than Net Available Cash from sales of Timberlands Assets
immediately prior to such liquidation or dissolution and (iii) a
Timberlands Contribution is made with any Net Available Cash from any sales
or other dispositions of Timberlands Assets held by Timber Holdings at the
time of such liquidation or dissolution (except to the extent such proceeds
would then be distributable pursuant to Section 4.04(b)(13), in which case
any such proceeds shall be deemed to have been contributed as a Timberlands
Contribution to Boise Holdings and distributed as a dividend pursuant to
such Section 4.04(b)(13)); or
(5) 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 Holdings, Timber Holdings and the Restricted Subsidiaries on a
Combined Consolidated Basis, in each case, to any "person" (as defined in
clause (1) above) other than Boise Holdings, Timber Holdings, a Wholly
Owned Subsidiary or a Permitted Holder (it being agreed that a sale of any
or all of the Timberlands Assets by Timber Holdings or a Subsidiary of
Timber Holdings or a sale of the Capital Stock of a Person which, together
with its Restricted Subsidiaries, owns or controls no material assets or
operations other than Timberlands Assets shall be deemed not to be a Change
of Control pursuant to this clause (5)).
6
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Consolidated Basis" means, (i) prior to the Timber Fall-away
Date, the consolidated financial data of each of Boise Holdings and its
Subsidiaries and the consolidated financial data of Timber Holdings and its
Subsidiaries, in each case prepared in accordance with GAAP, combined in
accordance with GAAP (other than including the treatment of minority interests
in Boise Holdings or Timber Holdings as equity in the combined financial
statements) and (ii) following the Timber Fall-away Date, the consolidated
financial data of Boise Holdings and its Subsidiaries prepared in accordance
with GAAP (for purposes of clarification, the financial data of Timber Holdings
and its consolidated subsidiaries shall be included for the period prior to the
Timber Fall-away Date to the extent such period prior to the Timber Fall-away
Date falls within any Measurement Period).
"Commodity Agreement" means any forward contract, swap, option, hedge
or other similar financial instrument or arrangement designed to protect against
fluctuations in commodity prices and not entered into for speculative purposes.
"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 Holdings, Timber Holdings 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 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 Holdings, Timber Holdings 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 Holdings,
Timber Holdings 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 Holdings, Timber
Holdings or any Restricted Subsidiary shall have made any Asset
Disposition, EBITDA for such period shall be reduced by an amount equal to
EBITDA (if
7
positive) directly attributable to the assets which 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 Holdings, Timber Holdings or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to Boise Holdings, Timber Holdings and their 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 Holdings, Timber Holdings
and their continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of such period Boise Holdings, Timber
Holdings or any Restricted Subsidiary (by merger or otherwise) shall have
made an Investment in any Restricted Subsidiary (or any Person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit 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 Holdings, Timber Holdings 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 Holdings, Timber
Holdings or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such 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;
(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; and
(8) for any four-quarter reference period that includes any period
of time prior to the Acquisition, PRO FORMA effect shall be given for such
period to the Acquisition and the other adjustments added to PRO FORMA
EBITDA to calculate
8
PRO FORMA Adjusted EBITDA as set forth in the Offering Memorandum in
footnote 7 under "Offering memorandum summary--Summary historical and PRO
FORMA condensed combined financial data" (without duplication of amounts
otherwise included in the calculation of EBITDA), it being understood that,
with respect to the adjustment related to the Additional Consideration
Agreement, the adjustment shall be the amount set forth in the Offering
Memorandum for calculating Adjusted EBITDA for the twelve months ended June
30, 2004 until such time as the Measurement Period includes an actual
payment or receipt pursuant to such agreement.
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 LLC and
may include Pro Forma Cost Savings. 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). For avoidance of doubt, in the
event the Timber Fall-away Date occurs during a Measurement Period, PRO FORMA
effect shall be given to such event as if it had occurred on the first day of
such period.
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 Holdings, Timber Holdings and their consolidated
Restricted Subsidiaries on a Combined Consolidated Basis, plus, to the extent
not included in such total interest expense, and to the extent Incurred by Boise
Holdings, Timber Holdings or their Restricted Subsidiaries, without duplication:
(1) interest expense attributable to Capital Lease Obligations;
(2) amortization of debt discount and debt issuance cost (other
than amortization of debt issuance costs in respect of Indebtedness
Incurred in connection with the Acquisition);
(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;
9
(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 Note Guarantor and all Preferred Stock of any Restricted
Subsidiary that is not a Note Guarantor, in each case held by Persons other
than Boise Holdings, Timber Holdings or a Restricted Subsidiary (other than
dividends payable solely in Capital Stock (other than Disqualified Stock)
of Boise Holdings or Timber Holdings);
(8) interest Incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any Person (other than
Boise Holdings and Timber Holdings and their respective 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 Holdings,
Timber Holdings or a Restricted Subsidiary) in connection with Indebtedness
Incurred by such plan or trust.
Consolidated Interest Expense shall not include amounts described in the
preceding sentence for Timber Holdings and its Restricted Subsidiaries for
periods following the Timber Fall-away Date.
"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, for any period, the net income of
Boise Holdings, Timber Holdings and their consolidated Subsidiaries on a
Combined Consolidated Basis; PROVIDED, HOWEVER, that there shall not be included
in such Consolidated Net Income:
(1) any net income of any Person (other than Boise Holdings and
Timber Holdings) if such Person is not a Restricted Subsidiary, except
that, subject to the exclusion contained in clause (3) below, Boise
Holdings' or Timber Holdings', as the case may be, equity in the net income
of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to Boise Holdings or Timber Holdings, as the case
may be, or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or
10
other distribution paid to a Restricted Subsidiary (other than an Issuer),
to the limitations contained in clause (2) below);
(2) any net income of any Restricted Subsidiary (other than an
Issuer) if such Restricted Subsidiary is subject to restrictions, directly
or indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to Boise Holdings,
Timber Holdings or the Issuers, as the case may be, except that:
(A) subject to the exclusion contained in clause (3) below,
Boise Holdings' or Timber Holdings', as the case may be, equity in the
net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income to the extent that the net
income of such Restricted Subsidiary would be permitted at the date of
determination to be dividended to Timber Holdings, Boise Holdings or
the Issuers without any prior approval or waiver (that has not been
obtained) pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules or
governmental regulations applicable to that Restricted Subsidiary or
its stockholders, (subject, in the case of a dividend or other
distribution paid to another Restricted Subsidiary, to the limitation
contained in this clause); and (B) Boise Holdings' or Timber
Holdings', as the case may be, equity in a net loss of any such
Restricted Subsidiary for such period shall be included in determining
such Consolidated Net Income;
PROVIDED that, with respect to the net income of any Restricted Subsidiary that
is a Note Guarantor, this clause (2) shall apply solely for purposes of Section
4.04(a);
(3) any gain or loss (or, in respect of sales of Timberlands
Assets, income or loss) realized upon the sale or other disposition of any
assets of Boise Holdings or Timber Holdings or their consolidated
Subsidiaries or any other Person (including pursuant to any
sale-and-leaseback arrangement) which are not sold or otherwise disposed of
in the ordinary course of business (it being understood that the
determination of whether any sale of Timberlands Assets has been made in
the ordinary course of business shall be made in good faith on a basis
consistent with that used in the calculation of PRO FORMA Adjusted EBITDA
as set forth in the Offering Memorandum under "Offering memorandum
summary--Summary historical and PRO FORMA condensed combined financial
data" (it being understood that such calculation makes adjustments for
non-ordinary course of business sales of Timberlands Assets and not for
ordinary course of business sales)) and any gain (or loss) realized upon
the sale or other disposition of any Capital Stock of any Person;
(4) extraordinary gains or losses;
(5) the cumulative effect of a change in accounting principles;
11
(6) any unrealized Statement of Financial Accounting Standards No.
133 gain or loss in respect of Hedging Obligations;
(7) any non-cash gains or losses attributable to the early
extinguishment of Indebtedness;
(8) unusual or non-recurring non-cash gains or losses;
(9) any non-cash goodwill impairment charges resulting from the
application of Statement of Financial Accounting Standards No. 142; and
(10) any non-cash compensation charge or expense, including any such
charge or expense arising from grants of stock options or restricted stock
or other equity-incentive programs for the benefit of officers, directors
and employees of Boise Holdings, Timber Holdings, any Restricted Subsidiary
or any direct or indirect parent of Boise Holdings or Timber Holdings,
in each case, for such period. Notwithstanding the foregoing, (i) any amounts
received and any amounts paid by Boise Holdings, Timber Holdings or any
Restricted Subsidiary (excluding Timber Holdings and its Restricted Subsidiaries
for periods following the Timber Fall-away Date) under the Additional
Consideration Agreement during such period shall be added and subtracted,
respectively, in calculating Consolidated Net Income, without duplication, and
(ii) for the purposes of Section 4.04 only, there shall be excluded from
Consolidated Net Income any repurchases, repayments or redemptions of
Investments, proceeds realized on the sale of Investments or return of capital
to Boise Holdings, Timber Holdings or a Restricted Subsidiary (excluding Timber
Holdings and its Restricted Subsidiaries for periods following the Timber
Fall-away Date) to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted Payments permitted under
Section 4.04(a)(3)(D).
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Parent, Boise Holdings or Timber
Holdings, as applicable, who (i) was a member of the Board of Directors of such
Person on the Issue Date and after giving effect to the Acquisition or (ii) was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of the nomination or election or was otherwise designated by a Permitted
Holder.
"Credit Agreement" means the Credit Agreement to be entered into by
and among Boise Holdings, Timber Holdings, Boise LLC and Timber, the lenders
referred to therein, JPMorgan Chase Bank, as Administrative Agent and Lehman
Commercial Paper Inc., as Syndication Agent, together with the related documents
thereto (including the term loans and revolving loans thereunder, 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 Holdings and Timber Holdings as additional
borrowers or Guarantors thereunder), and any agreement
12
(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.
"Cross Guarantor" means Timber Holdings, Timber and each other
Subsidiary of Timber Holdings that hereafter Guarantees the Securities pursuant
to the terms of this Indenture.
"Cross Guaranty" means, with respect to each series of Securities, a
Guarantee by a Cross Guarantor of the Issuers' obligations with respect to the
Securities of such series.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement with respect to currency values.
"Default" means any event which 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 Holdings, Timber Holdings or any
Restricted Subsidiary in connection with an Asset Disposition that is so
designated as Designated Non-cash Consideration pursuant to an Officer's
Certificate, setting forth the basis of such valuation.
"Designated Senior Indebtedness", with respect to a Person, means:
(1) any Obligations outstanding under the Credit Agreement;
(2) the Senior Notes; and
(3) any other Senior Indebtedness of such Person which, at the date
of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are
committed to lend up to, at least $25.0 million and is specifically
designated by such Person in the instrument evidencing or governing such
Senior Indebtedness as "Designated Senior Indebtedness" for purposes of
this Indenture.
"Determination Date" with respect to an Interest Period shall be the
second London Banking Day preceding the first day of such Interest Period.
13
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable (other than redeemable
only for Capital Stock of such Person which is not itself Disqualified
Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to 180 days after the Stated Maturity of the
Securities; PROVIDED, HOWEVER, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Securities 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 Securities and described under
Sections 4.06 and 4.09; and
(2) any such requirement only becomes operative after compliance
with such terms applicable to the Securities, including the purchase of any
Securities 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 LLC may designate in an
Officer's Certificate delivered to the Trustee at the time of issuance any
Preferred Stock of Boise Holdings, Timber Holdings or any Restricted Subsidiary
that would not otherwise be "Disqualified Stock" to be Disqualified Stock for
all purposes of this Indenture.
14
"EBITDA" for any period means the sum of Consolidated Net Income, plus
the following, without duplication, to the extent deducted in calculating such
Consolidated Net Income:
(1) all income tax expense of Boise Holdings, Timber Holdings and
their Restricted Subsidiaries on a Combined Consolidated Basis;
(2) Consolidated Interest Expense;
(3) depreciation, depletion and amortization expense of Boise
Holdings, Timber Holdings and their Restricted Subsidiaries on a Combined
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 non-recurring costs and expenses Incurred in connection
with the Acquisition, including but not limited to non-recurring costs and
expenses Incurred in the related Financing Transactions and severance
costs, facility closure and related restructuring costs incurred within 18
months of the Acquisition, in an aggregate amount for all periods not to
exceed $25,000,000;
(6) any non-recurring costs and expenses related to any Equity
Offering, Permitted Investment, acquisition, recapitalization or
Indebtedness permitted to be Incurred under this Indenture; and
(7) (A) all other non-cash charges of Boise Holdings, Timber
Holdings and their Restricted Subsidiaries on a Combined 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 Holdings, Timber
Holdings and their Restricted Subsidiaries on a Combined 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));
in each case for such period. 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 Note Guarantor, only if a corresponding amount would be permitted at the date
of determination to be dividended to an Issuer or Boise Holdings, with respect
to a Restricted Subsidiary of Boise Holdings, or to a Cross Guarantor, with
respect to a Restricted Subsidiary of Timber Holdings, by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter
15
and all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Equity Offering" means a public or private primary offering of
Capital Stock (other than Disqualified Stock) of Boise Holdings, Timber Holdings
or Boise LLC or of any direct or indirect parent company of Boise LLC, the
proceeds of which are contributed to the equity capital of Boise Holdings or
Timber Holdings, 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 Holdings, Timber Holdings or any Subsidiary of Boise Holdings
or Timber Holdings.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Excluded Contributions" means the net cash proceeds received by Boise
Holdings or Timber Holdings after the Issue Date from (i) contributions (other
than from Boise Holdings, Timber Holdings or any Subsidiary of Boise Holdings or
Timber Holdings) to its common equity capital and (ii) the sale (other than to
Boise Holdings, Timber Holdings or any Subsidiary of Boise Holdings or Timber
Holdings or any management equity plan or stock option plan or any other
management or employee benefit plan or agreement of Boise Holdings, Timber
Holdings or any Subsidiary of Boise Holdings or Timber Holdings) of Capital
Stock (other than Disqualified Stock) of Boise Holdings or Timber Holdings, in
each case designated as Excluded Contributions pursuant to an Officer's
Certificate.
"Financing Transactions" means (1) the issuance of the Securities and
(2) the entrance into the Credit Agreement by Boise Holdings, Timber Holdings
and their Subsidiaries and the funding of the senior secured credit facilities
thereunder on the Issue Date.
"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 of America as in effect as of the Issue Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including PRO FORMA financial statements) in periodic
reports
16
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC. All ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term Guarantor shall mean any
Person Guaranteeing any obligation.
"Guaranty Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a Note Guarantor guarantees the
Issuers' obligations with respect to the Securities on the terms provided for in
this Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity
Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"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:
(1) amortization of debt discount or the accretion of principal
with respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of regularly
17
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 the
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
18
(whether or not such 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.
In no event shall obligations of Boise Holdings or any of its Subsidiaries under
the Additional Consideration Agreement be deemed Indebtedness. 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 Holdings or Timber Holdings.
"Initial Purchasers" means J.P. Morgan Securities Inc., Lehman
Brothers Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co.
"Interest Period" means, with respect to the Senior Notes, the period
commencing on and including an interest payment date and ending on and including
the day immediately preceding the next succeeding interest payment date, with
the exception that the first Interest Period shall commence on and include the
Issue Date and end on and include January 14, 2005.
"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 Holdings, Timber Holdings 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 Holdings, Timber Holdings or any Restricted Subsidiary in such Person
remaining after giving effect thereto shall be deemed to be a new Investment at
such time. On the Timber Fall-away Date any Investment by Boise Holdings or any
of its Restricted Subsidiaries in Timber Holdings or any of its Restricted
Subsidiaries remaining at such time shall be
19
deemed to be a new Investment at such time. The acquisition by Boise Holdings,
Timber Holdings or any Restricted Subsidiary of a Person that holds an
Investment in a third Person shall be deemed to be an Investment by Boise
Holdings, Timber Holdings 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:
(1) "Investment" shall include the portion (proportionate to Boise
Holdings' or Timber Holdings', as the case may be, equity interest in such
Subsidiary) of the fair market value of the net assets of any Subsidiary of
Boise Holdings or Timber Holdings 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 Holdings
or Timber Holdings, as the case may be, shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary equal to an amount
(if positive) equal to (A) Boise Holdings' or Timber Holdings', as the case
may be, "Investment" in such Subsidiary at the time of such redesignation
less (B) the portion (proportionate to Boise Holdings' or Timber Holdings',
as the case may be, 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
LLC.
"Issue Date" means October 29, 2004.
"Issuers" means 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 or the state
in which the principal corporate trust offices of the Trustee and Paying Agent
are located (which shall be Minnesota as of the Issue Date).
"LIBOR", with respect to an Interest Period, shall be the rate
(expressed as a percentage per annum) for deposits in U.S. dollars for a
three-month period beginning on the second London Banking Day after the
Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London
time, on the Determination Date. If Telerate Page 3750 does not include such a
rate or is unavailable on a Determination Date, the Calculation Agent shall
request the principal London office of each of four major banks in the London
interbank market, as selected by the Calculation Agent, to provide such
20
bank's offered quotation (expressed as a percentage per annum), as of
approximately 11:00 a.m., London time, on such Determination Date, to prime
banks in the London interbank market for deposits in a Representative Amount in
U.S. dollars for a three-month period beginning on the second London Banking Day
after the Determination Date. If at least two such offered quotations are so
provided, the rate for the Interest Period shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the Calculation
Agent shall request each of three major banks in New York City, as selected by
the Calculation Agent, to provide such bank's rate (expressed as a percentage
per annum), as of approximately 11:00 a.m., New York City time, on such
Determination Date, for loans in a Representative Amount in U.S. dollars to
leading European banks for a three-month period beginning on the second London
Banking Day after the Determination Date. If at least two such rates are so
provided, the rate for the Interest Period shall be the arithmetic mean of such
rates. If fewer than two such rates are so provided, then the rate for the
Interest Period shall be the rate in effect with respect to the immediately
preceding Interest Period.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"London Banking Day" is any day on which dealings in U.S. dollars are
transacted or, with respect to any future date, are expected to be transacted in
the London interbank market.
"Make-Whole Amount" means in connection with any optional redemption
of any Senior Subordinated Note, the greater of (1) 1.0% of the principal amount
of such Senior Subordinated 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 Senior Subordinated Note on October 15, 2009 and the amount of
interest (exclusive of interest accrued to the redemption date) that would have
been payable in respect of such Senior Subordinated Note through October 15,
2009 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
0.5%, 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 Senior Subordinated Note being redeemed.
"Management Investors" means those executive officers of Boise
Holdings or Timber Holdings acquiring any Capital Stock directly or indirectly
in Boise Holdings or any direct or indirect parent company of Boise Holdings on
or prior to the Issue Date in connection with the Acquisition.
"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 Holdings.
21
"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 which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition;
(4) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by Boise Holdings, Timber Holdings 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
Holdings, Timber Holdings or any Restricted Subsidiary.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or Indebtedness, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
Incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
22
"Net Fair Market Value," with respect to any non-cash property
received by Boise Holdings or Timber Holdings 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), 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.
"Note Guarantor" means the Parent Guarantor, each Cross Guarantor and
each Subsidiary Guarantor.
"Note Guaranty" means, with respect to each series of Securities, the
Parent Guaranty, any Cross Guaranty and any Subsidiary Guaranty, as the context
may require, with respect to the Securities of such series.
"Obligations" means, with respect to any Indebtedness, all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Memorandum" means the final offering memorandum dated as of
October 15, 2004 and used in connection with the offering of the Securities.
"Officer" means the Chairman of the Board, the President, the Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of Boise
LLC and Boise Finance, as applicable, or, to the extent explicitly provided for
herein, Boise Holdings and Timber Holdings, 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
LLC or the Trustee.
23
"Parent" means Forest Products Holdings, L.L.C., a Delaware limited
liability company.
"Parent Guarantor" means Boise Holdings, in its capacity as guarantor
of the Securities.
"Parent Guaranty" means, with respect to each series of Securities,
the Guarantee by Boise Holdings of the Issuers' obligations with respect to the
Securities of such series.
"Permitted Asset Swap" means any transfer of properties or assets by
Boise Holdings, Timber Holdings 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 Holdings or Timber
Holdings if such fair market value exceeds $10,000,000, or an Officer of Boise
Holdings or Timber Holdings, as the case may be, if the fair market value is
less than or equal to $10,000,000) by Boise Holdings, Timber Holdings 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 Holdings or Timber Holdings if such fair market value exceeds
$10,000,000, or an Officer of Boise Holdings or Timber Holdings, as the case may
be, if the fair market value is less than or equal to $10,000,000) by Boise
Holdings, Timber Holdings or such Restricted Subsidiary in such exchange, (ii)
the aggregate fair market value of all property or assets transferred by Boise
Holdings, Timber Holdings 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 and (iii) with respect to any transfer of Timberlands
Assets, "Permitted Asset Swap" shall include only such transfers in which at
least 90% of the consideration received by the transferor consists of real
property owned or leased for the purpose of growing and harvesting timber, and
related timber rights.
"Permitted Holders" means (i) Madison Dearborn Partners, LLC, (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 Stockholders 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 Stockholders
Agreement and any such other party to the Stockholders 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 Rules 13d-3 or 13d-5 under the
Exchange Act) of more of the total voting power of the Voting Stock of the
Parent, Boise Holdings or Timber Holdings than 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
Stockholders 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
24
in its described capacity will be treated as "beneficially owned" by such
Permitted Holder.
