Exhibit 10.1

 

 

 

 

 

BOISE CASCADE HOLDINGS, L.L.C.

A Delaware Limited Liability Company

 

 

FOURTH AMENDED AND RESTATED OPERATING

AGREEMENT Dated as of February 26, 2013

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS OPERATING AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR UNDER ANY OTHER
APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE OFFERED, SOLD, ASSIGNED,
PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER
RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

 

 

 

 

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Table of Contents

 

ARTICLE I—ORGANIZATION

     2   

1.1 Formation

     2   

1.2 Name

     2   

1.3 Registered Office; Registered Agent; Principal Office; Other Offices

     2   

1.4 Purposes

     2   

1.5 Foreign Qualification

     2   

1.6 Term

     2   

1.7 No State-Law Partnership

     3   

1.8 Company Property

     3   

1.9 Limited Liability Company Agreement

     3   

ARTICLE II—UNIT INTERESTS; CAPITAL CONTRIBUTIONS

     3   

2.1 Unit Interests

     3   

2.2 Initial Units Issued as of the Effective Time of the Merger

     4   

2.3 Additional Units Issued after Effective Time of the Merger

     4   

ARTICLE III—CAPITAL ACCOUNTS

     5   

3.1 Establishment and Determination of Capital Accounts

     5   

3.2 Computation of Amounts

     6   

3.3 Negative Capital Accounts

     6   

3.4 Company Capital

     6   

3.5 No Withdrawal

     7   

3.6 Loans From Holders

     7   

3.7 Adjustments to Book Value

     7   

ARTICLE IV—DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

     7   

4.1 Generally

     7   

4.2 Distributions

     7   

4.3 Allocation of Profits and Losses

     9   

4.4 Special Allocations

     9   

4.5 Tax Allocations; Code Section 704(c)

     10   

 

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4.6 Amounts Withheld

     11   

ARTICLE V—MANAGEMENT

     11   

5.1 Management by the Directors

     11   

5.2 Actions by the Directors; Committees; Delegation of Authority and Duties

     12   

5.3 Number and Term of Office

     13   

5.4 Vacancies; Removal; Resignation

     13   

5.5 Board Meetings

     13   

5.6 Approval or Ratification of Acts or Contracts by Members

     14   

5.7 Action by Written Consent or Telephone Conference

     14   

5.8 Compensation

     15   

5.9 Officers

     15   

5.10 Reliance by Third Parties

     16   

ARTICLE VI—MEETINGS OF MEMBERS

     16   

6.1 Lack of Authority

     16   

6.2 Member Meetings

     16   

6.3 Proxies

     17   

6.4 Conduct of Meetings

     18   

6.5 Action by Written Consent or Telephone Conference

     18   

ARTICLE VII—LIMITED LIABILITY, EXCULPATION, AND INDEMNIFICATION

     19   

7.1 Limited Liability of Members

     19   

7.2 Exculpation of Covered Persons

     19   

7.3 Right to Indemnification for Covered Persons

     20   

7.4 Contract with Company

     20   

7.5 Advance Payment

     20   

7.6 Indemnification of Employees and Agents

     21   

7.7 Appearance as a Witness

     21   

7.8 Nonexclusivity of Rights

     21   

7.9 Insurance

     21   

7.10 Savings Clause

     21   

7.11 Investment Opportunities; Conflicts of Interest

     22   

 

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ARTICLE VIII—TAX MATTERS

     22   

8.1 Tax Returns

     22   

8.2 Tax Matters Member

     22   

8.3 Indemnification and Reimbursement for Payments on Behalf of a Holder

     23   

ARTICLE IX—BOOKS AND RECORDS, REPORTS, AND CONFIDENTIALITY

     24   

9.1 Maintenance of Books

     24   

9.2 Reports

     24   

9.3 Company Funds

     24   

9.4 Confidentiality

     25   

ARTICLE X—TRANSFERS; ADMISSION OF MEMBERS

     25   

10.1 Transfers

     25   

10.2 Incorporation of the Company

     26   

10.3 Void Assignment

     26   

10.4 Effect of Valid Assignment

     27   

10.5 Admission of Substituted Member

     28   

10.6 Admission of Additional Members

     28   

10.7 Effect of Incapacity

     29   

ARTICLE XI—DISSOLUTION, LIQUIDATION AND TERMINATION

     29   

11.1 Dissolution

     29   

11.2 Liquidation and Termination

     29   

11.3 Cancellation of Certificate

     30   

11.4 Reasonable Time for Winding Up

     30   

11.5 Return of Capital

     30   

ARTICLE XII—GENERAL PROVISIONS

     31   

12.1 Power of Attorney

     31   

12.2 [Reserved]

     31   

12.3 Filings

     31   

12.4 Offset

     31   

12.5 Notices

     32   

12.6 Entire Agreement

     34   

12.7 Effect of Waiver or Consent

     34   

12.8 Amendments

     34   

 

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12.9 Binding Effect

     34   

12.10 Governing Law; Severability

     34   

12.11 Further Assurances

     34   

12.12 Waiver of Certain Rights

     34   

12.13 Notice to Members of Provisions

     35   

12.14 Remedies

     35   

12.15 Severability

     35   

12.16 Descriptive Headings; Interpretations

     35   

12.17 Creditors

     35   

12.18 Delivery by Facsimile

     36   

12.19 No Public Disclosure

     36   

12.20 Survival

     36   

12.21 Counterparts

     36   

ARTICLE XIII—DEFINITIONS

     36   

13.1 Definitions of Terms Not Defined in the Text

     36   

13.2 Index of Definitions Defined in the Text

     40   

 

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FOURTH AMENDED AND

RESTATED OPERATING

AGREEMENT

OF

BOISE CASCADE HOLDINGS, L.L.C.

a Delaware Limited Liability Company

THIS FOURTH AMENDED AND RESTATED OPERATING AGREEMENT of Boise Cascade Holdings,
L.L.C. (this “Agreement”), is dated and made as of February 26, 2013.

RECITALS

WHEREAS, the Members initially entered into this Agreement on October 29, 2004
(the “Original Agreement”) with the intention that it be effective as of
September 22, 2004;

WHEREAS, on May 9, 2005, the Company was converted into a Delaware corporation
named Boise Cascade Company;

WHEREAS, acting pursuant to a Rescission Agreement, dated as of December 20,
2005, the shareholders of Boise Cascade Company (formerly the members) agreed to
rescind the conversion of the Company into Boise Cascade Company and by
appropriate filings with the Delaware Secretary of State accomplished such
rescission;

WHEREAS, the Rescission Agreement provided for reinstatement of the Original
Agreement effective as of May 9, 2005 and the Members re-executed the Original
Agreement on December 20, 2005 and amended and restated it effective as of
March 31, 2006 and then again September 6, 2012 and then further amended the
Original Agreement on February 12, 2013 (as so re-executed and as then amended
through the date hereof, the “Prior Agreement”);

WHEREAS, on February 11, 2013, the Company’s Subsidiary, Boise Cascade Company
consummated an initial public offering of its capital stock and on February 12,
2013, the Company repurchased all of its issued and outstanding Series A Common
Units and made a distribution in respect of Series B Common Units;

WHEREAS, on the date hereof, in accordance with that certain Agreement and Plan
of Merger, dated as of the date hereof, between the Company and its wholly-owned
subsidiary, BCH Merger Sub, LLC (the “Merger Agreement”) Merger Sub is being
merged with and into the Company in order to effect a recapitalization of the
Company in which all of the Series B Common Units and Series C Common Units are,
by virtue of the merger contemplated by the Merger Agreement, being exchanged
for Common Units of the Company;

WHEREAS, the Prior Agreement is, by virtue of the merger contemplated by the
Merger Agreement, being amended and restated in its entirety in the form of this
Agreement;

 

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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:

Unless otherwise defined herein, capitalized terms used in this Agreement will
have the meanings given to such terms in Section 13.1. Capitalized terms defined
in the text of this Agreement are indexed in Section 13.2.

ARTICLE I—ORGANIZATION

1.1 Formation. The Company has been organized as a Delaware limited liability
company by the filing of a Certificate of Formation (the “Certificate”) under
and pursuant to the Act.

1.2 Name. The name of the Company is “Boise Cascade Holdings, L.L.C.,” and all
Company business shall be conducted in that name or such other names that comply
with applicable law as the Board may select from time to time.

1.3 Registered Office; Registered Agent; Principal Office; Other Offices. The
Company shall maintain a registered office in the State of Delaware at, and the
name and address of the Company’s registered agent in the State of Delaware is,
The Corporation Trust Company, Corporation Trust Building, 1209 Orange Street,
Wilmington, DE 19801. The Board may, from time to time, change the Company’s
registered office and/or registered agent and shall forthwith amend the
Certificate to reflect such change(s). The principal office of the Company shall
be at such place as the Board may designate from time to time, which need not be
in the State of Delaware, and the Company shall maintain records there. The
Company may have such other offices as the Board may designate from time to
time.

1.4 Purposes. The purpose of the Company is to engage in any and all lawful
businesses and activities that limited liability companies are permitted to
carry on under the Act. The Company shall possess and may exercise all the
powers and privileges granted by the Act or by any other law or by this
Agreement, together with any powers incidental thereto, insofar as such powers
and privileges are necessary, appropriate, advisable, incidental or convenient
to the conduct, promotion or attainment of the business purposes or activities
of the Company.

1.5 Foreign Qualification. Prior to the Company’s conducting business in any
jurisdiction other than Delaware, the Board shall cause the Company to comply,
to the extent procedures are available and those matters are reasonably within
the control of the Board, with all requirements necessary to qualify the Company
as a foreign limited liability company in that jurisdiction. At the request of
the Board, each Holder shall execute, acknowledge, swear to and deliver all
certificates and other instruments conforming with this Agreement that are
necessary or appropriate to qualify, continue and terminate the Company as a
foreign limited liability company in all such jurisdictions in which the Company
may conduct business.

1.6 Term. The term of the Company commenced on the date the Certificate was
filed with the office of the Secretary of State of Delaware and shall continue
until termination and dissolution thereof as determined under Section 11.1 of
this Agreement.

 

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1.7 No State-Law Partnership. It is intended that the Company not be a
partnership (including, without limitation, a limited partnership) or joint
venture, and that no Holder or Director be a partner or joint venturer of any
other Holder or Director, for any purposes other than federal and, if
applicable, state tax purposes, and this Agreement shall not be construed to
suggest otherwise. Unless otherwise determined by the Tax Matters Member
pursuant to Section 8.2(b), the Members intend that the Company shall be treated
as a partnership for federal and, if applicable, state income tax purposes, and
each Holder and the Company shall file all tax returns and shall otherwise take
all tax and financial reporting positions in a manner consistent with such
treatment.

1.8 Company Property. Company assets shall be deemed to be owned by the Company
as an entity, and no Holder, individually or collectively, shall have any
ownership interest in such Company assets or any portion thereof. Legal title to
any or all Company assets may be held in the name of the Company or one or more
nominees, as the Board may determine. The Board hereby declares and warrants
that any Company assets for which legal title is held in the name of any nominee
shall be held in trust by such nominee for the use and benefit of the Company in
accordance with the provisions of this Agreement. All Company assets shall be
recorded as the property of the Company on its books and records, irrespective
of the name in which legal title to such Company assets is held. The Units of
each Holder shall constitute personal property.

1.9 Limited Liability Company Agreement. This Agreement is established for the
purpose of establishing the affairs of the Company and the conduct of its
business in accordance with the provisions of the Act. During the term of the
Company set forth in Section 1.6 hereof, the rights and obligations of the
Holders with respect to the Company shall be determined in accordance with the
terms and conditions of this Agreement and, except where the Act provides that
such rights and obligations specified in the Act shall apply “unless otherwise
provided in a limited liability company agreement” or words of similar effect
and such rights and obligations are set forth in this Agreement, the Act.
Notwithstanding the foregoing, Section 18-210 of the Act (entitled “Contractual
Appraisal Rights”) and Section 18-305(a) of the Act (entitled “Access to and
Confidentiality of Information; Records”) shall not apply to the Company or be
incorporated into this Agreement.

ARTICLE II—UNIT INTERESTS; CAPITAL CONTRIBUTIONS

2.1 Unit Interests.

(a) Authorized Units. Subject to the terms of this Agreement, the Company is
authorized to issue equity interests in the Company designated as Units. The
total number of Units that the Company shall have authority to issue is
29,700,000 Common Units.