"Permitted Investment" means:
(1) any Investment in Boise Holdings, Timber Holdings, a Restricted
Subsidiary or a Person that will, upon the making of such Investment,
become a Restricted Subsidiary; PROVIDED, HOWEVER, that the primary
business of such Restricted Subsidiary is a Related Business;
(2) 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
Holdings, Timber Holdings 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 Holdings, Timber Holdings 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 Holdings, Timber Holdings 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 Holdings, Timber
Holdings or a Restricted Subsidiary for the purpose of permitting such
Persons to purchase Capital Stock of Boise Holdings, Timber Holdings or any
direct or indirect parent of Boise Holdings or Timber Holdings, 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
Holdings, Timber Holdings 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 or (B) a
disposition of assets not constituting an Asset Disposition;
(9) an Investment in any Person where such Investment was acquired
by Boise Holdings, Timber Holdings or any Restricted Subsidiary (A) in
25
exchange for any other Investment or accounts receivable held by Boise
Holdings, Timber Holdings 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 Holdings, Timber
Holdings 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 Holdings, Timber
Holdings or any Restricted Subsidiary;
(11) Investments consisting of Hedging Obligations otherwise
permitted under Section 4.03;
(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 Holdings or Timber
Holdings;
(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 Entity or any Investment by a
Receivables Entity 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) $100.0 million and
26
(ii) 2.5% of Total Assets at any time prior to completion of the
Timberlands Sales, and 3.75% of Total Assets thereafter.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under workers' 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 Boise Holdings, Timber Holdings or 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 Holdings, Timber
Holdings 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;
27
(6) Liens securing Purchase Money Indebtedness Incurred pursuant to
Section 4.03(b)(14); 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) or (ii) an amount
equal to 2.75 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);
(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);
(16) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers'
28
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) which do not
materially interfere with the ordinary conduct of the business of Boise
Holdings, Timber Holdings or any of their Restricted Subsidiaries;
(18) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Issuers and their
Restricted Subsidiaries in the ordinary course of business;
(19) Liens in favor of the Issuers or any Note Guarantor or Liens on
assets of a Restricted Subsidiary of Boise Holdings or Timber Holdings that
is not a Note Guarantor in favor solely of another Restricted Subsidiary or
Boise Holdings or Timber Holdings that is not a Note 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
which 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 Holdings, Timber Holdings or any of their 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 $100.0 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
29
(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
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. For purposes of this definition, the term
"Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Pro Forma Cost Savings" means cost savings that Boise Holdings or
Timber Holdings reasonably determines are probable based upon specifically
identified actions to be taken within six months of the date of the acquisition
(net of any reduction in EBITDA as a result of such cost savings that Boise
Holdings or Timber Holdings reasonably determines are probable); PROVIDED that
Boise Holdings' or Timber Holdings' chief financial officer shall have certified
in an Officer's Certificate delivered to the Trustee the specific actions to be
taken, the cost savings to be achieved from each such action, that such savings
have been determined to be probable and the amount, if any, of any reduction in
EBITDA in connection therewith. Where specifically provided by this Indenture,
the Issuers shall give PRO FORMA effect to such Pro Forma Cost Savings as if
they had been effected as of the beginning of the applicable period.
"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
30
Boise Holdings, Timber Holdings 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 Holdings, Timber Holdings or any
Restricted Subsidiary pursuant to which Boise Holdings, Timber Holdings or any
Restricted Subsidiary may sell, convey, contribute to capital or otherwise
transfer to a Receivables Entity, 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 Timber Holdings, Boise
Holdings or any Restricted Subsidiary which is party to such Qualified
Receivables Transaction shall have determined in good faith that such
Qualified Receivables Transaction is economically fair and reasonable
to Timber Holdings, Boise Holdings 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 Timber Holdings, Boise Holdings or
any Restricted Subsidiary which is party to such Qualified Receivables
Transaction).
31
The grant of a security interest in any accounts receivable of Boise Holdings,
Timber Holdings 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 Securities 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 LLC) which shall be substituted for Standard & Poor's or
Moody's or both, as the case may be.
"Receivables" means accounts receivable (including all rights to
payment created by or arising from the sale of goods, leases of goods or the
rendition of services, no matter how evidenced (including in the form of chattel
paper) and whether or not earned by performance) of Boise Holdings, Timber
Holdings or any Restricted Subsidiary, whether now existing or arising in the
future.
"Receivables Entity" means any Person formed for the purposes of
engaging in a Qualified Receivables Transaction with Boise Holdings, Timber
Holdings or a Restricted Subsidiary which engages in no activities other than in
connection with the financing of Receivables of Boise Holdings, Timber Holdings
and Restricted Subsidiaries, all proceeds thereof and all rights (contractual or
other), collateral and other assets relating thereto, and any business or
activities incidental or related to such business, and which is designated by
the Board of Directors of the Restricted Subsidiary that is the direct parent
company of such Receivables Entity, or, if the Receivables Entity is not a
Subsidiary of Boise Holdings or Timber Holdings, by the Board of Directors of
any Restricted Subsidiary participating in such Qualified Receivables
Transaction, (in each case as provided below), as a Receivables Entity and:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(A) is Guaranteed by Boise Holdings, Timber Holdings or any
Restricted Subsidiary other than a Receivables Entity (excluding any
Guarantees (other than Guarantees of the principal of, and interest
on, Indebtedness and Guarantees of collection on Receivables) pursuant
to Standard Securitization Undertakings),
(B) is recourse to or obligates Boise Holdings, Timber
Holdings or any Restricted Subsidiary (other than a Receivables
Entity) in any way other than pursuant to Standard Securitization
Undertakings; or
(C) subjects any property or asset of Boise Holdings, Timber
Holdings or any Restricted Subsidiary other than a Receivables Entity,
directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings;
(2) with which neither Boise Holdings, Timber Holdings nor any
Restricted Subsidiary other than a Receivables Entity has any material
contract,
32
agreement, arrangement or understanding other than on terms which Boise
Holdings or Timber Holdings reasonably believes to be no less favorable to
Boise Holdings, Timber Holdings or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of
Boise Holdings or Timber Holdings; and
(3) to which neither Boise Holdings, Timber Holdings nor any
Restricted Subsidiary has any obligation to maintain or preserve such
entity's financial condition or cause such entity to achieve certain levels
of operating results (other than pursuant to Standard Securitization
Undertakings).
Any such designation by the Board of Directors of the applicable Restricted
Subsidiary shall be evidenced to the trustee by filing with the trustee a
certified copy of the resolution of such Board of Directors giving effect to
such designation and an Officer's Certificate certifying that such designation
complied with the foregoing conditions.
"Receivables Financing" means any transaction (including, without
limitation, any Qualified Receivables Transaction) pursuant to which Boise
Holdings, Timber Holdings or any Restricted Subsidiary may sell, convey or
otherwise transfer or grant a security interest in any Receivables or Related
Assets of the type specified in the definition of "Qualified Receivables
Transaction".
"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 Holdings, Timber Holdings 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 Indebtedness being Refinanced has a Stated Maturity
earlier than the Stated Maturity of the Securities, 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
Securities, the Refinancing Indebtedness has a Stated Maturity at least 123
days later than the Stated Maturity of the Securities;
(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,
33
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 Securities, such Refinancing Indebtedness is subordinated
in right of payment to the Securities 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 Holdings or Timber Holdings that is not a
Note Guarantor or Issuer that Refinances Indebtedness of Boise Holdings or
Timber Holdings, as the case may be, or Indebtedness of a Subsidiary of Boise
LLC that is not a Note Guarantor that Refinances Indebtedness of Boise LLC or
(B) Indebtedness of Boise Holdings, Timber Holdings or a Restricted Subsidiary
that Refinances Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business in which Boise Holdings, Timber
Holdings 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, Timber Holdings or any of their 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.
"Representative Amount" means a principal amount of not less than
$1,000,000 for a single transaction in the relevant market at the relevant time.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
Stock (other than (A) dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock), (B) dividends or
distributions payable solely to Boise Holdings, Timber Holdings or a
Restricted Subsidiary, (C) PRO RATA dividends or other distributions made
by a Subsidiary that is not a Wholly Owned Subsidiary
34
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 Holdings, Timber Holdings 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 Holdings
or Timber Holdings held by any Person (other than by a Restricted
Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of Boise Holdings or Timber Holdings (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 Holdings or Timber Holdings 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 Note Guarantor (other than (A) from Boise Holdings,
Timber Holdings 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 LLC, Boise Finance and any other
Subsidiary of Boise Holdings or Timber Holdings that is not an Unrestricted
Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by Boise Holdings, Timber Holdings or a Restricted Subsidiary on the Issue
Date or thereafter acquired by Boise Holdings, Timber Holdings or a Restricted
Subsidiary whereby Boise Holdings, Timber Holdings or a Restricted Subsidiary
transfers such property to a Person and Boise Holdings, Timber Holdings 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" means the Senior Notes and the Senior Subordinated Notes.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Senior Indebtedness" means with respect to any Person:
35
(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 the case of the
Senior Notes, or subordinate or PARI PASSU, in the case of the Senior
Subordinated Notes, in right of payment to such Securities or the Note Guaranty
of such Person of such Securities, as the case may be; PROVIDED, HOWEVER, that
Senior Indebtedness shall not include:
(1) any obligation of such Person to Boise Holdings, Timber
Holdings 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 which is
subordinate or junior in any respect to any other Indebtedness or other
Obligation of such Person; or
(5) that portion of any Indebtedness which 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 LLC 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).
"Senior Notes" means the Senior Floating Rate Notes due 2012 issued
pursuant to this Indenture, including the Initial Senior Notes and any Senior
Exchange Notes, treated as a single class.
"Senior Subordinated Indebtedness" means, with respect to a Person,
the Senior Subordinated Notes (in the case of the Issuers), the Note Guaranties
of the Senior Subordinated Notes (in the case of a Note Guarantor) and any other
Indebtedness of such Person that specifically provides that such Indebtedness is
to rank PARI PASSU with the Senior Subordinated Notes or such Note Guaranty of
the Senior Subordinated Notes, as the case may be, in right of payment and is
not subordinated by its terms in right of
36
payment to any Indebtedness or other obligation of such Person which is not
Senior Indebtedness of such Person.
"Senior Subordinated Notes" means the 7-1/8% Senior Subordinated Notes
due 2014 issued pursuant to this Indenture, including the Initial Senior
Subordinated Notes and any Senior Subordinated Exchange Notes, treated as a
single class.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of Boise Holdings or Timber Holdings within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC; PROVIDED that,
solely for purposes of Section 4.02, 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 Parent or any Subsidiary of the Parent (other
than a Receivables Entity) 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.
"Stockholders Agreement" means, collectively, the Stockholders
Agreements among the holders of the Capital Stock of Boise Holdings or Timber
Holdings, as applicable, as described in the Offering Memorandum under the
caption "Certain relationships and related transactions", 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.
"Subordinated Obligation" means, with respect to a Person, and with
respect to a series of Securities, any Indebtedness of such Person (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to such series of Securities or a Note Guaranty of
such Person of such series of Securities, as the case may be, pursuant to a
written agreement to that effect. With respect to the Senior Notes, the Senior
Subordinated Notes shall be Subordinated Obligations.
37
"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 Holdings that
executes this Indenture as a guarantor and each other Subsidiary of Boise
Holdings that hereafter guarantees the Securities pursuant to the terms of this
Indenture.
"Subsidiary Guaranty" means, with respect to each series of
Securities, a Guarantee by a Subsidiary Guarantor of the Issuers' obligations
with respect to the Securities of such series.
"Tax Distributions" shall mean cash distributions by Boise Holdings to
its 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 Holdings 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.
"Telerate Page 3750" means the display designated at "Page 3750" on
the Moneyline Telerate service (or such other page as may replace Page 3750 on
that service).
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in demand and time deposit accounts, certificates
of deposit and money market deposits maturing within 365 days of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any State thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital 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;
38
(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 LLC) 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.
"Timber Fall-away Date" means the date of the sale of all of the
Capital Stock of Timber Holdings in accordance with Section 4.06 and the release
of the Note Guaranties of Timber Holdings in accordance with Article 11.
"Timber LLCs" means Timber LLC I and Timber LLC II, each a Delaware
limited liability company and direct Wholly Owned Subsidiary of Timber.
"Timberlands Assets" means all the assets comprising the timberland
portfolio acquired by Timber in the Acquisition.
"Timberlands Entity" means any of Boise Holdings, Timber Holdings or
any of their respective Restricted Subsidiaries that, together with its
Subsidiaries, owns or controls a material amount of Timberlands Assets.
"Timberlands Parent Entity" means either or both of Boise Holdings or
Timber Holdings at the time such entity is a Timberlands Entity.
"Timberlands Parent Entity Proceeds" means the Net Available Cash from
sales, transfers or other dispositions of Capital Stock of a Timberlands Parent
Entity.
39
"Timberlands Proceeds" means the Net Available Cash from sales,
leases, transfers or other dispositions of Timberlands Assets or Capital Stock
of any Timberlands Entity (including, without limitation, any Timberlands Parent
Entity), including any Timberlands Contribution.
"Timberlands Sales" means the sale, disposition or other transfer in
one or more transactions of Timberlands Assets or Capital Stock of Timberlands
Entities which, together with their Subsidiaries, do not own or control material
assets or operates other than Timberlands Assets for aggregate proceeds of no
less than $1,485.0 million and the application of the proceeds thereof as
provided in Section 4.06.
"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 (i) prior to
the Timber Fall-away Date, Boise Holdings, Timber Holdings and the Restricted
Subsidiaries, prepared on a Combined Consolidated Basis and (ii) following the
Timber Fall-away Date, Boise Holdings 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 (i) prior to the Timber Fall-away
Date, Boise Holdings, Timber Holdings and their Restricted Subsidiaries,
determined on a Combined Consolidated Basis and (ii) following the Timber
Fall-away Date, Boise Holdings and its Restricted Subsidiaries on a consolidated
basis, in each case outstanding as of such date of determination, after giving
effect to any Incurrence of Indebtedness and the application of the proceeds
therefrom giving rise to such determination.
"Transactions" means the Acquisition, the Financing Transactions and
the payment of related fees and expenses, in each case as described in the
Offering Memorandum.
"Treasury Rate" means, in connection with the calculation of any
Make-Whole Amount with respect to any Senior Subordinated 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 October 15,
2009. 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", with respect to a series of Securities, means the party
named as such in this Indenture until a successor replaces it and, thereafter,
means the successor.
40
"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 the Timber LLCs and:
(1) any Subsidiary of Boise Holdings or Timber Holdings that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of Boise Holdings or Timber Holdings in the manner
provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Boards of Directors of Boise Holdings and Timber Holdings may designate any
Subsidiary of Boise Holdings (other than Boise LLC, Boise Finance and any Timber
Entity) or Timber Holdings (other than any Timberlands Entity), as the case may
be (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
Entity) holds any Lien on any property of, Boise Holdings or Timber Holdings or
any other Subsidiary of Boise Holdings or Timber Holdings 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.
The Boards of Directors of Boise Holdings and Timber Holdings may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (A) either (i) Boise LLC
could Incur $1.00 of additional Indebtedness under Section 4.03(a) 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 Holdings or Timber Holdings shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors of Boise Holdings or Timber Holdings 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.
41
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
Boise Holdings or Timber Holdings or one or more other Wholly Owned
Subsidiaries.
42
SECTION 1.02. Other Definitions.
[Enlarge/Download Table]
Defined in
Term Section
---- ------------------
"Affiliate Transaction".......................................................... 4.07(a)
"Appendix"....................................................................... 2.01
"Bankruptcy Law"................................................................. 6.01
"Blockage Notice"................................................................ 10.03
"Boise Finance".................................................................. Preamble
"Boise Holdings"................................................................. Preamble
"Boise LLC"...................................................................... Preamble
"Change of Control Offer"........................................................ 4.09(b)
"covenant defeasance option"..................................................... 8.01(b)
"Custodian"...................................................................... 6.01
"Event of Default"............................................................... 6.01
"Guaranteed Obligations"......................................................... 11.01
"Guaranty Blockage Notice"....................................................... 12.03(b)
"Guaranty Payment Blockage Period"............................................... 12.03(b)
"Guaranty Payment Default"....................................................... 12.03(a)
"Initial Lien"................................................................... 4.10
"Issuers"........................................................................ Preamble
"legal defeasance option"........................................................ 8.01(b)
"Offer".......................................................................... 4.06(b)
"Offer Amount"................................................................... 4.06(c)(2)
"Offer Period"................................................................... 4.06(c)(2)
"Paying Agent"................................................................... 2.03
"Payment Blockage Period"........................................................ 10.03
"Payment Default"................................................................ 10.03
"Purchase Date".................................................................. 4.06(c)(1)
"Refinancing Disqualified Stock"................................................. 4.04(b)(10)
"Registrar"...................................................................... 2.03
"Successor Company".............................................................. 5.01(a)(1)
"Timber"......................................................................... Preamble
"Timber Holdings"................................................................ Preamble
"Timberlands Contribution"....................................................... 11.06
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 Securities and the Note Guaranties;
"indenture security holder" means a Securityholder;
43
"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 Note
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;
(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;
(10) all references to the date the Securities were originally
issued shall refer to the Issue Date; and
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(11) on and after the occurrence of the Timber Fall-away Date, the
provisions of this Indenture shall be interpreted to give effect to Section
4.16 hereof.
Article 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in the Rule 144A/Regulation
S/IAI Appendix attached hereto (the "Appendix"), which is hereby incorporated
in, and expressly made part of, this Indenture. The Initial Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit 1 or 2 to the Appendix, as the case may be, which are hereby
incorporated in, and expressly made a part of, this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A or B hereto, as the case may be, which
are hereby incorporated in and expressly made a part of this Indenture. The
Securities 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 Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibits A and B are
part of the terms of this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall
sign the Securities for the Issuers by manual or facsimile signature. The
Issuers' seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
On the Issue Date, the Trustee shall authenticate and deliver $250
million of Senior Notes and $400 million of Senior Subordinated Notes and, at
any time and from time to time thereafter, the Trustee shall authenticate and
deliver Securities 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 Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of an issuance of Additional Securities pursuant to Section 2.13 after
the Issue Date, shall certify that such issuance is in compliance with Section
4.03.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuers to authenticate the Securities. Unless limited by the terms of
such
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appointment, an authenticating agent may authenticate Securities 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 Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of each series of the Securities 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. 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 in connection with each series of the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each
due date of the principal and interest on any Security, 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 Securityholders of the Securities of a series or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on such series of Securities 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 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. SECURITYHOLDER 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 Securityholders of each series of Securities.
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 with
respect to a series of Securities and at such other times as the Trustee may
request in writing, a list in such form and as of such date
46
as the Trustee may reasonably require of the names and addresses of
Securityholders of that series.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security 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
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations of the same
series, the Registrar shall make the exchange as requested if the same
requirements are met.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Issuers shall issue
and the Trustee shall authenticate a replacement Security of the same series 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 Security is replaced. The Issuers and
the Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional Obligation of the Issuers.
SECTION 2.08. OUTSTANDING SECURITIES. Securities of a series
outstanding at any time are all Securities of such series 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 Security does not
cease to be outstanding because an Issuer or an Affiliate of an Issuer holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuers receive proof satisfactory to
them that the replaced Security 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 Securities
(or portions thereof) of a series to be redeemed or maturing, as the case may
be, and the Paying Agent is not prohibited from paying such money to the
Securityholders of such series on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities
are ready for delivery, the Issuers may prepare and the Trustee shall
authenticate
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temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers consider
appropriate for temporary Securities. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. CANCELLATION. The Issuers at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities 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
Securities 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 Securities to the Issuers.
The Issuers may not issue new Securities to replace Securities 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 a series of the Securities, the Issuers shall pay
defaulted interest (plus interest on such defaulted interest to the extent
lawful) on such series in any lawful manner. The Issuers may pay the defaulted
interest on such series to the persons who are Securityholders of such series 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 Securityholder of such series 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 Securities 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 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 Issuers shall advise the Trustee in writing of any
change in any "CUSIP" numbers, ISINs or "Common Code" numbers applicable to the
Securities.
SECTION 2.13. ISSUANCE OF ADDITIONAL SECURITIES. After the Issue
Date, the Issuers shall be entitled, subject to its compliance with Section
4.03, to issue Additional Securities of each series under this Indenture, which
Securities shall have identical terms as the Initial Securities of such series
issued on the Issue Date, other than with respect to the date of issuance and
issue price.
With respect to any Additional Securities of a series, 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:
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(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture and the provision
of Section 4.03 that the Issuers are relying on to issue such Additional
Securities;
(2) the series, the issue price, the issue date and the CUSIP
number of such Additional Securities; PROVIDED, HOWEVER, that no Additional
Securities may be issued at a price that would cause such Additional
Securities to have "original issue discount" within the meaning of Section
1273 of the Code; and
(3) whether such Additional Securities shall be Initial Securities
or shall be issued in the form of Exchange Securities as set forth in
Exhibit A or B, as the case may be.
SECTION 2.14. SERIES OF SECURITIES. All of the Senior Notes issued
under this Indenture (including any Additional Senior Notes) shall be treated as
a single class for all purposes of this Indenture, including waivers,
amendments, redemptions and offers to purchase. All of the Senior Subordinated
Notes issued under this Indenture (including any Additional Senior Subordinated
Notes) shall be treated as a single class for all purposes of this Indenture,
including waivers, amendments, redemptions and offers to purchase. The Senior
Notes and Senior Subordinated Notes shall be treated as separate classes for all
purposes of this Indenture, including waivers, amendments, redemptions, offers
to purchase and the application of, and determination of compliance with, the
covenants contained in Article 4 hereof.
Article 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Issuers elect to redeem
Securities of a series pursuant to paragraph 5 of the Securities of that series,
they shall notify the Trustee in writing of the redemption date, the principal
amount of Securities to be redeemed and the paragraph of the Securities of that
series 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 SECURITIES TO BE REDEEMED. If fewer
than all the Securities of a series are to be redeemed, the Trustee shall select
the Securities of that series to be redeemed PRO RATA to the extent practicable.
The Trustee shall make the selection from outstanding Securities of that series
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000.
49
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Issuers promptly of the Securities or portions of Securities 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 a series of Securities, the Issuers
shall mail a notice of redemption by first-class mail to each Holder of such
series of Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities of that series are
to be redeemed, the identification and principal amounts of the particular
Securities 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 Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities of that series pursuant to
which the Securities called for redemption are being redeemed;
(8) the "CUSIP" number, ISIN or "Common Code" number, if any,
printed on the Securities 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 Securities.
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, Securities 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 Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on
50
the relevant record date to receive interest due on the related interest payment
date), and such Securities 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 interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Issuers to the
Trustee for cancellation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Issuers shall execute and the Trustee
shall authenticate for the Holder (at the Issuers' expense) a new Security of
the same series equal in principal amount to the unredeemed portion of the
Security surrendered.