(b) Interests of Unit Holders. The relative rights, powers, preferences, duties,
liabilities and obligations of Holders of the Units (including the Common Units)
shall be as set forth herein. Each Holder’s interest in the Company, including
such Holder’s interest in income, gains, losses, deductions and expenses of the
Company, shall be represented by the Units held by such Holder.

 

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(c) Voting Rights. Each Common Unit shall entitle the Member owning such Unit to
one vote on any matter to be voted on by the Members as provided in this
Agreement or required by applicable law; provided that to the extent any Holder
of Common Units is required to obtain any governmental approval, consent or
authorization prior to acquiring voting securities of the Company, such Holder
shall not be entitled to a vote in respect of such Common Units until such
necessary governmental approval consent or authorization has been obtained.

(d) Reserved.

(e) Certification of Units. The Units owned by the Members will be recorded on
the attached Schedule of Members and, initially, will not be represented by
physical certificates. The Board may in its discretion issue certificates to the
Holders representing the Units held by each Holder.

(f) Restrictive Legend. In the event that certificates representing the Units
are issued, each certificate or instrument shall be imprinted with a legend in
substantially the following form:

THE UNITS REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
                    ,                     , HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES
LAWS (“STATE ACTS”) AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR TRANSFERRED OR
OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION UNDER THE ACT OR STATE
ACTS OR AN EXEMPTION THEREFROM. THE TRANSFER OF THE UNITS REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN AN OPERATING AGREEMENT,
DATED AS OF OCTOBER 29, 2004 AND EFFECTIVE AS OF SEPTEMBER 22, 2004, AS AMENDED
AND MODIFIED FROM TIME TO TIME, GOVERNING THE ISSUER (THE “COMPANY”) AND BY AND
AMONG CERTAIN INVESTORS. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

2.2 Initial Units Issued as of the Effective Time of the Merger. As of
immediately after the effective time of the merger contemplated by the Merger
Agreement, the Members listed on the attached Schedule of Members own the number
of Common Units as set forth opposite each such Member’s name on the attached
Schedule of Members.

2.3 Additional Units Issued after Effective Time of the Merger.

(a) Issuances of Additional Units. The Board shall have the right to cause the
Company to issue or sell to Members or other Persons: (i) additional Units
(including other classes or series thereof having different rights),
(ii) obligations, evidences of indebtedness or other securities or interests
convertible or exchangeable into Units, and (iii) warrants, options or other
rights to purchase or otherwise acquire Units.

 

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(b) Reserved.

(c) Reserved

(d) Capital Contributions. In connection with any issuance of additional Units
or other interests in the Company, the acquiring Person shall in exchange for
such Units or other interests make Capital Contributions to the Company in an
amount, if any, specified by the Board.

(e) Record of Additional Issuances; Amendments. In connection with any issuance
of additional Units or other interests in the Company, the Board shall amend the
Schedule of Members as necessary to reflect such additional issuances (including
the number and class of Units and Capital Contributions of the acquiring
Person), and shall have the power to make any other amendments to this Agreement
as it deems necessary to authorize any such Units or other securities, provide
for the relative rights, powers, preferences, duties, liabilities and
obligations thereof, or otherwise reflect or provide for such additional
issuances.

(f) Counterparts. Each Member has executed a counterpart of the Prior Agreement
and this Agreement was adopted in connection with the merger contemplated by the
Merger Agreement and Section 18-209 of the Act and this Agreement as adopted in
connection with the merger contemplated by the Merger Agreement is the limited
liability company agreement of the Company for all purposes of the Act. Subject
to the restrictions in Article X, upon the acquisition of any Units or other
interests in the Company by a Person who is not a Member, such Person shall
execute and deliver a counterpart of this Agreement and, subject to compliance
with the conditions set forth in Section 10.7 or 10.8 hereof, as applicable,
such Person shall become a Member hereunder and shall be listed as a Member on
the Schedule of Members, together with such Member’s address, number and class
of Units and amount of Capital Contributions.

ARTICLE III—CAPITAL ACCOUNTS

3.1 Establishment and Determination of Capital Accounts. A capital account
(“Capital Account”) shall be established for each Holder. The Capital Account of
each Holder shall consist of its initial Capital Contribution and shall be
(a) increased by (i) any additional Capital Contributions made by such Holder
pursuant to the terms of this Agreement and (ii) such Holder’s share of items of
income and gain allocated to such Holder pursuant to Article IV, (b) decreased
by (i) such Holder’s share of items of loss, deduction and expense allocated to
such Holder pursuant to Article IV and (ii) any Distributions to such Holder of
cash or the fair market value of any other property (net of liabilities assumed
by such Holder and liabilities to which such property is subject) distributed to
such Holder and (c) adjusted as otherwise required by the Code and the
regulations thereunder, including, but not limited to, the rules of Treasury
Regulation Section 1.704-1(b)(2)(iv). Any references in this Agreement to the
Capital Account of a Holder shall be deemed to refer to such Capital Account as
the same may be increased or decreased from time to time as set forth above and
the Capital Account for each Holder as of immediately after the merger
contemplated by the Merger Agreement shall be as determined as provided in the
Merger Agreement.

 

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3.2 Computation of Amounts. For purposes of computing the amount of any item of
income, gain, loss, deduction or expense to be reflected in Capital Accounts,
the determination, recognition and classification of each such item shall be the
same as its determination, recognition and classification for federal income tax
purposes; provided that:

 

  (i) any income that is exempt from Federal income tax shall be added to such
taxable income or losses;

 

  (ii) any expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable
income or losses;

 

  (iii) if the Book Value of any Company property is adjusted pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(e) (in connection with a
distribution of such property) or (f) (in connection with a revaluation of
Capital Accounts), the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such property;

 

  (iv) if property that is reflected on the books of the Company has a Book
Value that differs from the adjusted tax basis of such property, depreciation,
amortization and gain or loss with respect to such property shall be determined
by reference to such Book Value; and

 

  (v) the computation of all items of income, gain, loss, deduction and expense
shall be made without regard to any election pursuant to Section 754 of the Code
that may be made by the Company, unless the adjustment to basis of Company
property pursuant to such election is reflected in Capital Accounts pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m).

3.3 Negative Capital Accounts. No Holder shall be required to pay to the Company
or any other Holder any deficit or negative balance that may exist from time to
time in such Holder’s Capital Account. Notwithstanding anything expressed or
implied to the contrary in this Agreement, upon liquidation, dissolution or
winding up of the Company, no Holder shall be required to make any Capital
Contribution to the Company in respect of any deficit in such Holder’s Capital
Account.

3.4 Company Capital. No Holder shall be paid interest on any Capital
Contribution to the Company or on such Holder’s Capital Account, and no Holder
shall have any right (i) to demand the return of such Holder’s Capital
Contribution or any other Distribution from the Company (whether upon
resignation, withdrawal or otherwise), except upon dissolution of the Company
pursuant to Article XI hereof, (ii) to seek or obtain a partition of any Company
assets, or (iii) to own or use any particular or individual assets of the
Company.

 

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3.5 No Withdrawal. No Holder shall be entitled to withdraw any part of such
Holder’s Capital Contribution or Capital Account or to receive any Distribution
from the Company, except as expressly provided herein.

3.6 Loans From Holders. Loans by Holders to the Company shall not be considered
Capital Contributions. If any Holder shall loan funds to the Company in excess
of the amounts required hereunder to be contributed by such Holder to the
capital of the Company, the making of such loans shall not result in any
increase in the amount of the Capital Account of such Holder. The amount of any
such loans shall be a debt of the Company to such Holder and shall be payable or
collectible in accordance with the terms and conditions upon which such loans
are made.

3.7 Adjustments to Book Value. The Company shall adjust the Book Value of its
assets to fair market value in accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(f) as of the following times: (a) at the Board’s
discretion in connection with the issuance of Units in the Company; (b) at the
Board’s discretion in connection with the Distribution by the Company to a
Holder of more than a de minimis amount of Company assets, including cash, if as
a result of such Distribution, such Holder’s interest in the Company is reduced;
and (c) the liquidation of the Company within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(g). Any such increase or decrease in Book Value of an
asset shall be allocated as a Profit or Loss to the Capital Accounts of the
Holders under Section 4.3 (determined immediately prior to the issuance of the
new Units or the distribution of assets in an ownership reduction transaction).

ARTICLE IV—DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

4.1 Generally. Subject to the provision of Section 18-607 of the Act and
Sections 4.2(a) and 4.2(e) of this Agreement, the Board shall have sole
discretion regarding the amounts, form and timing of Distributions to Holders,
in each case subject to the retention of, or payment to third parties of, such
funds as it deems necessary with respect to the reasonable business needs of the
Company, which shall include (but not by way of limitation) the payment or the
making of provision for the payment when due of Company obligations, including
the payment of any management or administrative fees and expenses or any other
obligations.

4.2 Distributions.

(a) Tax Distributions. With respect to any taxable income for any Taxable Year
beginning on or after January 1, 2013, the Board may, but shall not be obligated
to, cause the Company to distribute to each Holder with respect each Taxable
Year (within 75 days after the close of such Taxable Year, or on a quarterly or
other basis as shall be determined by the Board in its sole discretion to be
appropriate to enable each such Holder to pay estimated income tax liabilities).
The Company shall be entitled to pay amounts distributable pursuant to the prior
sentence by making payments to a tax authority on behalf of a Holder (or such
Holder’s direct or indirect partners or members), for example, in connection
with withholding taxes or composite return taxes and, in such case, such amounts
shall be treated as distributed to the Holder on whose behalf such payments were
made. Any Distribution to a Holder pursuant to this Section 4.2(a)

 

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that is made to a Holder of Common Units as a result of taxable income and gains
allocated to such Common Units, shall be treated as an advance Distribution
under Section 4.2(b) and shall be offset against future Distributions that such
Holder would otherwise be entitled to receive pursuant to Section 4.2(b).
Nothing herein shall limit the payment, as provided in Section 4D of the Merger
Agreement, of any Distribution to holders of Series B Common Units and Series C
Common Units in accordance with Section 4.2(a) of the Prior Agreement with
respect to taxable income for the Taxable Year ended December 31, 2012.

(b) Priority of Distributions. Subject to Sections 4.2(a) and 4.2(e), all
Distributions (including in connection with the dissolution and liquidation of
the Company pursuant to the terms of Article XI hereof) shall be made when and
as declared by the Board to the Holders of Common Units (in the proportion that
the number of Common Units held by each such Holder immediately prior to such
Distribution bears to the aggregate number of Common Units outstanding
immediately prior to such Distribution).

(c) In-Kind Distributions. At any time, and from time to time, the Company may
distribute to its Holders securities or other property held by the Company;
provided that any such Distribution shall not satisfy any of the Company’s
obligations pursuant to Section 4.2(a). In any Distribution pursuant to this
Section 4.2(c), the property so distributed will be distributed among the
Holders in the same proportions as cash equal to the fair market value of such
property (as determined in good faith by the Board) would be distributed among
the Holders pursuant to Section 4.2(b) and for the avoidance of doubt, the
Company may distribute cash, securities and/or other property as part of a
single distribution, whether or not in ratable strips to each Holder, so long as
the Board determines that the aggregate value being distributed to each Holder
complies with Section 4.2(b). The Board may require as a condition of
Distribution of securities hereunder that the Holders execute and deliver such
documents as the Board may deem necessary or appropriate to ensure compliance
with all U.S. federal and state securities laws which apply to such Distribution
and any contractual restrictions applicable to the securities being distributed
and any further transfer of the distributed securities (including compliance
with any lock-up to which the Company is subject), and may appropriately legend
the certificates which represent such securities to reflect any restriction on
transfer with respect to such laws. Notwithstanding anything in this Agreement
to the contrary, if the Company distributes cash from the sale of Boise Cascade
Company stock to one or more members and Boise Cascade Company stock in-kind to
one or more other members, any gain or loss on the Boise Cascade Company stock
sold shall be allocated solely to the members receiving such cash sale proceeds
and such Members shall bear any expenses or costs of the sale.

(d) Sale of the Company. In connection with any Sale of the Company, unless
otherwise determined by the Board, the aggregate cash, securities and other
property to be received in such Sale of the Company as consideration in respect
of the Units shall be allocated in such Sale of the Company among the Holders as
if such consideration were Distributed by the Company to the Holders pursuant to
the provisions of Section 4.2(b).

(e) Redemption of FPH Common Units in connection with Repurchases from FPH
Management Members. In the event FPH elects to exercise its rights under any FPH
Management Equity Agreement to repurchase FPH Common Units from an FPH
Management Member, the Company will redeem an equal number of Common Units held
by FPH at a redemption price equal to the repurchase price, if any, payable by
FPH for such FPH Common

 

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Units pursuant to the terms of such FPH Management Equity Agreement. In either
case, such redemption price will be paid to FPH in cash or securities. The
Members agree that any repurchase or redemption in accordance with this
Section 4.2(e) shall not be deemed to violate and shall not be deemed to trigger
the rights of any Member under any other agreement to which such Member is party
with the Company (including the Securityholders Agreement).

4.3 Allocation of Profits and Losses. For each Fiscal Year of the Company, after
adjusting each Holder’s Capital Account for all Capital Contributions and
distributions during such Fiscal Year and all special allocations pursuant to
Section 4.4 with respect to such Fiscal Year, all Profits and Losses (other than
Profits and Losses specially allocated pursuant to Section 4.4) shall be
allocated to the Holders’ Capital Accounts in a manner such that, as of the end
of such Fiscal Year, the Capital Account of each Holder (which may be either a
positive or negative balance) shall be equal to (i) the amount which would be
distributed to such Holder, determined as if the Company were to liquidate all
of its assets for the Book Value thereof and distribute the proceeds thereof
(after payment of all Company debts, liabilities and obligations) pursuant to
Section 4.2(b) hereof, minus (ii) the sum of (A) such Holder’s share of Company
Minimum Gain (as determined according to Treasury Regulation Section 1.704-2(d)
and (g)(3)) and Member Minimum Gain (as determined according to Treasury
Regulation Section 1.704-2(i)) and (B) the amount, if any, which such Holder is
obligated to contribute to the capital of the Company as of the last day of such
Fiscal Year.

4.4 Special Allocations. Notwithstanding the provisions of Section 4.3:

(a) Nonrecourse Deductions. Nonrecourse Deductions shall be allocated to the
Holders of Common Units, pro rata in proportion to the total number of such
Common Units held by each such Holder. If there is a net decrease in Company
Minimum Gain during any Taxable Year, each Holder shall be specially allocated
items of taxable income or gain for such Taxable Year (and, if necessary,
subsequent Taxable Years) in an amount equal to such Holder’s share of the net
decrease in Company Minimum Gain, determined in accordance with Treasury
Regulation Section 1.704-2(g). The items to be so allocated shall be determined
in accordance with Treasury Regulation Section 1.704-2(f)(6). This paragraph is
intended to comply with the minimum gain chargeback requirement in Treasury
Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

(b) Member Nonrecourse Deductions. Member Nonrecourse Deductions shall be
allocated in the manner required by Treasury Regulation Section 1.704-2(i).
Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4), if
there is a net decrease in Member Minimum Gain during any Taxable Year, each
Holder that has a share of such Member Minimum Gain shall be specially allocated
items of taxable income or gain for such Taxable Year (and, if necessary,
subsequent Taxable Years) in an amount equal to that Holder’s share of the net
decrease in Member Minimum Gain. Items to be allocated pursuant to this
paragraph shall be determined in accordance with Treasury Regulation Sections
1.704-2(i)(4) and 1.704-2(j)(2). This paragraph is intended to comply with the
minimum gain chargeback requirements in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

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(c) Unexpected Adjustments. If any Holder unexpectedly receives any adjustments,
allocations or Distributions described in Treasury Regulation
Section 1.704-l(b)(2)(ii)(d)(4), (5) or (6), items of taxable income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate the adjusted capital account deficit (determined according to
Treasury Regulation Section 1.704-1 (b)(2)(ii)(d)) created by such adjustments,
allocations or Distributions as quickly as possible. This paragraph is intended
to comply with the qualified income offset requirement in Treasury Regulation
Section 1.704-1 (b)(2)(ii)(d) and shall be interpreted consistently therewith.

(d) Curative Allocations. The allocations set forth in paragraphs (a), (b) and
(c) above (the “Regulatory Allocations”) are intended to comply with certain
requirements of the Treasury Regulations under Code Section 704. Notwithstanding
any other provisions of this Article IV (other than the Regulatory Allocations),
the Regulatory Allocations shall be taken into account in allocating Profits and
Losses among Holders so that, to the extent possible, the net amount of such
allocations of Profits and Losses and other items and the Regulatory Allocations
(including Regulatory Allocations that, although not yet made, are expected to
be made in the future) to each Holder shall be equal to the net amount that
would have been allocated to such Member if the Regulatory Allocations had not
occurred.

(e) Transactions between Holders and the Company. If, and to the extent that,
any Holder is deemed to recognize any item of income, gain, loss, deduction or
credit as a result of any transaction between such Holder and the Company
pursuant to Code Sections 1272-1274, 7872, 483, 482, 83 or any similar provision
now or hereafter in effect, and the Board determines that any corresponding
Profit or Loss of the Company should be allocated to the Holder who recognized
such item in order to reflect the Holder’s economic interests in the Company,
then the Board may so allocate such Profit or Loss.

4.5 Tax Allocations; Code Section 704(c).

(a) General. The income, gains, losses, deductions and expenses of the Company
shall be allocated, for federal, state and local income tax purposes, among the
Holders in accordance with the allocation of such income, gains, losses,
deductions and expenses among the Holders for computing their Capital Accounts,
except that if any such allocation is not permitted by the Code or other
applicable law, the Company’s subsequent income, gains, losses, deductions and
expenses shall be allocated among the Holders so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.

(b) Section 704(c). In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, deduction and expense with respect
to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Holders so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its fair market value at the time of contribution.

(c) Adjustment of Book Value. If the Book Value of any Company asset is adjusted
pursuant to Section 4.5, subsequent allocations of items of taxable income,
gain, loss, deduction and expense with respect to such asset shall take account
of any variation between the adjusted basis of such asset for federal income tax
purposes and its Book Value in the same manner as under Code Section 704(c).

 

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(d) Board Authority. Any elections or other decisions relating to allocations
for federal, state and local income tax purposes shall be made by the Board in
any manner that reasonably reflects the purpose and intent of this Agreement.
Allocations pursuant to this Section 4.5 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Holder’s Capital Account or share of profits, losses, other
items or distributions pursuant to any provisions of this Agreement.

4.6 Amounts Withheld. All amounts withheld pursuant to Section 8.3 from any
Distribution to a Holder shall be treated as amounts distributed to such Holder
pursuant to this Article IV for all purposes under this Agreement.

ARTICLE V—MANAGEMENT

5.1 Management by the Directors.

(a) Authority of Board. Except for situations in which the approval of the
Members is required by this Agreement or by non-waivable provisions of
applicable law, and subject to the provisions of Section 5.2 and Section 5.9,
(i) the powers of the Company shall be exercised by or under the authority of,
and the business and affairs of the Company shall be managed under the direction
of, the Board and (ii) the Board may make all decisions and take all actions for
the Company not otherwise provided for in this Agreement, including, without
limitation, the following:

(i) entering into, making and performing contracts, agreements and other
undertakings binding the Company that may be necessary, appropriate or advisable
in furtherance of the purposes of the Company and making all decisions and
waivers thereunder;

(ii) maintaining the assets of the Company in good order;

(iii) collecting sums due the Company;

(iv) opening and maintaining bank and investment accounts and arrangements,
drawing checks and other orders for the payment of money and designating
individuals with authority to sign or give instructions with respect to those
accounts and arrangements;

(v) acquiring, utilizing for Company purposes and disposing of any assets of the
Company;

(vi) to the extent that funds of the Company are available therefor, paying
debts and obligations of the Company;

(vii) hiring and employing executives, supervisors and other personnel;

(viii) selecting, removing and changing the authority and responsibility of
lawyers, accountants and other advisers and consultants;

(ix) borrowing money or otherwise committing the credit of the Company for its
activities and voluntary prepayments or extensions of debt;

 

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(x) obtaining insurance for the Company;

(xi) establishing reserves for commitments and obligations (contingent or
otherwise) of the Company;

(xii) determining Distributions of Company cash and other property as provided
in Section 4.2;

(xiii) subdividing (whether by unit split or otherwise) or combining (whether by
reverse split or otherwise) the number of Common Units issued and outstanding;

(xiv) establishing a seal for the Company; and

(xv) filing a petition under the federal bankruptcy laws or under any other
receivership, insolvency or reorganization laws.

(b) Power to Bind Company. Unless the Board consists of one Director, no
Director (acting in his capacity as such) shall have any authority to bind the
Company to any third party with respect to any matter except pursuant to a
resolution expressly authorizing such action, which resolution is duly adopted
by the Board by the affirmative vote required for such matter pursuant to the
terms of this Agreement.

(c) Officer Supervision. The management of the business and affairs of the
Company by the officers and the exercising of their powers shall be conducted
under the supervision of and subject to the approval of the Board.

5.2 Actions by the Directors; Committees; Delegation of Authority and Duties.

(a) Board of Directors. In managing the business and affairs of the Company and
exercising their powers, the Directors shall be members of and shall act as a
Board of Directors (the “Board”). The Board may act (i) through meetings and
written consents pursuant to Sections 5.5 and 5.7, (ii) through committees
pursuant to Section 5.2(c) and (iii) through any officer to whom authority and
duties have been delegated pursuant to Sections 5.2(e) and 5.9.

(b) Time and Attention. Each Holder acknowledges and agrees that no Director
shall, as a result of being a Director (as such), be bound to devote all of his
business time to the affairs of the Company, and that he and his Affiliates do
and will continue to engage for their own account and for the accounts of others
in other business ventures.

(c) Committees. The Board may, from time to time, designate one or more
committees, each of which shall be composed of at least two Directors. Any such
committee, to the extent provided in such resolution or in the Certificate or
this Agreement, shall have and may exercise all of the authority of the Board
delegated to such committee. The Board may dissolve any committee at any time,
unless otherwise provided in the Certificate or this Agreement.

 

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(d) Committee Rules. Unless the Board otherwise provides, each committee
designated by the Board may adopt, amend and repeal rules for the conduct of its
business. In the absence of a resolution by the Board or a provision in the
rules of such committee to the contrary, the presence of a majority of the total
number of members of such committee shall constitute a quorum for the
transaction of business, and the vote of a majority of the members of the Board
present at a meeting at which a quorum is present shall be the act of such
committee.

(e) Delegation; Generally. The Board may, from time to time, delegate to one or
more Persons (including any Director or officer) such authority and duties as
the Board may deem advisable. The Board also may assign titles to any Director,
Holder or other individual and may delegate to such Director, Holder or other
individual certain authority and duties. Any number of titles may be held by the
same Director, Holder or other individual. Any delegation pursuant to this
Section 5.2(e) may be revoked at any time by the Board.

5.3 Number and Term of Office. Each Director shall be a “manager” as described
in the Act. The number of Directors has been and may be established from time to
time by the affirmative vote of the Members holding the Required Interest and as
of the date of this Agreement the number of Directors and members of the Board
is eight. Each Director shall hold office for the term for which he is elected
and thereafter until his successor shall have been elected and qualified, or
until his earlier death, resignation or removal. A Director need not be a Member
or a Holder and need not be a resident of the State of Delaware.

5.4 Vacancies; Removal; Resignation. Any Director position to be filled by
reason of an increase in the number of Directors or by any other reason shall be
filled by the affirmative vote of the Members holding the Required Interest. A
Director elected to fill a vacancy occurring other than by reason of an increase
in the number of Directors shall be elected for the unexpired term of his
predecessor in office. Any Director may be removed, with or without cause, by
the Members holding the Required Interest. Any Director may resign at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein, or if no time is specified, at the time of its receipt by the
remaining Directors. The acceptance of a resignation shall not be necessary to
make it effective, unless expressly so provided in the resignation.

5.5 Board Meetings.

(a) Quorum; Voting. A majority of the total number of Directors fixed by, or in
the manner provided in, this Agreement shall constitute a quorum for the
transaction of business of the Board, and except as otherwise provided in this
Agreement, the act of a majority of the Directors present at a meeting of the
Board at which a quorum is present shall be the act of the Board. A Director who
is present at a meeting of the Board at which action on any Company matter is
taken shall be presumed to have assented to the action unless his dissent shall
be entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the Person acting as secretary of the meeting before
the adjournment thereof or shall deliver such dissent to the Company immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.