Article 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Issuers shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities 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 Securityholders 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 Securities, 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 Holdings and
Timber Holdings may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, Boise Holdings and Timber Holdings 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 either series of the Securities, 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 subject to such
Sections (including, for avoidance of doubt, a quarterly report for the quarter
ended September 30, 2004), 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 Holdings and Timber Holdings 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 Securities and the date any such report is required to be filed; PROVIDED,
FURTHER, that the financial statements contained in the reports furnished or
51
filed by Boise Holdings shall contain a footnote presenting financial statement
information (including condensed income statement, balance sheet and statement
of cash flow information for the applicable periods and comparative prior
periods, and such footnotes as are reasonably necessary for a complete
presentation of the information set forth in such financial statements) for
Boise Holdings and Timber Holdings on a Combined Consolidated Basis to the
extent permitted by the SEC, and, if not permitted, such information shall be
supplementally provided to the Trustee and the Holders; PROVIDED, FURTHER, 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 Holdings and Timber Holdings if they 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; and PROVIDED, FURTHER, if Boise
Holdings and Timber Holdings are exempt from the requirements of Section 13(a)
or 15(d) of the Exchange Act under Section 12h-5 of the Exchange Act, Boise
Holdings and Timber Holdings shall not be required to file such reports and
documents with the SEC under Section 13(a) or 15(d) of the Exchange Act (or any
successor provisions thereto) or provide such annual reports and such
information, documents and other reports to the Trustee and the Holders so long
as (i) the Parent files such annual reports and such information, documents and
other reports with the SEC, (ii) the Parent, the Issuers and each Note Guarantor
are in compliance with the requirements set forth in Rule 3-10 of Regulation S-X
under the Exchange Act and (iii) the Issuers provide the Trustee and Holders
with such annual reports and such information, documents and other reports filed
by Parent.
At any time that any of Boise Holdings' or Timber Holdings'
Subsidiaries (other than any Subsidiary of Boise Holdings or Timber Holdings
which is not then consolidated with Boise Holdings or Timber Holdings 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 Holdings and Timber Holdings and their Restricted Subsidiaries separate
from the financial condition and results of operations of such Unrestricted
Subsidiaries. In addition, the quarterly and annual financial information
required by the preceding paragraph shall include disclosure of the amount of
any payments made or received in the applicable period pursuant to the
Additional Consideration Agreement.
In addition, the Issuers shall furnish to the Holders of the
Securities 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 Securities are not freely transferable under the
Securities Act.
The Issuers also shall comply with the other provisions of TIA Section
314(a).
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SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) Boise Holdings and
Timber Holdings shall not, and shall not permit any of their respective
Restricted Subsidiaries to, Incur, directly or indirectly, any Indebtedness;
PROVIDED, HOWEVER, that the Issuers and the Note Guarantors 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 exceeds 2.0 to 1.
(b) Paragraph (a) shall not prohibit the Incurrence by Boise
Holdings, Timber Holdings or their respective Restricted Subsidiaries, as the
case may be, of any or all of the following Indebtedness:
(1) Indebtedness Incurred by the Issuers and the Note Guarantors
pursuant to any Credit Agreement; PROVIDED, HOWEVER, that, immediately
after giving effect to any such Incurrence, the aggregate principal amount
of all Indebtedness Incurred under this clause (1) and then outstanding
does not exceed $2,955.0 million 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 4.06(a)(3)(A) and clause
(ii) of the second paragraph of Section 4.06(a) and (y) the aggregate
principal amount of Indebtedness Incurred under clause (15) of this
paragraph (b) then outstanding;
(2) Indebtedness owed to and held by Boise Holdings, Timber
Holdings or any Restricted Subsidiary; PROVIDED, HOWEVER, that (A) any
subsequent issuance or transfer of any Capital Stock which 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
(other than a transfer to Boise Holdings, Timber Holdings or a Restricted
Subsidiary, including by means of a dividend or distribution by Boise
Holdings or Timber Holdings directly or indirectly to the owners of its
Capital Stock; PROVIDED that such owners of Capital Stock make a capital
contribution of such intercompany Indebtedness or Capital Stock to the
other of Boise Holdings or Timber Holdings, as applicable, immediately
thereafter), (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 Securities, (C) if a Note 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 Note Guarantor with respect to its Note Guaranties and (D) on the
Timber Fall-away Date any Indebtedness held by Timber Holdings or any of
its Restricted Subsidiaries shall be deemed to constitute the Incurrence of
such Indebtedness by the obligor thereon and shall not be permitted under
this clause (2);
(3) the Securities and the Exchange Securities (other than any
Additional Securities);
53
(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 Holdings, Timber Holdings 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 Holdings, Timber Holdings or a
Restricted Subsidiary); PROVIDED that on the date of such acquisition and
after giving PRO FORMA effect thereto, Boise LLC would have been entitled
to Incur at least $1.00 of additional Indebtedness pursuant to Section
4.03(a);
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) 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 Holdings, Timber Holdings and their Restricted
Subsidiaries; PROVIDED that such obligations are entered into in the
ordinary course of business to hedge or mitigate risks to which Boise
Holdings, Timber Holdings or any of their Restricted Subsidiaries are
exposed in the conduct of their business or the management of their
liabilities (as determined by Boise Holdings', Timber Holdings' or such
Restricted Subsidiary's principal financial officer in the exercise of his
or her good faith business judgment);
(8) Obligations in respect of performance, bid and surety bonds and
completion guarantees provided by or on behalf of Boise Holdings, Timber
Holdings or any Restricted Subsidiary in the ordinary course of business;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; PROVIDED, HOWEVER,
that such Indebtedness is extinguished within five Business Days of its
Incurrence;
(10) Indebtedness consisting of each Note Guaranty of a Note
Guarantor (including any Note Guaranty with respect to the Exchange
Securities) and any Guarantee by Boise LLC or any Note Guarantor of
Indebtedness (other than any Indebtedness Incurred by a Restricted
Subsidiary that is not a Note Guarantor pursuant to Section 4.03(b)(5),
(15), (16) or (18)) of Boise Holdings, Timber Holdings or any Restricted
Subsidiary so long as the Incurrence of such Indebtedness Incurred by Boise
Holdings, Timber Holdings or such Restricted Subsidiary is permitted under
the terms of this Indenture; PROVIDED that (i) if such
54
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 and
(ii) on the Timber Fall-away Date any Guarantee of Indebtedness of Timber
Holdings and its Restricted Subsidiaries shall be deemed to constitute an
Incurrence of such Guarantee by the obligor thereon and shall not be
permitted under this clause (10);
(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 Holdings, Timber
Holdings 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 Holdings, Timber Holdings or any Restricted
Subsidiary (contingent obligations referred to in a footnote 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
Holdings, Timber Holdings 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 Holdings, Timber Holdings or a Restricted
Subsidiary (other than officers, directors, employees or consultants of
Madison Dearborn Partners, LLC and its Affiliates (other than officers,
directors or employees of Boise LLC)) for the purpose of permitting such
Persons to purchase Capital Stock of Boise Holdings, Timber Holdings or any
direct or indirect parent of Boise Holdings or Timber Holdings, as the case
may be, in an amount not to exceed $20.0 million at any one time
outstanding;
(14) Purchase Money Indebtedness Incurred by Boise Holdings, Timber
Holdings or a Restricted Subsidiary, and any Refinancing Indebtedness
Incurred to Refinance such Indebtedness, in an aggregate principal amount
which, when added together with the amount of Indebtedness Incurred
pursuant to this clause
55
(14) and then outstanding, does not exceed 5% of Total Assets at the date
of determination;
(15) Indebtedness Incurred by a Receivables Entity in a Qualified
Receivables Transaction that is not recourse to Boise Holdings, Timber
Holdings 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
$2,955.0 million less (x) the aggregate principal amount of Indebtedness
Incurred under clause (1) of this paragraph (b) and (y) the sum of all
principal payments with respect to Indebtedness Incurred under clause (1)
of this paragraph (b) pursuant to Section 4.06(a)(3)(A) and clause (ii) of
the second paragraph of Section 4.06(a);
(16) Indebtedness Incurred by a Foreign Subsidiary in an aggregate
principal amount which, when added together with the amount of Indebtedness
Incurred pursuant to this clause (16) and then outstanding, does not exceed
$50.0 million;
(17) Indebtedness of an Issuer or of any Note Guarantor in an
aggregate principal amount which, when taken together with all other
Indebtedness Incurred pursuant to this clause (17) and then outstanding,
does not exceed $150.0 million;
(18) Attributable Debt in an aggregate principal amount which, when
taken together with all other Attributable Debt Incurred pursuant to this
clause (18) and then outstanding, does not exceed $150.0 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 greater
than the Consolidated Coverage Ratio immediately prior to the Incurrence of
such Attributable Debt; and
(19) Indebtedness of Boise Holdings or Timber Holdings 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 Holdings or Timber Holdings
from the issuance or sale (other than to a Subsidiary) of its Capital Stock
(other than Disqualified Stock) or as a contribution to capital of Boise
Holdings or Timber Holdings (other than Capital Stock owned by any Person
to the extent the purchase of such Capital Stock is financed directly or
indirectly with the proceeds of loans or advances from Boise Holdings,
Timber Holdings or a Restricted Subsidiary until such loans or advances are
repaid in cash), in each case, subsequent to the Issue Date; PROVIDED,
HOWEVER, that any such Net Cash Proceeds or capital contributions that are
so received or contributed (i) shall be excluded for purposes of making
Restricted Payments under Section 4.04(a)(3)(B) and Sections 4.04(b)(1),
(b)(4) and (b)(18) and (ii) shall not constitute Excluded Contributions.
56
(c) Notwithstanding the foregoing, neither the Issuers nor any Note
Guarantor will Incur any Indebtedness pursuant to the foregoing paragraph (b) if
the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of an Issuer or any Note Guarantor unless such
Indebtedness shall be subordinated to the Securities or the applicable Note
Guaranties to at least the same extent as such Subordinated Obligations.
(d) 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 and any Indebtedness Incurred by a Receivables Entity in a Qualified
Receivables Transaction that is outstanding on the Issue Date shall be
treated as Incurred under clause (15) 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, the Issuers, in their 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 (d)(1) above), and shall only be
required to include the amount and type of such Indebtedness in one of the
above clauses; and
(3) the Issuers shall be entitled to divide and classify (and
reclassify) an item of Indebtedness in more than one of the types of
Indebtedness described above.
(e) Notwithstanding Sections 4.03(a) and 4.03(b), and solely with
respect to the Senior Subordinated Notes, neither the Issuers nor any Note
Guarantor shall Incur (1) any Indebtedness if such Indebtedness is subordinate
or junior in ranking in any respect to any Senior Indebtedness of such Issuer or
Note Guarantor, as applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness of such Issuer or Note Guarantor, as applicable, or
(2) any Secured Indebtedness that is not Senior Indebtedness of such Person
unless contemporaneously therewith such Person makes effective provision to
secure the Senior Subordinated Notes or the relevant Note Guaranty of Senior
Subordinated Notes, as applicable, equally and ratably with (or on a senior
basis to, in the case of Indebtedness subordinated in right of payment to the
Senior Subordinated Notes or the relevant Note Guaranty of Senior Subordinated
Notes, as applicable) such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
(f) 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
57
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.
(g) 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 Incurred by a Person
that could have Incurred such Indebtedness pursuant to this Section 4.03.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) Boise
Holdings and Timber Holdings shall not, and shall not permit any of their
respective Restricted Subsidiaries to, directly or indirectly, make a Restricted
Payment if at the time Boise Holdings, Timber Holdings or such Restricted
Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) Boise LLC is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the Issue Date 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 Holdings or Timber Holdings from the issuance
or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than (i) Excluded Contributions or
Timberlands Contributions, (ii) an issuance or sale to Boise Holdings
or Timber Holdings or a
58
Subsidiary of Boise Holdings or Timber Holdings and (iii) an issuance
or sale to an employee stock ownership plan or to a trust established
by Boise Holdings or Timber Holdings or any of their Subsidiaries for
the benefit of their employees) and 100% of any cash capital
contribution (other than Excluded Contributions or Timberlands
Contributions), and 100% of the fair market value of a capital
contribution of property other than cash (other than Timberlands
Contributions), in each case received by Boise Holdings or Timber
Holdings from their equity holders subsequent to the Issue Date; PLUS
(C) the amount by which Indebtedness (other than Indebtedness
owed to Boise Holdings or Timber Holdings or any of their
Subsidiaries) of Boise Holdings or Timber Holdings is reduced on Boise
Holdings' or Timber Holdings' respective balance sheets upon the
conversion or exchange subsequent to the Issue Date of any
Indebtedness of Boise Holdings or Timber Holdings convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of
Boise Holdings or Timber Holdings (less the amount of any cash, or the
fair market value of any other property, distributed by Boise Holdings
or Timber Holdings upon such conversion or exchange); PROVIDED,
HOWEVER, that the foregoing amount shall not exceed the Net Cash
Proceeds received by Boise Holdings or Timber Holdings or any
Restricted Subsidiary from the sale of such Indebtedness (excluding
Net Cash Proceeds from sales to Boise Holdings or Timber Holdings or
to a Subsidiary of Boise Holdings or Timber Holdings or to an employee
stock ownership plan or to a trust established by Boise Holdings or
Timber Holdings or any of their Subsidiaries for the benefit of their
employees); PLUS
(D) 100% of the aggregate amount received in cash by Boise
Holdings, Timber Holdings or any Restricted Subsidiary and the fair
market value of property other than cash received by Boise Holdings,
Timber Holdings or any Restricted Subsidiary, in each case subsequent
to the Issue Date, from:
(i) the sale or other disposition (other than to Boise
Holdings, Timber Holdings or any of their Subsidiaries) of Investments
(other than Permitted Investments) made by Boise Holdings, Timber
Holdings or any of their Restricted Subsidiaries and from repurchases
and redemptions of such Investments (other than Permitted Investments)
from Boise Holdings, Timber Holdings or any of their Restricted
Subsidiaries by any Person (other than Boise Holdings, Timber Holdings
or any of their Subsidiaries) and from repayments of loans or advances
which constituted Investments (other than Permitted Investments)
(except in each case to the extent the Investment was made pursuant to
paragraph (b) below); and
59
(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 Holdings, Timber Holdings or a
Restricted Subsidiary, in each case subsequent to the Issue Date, the
fair market value of the Investment of Boise Holdings, Timber Holdings
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 paragraph (b) below 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 Holdings or Timber Holdings 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 of 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 Holdings or
Timber Holdings.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock of
Boise Holdings or Timber Holdings (other than Disqualified Stock and other
than Capital Stock issued or sold to Boise Holdings or Timber Holdings or a
Subsidiary of Boise Holdings or Timber Holdings or an employee stock
ownership plan or to a trust established by Boise Holdings or Timber
Holdings or any of their Subsidiaries for the benefit of their employees)
or a substantially concurrent cash capital contribution received by Boise
Holdings or Timber Holdings from its equity holders; PROVIDED, HOWEVER,
that (A) such Restricted Payment shall be excluded in the calculation of
the amount of Restricted Payments and (B) the Net Cash Proceeds from such
sale or such cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts under
Section 4.04(a)(3)(B) and shall not
60
constitute Excluded Contributions or Timberlands Contributions or be used
to Incur Indebtedness pursuant to Section 4.03(b)(19);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of an
Issuer or a Note Guarantor made by exchange for, or out of the proceeds of
the substantially concurrent Incurrence of, Indebtedness of such Person
which is permitted to be Incurred pursuant to Section 4.03; PROVIDED,
HOWEVER, that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the calculation of
the amount of Restricted Payments;
(3) 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 at the time of payment of such dividend or other
distribution, no other Default shall have occurred and be continuing (or
result therefrom); PROVIDED FURTHER, HOWEVER, that such dividend or other
distribution shall be included in the calculation of the amount of
Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
purchase, redemption or other acquisition of shares of Capital Stock of
Boise Holdings, Timber Holdings, any direct or indirect parent of Boise
Holdings or Timber Holdings or any of their 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 Holdings or Timber
Holdings or any direct or indirect parent of Boise Holdings or Timber
Holdings, 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 Holdings and Timber Holdings 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 which would otherwise be
permitted to be made pursuant to this clause (4) in any subsequent two
years that end prior to the maturity of the Senior Notes or the Senior
Subordinated Notes, as applicable, up to a maximum, together with amount
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 Holdings and Timber Holdings 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
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million in any calendar year pursuant to this clause (4) and that such
amount in any calendar year may be increased by (i) the cash proceeds of
key man life insurance policies received by Boise Holdings and Timber
Holdings and their Restricted Subsidiaries after the Issue Date and (ii)
the aggregate cash proceeds received by Boise Holdings or Timber Holdings
(or any direct or indirect parent of Boise Holdings or Timber Holdings to
the extent the proceeds are contributed to the common equity capital of
Boise Holdings or Timber Holdings) during that calendar year from any
re-issuance of Capital Stock by Boise Holdings or Timber Holdings (or any
direct or indirect parent of Boise Holdings or Timber Holdings) to
employees, officers, directors or consultants of Boise Holdings, Timber
Holdings and their Restricted 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 clauses (1) and
(18) of this Section 4.04(b) and shall not constitute Excluded
Contributions or Timberlands Contributions or be used to Incur Indebtedness
under Section 4.03(b)(19)), less any amount previously applied to the
payment of Restricted Payments pursuant to this clause (4); PROVIDED
FURTHER, HOWEVER, that such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments;
(5) the declaration and payments of dividends on Disqualified Stock
issued pursuant to Section 4.03; 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 in the calculation of the amount of Restricted Payments;
(6) repurchases of Capital Stock deemed to occur upon exercise of
stock options if such Capital Stock represents a portion of the exercise
price of such options; PROVIDED, HOWEVER, that such Restricted Payments
shall be excluded in the calculation of the amount of Restricted Payments;
(7) 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 Holdings, Timber Holdings or any direct or indirect
parent of Boise Holdings or Timber Holdings or in connection with a merger,
consolidation, amalgamation or other combination involving Boise Holdings
or Timber Holdings or any direct or indirect parent of Boise Holdings or
Timber Holdings; 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 Boards of Directors of Boise Holdings and
Timber Holdings); PROVIDED FURTHER, HOWEVER, that such payments shall be
excluded in the calculation of the amount of Restricted Payments;
(8) 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 Note 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
62
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 Securities as a result of such Change
of Control and have repurchased all Securities 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;
(9) payments of intercompany subordinated Indebtedness, the
Incurrence of which was permitted under Section 4.03(b)(2), other than any
such Indebtedness owed to Timber Holdings or any of its Subsidiaries on or
after the Timber Fall-away Date; PROVIDED, HOWEVER, that no Default has
occurred and is continuing or would otherwise result therefrom; PROVIDED
FURTHER, HOWEVER, that such payments shall be excluded in the calculation
of the amount of Restricted Payments;
(10) the acquisition or retirement of Disqualified Stock of Boise
Holdings or Timber Holdings (other than from Boise Holdings or Timber
Holdings or any of their 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 Holdings
or Timber Holdings or any of their Subsidiaries, or an employee stock
ownership plan or a trust established by Boise Holdings or Timber
Holdings or any of their Subsidiaries for the benefit of their
employees or other Person to the extent such sale is financed by loans
to such Person from or guaranteed by Boise Holdings or Timber Holdings
or any of their 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
63
(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 in the
calculation of the amount of Restricted Payments;
(11) for so long as Boise Holdings is a pass-through or disregarded
entity for United States Federal income tax purposes, Tax Distributions in
respect of any taxable year of Boise Holdings 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 (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 Holdings who is an individual is subject for such
year; and Boise Holdings 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 Holdings 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 Holdings
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;
(12) so long as 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 Note 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, with any excess Net Available Cash from Asset
Dispositions to the extent such excess Net Available Cash is permitted to
be used for general corporate purposes pursuant to Section 4.06; PROVIDED,
HOWEVER, that prior to such payment, purchase, redemption, defeasance or
other acquisition or retirement, the Issuers have made an offer to purchase
with respect to each series of the Securities and have repurchased all
Securities validly tendered and not withdrawn in connection with such
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;
(13) so long as no Default shall have occurred and be continuing,
Restricted Payments made from (and within one year of the receipt of)
Timberlands Proceeds from sales of Timberlands Assets or Capital Stock of
Timberlands Entities permitted under and pursuant to clause (ii)(C) of the
second
64
paragraph of Section 4.06(a) (including, with respect to the Senior Notes,
a redemption of Senior Subordinated Notes); PROVIDED, HOWEVER, that the
Consolidated Leverage Ratio, at the time of each such Restricted Payment,
after giving PRO FORMA effect to (a) such Restricted Payment, (b) the sale
of the Timberlands Assets or Capital Stock of a Timberlands Entity and the
application of the net proceeds therefrom and (c) to the extent reasonably
determinable in the good faith judgment of the principal financial officer
of Boise LLC, any increase or decrease in fiber, stumpage or similar costs
as a result of the sale of the Timberlands Assets or Capital Stock of a
Timberlands Entity as if the same had occurred at the beginning of the
Measurement Period would have been no greater than 4.5 to 1; PROVIDED
FURTHER, HOWEVER, that such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments;
(14) Restricted Payments that are made with Excluded Contributions;
PROVIDED, HOWEVER, that such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments;
(15) any payments made by Boise Holdings or Timber Holdings in
connection with the Acquisition and described in the Offering Memorandum
under the caption "Use of proceeds" (including any post-closing purchase
price adjustments or earn-outs in connection with the Acquisition) and any
payments made under the Additional Consideration Agreement; PROVIDED,
HOWEVER, that such Restricted Payments shall be excluded in the calculation
of the amount of Restricted Payments;
(16) so long as no Default under clause (1) or (2) of "Defaults"
below shall have occurred and be continuing, Restricted Payments to the
Parent used solely to pay franchise taxes; PROVIDED; HOWEVER, that such
Restricted Payments shall be included in the calculation of the amount of
Restricted Payments;
(17) so long as no Default under clause (1) or (2) of "Defaults"
below shall have occurred and be continuing, Restricted Payments to the
Parent for operating expenses and administrative, legal, accounting and
corporate reporting expenses Incurred in the ordinary course of business,
and other fees required to maintain its corporate existence, of up to $2.0
million per fiscal year (or $5.0 million per fiscal year following the
completion of an underwritten public offering of common stock of the
Parent); PROVIDED, HOWEVER, that such Restricted Payments shall be included
in the calculation of the amount of Restricted Payments;
(18) any dividends or distributions by Timber Holdings or Boise
Holdings directly or indirectly to the owners of its Capital Stock,
PROVIDED that such owners of Capital Stock make a capital contribution of
100% of the assets so dividended or distributed to the other of Boise
Holdings or Timber Holdings, as applicable, immediately thereafter;
PROVIDED, HOWEVER, that such capital contributions shall be excluded for
purposes of making Restricted Payments under clause 3(B) of the first
paragraph and clauses (b)(1), (b)(4) and (b)(18) of the
65
second paragraph of this covenant and shall not constitute Excluded
Contributions or Timberlands Contributions or be used to Incur Indebtedness
under Section 4.03(b)(19); PROVIDED FURTHER, HOWEVER, that such Restricted
Payments shall be excluded in the calculation of Restricted Payments; or
(19) Restricted Payments in an amount which, when taken together
with all Restricted Payments made pursuant to this clause (19), does not
exceed $35.0 million; 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.
For purposes of Sections 4.04(b)(1), (b)(2) and (b)(10)(B), 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.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. Boise Holdings and Timber Holdings shall not, and shall
not permit any of their respective Restricted Subsidiaries (other than the
Issuers) 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 Holdings, Timber Holdings or any Restricted Subsidiary or pay any
Indebtedness owed to Boise Holdings, Timber Holdings or any Restricted
Subsidiary, (b) make any loans or advances to Boise Holdings, Timber Holdings or
any Restricted Subsidiary or (c) transfer any of its property or assets to Boise
Holdings, Timber Holdings 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 Holdings or
Timber Holdings 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 or was acquired by
Boise Holdings or Timber Holdings 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 Entity or
any Standard Securitization Undertaking, in each case in connection with a
Qualified Receivables Transaction; PROVIDED that such restrictions apply
only to such
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Receivables Entity and Receivables and Related Assets of the type specified
in the definition of "Qualified Receivables Transaction";
(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;
(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 LLC or a Note Guarantor subsequent to the Issue Date
pursuant to Section 4.03(b)(17) or (19); 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 amendments or refinancings are, in
the good faith judgment of the Board of Directors of Boise LLC, 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.
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SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
(a) Boise Holdings and Timber Holdings shall not, and shall not permit any of
their respective Restricted Subsidiaries to, directly or indirectly, consummate
any Asset Disposition unless:
(1) Boise Holdings, Timber Holdings 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 $10,000,000, as determined in good
faith by the Board of Directors of Boise Holdings or Timber Holdings or
(ii), if such fair market value is equal to or less than $10,000,000, as
determined in good faith by an Officer of Boise Holdings or Timber
Holdings;
(2) in the case of Asset Dispositions which are not Permitted Asset
Swaps, at least 75% of the consideration thereof received by Boise
Holdings, Timber Holdings 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 Holdings, Timber Holdings or such
Restricted Subsidiary, as the case may be:
(A) to the extent Boise Holdings, Timber Holdings 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,
in the case of the Senior Notes, Indebtedness under any Credit
Agreement or, in the case of the Senior Subordinated Notes, any Senior
Indebtedness of an Issuer or Note Guarantor (including under any
Credit Agreement) and, in either case, Indebtedness (other than any
Disqualified Stock) of a Restricted Subsidiary that is not an Issuer
or Note Guarantor (in each case other than Indebtedness owed to Boise
Holdings, Timber Holdings or an Affiliate of Boise Holdings or Timber
Holdings) 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 Holdings, Timber Holdings 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 applicable series of Securities (and, in
the case of an offer to purchase Senior Notes, to holders of other
Senior Indebtedness of Boise LLC designated by Boise LLC and, in the
case of an offer to purchase Senior Subordinated Notes, to holders of
other Senior
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Subordinated Indebtedness of Boise LLC designated by Boise LLC) to
purchase Securities of such series (and such other Senior Indebtedness
or Senior Subordinated Indebtedness, as applicable, of Boise LLC)
pursuant to and subject to the conditions contained in this Indenture
(including, without limitation, with respect to any purchase of Senior
Subordinated Notes, Section 4.04);
PROVIDED, HOWEVER, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, Boise Holdings, Timber
Holdings or such Restricted Subsidiary shall permanently retire such
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, (i)
Boise Holdings, Timber Holdings and the 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 which is not applied in accordance with this Section 4.06 exceeds
$20.0 million; (ii) in the case of sales, leases, transfers or other
dispositions of Timberlands Assets or Capital Stock of any Timberlands Entity,
(A) the first $1,650.0 million of Timberlands Proceeds shall be used to
permanently repay Indebtedness outstanding under the Credit Agreement, (B) at
least 50% of Timberlands Proceeds received (taken together with all other
Timberlands Proceeds received) in excess of $1,650.0 million shall be applied to
permanently repay Indebtedness outstanding under the Credit Agreement, and (C)
an amount up to the remaining 50% of such excess may be used to make Restricted
Payments pursuant to Section 4.04(b)(13) in lieu of application pursuant to
Section 4.06(a)(3)(C); PROVIDED, HOWEVER, that (1) the Issuers may, at their
option, use the Net Available Cash described in clause (C) of this paragraph, to
the extent not otherwise used for Restricted Payments pursuant to such clause or
applied pursuant to Section 4.06(a)(3)(C), to redeem Senior Subordinated Notes
with Timberlands Proceeds pursuant to paragraph 5 of the Senior Subordinated
Notes (it being understood that a redemption of Senior Subordinated Notes
pursuant to such section shall be a Restricted Payment with respect to the
Senior Notes) and (2) to the extent that the aggregate amount of Indebtedness
outstanding under the Credit Agreement is less than the amount of Timberlands
Proceeds that is required to be applied in respect thereof pursuant to clauses
(A) and (B) of this paragraph, such excess Timberlands Proceeds shall be applied
pursuant to Section 4.06(a)(3)(A); and (iii) Boise Holdings, Timber Holdings and
their Restricted Subsidiaries shall not be permitted to sell, transfer or
otherwise dispose of any Capital Stock of a Timberlands Entity unless (x) such
Timberlands Entity and its Restricted Subsidiaries do not own or control any
material assets or operations other than Timberlands Assets and (y) following
such sale, transfer or other disposition such Timberlands Entity (A) in the case
of a Timberlands Entity that is not a Timberlands Parent Entity, is either a
Restricted Subsidiary of Boise Holdings, Timber Holdings or a Restricted
Subsidiary or none of the Capital Stock of such Timberlands Entity is owned
directly or indirectly by Boise Holdings, Timber Holdings or a Restricted
Subsidiary or (B) in the case of Timberlands Parent Entity, is either a
Subsidiary of Parent or none of the Capital Stock of such Timberlands Parent
Entity is owned directly or indirectly by Parent.
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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 Holdings
or Timber Holdings (other than obligations in respect of Disqualified Stock
of Boise Holdings or Timber Holdings) or any Restricted Subsidiary (other
than obligations in respect of Disqualified Stock or Preferred Stock of an
Issuer or a Note Guarantor) and the release of Boise Holdings, Timber
Holdings or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition;
(2) securities received by Boise Holdings or Timber Holdings or any
Restricted Subsidiary from the transferee that are converted within 90 days
by Boise Holdings or Timber Holdings 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
Holdings, Timber Holdings 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 5.0% of Total Assets at any time prior to the
completion of the Timberlands Sales, and 7.5% of Total Assets thereafter,
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 Securities (and other Senior Indebtedness or Senior Subordinated
Indebtedness, as applicable, of Boise LLC) pursuant to Section 4.06 (a)(3)(C) ,
the Issuers shall purchase Securities tendered pursuant to an offer by the
Issuers for the Securities (and such other Senior Indebtedness or Senior
Subordinated Indebtedness, as applicable) (the "Offer") at a purchase price of
100% of their principal amount (or, in the event such other Senior Indebtedness
or Senior Subordinated Indebtedness, as applicable, of Boise LLC was issued with
significant original issue discount, 100% of the accreted value thereof) without
premium, plus accrued but unpaid interest (or, in respect of such other Senior
Indebtedness or Senior Subordinated Indebtedness, as applicable, of Boise LLC,
such lesser price, if any, as may be provided for by the terms of such
Indebtedness) in accordance with the procedures (including prorating in the
event of oversubscription) set forth in Section 4.06(c). If the aggregate
purchase price of the securities 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 in the
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case of the Securities 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 purchase Securities (and other Senior Indebtedness or Senior
Subordinated Indebtedness, as applicable, of Boise LLC) 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 Securities tendered in such offer).
(c) (1) 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 Securities purchased by the Issuers either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the business
of Boise Holdings, Timber Holdings 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 Securities
pursuant to the Offer, together with the information contained in clause (3).
(2) 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
or Senior Subordinated Indebtedness, as applicable, 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). 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 or Senior Subordinated
Indebtedness, as applicable, 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 Securities 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
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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 Securities delivered by the Issuers to the Trustee is less
than the Offer Amount applicable to the Securities, 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.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, 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 Business
Day prior to the Purchase Date, a telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
which was delivered for purchase by the Holder and a statement that such
Holder is withdrawing his election to have such Security purchased. Holders
whose Securities are purchased only in part shall be issued new Securities
equal in principal amount to the unpurchased portion of the Securities
surrendered.
(4) At the time the Issuers deliver Securities to the Trustee which
are to be accepted for purchase, the Issuers shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Issuers pursuant to and in accordance with the terms of this Section
4.06. A Security 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 will 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 Securities 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
Holdings and Timber Holdings shall not, and shall not permit any of their
respective 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 Holdings or Timber Holdings (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable to
Boise Holdings or Timber Holdings or such Restricted Subsidiary than those
that could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate;
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(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 directors of Boise Holdings or Timber
Holdings, as the case may be (and, if any, a majority of the directors of
Boise Holdings or Timber Holdings, as the case may be, 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; and
(3) if such Affiliate Transaction involves an amount in excess of
$25.0 million, the Board of Directors of Boise Holdings or Timber Holdings,
as the case may be, shall also have received a written opinion from an
Independent Qualified Party to the effect that such Affiliate Transaction
is fair, from a financial standpoint, to Boise Holdings or Timber Holdings,
as the case may be, and its Restricted Subsidiaries or is not less
favorable to Boise Holdings or Timber Holdings, as the case may be, and its
Restricted Subsidiaries than could reasonably be expected to be obtained at
the time in an arm's-length transaction with a Person who was not an
Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Permitted Investment or Restricted Payment, in each case
permitted to be made pursuant to Section 4.04;
(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 Holdings or Timber Holdings, as
the case may be;
(3) the payment of reasonable fees to directors of Boise Holdings
and Timber Holdings and their Restricted Subsidiaries or any direct or
indirect parent of Boise Holdings or Timber Holdings who are not employees
of Boise Holdings, Timber Holdings or their Restricted Subsidiaries and
reasonable payments for indemnification to directors and officers of Boise
Holdings or Timber Holdings and their respective Restricted Subsidiaries or
any direct or indirect parent of Boise Holdings or Timber Holdings;
(4) any transaction with Boise Holdings, Timber Holdings, a
Restricted Subsidiary or joint venture or similar entity which would
constitute an Affiliate Transaction solely because Boise Holdings, Timber
Holdings or a Restricted Subsidiary owns an equity interest in or otherwise
controls such Restricted Subsidiary, joint venture or similar entity, or
because of the common ownership of Boise Holdings and Timber Holdings by
the Parent;
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(5) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of Boise Holdings or Timber Holdings or any
contribution to the capital of Boise Holdings or Timber Holdings;
(6) any agreement as in effect on the Issue Date and described in
the Offering Memorandum under the heading "Certain relationships and
related transactions" or "Management--Employment agreement" 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 LLC 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; and
(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 each of Boise Holdings and Timber Holdings not
affiliated with Madison Dearborn Partners, LLC acting in good faith.
SECTION 4.08. LIMITATION ON LINE OF BUSINESS. Boise Holdings and
Timber Holdings shall not, and shall not permit any of their respective
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 Securities 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
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receive interest due on the relevant interest payment date), in accordance with
the terms contemplated in Section 4.09(b). In the event that at the time of such
Change of Control the terms of any Credit Agreement, in the case of the Senior
Notes, or the terms of any Senior Indebtedness of the Issuers (including any
Credit Agreement), in the case of the Senior Subordinated Notes, restrict or
prohibit the purchase of Securities following such 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 applicable series of Securities as provided in Section
4.09(b).
(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 Securities 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
Securities purchased.
(c) Holders electing to have a Security purchased will be required
to surrender the Security, 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 will 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 Security which
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Issuers
under this Section 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.
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(e) Notwithstanding the foregoing provisions of this Section, the
Issuers shall not be required to make a Change of Control Offer with respect to
a series of Securities following a Change of Control if (1) a third party makes
the Change of Control Offer with respect to such series in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section applicable to a Change of Control Offer made by the Issuers and
purchases all Securities of such series validly tendered and not withdrawn under
such Change of Control Offer or (2) a notice of redemption of all of such series
of Securities has been given pursuant to this Indenture in accordance with
paragraph 5 of the Securities, unless and until there has been a default in
payment of the applicable redemption price. 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 a 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 Securities 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. Solely with respect to the
Senior Notes, Boise Holdings and Timber Holdings shall not, and shall not permit
any of their respective 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 Senior 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 Senior 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. Solely
with respect to the Senior Notes, Boise Holdings and Timber Holdings shall not,
and shall not permit any of their respective Restricted Subsidiaries to, enter
into any Sale/Leaseback Transaction with respect to any property unless:
(1) Boise Holdings, Timber Holdings 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 and (B) create a Lien on such property securing such
Attributable Debt without equally and ratably securing the Senior Notes
pursuant to Section 4.10;
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(2) the consideration received by Boise Holdings, Timber Holdings
or any Restricted Subsidiary in connection with such Sale/Leaseback
Transaction are at least equal to the fair market value (as determined by
the Board of Directors of Boise Holdings or Timber Holdings if such fair
market value exceeds $10,000,000, or an Officer of Boise Holdings or Timber
Holdings, as the case may be, if such fair market value is equal to or less
than $10,000,000) of such property; and
(3) the Net Available Cash from such transaction is applied in
compliance with Section 4.06.
SECTION 4.12 FUTURE GUARANTORS. At any time that any Indebtedness
under any Credit Agreement is outstanding, Boise Holdings shall cause each of
its Restricted Subsidiaries (other than the Issuers), and Timber Holdings shall
cause each of its Restricted Subsidiaries, that Incurs (including by Guarantee)
any Indebtedness under any Credit Agreement to, in each case, within five
Business Days of such Incurrence, execute and deliver to the Trustee a Guaranty
Agreement pursuant to which such Restricted Subsidiary shall Guarantee payment
of the Securities 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 Holdings shall cause each of its domestic Restricted
Subsidiaries (other than the Issuers), and Timber Holdings shall cause each of
its domestic Restricted Subsidiaries, 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)) to, 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) to, in
each case, within five Business Days of such Incurrence, execute and deliver to
the Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary
shall Guarantee payment of the Securities 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 Entity.
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 Securities and its
Guarantee in respect of the Credit Agreement.
Boise LLC 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.
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,
and more frequently if requested by the Trustee, an Officers' Certificate
stating that in the course of the performance by the signers of their duties as
Officers they would normally have
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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. The Issuers also shall comply with TIA Section 314(a)(4).
SECTION 4.15 FURTHER INSTRUMENTS AND ACTS. Upon 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.
SECTION 4.16 TIMBER FALL-AWAY OF COVENANTS. Except where the
context otherwise requires, on and after the Timber Fall-away Date, the
covenants contained in this Article 4 (and the definitions related thereto),
including without limitation the exceptions therefrom, shall no longer apply to
Timber Holdings and its Subsidiaries and shall be construed as if the references
to such entities were not contained therein.
Article 5
SUCCESSOR COMPANY
SECTION 5.01 MERGER OR TRANSFER OF ASSETS. (a) None of Boise
Holdings, Boise LLC, Boise Finance or, if Timber Holdings or any of its
Restricted Subsidiaries owns or controls any material assets or operations other
than Timberlands Assets, Timber Holdings, 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 Holdings, Timber Holdings and the Restricted Subsidiaries determined on a
Combined Consolidated Basis, to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not Boise Holdings, Timber Holdings, Boise LLC 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 the obligations of Boise Holdings, Timber
Holdings, Boise LLC or Boise Finance, as applicable, under the Note
Guaranties or the Securities, as applicable, and this Indenture;
(2) immediately after giving PRO FORMA effect to such transaction
(and treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such transaction as having been
Incurred by such Successor Company or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(3) immediately after giving PRO FORMA effect to such transaction,
either (A) the Successor Company would be able to Incur an additional $1.00
of
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Indebtedness pursuant to Section 4.03(a) or (B) the Consolidated Coverage
Ratio for the Successor Company would be greater than the Consolidated
Coverage Ratio immediately prior to such transaction;
(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; and
(5) the Issuers shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction 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
transaction had not occurred.
PROVIDED, HOWEVER, that clause (3) shall not be applicable to (A) Timber
Holdings or any Restricted Subsidiary consolidating with, merging into or
transferring all or part of its properties and assets to Boise Holdings, Timber
Holdings or a Wholly Owned Subsidiary (so long as no Capital Stock of Boise
Holdings, Timber Holdings or such Wholly Owned Subsidiary is distributed to any
Person) or (B) Boise Holdings, Timber Holdings, Boise Finance or Boise LLC
merging with an Affiliate of Boise LLC solely for the purpose and with the sole
effect of reincorporating Boise Holdings, Timber Holdings, Boise Finance or
Boise LLC in another jurisdiction.
For purposes of this Section 5.01, (A) 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 Holdings, Timber
Holdings or Boise LLC, which properties and assets, if held by Boise Holdings,
Timber Holdings or Boise LLC, as applicable, instead of such Subsidiaries, would
constitute all or substantially all of the properties and assets of Boise
Holdings, Timber Holdings and the Restricted Subsidiaries determined on a
Combined Consolidated Basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of Boise Holdings, Timber
Holdings and the Restricted Subsidiaries and (B) a disposition of all or
substantially all of the Timberlands Assets or of the Capital Stock of a Person
that together with its Subsidiaries does not own or control material assets or
operations other than Timberlands Assets shall not be deemed to be a sale of all
or substantially all of the assets of Boise Holdings, Timber Holdings and the
Restricted Subsidiaries determined on a Combined Consolidated Basis; PROVIDED
that the disposition referred to in this clause (B) is made in compliance with
Section 4.06.
The Successor Company shall be the successor to Boise Holdings, Timber
Holdings, Boise LLC 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
Securities.
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(b) Boise Holdings shall not permit any Subsidiary Guarantor to,
and Timber Holdings, if it and its Restricted Subsidiaries do not own or control
material assets or operations other than Timberlands Assets, shall not, and
shall not permit any of its Restricted Subsidiaries that is a Cross 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) Timber Holdings, the Subsidiary Guarantor or Cross Guarantor
(A) has been disposed of in its entirety to another Person (other than to
Boise Holdings, Timber Holdings or an Affiliate of Boise Holdings or Timber
Holdings), 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 Timber Holdings or Boise
Holdings, as applicable (or, in the case of Timber Holdings, has ceased to
be a Subsidiary of Parent), in both cases, if in connection therewith the
Issuers provide an Officers' Certificate to the Trustee to the effect that
Boise Holdings or Timber Holdings, as the case may be, shall comply with
its obligations under Section 4.06 in respect of such disposition; or
(2) the resulting, surviving or transferee Person (if not such Note
Guarantor) shall be a Person organized and existing under the laws of the
jurisdiction under which such Note Guarantor 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 Guaranty
Agreement, in a form satisfactory to the Trustee, all the obligations of
such Note Guarantor, if any, under its Note Guaranties; (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 Guaranty
Agreement, if any, comply with this Indenture;
PROVIDED, HOWEVER, that this Section 5.01 shall not be applicable to any
Subsidiary Guarantor or Cross Guarantor consolidating with, merging into or
transferring all or part of its properties and assets to any Issuer or Note
Guarantor where an Issuer or Note Guarantor is the surviving Person.
Article 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT. An "Event of Default" occurs with
respect to a series of Securities if:
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(1) the Issuers default in the payment of interest on such series
of Securities when due (whether or not such payment shall be prohibited by
Article 10), and such default continues for 30 days;
(2) the Issuers default in the payment of the principal of any
Security of such series when due at its Stated Maturity, upon optional
redemption, upon required purchase, upon declaration of acceleration or
otherwise (whether or not such payment shall be prohibited by Article 10);
(3) Boise Holdings, Timber Holdings, Boise LLC or Boise Finance
fails to comply with its obligations under Section 5.01 or any Timberlands
Contribution fails to be made to Boise Holdings with the Net Available Cash
from any sale, transfer or other disposition of Capital Stock of, or
liquidation or dissolution of, a Timberlands Parent Entity or fails to be
applied as Timberlands Proceeds as required by Section 4.06;
(4) Boise Holdings, Timber Holdings, Boise LLC or Boise Finance
fails to comply for 30 days after the notice specified below with any of
its obligations under Section 4.09 (other than a failure to purchase such
Securities);
(5) the Issuers fail or any Note Guarantor fails to comply for 60
days after the notice specified below with its other agreements with
respect to such Securities contained in this Indenture or such Securities;
(6) Indebtedness of an Issuer, any Note 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 (or its foreign currency equivalent at the time);
(7) an Issuer, Boise Holdings, any Significant Subsidiary or, prior
to the Timber Fall-away Date, Timber Holdings, 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;
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(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against an Issuer, Boise Holdings, any
Significant Subsidiary or, prior to the Timber Fall-away Date, Timber
Holdings, in an involuntary case;
(B) appoints a Custodian of an Issuer, Boise Holdings, any
Significant Subsidiary or, prior to the Timber Fall-away Date, Timber
Holdings, or for any substantial part of its property; or
(C) orders the winding up or liquidation of an Issuer, Boise
Holdings, any Significant Subsidiary or, prior to the Timber Fall-away
Date, Timber Holdings;
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 (or its foreign currency equivalent at the time) is entered
against an Issuer, a Note Guarantor or any Significant Subsidiary, remains
outstanding for a period of 60 consecutive days following the entry of such
judgment or decree and is not discharged, waived or the execution thereof
stayed; or
(10) any Note Guaranty of Boise Holdings, Timber Holdings or any
Significant Subsidiary of such series of Securities ceases to be in full
force and effect (other than in accordance with the terms of such Note
Guaranty) or any Note Guarantor denies or disaffirms its obligations under
its Note Guaranty of such series of Securities.
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 with respect to a series of Securities until the Trustee or the Holders
of at least 25% in principal amount of the outstanding Securities of such series
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".
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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) with respect to an
Issuer, Boise Holdings or, prior to the Timber Fall-away Date, Timber Holdings)
with respect to a series of Securities occurs and is continuing, the Trustee, by
notice to the Issuers, or the Holders of at least 25% in principal amount of the
outstanding Securities of such series, by notice to the Issuers and the Trustee,
may declare the principal of and accrued but unpaid interest on all the
Securities of such series 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) with respect to an
Issuer, Boise Holdings or, prior to the Timber Fall-away Date, Timber Holdings,
occurs, the principal of and interest on all the Securities 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 Securities. The Holders of a
majority in principal amount of the Securities of a series by notice to the
Trustee may rescind an acceleration and its consequences with respect to such
series if the rescission would not conflict with any judgment or decree and if
all existing Events of Default with respect to that series have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent Default
with respect to such series or impair any right consequent thereto.