 

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(b) Place; Attendance. Meetings of the Board may be held at such place or places
as shall be determined from time to time by resolution of the Board. At all
meetings of the Board, business shall be transacted in such order as shall from
time to time be determined by resolution of the Directors. Attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.

(c) Meeting In Connection With Member Meeting. In connection with any annual
meeting of Members at which Directors were elected, the Board may, if a quorum
is present, hold a first meeting for the transaction of business immediately
after and at the same place as such annual meeting of the Members. Notice of
such meeting at such time and place shall not be required.

(d) Time, Place and Notice. Regular meetings of the Board shall be held at such
times and places as shall be designated from time to time by resolution of the
Directors, or as requested by the Members holding the Required Interest. Notice
of such meetings shall not be required.

(e) Special Meetings. Special meetings of the Board may be called by any
Director on at least 24 hours’ notice to each other Director. Such notice need
not state the purpose or purposes of, nor the business to be transacted at, such
meeting, except as may otherwise be required by law or provided for in this
Agreement.

5.6 Approval or Ratification of Acts or Contracts by Members. Any Director in
his discretion may submit any act or contract for approval or ratification at
any meeting of the Board, and any act or contract that shall be approved or be
ratified by the Board shall be as valid and as binding upon the Company and upon
all the Members as if it shall have been approved or ratified by every Member of
the Company.

5.7 Action by Written Consent or Telephone Conference. Any action permitted or
required by the Act, the Certificate or this Agreement to be taken at a meeting
of the Board or any committee designated by the Board may be taken without a
meeting if a consent in writing, setting forth the action to be taken, is signed
by not less than the minimum number of Directors or members of such committee,
as the case may be, that would be necessary to take such action at a meeting at
which all Directors or members of such committee, as the case may be, were
present and voted. Such consent shall have the same force and effect as a vote
at a meeting and may be stated as such in any document or instrument filed with
the Secretary of State of Delaware, and the execution of such consent shall
constitute attendance or presence in person at a meeting of the Board or any
such committee, as the case may be. Prompt notice of the taking of any action
without a meeting by less than unanimous written consent will be given to those
Directors or members of such committee, as applicable, who did not consent in
writing to such action. Subject to the requirements of the Act, the Certificate
or this Agreement for notice of meetings, unless otherwise restricted by the
Certificate, the Directors or members of any committee designated by the Board
may participate in and hold a meeting of the Board or any

 

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committee of Directors, as the case may be, by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

5.8 Compensation. The Board shall have the authority to fix the compensation of
Directors, including, without limitation, a stated salary or other compensation
for attendance at each meeting of the Board or a stated annual salary as a
Director; provided that no such compensation shall be payable to any Director
who is a management employee of the Company or its Subsidiaries. Upon submission
of reasonable documentation, a Director shall be paid his or her reasonable
out-of-pocket expenses, if any, of attendance at each meeting of the Board. None
of the foregoing payments shall preclude any Director from serving the Company
in any other capacity and receiving compensation therefor. Members of special or
standing committees may, as determined by the Board, be allowed like
compensation for attending committee meetings.

5.9 Officers.

(a) Designation and Appointment. The Board may (but need not), from time to
time, designate and appoint one or more persons as an officer of the Company. An
officer need not be a resident of the State of Delaware, a Holder nor a
Director. Any officers so designated shall have such authority and perform such
duties as the Board may, from time to time, delegate to them. The Board may
assign titles (including chairman, chief executive officer, president, vice
president, secretary, assistant secretary, treasurer and assistant treasurer) to
particular officers. Unless the Board otherwise decides, if the title is one
commonly used for officers of a business corporation formed, the assignment of
such title shall constitute the delegation to such officer of the authority and
duties that are normally associated with that office, subject to (i) any
specific delegation of authority and duties made to such officer by the Board
pursuant to the third sentence of this Section 5.9(a) and (ii) any delegation of
authority and duties made to one or more officers pursuant to the terms of
Section 5.2(e). Each officer shall hold office until such officer’s successor
shall be duly designated and shall qualify or until such officer’s death or
until such officer shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same individual.
The salaries or other compensation, if any, of the officers and agents of the
Company shall be fixed from time to time by the Board.

(b) Resignation. Any officer (subject to any contract rights available to the
Company, if applicable) may resign as such at any time. Such resignation shall
be made in writing and shall take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the Board. The acceptance of a
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation. Any officer may be removed as such, either with or
without cause, by the Board in its discretion at any time; provided, however,
that such removal shall be without prejudice to the contract rights, if any, of
the individual so removed. Designation of an officer shall not of itself create
contract rights. Any vacancy occurring in any office of the Company may be
filled by the Board.

 

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5.10 Reliance by Third Parties. Any Person dealing with the Company, other than
a Holder, may rely on the authority of the Board (or any Director or officer
authorized by the Board) in taking any action in the name of the Company without
inquiry into the provisions of this Agreement or compliance herewith, regardless
of whether that action actually is taken in accordance with the provisions of
this Agreement. Every agreement, instrument or document executed by the Board
(or any Director or officer authorized by the Board) in the name of the Company
with respect to any business or property of the Company shall be conclusive
evidence in favor of any Person relying thereon or claiming thereunder that
(i) at the time of the execution or delivery thereof, this Agreement was in full
force and effect, (ii) such agreement, instrument or document was duly executed
according to this Agreement and is binding upon the Company and (iii) the Board
or such Director or officer was duly authorized and empowered to execute and
deliver such agreement, instrument or document for and on behalf of the Company.

ARTICLE VI—MEETINGS OF MEMBERS

6.1 Lack of Authority. No Holder or Member (in its capacity as such) has the
authority or power to act for or on behalf of the Company, to do any act that
would be binding on the Company or to make any expenditures on behalf of the
Company, unless (i) such specific authority has been expressly granted to and
not revoked from such Person by the Board or (ii) such specific authority has
been expressly granted to such Person pursuant to this Agreement, and the
Holders hereby consent to the exercise by the Board of the powers conferred on
them by law and this Agreement.

6.2 Member Meetings.

(a) Quorum; Voting. A quorum shall be present at a meeting of Members if the
Members holding a Required Interest are represented at the meeting in person or
by proxy. With respect to any matter, other than a matter for which the
affirmative vote of the holders of a specified portion of all Members entitled
to vote is required by the Act, the affirmative vote of the Members holding the
Required Interest at a meeting of Members at which a quorum is present shall be
the act of the Members.

(b) Place; Attendance. All meetings of the Members shall be held at the
principal place of business of the Company or at such other place within or
outside the State of Delaware as shall be specified or fixed in the notices or
waivers of notice thereof; provided that any or all Members may participate in
any such meeting by means of conference telephone or similar communications
equipment pursuant to Section 6.5.

(c) Power to Adjourn. Notwithstanding the other provisions of the Certificate or
this Agreement, the chairman of the meeting or the Members holding the Required
Interest shall have the power to adjourn such meeting from time to time, without
any notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If such meeting is adjourned by the Members,
such time and place shall be determined by a vote of the Members holding the
Required Interest. Upon the resumption of such adjourned meeting, any business
may be transacted that might have been transacted at the meeting as originally
called.

 

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(d) Meetings. Meetings of the Members for any proper purpose or purposes may be
called at any time by the Board or by Members holding the Required Interest. If
not otherwise stated in or fixed in accordance with the remaining provisions
hereof, the record date for determining Members entitled to call a special
meeting is the date any Member first signs the notice of that meeting. Only
business within the purpose or purposes described in the notice (or waiver
thereof) required by this Agreement may be conducted at a meeting of the
Members.

(e) Notice. Written or printed notice stating the place, day and hour of the
meeting and the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of the Board, to
each Member entitled to vote at such meeting. If mailed, any such notice shall
be deemed to be delivered when deposited in the United States mail, addressed to
the Member at its address provided for in Section 12.5, with postage thereon
prepaid.

(f) Fixing of Record Date. The date on which notice of a meeting of Members is
mailed or the date on which the resolution of the Directors declaring a
Distribution is adopted, as the case may be, shall be the record date for the
determination of the Members entitled to notice of or to vote at such meeting
(including any adjournment thereof) or the Members entitled to receive such
Distribution.

(g) No Cumulative Voting. There shall be no cumulative voting in the election of
Directors hereunder.

6.3 Proxies. A Member may vote either in person or by proxy executed in writing
by the Member. A telegram, telex, cablegram or similar transmission by the
Member, or a photographic, photo static, facsimile or similar reproduction of a
writing executed by the Member shall be treated as an execution in writing for
purposes of this Section. Proxies for use at any meeting of Members or in
connection with the taking of any action by written consent shall be filed with
the Board, before or at the time of the meeting or execution of the written
consent as the case may be. All proxies shall be received and taken charge of
and all ballots shall be received and canvassed by the Board, who shall decide
all questions concerning the qualification of voters, the validity of the
proxies and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions. No proxy
shall be valid after eleven months from the date of its execution unless
otherwise provided in the proxy. A proxy shall be revocable unless the proxy
form conspicuously states that the proxy is irrevocable and the proxy is coupled
with an interest. Should a proxy designate two or more Persons to act as
proxies, unless that instrument shall provide to the contrary, a majority of
such Persons present at any meeting at which their powers thereunder are to be
exercised shall have and may exercise all the powers of voting or giving
consents thereby conferred, or if only one be present, then such powers may be
exercised by that one; or, if an even number attend and a majority do not agree
on any particular issue, the Company shall not be required to recognize such
proxy with respect to such issue if such proxy does not specify how the Units
that are the subject of such proxy are to be voted with respect to such issue.

 

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6.4 Conduct of Meetings. The Chairman of the Board shall preside at all meetings
of the Members, or in his absence, the Members attending the meeting shall elect
their own chairman of the meeting. The Secretary of the Company shall act as
secretary of all meetings of the Members and keep the minutes. In the absence of
the Secretary, the chairman of the meeting may appoint any person to act as the
secretary of the meeting.

6.5 Action by Written Consent or Telephone Conference.

(a) Action By Written Consent. Any action required or permitted to be taken at
any annual or special meeting of Members may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the Member or Members holding not
less than the minimum percentages of Units or each class of Units that would be
necessary to take such action at a meeting at which all Members entitled to vote
on the action were present and voted. Every written consent shall bear the date
of signature of each Member who signs the consent. No written consent shall be
effective to take the action that is the subject to the consent unless, within
60 days after the date of the earliest dated consent delivered to the Company in
the manner required by this Section, a consent or consents signed by the Member
or Members holding not less than the minimum percentages of Units or each class
of Units that would be necessary to take the action that is the subject of the
consent are delivered to the Company by delivery to its registered office, its
principal place of business or the Board. Delivery shall be by hand or certified
or registered mail, return receipt requested. Delivery to the Company’s
principal place of business shall be addressed to a Director. A telegram, telex,
cablegram or similar transmission by a Member, or a photographic, photo static,
facsimile or similar reproduction of a writing signed by a Member, shall be
regarded as signed by the Member for purposes of this Section. Prompt notice of
the taking of any action by Members without a meeting by less than unanimous
written consent shall be given to those Members entitled to vote on such action
and who did not consent in writing to the action.

(b) Fixing of Record Date. The record date for determining Members entitled to
consent to action in writing without a meeting shall be the first date on which
a signed written consent setting forth the action taken or proposed to be taken
is delivered to the Company by delivery to its registered office, its principal
place of business, or the Board. Delivery shall be by hand or by certified or
registered mail, return receipt requested. Delivery to the Company’s principal
place of business shall be addressed to a Director.

(c) State Filings. If any action by Members is taken by written consent, any
certificate or documents filed with the Secretary of State of Delaware as a
result of the taking of the action shall state, in lieu of any statement
required by the Act concerning any vote of Members, that written consent has
been given in accordance with the provisions of the Act and that any written
notice required by the Act has been given.

(d) Telephone Conference. Members may participate in and hold a meeting by means
of conference telephone or similar communications equipment by means of which
all Persons participating in the meeting can hear each other, and participation
in such meeting shall constitute attendance and presence in person at such
meeting, except where a Person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.