(b) In the event of a declaration of acceleration of a series of
Securities 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)
(excluding any resulting payment default under this Indenture or such series of
Securities), the declaration of acceleration of such series of the Securities
shall be automatically annulled if the holders of all Indebtedness described in
Section 6.01(6) 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 such series of Securities would not conflict
with any judgment or decree of a court of competent jurisdiction, and all
existing Events of Default with respect to such series, except non-payment of
principal or interest on such series of Securities that became due solely
because of the acceleration of such series of Securities, have been cured or
waived.
SECTION 6.03 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities of each series to which an Event
of Default applies or to enforce the performance of any provision of such
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by
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the Trustee or any Securityholder 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 Securities of a series then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Securities of
such series waive an existing Default or Event of Default and its consequences
under this Indenture with respect to such series except (i) a continuing Default
or Event of Default in the payment of interest on, or the principal of, a
Security of such series, (ii) a Default arising from the failure to redeem or
purchase any Securities of such series when required pursuant to this Indenture
or (iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder affected. When a Default is waived
with respect to a series of Securities, it is deemed cured with respect to such
series, 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 Securities of a series 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 with respect to such
series. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders of such
series 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
Securityholder may pursue any remedy with respect to this Indenture or the
Securities of a series unless:
(1) such Holder gives to the Trustee written notice that an Event
of Default with respect to such series is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with such request within 60 days
after the receipt thereof and the offer of security or indemnity; and
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(5) Holders of a majority in principal amount of the outstanding
Securities of that series do not give the Trustee a direction inconsistent
with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder of the same series or to obtain a preference or priority
over another Securityholder of the same series. In the event that the Definitive
Securities are not issued to any beneficial owner promptly after the Registrar
has received a request from the Holder of a Global Security to issue such
Definitive Securities 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 Securities to pursue such remedy with respect to the portion of the Global
Security that represents such beneficial holder's Securities as if such
Definitive Securities 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 Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
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.
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 Securityholders
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.
SECTION 6.10 PRIORITIES. If the Trustee collects any money or
property with respect to a series of Securities 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 with
respect to such series;
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SECOND: solely with respect to the Senior Subordinated Notes, to
holders of Senior Indebtedness (including the Senior Notes) of the Issuers
and, if such money or property has been collected from a Note Guarantor, to
holders of Senior Indebtedness (including Guaranties of the Senior Notes)
of such Note Guarantor, in each case to the extent required by Article 10
and 12;
THIRD: to Holders of Securities of such series for amounts due
and unpaid on such Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities of such series for principal and interest,
respectively; and
FOURTH: to the Issuers.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Issuers shall mail to each Securityholder 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 or a suit by
Holders of more than 10% in aggregate principal amount of the Securities of a
series.
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.
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(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
(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 wilful 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.
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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.
(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 wilful 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
Securities 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 Securities
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.
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 Securities, it shall not be accountable for the Issuers'
use of the proceeds from the Securities, 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 Securities or in the Securities 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 Securities. 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
Securityholder of each series of Securities to which such Default applies notice
of the Default within 90 days after it occurs. Except in the case of a Default
in the payment of principal of or
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interest on any Security, 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 Securityholders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each October 15 beginning with the October 15 following the
date of this Indenture, and in any event prior to December 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of October 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Securityholders of
a series shall be filed with the SEC and each stock exchange (if any) on which
the Securities of that series are listed. The Issuers agree to notify promptly
the Trustee whenever the Securities of either series 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 Securities 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 Securities.
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) 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 with respect to a series of Securities by so notifying the Issuers. The
Holders of a majority in principal amount of the Securities of a series may
remove the Trustee with
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respect to such series by so notifying the Trustee and may appoint a successor
Trustee with respect to such series. The Issuers shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(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 Securities of a series with respect to
such series, and such Holders do not reasonably promptly appoint a successor
Trustee with respect to such series, or if a vacancy exists in the office of
Trustee with respect to a series of Securities for any reason (the Trustee in
such event being referred to herein as the retiring Trustee), the Issuers shall
promptly appoint a successor Trustee.
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 with respect to the applicable
series of Securities shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture with
respect to the applicable series of Securities. The successor Trustee shall mail
a notice of its succession to Securityholders of such series of Securities. The
retiring Trustee shall promptly transfer all property held by it as Trustee in
respect of the applicable series of Securities to the successor Trustee of such
series, subject to the lien provided for in Section 7.07.
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 applicable series of Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee for
such series of Securities.
If the Trustee fails to comply with Section 7.10, any Securityholder
of a series of Securities may petition any court of competent jurisdiction for
the removal of the Trustee with respect to such series and the appointment of a
successor Trustee with respect to such series.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuers' obligations under Section 7.07 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.
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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 Securities 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 Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities 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 Securities 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.
Article 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (1) the Issuers deliver to the Trustee all outstanding Securities of a
series (other than Securities replaced pursuant to Section 2.07) for
cancellation or (2) all outstanding Securities of a series have become due and
payable, whether at maturity or on a redemption date as a result of the mailing
of a 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 Securities of such series,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Issuers
pay all other sums payable hereunder by the Issuers with respect to such series,
then this Indenture shall, subject to Section 8.01(c), cease to be of further
effect with respect to such series. The Trustee shall acknowledge satisfaction
and discharge of this Indenture with respect to such series 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, the Issuers at any time
may terminate (1) all their obligations under the Senior Subordinated Notes and
this Indenture with respect to the Senior Subordinated Notes ("legal defeasance
option") or (2) their
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obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.12
and 4.13 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 Note Guarantors (other than Boise Holdings and
Timber Holdings)) and the limitations contained in Section 5.01(a)(3) ("covenant
defeasance option"), in each case, with respect to the Senior Subordinated
Notes. 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
Senior Subordinated 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 Senior Subordinated 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, Boise Holdings
or Timber Holdings to comply with Section 5.01(a)(3). If the Issuers exercise
their legal defeasance option or their covenant defeasance option, each Note
Guarantor, if any, shall be released from all its obligations with respect to
its Guaranty of the Senior Subordinated 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 Senior Subordinated Notes in Sections 2.03,
2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this Article 8 shall survive
until the Senior Subordinated 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 for the payment of principal of and interest
on the Senior Subordinated 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 Senior Subordinated Notes to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Issuers occurs which is continuing at the end of the period;
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(4) the deposit does not constitute a default under any other
agreement binding on the Issuers and is not prohibited by Article 10;
(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 Senior Subordinated Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such
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 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 Senior Subordinated Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(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 Senior Subordinated 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 Senior Subordinated 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 Senior Subordinated Notes. Money
and securities so held in trust are not subject to Article 10.
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.
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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, Securityholders 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 Note Guarantor's
obligations under this Indenture with respect to the Senior Subordinated Notes,
each Note Guaranty of the Senior Subordinated Notes and the Senior Subordinated
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 Senior Subordinated Notes because of the
reinstatement of their obligations, the Issuers shall be subrogated to the
rights of the Holders of such Senior Subordinated 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 Note
Guarantors and the Trustee may amend this Indenture with respect to a series of
Securities or the Securities of that series without notice to or consent of any
Holder of Securities of that series:
(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 Note Guarantor under this Indenture to
comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities of that series (PROVIDED that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code, or in a
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manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code);
(4) to add Guarantees with respect to the Securities of that
series, including any Subsidiary or Cross Guaranties, or to secure the
Securities of that series;
(5) to add to the covenants of the Issuers or a Note Guarantor for
the benefit of the Holders of the Securities of that series or to surrender
any right or power herein conferred upon the Issuers or a Note Guarantor
with respect to that series;
(6) to make any change that does not adversely affect the rights of
any Holder of the Securities of that series;
(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 Securities; PROVIDED, HOWEVER,
that (a) compliance with this Indenture as so amended would not result in
Securities 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 Securities.
An amendment under this Section with respect to the Senior
Subordinated Notes may not make any change that adversely affects the rights
under Article 10 or 12 of any holder of Senior Indebtedness (including the
Senior Notes and the Note Guaranties in respect of the Senior Notes) of an
Issuer or of a Note Guarantor then outstanding unless the holders of such Senior
Indebtedness (or their Representative) consent to such change.
After an amendment under this Section becomes effective, the Issuers
shall mail to the Securityholders of the applicable series of Securities a
notice briefly describing such amendment. The failure to give such notice to all
Securityholders, 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 Note
Guarantors and the Trustee may amend this Indenture with respect to the
Securities of a series or such Securities with the written consent of the
Holders of at least a majority in principal amount of the Securities of that
series then outstanding (including consents obtained in connection with a tender
offer or exchange for such Securities) and any past default or compliance with
any provisions with respect to the Securities of a series may also be waived
with the consent of the Holders of at least a majority in principal amount of
the Securities of that series then outstanding. However, without the consent of
each Holder of an outstanding Security of a series affected thereby, an
amendment or waiver may not, with respect to that series:
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(1) reduce the amount of such Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of interest
on any such Security;
(3) reduce the principal of or change the Stated Maturity of any
such Security;
(4) change the provisions applicable to the redemption of any such
Security as described under Article 3 hereof or paragraph 5 of such
Security;
(5) make any such Security payable in money other than that stated
in the Security;
(6) impair the right of any Holder of such Securities to receive
payment of principal of and interest on such Holder's Securities of such
series 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 Securities
of such series;
(7) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions;
(8) make any change in the ranking or priority of any such Security
that would adversely affect the Holders of that series of Securities; or
(9) make any change in, or release other than in accordance with
this Indenture, any Note Guaranty that would adversely affect the Holders
of that series of Securities.
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.
An amendment under this Section with respect to the Senior
Subordinated Notes may not make any change that adversely affects the rights
under Article 10 or 12 of any holder of Senior Indebtedness (including the
Senior Notes and the Note Guaranties in respect of the Senior Notes) of an
Issuer or of a Note Guarantor then outstanding unless the holders of such Senior
Indebtedness (or their Representative) consent to such change
After an amendment under this Section becomes effective, the Issuers
shall mail to Securityholders of the applicable series a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
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SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. (a) A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver with respect to a series of Securities becomes effective, it
shall bind every Securityholder of such series. 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 Securityholders 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
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall 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 SECURITIES. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security 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 Security shall issue and the Trustee shall
authenticate a new Security of the same series that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security 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) 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 the Issuers nor any
Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of a series of Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture with respect to
such series of Securities or such Securities unless such consideration is
offered to all Holders of such series of Securities and is paid to all Holders
of such series of Securities that so consent, waive or agree to
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amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
Article 10
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE. Each of the Issuers
agrees, and each Holder of a Senior Subordinated Note by accepting a Senior
Subordinated Note agrees, that the Indebtedness evidenced by the Senior
Subordinated Notes is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment of all Senior
Indebtedness of the Issuers (including the Senior Notes) and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Senior Subordinated Notes shall in all respects rank
PARI PASSU with all other Senior Subordinated Indebtedness of the Issuers and
only Indebtedness of the Issuers which is Senior Indebtedness shall rank senior
to the Senior Subordinated Notes in accordance with the provisions set forth
herein. All provisions of this Article 10 shall be subject to Section 10.12.
SECTION 10.02 LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of an Issuer to creditors upon a total or
partial liquidation or a total or partial dissolution of an Issuer or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to an Issuer or its property:
(1) holders of Senior Indebtedness of Boise LLC or Boise Finance,
as the case may be, shall be entitled to receive payment in full in cash of
such Senior Indebtedness before Holders of Senior Subordinated Notes shall
be entitled to receive any payment of principal of or interest on the
Senior Subordinated Notes; and
(2) until the Senior Indebtedness of Boise LLC or Boise Finance, as
the case may be, is paid in full in cash, any payment or distribution to
which Holders of Senior Subordinated Notes would be entitled but for this
Article 10 shall be made to holders of such Senior Indebtedness as their
interests may appear, except that Holders of Senior Subordinated Notes may
receive shares of stock and any debt securities that are subordinated to
such Senior Indebtedness to at least the same extent as the Senior
Subordinated Notes.
SECTION 10.03 DEFAULT ON SENIOR INDEBTEDNESS OF THE ISSUERS. (a)
The Issuers shall not pay the principal of, premium, if any, or interest on the
Senior Subordinated Notes or make any deposit pursuant to Section 8.01 and may
not purchase, redeem or otherwise retire any Senior Subordinated Notes
(collectively, "pay the Senior Subordinated Notes") if either of the following
(a "Payment Default") occurs:
(1) any Obligation on any Designated Senior Indebtedness of the
Issuers is not paid in full in cash when due; or
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(2) any other default on Designated Senior Indebtedness of the
Issuers occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms;
unless, in either case, the Payment Default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash; PROVIDED, HOWEVER, that the Issuers shall be entitled
to pay the Senior Subordinated Notes without regard to the foregoing if the
Issuers and the Trustee receive written notice approving such payment from the
Representatives of all Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing.
(b) During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Issuers
pursuant to which the maturity thereof may be accelerated without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Issuers shall not pay the Senior
Subordinated Notes for a period (a "Payment Blockage Period") commencing upon
the receipt by the Trustee (with a copy to the Issuers) of written notice (a
"Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter. The Payment Blockage Period shall end earlier if
such Payment Blockage Period is terminated:
(1) by written notice to the Trustee and the Issuers from the
Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice, and
all other defaults on such Designated Senior Indebtedness, if any, are
cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been discharged
or repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness shall have accelerated the
maturity of such Designated Senior Indebtedness, the Issuers shall be entitled
to resume paying the Senior Subordinated Notes after termination of such Payment
Blockage Period. The Senior Subordinated Notes shall not be subject to more than
one Payment Blockage Period in any consecutive 360-day period irrespective of
the number of defaults with respect to Designated Senior Indebtedness of the
Issuers during such period; PROVIDED, HOWEVER, that if any Blockage Notice
within such 360-day period is delivered to the Trustee by or on behalf of
holders of Designated Senior Indebtedness of the Issuers (other than holders of
Indebtedness under any Credit Agreement), the Representative of the holders of
Indebtedness under any Credit Agreement shall be entitled to give another
Blockage Notice within such period; PROVIDED FURTHER, HOWEVER, that in no event
shall the total number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the
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aggregate during any consecutive 360-day period, and there must be 181 days
during any consecutive 360-day period during which no Payment Blockage Period is
in effect.
SECTION 10.04 ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Senior Subordinated Notes is accelerated because of an Event of Default, the
Issuers or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness of the Issuers (or their Representatives) of the
acceleration. If any Designated Senior Indebtedness of the Issuers is
outstanding, neither the Issuers nor any Note Guarantor shall pay the Senior
Subordinated Notes until five Business Days after the Representatives of all the
issues of Designated Senior Indebtedness of the Issuers receive notice of such
acceleration and, thereafter, shall be entitled to pay the Senior Subordinated
Notes only if this Article 10 otherwise permits payment at that time.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to Holders of Senior Subordinated Notes that because of
this Article 10 should not have been made to them, such Holders of the Senior
Subordinated Notes who receive such distribution shall hold such distribution in
trust for the holders of Senior Indebtedness of Boise LLC or Boise Finance, as
the case may be, and pay it over to them as their interests may appear.
SECTION 10.06 SUBROGATION. After all Senior Indebtedness of the
Issuers is paid in full and until the Senior Subordinated Notes are paid in
full, Holders of Senior Subordinated Notes shall be subrogated to the rights of
holders of such Senior Indebtedness to receive distributions applicable to such
Senior Indebtedness. A distribution made under this Article 10 to holders of
such Senior Indebtedness which otherwise would have been made to Holders of
Senior Subordinated Notes is not, as between the Issuers and the Holders of
Senior Subordinated Notes, a payment by the Issuers on such Senior Indebtedness.
SECTION 10.07 RELATIVE RIGHTS. This Article 10 defines the
relative rights of Holders of Senior Subordinated Notes and holders of Senior
Indebtedness of the Issuers. Nothing in this Indenture shall:
(1) impair, as between the Issuers and Holders of Senior
Subordinated Notes, the obligation of the Issuers, which is absolute and
unconditional, to pay principal of and interest on the Senior Subordinated
Notes in accordance with their terms; or
(2) prevent the Trustee or any Holder of Senior Subordinated Notes
from exercising its available remedies upon a Default, subject to the
rights of holders of Senior Indebtedness of the Issuers to receive
distributions otherwise payable to Holders of Senior Subordinated Notes.
SECTION 10.08 SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS. No
right of any holder of Senior Indebtedness of the Issuers to enforce the
subordination of the Indebtedness evidenced by the Senior Subordinated Notes
shall be impaired by any
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act or failure to act by either of the Issuers or by the failure of either
Issuer to comply with this Indenture.
SECTION 10.09 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 10.03, the Trustee or Paying Agent shall continue to make payments on
the Senior Subordinated Notes and shall not be charged with knowledge of the
existence of facts that under this Article 10 would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
such payments are prohibited by this Article 10. The Issuers, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Issuers shall be entitled to give the notice; PROVIDED,
HOWEVER, that, if an issue of Senior Indebtedness of the Issuers has a
Representative, only the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of the Issuers with the same rights it would have if
it were not Trustee. The Registrar and co-registrar and the Paying Agent shall
be entitled to do the same with like rights. The Trustee shall be entitled to
all the rights set forth in this Article 10 with respect to any Senior
Indebtedness of the Issuers which may at any time be held by it, to the same
extent as any other holder of such Senior Indebtedness; and nothing in Article 7
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article 10 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of the Issuers, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.11 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO
ACCELERATE. The failure to make a payment pursuant to the Senior Subordinated
Notes by reason of any provision in this Article 10 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Holders of Senior Subordinated Notes or the
Trustee to accelerate the maturity of the Senior Subordinated Notes.
SECTION 10.12 TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Senior Subordinated Notes shall
not be subordinated to the prior payment of any Senior Indebtedness of the
Issuers or subject to the restrictions set forth in this Article 10, and none of
the Holders of Senior Subordinated Notes shall be obligated to pay over any such
amount to the Issuers or any holder of Senior Indebtedness of the Issuers or any
other creditor of the Issuers.
SECTION 10.13 TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Holders of Senior
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Subordinated Notes shall be entitled to rely (a) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 10.02 are pending, (b) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders of Senior Subordinated Notes or (c) upon the
Representatives of Senior Indebtedness of the Issuers for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
the Issuers, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Issuers to participate in any payment or distribution
pursuant to this Article 10, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee shall be entitled to defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
SECTION 10.14 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
Senior Subordinated Notes by accepting a Senior Subordinated Note authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
of Senior Subordinated Notes and the holders of Senior Indebtedness of the
Issuers as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF THE ISSUERS. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Issuers pursuant to
this Article 10 and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders of Senior Subordinated Notes or the
Issuers or any other Person, money or assets to which any holders of Senior
Indebtedness of the Issuers shall be entitled by virtue of this Article 10.
SECTION 10.16 RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF THE
ISSUERS ON SUBORDINATION PROVISIONS. Each Holder of Senior Subordinated Notes by
accepting a Senior Subordinated Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of the Issuers, whether
such Senior Indebtedness was created or acquired before or after the issuance of
the Senior Subordinated Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of such Senior Indebtedness
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
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Article 11
NOTE GUARANTIES
SECTION 11.01 GUARANTIES. (a) Each Note Guarantor of a series of
Securities hereby unconditionally and irrevocably guarantees, jointly and
severally, to each Holder of such series of Securities and to the Trustee and
its successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities of such series 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 such series of Securities and
such Securities and (b) the full and punctual performance within applicable
grace periods of all other obligations of the Issuers under this Indenture with
respect to such series of Securities and such Securities (all the foregoing
being hereinafter collectively called the "Guaranteed Obligations" with respect
to a series of Securities). Each Note Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Note Guarantor and that such Note Guarantor
shall remain bound under this Article 11 notwithstanding any extension or
renewal of any Obligation.
(b) Each Note Guarantor of a series of Securities waives
presentation to, demand of, payment from and protest to the Issuers of any of
the Guaranteed Obligations in respect of such series of Securities and also
waives notice of protest for nonpayment. Each Note Guarantor of a series of
Securities waives notice of any default under the Securities of such series or
the Guaranteed Obligations in respect of such series of Securities. The
obligations of each Note Guarantor with respect to a series of Securities
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 Note Guarantor) under this Indenture
in respect of such series of Securities, such Securities 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 in respect of such series of Securities, such Securities or any other
agreement; (4) the release of any security held by any Holder or the Trustee for
the Guaranteed Obligations in respect of such series of Securities or any of
them; (5) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations in respect of
such series of Securities; or (6) except as set forth in Section 11.06, any
change in the ownership of such Note Guarantor.
Each Note Guarantor further agrees that its Note Guaranty in respect
of a series of Securities 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 in respect of such series of
Securities.
(c) Each Note Guaranty in respect of the Senior Subordinated Notes
is, to the extent and in the manner set forth in Article 12, subordinated and
subject in right of payment to the prior payment in full of the principal of and
premium, if any, and
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interest on all Senior Indebtedness (including the Note Guaranties in respect of
the Senior Notes) of the Note Guarantor giving such Note Guaranty and each such
Note Guaranty is made subject to such provisions of this Indenture.
(d) Except as expressly set forth in Sections 8.01(b), 11.02 and
11.06, the obligations of each Note Guarantor in respect of a series of
Securities 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 in respect of such series of Securities or otherwise. Without
limiting the generality of the foregoing, the obligations of each Note Guarantor
in respect of a series of Securities 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 in respect of such
series of Securities, such Securities 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 in respect of such
series of Securities, 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 Note Guarantor or would otherwise operate as a discharge of
such Note Guarantor as a matter of law or equity.
(e) Each Note Guarantor further agrees that its Guarantee in
respect of a series of Securities 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 in respect of such series
of Securities is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.
(f) 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
Note Guarantor by virtue hereof, upon the failure of the Issuers to pay the
principal of or interest on any Guaranteed Obligation in respect of a series of
Securities 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 in respect of such series of Securities, each Note
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 in respect of such series of Securities, (B) accrued and unpaid
interest on such 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 such series of Securities and the Trustee.
(g) Each Note Guarantor of a series of Securities agrees that it
shall not be entitled to any right of subrogation in respect of any Obligations
in respect of such series of Securities guaranteed hereby until payment in full
of all Guaranteed Obligations in respect of such series of Securities and
(solely in the case of Note Guarantees of the
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Senior Subordinated Notes) all obligations to which the Guaranteed Obligations
are subordinated as provided in Article 12. Each Note Guarantor of a series of
Securities further agrees that, as between it, on the one hand, and the Holders
in respect of such series of Securities and the Trustee, on the other hand, (i)
the maturity of the Guaranteed Obligations in respect of such series of
Securities hereby may be accelerated as provided in Article 6 for the purposes
of such Note Guarantor's Note Guaranty in respect of such series of Securities
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations in respect of such
series of Securities guaranteed hereby, 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 Note Guarantor for the purposes of this Section.
(h) Each Note 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 11.02 LIMITATION ON LIABILITY. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Guaranteed Obligations in respect of a series of Securities guaranteed
hereunder by any Note Guarantor shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Indenture, as it relates to such Note
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 11.03 SUCCESSORS AND ASSIGNS. This Article 11 shall be
binding upon each Note Guarantor and its successors and assigns and shall enure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04 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 11 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 11 at law,
in equity, by statute or otherwise.
SECTION 11.05 MODIFICATION. No modification, amendment or waiver
of any provision of this Article 11, nor the consent to any departure by any
Note 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
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Note Guarantor in any case shall entitle such Note Guarantor to any other or
further notice or demand in the same, similar or other circumstances.
SECTION 11.06 RELEASE OF NOTE GUARANTOR. A Note Guarantor shall be
released automatically from its obligations under this Article 11 (other than
any obligation that may have arisen under Section 11.07)
(1) upon the sale or other disposition (including by way of
consolidation or merger) of a Subsidiary Guarantor or Cross Guarantor,
including the sale or disposition of Capital Stock of a Subsidiary
Guarantor or a Cross Guarantor, following which (i) if such Subsidiary
Guarantor or Cross Guarantor (other than Timber Holdings) is not a
Timberlands Entity, such Subsidiary Guarantor or Cross Guarantor is no
longer a Subsidiary of Boise Holdings or Timber Holdings or (ii) if such
Subsidiary Guarantor or Cross Guarantor is a Timberlands Entity, none of
Boise Holdings, Timber Holdings or any of their respective Restricted
Subsidiaries or, in the case of Timber Holdings, Parent, owns any Capital
Stock of such Subsidiary Guarantor or Cross Guarantor; or
(2) the sale or disposition of all or substantially all the assets
of a Subsidiary Guarantor or such a Cross 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 Issuers or an Affiliate
of the Issuers, (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 and each of Boise Holdings and Timber Holdings
shall comply with their obligations under Section 4.06. The Subsidiary
Guaranties of a Subsidiary Guarantor and the Cross Guaranties of a Cross
Guarantor also shall be automatically released:
(1) upon the designation of such Subsidiary Guarantor or Cross
Guarantor as an Unrestricted Subsidiary;
(2) at such time as such Subsidiary Guarantor or Cross Guarantor
does not have any Indebtedness outstanding that would have required such
Subsidiary Guarantor or Cross Guarantor to enter into a Guaranty Agreement
pursuant to Section 4.12 (other than the Senior Subordinated Notes, the
Senior Notes and Guarantees thereof, as the case may be) and such
Subsidiary Guarantor or Cross Guarantor is not a Timberlands Entity; or
(3) if the Issuers exercise their legal defeasance option or their
covenant defeasance option under Section 8.01 (solely with respect to
Guaranties of the Senior Subordinated Notes), or if their obligations under
this Indenture are discharged in accordance with the terms of this
Indenture.
Notwithstanding the foregoing, in the event of any sale, transfer or other
disposition of a Timberlands Parent Entity (or its Capital Stock), such
Timberlands Parent Entity's obligations under its Note Guaranties will not be
released unless (i) at the time of such sale, transfer or other disposition such
Timberlands Parent Entity and its Restricted
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Subsidiaries do not own or control any material assets or operations other than
Timberlands Assets, (ii) the Net Available Cash from such sale, transfer or
other disposition is concurrently contributed to Boise Holdings as common equity
(a "Timberlands Contribution"), except to the extent such Net Available Cash is
then distributable pursuant to Section 4.04(b)(13) (in which case any such Net
Available Cash not so contributed shall be deemed to have been contributed as a
Timberlands Contribution to Boise Holdings and distributed as a dividend
pursuant to such Section 4.04(b)(13)) and (iii) the proceeds of such Timberlands
Contribution are applied as Timberlands Proceeds in accordance with Section
4.06.
At the request of the Issuers, the Trustee shall execute and deliver
an appropriate instrument evidencing such release.
SECTION 11.07 CONTRIBUTION. Each Note Guarantor that makes a
payment under its Note Guaranty shall be entitled upon payment in full of all
Guaranteed Obligations under this Indenture to a contribution from each other
Note Guarantor in an amount equal to such other Note Guarantor's PRO RATA
portion of such payment based on the respective net assets of all the Note
Guarantors at the time of such payment determined in accordance with GAAP.
Article 12
SUBORDINATION OF NOTE GUARANTIES
SECTION 12.01 AGREEMENT TO SUBORDINATE. Each Note Guarantor of
Senior Subordinated Notes agrees, and each Holder of Senior Subordinated Notes
by accepting a Senior Subordinated Note agrees, that the Indebtedness evidenced
by such Note Guarantor's Note Guaranty of Senior Subordinated Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment of all Senior Indebtedness of such Note
Guarantor (including its Note Guaranty of the Senior Notes) and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Obligations of a Note Guarantor in respect of a Note
Guaranty of the Senior Subordinated Notes shall in all respects rank PARI PASSU
with all other Senior Subordinated Indebtedness of such Note Guarantor and only
Senior Indebtedness of such Note Guarantor (including such Note Guarantor's
Guaranty of Senior Indebtedness of the Issuers) shall rank senior to the
Obligations of such Note Guarantor in respect of the Senior Subordinated Notes
in accordance with the provisions set forth herein.
SECTION 12.02 LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of any Note Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of such Note
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Note Guarantor or its property:
(1) holders of Senior Indebtedness of such Note Guarantor shall be
entitled to receive payment in full in cash of such Senior Indebtedness
before
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Holders of Senior Subordinated Notes shall be entitled to receive any
payment pursuant to the Note Guaranty of the Senior Subordinated Notes of
such Note Guarantor; and
(2) until the Senior Indebtedness of such Note Guarantor is paid in
full in cash, any payment or distribution to which Holders of Senior
Subordinated Notes would be entitled but for this Article 12 shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that Holders of Senior Subordinated Notes may receive shares of
stock and any debt securities of such Note Guarantor that are subordinated
to such Senior Indebtedness to at least the same extent as the Note
Guaranty of the Senior Subordinated Notes.
SECTION 12.03 DEFAULT ON SENIOR INDEBTEDNESS OF NOTE GUARANTOR.
(a) A Note Guarantor shall not make payment on its Note Guaranty of the Senior
Subordinated Notes or purchase, redeem or otherwise retire or defease any Senior
Subordinated Notes or other Obligations in respect of the Senior Subordinated
Notes (collectively, "pay its Note Guaranty") if either of the following (a
"Guaranty Payment Default") occurs:
(1) any Obligation on any Designated Senior Indebtedness of such
Note Guarantor is not paid in full in cash when due; or
(2) any other default on Designated Senior Indebtedness of such
Note Guarantor occurs and the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms;
unless, in either case, the Guaranty Payment Default has been cured or waived
and any such acceleration has been rescinded or such Designated Senior
Indebtedness has been paid in full in cash; PROVIDED, HOWEVER, that any Note
Guarantor shall be entitled to pay its Note Guaranty of the Senior Subordinated
Notes without regard to the foregoing if such Note Guarantor and the Trustee
receive written notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Guaranty Payment
Default has occurred and is continuing.
(b) During the continuance of any default (other than a Guaranty
Payment Default) with respect to any Designated Senior Indebtedness of a Note
Guarantor pursuant to which the maturity thereof may be accelerated without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Note
Guarantor shall not pay its Note Guaranty of the Senior Subordinated Notes for a
period (a "Guaranty Payment Blockage Period") commencing upon the receipt by the
Trustee (with a copy to such Note Guarantor) of written notice (a "Guaranty
Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Guaranty Payment Blockage
Period and ending 179 days thereafter. The Guaranty Payment Blockage Period
shall end earlier if such Guaranty Payment Blockage Period is terminated:
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(1) by written notice to the Trustee and such Note Guarantor from
the Person or Persons who gave such Guaranty Blockage Notice;
(2) because the default giving rise to such Guaranty Blockage
Notice, and all other defaults on such Designated Senior Indebtedness, if
any, are cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been discharged
or repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness shall have accelerated the
maturity of such Designated Senior Indebtedness, any Note Guarantor shall be
entitled to resume payments pursuant to its Note Guaranty of the Senior
Subordinated Notes after termination of such Guaranty Payment Blockage Period.
No Note Guarantor shall be subject to more than one Guaranty Payment Blockage
Period in any consecutive 360-day period irrespective of the number of defaults
with respect to Designated Senior Indebtedness of such Note Guarantor during
such period; PROVIDED, HOWEVER, that if any Guaranty Blockage Notice within such
360-day period is delivered to the Trustee by or on behalf of any holders of
Designated Senior Indebtedness of such Note Guarantor (other than holders of
Indebtedness under any Credit Agreement), the Representative of the holders of
Indebtedness under any Credit Agreement shall be entitled to give another
Guaranty Blockage Notice within such period; PROVIDED FURTHER, HOWEVER, that in
no event shall the total number of days during which any Guaranty Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any consecutive 360-day period, and there must be 181 days during any
consecutive 360-day period during which no Guaranty Payment Blockage Period is
in effect.
SECTION 12.04 DEMAND FOR PAYMENT. If a demand for payment is made
on a Note Guarantor in respect of its Note Guaranty of Senior Subordinated Notes
pursuant to Article 11, the Trustee shall promptly notify the holders of the
Designated Senior Indebtedness of such Note Guarantor (or their Representatives)
of such demand.
SECTION 12.05 WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to Holders of Senior Subordinated Notes that because of
this Article 12 should not have been made to them, the Holders of Senior
Subordinated Notes who receive such distribution shall hold such distribution in
trust for the holders of Senior Indebtedness of the applicable Note Guarantor
and pay it over to them as their interests may appear.
SECTION 12.06 SUBROGATION. After all Senior Indebtedness of a Note
Guarantor is paid in full and until the Senior Subordinated Notes are paid in
full, Holders of Senior Subordinated Notes shall be subrogated to the rights of
holders of such Senior Indebtedness to receive distributions applicable to such
Senior Indebtedness of such Note Guarantor. A distribution made under this
Article 12 to holders of such Senior
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Indebtedness which otherwise would have been made to Holders of Senior
Subordinated Notes is not, as between the relevant Note Guarantor and Holders of
Senior Subordinated Notes, a payment by such Note Guarantor on such Senior
Indebtedness.
SECTION 12.07 RELATIVE RIGHTS. This Article 12 defines the
relative rights of Holders of Senior Subordinated Notes and holders of Senior
Indebtedness of a Note Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Note Guarantor and Holders of Senior
Subordinated Notes, the obligation of such Note Guarantor, which is
absolute and unconditional, to pay its Note Guaranty to the extent set
forth in Article 11; or
(2) prevent the Trustee or any Holder of Senior Subordinated Notes
from exercising its available remedies upon a Default by such Note
Guarantor under its Note Guaranty in respect of the Senior Subordinated
Notes, subject to the rights of holders of Senior Indebtedness of such Note
Guarantor to receive distributions otherwise payable to Holders of Senior
Subordinated Notes.
SECTION 12.08 SUBORDINATION MAY NOT BE IMPAIRED BY NOTE
GUARANTORS. No right of any holder of Senior Indebtedness of any Note Guarantor
to enforce the subordination of the Note Guaranty of the Senior Subordinated
Notes of such Note Guarantor shall be impaired by any act or failure to act by
such Note Guarantor or by its failure to comply with this Indenture.
SECTION 12.09 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 12.03, the Trustee or Paying Agent shall continue to make payments on
any Note Guaranty of the Senior Subordinated Notes and shall not be charged with
knowledge of the existence of facts that under this Article 12 would prohibit
the making of any such payments unless, not less than two Business Days prior to
the date of such payment, a Trust Officer of the Trustee receives notice
satisfactory to it that such payments are prohibited by this Article 12. The
Issuers, the relevant Note Guarantor, the Registrar or co-registrar, the Paying
Agent, a Representative or a holder of Senior Indebtedness of such Note
Guarantor shall be entitled to give the notice; PROVIDED, HOWEVER, that, if an
issue of Senior Indebtedness of any Note Guarantor has a Representative, only
the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of any Note Guarantor with the same rights it would
have if it were not Trustee. The Registrar and co-registrar and the Paying Agent
shall be entitled to do the same with like rights. The Trustee shall be entitled
to all the rights set forth in this Article 12 with respect to any Senior
Indebtedness of any Note Guarantor which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 12 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.
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SECTION 12.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of any Note Guarantor, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 12.11 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO
DEMAND PAYMENT. The failure to make a payment pursuant to a Note Guaranty of the
Senior Subordinated Notes by reason of any provision in this Article 12 shall
not be construed as preventing the occurrence of a Default. Nothing in this
Article 12 shall have any effect on the right of the Holders of Senior
Subordinated Notes or the Trustee to make a demand for payment on any Note
Guarantor pursuant to its Note Guaranty of the Senior Subordinated Notes.
SECTION 12.12 TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders of Senior
Subordinated Notes shall be entitled to rely (a) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 12.02 are pending, (b) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders of Senior Subordinated Notes or (c) upon the
Representatives of Senior Indebtedness of any Note Guarantor for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
such Note Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 12. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of any Note Guarantor to participate in any payment or
distribution pursuant to this Article 12, the Trustee shall be entitled to
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness of such Note Guarantor held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 12, and, if such evidence is not furnished, the
Trustee shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
Senior Subordinated Notes by accepting a Senior Subordinated Note authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
of Senior Subordinated Notes and the holders of Senior Indebtedness of any Note
Guarantor as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF NOTE GUARANTOR. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Note Guarantor
pursuant to this Article 12 and shall not be liable to any such holders if it
shall mistakenly pay over or distribute
111
to Holders of Senior Subordinated Notes or the Issuers or any other Person,
money or assets to which any holders of such Senior Indebtedness shall be
entitled by virtue of this Article 12.
SECTION 12.15 RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF NOTE
GUARANTORS ON SUBORDINATION PROVISIONS. Each Holder of Senior Subordinated Notes
by accepting a Senior Subordinated Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness of any Note
Guarantor, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Senior Subordinated Notes, to acquire and continue to
hold, or to continue to hold, such Senior Indebtedness and such holder of such
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
Article 13
MISCELLANEOUS
SECTION 13.01 TRUST INDENTURE ACT CONTROLS. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02 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 Note Guarantor:
1111 West Jefferson Street
Boise, Idaho 83728
(fax: (208) 384-7189)
Attention: Thomas E. Carlile, Chief Financial Officer
with a copy to:
Dennis Myers, Esq.
Kirkland & Ellis LLP
(fax: (312) 861-2200)
if to the Trustee:
U.S. Bank National Association
15 West South Temple, Suite 200
Salt Lake City, UT 84101
(fax: 801-534-6013)
Attention: Kim R. Galbraith, VP
with a copy to:
112
U.S. Bank National Association
1420 Fifth Avenue, 7th Floor
Seattle, WA 98101
(fax: 206-344-4630)
Attention: Craig Ferguson, 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 Securityholder shall be mailed
to the Securityholder at the Securityholder'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 Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders of Securities of a series may communicate pursuant to TIA
Section 312(b) with other Securityholders of such series of Securities with
respect to their rights under this Indenture with respect to such series of
Securities or such Securities. The Issuers, any Note Guarantor, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 13.04 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 13.05 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;
113
(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
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06 WHEN SECURITIES DISREGARDED. In determining whether
the Holders of the required principal amount of Securities of a series have
concurred in any direction, waiver or consent, Securities of such series 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 Securities which the Trustee knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 13.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08 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 13.09 GOVERNING LAW. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 13.10 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of either Issuer or any Note Guarantor shall
not have any liability for any obligations of the Issuers under the Securities
or this Indenture or of such Note Guarantor under its Note Guaranties or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 13.11 SUCCESSORS. All agreements of the Issuers in this
Indenture and the Securities shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successors.
114
SECTION 13.12 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 13.13 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet 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.
115
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 Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE CASCADE FINANCE
CORPORATION,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE CASCADE HOLDINGS, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE WHITE PAPER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE PACKAGING & NEWSPRINT,
L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
116
BOISE BUILDING SOLUTIONS
MANUFACTURING, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE BUILDING SOLUTIONS
DISTRIBUTION, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE LAND & TIMBER HOLDINGS
CORP.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE LAND & TIMBER CORP.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE BUILDING SOLUTIONS
MANUFACTURING HOLDINGS CORP.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
117
BC CHILE INVESTMENT
CORPORATION,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BC BRAZIL INVESTMENT
CORPORATION,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE WHITE PAPER HOLDINGS
CORP.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
MINNESOTA, DAKOTA & WESTERN
RAILWAY COMPANY,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
INTERNATIONAL FALLS POWER
COMPANY,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
118
BC CHINA CORPORATION,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE CASCADE TRANSPORTATION
HOLDINGS CORP.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BCT, INC.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE CASCADE AVIATION, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE CENTRAL WASHINGTON
LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
119
BOISE NORTHEAST WASHINGTON
LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE NORTHWEST OREGON
LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE SOUTHERN OREGON
LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE NORTHEAST OREGON
LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE IDAHO LAND & TIMBER, L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
120
BOISE MINNESOTA LAND & TIMBER,
L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE LOUISIANA LAND & TIMBER,
L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
BOISE ALABAMA LAND & TIMBER,
L.L.C.,
by /s/ Wayne Rancourt
------------------------------------
Name: Wayne Rancourt
Title: Secretary and Treasurer
121
U.S. BANK NATIONAL ASSOCIATION,
as TRUSTEE,
by /s/ Kim R. Galbraith
------------------------------------
Name: Kim R. Galbraith
Title: Vice President
RULE 144A/REGULATION S/IAI APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
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 Security or beneficial
interest therein, the rules and procedures of the Depository for such a
Temporary Regulation S Global Security, to the extent applicable to such
transaction and as in effect from time to time.
"Definitive Security" means a certificated Initial Security or
Exchange Security bearing, if required, the appropriate restricted securities
legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Distribution Compliance Period", with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Securities 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 Securities.
"Exchange Securities" means, collectively, the Senior Exchange Notes
and the Senior Subordinated Exchange Notes.
"IAI" means an institutional "accredited investor", as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
"Initial Purchasers" means (1) with respect to the Initial Securities
issued on the Issue Date, JPMorgan Securities Inc., Lehman Brothers Inc.,
Deutsche Bank Securities Inc. and Goldman, Sachs & Co., and (2) with respect to
each issuance of Additional Securities, the Persons purchasing or underwriting
such Additional Securities under the related Purchase Agreement.
"Initial Securities" means, collectively, the Initial Senior Notes and
the Initial Senior Subordinated Notes.
2
"Initial Senior Notes" means (1) $250,000,000 aggregate principal
amount of Senior Floating Rate Notes due 2012 issued on the Issue Date and (2)
Additional Senior Notes, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Initial Senior Subordinated Notes" means (1) $400,000,000 aggregate
principal amount of 7-1/8% Senior Subordinated Notes due 2014 issued on the
Issue Date and (2) Additional Senior Subordinated Notes, if any, issued in a
transaction exempt from the registration requirements of the Securities Act.
"Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, the Purchase Agreement dated October 15, 2004, among
the Issuers, the Note Guarantors and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities, the purchase agreement or
underwriting agreement among the Issuers, the Note Guarantors and the Persons
purchasing or underwriting such Additional Securities.
"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 Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreements" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement in
respect of the Senior Notes and the Registration Rights Agreement in respect of
the Senior Subordinated Notes (each, a "Registration Rights Agreement"), in each
case dated October 29, 2004, among the Initial Purchasers, the Issuers and the
Note Guarantors and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Issuers,
the Note Guarantors and the Persons purchasing such Additional Securities under
the related Purchase Agreement.
"Rule 144A Securities" means all Securities offered and sold to QIBs
in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto, and
shall initially be the Trustee.
"Senior Exchange Notes" means (1) the Senior Floating Rate Notes due
2012 issued pursuant to the Indenture in connection with a Registered Exchange
Offer pursuant to a Registration Rights Agreement and (2) Additional Senior
Notes, if any, issued pursuant to a registration statement filed with the SEC
under the Securities Act.
3
"Senior Subordinated Exchange Notes" means (1) the 7-1/8% Senior
Subordinated Notes due 2014 issued pursuant to the Indenture in connection with
a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2)
Additional Senior Subordinated Notes, if any, issued pursuant to a registration
statement filed with the SEC under the Securities Act.
"Shelf Registration Statement" means the registration statement filed
by the Issuers in connection with the offer and sale of Initial Securities
pursuant to a Registration Rights Agreement.
"Transfer Restricted Securities" means Securities 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
[Download Table]
Defined in
Term Section:
---- -------
"Agent Members" 2.1(b)
"Global Securities" 2.1(a)
"IAI Global Security" 2.1(a)
"Permanent Regulation S Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Regulation S Global Security" 2.1(a)
"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
"Temporary Regulation S Global Security" 2.1(a)
4
2. THE SECURITIES.
2.1 (a) FORM AND DATING. The Initial Securities will be offered and sold
by the Issuers pursuant to a Purchase Agreement. The Initial Securities will be
resold initially only to (i) 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 Securities may thereafter be transferred to, among others, QIBs,
IAIs and purchasers in reliance on Regulation S, subject to the restrictions on
transfer set forth herein. Initial Senior Notes and Initial Senior Subordinated
Notes initially resold pursuant to Rule 144A shall be issued initially in the
form of one or more permanent global Securities in definitive, fully registered
form (the "Rule 144A Global Senior Security" and the "Rule 144A Global Senior
Subordinated Security", respectively, and each, a "Rule 144A Global Security");
Initial Senior Notes and Initial Senior Subordinated Notes subsequently resold
to IAIs shall be issued initially in the form of one or more permanent global
Securities in definitive, fully registered form (the "IAI Global Senior
Security" and the "IAI Global Senior Subordinated Security", respectively, and
each, an "IAI Global Security"); and Initial Senior Notes and Initial Senior
Subordinated 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 (the "Temporary Regulation S Global Senior Security" and the
"Temporary Regulation S Global Senior Subordinated Security", respectively, and
each, a "Temporary Regulation S Global Security"), 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 Securities represented thereby with the Securities
Custodian and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Issuers and authenticated by the Trustee as
provided in this Indenture. Except as set forth in this Section 2.1(a),
beneficial ownership interests in a Temporary Regulation S Global Security will
not be exchangeable for interests in a Rule 144A Global Security, an IAI Global
Security, a permanent global security (a "Permanent Regulation S Global
Security", and together with the Temporary Regulation S Global Security, the
"Regulation S Global Security") or any other Security 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 Security, an IAI Global Security or a Permanent Regulation S Global
Security only upon certification in form reasonably satisfactory to the Trustee
that (i) beneficial ownership interests in such Temporary Regulation S Global
Security 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 and (ii) in the case of an exchange for an IAI Global Security,
certification that the interest in the Temporary Regulation S Global Security is
being transferred to an institutional "accredited investor" under the Securities
Act that is an institutional accredited investor acquiring the securities for
its own account or for the account of an institutional accredited investor.