 

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ARTICLE VII—LIMITED LIABILITY, EXCULPATION, AND INDEMNIFICATION

7.1 Limited Liability of Members.

(a) Limitation of Liability. Except as otherwise required by applicable law and
as explicitly set forth in this Agreement, the debts, liabilities, commitments
and other obligations of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member or Holder shall have any personal liability whatsoever in
its capacity as a Member or Holder, whether to the Company, to any of the other
Members or Holders, to the creditors of the Company or to any other Person, for
the debts, liabilities, commitments or any other obligations of the Company or
for any Losses of the Company. Accordingly, a Member or Holder shall be liable
only to make its Capital Contributions to the Company required pursuant to the
terms hereof and the other payments expressly provided for herein.

(b) Observance of Formalities. Notwithstanding anything contained herein to the
contrary, the failure of the Company, or any Director or Holder, to observe any
formalities or procedural or other requirements relating to the exercise of its
powers or management of the Company’s business and affairs under this Agreement
or the Act shall not be grounds for imposing personal liability on any of the
Members or Holders.

(c) Return of Distributions. In accordance with the Act and the laws of the
State of Delaware, a member of a limited liability company may, under certain
circumstances, be required to return amounts previously distributed to such
member. It is the intent of the Holders that no Distribution to any Holder
pursuant to Article IV hereof shall be deemed a return of money or other
property paid or distributed in violation of the Act. The payment of any such
Distribution of money or property to a Holder shall be deemed to be a compromise
within the meaning of the Act, and the Holder receiving any such money or
property shall not be required to return to any Person any such money or
property. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Holder is obligated to
make any such payment, such obligation shall be the obligation solely of such
Holder and not of any other Holder or Director. Notwithstanding the foregoing, a
Holder will be required to return to the Company any Distribution to the extent
made to it in clear and manifest accounting, clerical, or other similar error
(as determined in good faith by the Board).

7.2 Exculpation of Covered Persons. The personal liability of any Covered Person
to any Director, the Company or to any Member or Holder for any loss suffered by
the Company or any monetary damages for breach of fiduciary duties is hereby
eliminated to the fullest extent permitted by the Act. The Covered Persons shall
not be liable for errors in judgment. Any Covered Person may consult with
counsel and accountants and any Member, Director, officer, employee or committee
of the Company or other professional expert in respect of Company affairs, and
provided the Covered Person acts in good faith reliance upon the advice or
opinion of such counsel or accountants or other persons, the Covered Person
shall not be

 

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liable for any loss suffered by the Company in reliance thereon. If the Act is
hereafter amended or interpreted to permit further limitation of the liability
of a Covered Person beyond the foregoing, then this paragraph shall be
interpreted to limit the personal liability of the Covered Person to the fullest
extent permitted by the Act, as amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Company to limit the personal
liability of the Covered Person to a greater extent than that permitted by said
law prior to such amendment). In furtherance of, and without limiting the
generality of the foregoing, no Covered Person shall be (a) personally liable
for the debts, obligations or liabilities of the Company, including any such
debts, obligations or liabilities arising under a judgment, decree or order of a
court; (b) obligated to cure any deficit in any Capital Account; (c) required to
return all or any portion of any Capital Contribution; or (d) required to lend
any funds to the Company.

7.3 Right to Indemnification for Covered Persons. Subject to the limitations and
conditions as provided in this Article VII, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative (hereinafter a “Proceeding”), or any appeal in such
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that he or she, or a Person of whom he or she
is the legal representative, is or was a Covered Person or while a Covered
Person is or was serving at the request of the Company as a manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise shall be indemnified by the Company to the
fullest extent permitted by the Act, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment) against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including, without limitation,
attorneys’ fees) actually incurred by such Person in connection with such
Proceeding, and indemnification under this Article VII shall continue as to a
Person who has ceased to serve in the capacity that initially entitled such
Person to indemnity hereunder; provided that no such Person shall be indemnified
for any judgments, penalties, fines, settlements or expenses (i) to the extent
attributable to conduct for which indemnification would not be permitted under
the Act or other applicable law, (ii) for any present or future breaches of any
representations, warranties or covenants by such Person contained in this
Agreement or in any other agreement with the Company, or (iii) in any action
(except an action to enforce indemnification rights set forth in this
Section 7.3) brought by such Person. It is expressly acknowledged that the
indemnification provided in this Article could involve indemnification for
negligence or under theories of strict liability.

7.4 Contract with Company. The rights granted pursuant to this Article VII shall
be deemed contract rights, and no amendment, modification or repeal of this
Article shall have the effect of limiting or denying any such rights with
respect to actions taken or Proceedings arising prior to any amendment,
modification or repeal.

7.5 Advance Payment. The right to indemnification conferred in this Article VII
shall include the right to be paid or reimbursed by the Company the reasonable
expenses incurred by a Person of the type entitled to be indemnified under
Section 7.3 who was, is or is threatened to be made a named defendant or
respondent in a Proceeding in advance of the final disposition

 

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of the Proceeding and without any determination as to the Person’s ultimate
entitlement to indemnification; provided, however, that the payment of such
expenses incurred by any such Person in advance of the final disposition of a
Proceeding shall be made only upon delivery to the Company of a written
affirmation by such Person of his or her good faith belief that he has met the
standard of conduct necessary for indemnification under Article VII and a
written undertaking, by or on behalf of such Person, to repay all amounts so
advanced if it shall ultimately be determined that such indemnified Person is
not entitled to be indemnified under this Article VII or otherwise.

7.6 Indemnification of Employees and Agents. The Company, by adoption of a
resolution of the Board, may indemnify and advance expenses to any employees or
agents of the Company who are not or were not Covered Persons but who are or
were serving at the request of the Company as a manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic limited liability company, corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise against liabilities and expenses asserted against such Person
and incurred by such Person in such a capacity or arising out of their status as
such a Person, to the same extent that it may indemnify and advance expenses to
Covered Persons under this Article VII.

7.7 Appearance as a Witness. Notwithstanding any other provision of this Article
VII, the Company may pay or reimburse expenses incurred by a Covered Person in
connection with the appearance as a witness or other participation in a
Proceeding at a time when such Covered Person is not a named defendant or
respondent in the Proceeding.

7.8 Nonexclusivity of Rights. The right to indemnification and the advancement
and payment of expenses conferred in this Article VII shall not be exclusive of
any other right that a Covered Person or other Person indemnified pursuant to
Section 7.6 may have or hereafter acquire under any law (common or statutory),
provision of the Certificate or this Agreement, any agreement, vote of Members
or disinterested Directors or otherwise.

7.9 Insurance. The Company may purchase and maintain insurance, at its expense,
to protect itself and any Person who is or was serving as a Covered Person or is
or was serving at the request of the Company as a manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic limited ability company, corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise against any expense, liability or loss, whether or not the
Company would have the power to indemnify such Person against such expense,
liability or loss under this Article VII.

7.10 Savings Clause. If this Article VII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Director or any
other Person indemnified pursuant to this Article VII as to costs, charges and
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by any
applicable portion of this Article VII that shall not have been invalidated and
to the fullest extent permitted by applicable law.

 

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7.11 Investment Opportunities; Conflicts of Interest.

(a) Directors. Subject to the other express provisions of this Agreement and of
any agreement entered into by a Member with the Company or its Subsidiaries or
Affiliates, each Director of the Company at any time and from time to time may
engage in and own interests in other business ventures of any and every type and
description, independently or with others (including ones in competition with
the Company) with no obligation to offer to the Company or any other Member,
Holder, Director or officer the right to participate therein.

(b) FPH. The Holders expressly acknowledge that, subject to the other express
provisions of this Agreement, (i) FPH and its respective Affiliates are
permitted to have, and may presently or in the future have, investments or other
business relationships with entities engaged in the forestry products business
(including in areas in which the Company or any of its Subsidiaries may in the
future engage in business), and in related businesses other than through the
Company or any of its Subsidiaries (an “Other Business”), (ii) FPH and its
respective Affiliates have and may develop a strategic relationship with
businesses that are and may be competitive with the Company or any of its
Subsidiaries, (iii) none of FPH or its respective Affiliates (including their
respective representatives serving on the Board) will be prohibited by virtue of
their investments in the Company or its Subsidiaries or their service on the
Board from pursuing and engaging in any such activities, (iv) none of FPH or its
respective Affiliates (including their respective representatives serving on the
Board) will be obligated to inform the Company, or any Member, Holder, Director,
or officer of any such opportunity, relationship or investment, (v) neither the
Company nor any other Member, Holder, Director or officer will acquire or be
entitled to any interest or participation in any Other Business as a result of
the participation therein of any of FPH or its respective Affiliates and
(vi) the involvement of FPH or its respective Affiliates (including their
respective representatives serving on the Board) in any Other Business will not
constitute a conflict of interest by such Persons with respect to the Company,
any of its Subsidiaries or its Members or Holders.

(c) Transactions with the Company. The Company may transact business with any
Director, Member, Holder or officer or any Affiliate thereof; provided that the
terms of such transactions are no less favorable than those the Company could
obtain on an arm’s-length basis from unrelated third parties.

ARTICLE VIII—TAX MATTERS

8.1 Tax Returns. The Board shall cause to be prepared and filed all necessary
federal and state income tax and other tax returns for the Company, including
making any elections the Board may deem appropriate and in the best interests of
the Members. Each Holder shall furnish to the Board all pertinent information in
its possession relating to Company operations that is necessary to enable the
Company’s income tax and other tax returns to be prepared and filed.

8.2 Tax Matters Member. Unless and until the Members shall otherwise unanimously
agree, FPH shall be the “tax matters partner” of the Company pursuant to
Section 6231(a)(7) of the Code (the “Tax Matters Member”).

 

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(a) Authority of Tax Matters Member. The Tax Matters Member is authorized to
represent the Company before the Internal Revenue Service and any other
governmental agency with jurisdiction, and to sign such consents and to enter
into settlements and other agreements with such agencies as the Board deems
necessary or advisable.

(b) Tax Elections. The Tax Matters Member may, in its sole discretion, make or
revoke any election under the Code or the Treasury Regulations issued thereunder
(including for this purpose any new or amended Treasury Regulations issued after
the date of formation of the Company), including, without limitation, an
election to be taxed as a corporation for U.S. federal income tax purposes
pursuant to Treasury Regulation Section 301.7701-3.

(c) Reimbursement of Expenses. Promptly following the written request of the Tax
Matters Member, the Company shall, to the fullest extent permitted by law,
reimburse and indemnify the Tax Matters Member for all reasonable expenses,
including reasonable legal and accounting fees, claims, liabilities, losses and
damages incurred by the Tax Matters Member in connection with any administrative
or judicial proceeding (i) with respect to the tax liability of the Company
and/or (ii) with respect to the tax liability of the Holders in connection with
the operations of the Company.

(d) Survival of Provisions. The provisions of this Section 8.2 shall survive the
termination of the Company or the termination of any Holder’s interest in the
Company and shall remain binding on the Holders for as long a period of time as
is necessary to resolve with the Internal Revenue Service any and all matters
regarding the Federal income taxation or other taxes of the Company or the
Holders.

8.3 Indemnification and Reimbursement for Payments on Behalf of a Holder. If the
Company is obligated to pay any amount to a governmental agency (or otherwise
makes a payment) because of a Holder’s status or otherwise· specifically
attributable to a Holder (including, without limitation, federal withholding
taxes with respect to foreign Persons, state personal property taxes, state
personal property replacement taxes, state withholding taxes, state
unincorporated business taxes, etc.), then such Holder (the “Indemnifying
Holder”) shall indemnify the Company in full for the entire amount paid
(including, without limitation, any interest, penalties and expenses associated
with such payments). The amount to be indemnified shall be charged against the
Capital Account of the Indemnifying Holder, and, at the option of the Board,
either:

(a) promptly upon notification of an obligation to indemnify the Company, the
Indemnifying Holder shall make a cash payment to the Company equal to the full
amount to be indemnified (and the amount paid shall be added to the Indemnifying
Holder’s Capital Account but shall not be treated as a Capital Contribution), or

(b) the Company shall reduce distributions which would otherwise be made to the
Indemnifying Holder, until the Company has recovered the amount to be
indemnified (and, notwithstanding Section 3.1, the amount withheld shall not be
treated as a Capital Contribution).