Beneficial interests in Temporary Regulation S Global Securities or
IAI Global Securities may be exchanged for interests in Rule 144A Global
Securities if (1)
5
such exchange occurs in connection with a transfer of Securities in compliance
with Rule 144A and (2) the transferor of the beneficial interest in the
Temporary Regulation S Global Security or the IAI Global Security, as
applicable, 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 Security or the IAI Global Security, as
applicable, is being transferred to a Person (a) who 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 Temporary Regulation S Global Securities and
Rule 144A Global Securities may be exchanged for an interest in IAI Global
Securities if (1) such exchange occurs in connection with a transfer of the
securities in compliance with an exemption under the Securities Act and (2) the
transferor of the Regulation S Global Security or Rule 144A Global Security, as
applicable, first delivers to the trustee a written certificate (substantially
in the form of Exhibit C to this Indenture) to the effect that (A) the
Regulation S Global Security or Rule 144A Global Security, as applicable, is
being transferred (a) to an "accredited investor" within the meaning of
501(a)(1),(2),(3) or (7) under the Securities Act that is an institutional
investor acquiring the securities for its own account or for the account of such
an institutional accredited investor, in each case in a minimum principal amount
of the securities of $250,000, for investment purposes and not with a view to or
for offer or sale in connection with any distribution in violation of the
Securities Act and (B) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Security or an IAI Global
Security may be transferred to a Person who takes delivery in the form of an
interest in a Regulation S Global Security, 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 or 2 to this Appendix, as applicable) 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 Securities, the IAI Global Securities, the
Temporary Regulation S Global Securities and the Permanent Regulation S Global
Securities are collectively referred to herein as "Global Securities". The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to
a Global Security deposited with or on behalf of the Depository.
The Issuers shall execute and the Trustee shall, in accordance with
this Section 2.1(b) and Section 2.2, authenticate and deliver initially one or
more Global Securities in respect of each series of Securities that (a) shall be
registered in the name of the Depository for such Global Security or Global
Securities or the nominee of such
6
Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Trustee as custodian
for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Issuers, the Trustee and any
agent of the Issuers or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security 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 Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) DEFINITIVE SECURITIES. Except as provided in Section 2.3 or
2.4, owners of beneficial interests in Global Securities shall not be entitled
to receive physical delivery of Definitive Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver: (1) on the
Issue Date, an aggregate principal amount of $250 million of Senior Floating
Rate Notes due 2012 and an aggregate principal amount of $400 million of 7-1/8%
Senior Subordinated Notes due 2014, (2) any Additional Securities 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 (3) Exchange
Securities for issue only in a Registered Exchange Offer pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Securities
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 Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and, in the case of any issuance of Additional Securities
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 SECURITIES. When Definitive
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized
denominations,
7
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 Securities 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 Securities 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 Securities 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 Securities are being transferred to
the Issuers, a certification to that effect; or
(C) if such Definitive Securities 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 Security) 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).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security, an IAI
Global Security or a Permanent Regulation S Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, 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 Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A, (B) being
transferred to an IAI or (C) being transferred after expiration of the
Distribution Compliance Period by a Person who initially purchased
such Security in reliance on Regulation S to a buyer who elects to
hold its interest in such Security in
8
the form of a beneficial interest in the Permanent Regulation S Global
Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books
and records with respect to such Rule 144A Global Security (in the
case of a transfer pursuant to clause (b)(i)(A)), IAI Global Security
(in the case of a transfer pursuant to clause (b)(1)(B)) or Permanent
Regulation S Global Security (in the case of a transfer pursuant to
clause (b)(i)(C)) to reflect an increase in the aggregate principal
amount of the Securities represented by the Rule 144A Global Security,
IAI Global Security or Permanent Regulation S Global Security, as
applicable, such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security, IAI Global Security or Permanent Regulation S Global Security, as
applicable, to be increased by the aggregate principal amount of the Definitive
Security 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 Security, IAI Global Security or Permanent Regulation S Global
Security, as applicable, equal to the principal amount of the Definitive
Security so canceled. If no Rule 144A Global Securities, IAI Global Securities
or Permanent Regulation S Global Securities, 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 Security, IAI Global Security or Permanent
Regulation S Global Security, as applicable, in the appropriate principal
amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with this Indenture (including applicable restrictions
on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in
accordance with the Depository's procedures containing information
regarding the participant account of the Depository to be credited
with a beneficial interest in the Global Security. The Registrar
shall, in accordance with such instructions instruct the Depository to
credit to the account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the account of
the Person making the transfer the beneficial interest in the Global
Security being transferred.
9
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global
Security 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
Security 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), a Global
Security may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such
successor Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix, prior
to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities 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 Securities 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
SECURITIES. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred in accordance with the Applicable Procedures and only (1) to the
Issuers, (2) so long as such security 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 whom 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 Security), (4) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities Act,
(5) to an IAI purchasing for its own account, or for the account of such an IAI,
in a minimum principal amount of Securities of $250,000 or (6) 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 Security shall be transferable in
accordance with applicable law and the other terms of this Indenture.
(e) LEGEND.
10
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS [IN THE CASE OF
RULE 144A NOTES: TWO YEARS] [IN THE CASE OF REGULATION S NOTES:
40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH AN ISSUER OR ANY AFFILIATE OF THE
ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO AN ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM 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, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE
11
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER 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), (E)
OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Security 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
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a Definitive Security that does not
bear the legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security, 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 Security).
(iii) After a transfer of any Initial Securities pursuant to
and during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities, all requirements
pertaining to legends on such Initial Security will cease to apply,
the requirements requiring any such Initial Security issued to certain
Holders be issued in global form will cease to apply, and a
certificated Initial Security or an Initial Security in global form,
in each case without restrictive transfer legends, will be available
to the transferee of the Holder of such Initial Securities upon
exchange of such transferring Holder's certificated Initial Security
or directions to transfer such Holder's interest in the Global
Security, as applicable.
12
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders
be issued in global form will still apply with respect to Holders of
such Initial Securities that do not exchange their Initial Securities,
and Exchange Securities 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 Securities in
such Registered Exchange Offer.
(v) Upon a sale or transfer after the expiration of the
Distribution Compliance Period of any Initial Security acquired
pursuant to Regulation S, all requirements that such Initial Security
bear the Restricted Securities Legend shall cease to apply and the
requirements requiring any such Initial Security be issued in global
form shall continue to apply.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed, purchased
or canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the Securities
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 Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository)
of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures
of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
13
(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 Security (including any
transfers between or among Depository participants, members or
beneficial owners in any Global Security) 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 SECURITIES.
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Issuers that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depository or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor depository 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
Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository 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 Security, an
equal aggregate principal amount of Definitive Securities of authorized
denominations. Any portion of a Global Security 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 Depository shall direct. Any Definitive Security delivered in
exchange for an interest in the Global Security 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 Security 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 this Indenture or the Securities.
14
(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 Securities in definitive, fully
registered form without interest coupons. In the event that such Definitive
Securities are not issued, the Issuers expressly acknowledge, with respect to
the right of any Holder to pursue a remedy pursuant to Article 6 of this
Indenture, the right of any beneficial owner of Securities to pursue such remedy
with respect to the portion of the Global Security that represents such
beneficial owner's Securities as if such Definitive Securities had been issued.
EXHIBIT 1
to
RULE 144A/REGULATION S/IAI APPENDIX
[FORM OF FACE OF INITIAL SENIOR NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 SECURITY 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 SECURITY 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 SECURITY ONLY] UNTIL 40 DAYS AFTER THE LATER
OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES
WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN 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 Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF
OF ANY INVESTOR
2
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS] [IN THE CASE OF
REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH AN ISSUER OR ANY AFFILIATE OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO AN
ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM 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, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN
A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
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), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN
INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
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
3
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 SECURITY MAY BE SOLD, PLEDGED OR 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 SECURITIES 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 WHOM 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, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) 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), (E) OR (F) 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 (F) 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 SECURITY WILL NOTIFY ANY PURCHASER OF THIS
SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING
TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON
WHO IS
4
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 THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH AN EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE
REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE
(IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S
GLOBAL SECURITY IS BEING TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH IS ATTACHED AS EXHIBIT C TO THE INDENTURE AND CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI GLOBAL
SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN
INTEREST IN THE REGULATION S GLOBAL SECURITY, 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 Securities 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.
5
No. $
------- ---------
Senior Floating Rate Notes due 2012
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 on October 15, 2012.
Interest Payment Dates: January 15, April 15, July 15 and October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
BOISE CASCADE, L.L.C.,
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
BOISE CASCADE FINANCE
CORPORATION,
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
6
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of
the Senior Notes referred to in the Indenture.
by
---------------------------------
Authorized Signatory
7
[FORM OF REVERSE SIDE OF INITIAL SENIOR NOTE]
Senior Floating Rate Note due 2012
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 Senior Note
at a rate per annum, reset quarterly, equal to LIBOR plus 2.875%, as determined
by the Calculation Agent, which shall initially be the Trustee. The amount of
interest for each day that the Senior Notes are outstanding (the "Daily Interest
Amount") will be calculated by dividing the interest rate in effect for such day
by 360 and multiplying the result by the principal amount of the Senior Notes.
The amount of interest to be paid on the Senior Notes for each Interest Period
will be calculated by adding the Daily Interest Amounts for each day in the
Interest Period. All percentages resulting from any of the above calculations
will be rounded, if necessary, to the nearest one hundred thousandth of a
percentage point, with five one-millionths of a percentage point being rounded
upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655))
and all dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent being rounded upwards).
The Calculation Agent will, upon the request of any Holder of Senior
Notes, provide the interest rate then in effect with respect to the Senior
Notes. All calculations made by the Calculation Agent in the absence of manifest
error will be conclusive for all purposes and binding on the Issuers, the Note
Guarantors and the Holders of the Senior Notes.
The Issuers will pay interest quarterly in arrears on January 15,
April 15, July 15 and October 15 of each year, commencing January 15, 2005.
Interest on the Senior Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from October 29, 2004.
The Issuers will pay interest on overdue principal at the rate borne by this
Senior Note plus 1.0% per annum, and will pay interest on overdue installments
of interest at the same rate to the extent lawful. In addition, if a
Registration Default (as defined in the Registration Rights Agreement in respect
of the Senior Notes) occurs, additional interest will accrue on this Senior Note
at a rate of 0.50% per annum (increasing by an additional 0.50% 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 Senior 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.
8
2. METHOD OF PAYMENT
The Issuers will pay interest on the Senior Notes (except defaulted
interest) to the Persons who are registered holders of Senior Notes at the close
of business on the January 1, April 1, July 1 or October 1 next preceding the
interest payment date even if Senior Notes are canceled after the record date
and on or before the interest payment date. Holders must surrender Senior 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
Senior Notes represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by the Depository. The Issuers will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on a certificated Security 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 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 Senior Notes under an Indenture dated as of
October 29, 2004 ("Indenture"), among the Issuers, the Note Guarantors and the
Trustee. The terms of the Senior 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 "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Senior Notes are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Senior 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 Senior Notes pursuant to Section 2.13 of the
Indenture. The Initial Senior Notes issued on the Issue Date, any Additional
Senior Notes and all Senior 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 Holdings, Timber Holdings,
the Issuers and the other Restricted Subsidiaries of Boise Holdings and Timber
Holdings to incur additional indebtedness; pay dividends or
9
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
The Issuers shall be entitled at their option at any time and from
time to time to redeem all or a portion of the Senior 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 October 15 of the
years set forth below:
[Download Table]
Redemption
Period Price
------ ----------
2004 103.000%
2005 102.000%
2006 101.000%
2007 and thereafter 100.000%
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 Senior Notes to be redeemed
at his registered address. Senior Notes in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Senior 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 Senior Notes (or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Senior Notes will have the
right to cause the Issuers to repurchase all or any part of the Senior Notes of
such Holder at a repurchase price equal to 101% of the principal amount of the
Senior Notes to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
10
8. GUARANTY
The payment by the Issuers of the principal of, and premium and
interest on, the Senior Notes is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Note Guarantors to the extent set forth
in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Senior Notes are in registered form without coupons in
denominations of $2,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Senior 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 Senior Notes selected for redemption (except, in the case of a
Senior Note to be redeemed in part, the portion of the Senior Note not to be
redeemed) or any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed or 15 days before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Senior 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.
12. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Senior Notes may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Senior
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 Senior Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder of Senior Notes, the Issuers, the Note
Guarantors and the Trustee shall be entitled to amend the Indenture with respect
to the Senior Notes or the Senior Notes to cure any ambiguity, omission, defect
or inconsistency, or to comply with Article 5 of the Indenture, or to provide
for uncertificated Securities in addition to or in place of certificated
Securities, or to add guarantees with respect to the Senior Notes, including
Note Guaranties, or to secure the Senior Notes, or to add additional covenants
or surrender rights and powers conferred on the Issuers or the Note Guarantors,
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 Senior Notes, or to make
11
amendments to provisions of the Indenture relating to the form, authentication,
transfer and legending of the Senior Notes.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Senior Notes; (b) default in payment of principal
on the Senior Notes at maturity, upon redemption pursuant to paragraph 5 of the
Senior Notes, upon acceleration or otherwise, or failure by the Issuers to
purchase Senior Notes when required; (c) failure by the Issuers or any Note
Guarantor to comply with other agreements in the Indenture or the Senior 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 the Issuers if the amount accelerated (or so unpaid) exceeds $25
million; (e) certain events of bankruptcy or insolvency with respect to the
Issuers, Boise Holdings, Timber Holdings and the Significant Subsidiaries; (f)
certain judgments or decrees for the payment of money in excess of $25 million;
and (g) certain defaults with respect to Note Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Senior Notes may declare all the Senior Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Senior Notes being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Senior Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Senior Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Senior Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders 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 Senior 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
or the Trustee shall not have any liability for any obligations of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
12
16. AUTHENTICATION
This Security 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 Security.
17. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder 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 Senior Notes and have directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No representation
is made as to the accuracy of such numbers either as printed on the Senior 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 Senior Note, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement in respect of the
Senior 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 SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Issuers will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
1111 West Jefferson Street, Boise, Idaho 83728, (fax: (208) 384-7189);
Attention: Thomas E. Carlile, Chief Financial Officer.
13
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security 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 Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Issuers or any Affiliate of the Issuers, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
E to the Issuers; or
(1) E pursuant to an effective registration statement under the
Securities Act of 1933; or
(2) E 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 whom 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
14
(3) E 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) E pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933; or
(5) E to an institutional "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities 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 Securities, 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.
15
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security 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, 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
16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
[Enlarge/Download Table]
Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Date of Principal amount of this Principal amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
17
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.06 or 4.09 of the Indenture, check the box: E
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $[-]
Dated: Your Signature:
----------------- ---------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT 2
to
RULE 144A/REGULATION S/IAI APPENDIX
[FORM OF FACE OF INITIAL SENIOR SUBORDINATED NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 SECURITY 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 SECURITY 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 SECURITY ONLY] UNTIL 40 DAYS AFTER THE LATER
OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES
WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN 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 Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF
OF ANY INVESTOR
2
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS] [IN THE CASE OF
REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH AN ISSUER OR ANY AFFILIATE OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO AN
ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM 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, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN
A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
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), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN
INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
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
3
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 SECURITY MAY BE SOLD, PLEDGED OR 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 SECURITIES 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 WHOM 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, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) 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), (E) OR (F) 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 (F) 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 SECURITY WILL NOTIFY ANY PURCHASER OF THIS
SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING
TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON
WHO IS
4
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 THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH AN EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE
REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE
(IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S
GLOBAL SECURITY IS BEING TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH IS ATTACHED AS EXHIBIT C TO THE INDENTURE AND CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI GLOBAL
SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN
INTEREST IN THE REGULATION S GLOBAL SECURITY, 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 Securities 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.
5
No. $
------- ---------
7-1/8% Senior Subordinated Notes due 2014
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 on October 15, 2014.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
BOISE CASCADE, L.L.C.,
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
BOISE CASCADE FINANCE
CORPORATION,
by
------------------------------------
Name:
Title:
by
------------------------------------
Name:
Title:
6
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Senior
Subordinated Notes referred to in the
Indenture.
by
-----------------------------------------------
Authorized Signatory
7
[FORM OF REVERSE SIDE OF INITIAL SENIOR SUBORDINATED NOTE]
7-1/8% Senior Subordinated Note due 2014
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 Senior
Subordinated Note at the rate per annum shown above; PROVIDED, HOWEVER, that if
a Registration Default (as defined in the Registration Rights Agreement in
respect of the Senior Subordinated Notes) occurs, additional interest will
accrue on this Senior Subordinated Note at a rate of 0.50% per annum (increasing
by an additional 0.50% 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 Issuers will pay interest
semiannually in arrears on April 15 and October 15 of each year, commencing
April 15, 2005. Interest on the Senior Subordinated Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from October 29, 2004. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Issuers will pay interest on overdue principal
at the rate borne by this Senior Subordinated Note plus 1.0% per annum, and will
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. METHOD OF PAYMENT
The Issuers will pay interest on the Senior Subordinated Notes (except
defaulted interest) to the Persons who are registered holders of Senior
Subordinated Notes at the close of business on the April 1 or October 1 next
preceding the interest payment date even if Senior Subordinated Notes are
canceled after the record date and on or before the interest payment date.
Holders must surrender Senior Subordinated 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 Senior Subordinated Notes
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by the Depository. The Issuers will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; PROVIDED, HOWEVER, that
payments on a certificated Security 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).
8
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 Senior Subordinated Notes under an Indenture
dated as of October 29, 2004 ("Indenture"), among the Issuers, the Note
Guarantors and the Trustee. The terms of the Senior Subordinated 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
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Senior Subordinated Notes are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Senior Subordinated 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 Senior Subordinated Notes pursuant to
Section 2.13 of the Indenture. The Initial Senior Subordinated Notes issued on
the Issue Date, any Additional Senior Subordinated Notes and all Senior
Subordinated 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 Holdings, Timber Holdings, the Issuers
and the other Restricted Subsidiaries of Boise Holdings and Timber Holdings to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; engage in transactions with
affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of their assets and the assets of their subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Issuers shall not be entitled to redeem
the Senior Subordinated Notes.
On and after October 15, 2009, the Issuers shall be entitled at their
option (subject to their compliance with Section 4.04 of the Indenture) to
redeem all or a portion of the Senior Subordinated 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 October 15 of the
years set forth below:
9
[Download Table]
Redemption
Period Price
------ --------------
2009 103.563%
2010 102.375%
2011 101.188%
2012 and thereafter 100.000%
In addition, prior to October 15, 2007, the Issuers shall be entitled
at their option (subject to their compliance with Section 4.04 of the Indenture)
on one or more occasions to redeem Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) in an aggregate principal amount
(together with the principal amount of Senior Subordinated Notes redeemed as
described in the following paragraph) not to exceed 40% of the aggregate
principal amount of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 107.125%, 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 60% of such
aggregate principal amount of Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) remains outstanding immediately
after the occurrence of each such redemption (other than Senior Subordinated
Notes held, directly or indirectly, by the Issuers or their Affiliates); and (2)
each such redemption occurs within 90 days after the date of the related Equity
Offering.
In addition, prior to October 15, 2007, the Issuers shall be entitled,
at their option (subject to their compliance with Section 4.04 of the Indenture)
on one or more occasions to redeem Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) in an aggregate principal amount
(together with the principal amount of Senior Subordinated Notes redeemed as
described in the preceding paragraph) not to exceed 40% of the aggregate
principal amount of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 107.125%, plus accrued and
unpaid interest to the redemption date, with up to 50% of Timberlands Proceeds
(as defined in the Indenture) received after the Issue Date (taken together with
all other Timberlands Proceeds received after the Issue Date) in excess of
$1,650.0 million in the aggregate, less, without duplication, the amount of any
such Timberlands Proceeds otherwise applied pursuant to Section 4.04 or 4.06 of
the Indenture as provided in the Indenture; PROVIDED, HOWEVER, that (1) at least
60% of such aggregate principal amount of Senior Subordinated Notes (which
includes Additional Senior Subordinated Notes, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Senior
Subordinated Notes held, directly or indirectly, by the Issuers or their
Affiliates); and (2) each such redemption occurs within 90 days after the date
of the receipt of such Timberlands Proceeds.
Prior to October 15, 2009, the Issuers shall be entitled (subject to
their compliance with Section 4.04 of the Indenture) at their option to redeem
all or a portion of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes,
10
if any) at a redemption price equal to the sum of 100% of the principal amount
of the Senior Subordinated Notes (which includes Additional Senior Subordinated
Notes, if any) plus the applicable Make-Whole Amount (as defined in the
Indenture) as of the redemption date, if any, and accrued and unpaid interest to
the redemption date (subject to the right of Holders on the relevant record date
to receive interest due on the relevant interest payment date). The Issuers
shall cause notice of such redemption to be mailed by first-class mail to each
Holder's registered address, not less than 30 nor more than 60 days prior to the
redemption date.
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 Senior Subordinated Notes
to be redeemed at his registered address. Senior Subordinated Notes in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Senior Subordinated 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 Senior
Subordinated Notes (or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Senior Subordinated Notes will
have the right to cause the Issuers to repurchase all or any part of the Senior
Subordinated Notes of such Holder at a repurchase price equal to 101% of the
principal amount of the Senior Subordinated Notes to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record on
the relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. GUARANTY
The payment by the Issuers of the principal of, and premium and
interest on, the Senior Subordinated Notes is fully and unconditionally
guaranteed on a joint and several senior subordinated basis by each of the Note
Guarantors to the extent set forth in the Indenture.