 

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A Holder’s obligation to make contributions to the Company under this
Section 8.3 shall survive the termination, dissolution, liquidation and winding
up of the Company, and for purposes of this Section 8.3, the Company shall be
treated as continuing in existence. The Company may pursue and enforce all
rights and remedies it may have against each Holder under this Section 8.3,
including instituting a lawsuit to collect such contribution with interest
calculated at a rate equal to the Base Rate plus three percentage points per
annum (but not in excess of the highest rate per annum permitted by law).

ARTICLE IX—BOOKS AND RECORDS, REPORTS, AND CONFIDENTIALITY

9.1 Maintenance of Books.

(a) Books and Records. The Company shall keep books and records of account and
shall keep minutes of the proceedings of, or maintain written consents executed
by, its Members, the Board and each committee of the Board. The calendar year
shall be the accounting year of the Company.

(b) Schedule of Members. The Company will maintain, and as required update, the
attached Schedule of Members, which sets forth with respect to each Member their
respective name, address, number and class of Units owned by such Member and the
amount of Capital Contributions made by such Member with respect thereto. Unless
otherwise determined by the Board, the Schedule of Members will be and remain
confidential, and each Member hereby accepts, acknowledges and agrees that,
notwithstanding anything herein to the contrary, it will have no right to view
or obtain the Schedule of Members or otherwise obtain any such information
relating to any Member other than itself.

9.2 Reports.

(a) Tax Information. To the extent reasonably practicable, within 90 days after
the end of each Taxable Year, the Company shall prepare and mail to each Holder
and, to the extent necessary, to each former Holder (or such Holder’s legal
representatives), a report setting forth in sufficient detail such information
as shall enable such Holder or former Holder (or such Holder’s legal
representatives) to prepare its respective federal, state, and local income tax
returns in accordance with the laws, rules, and regulations then prevailing. The
Company shall also provide Form K-ls to each of the Holders as soon as
reasonably practicable after the end of each Taxable Year.

(b) Cost of Reports; No Additional Information. The Company shall bear the costs
of all reports and other information provided pursuant to this Section 9.2.
Except as otherwise provided in this Section 9.2, each Member hereby waives any
and all rights under the Act entitling such Member to additional information
from or access to the Company.

9.3 Company Funds. The Board may not commingle the Company’s funds with the
funds of any Holder, Director or any officer.

 

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9.4 Confidentiality. Each Holder recognizes and acknowledges that it may receive
certain confidential and proprietary information and trade secrets of the
Company and its Subsidiaries, including but not limited to confidential
information of the Company and its Subsidiaries regarding identifiable, specific
and discrete business opportunities being pursued by the Company or its
Subsidiaries (the “Confidential Information”). Each Holder (on behalf of itself
and, to the extent that such Holder would be responsible for the acts of the
following persons under principles of agency law, its directors, officers,
shareholders, partners, employees, agents and members) agrees that it will not,
during or after the term of this Agreement, whether through an Affiliate or
otherwise, take commercial or proprietary advantage of or profit from any
Confidential Information or disclose Confidential Information to any Person for
any reason or purpose whatsoever, except (i) to authorized representatives and
employees of the Company or the Subsidiaries and as otherwise may be proper in
the course of performing such Holder’s obligations, or enforcing such Holder’s
rights, under this Agreement, (ii) as part of such Holder’s normal reporting or
review procedure, or in connection with such Holder’s or such Holder’s
Affiliates’ normal fund raising, marketing, informational or reporting
activities, or to such Holder’s (or any of its Affiliates’) Affiliates,
employees, auditors, attorneys or other agents, (iii) to any bona fide
prospective purchaser of the equity or assets of such Holder or its Affiliates
or the Units held by such Holder, or prospective merger partner of such Holder
or its Affiliates, provided that such purchaser or merger partner agrees to be
bound by the provisions of this Section 9.4 or (iv) as is required to be
disclosed by order of a court of competent jurisdiction, administrative body or
governmental body, or by subpoena, summons or legal process, or by law, rule or
regulation, provided that the Holder required to make such disclosure shall
provide to the Board prompt notice of such requirement. For purposes of this
Section 9.4, Confidential Information shall not include any information of which
(x) such Person became aware prior to its affiliation with the Company, (y) such
Person learns from sources other than the Company or its Subsidiaries, (provided
that such Person does not know or have reason to know, at the time of such
Person’s disclosure of such information, that such information was acquired by
such source through violation of law, or breach of contractual confidentiality
obligations or breach of fiduciary duties) or (z) is disclosed in a prospectus
or other documents for dissemination to the public. Nothing in this Section 9.4
shall in any way limit or otherwise modify any confidentiality covenants entered
into by the Management Members pursuant to the Management Equity Agreements or
any other agreement entered into with the Company or its Subsidiaries.

ARTICLE X—TRANSFERS; ADMISSION OF MEMBERS

10.1 Transfers.

(a) Generally. THE TRANSFER OF ANY INTEREST IN THE COMPANY IS SUBJECT TO THE
RESTRICTIONS ON TRANSFER CONTAINED IN THIS AGREEMENT AND, WITH RESPECT TO
CERTAIN HOLDERS PARTY HERETO, THE SECURITYHOLDERS AGREEMENT (WHICH RESTRICTIONS
ARE INCORPORATED HEREIN BY REFERENCE). THE BOARD, IN ITS SOLE DISCRETION, MAY

 

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PROHIBIT ANY PROPOSED TRANSFER OF AN EQUITY INTEREST IF SUCH TRANSFER FAILS TO
SATISFY ONE OF THE SAFE HARBORS SET FORTH IN TREASURY REGULATION SECTION
1.7704-l(e)—(j) OR IF SUCH TRANSFER COULD OTHERWISE CREATE A RISK THAT THE
COMPANY COULD BE TREATED AS A PUBLICLY TRADED PARTNERSHIP WITHIN THE MEANING OF
CODE SECTION 7704.

(b) Restrictions on Transfers. The offer, sale, transfer, assignment, pledge or
other disposition of any interest in any Unit (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law),
directly or indirectly, is referred to herein as a “Transfer.” So long as the
Securityholders Agreement is in effect, no Holder of Common Units that is party
to the Securityholders Agreement shall Transfer any interest in any Units,
except as permitted pursuant to the terms of the Securityholders Agreement.

10.2 Incorporation of the Company. The Board may, in advance of, and in order to
facilitate, a Public Offering of securities of the Company, or for other reasons
that the Board deems to be in the best interests of the Company, cause the
Company to incorporate its business, or any portion thereof, including, without
limitation, by way of: (a) the Transfer of all of the assets of the Company,
subject to the liabilities of the Company, or the Transfer of any portion of
such assets and liabilities, to one or more corporations in exchange for equity
interests of said corporation(s) and the subsequent distribution of such equity
interests, at such time as the Board may determine, to the Holders in accordance
with this Agreement, (b) Transfer by each of the Holders of Units held by such
Holder to one or more corporations in exchange for equity interests of said
corporation(s) and, in connection therewith, each Holder hereby agrees to the
Transfer of its Units in accordance with the terms of exchange as provided by
the Board and further agrees that, as of the effective date of such exchange,
any Units outstanding thereafter that shall not have been tendered for exchange
shall represent only the right to receive a certificate representing the number
of equity interests of said corporation(s) as provided in the terms of the
exchange, (c) the merger of the Company with and into a corporation as a result
of which the Holders receive as merger consideration equity interests of such
corporation, as the surviving entity to the merger, which merger shall not be
required to be approved by the Members, (d) if the only assets of the Company
consist of cash and stock of a corporation, dissolve the Company and distribute
such cash and shares of stock to the Holders, or (e) the conversion of the
Company to a corporation or other entity pursuant to applicable law, which
conversion shall not be required to be approved by Members; provided that the
organizational documents of any such new corporation or entity, its equity
interests and/or a shareholders’ or other agreement, as appropriate, will in all
material respects reflect and be consistent with the terms and provisions
applicable to each Holder’s ownership of Units immediately prior to such
transaction; provided further, that each Holder is, as a result of such
transaction, in substantially the same ownership position with respect to the
Company (or its successor) as it was in immediately prior to such transaction.
Each Holder will take all reasonable actions in connection with the consummation
of such conversion as requested by the Board.

10.3 Void Assignment. Any sale, exchange or other transfer by any Holder of any
Units or other interests in the Company in contravention of this Agreement shall
be void and ineffectual and shall not bind or be recognized by the Company or
any other party. No such purported assignee shall have any right to any Profits,
Losses or Distributions of the Company.

 

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10.4 Effect of Valid Assignment.

(a) Assignment. A Transfer of Units permitted hereunder shall be effective as of
the date of assignment and compliance with the conditions to such Transfer.
Profits, Losses and other Company items shall be allocated between the assignor
and the assignee according to Code Section 706. Distributions made before the
effective date of such Transfer shall be paid to the assignor, and Distributions
made after such date shall be paid to the assignee.

(b) Record Owner. Notwithstanding the foregoing, the Company and the Board shall
be entitled to treat the record owner of any Units or other interest in the
Company as the absolute owner thereof and shall incur no liability for
Distributions of cash or other property made in good faith to such owner until
such time as a written assignment of such Units or other interest in the
Company, which assignment is permitted pursuant to the terms and conditions of
this Article X, has been received and accepted by the Board and recorded on the
books of the Company.

(c) Rights and Obligations of Assignee. Unless and until an assignee becomes a
substituted Member pursuant to Section 10.5, the assignee shall not be entitled
to any of the rights granted to a Member hereunder or under applicable law,
other than the rights granted specifically to assignees pursuant to this
Agreement or pursuant to the Act; provided that without relieving the assigning
Holder from any such limitations or obligations, as more fully described in
Section 10.4(e) hereof, such assignee shall be bound by any limitations and
obligations of a Holder contained herein by which a Member or other Holder would
be bound on account of the assignee’s interest in the Company (including the
obligation to make required Capital Contributions with respect to any
transferred Units).

(d) Acceptance of Benefits. Any Person who acquires in any manner whatsoever any
Units or other interest in the Company, irrespective of whether such Person has
accepted and adopted in writing the terms and provisions of this Agreement,
shall be deemed by the acceptance of the benefits of the acquisition thereof to
have agreed to be subject to and bound by all the terms and conditions of this
Agreement that any predecessor in such Units or other interest in the Company of
such Person was subject to or by which such predecessor was bound.

(e) Rights and Obligations of Assignor. Any Member or Holder who shall assign
any Units or other interest in the Company shall cease to be a Member or Holder
of the Company with respect to such Units or other interest and shall no longer
have any rights or privileges of a Member or Holder with respect to such Units
or other interest, except that the applicable provisions of Article VII shall
continue to inure to the benefit of such Member or Holder in accordance with the
terms thereof. Unless and until such an assignee is admitted as a substituted
Member in accordance with the provisions of Section 10.5 hereof, (i) such
assigning Holder shall retain all of the duties, liabilities and obligations of
a Holder with respect to such Units or other interest, including, without
limitation, the obligation (together with its assignee, pursuant to
Section 10.4(c) hereof) to make and return Capital Contributions on account of
such Units or other interest pursuant to the terms of this Agreement and
(ii) the Board may, in its sole discretion, reinstate all or any portion of the
rights and privileges of such Holder with respect to such Units or other
interest for any period of time prior to the date such assignee becomes a
substituted Member. Nothing contained herein shall relieve any Holder who
transfers any Units

 

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or other interest in the Company from any liability of such Holder to the
Company or the other Holders with respect to such Units or other interest that
may exist on the date such assignee becomes a substituted Member or that is
otherwise specified in the Act and incorporated into this Agreement or for any
liability to the Company or any other Person for any materially false statement
made by such Holder (in its capacity as such) in any Management Equity Agreement
or for any present or future breaches of any representations, warranties or
covenants by such Holder (in its capacity as such) contained herein or in the
other agreements with the Company.

10.5 Admission of Substituted Member.

(a) Admission. An assignee of any Units or other interests in the Company of a
Member, or any portion thereof, shall become a substituted Member entitled to
all the rights of a Member if and only if (i) the assignor gives the assignee
such right, (ii) the Board has granted its prior written consent to such
assignment and substitution, which consent may be withheld in the sole
discretion of the Board, and (iii) such assignee shall execute and deliver a
counterpart of this Agreement agreeing to be bound by all of the terms and
conditions of this Agreement, and such other documents and instruments as may be
necessary or appropriate to effect such Person’s admission as a substituted
Member, in form satisfactory to the Board. Any such assignee will become a
substituted Member on the later of (i) the effective date of Transfer, and
(ii) the date on which all of the conditions set forth in the preceding sentence
have been satisfied.