9. SUBORDINATION
The Senior Subordinated Notes are subordinated to Senior Indebtedness
of the Issuers and the Note Guarantors on the terms and subject to the
conditions set forth in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness must be paid before the Senior Subordinated Notes may be
paid. Each Securityholder by accepting a Senior Subordinated Note agrees to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
11
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Senior Subordinated Notes are in registered form without coupons
in denominations of $2,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Senior Subordinated 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 Senior Subordinated Notes selected for
redemption (except, in the case of a Senior Subordinated Note to be redeemed in
part, the portion of the Senior Subordinated Note not to be redeemed) or any
Senior Subordinated Notes for a period of 15 days before a selection of Senior
Subordinated Notes to be redeemed or 15 days before an interest payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Senior Subordinated Note may be treated
as the owner of it for all purposes.
12. 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.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Issuers at any time shall be
entitled to terminate some or all of their obligations under the Senior
Subordinated Notes and the Indenture if the Issuers deposit with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Senior Subordinated Notes to redemption or maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Senior Subordinated Notes may be amended with the written
consent of the Holders of at least a majority in principal amount outstanding of
the Senior Subordinated 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 Senior Subordinated Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any Holder
of Senior Subordinated Notes, the Issuers, the Note Guarantors and the Trustee
shall be entitled to amend the Indenture with respect to the Senior Subordinated
Notes or the Senior Subordinated Notes to cure any ambiguity, omission, defect
or inconsistency, or to comply with Article 5 of the Indenture, or to provide
for uncertificated Securities in addition to or in place of certificated
Securities, or to add
12
guarantees with respect to the Senior Subordinated Notes, including Note
Guaranties, or to secure the Senior Subordinated Notes, or to add additional
covenants or surrender rights and powers conferred on the Issuers or the Note
Guarantors, 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 Senior Subordinated Notes, or to
make amendments to provisions of the Indenture relating to the form,
authentication, transfer and legending of the Senior Subordinated Notes.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Senior Subordinated Notes; (b) default in payment
of principal on the Senior Subordinated Notes at maturity, upon redemption
pursuant to paragraph 5 of the Senior Subordinated Notes, upon acceleration or
otherwise, or failure by the Issuers to purchase Senior Subordinated Notes when
required; (c) failure by the Issuers or any Note Guarantor to comply with other
agreements in the Indenture or the Senior Subordinated 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 the Issuers if the amount accelerated (or so unpaid) exceeds $25
million; (e) certain events of bankruptcy or insolvency with respect to the
Issuers, Boise Holdings, Timber Holdings and the Significant Subsidiaries; (f)
certain judgments or decrees for the payment of money in excess of $25 million;
and (g) certain defaults with respect to Note Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Senior Subordinated Notes may declare all the Senior
Subordinated Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Senior
Subordinated Notes being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Senior
Subordinated Notes except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture or the Senior Subordinated Notes unless it receives
indemnity or security satisfactory to it. Subject to certain limitations,
Holders of a majority in principal amount of the Senior Subordinated Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders 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.
16. 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 Senior Subordinated 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.
13
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Issuers
or the Trustee shall not have any liability for any obligations of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
18. AUTHENTICATION
This Security 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 Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder 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).
20. 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 Senior Subordinated Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
21. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
Each Holder of a Senior Subordinated Note, by acceptance hereof,
acknowledges and agrees to the provisions of the Registration Rights Agreement
in respect of the Senior Subordinated Notes, including the obligations of the
Holders with respect to a registration and the indemnification of the Issuers to
the extent provided therein.
22. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Issuers will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: 1111 West
Jefferson Street, Boise,
14
Idaho 83728, (fax: (208) 384-7189); Attention: Thomas E. Carlile, Chief
Financial Officer.
15
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security 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 Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Issuers or any Affiliate of the Issuers, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
E to the Issuers; or
(1) E pursuant to an effective registration statement under the
Securities Act of 1933; or
(2) E 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 whom 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
16
(3) E 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) E pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933; or
(5) E to an institutional "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities 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 Securities, 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.
17
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security 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, 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
18
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
[Enlarge/Download Table]
Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Date of Principal amount of this Principal amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
19
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.06 or 4.09 of the Indenture, check the box: E
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $[-]
Dated: Your Signature:
----------------- ---------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF SENIOR EXCHANGE NOTE]*
----------
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
2
No. $
------------- -----------
Senior Floating Rate Notes due 2012
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 on October 15, 2012.
Interest Payment Dates: January 15, April 15, July 15 and October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
BOISE CASCADE, L.L.C.,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
BOISE CASCADE FINANCE
CORPORATION,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
3
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one
of the Senior Notes referred to in the Indenture.
by
---------------------------------------------
Authorized Signatory
4
[FORM OF REVERSE SIDE OF SENIOR EXCHANGE NOTE]
Senior Floating Rate Note due 2012
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 Senior Note
at a rate per annum, reset quarterly, equal to LIBOR plus 2.875%, as determined
by the Calculation Agent, which shall initially be the Trustee. The amount of
interest for each day that the Senior Notes are outstanding (the "Daily Interest
Amount") will be calculated by dividing the interest rate in effect for such day
by 360 and multiplying the result by the principal amount of the Senior Notes.
The amount of interest to be paid on the Senior Notes for each Interest Period
will be calculated by adding the Daily Interest Amounts for each day in the
Interest Period. All percentages resulting from any of the above calculations
will be rounded, if necessary, to the nearest one hundred thousandth of a
percentage point, with five one-millionths of a percentage point being rounded
upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655))
and all dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent being rounded upwards).
The Calculation Agent will, upon the request of any Holder of Senior
Notes, provide the interest rate then in effect with respect to the Senior
Notes. All calculations made by the Calculation Agent in the absence of manifest
error will be conclusive for all purposes and binding on the Issuers, the Note
Guarantors and the Holders of the Senior Notes.
The Issuers will pay interest quarterly in arrears on January 15,
April 15, July 15 and October 15 of each year, commencing January 15, 2005.
Interest on the Senior Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from October 29, 2004.
The Issuers will pay interest on overdue principal at the rate borne by this
Senior Note plus 1.0% per annum, and will pay interest on overdue installments
of interest at the same rate to the extent lawful. [IN ADDITION, IF A
REGISTRATION DEFAULT (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT IN RESPECT
OF THE SENIOR NOTES) OCCURS, ADDITIONAL INTEREST WILL ACCRUE ON THIS SENIOR NOTE
AT A RATE OF 0.50% PER ANNUM (INCREASING BY AN ADDITIONAL 0.50% 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.](1) The interest rate on the Senior Notes will in no event be higher than
the maximum rate
----------
(1) Insert if at the date of issuance of the Exchange Security any Registration
Default has occurred with respect to the related Initial Securities during the
interest period in which such date of issuance occurs.
5
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 Senior Notes (except defaulted
interest) to the Persons who are registered holders of Senior Notes at the close
of business on the January 1, April 1, July 1 or October 1 next preceding the
interest payment date even if Senior Notes are canceled after the record date
and on or before the interest payment date. Holders must surrender Senior 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
Senior Notes represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by the Depository. The Issuers will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on a certificated Security 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 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 Senior Notes under an Indenture dated as of
October 29, 2004 ("Indenture"), among the Issuers, the Note Guarantors and the
Trustee. The terms of the Senior 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 "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Senior Notes are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Senior 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 Senior Notes pursuant to Section 2.13 of the
Indenture. The Initial Senior Notes issued on the Issue Date, any Additional
Senior Notes and all Senior Exchange Notes issued in exchange therefor will be
treated as a single class for all
6
purposes under the Indenture. The Indenture contains covenants that limit the
ability of Boise Holdings, Timber Holdings, the Issuers and the other Restricted
Subsidiaries of Boise Holdings and Timber Holdings 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
The Issuers shall be entitled at their option at any time and from
time to time to redeem all or a portion of the Senior 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 October 15 of the
years set forth below:
[Download Table]
Redemption
Period Price
2004 103.000%
2005 102.000%
2006 101.000%
2007 and thereafter 100.000%
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 Senior Notes to be redeemed
at his registered address. Senior Notes in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Senior 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 Senior Notes (or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Senior Notes will have the
right to cause the Issuers to repurchase all or any part of the Senior Notes of
such Holder at a repurchase price equal to 101% of the principal amount of the
Senior Notes to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders
7
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. GUARANTY
The payment by the Issuers of the principal of, and premium and
interest on, the Senior Notes is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Note Guarantors to the extent set forth
in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Senior Notes are in registered form without coupons in
denominations of $2,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Senior 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 Senior Notes selected for redemption (except, in the case of a
Senior Note to be redeemed in part, the portion of the Senior Note not to be
redeemed) or any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed or 15 days before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Senior 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.
12. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Senior Notes may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Senior
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 Senior Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder of Senior Notes, the Issuers, the Note
Guarantors and the Trustee shall be entitled to amend the Indenture with respect
to the Senior Notes or the Senior Notes to cure any ambiguity, omission, defect
or inconsistency, or to comply with Article 5 of the Indenture, or to provide
for uncertificated Securities in addition to or in place of certificated
Securities, or to add guarantees with respect to the Senior Notes, including
Note Guaranties, or to secure the Senior Notes, or to add additional covenants
or surrender rights and powers
8
conferred on the Issuers or the Note Guarantors, 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 Senior Notes, or to make amendments to provisions of the Indenture
relating to the form, authentication, transfer and legending of the Senior
Notes.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Senior Notes; (b) default in payment of principal
on the Senior Notes at maturity, upon redemption pursuant to paragraph 5 of the
Senior Notes, upon acceleration or otherwise, or failure by the Issuers to
purchase Senior Notes when required; (c) failure by the Issuers or any Note
Guarantor to comply with other agreements in the Indenture or the Senior 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 the Issuers if the amount accelerated (or so unpaid) exceeds $25
million; (e) certain events of bankruptcy or insolvency with respect to the
Issuers, Boise Holdings, Timber Holdings and the Significant Subsidiaries; (f)
certain judgments or decrees for the payment of money in excess of $25 million;
and (g) certain defaults with respect to Note Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Senior Notes may declare all the Senior Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Senior Notes being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Senior Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Senior Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Senior Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders 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 Senior 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
or the Trustee shall not have any liability for any obligations of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations
9
or their creation. By accepting a Security, each Securityholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. AUTHENTICATION
This Security 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 Security.
17. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder 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 Senior Notes and have directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No representation
is made as to the accuracy of such numbers either as printed on the Senior 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 Senior Note, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement in respect of the
Senior Notes, including the obligations of the Holders with respect to a
registration and the indemnification of the Issuers to the extent provided
therein.](2)
20. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Issuers will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
1111 West Jefferson Street, Boise, Idaho 83728, (fax: (208) 384-7189);
Attention: Thomas E. Carlile, Chief Financial Officer.
----------
(2) Delete if this security is not being issued in exchange for an Initial
Security.
10
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security 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 Security.
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.06 or 4.09 of the Indenture, check the box: E
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $[-]
Dated: Your Signature:
----------------- ---------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF FACE OF SENIOR SUBORDINATED EXCHANGE NOTE]*
----------
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
2
No. $
--------- --------
7-1/8% Senior Subordinated Notes due 2014
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 on October 15, 2014.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
BOISE CASCADE, L.L.C.,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
BOISE CASCADE FINANCE
CORPORATION,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
3
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Senior
Subordinated Notes referred to in the Indenture.
by
-------------------------------------------------
Authorized Signatory
4
[FORM OF REVERSE SIDE OF SENIOR SUBORDINATED EXCHANGE NOTE]
7-1/8% Senior Subordinated Note due 2014
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 Senior
Subordinated Note at the rate per annum shown above[; PROVIDED, HOWEVER, THAT IF
A REGISTRATION DEFAULT (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT IN
RESPECT OF THE SENIOR SUBORDINATED NOTES) OCCURS, ADDITIONAL INTEREST WILL
ACCRUE ON THIS SENIOR SUBORDINATED NOTE AT A RATE OF 0.50% PER ANNUM (INCREASING
BY AN ADDITIONAL 0.50% 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.](1) The Issuers will pay interest
semiannually in arrears on April 15 and October 15 of each year, commencing
April 15, 2005. Interest on the Senior Subordinated Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from October 29, 2004. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Issuers will pay interest on overdue principal
at the rate borne by this Senior Subordinated Note plus 1.0% per annum, and will
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. METHOD OF PAYMENT
The Issuers will pay interest on the Senior Subordinated Notes (except
defaulted interest) to the Persons who are registered holders of Senior
Subordinated Notes at the close of business on the April 1 or October 1 next
preceding the interest payment date even if Senior Subordinated Notes are
canceled after the record date and on or before the interest payment date.
Holders must surrender Senior Subordinated 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 Senior Subordinated Notes
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by the Depository. The Issuers will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; PROVIDED, HOWEVER, that
payments on a certificated Security 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
----------
(1)Insert if at the date of issuance of the Exchange Security any Registration
Default has occurred with respect to the related Initial Securities during the
interest period in which such date of issuance occurs.
5
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 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 Senior Subordinated Notes under an Indenture
dated as of October 29, 2004 ("Indenture"), among the Issuers, the Note
Guarantors and the Trustee. The terms of the Senior Subordinated 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
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Senior Subordinated Notes are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Senior Subordinated 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 Senior Subordinated Notes pursuant to
Section 2.13 of the Indenture. The Initial Senior Subordinated Notes issued on
the Issue Date, any Additional Senior Subordinated Notes and all Senior
Subordinated 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 Holdings, Timber Holdings, the Issuers
and the other Restricted Subsidiaries of Boise Holdings and Timber Holdings to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; engage in transactions with
affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of their assets and the assets of their subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Issuers shall not be entitled to redeem
the Senior Subordinated Notes.
On and after October 15, 2009, the Issuers shall be entitled at their
option (subject to their compliance with Section 4.04 of the Indenture) to
redeem all or a portion of the Senior Subordinated 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
6
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
October 15 of the years set forth below:
[Download Table]
Redemption
Period Price
------ -----------------
2009 103.563%
2010 102.375%
2011 101.188%
2012 and thereafter 100.000%
In addition, prior to October 15, 2007, the Issuers shall be entitled
at their option (subject to their compliance with Section 4.04 of the Indenture)
on one or more occasions to redeem Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) in an aggregate principal amount
(together with the principal amount of Senior Subordinated Notes redeemed as
described in the following paragraph) not to exceed 40% of the aggregate
principal amount of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 107.125%, 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 60% of such
aggregate principal amount of Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) remains outstanding immediately
after the occurrence of each such redemption (other than Senior Subordinated
Notes held, directly or indirectly, by the Issuers or their Affiliates); and (2)
each such redemption occurs within 90 days after the date of the related Equity
Offering.
In addition, prior to October 15, 2007, the Issuers shall be entitled,
at their option (subject to their compliance with Section 4.04 of the Indenture)
on one or more occasions to redeem Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) in an aggregate principal amount
(together with the principal amount of Senior Subordinated Notes redeemed as
described in the preceding paragraph) not to exceed 40% of the aggregate
principal amount of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 107.125%, plus accrued and
unpaid interest to the redemption date, with up to 50% of Timberlands Proceeds
(as defined in the Indenture) received after the Issue Date (taken together with
all other Timberlands Proceeds received after the Issue Date) in excess of
$1,650.0 million in the aggregate, less, without duplication, the amount of any
such Timberlands Proceeds otherwise applied pursuant to Section 4.04 or 4.06 of
the Indenture as provided in the Indenture; PROVIDED, HOWEVER, that (1) at least
60% of such aggregate principal amount of Senior Subordinated Notes (which
includes Additional Senior Subordinated Notes, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Senior
Subordinated Notes held, directly or indirectly, by the Issuers or their
Affiliates); and (2) each such redemption occurs within 90 days after the date
of the receipt of such Timberlands Proceeds.
7
Prior to October 15, 2009, the Issuers shall be entitled (subject to
their compliance with Section 4.04 of the Indenture) at their option to redeem
all or a portion of the Senior Subordinated Notes (which includes Additional
Senior Subordinated Notes, if any) at a redemption price equal to the sum of
100% of the principal amount of the Senior Subordinated Notes (which includes
Additional Senior Subordinated Notes, if any) plus the applicable Make-Whole
Amount (as defined in the Indenture) as of the redemption date, if any, and
accrued and unpaid interest to the redemption date (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
interest payment date). The Issuers shall cause notice of such redemption to be
mailed by first-class mail to each Holder's registered address, not less than 30
nor more than 60 days prior to the redemption date.
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 Senior Subordinated Notes
to be redeemed at his registered address. Senior Subordinated Notes in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Senior Subordinated 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 Senior
Subordinated Notes (or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Senior Subordinated Notes will
have the right to cause the Issuers to repurchase all or any part of the Senior
Subordinated Notes of such Holder at a repurchase price equal to 101% of the
principal amount of the Senior Subordinated Notes to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record on
the relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. GUARANTY
The payment by the Issuers of the principal of, and premium and
interest on, the Senior Subordinated Notes is fully and unconditionally
guaranteed on a joint and several senior subordinated basis by each of the Note
Guarantors to the extent set forth in the Indenture.
9. SUBORDINATION
The Senior Subordinated Notes are subordinated to Senior Indebtedness
of the Issuers and the Note Guarantors on the terms and subject to the
conditions set forth in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness must be paid before the Senior Subordinated Notes may be
paid. Each Securityholder by accepting a Senior Subordinated Note agrees to the
subordination provisions contained in the
8
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Senior Subordinated Notes are in registered form without coupons
in denominations of $2,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Senior Subordinated 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 Senior Subordinated Notes selected for
redemption (except, in the case of a Senior Subordinated Note to be redeemed in
part, the portion of the Senior Subordinated Note not to be redeemed) or any
Senior Subordinated Notes for a period of 15 days before a selection of Senior
Subordinated Notes to be redeemed or 15 days before an interest payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Senior Subordinated Note may be treated
as the owner of it for all purposes.
12. 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.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Issuers at any time shall be
entitled to terminate some or all of their obligations under the Senior
Subordinated Notes and the Indenture if the Issuers deposit with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Senior Subordinated Notes to redemption or maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Senior Subordinated Notes may be amended with the written
consent of the Holders of at least a majority in principal amount outstanding of
the Senior Subordinated 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 Senior Subordinated Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any Holder
of Senior Subordinated Notes, the Issuers, the Note Guarantors and the Trustee
shall be entitled to amend the Indenture with respect to the Senior
9
Subordinated Notes or the Senior Subordinated Notes to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Senior
Subordinated Notes, including Note Guaranties, or to secure the Senior
Subordinated Notes, or to add additional covenants or surrender rights and
powers conferred on the Issuers or the Note Guarantors, 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 Senior Subordinated Notes, or to make amendments to provisions of the
Indenture relating to the form, authentication, transfer and legending of the
Senior Subordinated Notes.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Senior Subordinated Notes; (b) default in payment
of principal on the Senior Subordinated Notes at maturity, upon redemption
pursuant to paragraph 5 of the Senior Subordinated Notes, upon acceleration or
otherwise, or failure by the Issuers to purchase Senior Subordinated Notes when
required; (c) failure by the Issuers or any Note Guarantor to comply with other
agreements in the Indenture or the Senior Subordinated 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 the Issuers if the amount accelerated (or so unpaid) exceeds $25
million; (e) certain events of bankruptcy or insolvency with respect to the
Issuers, Boise Holdings, Timber Holdings and the Significant Subsidiaries; (f)
certain judgments or decrees for the payment of money in excess of $25 million;
and (g) certain defaults with respect to Note Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Senior Subordinated Notes may declare all the Senior
Subordinated Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Senior
Subordinated Notes being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Senior
Subordinated Notes except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture or the Senior Subordinated Notes unless it receives
indemnity or security satisfactory to it. Subject to certain limitations,
Holders of a majority in principal amount of the Senior Subordinated Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders 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.
16. 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 Senior Subordinated Notes and may otherwise deal with and collect
obligations owed to
10
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.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Issuers
or the Trustee shall not have any liability for any obligations of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
18. AUTHENTICATION
This Security 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 Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder 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).
20. 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 Senior Subordinated Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
[21. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
EACH HOLDER OF A SENIOR SUBORDINATED NOTE, BY ACCEPTANCE HEREOF,
ACKNOWLEDGES AND AGREES TO THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT
IN RESPECT OF THE SENIOR SUBORDINATED NOTES, INCLUDING THE OBLIGATIONS OF THE
HOLDERS WITH RESPECT TO A REGISTRATION AND THE INDEMNIFICATION OF THE ISSUERS TO
THE EXTENT PROVIDED THEREIN.](2)
----------
(2) Delete if this security is not being issued in exchange for an Initial
Security.
11
22. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Issuers will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: 1111 West
Jefferson Street, Boise, Idaho 83728, (fax: (208) 384-7189); Attention:
Thomas E. Carlile, Chief Financial Officer.
12
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security 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 Security.
13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.06 or 4.09 of the Indenture, check the box: E
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $[-]
Dated: Your Signature:
----------------- ---------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT C
Form of
Transferee Letter of Representation
[ ]
In care of
[ ]
[ ]
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the [ ]% [ ] due 20[ ] (the "Securities") of Boise Cascade, L.L.C. and
Boise Cascade Finance Corporation (the "Issuers").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:________________________
Address:______________________
Taxpayer ID Number:____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to
2
the date that is two years after the later of the date of original issue and the
last date on which the Issuers were or any affiliate of the Issuers was the
owner of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (i) to the Issuers, (ii) in the United States to a
person whom the seller reasonably believes is a qualified institutional buyer in
a transaction meeting the requirements of Rule 144A, (iii) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is an institutional accredited investor purchasing
for its own account or for the account of an institutional accredited investor,
in each case in a minimum principal amount of the Securities of $250,000, (iv)
outside the United States in a transaction complying with the provisions of Rule
904 under the Securities Act, (v) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to
an effective registration statement under the Securities Act, in each of cases
(i) through (vi), subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (iii) above prior to
the Resale Restriction Termination Date, the transferor shall deliver a letter
from the transferee substantially in the form of this letter to the Issuers and
the Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Issuers and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (iii), (iv) or (v) above
to require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Issuers and the Trustee.
TRANSFEREE:_________________,
by:__________________
Dates Referenced Herein and Documents Incorporated by Reference
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