(b) Update Schedule of Members. Upon the admission of a substituted Member, the
Schedule of Members attached hereto shall be amended to reflect the name,
address, number and class of Units and amount of Capital Contributions of such
substituted Member and to eliminate the name and address of and other
information relating to the assigning Member with regard to the assigned Units
and other interests in the Company.

10.6 Admission of Additional Members.

(a) Admission. A Person may be admitted to the Company as an additional Member
only as contemplated under Section 2.3 hereof and only if such additional Member
shall execute and deliver a counterpart of this Agreement agreeing to be bound
by all of the terms and conditions of this Agreement, and such other documents
and instruments as may be necessary or appropriate to effect such Person’s
admission as an additional Member (including pursuant to a Management Equity
Agreement, as applicable, and such other documents referenced therein), in form
satisfactory to the Board. Such admission shall become effective on the date on
which the Board determines in its sole discretion that such conditions have been
satisfied and when any such admission is shown on the books and records of the
Company.

(b) Updated Schedule of Members. Upon the admission of an additional Member, the
Schedule of Members attached hereto shall be amended to reflect the name,
address, number and class of Units and amount of Capital Contributions of such
additional Member.

 

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10.7 Effect of Incapacity. Except as otherwise provided herein, the Incapacity
of a Member shall not dissolve or terminate the Company. In the event of such
Incapacity, the executor, administrator, guardian, trustee or other personal
representative of the Incapacitated Member shall be deemed to be the assignee of
such Member’s Units or other interests in the Company and may, subject to the
approval of the Board, become a substituted Member upon the terms and conditions
set forth in Section 10.5.

ARTICLE XI—DISSOLUTION, LIQUIDATION AND TERMINATION

11.1 Dissolution. The Company shall be dissolved and its affairs shall be wound
up on the first to occur of the following:

(a) a determination by the Board;

(b) the written consent of the Members holding the Required Interest; or

(c) the entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act.

The Company shall not be dissolved by the admission of additional or substituted
Members. The death, retirement, resignation, expulsion, bankruptcy or
dissolution of a Member, or the occurrence of any other event that terminates
the continued membership of a Member in the Company, shall not cause a
dissolution of the Company. Except as otherwise set forth in this Article XI,
the Company is intended to have perpetual existence.

11.2 Liquidation and Termination. On dissolution of the Company, the Board shall
act as liquidators or may appoint one or more Members as liquidator. The
liquidators shall proceed diligently to wind up the affairs of the Company and
make final distributions as provided herein and in the Act. The costs of
liquidation shall be borne as a Company expense. Until final distribution, the
liquidators shall continue to operate the Company properties with all of the
power and authority of the Board. The steps to be accomplished by the
liquidators are as follows:

(a) Proper Accounting. As promptly as possible after dissolution and again after
final liquidation, the liquidators shall cause a proper accounting to be made by
a recognized firm of certified public accountants of the Company’s assets,
liabilities and operations through the last day of the calendar month in which
the dissolution occurs or the final liquidation is completed, as applicable;

(b) Notice. The liquidators shall cause the notice described in the Act to be
mailed to each known creditor of and claimant against the Company in the manner
described thereunder;

(c) Satisfaction of Liabilities. The liquidators shall pay, satisfy or discharge
from Company funds all of the debts, liabilities and obligations of the Company
(including, without limitation, all expenses incurred in liquidation) or
otherwise make adequate provision for payment and discharge thereof;

 

29

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(d) Contractual Claims. The liquidators shall make reasonable provision to pay
all contingent, conditional or unmatured contractual claims known to the
Company;

(e) Compensation for Claims. The liquidators shall make such provision as will
be reasonably likely to be sufficient to provide compensation for any claim
against the Company which is the subject of a pending action, suit or proceeding
to which the Company is a party;

(f) Unknown Claims. The liquidators shall make such provision as will be
reasonably likely to be sufficient for claims that have not been made known to
the Company or that have not arisen but that, based on facts known to the
Company, are likely to arise or to become known to the Company within 10 years
after the date of dissolution; and

(g) Remaining Assets. All remaining assets of the Company shall be distributed
to the Holders in accordance with Section 4.2(b) by the end of the Taxable Year
of the Company during which the liquidation of the Company occurs (or, if later,
90 days after the date of the liquidation).

All distributions in kind to the Holders shall be made subject to the liability
of each distributee for costs, expenses and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination, and those
costs, expenses and liabilities shall be allocated to the distributees pursuant
to this Section 11.2. The distribution of cash and/or property to a Holder in
accordance with the provisions of this Section 11.2 constitutes a complete
return to the Holder of its Capital Contributions and a complete distribution to
the Holder of its interest in the Company and all of the Company’s property and
constitutes a compromise to which all Members have consented within the meaning
of the Act. To the extent that a Holder returns funds to the Company, it has no
claim against any other Holder for those funds.

11.3 Cancellation of Certificate. On completion of the Distribution of Company
assets as provided herein, the Company shall be terminated, and the Board (or
such other Person or Persons as the Act may require or permit) shall file a
certificate of cancellation with the Secretary of State of Delaware, cancel any
other filings made pursuant to Section 1.1 or 12.3 and take such other actions
as may be necessary to terminate the Company.

11.4 Reasonable Time for Winding Up. A reasonable time shall be allowed for the
orderly winding up of the business and affairs of the Company and the
liquidation of its assets pursuant to Section 11.2 hereof in order to minimize
any losses otherwise attendant upon such winding up.

11.5 Return of Capital. The liquidators shall not be personally liable for the
return of Capital Contributions or any portion thereof to the Holders (it being
understood that any such return shall be made solely from Company assets).

 

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ARTICLE XII—GENERAL PROVISIONS

12.1 Power of Attorney.

(a) Granting of Power of Attorney. Each Holder hereby constitutes and appoints
the Board and the liquidators, with full power of substitution, as his true and
lawful agent and attorney-in-fact, with full power and authority in his, her or
its name, place and stead, to execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices; (i) this Agreement, all certificates
and other instruments and all amendments thereof which are in accordance with
the terms of this Agreement and which the Board deems appropriate or necessary
to form, qualify, or continue the qualification of, the Company as a limited
liability company in the State of Delaware and in all other jurisdictions in
which the Company may conduct business or own property, (ii) all instruments
which the Board deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement which is made and approved in
accordance with its terms, (iii) all conveyances and other instruments or
documents which the Board deems appropriate or necessary to reflect the
dissolution and liquidation of the Company pursuant to the terms of this
Agreement, including a certificate of cancellation and (iv) all instruments
relating to the admission, withdrawal or substitution of any Holder pursuant to
Article X hereof.

(b) Irrevocable. The foregoing power of attorney is irrevocable and coupled with
an interest, and shall survive the Incapacity of any Holder and the transfer of
all or any portion of his or its Units and shall extend to such Holder’s heirs,
successors, assigns and personal representatives.

12.2 [Reserved]

12.3 Filings. Following the execution and delivery of this Agreement, the
Company and the Members shall promptly prepare any documents required to be
filed and recorded under the Act, and the Company and the Members shall promptly
cause each such document to be filed and recorded in accordance with the Act
and, to the extent required by local law, to be filed and recorded or notice
thereof to be published in the appropriate place in each jurisdiction in which
the Company may hereafter establish a place of business. The Company and the
Members shall also promptly cause to be filed, recorded and published such
statements of fictitious business name and any other notices, certificates,
statements or other instruments required by any provision of any applicable law
of the United States or any state or other jurisdiction that governs the conduct
of its business from time to time.

12.4 Offset. Whenever the Company or any Subsidiary is to pay any sum to any
Holder under this Agreement or pursuant to any other agreement or right, any
amounts that such Holder owes to the Company or any Subsidiary under this
Agreement or pursuant to any other agreement or right may be offset against and
deducted from that sum before payment.

 

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12.5 Notices. Except as expressly set forth to the contrary in this Agreement,
all notices, requests, or consents provided for or permitted to be given under
this Agreement must be in writing and shall be deemed to have been given or made
when (a) delivered personally to the recipient, (b) telecopied or delivered by
electronic mail to the recipient (with hard copy sent to the recipient by
reputable overnight courier service (charges prepaid) that same day) if
telecopied or mailed before 5:00pm Chicago time on a Business Day, and otherwise
on the next Business Day, (c) one Business Day after being sent by reputable
overnight courier service (charges prepaid), or (d) five Business Days after
being depositing in the United States mail, addressed to the recipient, postage
paid, and registered or certified with return receipt requested. All notices,
requests, and consents to be sent to a Member or Holder must be sent to or made
at the address given for that Member on the Schedule of Members or Holders on
the books and records of the Company, or such other address as that Member or
Holder may specify by notice to the Company and the other Members. Any notice,
request, or consent to the Company or the Board must be given to the Board at
the following address:

 

To the Company

L.L.C.

           Boise Cascade Holdings,      

c/o Madison Dearborn Partners,

LLC Three First National Plaza

Suite 3800

Chicago, Illinois 60602

  

 

32

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     Attention:  

Samuel M. Mencoff

Thomas S. Souleles

     Facsimile:   312-895-1056      E-mail:  

smencoff@mdcp.com

tsouleles@mdcp.com

With a copy (which shall not

constitute notice) to:

    

Kirkland & Ellis LLP

300 N. LaSalle

Chicago, Illinois 60654

     Attention:  

Richard J. Campbell

Jeffrey W. Richards

     Facsimile:   (312) 862-2200      E-mail:   rcampbell@kirkland.com
jrichards@kirkland.com

 

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Whenever any notice is required to be given by law, the Certificate or this
Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

12.6 Entire Agreement. This Agreement and the other agreements referred to
herein constitute the entire agreement of the Members and their Affiliates
relating to the Company and supersede all prior contracts or agreements with
respect to the Company, whether oral or written.

12.7 Effect of Waiver or Consent. A waiver or consent, express or implied, to or
of any breach or default by any Person in the performance by that Person of its
obligations with respect to the Company is not a consent or waiver to or of any
other breach or default in the performance by that Person of the same or any
other obligations of that Person with respect to the Company. Failure on the
part of a Person to complain of any act of any Person or to declare any Person
in default with respect to the Company, irrespective of how long that failure
continues, does not constitute a waiver by that Person of its rights with
respect to that default until the applicable statute-of-limitations period has
run.

12.8 Amendments. Except as otherwise expressly set forth herein, this Agreement
may be amended, modified, or waived from time to time only by the written
consent of the Members holding the Required Interest.

12.9 Binding Effect. Subject to the restrictions on Transfer set forth in this
Agreement, this Agreement is binding on and shall inure to the benefit of the
Members, Holders, and their respective heirs, legal representatives, successors
and assigns.

12.10 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and any provision
of the Certificate or any mandatory provision of the Act, the applicable
provision of the Certificate or the Act shall control. If any provision of this
Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any extent, the remainder of this Agreement and the
application of that provision to other Persons or circumstances are not affected
thereby and that provision shall be enforced to the greatest extent permitted by
law.

12.11 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Holder shall execute and deliver any additional
documents and instruments and perform any additional acts that may be necessary
or appropriate to effectuate and perform the provisions of this Agreement and
those transactions.

12.12 Waiver of Certain Rights. Each Holder irrevocably waives any right it may
have to maintain any action for dissolution of the Company or for partition of
the property of the Company, for any rights of appraisal it may have under
Section 18-210 of the Act, or for any rights to information from the Company
provided under Section 18-305 of the Act.

 

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12.13 Notice to Members of Provisions. By executing this Agreement, each Member
acknowledges that it has actual notice of (i) all of the provisions hereof
(including, without limitation, the restrictions on Transfer set forth in
Article X) and (ii) all of the provisions of the Certificate.

12.14 Remedies. Each Holder shall have all rights and remedies set forth in this
Agreement and all rights and remedies which such Person has been granted at any
time under any other agreement or contract and all of the rights which such
Person has under any law. Any Person having any rights under any provision of
this Agreement or any other agreements contemplated hereby shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.

12.15 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

12.16 Descriptive Headings; Interpretations. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. All references to Articles and Sections refer to
articles and sections of this Agreement, and all references to Schedules are to
schedules attached hereto, each of which is incorporated herein and made a part
hereof for all purposes. Whenever required by the context, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa. The use of the word “including” in this Agreement shall
be by way of example rather than by limitation. The use of the words “or,”
“either” and “any” shall not be exclusive. Reference to any agreement, document
or instrument means such agreement, document or instrument as amended or
otherwise modified from time to time in accordance with the terms thereof, and
if applicable hereof. Wherever required by the context, references to a Fiscal
Year shall refer to a portion thereof. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Wherever a conflict
exists between this Agreement and any other agreement, this Agreement shall
control but solely to the extent of such conflict.

12.17 Creditors. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the Company or any of its
Affiliates, and no creditor who makes a loan to the Company or any of its
Affiliates may have or acquire (except pursuant to the terms of a separate
agreement executed by the Company in favor of such creditor) at any time as a
result of making the loan any direct or indirect interest in Company Profits,
Losses, Distributions, capital or property other than as a secured creditor.

 

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12.18 Delivery by Facsimile. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

12.19 No Public Disclosure. The Company shall not disclose any holder of
Investor Units’ name or identity as an investor in the Company in any press
release or other public announcement or in any document or material filed with
any governmental entity, without the prior written consent of such Person,
unless such disclosure is required by applicable law or governmental regulations
or by order of a court of competent jurisdiction, in which case prior to making
such disclosure the Company shall give written notice to such Person describing
in reasonable detail the proposed content of such disclosure and shall permit
such Person to review and comment upon the form and substance of such
disclosure.

12.20 Survival. All indemnities and reimbursement obligations made pursuant to
this Agreement shall survive dissolution and liquidation of the Company until
the expiration of the longest applicable statute of limitations (including
extensions and waivers) with respect to the matter for which a party would be
entitled to be indemnified or reimbursed, as the case may be.

12.21 Counterparts. This Agreement may be executed in multiple counterparts with
the same effect as if all signing parties had signed the same document. All
counterparts shall be construed together and constitute the same instrument.

ARTICLE XIII—DEFINITIONS

13.1 Definitions of Terms Not Defined in the Text. For purposes of this
Agreement, the following terms have the meanings set forth below with respect
thereto:

“Act” means the Delaware Limited Liability Company Act, 6 Del. L.
Section 18-101, et seq., as it may be amended from time to time, and any
successor to such statute.

“Affiliate” shall mean, with respect to any Person, (i) any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person, where “control” means the possession, directly or indirectly, of
the power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise, and (ii) any officer,
director, partner, or member thereof.

 

36

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“Base Rate” means, on any date, a variable rate per annum equal to the rate of
interest most recently published by The Wall Street Journal as the “prime rate”
at large U.S. money center banks.

“Board” means the Board of Directors as described in Section 6.1 of this
Agreement.

“Book Value” means, with respect to any Company property, the Company’s adjusted
basis for federal income tax purposes, adjusted from time to time to reflect the
adjustments required or permitted by Treas. Reg. §1.704-1(b)(2)(iv)(d)-(g).

“Business Day” means any day other than a Saturday, a Sunday or a holiday on
which national banking associations in the State of New York, the State of Idaho
or the State of Delaware are closed.

“Capital Contribution” means the amount of cash or cash equivalents, or the fair
market value (as determined by the Board) of any other property, that is
contributed by a Holder to the capital of the Company in respect of any Unit in
accordance with the terms of Article III of this Agreement.

“Code” means the Internal Revenue Code of 1986 and any successor statute, as
amended from time to time.

“Common Units” means Common Units of the Company, having the rights, preferences
and priorities ascribed to Common Units in this Agreement.

“Company” means Boise Cascade Holdings, L.L.C., a Delaware limited liability
company.

“Company Minimum Gain” has the meaning set forth for “partnership minimum gain”
in Treasury Regulation Section 1.704-2(d).

“Covered Person” means any Director, any Member, and any director, officer,
manager, partner, or other principal of the Company or any of the foregoing.

“Directors” means the individuals elected to the Board as of the date of this
Agreement and any Member or other Person hereafter elected as a director of the
Company as provided in Section 5.4 of this Agreement, but does not include any
Person who has ceased to serve as a director of the Company.

“Distribution” means any distribution made by the Company to a Holder, whether
in cash, property or securities of the Company and whether by liquidating
distribution or otherwise; provided that none of the following shall be a
Distribution: (a) any redemption or repurchase by the Company of any securities
of the Company (including Units), (b) any recapitalization or exchange of
securities of the Company, (c) any subdivision (by Unit split, pro rata Unit
dividend or otherwise) or any combination (by reverse Unit split or otherwise)
of any outstanding Units or (d) any fees or remuneration paid to any Holder in
such Holder’s capacity as an employee, officer, consultant, Director or other
provider of services to the Company.

 

37

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“Equity Value” means the total net pre-tax proceeds which would be received by
the holders of Units if the assets of the Company as a going concern were sold
in an orderly transaction designed to maximize the proceeds therefrom, and such
proceeds were then distributed in accordance with Section 4.2(b), after payment
of, or provision for, all Company obligations in accordance with Section 11.2,
as determined in good faith by the Board.

“Fiscal Year” of the Company means the calendar year, or such other annual
accounting period as is established by the Board.

“FPH” means Forest Products Holdings, L.L.C.

“FPH Common Unit” means a “Common Unit” of FPH, as such term is defined in the
FPH LLC Agreement.

“FPH LLC Agreement” means that certain limited liability company agreement
relating to the affairs of FPH as amended, restated, modified, or waived from
time to time.

“FPH Management Equity Agreement” means a “Management Equity

Agreement”, as such term is defined in the FPH LLC Agreement.

“FPH Management Member” means a “Management Member” of FPH; as such term is
defined in the FPH LLC Agreement.

“GAAP” means U.S. generally accepted accounting principles, consistently
applied.

“Governmental Entity” means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.

“Holder” means a holder of one or more Units as reflected on the Company’s books
and records.

“Incapacity” or “Incapacitated” means (a) with respect to a natural person, the
bankruptcy, death, incompetency or insanity of such person and (b) with respect
to any other Person, the bankruptcy, liquidation, dissolution or termination of
such Person.

“Losses” for any period means all items of Company loss, deduction and expense
for such period determined according to Section 3.2.

“Member” means each of the Initial Members and any Person admitted to the
Company as a substituted Member or additional Member, but only so long as such
Person is shown on the Company’s books and records as the owner of one or more
Units.

“Member Minimum Gain” has the meaning set forth for “partner nonrecourse debt
minimum gain” in Treasury Regulation Section 1.704-2(i).

 

38

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“Member Nonrecourse Deductions” has the meaning set forth for “partner
nonrecourse deductions” in Treasury Regulation Section 1.704-2(i).

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulation

Section 1.704-2(b)(l).

“Person” means a natural person, partnership (whether general or limited),
limited liability company, trust, estate, association, corporation, custodian,
nominee or any other individual or entity in its own or any representative
capacity.

“Profits” for any period means all items of Company income and gain for such
period determined according to Section 3.2.

“Public Offering” means any underwritten sale of Common Units pursuant to an
effective registration statement under the Securities Act filed with the
Securities and Exchange Commission on Form S-1 (or a successor form adopted by
the Securities and Exchange Commission); provided that the following shall not
be considered a Public Offering: (i) any issuance of common equity securities as
consideration for a merger or acquisition and (ii) any issuance of common equity
securities or rights to acquire common equity securities to employees, Directors
or consultants of or to the Company or its Subsidiaries as part of an incentive
or compensation plan.

“Required Interest” means a majority of the outstanding Common Units.

“Sale of the Company” means the bona fide arm’s length sale of the Company to a
third party or group of third parties acting in concert, in each case which
party or parties is not an Affiliate of the Company or the Initial Members,
pursuant to which such party or parties acquire (i) equity securities of the
Company that, directly or indirectly through one or more intermediaries, have
more than 50% of the ordinary voting power then outstanding to elect Directors
or (ii) all or substantially all of the Company’s assets determined on a
consolidated basis (in either case, whether by merger, consolidation, sale or
transfer of the Company’s or any Subsidiary’s equity securities, sale or
transfer of the Company’s consolidated assets, or other reorganization).

“Schedule of Members” shall mean the Schedule of Members attached hereto, which
sets forth with respect to each Member the respective number and class of Units
owned by such Member and the amount of Capital Contributions made by such Member
with respect thereto.

“Securities Act” means the Securities Act of 1933, as amended, and applicable
rules and regulations thereunder, and any successor to such statute, rules or
regulations. Any reference herein to a specific section, rule or regulation of
the Securities Act shall be deemed to include any corresponding provisions of
future law.

“Securityholders Agreement” means that certain securityholders agreement, dated
as of October 26, 2004, by and among the Company, FPH and OfficeMax, as the same
has been and may be amended, restated, modified, supplemented or waived from
time to time.

 

39

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“Series A Common Unit” shall have the meaning given to such term in the Prior
Agreement.

“Series B Common Unit” shall have the meaning given to such term in the Prior
Agreement.

“Series C Common Unit” shall have the meaning given to such term in the Prior
Agreement.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association or
other business entity (other than a corporation). For purposes hereof,
references to a “Subsidiary” of any Person shall be given effect only at such
times that such Person has one or more Subsidiaries, and, unless otherwise
specified, the term “Subsidiary” refers to a Subsidiary of the Company.

“Taxable Year” means the Company’s taxable year ending December 31 (or part
thereof, in the case of the Company’s last taxable year), or such other year as
is determined by the Board in compliance with Section 706 of the Code.

“Units” mean interests in the Company (including Common Units) representing the
Holder’s fractional interest in the income, gains, losses, deductions and
expenses of the Company, and having the relative rights, powers, preferences,
duties, liabilities and obligations set forth with respect thereto in this
Agreement. Whenever a reference is made to a Unit or any series of Units
hereunder, such Units shall also include any Units issued with respect to such
Units in a unit split, unit dividend, unit combination, merger or other
recapitalization involving such Units.

13.2 Index of Definitions Defined in the Text. The following terms are defined
in the text of this Agreement in the section listed opposite such term below:

 

40

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Term    Section  

“Agreement”

     preamble   

“Board”

     5.2(a)   

“Capital Account”

     3.1   

“Certificate”

     1.1   

“Confidential Information”

     9.4   

“Indemnifying Holder”

     8.3   

“Other Business”

     7.11(b)   

“Proceeding”

     7.3   

“Regulatory Allocations”

     4.4(d)   

“Tax Matters Member”

     8.2   

“Transfer”

     10.0(b)   

*    *    *    *    *    *

 

41

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IN WITNESS WHEREOF, the undersigned Member has executed this Agreement, and
agreed to be bound by and subject to all of the provisions hereof, as of this
26th day of February, 2013.

 

FOREST PRODUCTS HOLDINGS, L.L.C. 1111 W. Jefferson Street, Suite 300 Boise,
Idaho 83702 EIN: 20-1478536 /s/ Wayne Rancourt Wayne Rancourt, SVP, CFO,
Treasurer

 

Accepted, acknowledged, and

Agreed to this 26th day of

February, 2013

 

BOISE CASCADE HOLDINGS, L.L.C.

/s/ John T. Sahlberg

John T. Sahlberg, SVP, General Counsel
    and Secretary

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement, and
agreed to be bound by and subject to all of the provisions hereof, as of this
26th day of February, 2012.

 

OFFICEMAX INCORPORATED

263 Shuman Blvd.

Naperville, IL 60563

EIN: 82-0100960

/s/ Matthew R. Broad Matthew R. Broad, EVP & General Counsel

 

Accepted, acknowledged, and

Agreed to this 26th day of

February, 2013

 

BOISE CASCADE HOLDINGS, L.L.C.

/s/ John T. Sahlberg

John T. Sahlberg, SVP, General Counsel

    and Secretary

--------------------------------------------------------------------------------

SCHEDULE OF

MEMBERS

As of February 26, 2013

 

     Common      Voting  

Name and Address

   Units      Percentage  

OfficeMax Incorporated 1

     5,941,851         20.01 % 

Forest Products Holdings, L.L.C.

     23,758,149         79.99 % 

Total:

     29,700,000         100.00 % 

 

1

Formerly named Boise Cascade Corporation.